[Senate Report 105-355]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 664
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-355
_______________________________________________________________________


 
                   BORDER SMOG REDUCTION ACT OF 1998

                                _______
                                

               September 28, 1998.--Ordered to be printed

_______________________________________________________________________


    Mr. Chafee, from the Committee on Environment and Public Works, 
                        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 Environment and Public Works, to which 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, 
reports favorably thereon and recommends that the bill do pass.

                    General Statement and Background

    Under the Clean Air Act, areas that do not comply with the 
National Ambient Air Quality Standard (NAAQS) are required to 
be designated as ``nonattainment''. Section 181 of the Clean 
Air Act provides for the classification of ozone nonattainment 
areas as ``marginal'', ``moderate'', ``serious'', ``severe'', 
or ``extreme'' depending on the level of ozone measured above 
the maximum level allowed in the NAAQS. Any State with 
nonattainment areas is required to develop a State 
Implementation Plan (SIP) that describes the means by which the 
State expects to improve air quality to bring the nonattainment 
area into compliance with the NAAQS.
    Tropospheric--or ground-level--ozone is one of the six 
criteria pollutants for which a NAAQS has been established. 
Ozone is formed in the lower atmosphere by the chemical 
interaction of volatile organic chemicals (VOCs) and nitrous 
oxides (NOx) exposed to sunlight. Motor vehicles represent 
roughly half of the VOC and NOx emissions nationwide.
    One control measure included in SIPs is implementation of 
an inspection and maintenance (I/M) program that is used to 
ensure emission reductions from in-use motor vehicles. The 
Clean Air Act requires States with ozone nonattainment areas 
designated as moderate or worse to include an I/M program in 
the SIP it submits. While auto manufacturers are required to 
meet emission limits for the vehicles they sell, State I/M 
programs are used to ensure that proper maintenance is used so 
vehicle emissions performance does not needlessly deteriorate. 
Basic I/M includes measures such as periodic testing of 
tailpipe emissions. Vehicles that fail emissions tests are 
denied registration. ``Enhanced'' I/M is required in the 
serious, severe, and extreme nonattainment areas. This 
typically includes dynamometer testing, which uses a treadmill 
to simulate various driving conditions during emissions 
testing, as well as tests of evaporative emissions. The 
Environmental Protection Agency (EPA) considers I/M programs to 
be one of the most cost-effective control strategies for 
complying with the NAAQS for ozone and estimates the cost per 
ton of pollution reduced around $500.
    Areas on the California (San Diego) and Texas (El Paso) 
borders with Mexico are designated as serious nonattainment for 
ozone. Buffalo, New York is a marginal ozone nonattainment area 
that borders Canada. Arizona, New Mexico, Maine, New Hampshire, 
and Michigan also contain ozone nonattainment areas, none of 
which are contiguous with the foreign border. It is possible 
that other border States will have new areas designated 
nonattainment for ozone when designations are made for the new 
8-hour ozone standard in July 1999.
     This legislation would provide a mechanism to exclude 
certain foreign-registered motor vehicles from those 
nonattainment areas on or near a foreign border unless they 
comply with emission limits applied within the nonattainment 
area. It is estimated that, each day, up to 45,000 vehicles 
cross into the United States at the San Ysidro border in 
Southern California. As many as 7,000 of those may be operated 
by individuals who commute into California on a routine basis 
for work or school. The California Air Resources Board 
estimates that, if this class of vehicles were in compliance 
with California emissions requirements, motor vehicle pollution 
in San Diego would be reduced by up to 13 percent.
    This legislation provides legal authority to prohibit cars 
that have not complied with California emission testing 
requirements from entering the United States more than twice in 
a 12-month period. It also allows other States that share a 
border with either Canada or Mexico, and contain an ozone 
nonattainment area to allow such a prohibition to be applied at 
its foreign borders as well.

                     Objectives of the Legislation

    H.R. 8 amends the Clean Air Act to expand Federal ozone 
measures to include ensuring that foreign-registered, 
noncommercial motor vehicles comply with applicable emission 
standards for the State that vehicle attempts to enter. The 
bill would ban entry of foreign-registered, noncommercial motor 
vehicles operated by a United States citizen or a foreign 
national who is a permanent resident of the United States, or 
holds a valid visa for the purposes of employment or 
educational study in the United States. The entry ban would 
apply in States in which State law contains provisions for the 
compliance of foreign-registered, noncommercial motor vehicles 
with inspection and maintenance programs, and that contain 
serious, severe, or extreme ozone nonattainment areas 
contiguous with a foreign country. States that are contiguous 
with a foreign country, and contain ozone nonattainment areas 
not meeting the above criteria may elect to apply the entry ban 
or establish an alternative approach under certain conditions.

                      Section-By-Section Analysis

Section 1. Short Title
    This section designates the short title of the Act as 
``Border Smog Reduction Act of 1998''.
Section 2. Amendment of 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 section 2 
provides that foreign-registered, noncommercial vehicles may 
not enter the United States at certain border crossings more 
than twice in a 12-month period unless they meet applicable 
emission requirements. This entry ban would apply in serious, 
severe or extreme ozone nonattainment areas that are contiguous 
with a foreign border and located in a State where State law 
has requirements for the inspection and maintenance of foreign-
registered, noncommercial vehicles under the implementation 
plan applicable in the ozone nonattainment area. The entry 
would apply to 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 in the United States. The entry ban would not 
apply if the operator of the vehicle presents documentation at 
the United States border establishing that the vehicle has 
complied with emission requirements that are in effect and are 
applicable to motor vehicles of the same type and model year.
    This section permits the United States to impose and 
collect from the operator of any vehicle that attempts to 
violate the entry ban a civil penalty of not more than $200 for 
an initial violation and not more than $400 for repeated 
violations.
    Any State meeting the criteria of paragraph (1) may exempt 
itself from the entry ban upon receipt by the President of 
written notification from the Governor. In the case of a State 
that is contiguous with a foreign country, and contains ozone 
nonattainment areas not meeting the criteria of paragraph (1) 
may elect to apply the entry ban contained in paragraph (1) or 
elect to establish an alternative approach to facilitate the 
compliance of foreign-registered vehicles entering ozone non-
attainment areas with the vehicle inspection and maintenance 
requirements in effect under an applicable implementation plan. 
An alternative approach may be established one year after the 
Governor of the State submits a written description of the 
approach to the President and the President approves the 
approach. In States that elect to apply the entry ban in 
paragraph (1), the entry ban takes effect 180 days after the 
President's receipt from the Governor of written notification 
of the State's election to apply the entry ban.
Section 3. General Provisions
    This section provides that the entry ban 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. Section 3 states that nothing in this Act 
shall be construed to require action that is inconsistent with 
obligations of the United States under any international 
agreement. This section also provides that appropriate agencies 
of the government must distribute information to publicize the 
entry ban, and the effective date of the entry ban, 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 amendment 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 and registered in, or 
operated from, Mexico, as a result of the implementation of the 
North American Free Trade Agreement. Not later than July 1, 
1999, the Comptroller is to submit to Congress a report 
describing findings of the study.

                                Hearings

    The Committee on Environment and Public Works held no 
hearings on H.R. 8.

                          Legislative History

    On July 20, 1998, H.R. 8 was received in the Senate, read 
twice, and referred to the Committee on Environment and Public 
Works. On Wednesday, September 23, 1998 the committee held a 
business meeting to consider the bill. H.R. 8 was reported 
favorably by the committee on a voice vote.

                      Regulatory Impact Statement

    In compliance with section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee makes this 
evaluation of the regulatory impact of the reported bill. The 
reported bill will have no regulatory impact. This bill will 
not have any adverse impact on the personal privacy of 
individuals.

                          Mandates Assessment

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the committee finds that the bill would 
impose no Federal intergovernmental unfunded mandates on State, 
local or tribal governments. All of its governmental directives 
are imposed on Federal agencies. Additionally, a State can 
elect to withdraw from participation in any activity described 
by this bill by written notification to the President from the 
Governor. The bill does not directly impose any private sector 
mandates.

                          Cost of Legislation

    Section 403 of the Congressional Budget and Impoundment 
Control Act requires that a statement of the cost of the 
reported bill, prepared by the Congressional Budget Office, be 
included in the report. That statement follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 25, 1998.

Hon. John H. Chafee, Chairman,
Committee on Environment and Public Works,
U.S. Senate, 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 Grabowicz (for Federal costs), who can be 
reached at 226-2860, Pepper Santalucia (for the State and local 
impact), who can be reached at 225-3220, and Patrice Gordon 
(for the impact on the private sector), who can be reached at 
226-2940.

            Sincerely,
                                           June E. O'Neill,
                                                          Director.
                                ------                                


               Congressional Budget Office Cost Estimate

H.R. 8, Border Smog Reduction Act of 1998, as ordered reported 
by the Senate Committee on Environment and Public Works on 
September 23, 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 vehicle emissions. Under this act, 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 
legislation 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 
act'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 act. 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 act 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 in 
1996, adjusted annually for inflation) in any one of the first 
five years that the mandate would be effective.
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 
act'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 act'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
    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
    H.R. 8 contains no intergovernmental mandates as defined in 
UMRA because States would not be required to take any action as 
a result of this act'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 act 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).
Previous CBO Estimate
    On July 17, 1998, CBO prepared a cost estimate for H.R. 8, 
as ordered reported by the House Committee on Commerce on June 
24, 1998. The two versions of the legislation are identical, as 
are the two estimates.
    Estimate Prepared by: Federal Costs: Mark Grabowicz (226-
2860); Impact on State, Local, and Tribal Governments: Pepper 
Santalucia (225-3220); Impact on the Private Sector: Patrice 
Gordon (226-2940).
    Estimate Approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                        Changes in Existing Law

    In compliance with section 12 of rule XXVI of the Standing 
Rules of the Senate, changes in existing law made by the bill 
as reported are shown as follows: Existing law proposed to be 
omitted is enclosed in [black brackets], new matter is printed 
in italic, existing law in which no change is proposed is shown 
in roman:

                             CLEAN AIR ACT

 Public Law 159 (July 14, 1955; 69 Stat. 322) Codified under 42 U.S.C. 
7401-7626.

           *       *       *       *       *       *       *


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.

                               
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