[Federal Register Volume 60, Number 180 (Monday, September 18, 1995)]
[Rules and Regulations]
[Pages 48029-48037]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23106]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 51

[FRL-5294-9]


Inspection/Maintenance Flexibility Amendments

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: Today's action revises the motor vehicle Inspection/
Maintenance (I/M) Program Requirements. EPA announced its intent to 
amend the I/M Program Requirements in December 1994 and held 
stakeholders' meetings on January 24, 1995 and January 31, 1995. This 
action creates an additional, less stringent enhanced I/M performance 
standard which allows areas that can meet the 1990 Clean Air Act 
requirements for Reasonable Further Progress and attainment to 
implement an I/M program that falls below the originally promulgated 
enhanced I/M performance standard. Because the new low enhanced I/M 
performance standard eliminates the need for the special enhanced 
performance standard for El Paso, Texas, today's action repeals that 
special performance standard. This action also revises the high 
enhanced I/M performance standard to include a visual inspection of the 
positive crankcase ventilation (PCV) valve on all light-duty vehicles 
and light-duty trucks from model years 1968 to 1971, inclusive, and of 
the exhaust gas recirculation (EGR) valve on all light-duty vehicles 
and light-duty trucks from 

[[Page 48030]]
model years 1972 through 1983, inclusive. The low enhanced performance 
standard contains similar testing requirements, which are necessary to 
ensure full compliance with the Clean Air Act's requirement that all 
federal performance standards for enhanced I/M programs be based upon a 
model program that includes, at a minimum, two inspections per subject 
vehicle: an emission inspection and a visual inspection. Today's action 
also changes the waiver cost requirements by extending the deadline for 
implementing the minimum expenditure to qualify for a waiver specified 
in the Clean Air Act; allowing the application of pre-inspection 
repairs toward meeting the waiver expenditure requirements under 
limited circumstances; allowing the cost of primary emission control 
components replaced by family or friends to apply toward the waiver 
cost requirement; and removing the bar against issuing hardship 
exemptions more than once per vehicle lifetime. EPA is also including 
revised regulatory language to change the population cutoff for basic 
I/M from 50,000 persons to 200,000 persons. Lastly, this rule makes 
clarifying amendments to the I/M requirements for areas undergoing 
redesignation. EPA will soon publish a separate Supplemental Notice of 
Proposed Rulemaking proposing an additional performance standard for 
attainment and moderate (with less than 200,000 population) ozone 
nonattainment areas not otherwise required to implement basic I/M 
programs in the Ozone Transport Region. That proposed standard is based 
on minimum statutory requirements for these particular areas and would 
afford them flexibility beyond that provided by this final action.

EFFECTIVE DATE: This rule will take effect on October 18, 1995.

ADDRESSES: Materials relevant to this rulemaking are contained in 
Public Docket No. A-95-08. The docket is located at the Air Docket, 
Room M-1500 (6102), Waterside Mall SW., Washington, DC 20460. The 
docket may be inspected between 8 a.m. to 4:30 p.m. on weekdays. A 
reasonable fee may be charged for copying docket material.

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

SUPPLEMENTARY INFORMATION:

I. Table of Contents

II. Summary of Rule
III. Authority
IV. Public Participation
    A. Low Enhanced Performance Standard
    B. Extended Deadline for Implementing the $450 Waiver
    C. Population Requirements for Basic I/M
    D. Test-and-Repair Discount and Program Equivalency
V. Administrative Requirements
    A. Administrative Designation
    B. Reporting and Recordkeeping Requirement
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Act

II. Summary of Rule

    Under the Clean Air Act as amended in 1990 (the Act), 42 U.S.C. 
7401 et seq., the U.S. Environmental Protection Agency (EPA) published 
in the Federal Register on November 5, 1992 (40 CFR part 51, subpart S) 
rules related to plans for Motor Vehicle Inspection and Maintenance (I/
M) programs (hereafter referred to as the I/M rule, see 57 FR 52950). 
EPA published a notice of proposed rule making proposing changes to the 
I/M rule in the Federal Register on April 28, l995 (60 FR 20934). EPA 
today takes final action to revise the 1992 I/M rule to provide greater 
flexibility to states required to implement I/M programs.
    Section 182 of the Act was prescriptive regarding the various 
elements that are required as part of an enhanced I/M performance 
standard. It also required that EPA provide states with flexibility in 
meeting the requirement for enhanced or basic I/M programs. States have 
requested additional flexibility in two areas: the timing of the Act's 
mandated minimum expenditure required to qualify for a waiver and a 
lower performance standard for areas that may not need an enhanced I/M 
program as effective as the one EPA adopted in 1992 to meet the Act's 
Reasonable Further Progress and attainment demonstration requirements. 
(These two standards are referred as the low enhanced and high enhanced 
performance standards, respectively.)
    EPA is establishing an alternate, low enhanced I/M performance 
standard. This standard is designed for nonattainment areas that are 
required to implement enhanced I/M but which can obtain adequate 
emission reductions from other sources to meet emission reduction 
requirements, without the stringency of the high enhanced I/M 
performance standard. EPA will approve an enhanced I/M SIP meeting the 
low performance standard provided EPA has approved or is simultaneously 
approving the state's 1996 15% VOC reasonable further progress SIP and 
provided that the state's ozone or CO attainment SIP and its post-1996 
VOC reasonable further progress SIPs have not been disapproved.
    The low enhanced performance standard meets the Act's requirement 
that it be based on centralized, annual testing of light duty cars and 
trucks, and checks for tampering and exhaust emissions. Nevertheless, 
this standard can be met with a comprehensive decentralized, test-and-
repair program.
    EPA's opinion that states should have the flexibility to implement 
only the low enhanced I/M program if more is not needed to meet their 
air quality goals makes common sense for areas whose emissions affect 
only themselves. With respect to states in the Northeast Ozone 
Transport Region, however, there is the additional issue of the effect 
of one area's emissions on downwind areas' air quality, even if the 
first area's emissions result in achievement of all local goals for 
clean air. EPA believes that making the low enhanced performance 
standard available even within the OTR will result in needed reductions 
on both local and regional scales, while offering useful flexibility 
especially with respect to areas that themselves have no air quality 
problem. OTR states are required to submit attainment plans for their 
nonattainment areas, and these plans must address both local and 
transported emissions. In fact, EPA now believes that the low 
performance standard that EPA proposed and is finalizing today offers 
insufficient flexibility, in that it would require states to create 
all-new networks of emission testing stations in many cities currently 
without them, cities with no air quality problem of their own. EPA 
believes that the affected states will likely be able to find more 
cost-effective and publicly preferred ways to provide for region-wide 
attainment. However, EPA did not propose any more flexible policy for 
these areas, and cannot take final action at this time to provide more 
flexibility. Therefore, EPA will soon publish a Supplemental Notice of 
Proposed Rulemaking, which offers additional flexibility by proposing 
to establish a lower enhanced performance standard for qualified areas 
in the OTR. The Supplemental Notice will also explain the legal basis 
for this additional flexibility. The standard will allow attainment 
areas and marginal and moderate (with less than 200,000 population) 
ozone areas in the OTR, not otherwise required to implement basic I/M 
programs, to implement enhanced 

[[Page 48031]]
programs which meet the requirements of the statute without 
establishing extensive emission test networks.
    EPA published a Notice of Proposed Rulemaking (NPRM) on April 28, 
1995 describing these and other proposed amendments to the I/M rule. 
Proposed changes in the waiver requirements, population cutoff for 
basic programs and requirements for basic areas which have been 
redesignated to attainment were designed to offer greater flexibility 
to the states in the implementation of their I/M programs. The NPRM 
also proposed the inclusion of visual checks as part of the test 
procedure for all vehicles subject to enhanced I/M. Readers should 
refer to the NPRM for a complete description of the background and 
rationale for the proposed amendments, which will not be restated here.
    After receiving and considering public comment on the NPRM, EPA is 
today finalizing each of the proposed amendments as follows.
    (1) EPA is establishing the alternative low enhanced performance 
standard.
    (2) EPA is extending the deadline for the full implementation of 
the minimum expenditure required to be eligible for a waiver for both 
basic and enhanced I/M programs until January 1998. In the interim, a 
state can establish any minimum expenditure it chooses, as long as it 
accounts for the higher waiver rates that will occur between now and 
1998 in its emission inventory forecasts in the Reasonable Further 
Progress plan.
    (3) EPA is allowing states to include qualified repair cost 
expenditures that occur within 60 days of the initial test toward 
meeting the minimum waiver expenditure.
    (4) Additionally, EPA is allowing the cost of specified emission 
control components replaced by persons other than recognized repair 
technicians to apply towards the waiver cost limit.
    (5) EPA is deleting language from the November 5, 1992 I/M rule 
barring motorists from qualifying for more than one hardship exemption 
during the lifetime of a vehicle.
    (6) EPA is adding a visual inspection of the positive crankcase 
ventilation (PCV) valve on all light-duty vehicles and light-duty 
trucks of model year 1968 through 1971, inclusive, and of the exhaust 
gas recirculation (EGR) valve on all light-duty vehicles and light-duty 
trucks of model year 1972 through 1983, inclusive to the high enhanced 
performance standard.
    (7) In the proposed rule of April 28, 1995, EPA requested comment 
on whether or not it should change the minimum population cutoff for 
basic I/M programs. Based on the public comment received, EPA is 
revising the regulatory language in this rulemaking to increase the 
minimum threshold for basic I/M programs to 200,000 or more.
    (8) Finally, EPA is clarifying the requirements for basic I/M areas 
that are eligible for redesignation to attainment. Consistent with 
EPA's original intent, EPA does not believe that a violation of the 
standard in an area that has been redesignated automatically requires 
the implementation or upgrade of an I/M program. EPA believes that, in 
the event of a violation, a state should have the flexibility to select 
whichever contingency measures are best suited to correcting the 
problem to bring the area to attainment as quickly as possible. The 
rule would continue to require, however, that such an upgraded basic I/
M program be among the contingency measures from which the state will 
choose. Changes to remove extraneous language related to the 
requirements for an implementation schedule will also go into effect.

III. Authority

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

IV. Public Participation

    This section discusses the content of the most significant of the 
flexibility amendments, the submissions to the docket received during 
the comment period and EPA's response to those comments. Submissions 
were received from approximately 60 commenters including state 
governments and agencies, industry, environmental organizations and 
other organizations. Copies of the original comments can be obtained in 
their entirety for a reasonable copying fee from the docket for this 
rule. The docket also includes a complete Response to Comments document 
for this rule. Substantial comments were received on each of the 
amendments and were fully addressed in that document.

A. Low Enhanced Performance Standard
1. Summary of Proposal
    EPA proposed to establish an alternate, less stringent I/M 
performance standard called the low enhanced performance standard. This 
low enhanced standard is designed for areas which are required to 
implement enhanced programs but which do not have a major mobile source 
component to the air quality problem, or which can obtain adequate 
reductions from other sources to meet the 15% VOC reduction requirement 
and demonstrate attainment.
    The low enhanced standard differs from the original standard, now 
referred to as the high enhanced performance standard, in that it 
allows for idle testing. Although the standard is based on an annual, 
test-only network this can also be met with a biennial, test-and-repair 
network.
2. Summary of Comments
    Commenters generally supported the notion of flexibility and the 
proposed low enhanced option, although most believe that it does not 
offer enough flexibility. The thrust of these comments was that the 
proposed flexibility will not be a viable option for most areas because 
credit discounts for test-and-repair networks and other mandated 
requirements preclude most states from implementing programs which they 
believe to be equivalent to required programs. One comment asked for 
clarification of an apparent inconsistency between the summary and the 
proposed rule: whether the low enhanced standard can be applied if 
attainment goals are met for either CO and/or ozone or both CO and 
ozone.
    Several commenters strongly opposed the proposed low enhanced 
standard, claiming that it is inconsistent with Clean Air Act section 
182(c)(3)(C)(vi), which mandates EPA to require centralized networks 
unless states can demonstrate equivalency of decentralized networks. 
They argue that these programs will be less effective and will result 
in failure to meet attainment goals. Comments were also made that EPA 
is mandated to establish ``a'' performance standard and that to 
establish more than one is contrary to law.
3. Response to Comments
    EPA has designed this flexibility specifically for those areas 
which either do not have a major mobile source component to their air 
pollution problem or which do not require I/M programs which achieve 
substantial reductions in automotive emissions to achieve air quality 
goals. To lower the standard any further and make it available to more 
enhanced I/M areas by granting inappropriately large credits to test-
and-repair programs would undermine the goals of I/M and the Clean Air 
Act. While the Act requires certain program parameters to ensure 
programs are both effective and enforceable, EPA is mandated to ensure 
that these programs meet their intended goals. EPA maintains that it 
offers the states flexibility to do so by making a case-by-case 
assessment of program 

[[Page 48032]]
effectiveness and assigning credits accordingly. EPA is, in fact, in 
the process of doing this with two test-and-repair states. EPA believes 
that to allow more credit for test-and-repair networks than is 
scientifically justified by the available data or make vital 
requirements optional would lead to failed programs and attainment 
goals. EPA supports its credit assessment for test-and-repair networks 
later in this document.
    EPA believes that the low enhanced performance standard is 
consistent with the Act's requirement that a program be based on a 
centralized network unless the state demonstrates that a decentralized 
program is equally effective. EPA believes that low enhanced programs 
that opt for the decentralized network can make such a demonstration 
with the MOBILE5a model and a comprehensive program which includes 
annual testing of heavy duty vehicles, pressure testing, and full anti-
tampering programs. EPA also maintains that the Act in no way bars it 
from establishing multiple performance standards. This is not a new 
interpretation, but rather one which EPA took in the case of El Paso 
which was subject to an alternate standard under the original I/M rule.
    To clarify the apparent inconsistency between the summary and the 
rule: low enhanced I/M may be implemented only in those states that can 
meet all of the 1990 Clean Air Act requirements for Reasonable Further 
Progress (RFP) for ozone and attainment for both ozone and carbon 
monoxide, if the area is required to implement enhanced I/M for both 
pollutants. If an area is required to implement enhanced I/M for only 
one pollutant (regardless of a requirement to implement basic I/M for 
the other pollutant), then low enhanced may be implemented if RFP and 
attainment requirements are met for that pollutant.

B. Extended Deadline for Implementing the $450 Waiver

1. Summary of Proposal
    The original I/M rule requires that for enhanced programs, states 
must implement the $450 minimum expenditure to qualify for a waiver 
when the I/M program starts in 1995.
    EPA proposed to postpone full implementation of the enhanced I/M 
waiver requirement until January 1, 1998, to allow states time to reach 
the long-term goals of the Clean Air Act. This action aims to provide 
the short term regulatory relief states have been requesting and would 
give states additional time to develop programs to assist low-income 
vehicle owners to repair their vehicles.
    Some states are in the process of developing programs to mitigate 
the impact of I/M-related repair costs on low-income motorists. Such 
efforts have generally involved either granting low-income motorists 
time extensions of up to one full test cycle (per the November 5, 1992 
rule), repair subsidy programs for individuals on some form of public 
assistance, or scrappage programs for low value, high emitting 
vehicles. Repair subsidy and scrappage based efforts tend to vary most 
in the area of funding mechanism. In some programs, mitigation efforts 
are funded by way of late fees collected from motorists who have missed 
their scheduled testing deadline; in others, revenue is generated by 
allowing new car buyers to pay a on-time ``mitigation fee'' which 
exempts them from the first scheduled inspection. EPA is willing to 
work with states that wish to develop other creative ways to deal with 
the issue of repair costs for low-income motorists.
2. Summary of Comments
    Comments were divided on the issue of whether EPA should extend the 
deadline for implementing the $450 waiver. Most of the parties 
unsatisfied by EPA's proposal argued that a CPI (Consumer Price Index) 
adjustment of the $450 waiver expenditure would increase the repair 
cost minimum to between $600-650 when the full waiver requirement would 
be implemented in 1998, leading to public acceptance problems. With 
respect to this issue, two parties made the following recommendations: 
The EPA was urged to allow states to maintain their current minimum 
waiver amounts until 1998, at which time the phase-in would begin. Once 
$450 was applied as the limit during 1998, the minimum waiver amount 
would be adjusted annually based on the CPI with 1998 as the base year. 
Another commenter asked for revision of the rule language to clearly 
state that the often-referenced CPI-adjusted $450 amount would be 
likely to exceed $600 in 1998. One comment claimed that lost credit 
would occur from extending the waiver and this would have to be made up 
elsewhere. Another commenter queried why EPA was still interested in 
identifying high emitters through enhanced test programs when the 
amendment would mean that individuals would not be required to make all 
the necessary repairs.
    The general thrust of comments supporting the rule focused on the 
additional flexibility this amendment would give states to phase in the 
$450 minimum expenditure waiver and implement hardship waiver programs. 
One comment suggested that the additional time would allow states to 
work on building public acceptance of the program and improve 
technician training. Another comment supported the extension of the 
deadline but suggested that CPI adjustments be applied only to the full 
minimum expenditure waiver amount no sooner than one full test cycle 
following final implementation.
3. Response to Comments
    For emissions-related repairs not covered by warranty, the Clean 
Air Act very clearly requires a minimum expenditure of $450 for 
vehicles to qualify for a waiver. It is also very clear that the waiver 
limit is to be adjusted annually based on the Consumer Price Index, 
with a base year of 1989. As the preamble to the original I/M rule 
states, (page 52964, Federal Register), EPA will annually notify states 
of the adjusted amount.
    It is not the EPA's intention that states begin the phase-in in 
1998. EPA maintains that states have more than enough flexibility to 
begin the phase-in now to maintain a minimal increment by 1998. EPA 
believes that the enhanced I/M program should be fully implemented by 
1998, including the CPI adjusted $450 waiver, to enable areas to 
achieve the reductions contemplated by the program prior to the 
attainment deadline for serious areas (i.e., 11/15/99). Should areas 
need reductions between now and 1998 to meet reasonable further 
progress requirements, they would have to achieve them from other 
programs should they choose to delay full implementation of the $450 
waiver amount.
    EPA believes that the extension of the waiver deadline will give 
states the opportunity to improve technician training so that by 1998 
the majority of vehicles would be repaired for well below the CPI-
adjusted $450 minimum waiver amount. The additional time will also give 
states ample opportunity to set up hardship programs for low-income 
vehicle owners and scrappage programs for vehicles that are not 
economical to repair.
    To clarify the apparent misunderstanding regarding the proposed 
amendment's effect on repairs: I/M programs will continue as scheduled, 
motorists will still be required to repair their vehicles, and real 
emissions reductions will be achieved. However, the minimum waiver 
amount will depend on the cost limit prescribed by the state's phase-in 


[[Page 48033]]
program and the levels of emissions reductions will depend upon what 
waiver rates result.
C. Population Requirements for Basic I/M

1. Summary of Proposal
    EPA requested comment on whether it should change the minimum 
population cut-off for basic I/M programs. Currently, basic I/M 
programs are required in moderate ozone and carbon monoxide non-
attainment areas with a 1990 Census-defined population of 50,000 or 
more. EPA considered raising this threshold to 200,000 or more.
2. Summary of Comments
    The majority of responses to the proposed amendment were generally 
supportive. Some commenters indicated that the issue did not affect 
them since they were in the OTR (Ozone Transport Region) and therefore 
required enhanced testing regardless of whether or not the population 
cut-off was increased. Many of the commenters who supported the change 
did so with a proviso: that the rule be applied only to areas that were 
not currently included in I/M and that were in moderate attainment 
areas. Two parties indicated that the proposed amendment should only 
apply if an area can demonstrate that the absence of I/M would not 
impact downwind areas. A few supported the change because they viewed 
it as added flexibility for the states.
    Commenters opposed to the amendment suggested that EPA had not 
offered a reasonable explanation for this change and that areas with 
less than 200,000 people deserved clean air protection. They argued 
that the amendment would only serve to encourage states to opt-out of 
OTR to avoid compliance.
3. Response to Comments
    EPA proposed this amendment to grant states further flexibility in 
designing I/M programs to meet local needs. Areas under 200,000 
population which are still in nonattainment are required to achieve 
whatever ozone reductions are needed to meet reasonable further 
progress or attainment requirements. While exempted from the mandatory 
basis I/M requirement under this amendment, such areas would have to 
achieve those reductions from other programs, or implement an I/M 
program, at the state's discretion.
    EPA concludes that the 200,000 population cut-off for basic 
programs is authorized by the Act because sections 182(a)(2)(B)(i) and 
182(b)(4) require implementation only of an I/M program no less 
stringent than that required under pre-1990 EPA I/M guidance. EPA's 
pre-1990 I/M guidance required implementation of basic I/M programs 
only in urbanized areas of 200,000 population. It is true that some 
moderate areas would not be required to implement I/M programs if their 
population were under 200,000, despite the fact that section 182(b)(4) 
requires a basic I/M program in all moderate areas. However, the basic 
program that is required is a program that applies only to areas of 
200,000 or more population. The issue of whether Congress meant to 
expand the geographic scope of basic I/M programs by requiring them in 
all moderate areas was presented to the court in litigation on the 1992 
I/M rules. The court ruled that the statutory language ``does not, in 
our view, compel the conclusion that Congress sought silently to alter 
any preexisting exclusions for basic I/M programs, particularly when 
Congress explicitly incorporated the preexisting guidance by 
reference.'' Further, the court concluded that ``the requirement that 
states submit implementation plans for those moderate areas not covered 
in the previous statute does not by its term affect the scope of I/M 
programs within those areas''. Natural Resources Defense Council, Inc. 
v. EPA, 22 F.3d 1125, 1141-2. Consequently, EPA believes that although 
basic I/M programs are required for all moderate areas, they need only 
be implemented in urbanized areas with populations of 200,000 or more 
within such moderate areas.
    Basic I/M is prescribed to solve local problems. Questions arising 
from the transport of ozone and CO downwind across state boundaries may 
be answered by referring to section 184 of the Clean Air Act.
    As to the effects on OTR areas, states will not be encouraged to 
opt out to avoid compliance. Rather, the SNPRM discussed previously 
outlines the OTR-low enhanced performance standard which gives states 
more flexibility and incentive to remain in the OTR.

D. Test-and-Repair Discount and Program Equivalency

1. Summary of the Issue
    Although today's action does not address the credit allowances for 
test-and-repair networks and the question of equivalency with test-only 
networks, the issue has become a point of contention as some states 
seek more flexibility in program design. A notable quantity of the 
comments received on today's rulemaking dealt expressly with this 
issue.
2. Summary of Comments
    Commenters in support of the default discount stressed that SIP 
credits must be based on real quantifiable emissions reductions and 
that they supported the default discount and would also support data 
that showed an even greater discount for a test-and-repair network. 
Another commenter strongly supported the default discount, adding that 
the undisputed performance disadvantage of ``test-and repair'' systems 
should persuade EPA to keep the current credit structure. Another group 
commented that their independent data analysis of two states, one with 
a test-only system and one with a test-and-repair system, showed 
conclusively that the test-and-repair system was achieving 
significantly less emission reductions than the test-only system and 
that the default discount used by the EPA accurately reflected the loss 
of emission reductions for the test-and-repair system.
    Commenters opposed to the default discount claimed that test-only 
I/M does not work as well as EPA claims and that test-and-repair 
programs are unfairly discounted by their comparison to an inflated 
estimate of test-only effectiveness. Some commenters added that past 
performance has shown that test-and-repair could be as effective as 
test-only and should be credited accordingly. The California I/M Review 
Committee was frequently cited along with studies by Georgia Tech, and 
others as scientific evidence that the audit data upon which EPA 
studies were based was somehow flawed.
3. Response to Comments
    It should first be noted that in the original I/M rule EPA had 
proposed granting ``provisional equivalency'' to test-and-repair 
programs for purposes of initial SIP submission and approval, requiring 
program evaluation to assure that programs meet the performance 
standard. Comments by state agencies and others at that time were 
compelling and strongly against provisional equivalency. They argued 
that because both state and EPA evidence showed that test-and-repair 
programs were inferior to test-only programs, in terms of emissions 
reductions, it would be inadequate and probably illegal for EPA to 
grant them full credit. They suggested that to grant provisional 
equivalency without proven success would be irresponsible and would 
allow ineffective and costly programs to continue while air quality 
improvement would suffer. EPA acknowledged these 

[[Page 48034]]
comments and eliminated provisional equivalency from the final I/M 
rule. Nevertheless, EPA included provisions in the final rule allowing 
states to make demonstrations based on local data that test-and-repair 
was more effective than the national default credits.
    EPA's default discount for test-and-repair services is based on the 
best data from a broad set of indicators and across many programs. 
Cited studies have not shown evidence that would cause EPA to revoke 
the default discount. The most comprehensive study of test-and-repair 
effectiveness was conducted by the California I/M Review Committee in 
the early 1990s and showed that despite aggressive enforcement, the use 
of advanced technology, and a huge outlay of government oversight, the 
program still did not achieve more than half of what a test-only 
program could achieve. While EPA continues to believe that the default 
discount is appropriate as a national estimate when there is no local 
data to prove another level, EPA is willing to consider local data to 
determine whether it supports a higher or lower credit. EPA believes 
the I/M rule allows it to give prospective credit based on a 
retrospective analysis of such local data. EPA is working with Utah and 
Virginia at this time to analyze local data in an attempt to establish 
program specific credits.
    EPA received only minor comment on all other proposals in the NPRM 
for this rule. A summary of those comments and of EPA's response may be 
found in the Response to Comments document included in the docket for 
this rule.
    Based upon the public comment received and a reasoned analysis, EPA 
is proceeding with the adoption of each of the proposed amendments with 
no substantive changes.

V. Administrative Requirements

A. Administrative Designation

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

B. Reporting and Recordkeeping Requirement

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

C. Regulatory Flexibility Act

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

D. Unfunded Mandates Act

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

List of Subjects in 40 CFR Part 51

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon monoxide, Transportation.

    Dated: September 6, 1995.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, part 51 of title 40 of the 
Code of Federal Regulations is amended to read as follows:

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

    Authority: 42 U.S.C. 740l-7671q.

    2. Section 51.350 is amended by revising paragraphs (a)(4), (a)(6), 
(a)(7), (a)(8), (a)(9) and (b)(4) and by removing and reserving 
paragraph (a)(5) to read as follows:


Sec. 51.350  Applicability.

* * * * *
    (a) * * *
    (4) Any area classified as moderate ozone nonattainment, and not 
required to implement enhanced I/M under paragraph (a)(1) of this 
section, shall implement basic I/M in any 1990 Census-defined urbanized 
area with a population of 200,000 or more.
    (5) [Reserved]
    (6) If the boundaries of a moderate ozone nonattainment area are 
changed pursuant to section 107(d)(4)(A)(i)-(ii) of the Clean Air Act, 
such that the area includes additional urbanized areas with a 
population of 200,000 or more, then a basic I/M program shall be 
implemented in these additional urbanized areas.
    (7) If the boundaries of a serious or worse ozone nonattainment 
area or of a moderate or serious CO nonattainment area with a design 
value greater than 12.7 ppm are changed any time after enactment 
pursuant to section 107(d)(4)(A) such that the area includes additional 
urbanized areas, then an enhanced I/M program shall be implemented in 
the newly included 1990 Census-defined urbanized areas, if the 1980 
Census-defined urban area population is 200,000 or more.
    (8) If a marginal ozone nonattainment area, not required to 
implement enhanced I/M under paragraph (a)(1) of this section, is 
reclassified to moderate, a basic I/M program shall be implemented in 
the 1990 Census-defined urbanized area(s) with a 

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population of 200,000 or more. If the area is reclassified to serious 
or worse, an enhanced I/M program shall be implemented in the 1990 
Census-defined urbanized area, if the 1980 Census-defined urban area 
population is 200,000 or more.
    (9) If a moderate ozone or CO nonattainment area is reclassified to 
serious or worse, an enhanced I/M program shall be implemented in the 
1990 Census-defined urbanized area, if the 1980 Census-defined 
population is 200,000 or more.
    (b) * * *
    (4) In a multi-state urbanized area with a population of 200,000 or 
more that is required under paragraph (a) of this section to implement 
I/M, any state with a portion of the area having a 1990 Census-defined 
population of 50,000 or more shall implement an I/M program. The other 
coverage requirements in paragraph (b) of this section shall apply in 
multi-state areas as well.
* * * * *
    3. Section 51.351 is amended by revising paragraphs (a) 
introductory text, and (b), by removing and reserving paragraph (e) and 
by adding paragraphs (f) and (g) to read as follows:


Sec. 51.351  Enhanced I/M performance standards.

    (a) Enhanced I/M programs shall be designed and implemented to meet 
or exceed a minimum performance standard, which is expressed as 
emission levels in area-wide average grams per mile (gpm), achieved 
from highway mobile sources as a result of the program. The emission 
levels achieved by the state's program design shall be calculated using 
the most current version, at the time of submittal, of the EPA mobile 
source emission factor model or an alternative model approved by the 
Administrator, and shall meet the minimum performance standard both in 
operation and for SIP approval. Areas shall meet the performance 
standard for the pollutants which cause them to be subject to enhanced 
I/M requirements. In the case of ozone nonattainment areas subject to 
enhanced I/M and subject areas in the Ozone Transport Region, the 
performance standard must be met for both oxides of nitrogen (NOX) 
and volatile organic compounds (VOCs), except as provided in paragraph 
(d) of this section.
* * * * *
    (b) On-road testing. The performance standard shall include on-road 
testing of at least 0.5% of the subject vehicle population, or 20,000 
vehicles whichever is less, as a supplement to the periodic inspection 
required in paragraphs (f) and (g) of this section. Specific 
requirements are listed in Sec. 51.371 of this subpart.
    (e) [Reserved].
* * * * *
    (f) High Enhanced Performance Standard. Except as provided in 
paragraph (g) of this section, the model program elements for the 
enhanced I/M performance standard shall be as follows:
    (1) Network type. Centralized testing.
    (2) Start date. For areas with existing I/M programs, 1983. For 
areas newly subject, 1995.
    (3) Test frequency. Annual testing.
    (4) Model year coverage. Testing of 1968 and later vehicles.
    (5) Vehicle type coverage. Light duty vehicles, and light duty 
trucks, rated up to 8,500 pounds Gross Vehicle Weight Rating (GVWR).
    (6) Exhaust emission test type. Transient mass-emission testing on 
1986 and later model year vehicles using the IM240 driving cycle, two-
speed testing (as described in appendix B of this subpart S) of 1981-
1985 vehicles, and idle testing (as described in appendix B of this 
subpart S) of pre-1981 vehicles is assumed.
    (7) Emission standards. (i) Emission standards for 1986 through 
1993 model year light duty vehicles, and 1994 and 1995 light-duty 
vehicles not meeting Tier 1 emission standards, of 0.80 gpm 
hydrocarbons (HC), 20 gpm CO, and 2.0 gpm NOX;
    (ii) Emission standards for 1986 through 1993 light duty trucks 
less than 6000 pounds gross vehicle weight rating (GVWR), and 1994 and 
1995 trucks not meeting Tier 1 emission standards, of 1.2 gpm HC, 20 
gpm CO, and 3.5 gpm NOX;
    (iii) Emission standards for 1986 through 1993 light duty trucks 
greater than 6000 pounds GVWR, and 1994 and 1995 trucks not meeting the 
Tier 1 emission standards, of 1.2 gpm HC, 20 gpm CO, and 3.5 gpm 
NOX;
    (iv) Emission standards for 1994 and later light duty vehicles 
meeting Tier 1 emission standards of 0.70 gpm HC, 15 gpm CO, and 1.4 
gpm NOX;
    (v) Emission standards for 1994 and later light duty trucks under 
6000 pounds GVWR and meeting Tier 1 emission standards of 0.70 gpm HC, 
15 gpm CO, and 2.0 gpm NOX;
    (vi) Emission standards for 1994 and later light duty trucks 
greater than 6000 pounds GVWR and meeting Tier 1 emission standards of 
0.80 gpm HC, 15 gpm CO and 2.5 gpm NOX;
    (vii) Emission standards for 1981-1985 model year vehicles of 1.2% 
CO, and 220 gpm HC for the idle, two-speed tests and loaded steady-
state tests (as described in appendix B of this subpart S); and
    (viii) Maximum exhaust dilution measured as no less than 6% CO plus 
carbon dioxide (CO2) on vehicles subject to a steady-state test 
(as described in appendix B of this subpart S); and
    (viii) Maximum exhaust dilution measured as no less than 6% CO plus 
carbon dioxide (CO2) on vehicles subject to a steady-state test 
(as described in appendix B of this subpart S).
    (8) Emission control device inspections. (i) Visual inspection of 
the catalyst and fuel inlet restrictor on all 1984 and later model year 
vehicles.
    (ii) Visual inspection of the positive crankcase ventilation valve 
on 1968 through 1971 model years, inclusive, and of the exhaust gas 
recirculation valve on 1972 through 1983 model year vehicles, 
inclusive.
    (9) Evaporative system function checks. Evaporative system 
integrity (pressure) test on 1983 and later model year vehicles and an 
evaporative system transient purge test on 1986 and later model year 
vehicles.
    (10) Stringency. A 20% emission test failure rate among pre-1981 
model year vehicles.
    (11) Waiver rate. A 3% waiver rate, as a percentage of failed 
vehicles.
    (12) Compliance rate. A 96% compliance rate.
    (13) Evaluation date. Enhanced I/M program areas shall be shown to 
obtain the same or lower emission levels as the model program described 
in this paragraph by 2000 for ozone nonattainment areas and 2001 for CO 
nonattainment areas, and for severe and extreme ozone nonattainment 
areas, on each applicable milestone and attainment deadline, 
thereafter. Milestones for NOX shall be the same as for ozone.
    (g) Alternate Low Enhanced I/M Performance Standard. An enhanced I/
M area which is either not subject to or has an approved State 
Implementation Plan pursuant to the requirements of the Clean Air Act 
Amendments of 1990 for Reasonable Further Progress in 1996, and does 
not have a disapproved plan for Reasonable Further Progress for the 
period after 1996 or a disapproved plan for attainment of the air 
quality standards for ozone or CO, may select the alternate low 
enhanced I/M performance standard described below in lieu of the 
standard described in paragraph (f) of this section. The model program 
elements for this alternate low enhanced I/M performance standard are:
    (1) Network type. Centralized testing. 

[[Page 48036]]

    (2) Start date. For areas with existing I/M programs, 1983. For 
areas newly subject, 1995.
    (3) Test frequency. Annual testing.
    (4) Model year coverage. Testing of 1968 and newer vehicles.
    (5) Vehicle type coverage. Light duty vehicles, and light duty 
trucks, rated up to 8,500 pounds GVWR.
    (6) Exhaust emission test type. Idle testing of all covered 
vehicles (as described in Appendix B of Subpart S).
    (7) Emission standards. Those specified in 40 CFR Part 85, Subpart 
W.
    (8) Emission control device inspections. Visual inspection of the 
positive crankcase ventilation valve on all 1968 through 1971 model 
year vehicles, inclusive, and of the exhaust gas recirculation valve on 
all 1972 and newer model year vehicles.
    (9) Evaporative system function checks. None.
    (10) Stringency. A 20% emission test failure rate among pre-1981 
model year vehicles.
    (11) Waiver rate. A 3% waiver rate, as a percentage of failed 
vehicles.
    (12) Compliance rate. A 96% compliance rate.
    (13) Evaluation date. Enhanced I/M program areas subject to the 
provisions of this paragraph shall be shown to obtain the same or lower 
emission levels as the model program described in this paragraph by 
2000 for ozone nonattainment areas and 2001 for CO nonattainment areas, 
and for severe and extreme ozone nonattainment areas, on each 
applicable milestone and attainment deadline, thereafter. Milestones 
for NOx shall be the same as for ozone.
    4. Section 51.360 is amended by revising the introductory text and 
paragraphs (a)(1), (a)(5), (a)(6), (a)(7) introductory text, (a)(9) and 
(b) to read as follows:


Sec. 51.360  Waivers and compliance via diagnostic inspection.

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


Sec. 51.372  State implementation plan submissions.

* * * * *
    (c) Redesignation requests. Any nonattainment area that EPA 
determines would otherwise qualify for redesignation from nonattainment 
to attainment shall receive full approval of a State Implementation 
Plan (SIP) submittal under Sections 182(a)(2)(B) or 182(b)(4) if the 
submittal contains the following elements:
* * * * *
    (3) A contingency measure consisting of a commitment by the 
Governor or the Governor's designee to adopt or consider adopting 
regulations to implement an I/M program to correct a violation of the 
ozone or CO standard or other air quality problem, in accordance with 
the provisions of the maintenance plan.
    (4) A contingency commitment that includes an enforceable schedule 
for adoption and implementation of the I/M program, and appropriate 
milestones. The schedule shall include the date for submission of a SIP 
meeting all of the requirements of this subpart. Schedule milestones 
shall be listed in months from the date EPA notifies the state that it 
is in violation of the ozone or CO standard or any earlier date 
specified in the state plan. Unless the state, in accordance with the 
provisions of the maintenance plan, chooses not to implement I/M, it 
must submit a SIP revision containing an I/M program no more than 18 
months after notification by EPA.
* * * * *
    (e) SIP submittals to correct violations. SIP submissions required 
pursuant to a violation of the ambient ozone or CO standard (as 
discussed in paragraph (c) of this section) shall address all of the 
requirements of this subpart. The SIP shall demonstrate that 
performance standards in either 

[[Page 48037]]
Sec. 51.351 or Sec. 51.352 shall be met using an evaluation date 
(rounded to the nearest January for carbon monoxide and July for 
hydrocarbons) seven years after the date EPA notifies the state that it 
is in violation of the ozone or CO standard or any earlier date 
specified in the state plan. Emission standards for vehicles subject to 
an IM240 test may be phased in during the program but full standards 
must be in effect for at least one complete test cycle before the end 
of the 5-year period. All other requirements shall take effect within 
24 months of the date EPA notifies the state that it is in violation of 
the ozone or CO standard or any earlier date specified in the state 
plan. The phase-in allowances of Sec. 51.373(c) of this subpart shall 
not apply.

[FR Doc. 95-23106 Filed 9-15-95; 8:45 am]
BILLING CODE 6560-50-P