[Federal Register Volume 61, Number 212 (Thursday, October 31, 1996)]
[Proposed Rules]
[Pages 56172-56183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27951]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[Docket 153, NJ23-1; FRL-5643-3]


Approval and Promulgation of Air Quality Implementation Plans; 
New Jersey: Enhanced Motor Vehicle Inspection and Maintenance Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed conditional interim rule.

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SUMMARY: EPA is proposing a conditional interim approval of a State 
Implementation Plan (SIP) revision submitted by the State of New 
Jersey. This revision establishes and requires the implementation of a 
statewide enhanced inspection and maintenance (I/M) program. The 
intended effect of this action is to propose conditional interim 
approval of an I/M program proposed by the State, based upon the 
State's good faith estimate, which asserts that the State's network 
design provides emission reduction credits that

[[Page 56173]]

are appropriate and the revision is otherwise in compliance with the 
Clean Air Act (CAA). This action is being taken under section 348 of 
the National Highway System Designation Act of 1995 (NHSDA) and section 
110 of the CAA. EPA is proposing a conditional interim approval because 
the State's SIP revision is deficient with respect to the following 
requirements: test procedures, standards, and equipment, and 
performance standard modeling. If the State commits within 30 days of 
the publication of this document to correct the major deficiencies by 
dates certain as described below, and corrects the deficiencies by 
those dates, then this interim approval shall expire pursuant to the 
NHSDA and section 110 of the CAA on the earlier of 18 months from final 
interim approval, or on the date EPA takes final action. In the event 
that the State fails to submit a commitment to correct all of the major 
deficiencies within 30 days after the publication of this document, 
then EPA is proposing in the alternative to disapprove the SIP 
revision. If the conditional interim approval is converted to a 
disapproval, EPA will notify the State by letter that the conditions 
have not been met and that the conditional interim approval has been 
converted to a disapproval.

DATES: Comments must be received on or before December 2, 1996.

ADDRESSES: Written comments on this proposed action may be addressed 
to: Regional Administrator, Attention: Air Programs Branch, Division of 
Environmental Planning and Protection, Environmental Protection Agency, 
Region 2, 290 Broadway, 25th Floor, New York, New York 10007-1866. 
Copies of the documents relevant to this action are available for 
public inspection during normal business hours at the address shown 
above.
    Electronic Availability: This document and EPA's technical support 
document are available at Region 2's site on the Internet's World Wide 
Web at: http://www.epa.gov/region02/air/sip/.
FOR FURTHER INFORMATION CONTACT: Rudolph K. Kapichak, Mobile Source 
Team Leader, Air Programs Branch, Environmental Protection Agency, 
Region 2, 25th Floor, 290 Broadway, New York, New York 10007-1866, 
(212) 637-4249.

SUPPLEMENTARY INFORMATION:

I. Background

A. Impact of the National Highway System Designation Act on the Design 
and Implementation of Enhanced Inspection & Maintenance Programs under 
the Clean Air Act

    The National Highway System Designation Act of 1995 (NHSDA) 
establishes two key changes to the enhanced I/M Rule requirements 
previously developed by EPA. Under the NHSDA, EPA cannot require states 
to adopt or implement centralized, test-only IM240 enhanced vehicle 
inspection and maintenance programs as a means of compliance with 
section 182, 184 or 187 of the CAA. Also under the NHSDA, EPA cannot 
disapprove a state I/M SIP revision, nor apply an automatic discount to 
a state I/M SIP revision under section 182, 184 or 187 of the CAA, 
because the I/M program in such plan revision is decentralized, or a 
test-and-repair program. Accordingly, the so-called ``50 percent credit 
discount'' that was established by the EPA's I/M Program Requirements 
Final Rule, (published November 5, 1992, and herein referred to as the 
I/M Rule or the federal I/M regulation) has been effectively replaced 
with a presumptive equivalency criterion, which places the emission 
reduction credits for decentralized networks on par with credit 
assumptions for centralized networks, based upon a state's good faith 
estimate of reductions as provided by the NHSDA and explained below in 
this section.
    EPA's I/M Rule established many other criteria unrelated to network 
design or test type for states to use in designing enhanced I/M 
programs. All other elements of the I/M Rule, and the statutory 
requirements established in the CAA continue to be required of those 
states submitting I/M SIP revisions under the NHSDA. Therefore, the 
NHSDA specifically requires that these I/M SIP submittals must 
otherwise comply in all respects with the I/M Rule and the CAA.
    The NHSDA also requires states to swiftly develop, submit, and 
begin implementation of these enhanced I/M programs, since the 
anticipated start-up dates developed under the CAA and EPA's rules have 
already been delayed. In requiring states to submit I/M programs within 
120 days of the NHSDA passage, and in allowing these states to submit 
proposed regulations within this time frame for these I/M programs 
(which can be finalized and submitted to EPA during the interim 
period), it is clear that Congress intended for states to begin testing 
vehicles as soon as practicable, now that the decentralized credit 
issue has been clarified and directly addressed by the NHSDA.
    Submission criteria described under the NHSDA allows for a state to 
submit proposed regulations for this interim program, provided that the 
state has all of the statutory authority necessary to carry out the 
program. Also, in proposing the interim emission reduction credits for 
this program, states are required to make good faith estimates 
regarding the performance of their enhanced I/M programs. Since these 
estimates are expected to be difficult to quantify, the state need only 
provide that the proposed credits claimed for the submission have a 
basis in fact. A good faith estimate of a state's program may be based 
on any of the following: the performance of any previous I/M program, 
the results of remote sensing or other roadside testing techniques, 
fleet and vehicle miles traveled (VMT) profiles; demographic studies, 
or other evidence which has relevance to the effectiveness or emissions 
reducing capabilities of an I/M program.
    This action is being taken under the authority of both the NHSDA 
and section 110 of the CAA. Section 348 of the NHSDA expressly directs 
EPA to issue this interim approval for a period of 18 months, at which 
time the interim program will be evaluated in concert with the 
appropriate state agencies and EPA. The Conference Report on section 
348 of the NHSDA states that it is expected that the estimated emission 
reduction credits claimed by the state in its I/M SIP submittal, and 
the actual emissions reductions demonstrated through the program data 
may not match exactly. Therefore, the Conference Report suggests that 
EPA use the program data to appropriately adjust the proposed emission 
reduction credits to reflect the emissions actually determined by the 
state during the program evaluation period.
    Furthermore, EPA believes that in taking action under section 110 
of the CAA, it is appropriate to grant a conditional interim approval 
to this submittal since there are some deficiencies with the submittal 
with respect to CAA statutory and regulatory requirements (identified 
herein) that EPA believes can be corrected by the state during the 
interim period.

B. Interim Approvals under the NHSDA

    The NHSDA directs EPA to grant interim approval for a period of 18 
months to approvable I/M submittals under this Act. This Act also 
directs

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EPA and the states to review the interim program results at the end of 
18 months, and to make a determination as to the effectiveness of the 
interim program. Following this demonstration, EPA will adjust any 
credit claims made by the state in its good faith effort to reflect the 
emissions reductions actually measured by the state during the program 
evaluation period. The NHSDA is clear that the interim approval shall 
last for only 18 months, and that the program evaluation is due to EPA 
at the end of that period. Therefore, EPA believes Congress intended 
for these programs to begin operating as soon as possible, which EPA 
believes should be at the latest, November 15, 1997, so that about six 
months of operational program data can be collected to evaluate the 
interim program. EPA further believes that in setting such a strict 
timetable for program evaluations under the NHSDA that Congress 
recognized and attempted to mitigate any further delay with the start-
up of this program. For the purposes of this program, ``start-up'' is 
defined as a fully operational program which has begun regular, 
mandatory inspections and repairs, using the final test strategy and 
covering each of a state's required enhanced I/M areas. EPA proposes 
that if the state fails to start its program on this schedule, the 
conditional interim approval granted under the provisions of the NHSDA 
will convert to a disapproval after a finding letter is sent to the 
state.
    The program evaluation to be used by the state during the 18-month 
interim period must be acceptable to EPA. EPA anticipates that such a 
program evaluation process will be developed by the Environmental 
Council of States (ECOS) group that has convened and that was organized 
for this purpose. EPA further anticipates that in addition to the 
interim, short term evaluation, the state will conduct a long term, 
ongoing evaluation of the I/M program as required by the I/M Rule in 
CFR 51.353 and 51.366.

C. Process for Final Approval of this Program under the CAA

    As per the NHSDA requirements, this interim rulemaking will expire 
within 18 months of the date of publication of the conditional interim 
approval, or sooner if EPA takes action to approve the final SIP 
submittal prior to that date. A final approval of the state's final I/M 
SIP revision (which will include the state's program evaluation and 
final adopted state regulations) is still necessary under section 110 
and under section 182, 184 or 187 of the CAA. After EPA reviews the 
state's submitted program evaluation, final rulemaking on the state's 
I/M SIP revision will occur.

II. EPA's Analysis of New Jersey's Submittal

    On March 27, 1996, the New Jersey Department of Environmental 
Protection (DEP) submitted a revision to its State Implementation Plan 
(SIP) for an enhanced I/M program to qualify under the NHSDA. The 
revision consists of enabling legislation that will allow the State to 
implement the I/M program, proposed regulations, a description of the 
I/M program, and a good faith estimate that includes the State's basis 
in fact for emission reduction claims of the program. The State's 
credit assumptions were based upon the removal of the 50 percent credit 
discount for all portions of the program that are based on a test-and-
repair network, and the application of the State's own estimate of the 
effectiveness of its decentralized test-and-repair program.

A. Analysis of the NHSDA Submittal Criteria

Transmittal Letter
    On March 27, 1996, New Jersey submitted an enhanced I/M SIP 
revision to EPA, requesting action under the NHSDA and the CAA. The 
official submittal was made by Robert C. Shinn, Jr., Commissioner of 
the Department of Environmental Protection, the appropriate State 
official, and was addressed to Regional Administrator Jeanne M. Fox, 
the appropriate EPA official in the Region.
Enabling Legislation
    New Jersey has legislation under the Federal Clean Air Mandate 
Compliance Act, Public Law 1995, Chapter 112, enabling the 
implementation of a hybrid, biennial I/M program.
Proposed Regulations
    On May 6, 1996, New Jersey's proposed regulations appeared in the 
State Register in accordance with 40 CFR Part 51, establishing an 
enhanced I/M program. These regulations, which had been signed by DEP 
Commissioner Shinn on March 26, 1996, take advantage of additional 
flexibility granted by Congress in the NHSDA. They call for the 
continuation of a hybrid inspection program. The primary changes to the 
existing program are as follows:
     the program will require biennial inspection rather than 
annual inspection,
     a one-mode Acceleration Simulation Mode test (using a 
dynamometer) will replace the idle test for 1981 and newer vehicles,
     waivers will now be granted for 1981 and newer vehicles 
meeting the repair expenditure requirements, and
     motorist enforcement will be through revocation of the 
vehicle registration rather than a windshield sticker.
    The State anticipates fully adopting regulations by early November 
1996.
Program Description
    New Jersey's hybrid I/M program will be operated on a statewide 
basis and is scheduled to begin operating 12 months after EPA's 
conditional interim approval of the I/M SIP revision submittal. During 
the 12 months preceding program start-up, New Jersey will operate a 
pilot version of the program on a voluntary basis. This will include 
approximately six test-only lanes (about 7 percent of existing lanes) 
and will be open to participation by test-and-repair facilities. Since 
this program will be voluntary, the State will solicit participation by 
offering a two-year certificate of compliance (sticker) to those 
motorists who choose and pass the new test. New Jersey hopes to use 
data from this demonstration program to evaluate the potential 
effectiveness of the full version of the program.
    As required by NHSDA, New Jersey included in its submittal a 
description of elements that provide the basis for the test-and-repair 
program effectiveness claim.
Emission Reduction Claim and Basis for the Claim
    New Jersey claims an 80 percent effectiveness from the test-and-
repair portion of the program based on the following elements: 
increased auditing of test-and-repair facilities, specifications for 
the new emissions analyzer equipment, and implementation of the repair 
technician training and certification program.

B. Analysis of the EPA I/M Regulation and CAA Requirements

    As previously stated, the NHSDA left those elements of the I/M Rule 
that do not pertain to network design or test type intact and 
specifically required compliance with all other provisions of the Act. 
Based upon EPA's review of New Jersey's submittal, EPA believes the 
State has not complied with all aspects of the NHSDA, the CAA and the 
I/M Rule. Therefore, EPA proposes to grant the I/M SIP revision 
conditional interim approval. Before EPA can continue with the interim 
rulemaking process, the State must make a commitment within 30 days of 
October

[[Page 56175]]

31, 1996 to correct the major deficiencies identified within this 
document by dates certain as described in this document. New Jersey's 
major deficiencies are described below.
Enhanced I/M Performance Standard Modeling
    In order to determine whether the state I/M program meets the 
enhanced I/M performance standard, and is therefore approvable, the 
state must submit a modeling demonstration that the program achieves 
the required emission reductions by the relevant dates. New Jersey did 
not include all modeling assumptions in its submittal. Given that New 
Jersey plans to use a one-mode Acceleration Simulation Mode (ASM) test 
procedure, it is possible that final modeling assumptions would not be 
available for some time since an acceptable test procedure and emission 
reduction credits for this test have yet to be established. EPA and 
states interested in using ASM have been actively pursuing acceptable 
test procedures using one and two ASM modes.
Test Procedures, Standards and Equipment
    Written test procedures and pass/fail standards and equipment 
specifications shall be established and followed for each model year 
and vehicle type included in the program. Test procedures and standards 
are detailed in 40 CFR 51.357 and in the EPA document entitled ``High-
Tech I/M Test Procedures, Emission Standards, Quality Control 
Requirements, and Equipment Specifications'', EPA-AA-EPSD-IM-93-1, 
dated April 1994 and ``Acceleration Simulation Mode Test Procedures, 
Emission Standards, Quality Control Requirements, and Equipment 
Specifications'', EPA-AA-RSPD-IM-96-2, dated July 1996.
    New Jersey's I/M program will be using a one-mode Acceleration 
Simulation Mode (ASM) emissions test for most of its fleet. New Jersey 
has been working with other states and the equipment manufacturers, in 
coordination with EPA, to develop their own procedures, specifications 
and standards for one- and two-mode ASM testing. It is anticipated that 
the states' test procedures, specifications and standards will be 
released shortly. The State must finalize its test procedures, 
standards and equipment specifications well before testing begins.
    The State must commit within 30 days of the publication date of 
this proposal to correct these major deficiencies by dates certain or 
this approval will convert to a disapproval under CAA section 
110(k)(4). EPA proposes that the deficiency with regard to the enhanced 
performance standard modeling must be corrected within 12 months of 
EPA's conditional interim approval. Because the finalization of the 
test procedures, standards and equipment specifications is critical to 
ensuring that the program begins testing by the required date EPA 
proposes that this deficiency must be corrected no later than January 
31, 1997. It is essential that the State submit final test procedures, 
standards and equipment specifications no later than this date because 
a significant lead time is necessary in order for the program to begin 
testing as planned.
    EPA has also identified certain minor (de minimis) deficiencies in 
the I/M SIP revision, which include:

(1) Adequate tools and resources,
(2) Vehicle coverage,
(3) Quality control,
(4) Motorist compliance enforcement,
(5) Quality assurance,
(6) Data collection,
(7) Data analysis and reporting, and
(8) Public awareness and consumer protection.

    EPA has determined that allowing the State a longer time to correct 
these minor deficiencies will have a de minimis impact on the State's 
ability to meet clean air goals. Therefore, the State need not commit 
to correct these minor deficiencies in the short term, and EPA will not 
impose conditions on the interim approval with respect to these minor 
deficiencies. However, the State must correct these minor deficiencies 
during the 18-month term of the interim approval, as part of the fully 
adopted rules that New Jersey will submit to support final approval of 
its I/M SIP revision. So long as the State corrects these minor 
deficiencies prior to final action on the State's I/M SIP revision, EPA 
concludes that failure to correct the deficiencies in the short term is 
de minimis and will not adversely affect EPA's ability to give interim 
approval to the proposed I/M program.
Applicability--40 CFR 51.350
    Sections 182(c)(3) and 184(b)(1)(A) of the CAA and 40 CFR Part 
51.350(a) require all states with areas classified as serious or worse 
ozone nonattainment areas and all metropolitan statistical areas (MSAs) 
with 1980 populations greater than 100,000 in the Ozone Transport 
Region to implement an enhanced I/M program. The New Jersey portions of 
the New York-New Jersey-Long Island and the Philadelphia-Wilmington-
Trenton consolidated metropolitan statistical areas are both classified 
as severe ozone nonattainment areas and are required to implement an 
enhanced I/M program as per section 182(c)(3) of the CAA and 40 CFR 
51.350(2). The Atlantic City MSA and the Allentown-Bethlehem-Easton 
MSA, which includes one county in New Jersey, have 1980 populations 
greater than 100,000 and are required to implement an enhanced I/M 
program as per section 184(b)(1)(A) of the CAA and 40 CFR Part 
51.350(a). In addition, section 187(a)(6) of the CAA requires moderate 
carbon monoxide (CO) nonattainment areas with design value carbon 
monoxide concentrations greater than 12.7 ppm to implement an enhanced 
I/M program. Bergen, Essex, Hudson, Union, and part of Passaic Counties 
comprise such an area in northern New Jersey.
    New Jersey's I/M legislation provides the legal authority to 
establish a statewide program. The State's I/M SIP revision submittal 
identifies program boundaries as ``statewide'', therefore, EPA is 
proposing to find that the geographic applicability requirements are 
satisfied.
    The federal I/M regulation requires that the state program shall 
not sunset until it is no longer necessary. EPA interprets the federal 
I/M regulation as stating that an I/M SIP that does not sunset prior to 
the attainment deadline for each applicable area satisfies this 
requirement. New Jersey's I/M SIP revision includes regulations from 
both the DEP and the Department of Transportation (DOT) because the two 
departments share responsibilities for the program and have 
complementary legal authorities for the implementation of different 
aspects of the program. The DEP I/M regulations do not include a sunset 
date. However, the DOT regulations are statutorily bound to expire 
after five years. If the DOT regulations are not readopted after five 
years, the State would be unable to operate the I/M program in which 
case EPA would have reason to notify New Jersey of its failure to 
implement the program. However, in the past and as a matter of 
practice, DOT regulations are readopted prior to the expiration of the 
rules they replace. In light of this past practice, EPA is confident 
that this practice will continue. Therefore, EPA is not proposing to 
condition New Jersey's interim approval because of its inability to 
maintain the program as long as it is necessary to attain the 
applicable standards. The State's SIP submittal meets the applicability 
requirements of the federal I/M regulation for interim approvable.

[[Page 56176]]

Enhanced I/M Performance Standard--40 CFR 51.351
    The federal I/M regulation requires that an enhanced I/M program 
must 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) for certain pollutants. The 
performance standard shall be established using local characteristics, 
such as vehicle mix and local fuel controls, and the following model I/
M program parameters: network type, start date, test frequency, model 
year coverage, vehicle type coverage, exhaust emission test type, 
emission standards, emission control device, evaporative system 
function checks, stringency, waiver rate, compliance rate, and 
evaluation date. 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. At the 
time of the New Jersey I/M SIP revision submittal, the most current 
version was MOBILE5a__h. 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, the performance 
standard must be met for both nitrogen oxides (NOX) and 
hydrocarbons (HC) as evaluated for the year 2002. In the case of carbon 
monoxide nonattainment areas, the performance standard must be met for 
CO as evaluated in the year 2002. The New Jersey submittal must meet 
the enhanced I/M performance standard for HC, NOX, and CO in all 
applicable I/M areas in New Jersey.
    New Jersey did not include all modeling assumptions in its 
submittal. The State acknowledges that this is the case and commits to 
submit them at a later date. Given that New Jersey plans to use a one-
mode Acceleration Simulation Mode (ASM) test procedure, it is possible 
that final modeling assumptions would not be available for quite some 
time since an acceptable test procedure or emission reduction credits 
for this test have yet to be established. EPA and states interested in 
using ASM have been actively pursuing acceptable test procedures using 
one and two ASM modes.
    New Jersey intends to phase in the pass/fail standards so that 
those during the initial cycles will not be as stringent as those the 
program will eventually use. If the State's final program analysis 
indicates that use of these standards will not generate the needed 
emission reductions in order for the State to meet the goals of its 15 
percent plan, New Jersey may be required to use tighter standards, or 
implement other control strategies.
    EPA is proposing conditional interim approval of the State program 
at this time consistent with the intent of the NHSDA that state I/M 
programs be promptly approved and implemented. EPA proposes that this 
approval be conditioned upon the requirement that the State conduct and 
submit the necessary modeling and demonstration that the program will 
meet the performance standard. The State must commit that the modeling 
and demonstration be submitted by a date certain within 12 months from 
conditional interim approval. If the State fails to submit this new 
modeling within 12 months, EPA proposes that the conditional interim 
approval will convert to a disapproval upon a letter from EPA 
indicating that the State has failed to submit the modeling and 
demonstration of compliance with the performance standard by the 
required date.
    If the State cannot meet the enhanced I/M performance standard, the 
State may demonstrate compliance with the low enhanced performance 
standard established in 40 CFR 51.351(g). That section provides that 
states may select the low enhanced performance standard if they have an 
approved SIP for reasonable further progress in 1996, commonly known as 
either a 15 percent reduction SIP or the 15 percent plan. In fact EPA 
approval of 15 percent plans has been delayed, and although EPA is 
preparing to take action on 15 percent plans in the near future, it is 
unlikely that EPA will have completed final action on most 15 percent 
plans prior to the time EPA believes it would be appropriate to give 
final or conditional interim approval to I/M programs under the NHSDA. 
In addition, New Jersey is currently reassessing its 15 percent plan to 
include the I/M program changes. This reassessment is to be based on 
the program as it is being implemented in November 1999. If the results 
indicate that the State will not achieve a 15 percent reduction in 
emissions, New Jersey may choose to either make I/M program 
improvements or add other provisions to its overall control plan.
    In enacting the NHSDA, Congress evidenced an intent to have states 
promptly implement I/M programs under interim approval status to gather 
the data necessary to support state claims of appropriate credit for 
alternative network design systems. By providing that such programs 
must be submitted within a four month period, that EPA could approve I/
M programs on an interim basis based only upon proposed regulations, 
and that such approvals would last only for an 18 month period, it is 
clear that Congress anticipated both that these programs would start 
quickly and that EPA would act quickly to give them interim approval.
    Many states have designed a program to meet the low enhanced 
performance standard, and have included that program in their 15 
percent plan submitted to EPA for approval. Such states anticipated 
that EPA would propose approval both of the I/M programs and the 15 
percent plans on a similar schedule, and thus that the I/M programs 
would qualify for approval under the low performance standard. EPA does 
not believe it would be consistent with the intent of the NHSDA to 
delay action on interim I/M approvals until the Agency has completed 
action on the corresponding 15 percent plans. Although EPA acknowledges 
that under its regulations final approval of a low enhanced I/M program 
after the 18-month evaluation period would have to await approval of 
the corresponding 15 percent plan, EPA believes that in light of the 
NHSDA it can grant either final or conditional interim approval of such 
I/M plans provided that the Agency has determined as an initial matter 
that approval of the 15 percent plan is appropriate, and has issued a 
proposed approval of that 15 percent plan.
    The State plans to submit a revised 15 percent plan. It is possible 
that New Jersey's proposed I/M program may fall short of the enhanced 
I/M performance standard but exceed the low enhanced performance 
standard. If this is the case and the emission reductions provided by 
the I/M program allow the State to fulfill the requirements of its 15 
percent plan, then EPA will review the 15 percent plan and propose 
action on it shortly thereafter. Should EPA propose approval of the 15 
percent plan, EPA will proceed to take conditional interim approval 
action on the I/M plan. EPA proposes in the alternative that if the 
Agency proposes instead to disapprove the 15 percent plan, EPA would 
then disapprove the I/M plan as well because the State would no longer 
be eligible to select the low enhanced performance standard under the 
terms of 40 CFR 51.351(g).
Network Type and Program Evaluation--40 CFR 51.353
    The federal I/M regulation requires that enhanced programs shall 
include an ongoing evaluation to quantify the emission reduction 
benefits of the program, and to determine if the program is meeting the 
requirements of

[[Page 56177]]

the CAA and the federal I/M regulation. The I/M SIP revision submittal 
shall include details on the program evaluation and a schedule for 
submittal of biennial evaluation reports, data from a state-monitored 
or administered mass emission test of at least 0.1 percent of the 
vehicles subject to inspection each year, a description of the sampling 
methodology, the data collection and analysis system, and the legal 
authority enabling the evaluation program.
    In order to determine whether the State I/M program meets the 
enhanced I/M performance standard, and is therefore approvable, it must 
submit modeling demonstrating that the program achieves the required 
emission reductions by the relevant dates. Because of delayed program 
start-up and program reconfiguration, the existing modeling used by the 
State to demonstrate compliance with the performance standard is no 
longer accurate, as it is based on start-up and phase-in of testing and 
cut-points that do not reflect the current program configuration or 
start dates that the State will actually implement. EPA believes, based 
on the available modeling and its own extrapolation of expected 
emission reductions from the program, that the State program will meet 
the performance standard. The State must conduct new modeling using the 
actual program configuration and start dates to verify that the 
performance standard will in fact be met. For example, phase-in 
cutpoints corresponding to the test-type and correct program start-up 
dates should be included in the new modeling.
    EPA is proposing conditional interim approval of the State's 
program at this time consistent with the intent of the NHSDA that state 
I/M programs be promptly approved and implemented. EPA proposes that 
this approval be conditioned upon the requirement that the State commit 
to conduct and submit the necessary new modeling and demonstration that 
the program will meet the performance standard, by a date certain 
within 12 months from conditional interim approval. If the State fails 
to submit this new modeling within 12 months, EPA proposes that the 
conditional interim approval will convert to a disapproval upon a 
letter from EPA indicating that the State has failed to submit the 
modeling and demonstration of compliance with the performance standard 
by the required date.
    In addition, the existing I/M Rule requires that the modeling 
demonstrate that the state program has met the performance standard by 
fixed evaluation dates. The first such date is January 1, 2000. 
However, few state programs will be able to demonstrate compliance with 
the performance standard by that date as a result of delays in program 
start-up and phase in of testing requirements. EPA believes that based 
on the provisions of the NHSDA, the evaluation dates in the current I/M 
Rule have been superseded. Congress provided in the NHSDA for state 
development of I/M programs that would start significantly later than 
the start dates in the current I/M Rule. Consistent with Congressional 
intent, such programs by definition will not achieve full compliance 
with the performance standard by the beginning of 2000.
    As explained above, EPA has concluded that the NHSDA superseded the 
start date requirements of the I/M Rule, but that states should still 
be required to start their programs as soon as possible, which EPA has 
determined would be by November 15, 1997. Therefore, EPA believes that 
pursuant to the NHSDA, the initial evaluation date should be January 1, 
2002. This evaluation date will allow states to fully implement their 
I/M programs and complete one cycle of testing at full cut points in 
order to demonstrate compliance with the performance standard.
    New Jersey proposes to implement a hybrid enhanced I/M program, 
under which the State will maintain a system of centralized test-only 
stations and decentralized test-and-repair stations. Under the program, 
motorists will be able to choose where a vehicle is inspected. As part 
of the State's Request for Proposal (RFP), New Jersey requested that 
contractors submit alternative network designs that may be considered 
to be equal to or better than the State's proposed I/M program.
    New Jersey commits to perform transient emissions inspection on 0.1 
percent of the vehicle population to comply with the program evaluation 
aspects of the I/M Rule.
    With the conditions described above, the State's submittal meets 
the network type and program evaluation requirements of the federal I/M 
regulation for interim approval.
Adequate Tools and Resources--40 CFR 51.354
    The federal I/M regulation requires the state to demonstrate that 
adequate funding for the program is available. A portion of the test 
fee or a separately assessed per vehicle fee shall be collected, placed 
in a dedicated fund and used to finance the program. Alternative 
funding approaches are acceptable if it is demonstrated that the 
funding can be maintained. Reliance on funding from the state or local 
general fund is not acceptable unless doing otherwise would be a 
violation of the state's constitution. The I/M SIP revision shall 
include a detailed budget plan which describes the source of funds for 
personnel, program administration, program enforcement, and purchase of 
equipment. The I/M SIP revision shall also detail the number of 
personnel dedicated to the quality assurance program, data analysis, 
program administration, enforcement, public education and assistance 
and other necessary functions.
    In its revised I/M SIP revision submittal, New Jersey indicates 
that $25 million in Capital Funds have been dedicated to upgrade the 
central DMV computer system. New Jersey also plans to use any other 
source of funding that is made available for auditing and program 
oversight. The State also indicates that the DEP's funding request will 
fully fund the DEP's responsibilities in the 1997 budget year. Since 
the State has not indicated how the I/M program will be funded past the 
1997 budget year, the State must confirm its plan for funding the 
enhanced I/M program throughout its duration by submitting supplemental 
information to EPA prior to the end of the 18-month interim period.
    The State's 1995 I/M SIP revision submittal indicated that under 
legislative authority, an amount of $11.50 from each vehicle 
registration fee will be deposited in the ``Motor Vehicle Inspection 
Program Fund.'' This fund may also receive funds from licensing fees 
and enforcement fines. This fund will be utilized for implementing, 
administrating, evaluating, auditing and enforcing the I/M program. The 
State must confirm that these funds will be available for the program 
functions described above.
    The DMV anticipates requiring a staffing level of 172 full time 
employees for the operation of the enhanced I/M program. The State must 
confirm that this level of funding and personnel will be adequate to 
allow the program to operate unhindered until it is no longer 
necessary. Alternatives to this approach would be acceptable, if the 
State can demonstrate that adequate funding can be maintained in some 
other fashion.
    This is a minor deficiency and must be corrected in the State's 
final I/M SIP revision submitted at the end of the 18-month interim 
period.
Test Frequency and Convenience--40 CFR 51.355
    The federal I/M regulation establishes an enhanced I/M performance 
standard

[[Page 56178]]

that assumes an annual test frequency; however, other schedules may be 
approved if the performance standard is achieved. The SIP shall 
describe the test year selection scheme, how the test frequency is 
integrated into the enforcement process and shall include the legal 
authority, regulations or contract provisions to implement and enforce 
the test frequency. The program shall be designed to provide convenient 
service to the motorist by ensuring short wait times, short driving 
distances and regular testing hours.
    New Jersey proposes a biennial test frequency. Legal authority is 
contained in the I/M SIP revision submittal. Vehicles that violate this 
requirement will have registrations denied or revoked. New Jersey 
intends to make use of existing inspection stations. Some outdated 
stations may be closed and new stations constructed to supplement the 
inspection stations that will have the new equipment installed. 
Standards will be developed by New Jersey to keep the wait times below 
30 minutes. Incentives will be provided to shorten the wait times to 15 
minutes.
    The New Jersey submittal meets the test frequency and convenience 
requirements of the federal I/M regulation for interim approvable.
Vehicle Coverage--40 CFR 51.356
    The federal I/M regulation establishes a performance standard for 
enhanced I/M programs that is based on coverage of all 1968 and later 
model year light duty vehicles and light duty trucks up to 8,500 pounds 
gross vehicle weight rating (GVWR), and includes vehicles operating on 
all fuel types. Other levels of coverage may be approved if the 
necessary emission reductions are achieved. Vehicles registered or 
required to be registered within the I/M program area boundaries and 
fleets primarily operated within the I/M program area boundaries and 
belonging to the covered model years and vehicle classes comprise the 
subject vehicles. Fleets may be officially inspected outside of the 
normal I/M program test facilities, if such alternatives are approved 
by the program administration, but shall be subject to the same test 
requirements using the same quality control standards as non-fleet 
vehicles and shall be inspected in the same type of test network as 
other vehicles in the state, according to the requirements of 40 CFR 
51.353(a). Vehicles which are operated on federal installations located 
within an I/M program area shall be tested, regardless of whether the 
vehicles are registered in the State or local I/M area.
    The federal I/M regulation requires that the SIP shall include the 
legal authority or rule necessary to implement and enforce the vehicle 
coverage requirement, a detailed description of the number and types of 
vehicles to be covered by the program and a plan for how those vehicles 
are to be identified including vehicles that are routinely operated in 
the area but may not be registered in the area, and a description of 
any special exemptions including the percentage and number of vehicles 
to be impacted by the exemption. Such exemptions shall be accounted for 
in the emissions reduction analysis.
    The New Jersey enhanced I/M program requires all model years of 
light and heavy duty gasoline-fueled vehicles to undergo some form of 
emissions inspection. The SIP submittal indicates that, as of 1994, 
4,830,771 vehicles will be included in the I/M program. New Jersey 
proposes to exempt diesel vehicles, motorcycles, historic vehicles, 
collector vehicles, farm equipment and machinery, traction equipment, 
fire trucks greater than 10,000 pounds GVWR, in-transit construction 
equipment and military tactical vehicles operated on federal 
installations within the State. Fleet vehicles primarily operated in 
the State but registered in other program areas will be identified and 
may be inspected in New Jersey. Vehicles registered in New Jersey but 
primarily operated in another program area are required to be inspected 
in New Jersey.
    The State's draft request for proposal (RFP) indicates that fleet 
vehicles registered in the State or primarily operated in the State are 
required to participate in the enhanced I/M program. Fleet vehicles may 
be inspected at a test-only facility or private inspection facility. 
Owners or lessees of fleet vehicles may apply to become a licensed 
private inspection facility for self inspections. Fleet vehicles which 
fail two consecutive initial emissions tests are required to be 
inspected at a test-only facility following the second initial test.
    New Jersey's RFP has not been finalized. This is a minor deficiency 
and must be corrected in the State's final I/M SIP revision submitted 
at the end of the 18-month interim period.
Test Procedures and Standards--40 CFR 51.357
    The federal I/M regulation requires that written test procedures 
and pass/fail standards shall be established and followed for each 
model year and vehicle type included in the program. Test procedures 
and standards are detailed in 40 CFR 51.357 and in the EPA document 
entitled ``High-Tech I/M Test Procedures, Emission Standards, Quality 
Control Requirements, and Equipment Specifications'', EPA-AA-EPSD-IM-
93-1, dated April 1994 and ``Acceleration Simulation Mode Test 
Procedures, Emission Standards, Quality Control Requirements, and 
Equipment Specifications'', EPA-AA-RSPD-IM-96-2, dated July 1996. The 
federal I/M regulation also requires vehicles that have been altered 
from their original certified configuration (i.e., engine or fuel 
switching) to be subject to the requirements of Sec. 51.357(d).
    New Jersey's proposed rules require that all test procedures and 
standards for the chassis model year and type will be applied to 
vehicles with switched engines. New Jersey's proposed I/M rules do not 
allow vehicles to switch to a fuel type for which there is no certified 
configuration. New Jersey's I/M program will be using a one-mode 
Acceleration Simulation Mode (ASM) emissions test for most of its 
fleet. New Jersey has been working with other states and the equipment 
manufacturers, in coordination with EPA, to develop their own 
procedures, specifications and standards for one- and two-mode ASM 
testing. It is anticipated that states' test procedures, specifications 
and standards will be released shortly.
    In light of the anticipated release of these test procedures and 
standards in the near future and their importance to the implementation 
of the program, EPA believes that it is not appropriate to proceed to 
conditional interim approval prior to the submittal of the current 
version of the procedures and standards. Therefore, New Jersey must 
submit the current version of its procedures and standards to EPA 
within 30 days of publication of this document.
    Within 30 days of the publication of this notice New Jersey must 
submit both the current version of its test procedures and standards 
for a one-mode ASM test and a commitment to submit final test 
procedures and standards by a date certain which is no later than 
January 31, 1997. It is essential that the State submit final test 
procedures and standards no later than this date because a significant 
lead time is necessary in order for the program to begin testing as 
planned. If the State does not submit the latest draft of the test 
procedures and standards within 30 days of the publication of this 
notice or the State fails to commit within 30 days to submit approvable 
final test procedures and standards for the one-mode ASM test as 
specified above, then EPA proposes in the alternative to disapprove the 
New

[[Page 56179]]

Jersey I/M SIP. If the State commits to submit the final procedures and 
standards but these conditions are not met, EPA will issue a letter to 
the State indicating that the conditional interim approval has been 
converted to a disapproval.
Test Equipment--40 CFR 51.358
    The federal I/M regulation requires computerized test systems for 
performing any measurement on subject vehicles. The federal I/M 
regulation requires that the state SIP submittal include written 
technical specifications for all test equipment used in the program. 
The specifications shall describe the emission analysis process, the 
necessary test equipment, the required features, and written acceptance 
testing criteria and procedures.
    New Jersey has been working with other states and the equipment 
manufacturers, in coordination with EPA, to develop their own, 
specifications for one- and two-mode ASM testing. It is anticipated 
that the states' test procedures, specifications and standards will be 
released shortly.
    In light of the anticipated release of the specifications in the 
near future and their importance to the implementation of the program, 
EPA believes that it is not appropriate to proceed to conditional 
interim approval prior to the submittal of the current version of the 
equipment specifications. Therefore, New Jersey must submit the current 
version of its equipment specifications to EPA within 30 days of the 
publication of this document.
    Within 30 days of the publication of this notice, New Jersey must 
submit both the current version of its test equipment specifications 
for a one-mode ASM test and a commitment to submit final test equipment 
specifications by a date certain which is no later than January 31, 
1997. It is essential that the State submit final test equipment 
specifications no later than this date because a significant lead time 
is necessary in order for the program to begin testing as planned. If 
the State does not submit the latest draft of the test equipment 
specifications within 30 days of the publication of this notice or the 
State fails to commit within 30 days to submit approvable final test 
equipment specifications for the one-mode ASM test as specified above, 
then EPA proposes in the alternative to disapprove the New Jersey I/M 
SIP. If the State commits to submit the final equipment specifications 
but these conditions are not met, EPA will issue a letter to the State 
indicating that the conditional interim approval has been converted to 
a disapproval.
Quality Control--40 CFR 51.359
    The federal I/M regulation requires that states implement quality 
control measures that will insure that emission measurement equipment 
is calibrated and maintained properly, and that inspection, calibration 
records, and control charts are accurately created, recorded and 
maintained.
    New Jersey's draft RFP contains quality control measures for the 
emission measurement equipment, record keeping requirements and 
measures to maintain the security of all documents used to establish 
compliance with the inspection requirements. This portion of the New 
Jersey submittal complies with the quality control requirements set 
forth in the federal I/M regulation. However, questions remain as to 
the details of the one-mode ASM test as stated in the Test Procedures 
and Standards section of this notice. In addition, a draft RFP cannot 
be accepted to comply with all requirements of this section. The final 
RFP should be forwarded to EPA upon completion. This is a minor 
deficiency and must be corrected in the State's final I/M SIP revision 
submitted at the end of the 18-month interim period.
Waivers and Compliance Via Diagnostic Inspection--40 CFR 51.360
    The federal I/M regulation allows for the issuance of a waiver, 
which is a form of compliance with the program requirements that allow 
a motorist to comply without meeting the applicable test standards. For 
enhanced I/M programs, an expenditure of at least $450 in repairs, 
adjusted annually to reflect the change in the Consumer Price Index 
(CPI) as compared to the CPI for 1989, is required in order to qualify 
for a waiver. Waivers can only be issued after a vehicle has failed a 
retest performed after all qualifying repairs have been made. Any 
available warranty coverage must be used to obtain repairs before 
expenditures can be counted toward the cost limit. Tampering related 
repairs shall not be applied toward the cost limit. Repairs must be 
appropriate to the cause of the test failure. Repairs for 1980 and 
newer model year vehicles must be performed by a recognized repair 
technician. The federal I/M regulation allows for compliance via a 
diagnostic inspection after failing a retest on emissions and requires 
quality control of waiver issuance. The I/M SIP revision must set a 
maximum waiver rate and must describe corrective action that would be 
taken if the waiver rate exceeds that committed to in the I/M SIP 
revision.
    New Jersey has requested that EPA delay the implementation of the 
$450 waiver plus CPI adjustment requirement until the year 2000. The 
State proposes to phase-in the waiver by allowing 1981 and newer 
vehicles a $200 waiver limit. No waivers will be granted to pre-1981 
vehicles since New Jersey will require that these vehicles only pass 
the idle test. Owners applying for a waiver may include proof of 
qualifying repairs that were made up to 60 days prior to the inspection 
date.
    EPA is proposing to approve the State's request to extend the 
deadline for the full implementation of the cost waiver including the 
CPI adjustment until January 1, 2000. This will allow the State to 
complete one full cycle of testing with the $200 cost waiver and will 
also allow the State to complete a full cycle of testing with the full 
$450 plus the annual CPI adjustment made retroactively to 1989 cost 
waiver before January 1, 2002 which is the performance standard 
modeling evaluation date. EPA believes, that consistent with its 
interpretation that the start dates and evaluation dates have been 
extended by approximately two years by the NHSDA, the full 
implementation of the waiver can also be extended by two years.
    The New Jersey submittal meets the waiver and compliance via 
diagnostic inspection requirements of the federal I/M regulation for 
interim approval.
Motorist Compliance Enforcement--40 CFR 51.361
    The federal I/M regulation requires that compliance shall be 
ensured through the denial of motor vehicle registration in enhanced I/
M programs unless an exception for use of an existing alternative is 
approved. An enhanced I/M area may use either sticker-based enforcement 
programs or computer-matching programs if either of these programs were 
used in the existing program that was operating prior to passage of the 
CAA, and it can be demonstrated that the alternative has been more 
effective than registration denial. The I/M SIP revision shall provide 
information concerning the enforcement process, legal authority to 
implement and enforce the program, and a commitment to a compliance 
rate to be used for modeling purposes and to be maintained in practice.
    New Jersey proposed a system of registration revocation for 
motorist compliance enforcement. The DMV has statutory authority under 
N.J.S.A. 39:5-30 and 39:3-5 to deny or revoke motor vehicle 
registration. New Jersey intends

[[Page 56180]]

to use a registration revocation enforcement program that will be 
backed up by the use of windshield stickers and computer matching of 
vehicle and motorist information. The method proposed by the State is 
as effective as a registration denial system because the ultimate 
enforcement mechanism is the revocation or denial of the vehicle 
registration. On August 6, 1996, New Jersey supplemented the March 27, 
1996 submittal with a flow chart outlining the registration revocation 
process. In its final submittal of adopted regulations, the State 
should include a detailed description of how the registration 
revocation process will be applied. This is a minor deficiency and must 
be corrected in the State's final I/M SIP revision submitted at the end 
of the 18-month interim period.
Motorist Compliance Enforcement Program Oversight--40 CFR 51.362
    The federal I/M regulation requires that the enforcement program 
shall be audited regularly and shall follow effective program 
management practices, including adjustments to improve operation when 
necessary. The I/M SIP shall include quality control and quality 
assurance procedures to be used to insure the effective overall 
performance of the enforcement system. An information management system 
shall be established which will characterize, evaluate and enforce the 
program.
    New Jersey proposes to use an electronic data capture system 
facilitated by bar coding of critical vehicle information that will 
allow cross-referencing of test results. The quality control provisions 
of this program will be implemented by members of the New Jersey DOT, 
DEP, and State and local police officials. This section of the New 
Jersey submittal meets the requirements of the federal I/M regulation 
for interim approval.
Quality Assurance--40 CFR 51.363
    The federal I/M regulation requires that an ongoing quality 
assurance program shall be implemented to discover, correct and prevent 
fraud, waste, and abuse in the enhanced I/M program. The program shall 
include covert and overt performance audits of the inspectors, audits 
of station and inspector records, equipment audits, and formal training 
of all state I/M enforcement officials and auditors. A description of 
the quality assurance program which includes written procedure manuals 
on the above discussed items must be submitted as part of the SIP.
    In New Jersey's draft RFP, a description of the quality assurance 
program is given. DEP and DOT will perform performance audits, record 
audits, and equipment audits in accordance with the requirements of the 
federal I/M regulation.
    The State's RFP is still in draft form. This is a minor deficiency 
and must be corrected in the State's final I/M SIP revision submitted 
at the end of the 18-month interim period.
Enforcement Against Contractors, Stations and Inspectors--40 CFR 51.364
    The federal I/M regulation requires that enforcement against 
licensed stations, contractors and inspectors shall include swift, 
sure, effective, and consistent penalties for violation of program 
requirements. The federal I/M regulation requires the establishment of 
minimum penalties for violations of program rules and procedures that 
can be imposed against stations, contractors and inspectors. The legal 
authority for establishing and imposing penalties, civil fines, license 
suspensions and revocations must be included in the I/M SIP revision. 
State quality assurance officials shall have the authority to 
temporarily suspend station and/or inspector licenses immediately upon 
finding a violation that directly affects emission reduction benefits, 
unless constitutionally prohibited. An official opinion explaining any 
state constitutional impediments to immediate suspension authority must 
be included in the submittal. The I/M SIP revision shall describe the 
administrative and judicial procedures and responsibilities relevant to 
the enforcement process, including which agencies, courts and 
jurisdictions are involved, who will prosecute and adjudicate cases and 
the resources and sources of those resources which will support this 
function.
    New Jersey submitted State regulations published on October 2, 
1995, which include a penalty schedule as required under this section 
of the I/M Rule. The State's regulations provide for up to lifetime 
suspensions of inspection licenses for most major violations. The 
regulations also describe administrative and judicial procedures with 
respect to the enforcement of this portion of the program. As a result, 
EPA finds that this section of the New Jersey submittal meets the 
requirements of the federal I/M regulation for interim approval.
Data Collection--40 CFR 51.365
    Accurate data collection is essential to the management, evaluation 
and enforcement of an I/M program. The federal I/M regulation requires 
data to be gathered on each individual test conducted and on the 
results of the quality control checks of test equipment required under 
40 CFR 51.359.
    In New Jersey's 1995 I/M SIP revision submittal, the State 
indicated it will collect data to distinguish complying and 
noncomplying vehicles and inspection facilities. For each vehicle 
tested, New Jersey will require collection of data as outlined in the 
federal I/M regulation. Results of the visual inspection of the 
catalytic converter, gas cap, evaporative system, and the pressure and 
purge test will also be provided. Results of quality control checks 
will be reported and identified by station number, system number, date 
and start time. Additionally, New Jersey is awaiting guidance from ECOS 
on the data collection requirements for the short term program 
evaluation. New Jersey's data collection procedure is not yet 
finalized. This is a minor deficiency and must be corrected in the 
State's final I/M SIP revision submitted at the end of the 18-month 
interim period.
Data Analysis and Reporting--40 CFR 51.366
    Data analysis and reporting are required to allow for monitoring 
and evaluation of the program by the state and EPA. The federal I/M 
regulation requires annual reports to be submitted which provide 
information and statistics and summarize activities performed for each 
of the following programs: testing, quality assurance, quality control 
and enforcement. These reports are to be submitted by July and shall 
provide statistics for the period of January to December of the 
previous year. A biennial report shall be submitted to EPA which 
addresses changes in program design, regulations, legal authority, 
program procedures and any weaknesses in the program found during the 
two-year period and how these problems will be or were corrected.
    New Jersey, in its draft RFP, requires the contractor to provide 
the information to the State in order to meet the requirements of the 
federal I/M regulation. The State commits to submitting these reports 
to EPA by July of each year for data collected January to December of 
the previous year.
    The State's RFP is not completed. This is a minor deficiency and 
must be corrected in the State's final I/M SIP revision submitted at 
the end of the 18-month interim period.

[[Page 56181]]

Inspector Training and Licensing or Certification--40 CFR 51.367
    The federal I/M regulation requires all inspectors to be formally 
trained and licensed or certified to perform inspections.
    The State's I/M SIP revision submittal requires inspectors to be 
trained by the contractor or subcontractor and licensed by the DMV. 
Trainees will be required to pass both a written and a hands-on test in 
order to be licensed.
    This element of New Jersey's SIP submittal meets the requirements 
of the federal I/M regulation for interim approval.
Public Information and Consumer Protection--40 CFR 51.368
    The federal I/M regulation requires the I/M SIP to include public 
information and consumer protection programs.
    At least three months prior to I/M program implementation, New 
Jersey will inform the motoring public on the environmental benefits 
and requirements of the program. As indicated in the draft RFP, the 
State, through a contractor, will continue a public awareness program 
throughout the contract life of seven years. Motorists that fail the 
emissions test will receive statistics on the repair facilities in the 
area.
    New Jersey's proposed I/M program provides for motorists to be 
informed of program requirements and protected from potential abuses by 
inspectors and/or stations. The State's submittal indicates that a 
public information program will be undertaken prior to program 
commencement; however, it does not include a description of the 
activities planned. Based on the unfavorable reaction the public had at 
the start of other states' programs, public awareness is a crucial 
element of the program. This is a minor deficiency and must be 
corrected in the State's final I/M SIP revision submitted at the end of 
the 18-month interim period.
Improving Repair Effectiveness--40 CFR 51.369
    Effective repairs are key to achieving program goals. The federal 
I/M regulation requires states to take steps to ensure that the 
capability exists in the repair industry to repair vehicles. The I/M 
SIP must include a description of the technical assistance program to 
be implemented, a description of the procedures and criteria to be used 
in meeting the performance monitoring requirements in the federal I/M 
regulation, and a description of the repair technician training 
resources available in the community.
    The State is developing an Emission Technician Education Plan to 
improve the skills of the current and future technicians. The State 
will utilize the Automotive Service Excellence (ASE) L1 exam as the 
final examination for the training program after taking a course on New 
Jersey-specific enhanced I/M requirements. Performance monitoring will 
be performed in accordance with the requirements of the federal I/M 
regulation. Motorists that fail the initial test will be given a 
summary of the performance of individual repair facilities in order to 
help the motorist to select a repair facility that has demonstrated the 
ability to effectively repair failing vehicles. The State's submittal 
meets the repair effectiveness requirements of the federal I/M 
regulation for interim approval.
Compliance With Recall Notices--40 CFR 51.370
    The federal I/M regulation requires the states to establish methods 
to ensure that vehicles that are subject to enhanced I/M and are 
included in an emission related recall receive the required repairs 
prior to completing the emission test and/or renewing the vehicle 
registration.
    In its I/M submittal the State requires motorists to obtain recall 
repairs in order to complete the inspection process. Motorists will be 
notified at the inspection station of any outstanding recalls. The 
State commits to providing an annual report providing information on 
recall compliance. The State's submittal meets the recall notice 
requirements of the federal I/M regulation for interim approval.
On-road Testing--40 CFR 51.371
    The federal I/M regulation requires on-road testing in enhanced I/M 
areas. The use of either remote sensing devices (RSD) or roadside 
pullovers including tailpipe emission testing can be used to meet the 
federal I/M regulation. The I/M program must include on-road testing of 
0.5 percent of the subject fleet or 20,000 vehicles, whichever is less, 
in the nonattainment area or the I/M program area. Motorists that have 
passed an emission test and are found to be high emitters as a result 
of an on-road test shall be required to pass an out-of-cycle test.
    New Jersey proposes to utilize RSD to identify high emitters for 
roadside pullovers. Testing will be conducted on 20,000 vehicles each 
cycle. The RSD program will be conducted in two phases. Phase I will be 
utilized for fleet characterization and data collection. The data also 
will be used to develop a correlation between RSD results and results 
from the enhanced I/M test. The RSD cutpoints will also be determined. 
These cutpoints are not required to be the same as the cutpoints 
established for the enhanced I/M emissions test since RSD will identify 
only gross emitters. Phase II of the program will require vehicles that 
fail the test to have an off-cycle emission inspection within 30 days.
    The State's submittal meets the on-road testing requirements of the 
federal I/M regulation for interim approval.
State Implementation Plan Submissions/Implementation Deadlines--40 CFR 
51.372-51.373
    These sections of the federal I/M regulations require that the 
state outline program milestones and provide an implementation 
schedule.
    New Jersey's I/M SIP revision submittal contains the proposed 
enhanced I/M program regulations. However, the State should review its 
1995 I/M SIP revision submittal and its revised 1996 SIP submittal to 
eliminate any inconsistencies between the submittals. Final equipment 
specifications have not been developed. The RFP is in draft form as of 
the date of this notice. Licensing and certification of inspectors will 
be performed prior to the start of the program in 1997. Mandatory 
testing is scheduled to begin in 12 months after conditional interim 
approval. Full stringency cutpoints are proposed to be implemented in 
January 2000. With the conditions noted above, the State's submittal 
includes the relevant program requirements of the federal I/M 
regulation for interim approval.

III. Discussion for Rulemaking Action

    Today's notice of proposed conditional interim approval begins a 
30-day time period for the State to make a commitment to EPA to correct 
the major deficiencies of the I/M SIP revision that EPA has identified, 
by dates certain as described in this notice. These major deficiencies 
are:

Enhanced I/M Performance Standard Modeling

    In order to determine whether the state I/M program meets the 
enhanced I/M performance standard, and is therefore approvable, states 
must submit modeling demonstrating that the program achieves the 
required emission reductions by the relevant dates. New Jersey did not 
include all modeling assumptions in its submittal. Given that New 
Jersey plans to use a one-mode Acceleration Simulation Mode (ASM) test 
procedure, it is possible that final modeling assumptions would not be

[[Page 56182]]

available for some time since an acceptable test procedure or emission 
reduction credits for this test have yet to be established. EPA and 
states interested in using ASM have been actively pursuing acceptable 
test procedures using one and two ASM modes.

Test Procedures, Standards and Equipment

    Written test procedures and pass/fail standards and equipment 
specifications shall be established and followed for each model year 
and vehicle type included in the program. Test procedures and standards 
are detailed in 40 CFR 51.357 and in the EPA document entitled ``High-
Tech I/M Test Procedures, Emission Standards, Quality Control 
Requirements, and Equipment Specifications'', EPA-AA-EPSD-IM-93-1, 
dated April 1994 and ``Acceleration Simulation Mode Test Procedures, 
Emission Standards, Quality Control Requirements, and Equipment 
Specifications'', EPA-AA-RSPD-IM-96-2, dated July 1996.
    New Jersey's I/M program will be using a one-mode Acceleration 
Simulation Mode (ASM) emissions test for most of its fleet. New Jersey 
has been working with other states and the equipment manufacturers, in 
coordination with EPA, to develop their own procedures, specifications 
and standards for one- and two-mode ASM testing. It is anticipated that 
states' test procedures, specifications and standards will be released 
shortly. EPA must receive the State's test procedures, standards and 
equipment specifications well before testing begins since finalization 
of these program elements is critical to the program beginning 
operation as planned.
    Within 30 days of publication of this document, the State must make 
a commitment to EPA to correct these major deficiencies, by dates 
certain. In the case of the test procedures, standards and equipment 
specifications EPA is requiring that the State submit final versions of 
these materials by January 31, 1997. EPA believes that the State must 
finalize these elements far in advance of the planned start date for 
the program so that equipment may be purchased and installed and the 
program's start date is not jeopardized. In the case of the performance 
standard modeling, EPA is requiring that the State submit the required 
modeling no later than 12 months from the date of the publication of 
the notice of conditional interim approval. If the State does not make 
such a commitment within 30 days, EPA today is proposing in the 
alternative that this SIP revision be disapproved.
    If EPA disapproves this submission or if the State does not correct 
the major deficiencies identified above and implement the interim 
program pursuant to section 110(k) so that the conditional interim 
approval converts to a disapproval, EPA, under section 179(a)(2), must 
apply one of the sanctions set forth in section 179(b) within 18 months 
of such disapproval or finding. Section 179(b) provides two sanctions 
available to the Administrator: highway funding and the imposition of 
emission offset requirements. In EPA's August 4, 1994 final sanctions 
rule, (See 59 FR 39832) the sequence of mandatory sanctions for 
findings and disapprovals made pursuant to section 179 of the CAA was 
finalized. This rulemaking states that the section 179(b)(2) offset 
sanction applies in an area 18 months from the date when the EPA makes 
a finding or a disapproval under section 179(a) with regard to that 
area. Furthermore, the section 179(b)(1) highway funding restrictions 
apply in an area six months following application of the offset 
sanction. This nondiscretionary process for imposing and lifting 
sanctions is set forth at 40 CFR 52.31.
    If the State makes the commitment within 30 days, EPA's conditional 
interim approval of the plan will last until the date by which the 
State has committed to cure all of the major deficiencies. EPA expects 
that within this period the State will not only correct the major 
deficiencies as committed to by the State, but that the State will also 
begin program start-up by November 15, 1997. If the State does not 
correct the major deficiencies and begin the implementation of the 
program by the required dates, EPA is proposing in this document that 
the conditional interim approval will be converted to a disapproval 
after a finding letter is sent to the State.

IV. Explanation of the Interim Approval

    At the end of the 18-month interim period, the approval status for 
this program will automatically lapse pursuant to the NHSDA. It is 
expected that the State will at that time be able to make a 
demonstration of the program's effectiveness using an appropriate 
evaluation criteria. Since EPA expects that these programs will have 
started by November 15, 1997, the State will have at least six months 
of program data that can be used for the demonstration. If the State 
fails to provide a demonstration of the program's effectiveness to EPA 
within 18 months of the conditional interim approval, the interim 
approval will lapse, and EPA will be forced to disapprove the State's 
I/M SIP revision. If the State's program evaluation demonstrates a 
lesser amount of emission reductions actually realized than were 
claimed in the State's previous submittal, EPA will adjust the State's 
credits accordingly, and use this information to act on the State's 
final I/M program.

V. Further Requirements for Final I/M SIP Approval

    At the end of the 18-month interim period, which is started by the 
conditional interim approval of the I/M SIP revision, final approval of 
the State's plan will be granted based upon the following criteria:
    1. The State has complied with all the conditions of its commitment 
to EPA,
    2. EPA's review of the State's program evaluation confirms that the 
appropriate amount of program credit was claimed by the State and was 
achieved with the interim program,
    3. Final program regulations are submitted to EPA, and
    4. The State I/M program meets all of the requirements of the 
federal I/M regulation, including those deficiencies found de minimis 
for purposes of interim approval.

VI. EPA's Evaluation of the Interim Submittal

    EPA is proposing a conditional interim approval of the New Jersey 
SIP revision for enhanced I/M, which was submitted on March 27, 1996. 
EPA is soliciting public comments on the issues discussed in this 
notice or on other relevant matters. These comments will be considered 
before taking subsequent action. Interested parties may participate in 
the federal rulemaking procedure by submitting written comments to the 
EPA Regional office listed in the Addresses section of this document.

Proposed Action

    EPA is proposing conditional interim approval of this revision to 
the New Jersey SIP for an enhanced I/M program based on certain 
conditions.

Major Deficiencies

    (1) New Jersey must within 30 days of the publication of this 
notice: (1) Submit the current version of its one-mode ASM test 
procedures, standards and equipment specifications to EPA and (2) 
commit to submitting final test procedures, standards and equipment 
specifications to EPA by a date certain but no later than January 31, 
1997.

[[Page 56183]]

    (2) New Jersey must commit within 30 days of the publication of 
this notice to submit modeling results once acceptable test procedures 
and standards have been developed for one-mode ASM. This commitment 
must be fulfilled by a date certain but no later than 12 months after 
conditional interim approval.

Minor Deficiencies

    (1) New Jersey must submit proof that adequate funding will be 
available throughout the life of the program.
    (2) New Jersey must submit final requirements for inspection of 
fleet vehicles.
    (3) New Jersey's quality control measures must be in accordance 
with the requirements set forth in 40 CFR 51.359.
    (4) New Jersey must provide a detailed description of its motorist 
compliance enforcement program.
    (5) New Jersey must provide a description of the procedures that 
will ensure program quality; such as audits, and training requirements.
    (6) New Jersey must provide final program requirements for data 
collection.
    (7) New Jersey must provide final procedures for analyzing and 
reporting program data.
    (8) New Jersey must complete the public information program, 
including the repair station report card.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any state implementation plan. Each request for revision to 
the state implementation plan shall be considered separately in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.

Administrative Requirements

Executive Order 12866

    This action has been classified as a Table 3 action for signature 
by the Regional Administrator under the procedures published in the 
Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a 
July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for 
Air and Radiation. The Office of Management and Budget (OMB) has 
exempted this regulatory action from E.O. 12866 review.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    Conditional approvals of SIP submittals under section 110 and 
subchapter I, part D of the CAA do not create any new requirements but 
simply approve requirements that the State is already imposing. 
Therefore, because the Federal SIP approval does not impose any new 
requirements, I certify that it does not have a significant impact on 
any small entities affected. Moreover, due to the nature of the 
Federal-State relationship under the CAA, preparation of a flexibility 
analysis would constitute federal inquiry into the economic 
reasonableness of state action. The Clean Air Act forbids EPA to base 
its actions concerning SIPs on such grounds. Union Electric Co. v. U.S. 
EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).
    If the conditional approval is converted to a disapproval under 
section 110(k), based on the State's failure to meet the commitment, it 
will not affect any existing State requirements applicable to small 
entities. Federal disapproval of the State submittal does not affect 
its state-enforceability. Moreover, EPA's disapproval of the submittal 
does not impose a new federal requirement. Therefore, EPA certifies 
that this disapproval action does not have a significant impact on a 
substantial number of small entities because it does not remove 
existing requirements nor does it substitute a new federal requirement.

Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
private sector, of $100 million or more. Under section 205, EPA must 
select the most cost-effective and least burdensome alternative that 
achieves the objectives 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 
or uniquely impacted by the rule.
    EPA has determined that the approval action proposed does not 
include a federal mandate that may result in estimated costs of $100 
million or more to either State, local, or tribal governments in the 
aggregate, or to the private sector. This federal action approves pre-
existing requirements under State or local law, and imposes no new 
federal requirements. Accordingly, no additional costs to State, local, 
or tribal governments, or to the private sector, result from this 
action.
    The Administrator's decision to approve or disapprove the SIP 
revision will be based on whether it meets the requirements of section 
110(a)(2)(A)-(K) and part D of the Clean Air Act, as amended, and EPA 
regulations in 40 CFR Part 51.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, Incorporation by reference, Intergovernmental relations, 
Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, 
Volatile organic compounds.

    Authority: 42 U.S.C. 7401-7671q.

    Dated: October 18, 1996.
William J. Muszynski,
Deputy Regional Administrator.
[FR Doc. 96-27951 Filed 10-30-96; 8:45 am]
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