Document ID: EPA-HQ-OAR-2006-0740-0002
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2006-09-19T04:00Z

SEQ CHAPTER \h \r 1 

D R A F T 

Supporting Statement

for

Information Collection Request

Information Requirements for Importation of Nonconforming Vehicles
(Renewal)

EPA ICR 0010.11

August 2006

Certification and Innovative Strategies Division 

Office of Transportation and Air Quality 

Office of Air and Radiation 

U.S. Environmental Protection Agency

PART A OF THE SUPPORTING STATEMENT

1.    IDENTIFICATION OF THE INFORMATION COLLECTION

(a)  TITLE OF THE INFORMATION COLLECTION

    Information Requirements for Importation of Nonconforming Vehicles,
OMB Control Number 2060-0095, ICR 0010.11.

(b)  SHORT CHARACTERIZATION (ABSTRACT)

     The Clean Air Act requires motor vehicles and engines imported into
the U.S. to conform to applicable emission requirements.  This
Information Collection Request covers importation reporting requirements
for light duty vehicle, light duty truck, and on-road motorcycle
vehicles and engines. The information collection instruments are Form 1
for initial entry, and Form 8 for final entry (see below). All
heavy-duty on-road and all non-road vehicle and engine importation
reporting requirements are now covered by ICR 1723 (OMB 2060-0294). The
two programs use separate forms (except, in theory, some non-road
compression ignition engines for Form 8), have differing regulatory
provisions, and are processed by differing staffs. Most importers are
also required to apply for and obtain a certificate of conformity from
EPA; that information burden for the light duty and motorcycle
certification program is covered by ICR 0783 (OMB 2060-0104).  There is
some overlap between the present ICR and 0783 because testing for
Independent Commercial Importers (ICIs) is reported both on Form 8,
covered by this ICR, and, initially, and in more detail, for
certification via ICR 0783. (Similarly, all importing manufacturers, and
not just ICIs, use Form 1.) Thus, the certification information burden
is covered in ICR 0783 and the (different and less detailed) testing
burden for imports subsequent to certification in this ICR. 

     Rather than attempting to allocate the fees for LDV and motorcycle
imports between initial certification fees and additional fees upon
importation of additional vehicles under a certificate (most ICI’s pay
reduced fees and therefore pay additional 1% fees upon each additional
import) the entire import fees burden is included under ICR 0783. 

     The post-certification, final-entry testing burden for light duty
vehicle imports falls into two categories. For regular light duty ICIs,
a city test (the “FTP”) is required for every third vehicle imported
under a certificate for the first 300 vehicles imported, and every fifth
thereafter (40 CFR 85.1505). The other light duty imports category is
“mod and test”, which applies to vehicles whose original production
year is six or more prior to the year of importation. Every such vehicle
must be modified to meet applicable emissions requirements and tested
with the FTP (40 CFR 85.1509). In the first case, each FTP test will be
accompanied by a 2-hour evap test, in the second case by an OBD
(on-board diagnostics) demonstration, and in both cases by a highway
test in order to compute a combined fuel economy number to comply with
gas guzzler fuel economy requirements. Form 8 includes spaces for
reporting the test results and combined fuel economy. For motorcycle
imports, no additional testing is required beyond the original
certification testing. Only four nonconforming motorcycles have been
imported in the last two years. 

	Most ICIs contract with a broker to do the some of the imports process
and a testing laboratory to perform the necessary tests. The testing lab
also performs whatever modifications are necessary to bring the vehicle
up to certification standards. 

     The Compliance and Innovative Strategies Division  (CISD) in
EPA’s Office of Transportation and Air Quality collects information
and requires some recordkeeping to help insure that imported vehicles
and engines are brought into compliance with Federal emission
requirements or that they qualify for exemption or exclusion from them.
“Nonconforming” refers to the vehicles and engines that are not
constructed to EPA certification standards and therefore must meet
various additional requirements, such as testing, prior to being
certified and available for sale in the U.S.  The information is also
used by the U.S. Customs Service (Customs), State regulatory agencies,
businesses, and individuals to verify whether or not vehicles are in
compliance.

    Information collected includes vehicle identification data, U.S.
Customs entry statements that such information is correct, and summary
emission test results.  The information is either stored in a computer
database, or retained in document form.  The information is used to
monitor compliance of imports and respond to inquiries from the public
concerning the compliance status of specific imported vehicles. This
information is collected on two forms (attached):

	$EPA Form 3520-1 (“Form 1”).  This form is used by importers who
are applying for entry into the U.S. of light duty vehicle, light duty
truck, and motorcycle vehicles or engines, whether conforming,
nonconforming, exempt, or excluded.  The form identifies to all parties
involved the category of import and the requirements that are
appropriate to that category. The form goes from the importer or its
agent (broker) to Customs, which stamps the form and forwards it in
batch to EPA. EPA gathers the forms in Ann Arbor where they are filed
for future reference.   

	$EPA Form 3520-8  (“Form 8”). This form is used by ICIs to request
“final admission” of a nonconforming vehicle or engine upon their
certification that it has been brought into compliance with Federal
emission requirements. The Form is held for fifteen days, during which
the ICI can not release the vehicle for sale. This gives EPA a chance to
conduct any review or oversight, including confirmation testing, deemed
necessary before the vehicle or engine is released to the owner. 

     The information collection will involve 12,352 responses from
12,000 respondents at an O&M cost of $1,780, a capital cost of 
$104,790, and a labor cost of $431,765.

2.   NEED FOR AND USE OF THE COLLECTION

(a)  NEED/AUTHORITY FOR THE COLLECTION

     Joint EPA and Customs regulations at 40 CFR 85.1501 et seq., 19 CFR
12.73,  and 19 CFR 12.74, promulgated under the authority under the
Clean Air Act (Sections 203 and 208), give authority for the collection
of the information.  The collection helps insure compliance of imported
vehicles and engines with Federal emissions requirements, which helps
meet the Agency goal of reducing air pollution.  Without this
information, EPA could not confirm that imported vehicles and engines
conform to the emission requirements, and consequently would not be able
to allow importation or sale of these vehicles and engines.

(b)  PRACTICAL UTILITY/USERS OF THE DATA

     CISD receives the forms, and the information on them is used by
Agency  personnel to verify that all Federal emission requirements (or
exemptions or exclusions thereto) concerning imported nonconforming
light duty motor vehicles and motorcycles are met.  The information is
also used to identify and prosecute violators of the regulations and to
monitor the program in achieving the objectives of the regulations. It
is also used to answer public inquiries concerning the compliance or
exempted or excluded status of particular motor vehicles. Public access
to this information is not direct but rather through the Automotive
Imports Helpline in order to maintain security of information protected
under the Privacy Act. 

3. NONDUPLICATION, CONSULTATIONS, AND OTHER COLLECTION CRITERIA

(a)  NONDUPLICATION

     A search of the Government Information Locator System (GILS) found
no other program or agency collecting this information. As explained
above, Form 1 is necessary to identify at the point of importation the
applicable category of the vehicle or engine for regulatory purposes and
to receive Customs acknowledgement thereof; Form 8 is necessary to
report test results to EPA and alert it of pending release to the owner.
As stated on Form 1, vehicles that are primarily manufactured for use on
public roads are also required to file an HS-7 Declaration Form to
identify the basis for the vehicle’s admission under the laws
administered by the Department of Transportation. EPA had discussions
with the Department in late 2005 that considered whether a combined form
would be feasible, and the conclusion was that a single form was not
practical at this time because of the unique requirements of each
program and the different agencies administering them.  

(b)  PUBLIC NOTICE

     A Federal Register notice has been published, soliciting public
comment for this ICR on __/__/2006 (__ FR ____); ___ comments were
received.

(c)  CONSULTATIONS

     Consultations have been made with Customs headquarters and ICIs to
discuss form revisions and to obtain accurate burden and cost estimates.
 The following ICIs were contacted:

Auto Enterprises, Inc.

850 N. Rochester Rd.

Clawson, MI  48017

Rep: Mr.  Philip Trupiano

Phone: (248) 723-6677

J.K. Technologies , L.L.C. 

3500 Sweet Air Street

Baltimore, MD 21211

Rep: Mr. Jonathan Weisheit

Phone: (410) 366-6332

Wallace Environmental Testing Laboratories

2140 Wirtcrest

Houston, TX 77055

Rep: Mr. Les Weaver

Phone: (713) 956-7705

(d)  EFFECTS OF LESS FREQUENT COLLECTION

                 Since reporting is done only at the time of initial and
“final” entry, the effects of less frequent collection would be to
seriously undermine the Agency's ability to whether vehicles being
imported meet applicable emission requirements. Consequently, the Agency
would not be able to allow entry of vehicles being imported.  Therefore,
less frequent collection is not feasible.

(e)  GENERAL GUIDELINES

     This ICR requires that ICIs notify EPA when requesting final
admission for vehicles (Form 8) and this may occasionally result in
reporting more often than quarterly if vehicles are tested and ready for
sale more frequently than quarterly.  This requirement is necessary for
EPA to inspect vehicles prior to release from the ICI.  If EPA only
required quarterly reports, either the ICI would have to hold vehicles
and release them on a quarterly basis or EPA would not likely have the
opportunity to inspect or require confirmatory testing of vehicles
imported by the ICI.

     EPA's regulations require that ICIs retain records for a period of
six years from the date of entry (40 CFR 85.1507(a)).  ICIs are
responsible for the same emissions warranties that apply to
manufacturers, generally extending to 8 years or 80,000 miles for major
emission control components.  The Clean Air Act requires that light duty
vehicles meet Federal emission standards throughout their useful lives,
which is defined by the Clean Air Act to be 10 years or 100,000 miles
(Sec. 202(d)); these requirements are implemented through the
certification process for ICIs as they are for manufacturers. The
imports regulations specify that the useful life period starts from the
date that the vehicle is released to the owner by the ICI.  The six year
record retention requirement is the  minimum considered consistent with
these obligations.

                                                        

(f)  CONFIDENTIALITY

      Any information submitted to the Agency for which a claim of
confidentiality is made will be safeguarded according to policies set
forth in Title 40, Chapter 1, Part 2, Subpart B - Confidentiality of
Business Information (see CFR 2).  The public is not permitted access to
information containing personal or organizational identifiers.  This
collection complies with the Privacy Act of 1974 and OMB Circular A-130.

(g) SENSITIVE QUESTIONS

 	There are no sensitive questions.

4.  THE RESPONDENTS AND THE INFORMATION REQUESTED

(a)  RESPONDENTS/NAICS CODES

      The Light Duty Vehicle Group of CISD collects information from
individual importers and both small and large companies that import
light duty vehicle, light duty truck, and on road motorcycle vehicles or
engines.  The NAICS code for respondents is 423110, Automobile and Other
Motor Vehicle Merchant Wholesalers, and 441200, Other Motor Vehicle
Dealers. 

(b)  INFORMATION REQUESTED

(i)  Data Items

     The data requested in reports include:

     - vehicle identification number

     - vehicle make

     - vehicle model

     - model year of the vehicle

     - port of entry

     - date of entry

     - entry number

     - importer name, address and telephone number

     - owner name, address, telephone number and SSN or EIN

     - emission test results

     - applicable EPA certificate of conformity

     - fuel economy

     - test date

     - modification date

     - name of emissions test laboratory

     - vehicle storage location

     - justification for an exclusion or exemption, if applicable

     and records are maintained on:

     - documents related to certification, modification, importation,
storage, registration or                     emission testing

     - bills of sale, invoices, or purchase agreements

     - documents providing parts identification data associated with the
emission control system

     - documents providing evidence of the initiation of the "hold
period"

(ii) Respondent Activities

     To complete the collection, the respondent would:

      -read form instructions

      -collect data and complete forms

      -conduct required emission testing (ICIs only)

INFORMATION REQUIREMENTS FOR 

IMPORTATION OF NONCONFORMING MOTOR VEHICLES 

AND MOTOR VEHICLE ENGINES

40 CFR PART 85 SUBPARTS P and R

INFORMATION REQUIREMENTS      				CITATION

I. ICI requirements

- Reporting

- Application for final admission   					85.1505(a)

   (certified)

- Reasonable assistance during inspection, 					85.1506(c),(g)(4)

   including copies of records or documents 				85.1506(b)(2)

- Application for final admission   					85.1509(b)

   (modification/test)

- Repair and retest							85.1509(g)

- Maintenance instructions, attestation,  				85.1510(a)

   parts list

- Altitude compensator instructions, attestation 			85.1510(b)

- Emission warranties, attestation   					85.1510(c)

- Emission labeling, attestation   					85.1510(d)

- Fuel economy labeling, attestation  					85.1510(e)

- Gas guzzler tax forms, attestation  					85.1510(f)

- Reply to notice of suspension or  					85.1513(f)(3)(ii),

   revocation      							85.1513(f)(3)(iv)

   									85.1513(f)(6)

- Request for hearing    						85.1513(f)(3)(iii)

Recordkeeping

- Certification, modification, test, purchase, 				85.1507

   sale, storage, registration, importation     

- Owners or ultimate purchasers  					85.1508(b)

- Maintenance instructions, parts list,  				85.1510

   altitude compensator instructions, 

   emission warranties, emission labeling,

   fuel economy labeling

II. Requirements applying to all importers

- Notification of conditional admission  				85.1504(a)

- Request for prior approval (exemption), 				85.1511(b),(g)

   request for extension of exemption     

- Request for prior approval (exclusion)				85.1511(c)-(g)              
                                          

- Attestations, copy of paid invoice  					85.1512(f)

- Claim of confidentiality    						85.1514

5.  THE INFORMATION COLLECTED--AGENCY ACTIVITIES, COLLECTION
METHODOLOGY, AND INFORMATION MANAGEMENT

(a)  AGENCY ACTIVITIES

     CISD receives the forms in paper form either directly from the
importers (Form 8) or indirectly from the importers through Customs
(Form 1).  Form 1 data is entered into the Automated Imports Tracking
System (AITS); Form 8 data is collected by the imports team and copies
distributed to certification staff.  After receiving the information,
EPA uses it to determine whether vehicles meet EPA requirements and
whether to conduct investigations or require confirmatory testing, and
retains it in order to respond to public, State government, and Federal
government inquires. It is anticipated that Form 8 data will be added to
the AITS in the near future.  In addition, ICI’s will be included in
the VERIFY information system that eventually will include all EPA
engine certification application data; the first ICI certification
applications are currently scheduled for inclusion in the version
scheduled for August, 2007. As part of its effort to provide electronic
versions of all current paper forms, the Verify system will also include
Form 8 submissions upon completion of the ICI module. 

(b)  COLLECTION METHODOLOGY AND MANAGEMENT

    Both Customs and CISD use the information to determine if vehicles
meet EPA requirements.  CISD retains information in the AITS or document
form in order to respond to public, State government, and Federal
government inquires, which are handled by CISD staff.

(c)  SMALL ENTITY FLEXIBILITY

     Small entities that are required to submit information to EPA have
been doing so by completing and submitting EPA paper forms.  EPA
regulations provide, as an alternative, for submission of imports data
electronically (e.g. 40 CFR 85.1505(a), 85.1509(b) & (c)). Under EPA
guidance (CCD-02-04;   HYPERLINK
"http://www.epa.gov/otaq/cert/dearmfr/dearmfr.htm" 
http://www.epa.gov/otaq/cert/dearmfr/dearmfr.htm  ) ICIs qualify per se
as small volume manufacturers entitled to the special provisions
available to all certifying small manufacturers under EPA’s
certification regulations. 

(d) COLLECTION SCHEDULE

      The information is not subject to a collection schedule, but is
collected at the time of vehicle entry and when the vehicle is ready for
final admission by EPA.

6. ESTIMATING THE BURDEN AND COST OF THE COLLECTION

	

(a) ESTIMATING RESPONDENT BURDEN (HOURS)

Motor vehicles and motor vehicle engines, and on road motorcycles and
engines

	Hours per Response	Number Responses	Total Hours

I. Reporting

Form 3520-1	0.5	12,000	6,000

Form 3520-8	0.5	     352	176     

II. Recordkeeping

Form 3520-8	0.5	352	176

III. Testing

Form 3520-8

	     Regular ICI	28.0	96	2,688

     Mod and Test	28.0	42	1,176

Total

12,856	10,216

(b) ESTIMATING RESPONDENT COST

	Labor	O&M	Capital/Startup (unamortized)

I. Reporting

Form 3520-1	$201,420	$0	0

Form 3520-8	$8,749 	$1056      	     0

II. Recordkeeping

Form 3520-8	$5,908 	$704 	0

III. Testing

Form 3520-8

	     Regular ICI	$150,044 	$0	$512,000

     Mod and Test	$65,644 	$0	$224,000 

Total	$431,765	$1,780	$736,000

	   

(i) Labor Costs

     Labor costs are considered to be more closely approximated by the
motor vehicle manufacturing industry, NAICS 336100, than retail and
wholesale trades in vehicles that do not involve testing and
modification.   Rates for engineering managers, mechanical engineers,
and secretaries (except legal, medical, and executive) from the May 2005
BLS National Industry-Specific Occupational Employment and Wage
Estimates (  HYPERLINK
"http://www.bls.gov/oes/current/naics4_336100.htm" 
http://www.bls.gov/oes/current/naics4_336100.htm  , accessed August 22,
2006). With a 160% overphead multiplier, these are $81,38, $49.71, and
$33.57, respectively. Most ICI certification representatives who fill
out Form 8s are motor vehicle technicians; Form 1 labor burdens are
considered secretarial. Test labor costs are $55.82 per hour based on
ICR0783.47. 

(ii) Capital/Start-up Costs 

     Consistent with ICR 0783, a capital cost of $4,000,000 for a test
facility capable of conducting 750 FTP and highway tests per year has
been allocated on a per-test basis. For ICIs, these test facility costs
will in most cases be covered by contractual costs between the importer
and a testing laboratory. As mentioned above, these costs listed here
are not initial certification costs but the post certification test
costs for additional imported vehicles. As with other ICR’s, these
capital costs are annualized and subject to 7% interest depreciation but
are considered to be on-going rather than startup capital costs. 

(iii) Operations and Maintenance Costs 

     Operations and maintenance costs were calculated based on responses
received from the ICIs contacted.  The Operations and Maintenance cost
for reporting ordinarily involves a purchase of services from brokers
who complete a package of importation forms (including those of other
agencies) and file them with Customs.  This cost is estimated as a
component of overall broker activities to import a vehicle or engine,
and incorporates a $2 per form recordkeeping cost for broker form
retention within overall broker activities and a $3 per form mailing
cost for Form 8s and a total of $1 per form for Form 1.  O&M costs
associated with testing are negilgible compared with those for
certification vehicles; post-certification vehicles do not have mileage
accumulation or durability demonstration requirements or consequent
vehicle depreciation; vehicle preparation is minimal.  Costs associated
with modification of vehicles necessary to bring them up to
certification standards are excluded; they are not reported on the
imports forms, they vary widely depending on the vehicle being imported
and therefore can not be predicted or accounted from one year to
another, and are analogous to, for example, the costs of catalytic
converters and other emissions control technologies that original
manufacturers are required to install in vehicles in order to comply
with the Clean Air Act and which are not included in the certification
paperwork burden. 

(c) ESTIMATING AGENCY BURDEN AND COST

     The imports program is administered by EPA's Compliance and
Innovative Strategies Division (CISD). Forty percent of one Full Time
Equivalent employees (FTE), GS 12/3;  twenty percent of one Senior
Environmental Employment (SEE) Program employee (the SEE Program is an
employment program for older workers authorized by the Environmental 
Programs assistance Act, passed by Congress in l984, and provides
employment opportunities to senior citizens age 55 and over); and a
portion of the work assignment under a government contract  are
allocated to imports activities.  Based on the 2006 GS pay schedule, EPA
estimates an hourly $34.35 for the FTE, then multiplies the hourly rates
by the standard government benefits multiplication factor of 1.6, at a
cost of $45,728, and a cost of  $8,480 for the SEE;  $179,450 is
estimated for the contractor.  The contractor estimate is based upon the
work assignment rather than an estimate of hours. An estimated total
agency cost of $233,657 per year is therefore allocated to imports
activities.  These activities include both on-road imports (this ICR)
and nonroad imports (ICR 1723; OMB 2060-0320). An estimated 90% of these
activities currently involve on-road imports; consequently, $210,292 is
the estimate for the agency cost for purposes of this ICR. 

(d) Estimating the Respondent Universe and Total Burden and Costs

	We estimate 12,000 Form 1’s are submitted, based on an extrapolation
of entries in the AITS (not all have yet been entered), averaging one
respondent per form, and 352 Form 8s from five ICIs, based on a hand
count of Form 8s received in 2005 and 2006, plus an estimate based on
actual and projected imports from one high-volume importer covering four
origianal production years. The total number of respondents is therefore
estimated as 12,352. For each engine family, one imported vehicle is
used for certification testing; therefore, while the forms count does
not decrease, the testing responses is decreased by the number of engine
families. For model year 2005, 21 ICI engine families were certified;
the count of 300 regular ICIs was reduced by 11 to total 289 vehicles
subject to post-certification testing; every third vehicle results in an
estimate of  96 tests; the total of 52 mod & test vehicles was reduced
by 10 certification vehicles; the remaining 42 are subject to tests. 

(e) Bottom Line Burden Hours and Cost

(i) Respondent Tally

Respondents						    12,352				

Burden Hours						    10,216

Labor Cost						$431,765

Operating Cost					    $1,780

Capital Cost						$736,000

Capital Cost (Annualized)				$104,790

Total (Annualized)					$538,335

(ii) Agency Tally

Employees						             2

Employee Labor Cost					  $48,787

Contract Labor Cost					$161,505

Total Cost						$210,292

6(f) Reasons For Change In Burden

     This ICR follows the cost assumptions of the previous renewal, but
has a substantial change in hours and burdens due to the following:
First, the number of  Form 8’s has been increased from 200 to 352. The
number of Form 1’s has been reduced from 20,000 to 12,000 based on a
better estimate due to the availability of the AITS. Second, the testing
cost is modified to represent the substantially different testing
requirements for the two different classes of ICIs. Third, a cost is
assigned to the labor burden associated with reporting and recordkeeping
of the forms, which was absent from the prior estimate. Fourth, an O&M
and a capital cost are assigned to the testing requirement, consistent
with other certification ICRs, namely the 0783 series. Fifth, testing
costs exclude a $660,000 operation and maintenance expense that was in
the prior renewal. This cost is unexplained but probably includes an
estimate of modification costs, which are excluded here for the reasons
stated above. 

6(e) BURDEN STATEMENT

     Public reporting burden for this collection is estimated to average
30 minutes per response and to average 30 minutes per response
recordkeeping (form 3520-8 only).  Burden means the total time, effort,
or financial resources expended by persons to generate, maintain,
retain, or disclose or provide information to or for a Federal agency. 
This includes the time needed to review instructions; develop, acquire,
install, and utilize technology and systems for the purposes of
collecting, validating, and verifying information, processing and
maintaining information, and disclosing and providing information;
adjust the existing ways to comply with any previously applicable
instructions and requirements; train personnel to be able to respond to
a collection of information; search data sources; complete and review
the collection of information; and transmit or otherwise disclose the
information.  An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays a
currently valid OMB control number.  The OMB control numbers for EPA's
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

     To comment on the Agency's need for this information, the accuracy
of the provided burden estimates, and any suggested methods for
minimizing respondent burden, including through the use of automated
collection techniques, EPA has established a public docket for this ICR
under Docket ID No. OAR-2003-0181, which is available for public viewing
at the Air and Radiation Docket and Information Center in the EPA Docket
Center (EPA/DC), EPA West, Room B102, 1301 Constitution Ave., NW,
Washington, DC.  The EPA Docket Center Public Reading Room is open from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays.
 The telephone number for the Reading Room is (202) 566-1744, and the
telephone number for the Air and Radiation Docket and Information Center
is (202) 566-1742.  An electronic version of the public docket is
available through EPA Dockets (EDOCKET) at http://www.epa.gov/edocket. 
Use EDOCKET to submit or view public comments, access the index listing
of the contents of the public docket, and to access those documents in
the public docket that are available electronically.  Once in the
system, select “search,” then key in the docket ID number identified
above.  Also, you can send comments to the Office of Information and
Regulatory Affairs, Office of Management and Budget, 725 17th Street,
NW, Washington, DC 20503, Attention: Desk Office for EPA.  Please
include the EPA Docket ID No. (OAR-2003-0181) and OMB control number
(2060-0095) in any correspondence.

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