[House Report 105-634]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     105-634
_______________________________________________________________________


 
                   BORDER SMOG REDUCTION ACT OF 1998

                                _______
                                

 July 20, 1998.--Committed to the Committee of the White House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Bliley , from the Committee on Commerce, submitted the following

                              R E P O R T

                         [To accompany H.R. 8]

      [Including cost estimate of the Congressional Budget Office]

      The Committee on Commerce, to whom was referred the bill 
(H.R. 8) to amend the Clean Air Act to deny entry into the 
United States of certain foreign motor vehicles that do not 
comply with State laws governing motor vehicle emissions, and 
for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Hearings.........................................................     8
Committee Consideration..........................................     8
Rollcall Votes...................................................     8
Committee Oversight Findings.....................................     9
Committee on Government Reform and Oversight.....................     9
New Budget Authority, Entitlement Authority, and Tax Expenditures     9
Committee Cost Estimate..........................................     9
Congressional Budget Office Estimate.............................     9
Federal Mandates Statement.......................................    11
Advisory Committee Statement.....................................    11
Constitutional Authority Statement...............................    11
Applicability to Legislative Branch..............................    12
Section-by-Section Analysis of the Legislation...................    12
Changes in Existing Law Made by the Bill, as Reported............    13

                               Amendment

  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Border Smog Reduction Act of 1998''.

SEC. 2. AMENDMENT OF CLEAN AIR ACT.

  Section 183 of the Clean Air Act (42 U.S.C. 7511b) is amended by 
adding the following new subsection at the end:
  ``(h) Vehicles Entering Ozone Nonattainment Areas.--
          ``(1) Authority regarding ozone inspection and maintenance 
        testing.--No noncommercial motor vehicle registered in a 
        foreign country and operated by a United States citizen or by 
        an alien who is a permanent resident of the United States, or 
        who holds a valid visa for purposes of employment or 
        educational study in the United States, may enter a serious, 
        severe, or extreme ozone nonattainment area from a foreign 
        country bordering the United States and contiguous to such 
        nonattainment area more than twice in a single 12-month period, 
        if State law has requirements for the inspection and 
        maintenance of such vehicles under the applicable 
        implementation plan in the nonattainment area. The preceding 
        sentence shall not apply if the operator presents documentation 
        at the United States border entry point establishing that the 
        vehicle has complied with such requirements that are in effect 
        and are applicable to motor vehicles of the same type and model 
        year.
          ``(2) Sanctions for violations.--The President of the United 
        States may impose and collect from the operator of any motor 
        vehicle who violates, or attempts to violate, paragraph (1) a 
        civil penalty of not more than $200, except that in any case of 
        repeated violations or attempted violations such penalty may 
        not exceed $400.
          ``(3) State election.--The prohibition set forth in paragraph 
        (1) shall not apply in any State which elects to be exempt from 
        the prohibition. Such election shall take effect upon the 
        President's receipt of written notice from the Governor of the 
        State notifying the President of such election.
          ``(4) State election for other nonattainment areas.--
                  ``(A) In general.--In the case of a State that is 
                contiguous with a foreign country and that contains an 
                ozone nonattainment area (other than an ozone 
                nonattainment area to which paragraph (1) applies), 
                such State may elect for the prohibition described in 
                such paragraph to apply in the State, or may elect to 
                establish in accordance with subparagraph (B) an 
                alternative approach to facilitate the compliance, by 
                motor vehicles registered in foreign countries and 
                entering such nonattainment area, with the motor 
                vehicle inspection and maintenance requirements in 
                effect under the applicable implementation plan in the 
                nonattainment area and applicable to motor vehicles of 
                the same type and model year.
                  ``(B) Alternative approach.--An alternative approach 
                by a State under subparagraph (A) is established in 
                accordance with this subparagraph if the Governor of 
                the State submits to the President a written 
                description of such approach and the President approves 
                the approach as facilitating compliance for purposes of 
                such subparagraph.
                  ``(C) Effective date regarding state election.--If a 
                State makes an election under subparagraph (A) for an 
                alternative approach, the alternative approach takes 
                effect in the State one year after the date on which 
                the President approves the approach. If the State makes 
                the other election under such subparagraph, the 
                prohibition described in paragraph (1) takes effect in 
                the State 180 days after the President's receipt of 
                written notice from the Governor of the State notifying 
                the President of such election.
          ``(5) Alternative approach regarding serious, severe, and 
        extreme areas.--In the case of a State containing an ozone 
        nonattainment area to which paragraph (1) applies, paragraph 
        (4) applies to the State to the same extent and in the same 
        manner as such paragraph applies to States described in such 
        paragraph, subject to paragraph (3).
          ``(6) Definition.--For purposes of this section, a serious, 
        severe, or extreme ozone nonattainment area is a Serious Area, 
        a Severe Area, or an Extreme Area as classified under section 
        181, respectively, other than any such area first classified 
        under such section after the date of the enactment of the 
        Border Smog Reduction Act of 1998.''.

SEC. 3. GENERAL PROVISIONS.

  (a) In General.--The amendment made by section 2 takes effect 180 
days after the date of the enactment of this Act. Nothing in such 
amendment shall be construed to require action that is inconsistent 
with the obligations of the United States under any international 
agreement.
  (b) Information.--As promptly as practicable following the enactment 
of this Act, the appropriate agency of the United States shall 
distribute information to publicize the prohibition set forth in the 
amendment made by section 2 and its effective date.

SEC. 4. STUDY BY GENERAL ACCOUNTING OFFICE.

  (a) In General.--The Comptroller General of the United States shall 
conduct a study of the impact of the amendment made by this Act, as 
described in subsection (b).
  (b) Contents of Study.--The study under subsection (a) shall compare 
the potential impact of the amendment made by this Act on air quality 
in ozone nonattainment areas affected by such amendment with the impact 
on air quality in the same areas caused by the increase in vehicles 
engaged in commerce operating in the United States and registered in, 
or operated from, Mexico, as a result of the implementation of the 
North American Free Trade Agreement.
  (c) Report.--Not later than July 1, 1999, the Comptroller General of 
the United States shall submit to the Committee on Commerce of the 
House of Representatives, and the Committee on Environment and Public 
Works of the Senate, a report describing the findings of the study 
under subsection (a).

                          Purpose and Summary

    The purpose of H.R. 8, the Border Smog Reduction Act of 
1998, is to provide States located on the border of the United 
States and a foreign country with mechanisms to provide for the 
compliance of foreign-registered motor vehicles with State 
inspection and maintenance requirements that are applicable in 
ozone nonattainment areas located in such States. Under the 
provisions of the bill, a State may provide for the denial of 
entry into the United States of certain foreign-registered 
noncommercial motor vehicles where State law applicable to such 
nonattainment areas provides that such vehicles comply with 
inspection and maintenance requirements and such vehicles 
attempt to enter the State from a foreign country more than 
twice in one year without complying with applicable inspection 
and maintenance requirements. Operators of such vehicles may 
also be subject to fines for violations and repeated 
violations.
    The bill also provides that States located on the border of 
the United States that contain an ozone nonattainment area may 
establish alternative approaches to facilitate compliance with 
motor vehicle inspection and maintenance requirements. Such an 
alternative approach may be of the State's own design and 
include measures other than denial of entry of vehicles into 
the United States. All alternative approaches, however, are 
subject to approval by the President.

                  Background and Need for Legislation

General background

    Under the Clean Air Act, areas that do not comply with a 
National Ambient Air Quality Standard (NAAQS) are required to 
be designated as ``nonattainment.'' For such areas, States are 
required to develop State Implementation Plans (SIPs) which 
provide for the implementation, maintenance, and enforcement of 
a NAAQS. These SIPs include enforceable emission limitations 
and other control measures aimed towards attaining compliance 
with the NAAQS within the time frames specified in the Clean 
Air Act.
    Ozone is one of the six criteria pollutants for which a 
NAAQS have been established. Ozone is formed in the atmosphere 
by the chemical interaction of volatile organics (VOCs) and 
nitrous oxides (NOx). There are many separate 
sources of both VOCs and NOx; however, motor vehicles represent 
a major source of both pollutants and, in some areas, may be 
the largest single contributor to ozone formation.
    Section 181 of the Clean Air Act provides for the 
classification of ozone nonattainment areas as ``marginal'', 
``moderate'', ``serious'', ``severe'', and ``extreme''. Section 
181 also provides for different attainment dates for 
nonattainment areas based on the severity of the area's 
classification.
    At present, areas on the border of Southern California and 
Mexico and the Juarez/El Paso border area in Texas are 
designated as ``serious'' nonattainment areas for ozone. A 
marginal ozone nonattainment area exists in the Buffalo, New 
York/Ontario Province border area. The States of Arizona, New 
Mexico, Texas, Maine, New Hampshire, New York, and Michigan 
contain ozone nonattainment areas, although these areas are not 
contiguous with a foreign border. In addition, it is probable 
that several new ozone nonattainment areas will be established 
in border States when designations are made for the new 8 hour, 
.08 part per million ozone standard in July 1999.
    The Clean Air Act requires all ozone nonattainment areas to 
employ some form of vehicle inspection and maintenance (I&M) 
and further requires areas classified as being in serious, 
severe, or extreme nonattainment to institute ``enhanced'' 
vehicle I&M. Basic I&M includes such measures as periodic 
testing of tailpipe emissions and enforcement through denial of 
registration. Enhanced I&M can include such measures as vehicle 
dynamometer testing (which uses a treadmill to measure vehicle 
emissions) purge flow testing of evaporative emissions from 
vehicles, and pressure testing of vehicle evaporative systems. 
Altogether, the Environmental Protection Agency (EPA) considers 
vehicle I&M to be one of the most cost-effective control 
technologies available to help States meet the ozone NAAQS. EPA 
has estimated that vehicle inspection and maintenance programs 
reduce pollution at a cost of $500 per ton, as opposed to 
$2,000 to $10,000 per ton for stationary sources.

Need for legislation

    On March 24, 1995, the Subcommittee on Oversight and 
Investigations conducted a hearing on vehicle inspection and 
maintenance programs. At this hearing, Mary Nichols, EPA 
Assistant Administrator for Air and Radiation, testified that 
inspection and maintenance programs were a ``critical element 
in our effort to improve air quality and to protect human 
health.'' Ms. Nichols further testified that:

          Cars today emit 90 percent less pollution today when 
        they come off the assembly lines than they did 20 years 
        ago. The simple fact is, however, that cars deteriorate 
        as they age, even the highly-sophisticated, computer-
        controlled and fuel injected cars that are being 
        produced today. It is not unusual for cars on the road 
        to pollute between 2 and 17 times as much as the new 
        car standards to which they were designed and built. 
        About 20 to 40 percent of the vehicles on the road 
        today need repairs to bring down their emission levels. 
        An inspection program is the cleanest, cheapest and 
        smartest way to identify these cars and to ensure that 
        they are repaired effectively * * * we have found that 
        the vast majority of Americans understand and accept 
        their responsibility to maintain their cars in a 
        reasonable manner and not to remove or disable the 
        emissions control devices. Most motorist agree that 
        spending $20 and 15 minutes, which is about what it 
        takes for an oil change, is a small price to pay for 
        cleaner air and better health, providing that the test 
        is accurate, fair and convenient.1

    \1\ Subcommittee on Health and Environment Hearing, Clean Air Act 
Amendments Inspection and Maintenance Programs, March 23 and 24, 1995, 
Serial No. 104-16 at pp. 175 and 177.
---------------------------------------------------------------------------
    On November 18, 1997, the Subcommittee on Health and 
Environment held a field hearing in San Diego, California, 
concerning transborder air pollution and the impact of commuter 
vehicles on air quality in border regions. Approximately 40,000 
to 45,000 vehicles per day cross the border at San Ysidro, just 
south of San Diego. The San Diego Air Pollution Control 
District has estimated that approximately 7,000 of these 
vehicles are commuter vehicles and that these vehicles may 
represent 13 percent of the vehicular inventory of ozone-
forming precursors.2
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    \2\ Other estimates of emissions associated with these vehicles 
vary, however, testimony received during the Subcommittee's hearing 
indicated that these vehicles tend to be older and emit more pollution 
than California vehicles subject to State inspection and maintenance 
requirements. California Air Resources Board Chairman John D. Dunlap, 
III, testified that ``preliminary data indicates that in some cases, 
Mexican vehicles emit up to 4 times the emissions of a California 
car.'' Mr. Paul Ganster, Director, Institute for Regional Studies of 
the Californias, testified that while it was difficult to estimate the 
impact of transborder traffic on the ambient air quality of San Diego, 
``there could be as many as 39,000 vehicles on San Diego streets each 
day that are Mexican in registration * * *. It is believed that the 
Mexican vehicles produce approximately ten-fold higher levels of 
pollutants than the San Diego vehicles * * *''. Subcommittee on Health 
and Environment Hearing, Transborder Air Pollution, Including the 
Impact of Emissions from Foreign Transborder Commuter Vehicles on Air 
Quality in Border Regions, November 18, 1997, Serial No. 105-60 at pp. 
21 and 47.
---------------------------------------------------------------------------
    During the November 18, 1997, field hearing, the 
Subcommittee received testimony from the United States Customs 
Service, the Environmental Protection Agency, the California 
Air Resources Board, a San Diego County Supervisor, a 
representative from the American Lung Association of San Diego 
and Imperial Counties, and individuals representing other local 
interests. The United States Customs Service testified that it 
does not presently have legal authority to deny entry to motor 
vehicles on the basis that such vehicles do not meet State 
inspection and maintenance requirements.3 The 
California Air Resources Board testified that it supported H.R. 
8 on the basis of its impact on air quality and as a matter of 
equity for U.S. citizens. The San Diego County Supervisor 
testified that the San Diego County Board of Supervisors 
supported H.R. 8 as a means to address air quality problems as 
well as a lack of jurisdiction by State and local officials in 
the border area.
---------------------------------------------------------------------------
    \3\ Testimony of Mr. Rudy M. Camacho, Director, Southern California 
Customs Management Center, U.S. Customs Service; Subcommittee on Health 
and Environment Hearing, Transborder Air Pollution, Including the 
Impact of Emissions from Foreign Transborder Commuter Vehicles on Air 
Quality in Border Regions, November 18, 1997, Serial No. 105-60 at p. 
33.
---------------------------------------------------------------------------
    Altogether, at present, foreign-registered vehicles may 
enter the United States daily, operate on highways in 
nonattainment areas, contribute to air pollution in the 
nonattainment area, and either not be subject to State 
inspection and maintenance laws or be able to avoid effective 
enforcement of State laws requiring such vehicles to be 
registered and subject to local I&M programs.4 In 
addition to environmental concerns associated with such 
vehicular pollution, State and local officials, as well as 
private citizens, have argued that it is simply not equitable 
to treat U.S. vehicles and foreign-registered vehicles 
differently.5 H.R. 8 is intended address this 
problem and to provide States that contain ozone nonattainment 
areas and that are located on the border of the United States 
and Mexico and Canada with mechanisms to enforce State laws 
regarding the inspection and maintenance of foreign-registered 
vehicles.
---------------------------------------------------------------------------
    \4\ On September 30, 1993, the California Governor approved AB 
2008. The enactment of this bill added Health and Safety Code Section 
44011.1 which expanded the coverage of vehicles subject to California's 
smog check program to include registered vehicles which are garaged 
outside of California and used for daily commuting.
    \5\ Testimony of Mr. John D. Dunlap, III; Mr. Greg Cox; and Dr. 
Kevin M. Murray; Subcommittee on Health and Environment Hearing, 
November 18, 1997, Serial No. 105-60, at pp. 21, 38, and 63.
---------------------------------------------------------------------------
    One mechanism provided in the legislation is to require the 
denial of entry into the United States of foreign-registered, 
noncommercial vehicles which do not meet State inspection and 
maintenance requirements applicable in ozone nonattainment area 
and to provide for fines for certain operators of such 
vehicles. Another mechanism provided in the legislation is to 
allow States on the border of the United States which contain 
ozone nonattainment areas the option todesign an alternative 
approach, subject to the approval of the President of the United States 
or his designee. An alternative approach must be designed to facilitate 
the compliance by motor vehicles registered in foreign countries with 
motor vehicle inspection and maintenance requirements in effect in 
ozone nonattainment areas, but a State is only required to submit a 
written description of the approach which is acceptable to the 
President and is not required to revise an applicable State 
Implementation Plan. Therefore, taken as a whole, H.R. 8 will allow 
border States options to more effectively enforce inspection and 
maintenance laws against all vehicles, whether registered in the State 
or in a foreign country, which operate in ozone nonattainment areas and 
which affect air quality in the nonattainment area.
    H.R. 8 also provides time and opportunity for foreign-
registered vehicles to comply with State inspection and 
maintenance requirements established by the legislation. 
Inspection and maintenance requirements on foreign-registered 
vehicles imposed in States under paragraph (h)(1) of Section 2 
of the bill will not take effect until 180 days after enactment 
of the legislation or 180 days after Presidential approval of a 
State which ``opts in'' to the paragraph (h)(1) program. This 
time is intended to allow sufficient opportunity to distribute 
information to publicize the fact that vehicles will be subject 
to denial of entry and that operators face the possibility of 
fines. In addition, vehicles entering States operating under 
paragraph (h)(1) of Section 2 will be allowed to enter 
nonattainment areas twice within a 12 month period without 
having complied with applicable inspection and maintenance 
requirements. This entry is intended to allow such vehicles to 
be inspected and certified by States that require such 
inspection and maintenance. In the case of States which opt for 
alternative approaches, any approach approved by the President 
will not take effect until one year after such approval. This 
time period is similarly intended to allow for sufficient time 
for implementation of any new requirements under the 
legislation.
    H.R. 8 additionally provides legal authority to the 
President of the United States to enforce applicable State 
inspection and maintenance requirements. The legislation 
confers such authority in three instances. First, H.R. 8 would 
provide the President with legal authority (and require the 
President to exercise such authority within 180 days) to deny 
entry and collect fines with respect to foreign-registered 
noncommercial vehicles in States with serious, severe or 
extreme ozone nonattainment areas which are contiguous to the 
border, and where State law required the inspection and 
maintenance of such vehicles under the applicable 
implementation plan in the nonattainment area. Entry would be 
denied to vehicles operated by U.S. citizens, permanent 
residents, or aliens holding valid visas for employment or 
educational study. At present, only the State of California 
meets the requirement of a contiguous ozone nonattainment area, 
designated serious or above, and the requirement that State law 
provide for the inspection and maintenance of foreign-
registered noncommercial vehicles.
    Second, upon the application of a border State containing 
ozone nonattainment areas in any area of the State, H.R. 8 
would provide legal authority to the President (and require the 
exercise of this authority 180 days after the President 
receives the application) to deny entry and impose fines on 
foreign-registered noncommercial vehicles where State law 
provided for the inspection and maintenance of such vehicles. 
Vehicles not in compliance with applicable State law and 
operated by U.S. citizens, permanent residents, or aliens with 
a valid employment or educational visa would be denied entry 
and be subject to fines on the same basis as such vehicles in 
States which contain contiguous ozone nonattainment areas. At 
present, the States of Arizona, New Mexico, Texas, Maine, New 
Hampshire, New York and Michigan contain ozone nonattainment 
areas that are noncontiguous to a foreign border.6
---------------------------------------------------------------------------
    \6\ Texas and New York also contain ozone nonattainment areas that 
are contiguous to a foreign border. National Air Quality and Emissions 
Trends Report, 1996; United States Environmental Protection Agency, 
January 1998, pp. 73-74.
---------------------------------------------------------------------------
    Third, upon the application of a border State containing 
ozone nonattainment areas in any area of the State, H.R. 8 
would provide legal authority to the President (and require the 
exercise of this authority one year after the President 
receives the application) to implement an alternative approach 
to facilitate the compliance of foreign-registered motor 
vehicles entering nonattainment areas with State inspection and 
maintenance requirements. Such an alternative approach, 
however, must be approved by the President before it is legally 
effective. All States which contain ozone nonattainment areas 
and which border a foreign country may make an application to 
the President for adoption of an alternative approach.
    Finally, H.R. 8 provides for a study of the impact of 
amendments made by the legislation. This study is required to 
compare the potential impact of the amendments on air quality 
in ozone nonattainment areas with the impact on air quality in 
the same areas caused by vehicles registered in, or operating 
from, Mexico as a result of the implementation of the North 
American Free Trade Agreement.

                                Hearings

    The Subcommittee on Health and Environment held a field 
hearing in San Diego, California, on November 18, 1997, 
concerning transborder air pollution and the impact of commuter 
vehicles on air quality in border regions and received 
testimony concerning H.R. 8. Witnesses at this hearing were as 
follows: Mr. Rudy M. Camacho, Director, Southern California 
Customs Management Center, U.S. Customs Service; Mr. David 
Howekamp, Director, Air Division, U.S. Environmental Protection 
Agency, Region IX; Mr. John D. Dunlap, III, Chairman, 
California Air Resources Board; Mr. Greg Cox, County 
Supervisor, San Diego County Board of Supervisors; Mr. Paul 
Ganster, Director, Institute for Regional Studies of the 
Californias, San Diego State University, California; Mr. 
Stanley Kenniston, Member, Citizens for Clean Air Policy; Dr. 
Kevin M. Murray, Chairman, Board of Directors, American Lung 
Association of San Diego and Imperial Counties; and Mr. Eugene 
J. Sprofera, private citizen.

                        Committee Consideration

    On June 19, 1998, the Subcommittee on Health and 
Environment met in open markup session and approved H.R. 8, the 
Border Smog Reduction Act of 1998, for Full 
Committeeconsideration, amended, by a voice vote. On June 24, 1998, the 
Committee on Commerce met in open markup session and ordered H.R. 8 
reported to the House, amended, by a voice vote, a quorum being 
present.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 8 
reported. An amendment by Mr. Brown to require the General 
Accounting Office to study the potential impact on air quality 
of approval of the Border Smog Reduction Act with the impact of 
increased commercial vehicles from Mexico resulting from 
implementation of the North American Free Trade Agreement was 
agreed to by a voice vote. An amendment by Mr. Bilbray to allow 
border States that contain ozone nonattainment areas to ``opt 
in'' to either (1) a program of enforcing State inspection and 
maintenance laws through denial of entry to certain 
noncommercial foreign-registered vehicles with fines for 
violations, or (2) an alternative program designed by the 
border State with the approval of the Federal government was 
agreed to by a voice vote. A motion by Mr. Bliley to order H.R. 
8 reported to the House, as amended, was agreed to by a voice 
vote, a quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee held a legislative 
hearing and made findings that are reflected in this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee finds that 
H.R. 8, the Border Smog Reduction Act of 1998, would result in 
no new or increased budget authority, entitlement authority, or 
tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 17, 1998.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 8, the Border Smog 
Reduction Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts for this 
estimate are Mark Grabowich (for federal costs), Pepper 
Santalucia (for the state and local impact), and Patrice Gordon 
(for the impact on the private sector).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 8--Border Smog Reduction Act of 1998

    Summary: H.R. 8 would deny regular entry into the United 
States to certain operators of noncommercial motor vehicles 
registered in a foreign country that do not comply with state 
laws regarding motor vehicles emissions. Under this bill, such 
operators would have to document compliance with state 
inspection and maintenance requirements before entering border 
areas experiencing specified levels of ozone pollution. Federal 
enforcement would begin 180 days after enactment of the bill 
unless the affected states elect to be exempt from the program. 
These prohibitions could apply to other border areas under 
certain terms and conditions. Violators of the bill's 
provisions would be subject to a civil fine of up to $400. This 
legislation also would direct the General Accounting Office 
(GAO) to prepare a report on air quality issues related to the 
implementation of this bill and the North American Free Trade 
Agreement with Mexico.
    CBO estimates that implementing this legislation would 
increase federal spending by about $1 million in fiscal year 
1999 and about $1.5 million each year thereafter, assuming the 
appropriation of the necessary amounts. Annual costs could 
reach $3 million by 2000 if all eligible states participate in 
the program established by the bill. This legislation could 
affect receipts, so pay-as-you-go procedures would apply, but 
any effects would be less than $500,000 a year.
    H.R. 8 contains no intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA). The bill would impose 
a private-sector mandate, as defined by UMRA, but CBO estimates 
that the cost of complying with such a mandate would not exceed 
the statutory threshold established in UMRA ($100 million 1996, 
adjusted annually for inflation).
    Estimated cost to the Federal Government: Implementing H.R. 
8 would increase the workload of the Customs Service in any 
state that allows the border restrictions to apply. Assuming 
that the entry restrictions would go into effect in California, 
which seems likely, the service would have to check roughly 
10,000 vehicles daily for compliance with California's 
inspection requirements. Customs would require additional 
resources to prevent increases in waiting times for vehicles 
crossing the border. We estimate that enacting H.R. 8 would 
cost about $700,000 in fiscal year 1999 and about $1.5 million 
annually thereafter for additional staff for the Customs 
Service, subject to the availability of appropriations. If the 
other eligible border states allow the bill's restrictions to 
apply at their borders, the total cost to the service would 
reach $3 million annually, probably beginning in fiscal year 
2000.
    H.R. 8 would require GAO to prepare by July 1, 1999, a 
report assessing the potential impact of the bill's provisions 
on air quality. Based on information from the agency, CBO 
estimates that GAO would spend about $300,000 in fiscal year 
1999 to conduct the study, assuming appropriation of the 
necessary amounts.
    The bill's provisions relating to new civil penalties could 
result in increased collections of civil fines. These fines are 
classified as revenues (governmental receipts), but CBO 
estimates that any such increase would be less than $500,000 
annually.
    Pay-as-you-go considerations: Section 252 of the Balanced 
Budget and Emergency Deficit Control Act sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts. Enacting H.R. 8 could increase receipts, but CBO 
estimates that any such increase would be less than $500,000 
annually.
    Estimated impact on State, local, and tribal governments: 
The bill contains no intergovernmental mandates as defined in 
UMRA because states would not be required to take any action as 
a result of this bill's enactment. Any costs incurred by 
states, which are likely to be small, would result from their 
decision to allow the entry restriction in the bill to apply at 
their border.
    Estimated impact on the private sector: H.R. 8 would impose 
a private-sector mandate, as defined by UMRA by preventing 
entry into the United States of certain foreign-registered 
vehicles in border areas that have the worst ozone pollution 
problems. The federal government would enforce this prohibition 
in any state that has requirements for inspection and 
maintenance of those vehicles as part of its state 
implementation plan under the Clean Air Act, unless the state 
opts out. In order to cross the border in those areas, drivers 
of those vehicles would have to prove to a federal border agent 
that their vehicle is in compliance with the state vehicle 
inspection law. States with less severe ozone pollution 
problems could request federal enforcement of the prohibition 
at their borders.
    CBO assumes that San Diego, California, is the only ozone 
nonattainment area where federal enforcement would 
automatically go into effect. About 10,000 people commuting to 
work or school using the ports of entry between Mexico and San 
Diego could be subject to this federal mandate. Based on the 
number of vehicles affected and the likely costs of compliance, 
CBO estimates that the cost of complying with such a mandate 
would not exceed the statutory threshold established in UMRA 
($100 million in 1996, adjusted annually for inflation).
    Estimate prepared by: Federal costs: Mark Grabowicz; Impact 
on State, local, and tribal governments: Pepper Santalucia; 
Impact on the private sector: Patrice Gordon.
    Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
Article I, section 8, clause 3, which grants Congress the power 
to regulate commerce with foreign nations, among the several 
States, and with the Indian tribes.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section designates the short title of the Act as the 
``Border Smog Reduction Act of 1998.''

Section 2. Amendment to the Clean Air Act

    This section adds a new subsection to Section 183 of the 
Clean Air Act (42 U.S.C. 7511b). Paragraph (1) of this 
subsection provides that foreign-registered noncommercial 
vehicles, operated by a United States citizen or by an alien 
who is a permanent resident of the United States, or who holds 
a valid visa for purposes of employment or educational study, 
will be denied entry into serious, severe or extreme ozone 
nonattainment areas which are contiguous to the border of the 
United States if State law has requirements for inspection and 
maintenance of such vehicles under the applicable 
implementation plan for the nonattainment area and such 
vehicles have not complied with the inspection and maintenance 
requirements. Foreign-registered noncommercial vehicles are 
allowed, however, to enter an ozone nonattainment area meeting 
the criteria established by paragraph (1) twice in a single 12-
month period and, furthermore, such vehicles will not be denied 
entry if an operator of the vehicle presents documentation that 
the vehicle is in compliance with applicable inspection and 
maintenance requirements. The subsection also provides for 
civil penalties for violations or attempted violations of the 
prohibition established in paragraph (1).
    A State which meets the criteria of paragraph (1) of the 
subsection may elect to not apply the prohibition contained in 
the paragraph if the State provides written notice to the 
President of such election. In addition, in States which border 
a foreign country and which contain ozone nonattainment areas, 
a State may elect to apply the prohibition contained in 
paragraph (1) or elect to establish an alternative approach to 
facilitate the compliance of foreign-registered motor vehicles 
entering ozone nonattainment areas in the State with motor 
vehicle inspection and maintenance requirements in effect under 
an applicable implementation plan. An alternative approach may 
only be established, however, if the Governor of a State 
submits a written description of the approach to the President 
and the President approves the approach. States which contain 
serious, severe and extreme ozone nonattainment areas which are 
contiguous to a foreign border (and meet all other requirements 
of paragraph(1)) may also elect to submit an alternative 
approach to the President for his approval. Alternative 
approaches approved by the President take effect one year after 
the President approves the approach. In States which elect to 
apply the prohibition in paragraph (1), the prohibition takes 
effect 180 days after the President's receipt of written notice 
notifying the President of an election to apply to the 
prohibition.

Section 3. General provisions

    This section provides that the prohibition established in 
paragraph (1) of Section 2 takes effect 180 days after the 
enactment of the Act in States meeting the criteria established 
in that paragraph. This section also provides that appropriate 
agencies of the government must distribute information to 
publicize the prohibition, and the effective date of the 
prohibition, set forth in Section 2.

Section 4. Study by General Accounting Office

    This section directs the Comptroller General of the United 
States to conduct a study of the impact of the amendments made 
by the Act. The section directs the Comptroller to study the 
potential impact of the amendments made by the Act on air 
quality in ozone nonattainment areas affected by the Act with 
the impact on air quality in the same areas caused by the 
increase in vehicles engaged in commerce operating in the 
United States and registered in, or operated from, Mexico, as a 
result of the implementation of the North American Free Trade 
Agreement.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (new matter is printed 
in italic and existing law in which no change is proposed is 
shown in roman):

                    SECTION 183 OF THE CLEAN AIR ACT

SEC. 183. FEDERAL OZONE MEASURES.

  (a) * * *

           *       *       *       *       *       *       *

  (h) Vehicles Entering Ozone Nonattainment Areas.--
          (1) Authority regarding ozone inspection and 
        maintenance testing.--No noncommercial motor vehicle 
        registered in a foreign country and operated by a 
        United States citizen or by an alien who is a permanent 
        resident of the United States, or who holds a valid 
        visa for purposes of employment or educational study in 
        the United States, may enter a serious, severe, or 
        extreme ozone nonattainment area from a foreign country 
        bordering the United States and contiguous to such 
        nonattainment area more than twice in a single 12-month 
        period, if State law has requirements for the 
        inspection and maintenance of such vehicles under the 
        applicable implementation plan in the nonattainment 
        area. The preceding sentence shall not apply if the 
        operator presents documentation at the United States 
        border entry point establishing that the vehicle has 
        complied with such requirements that are in effect and 
        are applicable to motor vehicles of the same type and 
        model year.
          (2) Sanctions for violations.--The President of the 
        United States may impose and collect from the operator 
        of any motor vehicle who violates, or attempts to 
        violate, paragraph (1) a civil penalty of not more than 
        $200, except that in any case of repeated violations or 
        attempted violations such penalty may not exceed $400.
          (3) State election.--The prohibition set forth in 
        paragraph (1) shall not apply in any State which elects 
        to be exempt from the prohibition. Such election shall 
        take effect upon the President's receipt of written 
        notice from the Governor of the State notifying the 
        President of such election.
          (4) State election for other nonattainment areas.--
                  (A) In general.--In the case of a State that 
                is contiguous with a foreign country and that 
                contains an ozone nonattainment area (other 
                than an ozone nonattainment area to which 
                paragraph (1) applies), such State may elect 
                for the prohibition described in such paragraph 
                to apply in the State, or may elect to 
                establish in accordance with subparagraph (B) 
                an alternative approach to facilitate the 
                compliance, by motor vehicles registered in 
                foreign countries and entering such 
                nonattainment area, with the motor vehicle 
                inspection and maintenance requirements in 
                effect under the applicable implementation plan 
                in the nonattainment area and applicable to 
                motor vehicles of the same type and model year.
                  (B) Alternative approach.--An alternative 
                approach by a State under subparagraph (A) is 
                established in accordance with this 
                subparagraph if the Governor of the State 
                submits to the President a written description 
                of such approach and the President approves the 
                approach as facilitating compliance for 
                purposes of such subparagraph.
                  (C) Effective date regarding state 
                election.--If a State makes an election under 
                subparagraph (A) for an alternative approach, 
                the alternative approach takes effect in the 
                State one year after the date on which the 
                President approves the approach. If the State 
                makes the other election under such 
                subparagraph, the prohibition described in 
                paragraph (1) takes effect in the State 180 
                days after the President's receipt of written 
                notice from the Governor of the State notifying 
                the President of such election.
          (5) Alternative approach regarding serious, severe, 
        and extreme areas.--In the case of a State containing 
        an ozone nonattainment area to which paragraph (1) 
        applies, paragraph (4) applies to the State to the same 
        extent and in the same manner as such paragraph applies 
        to States described in such paragraph, subject to 
        paragraph (3).
          (6) Definition.--For purposes of this section, a 
        serious, severe, or extreme ozone nonattainment area is 
        a Serious Area, a Severe Area, or an Extreme Area as 
        classified under section 181, respectively, other than 
        any such area first classified under such section after 
        the date of the enactment of the Border Smog Reduction 
        Act of 1998.