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[Federal Register Volume 60, Number 82 (Friday, April 28, 1995)]
[Proposed Rules]
[Pages 20934-20941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10505]

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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 51

[FRL-5196-5]

Inspection/Maintenance Flexibility Amendments

AGENCY: Environmental Protection Agency.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This notice proposes revisions to the motor vehicle 
Inspection/Maintenance (I/M) Program Requirements. EPA announced its 
intent to amend the I/M Program Requirements in December 1994 and held 
stakeholders' meetings on January 24, 1995 and January 31, 1995. This 
proposed action would create a second, less stringent enhanced I/M 
performance standard that could be used in areas that can demonstrate 
an ability to meet the 1990 Clean Air Act deadlines for Reasonable 
Further Progress and attainment while implementing an I/M program that 
falls below the originally promulgated enhanced I/M performance 
standard. [[Page 20935]] Because the new low enhanced I/M performance 
standard eliminates the need for the special enhanced performance 
standard for El Paso, Texas, this proposed action would repeal that 
special performance standard. This proposed action would also revise 
the high enhanced I/M performance standard to include a visual 
inspection of the positive crankcase ventilation (PCV) valve on all 
light-duty vehicles and light-duty trucks from model years 1968 to 
1971, inclusive, and of the exhaust gas recirculation (EGR) valve on 
all light-duty vehicles and light-duty trucks from model years 1972 
through 1983, inclusive. The low enhanced performance standard contains 
similar requirements, which are necessary to ensure full compliance 
with the Clean Air Act's requirement that all federal performance 
standards for enhanced I/M programs be based upon a model program that 
includes, at a minimum, two inspections per subject vehicle: an 
emission inspection and a visual inspection. This proposed action would 
also change the waiver cost requirements by: Extending the deadline for 
implementing the minimum expenditure to qualify for a waiver specified 
in the Clean Air Act; allowing the application of pre-inspection 
repairs toward meeting the waiver expenditure requirements under 
limited circumstances; allowing repairs of primary emission control 
components performed by non-technicians to apply toward the waiver cost 
requirement; and removing the bar against issuing hardship exemptions 
more than once per vehicle lifetime. This proposal also solicits public 
comment on whether or not EPA should include revised regulatory 
language in its final rulemaking which change the population cutoff for 
basic I/M from 50,000 persons to 200,000 persons. Lastly, this proposal 
would make clarifying amendments to the I/M requirements for areas 
undergoing redesignation.
DATES: Written comments on this proposal must be received no later than 
May 15, 1995. A public hearing is scheduled for May 17, 1995.
ADDRESSES: Interested parties may submit written comments (in duplicate 
if possible) to Public Docket No. A-95-08. It is requested that a 
duplicate copy be submitted to Eugene J. Tierney at the address in the 
FOR FURTHER INFORMATION CONTACT section below. The docket is located at 
the Air Docket, Room M-1500 (6102), Waterside Mall S.W., Washington, DC 
20460. The public hearing will be held at the National Fuel and Vehicle 
Emission Laboratory at 2565 Plymouth Road, Ann Arbor, Michigan, 
Conference Rooms C&D from 10:00 a.m. through 3:00 p.m. The docket may 
be inspected between 8:30 a.m. and 12 noon and between 1:30 p.m. until 
3:30 p.m. on weekdays. A reasonable fee may be charged for copying 
docket material.

FOR FURTHER INFORMATION CONTACT: Eugene J. Tierney, Office of Mobile 
Sources, National Vehicle and Fuel Emissions Laboratory, 2565 Plymouth 
Road, Ann Arbor, Michigan, 48105. Telephone (313) 668-4456.

SUPPLEMENTARY INFORMATION:

I. Table of Contents
II. Summary of Proposal
III. Authority
IV. Background of the Proposed Amendments
    A. Visual Inspection
    B. Enhanced Performance Standards
    C. Waivers
    D. Redesignation
    E. Population Requirements
V. Discussion of Major Issues
    A. Emission Impact of the Proposed Amendments
    B. Impact on Existing and Future I/M Programs
VI. Economic Costs and Benefits
VII. Public Participation
    A. Comments and the Public Docket
    B. Public Hearing
VIII. Administrative Requirements
    A. Administrative Designation
    B. Reporting and Record Keeping Requirement
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Act

II. Summary of Proposal

    Under the Clean Air Act as amended in 1990 (the Act), 42 U.S.C. 
7401 et seq., the U.S. Environmental Protection Agency (EPA) published 
in the Federal Register on November 5, 1992 (40 CFR part 51) rules 
related to plans for Motor Vehicle Inspection and Maintenance (I/M) 
programs (hereafter referred to as the I/M rule, see 57 FR 52950). EPA 
is proposing today to revise this rule to provide greater flexibility 
to states required to implement I/M programs.
    Section 182 of the Act was prescriptive regarding the various 
elements that are required as part of an enhanced I/M performance 
standard. It also required that EPA provide states with flexibility in 
meeting the requirement for enhanced or basic I/M programs. States have 
requested additional flexibility in two areas: the timing of the Act's 
mandated minimum expenditure required to qualify for a waiver and a 
lower performance standard for areas that do not need an enhanced I/M 
program as effective as the one EPA adopted in 1992 to meet the Act's 
Reasonable Further Progress and attainment demonstration requirements. 
(These two programs are hereafter referred to as low enhanced and high 
enhanced performance standards, respectively.)
    EPA is today proposing to establish an alternate, low enhanced I/M 
performance standard for those areas that can meet the Act's 
requirements for Reasonable Further Progress and attainment of either 
the carbon monoxide (CO) and/or ozone ambient air quality standards 
without the benefits of the high enhanced I/M performance standard. 
This low enhanced performance standard is designed for areas that are 
required to implement enhanced I/M but do not have a major mobile 
source component to the air quality problem or can obtain adequate 
emission reductions from other sources to meet the 15% VOC emission 
reduction requirement and demonstrate attainment. With respect to 
states in the northeast ozone transport region (OTR), EPA believes that 
the low enhanced performance standard will provide needed reductions 
but still offers greater flexibility. Areas within the Northeast OTR 
are still subject to the enhanced I/M requirement and OTR states are 
required to submit plans for their nonattainment areas. However EPA 
believes that the states are in the best position to make decisions 
about the emphasis placed upon individual strategies within their 
borders as long as emission reduction opportunities needed for timely 
attainment are not irrevocably lost. Moreover, with respect to 
interstate pollution within the OTR, EPA has just oulined a phased 
attainment-process among states contributing to or affected by 
transport. See memorandum of March 2, 1995 from Mary D. Nichols, 
Assistant Administrator for Air and Radiation, entitled ``Ozone 
Attainment Demonstrations'' (available in the docket for this 
rulemaking). The desired outcome of that process is to reach consensus 
on the additional regionwide and national emission reductions needed to 
bring all areas in the OTR into attainment. EPA believes that the 
interstate consultative process provides the best forum for 
ascertaining and requiring those necessary additional emission 
reductions. The low enhanced performance standard meets the Act's 
requirement that it be based on centralized, annual testing of light 
duty cars and trucks, and checks for tampering and exhaust emissions. 
Nevertheless, this standard can be met with a comprehensive 
decentralized, test-and-repair program.
    EPA is also proposing modifications to the requirements related to 
waivers. [[Page 20936]] EPA is proposing to extend the deadline for the 
full implementation of the minimum expenditure required to be eligible 
for a waiver for both basic and enhanced I/M programs until January 
1998. This will allow states additional time to phase-in the higher 
expenditures required by the Act and the I/M rule. In the interim, a 
state can establish any minimum expenditure it chooses, as long as it 
accounts for the higher waiver rates that will occur between now and 
1998 in its emission inventory forecasts in the Reasonable Further 
Progress plan.
    EPA is proposing to allow states to include qualified repair cost 
expenditures that occur within 60 days of the initial test toward 
meeting the minimum waiver expenditure. EPA also proposes to delete 
language from the November 5, 1992 I/M rule barring motorists from 
qualifying for more than one hardship exemption during the lifetime of 
a vehicle.
    Pursuant to the opinion of the Court of Appeals for the District of 
Columbia Circuit, Natural Resource Defense Council v. EPA, 22 F.3d 1125 
(D.C. Cir. 1994), EPA is proposing today to revise the enhanced I/M 
performance standard to correct the omission of a visual check on pre-
1984 vehicles in the high enhanced performance standard. EPA is 
proposing to include in the high enhanced performance standard a visual 
inspection of the positive crankcase ventilation (PCV) valve on all 
light-duty vehicles and light-duty trucks of model year 1968 through 
1971, inclusive, and of the exhaust gas recirculation (EGR) valve on 
all light-duty vehicles and light-duty trucks of model year 1972 
through 1983, inclusive. According to EPA's current guidance for 
estimating emission reductions from I/M programs, this change should 
not significantly increase the overall emission reduction requirements 
that must be met by states as they design programs to meet the enhanced 
I/M performance standard.
    EPA is also requesting comment on whether or not it should change 
the minimum population cutoff for basic I/M programs. Currently, for 
areas outside an ozone transport region, basic I/M programs are 
required in moderate ozone and carbon monoxide nonattainment areas with 
1990 Census-defined population of 50,000 or more. EPA is considering 
the possibility of including revised regulatory language in the final 
rulemaking that would increase this minimum threshold for basic I/M 
programs to 200,000 or more. If adopted, this proposed change would 
mark a return to the policy in effect prior to the 1990 Clean Air Act 
Amendments on minimum population requirements for basic I/M and would 
provide states further flexibility in meeting their Clean Air Act 
goals.
    At the I/M Stakeholders meetings of January 24 and 31, 1995, EPA 
indicated its intent to establish additional I/M credits for the use of 
remote sensing. These credits will be published in a guidance document, 
similar to the one in which credits for retest-based hybrid programs. 
ASM2 testing, and mechanic training and certification were published. 
EPA intends to base these credits on data from the California I/M Pilot 
Program in Sacramento, since this is the most comprehensive study on 
remote sensing to date. The agency is interested in obtaining all 
available information on remote sensing. Therefore, EPA is requesting 
comments from anyone with data on the effectiveness remote sensing and 
on ways it might be used to supplement I/M programs.
    Finally, EPA is proposing to clarify the requirements for basic I/M 
areas that are eligible for redesignation to attainment. On January 5, 
1995, EPA published a final amendment to the I/M rule to address this 
issue (60 FR 1738). The rule was not completely clear with regard to 
EPA's intent in the event that an area that has been redesignated to 
attainment experiences a violation of the standard. EPA does not 
believe that a violation automatically requires the implementation or 
upgrade of an I/M program. EPA believes that, in the event of a 
violation, a state should have the flexibility to select whichever 
contingency measures are best suited to correcting the problem to bring 
the area to attainment as quickly as possible. The rule would continue 
to require, however, that such an upgraded basic I/M program be among 
the contingency measures from which the state will choose. Changes to 
remove extraneous language related to the requirements for an 
implementation schedule are being proposed, as well.

III. Authority

    Authority for the action proposed in this notice is granted to EPA 
by section 182 of the Clean Air Act as amended (42 U.S.C. 7401, et 
seq.).

IV. Background of the Proposed Amendments

    The features of the enhanced I/M performance standard model program 
are used to generate the minimum performance target that a state must 
meet. When programmed into the most current version of EPA's mobile 
source emission factor model (hereafter referred to as the MOBILE 
model), these features produce a target emission factor (emissions per 
mile of vehicle travel) which a state's proposed program must not 
exceed to be deemed minimally acceptable for purposes of state 
implementation plan (SIP) approval. This combination of features, 
however, does not constitute a recommended program design. For example, 
while the enhanced I/M performance standard, as required by the Act, 
includes annual vehicle inspections, EPA does not require or even 
recommend that state programs actually adopt annual testing. In fact, 
EPA has found biennial testing to be significantly less expensive while 
only marginally less effective at reducing fleet-wide vehicle 
emissions. This marginal loss in benefit can be easily accommodated by 
strengthening some other aspects of the program, for example, by 
increasing vehicle coverage, or increasing the number or stringency of 
the tests conducted on selected classes of vehicles. The use of the 
performance standard approach allows EPA to meet Congress's dual 
statutory requirements that the EPA develop a performance standard 
based on certain statutory features and that the standard provide 
states with maximum flexibility to design I/M programs to meet local 
needs.

A. Visual Inspections

    During the Fall of 1992, the National Resources Defense Council 
(NRDC) filed three separate lawsuits against EPA in the Court of 
Appeals for the District of Columbia Circuit, challenging various 
aspects of EPA's policy on committal-based State Implementation Plans 
(SIP) and the I/M rule. Among other things, NRDC maintained that the 
enhanced I/M performance standard had been purposely weakened to 
justify a shift away from the statutory presumption of annual testing 
to EPA's preferred alternative, biennial testing. NRDC maintained that 
this was achieved by exempting older vehicles from the high-tech 
tailpipe test known as the IM240, visual inspections, and evaporative 
system checks. In responding to NRDC's claims, EPA maintained that it 
set the enhanced performance standard strict enough to net significant 
emission reductions while also being lenient enough to provide states 
with ``continued reasonable flexibility to fashion effective, 
reasonable, and fair programs for the affected consumer,'' as required 
by section 182(a)(2)(B)(ii) of the Act.
    In its May 6, 1994 ruling, the Court of Appeals found that, ``each 
of the parties wins some and loses some on this issue.'' NRDC v. EPA, 
22 F.3d 1125 (D.C. Cir. 1994). Agreeing with EPA, the court found that 
the Act did not require [[Page 20937]] EPA to set the most stringent 
annual performance standard possible. Nevertheless, the Court also 
agreed with NRDC's contention that the Act required EPA to establish an 
enhanced I/M performance standard that is ``the product of two 
different kinds of testing,'' including a visual and an emission test. 
Since EPA's current enhanced I/M performance standard only includes one 
test, a steady-state, idle-based tailpipe test, on vehicle model years 
1968 through 1983 and does not require a visual inspection of those 
cars, the Court found that the current standard falls short of 
complying with the letter of the Act for those model years.
    To correct this oversight, EPA is today proposing to amend the high 
enhanced I/M performance standard to include a minimum of two 
inspections per subject vehicle. Currently, the only vehicles included 
in the high enhanced I/M performance standard that are not covered by 
both tests are light-duty vehicles and light-duty trucks from model 
years 1968 through 1983. EPA therefore proposes to amend the current 
high enhanced I/M performance standard to include a visual inspection 
for the PCV valve on 1968 through 1971 light-duty vehicles and light-
duty trucks up to 8,500 pounds Gross Vehicle Weight Rating (GVWR) and a 
visual inspection of the EGR valve on model year 1972 through 1983 
light-duty vehicles and light-duty trucks. Tampering surveys have shown 
that these emission control devices are tampered or inadequately 
maintained. A visual check can identify such problems and emission 
reductions can occur on individual cars as a result of repairs to these 
devices.

B. Enhanced Performance Standards

    The Court of Appeals ruling on the issue of performance standard 
stringency also clarifies EPA's authority to establish any enhanced I/M 
performance standard it deems reasonable, provided it incorporates the 
minimally required elements set forth by Congress in the Act. By 
requiring enhanced I/M, Congress gave states one mechanism to meet the 
required 15% reduction of VOC emissions and demonstrate attainment. 
Today, EPA is proposing to give states greater flexibility in choosing 
the enhanced I/M program which will work best with the 15% VOC emission 
reduction plan. States may elect to implement low enhanced I/M, or any 
program between low and high enhanced I/M, if that is all they need to 
meet the 15% VOC emission reduction requirement and attainment 
demonstration. EPA believes it is reasonable to require lower 
reductions from enhanced I/M where greater reductions are not needed to 
reduce VOC emissions by 15% or for attainment.
    EPA maintains that the Act in no way bars it from establishing more 
than one enhanced I/M performance standard. EPA believes that precedent 
exists for the adoption of multiple enhanced I/M performance standards, 
tailored to the unique needs of certain areas, and points to the case 
of El Paso, Texas, for which a separate, enhanced I/M performance 
standard already exists [40 CFR Part 51.351(e)], as evidence of this 
interpretation. Today, EPA proposes to repeal Sec. 51.351(e) which 
establishes the El Paso performance standard because the new low 
enhanced performance standard eliminates the need for that special 
enhanced performance standard.

C. Waivers

    EPA also believes Section 182 (3)(C) of the Act provides 
flexibility in its waiver requirement, by not specifying a deadline by 
which such limits are to be fully implemented and determinative in the 
granting of waivers. To get the full emission reduction potential of an 
I/M program element, the statutory waiver requirement must be in full 
effect at least one full inspection cycle prior to evaluation (so that 
all subject vehicles will be held to that standard and found to 
comply). Since compliance with the performance standard is based on a 
modeling demonstration comparing the state's program to the performance 
standard using an initial evaluation date of January 1, 2000 for ozone 
nonattainment areas, and January 1, 2001 for carbon monoxide (CO) 
nonattainment areas, EPA believes it is possible to postpone full 
implementation of the enhanced I/M waiver requirements at least January 
1, 1998 without jeopardizing the ability of states to meet the relevant 
enhanced I/M performance standards. EPA requests comment on whether 
this or a later date would be appropriate. EPA also requests comments 
as to the timing of application of the CPI adjustment in relation to 
the phase-in of the full waiver requirements.
    Adoption of a January 1, 1998 date for full implementation of the 
waiver requirement would provide states with the continued flexibility 
necessary to allow for biennial testing. Furthermore, postponing full 
implementation of the waiver requirement provides the short term 
regulatory relief states have been requesting since passage of the Act, 
while at the same time allowing states to meet the long-term Clean Air 
Act goals. As mentioned previously, EPA requests comments on the need 
for and implications of postponing full implementation of the waiver 
requirements to a date beyond January 1, 1998. EPA hopes that states 
will use any additional time to develop programs to assist vehicle 
owners in fully repairing their vehicles; for example, by subsidizing 
or co-funding repairs out of revenues collected in any of a number of 
possible ways.
    Today's proposed action would also allow motorists to apply the 
cost of pre-inspection repair of primary emission control devices 
toward meeting the minimum waiver expenditure requirement provided the 
repairs were made within 60 days of the inspection. When repairs 
correct obvious emission control problems, EPA believes it is 
appropriate to credit repair costs toward minimum waiver expenditures, 
provided the repairs occur shortly prior to testing.
    Today's proposed action would limit the non-technician repairs that 
can be applied toward waiver limits to repairs of primary emission 
control components only. However, today's action also removes the 
language limiting application of non-technician repairs toward waiver 
expenditure requirements to pre-1980 model year vehicles. The result is 
that a non-technician repair to a primary emission control component 
may be applied toward the waiver expenditure requirement for any model 
year vehicle. EPA does not believe there is reason to distinguish 
between model years for non-technician repairs to primary emission 
controls. EPA believes it is appropriate to maintain the distinction 
for other types of repairs since these are not easily diagnosed or 
performed the way a missing catalyst, for example, may be diagnosed and 
repaired.
    Today's action proposes to remove the language from the I/M rule 
which limits hardship extensions to one time in the lifetime of a 
vehicle. EPA believes it is in the interest of fairness to remove this 
limitation, especially in the case of used car buyers who may otherwise 
be deprived of the opportunity for such an extension because this 
``right'' was already exercised by a previous owner. Instead, the 
proposed action would allow a vehicle that has already received a time 
extension and subsequently passed the applicable test standards to be 
eligible for another time extension. While EPA acknowledges that there 
is a potential for minuscule emission reduction losses as a result of 
changing this limitation, EPA believes that any potential abuses will 
be accounted for by the existing requirements that all such extensions 
be tracked by the state, [[Page 20938]] that the state commit to a 
maximum waiver limit as part of its SIP for modeling purposes, and that 
the state commit to program modifications should the actual waiver rate 
exceed that committed to in the SIP.

D. Redesignation

    Today's action proposes to clarify the requirements for basic I/M 
areas that are eligible for redesignation to attainment. EPA believes 
these changes are necessary because the amendments to the I/M rule 
addressing redesignation, which were published on January 5, 1995 (60 
FR 1738), were not clear with regard to EPA's intent in the event that 
an area that has been redesignated to attainment experiences a 
violation of the standard. EPA does not believe that a violation of the 
standard automatically requires the state to implement or upgrade an I/
M program. If a violation or other air quality problem occurs, EPA 
believes that the state should have the flexibility to select the 
contingency measure(s) that will most quickly correct the problem and 
bring the area to attainment.
    Today's proposed action also clarifies the timing of SIP 
submissions and program implementation in areas that select I/M to 
correct the air quality problem. SIPs must be submitted 18 months after 
EPA notifies the state that a violation has occurred and programs must 
be implemented 24 months after the date of notification. No particular 
date is specified as to when a state must make a selection, but clearly 
the selection must be made in time to submit a plan by the 18 month 
point and implement by the 24 month point.

E. Population Requirements

    Under current EPA regulations, basic I/M programs are required in 
moderate ozone and carbon monoxide nonattainment areas with a 1990 
Census-defined population of 50,000 or more. Today's proposal solicits 
public comment on whether revised regulatory language should be 
included in the final rulemaking to increase the minimum population 
threshold for basic I/M programs to 200,000 or more. If adopted, this 
proposed change would mark a return to the policy in effect prior to 
the 1990 Clean Air Act Amendments on minimum population requirements 
for basic I/M. This potential revision is proposed to grant states 
further flexibility in designing I/M programs to meet local needs, and 
to allow some areas with a population of less than 200,000 and without 
existing I/M programs to opt-out of I/M completely. Should public 
comment favor, or at least not overwhelmingly oppose, such a revision, 
EPA hereby proposes to set the urbanized area population threshold at 
200,000 or more based on the 1990 Census. Under this proposed change, 
any area outside an ozone transport region classified as moderate ozone 
or carbon monoxide nonattainment would be required to implement a basic 
I/M program if its 1990 Census-defined population was equal to or 
exceeded 200,000. EPA believes that this change is authorized by the 
Act because Section 182 requires implementation in all moderate ozone 
nonattainment areas only of the program contained in pre-1990 guidance, 
which limited basic I/M applicability to areas with a population of 
200,000 or more. EPA requests comments on whether this proposed change 
would have any implications on the states continued participation in 
the Northeast Ozone Transport Region.

V. Discussion of Major Issues

A. Emission Impact of the Proposed Amendments

    The proposed low enhanced I/M performance standard was modeled 
using MOBILE5a and national average values for vehicle age mix, mileage 
accumulation, and other area and fleet related variables. Compared to a 
no I/M case, the proposed low enhanced performance standard yields a 
VOC emission reduction of about 9.3%, and a NOx emission reduction of 
about 1.5%, assuming an evaluation date of January 1, 2000; assuming a 
January 1, 2001 evaluation date, the low enhanced performance standard 
produces a CO emission reduction of about 14.2% compared to the no-I/M 
case. The low enhanced performance standard yields a 45% greater 
reduction in VOC emissions than the basic performance standard. 
Specifically, the basic performance standard programs yields a minimum 
VOC reduction of 6.4% compared to the minimum 9.3% reduction from the 
low enhanced standard.
    The proposed low enhanced I/M performance standard would allow 
ozone nonattainment states to adopt a biennial decentralized, test-and-
repair program that included idle tailpipe testing, full visual checks, 
and pressure testing of the evaporative emission control system on all 
gasoline powered vehicles. For areas needing to meet the Act's 
requirements for CO, the proposed low enhanced I/M performance standard 
can be met using a biennial, decentralized test and repair program 
including two-speed tailpipe testing and full visual checks on all 
gasoline powered vehicles in conjunction with a comprehensive training 
or certification program for vehicle repair technicians. If these CO 
areas also have an ozone requirement, pressure testing will need to be 
added to the scenario. Alternatively, if test-only, IM240, purge and 
pressure testing are adopted, states would be able to meet the new, low 
enhanced standard while exempting large portions of either the oldest 
or newest vehicles from the test.
    The changes in the waiver criteria (e.g., the lower minimum 
expenditure for the interim years preceding 1998) could reduce emission 
reduction benefits achieved by I/M programs, depending on the degree to 
which particular states lower the minimum expenditure in the short 
term. If states establish lower minimum expenditures, waiver rates will 
be higher than under the $450 standard. Instead of waiver rates on the 
order of 3% of failed vehicles in enhanced programs, waiver rates could 
be as high as 20% or more if states were to lower the minimum to $100-
$150. Prior to 1998, the first milestone that states have to meet is 
the Act's 15% reduction in VOC emissions by November 15, 1996. In 
states that require only a lower expenditure, the higher waiver rates 
will lower benefits for this milestone. This loss in emission reduction 
needs to be accounted for in calculating 15% plan benefits. As a 
result, states may have to increase emission reductions from other 
sources, such as stationary sources, to make up for the loss.

B. Impact on Existing and Future I/M Programs

    Only states that choose to utilize the proposed flexibility will be 
affected by today's proposal. Modifications to a state's I/M program as 
a result of this rule change may require a SIP revision, if a plan has 
already been approved. Each case is likely to be different, depending 
upon the magnitude of the change. It is important to note that today's 
proposed flexibility in no way increases the existing burden on states. 
States that currently comply, or are in the process of complying, with 
the existing I/M rule would only be affected by today's rule if they so 
choose. Today's proposed amendments represent opportunities for those 
states that can meet the criteria set forth in today's proposal; under 
no circumstances are these proposed opportunities to be construed as 
mandatory obligations.

VI. Economic Costs and Benefits

    Today's proposed revisions provide states additional flexibility 
that lessens rather than increases the potential burden on states. 
Furthermore, states are [[Page 20939]] under no obligation, legal or 
otherwise, to modify existing plans meeting the previously applicable 
requirements as a result of today's proposal.

VII. Public Participation

A. Comments and the Public Docket

    EPA desires full public participation in arriving at final 
decisions in this Rulemaking action. EPA solicits comments on all 
aspects of this proposal from all parties. Wherever applicable, full 
supporting data and detailed analysis should also be submitted to allow 
EPA to make maximum use of the comments. All comments should be 
directed to the Air Docket, Docket No. A-95-08.

B. Public Hearing

    If a hearing is requested, anyone wishing to present testimony 
about this proposal at the public hearing (see DATES) should, if 
possible, notify the contact person (see FOR FURTHER INFORMATION 
CONTACT) at least seven days prior to the day of the hearing. The 
contact person should be given an estimate of the time required for the 
presentation of testimony and notification of any need for audio/visual 
equipment. A sign-up sheet will be available at the registration table 
the morning of the hearing to schedule those wishing to present 
testimony who have not notified the contact earlier. This testimony 
will be scheduled on a first-come, first-serve basis following the 
previously scheduled testimony.
    EPA requests that approximately 50 copies of the statement or 
material to be presented be brought to the hearing for distribution to 
the audience. In addition, EPA would find it helpful to receive an 
advanced copy of any statement or material to be presented at the 
hearing at least one week before the scheduled hearing date. This will 
give EPA staff adequate time to review such material before the 
hearing. Such advanced copies should be submitted to the contact person 
listed.
    The official records of the hearing will be kept open for 15 days 
following the hearing to allow submission of rebuttal and supplementary 
testimony. All such submittals should be directed to the Air Docket, 
Docket No. A-95-08 (see ADDRESSES).
    The hearing will be conducted informally, and technical rules of 
evidence will not apply. A written transcript of the hearing will be 
placed in the above docket for review. Anyone desiring to purchase a 
copy of the transcript should make individual arrangements with the 
court reporter recording the proceeding.

VIII. Administrative Requirements

A. Administrative Designation

    It has been determined that these proposed amendments to the I/M 
rule is a significant regulatory action under the terms of Executive 
Order 12866 and are therefore subject to OMB review. Any impacts 
associated with these revisions do not constitute additional burdens 
when compared to the existing I/M requirements published in the Federal 
Register on November 5, 1992 (57 FR 52950).
    However, it does not create an annual effect on the economy of $100 
million or more or otherwise adversely affect the economy or the 
environment. It is not inconsistent with nor does it interfere with 
actions by other agencies. It does not alter budgetary impacts of 
entitlements or other programs, and it does not raise any new or 
unusual legal or policy issues.

B. Reporting and Recordkeeping Requirement

    There are no information requirements in this proposed/final rule 
which require the approval of the Office of Management and Budget under 
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

C. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the Administrator certifies that this proposal will not 
have a significant economic impact on a substantial number of small 
entities and, therefore, is not subject to the requirement of a 
Regulatory Impact Analysis. A small entity may include a small 
government entity or jurisdiction. A small government jurisdiction is 
defined as ``governments of cities, counties, towns, townships, 
villages, school districts, or special districts, with a population of 
less than 50,000.'' This certification is based on the fact that the I/
M areas impacted by the proposed rulemaking do not meet the definition 
of a small government jurisdiction, that is, ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than 50,000.'' Furthermore, the 
impact created by the proposed action does not increase the pre-
existing burden which this proposal seeks to amend.

D. Unfunded Mandates

    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule where the estimated costs to State, local, or tribal 
governments, or to the private sector, will be $100 million or more. 
Under Section 205, EPA must select the most cost-effective and least 
burdensome alternative that achieves the objective of the rule and is 
consistent with statutory requirements. Section 203 requires EPA to 
establish a plan for informing and advising any small governments that 
may be significantly impacted by the rule.
    To the extent that the rules being proposed by this action would 
impose mandate as defined in Section 101 of the Unfunded Mandates Act 
upon the state, local, or tribal governments, or the private sector, as 
explained above, this proposed rule is not estimated to impose costs in 
excess of $100 million. Therefore, EPA has not prepared a statement 
with respect to budgetary impacts. As noted above, this rule offers 
opportunities to states that would enable them to lower economic 
burdens from those resulting from the currently existing I/M rule.

List of Subjects in 40 CFR Part 51

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon monoxide, Intergovernmental relations, 
Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides, 
Volatile organic compounds.

    Dated: April 18, 1995.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, part 51 of title 40 of the 
Code of Federal Regulations is proposed to be amended to read as 
follows:

PART 51--[AMENDED]

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

    Authority: 42 U.S.C. 740l-7671q.
    2. Section 51.351 is amended by revising paragraphs (a) and (b), by 
removing and reserving paragraph (e), and by adding paragraphs (f) and 
(g) to read as follows:

Sec. 51.351  Enhanced I/M performance standards.

    (a) Enhanced I/M programs shall be designed and implemented to meet 
or exceed a minimum performance standard, which is expressed as 
emission levels in area-wide average grams per mile (gpm), achieved 
from highway mobile sources as a result of the program. The emission 
levels achieved by the state's program design shall be calculated using 
the most current version, at the time of submittal, [[Page 20940]] of 
the EPA mobile source emission factor model or an alternative model 
approved by the Administrator, and shall meet the minimum performance 
standard both in operation and for SIP approval. Areas shall meet the 
performance standard for the pollutants which cause them to be subject 
to enhanced I/M requirements. In the case of ozone nonattainment areas 
subject to enhanced I/M and subject areas in the Ozone Transport 
Region, the performance standard must be met for both oxides of 
nitrogen (NOX) and volatile organic compounds (VOCs), except as 
provided in paragraph (d) of this section.
    (b) On-road testing. The performance standard shall include on-road 
testing of at least 0.5% of the subject vehicle population, or 20,000 
vehicles whichever is less, as a supplement to the periodic inspection 
required in paragraphs (f) and (g) of this section. Specific 
requirements are listed in Sec. 51.371 of this subpart.
* * * * *
    (e) [Reserved].
* * * * *
    (f) High Enhanced Performance Standard. Except as provided in 
paragraph (g) of this section, the model program elements for the 
enhanced I/M performance standard shall be as follows:
    (1) Network type. Centralized testing.
    (2) Start date. For areas with existing I/M programs, 1983. For 
areas newly subject, 1995.
    (3) Test frequency. Annual testing.
    (4) Model year coverage. Testing of 1968 and later vehicles.
    (5) Vehicle type coverage. Light duty vehicles, and light duty 
trucks, rated up to 8,500 pounds Gross Vehicle Weight Rating (GVWR).
    (6) Exhaust emission test type. Transient mass-emission testing on 
1986 and later model year vehicles using the IM240 driving cycle, two-
speed testing (as described in appendix B of this subpart S) of 1981-
1985 vehicles, and idle testing (as described in appendix B of this 
subpart S) of pre-1981 vehicles is assumed.
    (7) Emission standards. (i) Emission standards for 1986 through 
1993 model year light duty vehicles, and 1994 and 1995 light-duty 
vehicles not meeting Tier 1 emission standards, of 0.80 gpm 
hydrocarbons (HC), 20 gpm CO, and 2.0 gpm NOx;
    (ii) Emission standards for 1986 through 1993 light duty trucks 
less than 6000 pounds gross vehicle weight rating (GVWR), and 1994 and 
1995 trucks not meeting Tier 1 emission standards, of 1.2 gpm HC, 20 
gpm CO, and 3.5 gpm NOx;
    (iii) Emission standards for 1986 through 1993 light duty trucks 
greater than 6000 pounds GVWR, and 1994 and 1995 trucks not meeting the 
Tier 1 emission standards, of 1.2 gpm HC, 20 gpm CO, and 3.5 gpm NOx;
    (iv) Emission standards for 1994 and later light duty vehicles 
meeting Tier 1 emission standards of 0.70 gpm, 15 gpm CO, and 1.4 gpm 
NOX;
    (v) Emission standards for 1994 and later light duty trucks under 
6000 pounds GVWR and meeting Tier 1 emission standards of 0.70 gpm, 15 
gpm CO, and 2.0 gpm NOX;
    (vi) Emission standards for 1994 and later light duty trucks 
greater than 6000 pounds GVWR and meeting Tier 1 emission standards of 
0.80 gpm, 15 gpm CO and 2.5 gpm NOX;
    (vii) Emission standards for 1981-1985 model year vehicles of 1.2% 
CO, and 220 gpm HC for the idle, two-speed tests and loaded steady-
state tests (as described in appendix B of this subpart S); and
    (viii) Maximum exhaust dilution measured as no less than 6% CO plus 
carbon dioxide (CO2) on vehicles subject to a steady-state test 
(as described in appendix B of this subpart S); and
    (ix) Maximum exhaust dilution measured as no less than 6% CO plus 
carbon dioxide (CO2) on vehicles subject to a steady-state test 
(as described in appendix B of this subpart S).
    (8) Emission control device inspections. (i) Visual inspection of 
the catalyst and fuel inlet restrictor on all 1984 and later model year 
vehicles.
    (ii) Visual inspection of the positive crankcase ventilation valve 
on 1968 through 1971 model years, inclusive, and of the exhaust gas 
recirculation valve on 1972 through 1983 model year vehicles, 
inclusive.
    (9) Evaporative system function checks. Evaporative system 
integrity (pressure) test on 1983 and later model year vehicles and an 
evaporative system transient purge test on 1986 and later model year 
vehicles.
    (10) Stringency. A 20% emission test failure rate among pre-1981 
model year vehicles.
    (11) Waiver rate. A 3% waiver rate, as a percentage of failed 
vehicles.
    (12) Compliance rate. A 96% compliance rate.
    (13) Evaluation date. Enhanced I/M program areas shall be shown to 
obtain the same or lower emission levels as the model program described 
in this paragraph by 2000 for ozone nonattainment areas and 2001 for CO 
nonattainment areas, and for severe and extreme ozone nonattainment 
areas, on each applicable milestone and attainment deadline, 
thereafter. Milestones for NOX shall be the same as for ozone.
    (g) Alternate Low Enhanced I/M Performance Standard. An area either 
not subject to or able to meet the requirements of the Clean Air Act 
Amendments of 1990 for Reasonable Further Progress in 1996 and 
thereafter, and the relevant deadlines for attainment of the ambient 
air quality standards for ozone and CO without an enhanced I/M program 
meeting the performance standard described in paragraph (f) of this 
section, may select the alternate low enhanced I/M performance standard 
described below in lieu of the standard described in paragraph (f). The 
program elements for this alternate low enhanced I/M performance 
standard are:
    (1) Network type. Centralized testing.
    (2) Start date. For areas with existing I/M programs, 1983. For 
areas newly subject, 1995.
    (3) Test frequency. Annual testing.
    (4) Model year coverage. Testing of 1968 and newer vehicles.
    (5) Vehicle type coverage. Light duty vehicles, and light duty 
trucks, rated up to 8,500 pounds GVWR.
    (6) Exhaust emission test type. Idle testing of all covered 
vehicles (as described in Appendix B of Subpart S).
    (7) Emission standards. Those specified in 40 CFR Part 85, Subpart 
W.
    (8) Emission control device inspections. Visual inspection of the 
positive crankcase ventilation valve on all 1968 through 1971 model 
year vehicles, inclusive, and of the exhaust gas recirculation valve on 
all 1972 and newer model year vehicles.
    (9) Evaporative system function checks. None.
    (10) Stringency. A 20% emission test failure rate among pre-1981 
model year vehicles.
    (11) Waiver rate. A 3% waiver rate, as a percentage of failed 
vehicles.
    (12) Compliance rate. A 96% compliance rate.
    (13) Evaluation date. Enhanced I/M program areas subject to the 
provisions of this paragraph shall be shown to obtain the same or lower 
emission levels as the model program described in this paragraph by 
2000 for ozone nonattainment areas and 2001 for CO nonattainment areas, 
and for severe and extreme ozone nonattainment areas, on each 
applicable milestone and attainment deadline, thereafter. Milestones 
for NOX shall be the same as for ozone.
    3. Section 51.360 is amended by revising the introductory text and 
paragraph (a)(1), (a)(5), (a)(6), (a)(7) introductory text, (a)(7)(ii), 
(a)(9) and (b) to read as follows: [[Page 20941]] 

Sec. 51.360  Waivers and compliance via diagnostic inspection.

    The program may allow the issuance of a waiver, which is a form of 
compliance with the program requirements that allows a motorist to 
comply without meeting the applicable test standards, as long as the 
prescribed criteria described below are met.
    (a) * * *
    (1) Waivers shall be issued only after a vehicle has failed a 
retest performed after all qualifying repairs have been completed. 
Qualifying repairs include repairs of primary emission control 
components performed within 60 days of the test date.
* * * * *
    (5) General repairs shall be performed by a recognized repair 
technician (i.e., one professionally engaged in vehicle repair, 
employed by a going concern whose purpose is vehicle repair, or 
possessing nationally recognized certification for emission-related 
diagnosis and repair) in order to qualify for a waiver. I/M programs 
may allow repairs of primary emission control components performed by 
non-technicians (e.g., owners) to apply toward the waiver limit.
    (6) In basic programs, a minimum of $75 for pre-81 vehicles and 
$200 for 1981 and newer vehicles shall be spent in order to qualify for 
a waiver. These model year cutoffs and the associated dollar limits 
must be in full effect no later than January 1, 1998. Prior to January 
1, 1998, states may adopt any minimum expenditure commensurate with the 
waiver rate committed to for the purposes of modeling compliance with 
the basic I/M performance standard.
    (7) Beginning on January 1, 1998, enhanced I/M programs shall 
require the motorist to make an expenditure of at least $450 in repairs 
to qualify for a waiver. The I/M program shall provide that the $450 
minimum expenditure shall be adjusted in January of each year by the 
percentage, if any, by which the Consumer Price Index for the preceding 
calendar year differs from the Consumer Price Index of 1989. Prior to 
January 1, 1998, states may adopt any minimum expenditure commensurate 
with the waiver rate committed to for the purposes of modeling 
compliance with the relevant enhanced I/M performance standard.
* * * * *
    (ii) The revision of the Consumer Price Index which is most 
consistent with the Consumer Price Index for calendar year 1989 shall 
be used. The first Consumer Price Index adjustment to the minimum $450 
waiver expenditure shall go into effect on January 1, 1998.
* * * * *
    (9) A time extension, not to exceed the period of the inspection 
frequency, may be granted to obtain needed repairs on a vehicle in the 
case of economic hardship when waiver requirements have not been met. 
After having received a time extension, a vehicle must fully pass the 
applicable test standards before becoming eligible for another time 
extension. The extension for a vehicle shall be tracked and reported by 
the program.
    (b) Compliance via diagnostic inspection. Vehicles subject to a 
transient IM240 emission test at the cutpoints established in 
Secs. 51.351 (f)(7) and (g)(7) of this subpart may be issued a 
certificate of compliance without meeting the prescribed emission 
cutpoints, if, after failing a retest on emissions, a complete, 
documented physical and functional diagnosis and inspection performed 
by the I/M agency or a contractor to the I/M agency show that no 
additional emission-related repairs are needed. Any such exemption 
policy and procedures shall be subject to approval by the 
Administrator.
* * * * *
    4. Section 51.372 is amended by revising paragraph (c) introductory 
text, (c)(3) and (c)(4), and paragraph (e) to read as follows:

Sec. 51.372.  State implementation plan submissions.

* * * * *
    (c) Redesignation requests. Any nonattainment area that EPA 
determines would otherwise qualify for redesignation from nonattainment 
to attainment shall receive full approval of a State Implementation 
Plan (SIP) submittal under Sections 182(a)(2)(B) or 182(b)(4) if the 
submittal contains the following elements:
* * * * *
    (3) A contingency measure consisting of a commitment by the 
Governor or the Governor's designee to adopt or consider adopting 
regulations to implement an I/M program to correct a violation of the 
ozone or CO standard or other air quality problem, in accordance with 
the provisions of the maintenance plan.
    (4) A commitment that includes an enforceable schedule for adoption 
and implementation of the I/M program, and appropriate milestones. The 
schedule shall include the date for submission of a SIP meeting all of 
the requirements of this subpart. Schedule milestones shall be listed 
in months from the date EPA notifies the state that it is in violation 
of the ozone or CO standard or any earlier date specified in the state 
plan. Unless the state, in accordance with the provisions of the 
maintenance plan, chooses not to implement I/M, it must submit a SIP 
revision containing an I/M program no more than 18 months after 
notification by EPA.
* * * * *
    (e) SIP submittals to correct violations. SIP submissions required 
pursuant to a violation of the ambient ozone or CO standard (as 
discussed in Sec. 51.372(c)) shall address all of the requirements of 
this subpart. The SIP shall demonstrate that performance standards in 
either Sec. 51.351 or Sec. 51.352 shall be met using an evaluation date 
(rounded to the nearest January for carbon monoxide and July for 
hydrocarbons) seven years after the date EPA notifies the state that it 
is in violation of the ozone or CO standard or any earlier date 
specified in the state plan. Emission standards for vehicles subject to 
an IM240 test may be phased in during the program but full standards 
must be in effect for at least one complete test cycle before the end 
of the 5-year period. All other requirements shall take effect in 
within 24 months of the date EPA notifies the state that it is in 
violation of the ozone or CO standard or any earlier date specified in 
the state plan. The phase-in allowances of Sec. 51.373(c) of this 
subpart shall not apply.

[FR Doc. 95-10505 Filed 4-27-95; 8:45 am]
BILLING CODE 6560-50-P
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