Air Pollution: Delays in Motor Vehicle Inspection Programs Jeopardize
Attainment of the Ozone Standard (Letter Report, 06/15/98,
GAO/RCED-98-175).

Pursuant to a congressional request, GAO reviewed the status of states'
motor vehicle inspection programs, focusing on the: (1) progress made by
the 23 states that are required to implement enhanced inspection and
maintenance (I&M) programs, including the difficulties that the states
have encountered; and (2) impact that delays in implementing enhanced
I&M programs may have on the states' ability to comply with the national
air quality standard for ozone.

GAO noted that: (1) two of the 23 states had begun testing vehicles by
the January 1995 deadline that the Environmental Protection Agency (EPA)
set for implementing enhanced I&M programs, and 12 had begun testing
vehicles as of April 1998; (2) a number of factors have contributed to
delays in implementing programs; (3) opposition to EPA's enhanced I&M
regulation--including the reluctance of some state legislatures to
provide the legislative authority and funding needed to implement these
programs--caused most of the 23 states to delay implementation; (4) in
addition, the states had difficulty in obtaining new testing equipment
and software support from vendors; (5) the delays in implementing
enhanced I&M programs have jeopardized the states' ability to meet the
deadlines for attaining the national ozone standard; (6) EPA has allowed
the states to claim credit for future reductions in emissions of
volatile organic compounds (VOC) from their enhanced I&M programs,
provided they demonstrate that they will achieve the required reductions
as soon as practical after November 1996; (7) if states cannot
demonstrate that reductions in VOC can be obtained from the mandatory
enhanced inspection and maintenance programs, they may have to look to
other mobile sources as well as stationary sources to meet their goals
for reducing these emissions; and (8) however, achieving further
reductions from other sources will be costly and take longer than
achieving the reductions from enhanced inspection I&M programs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-98-175
     TITLE:  Air Pollution: Delays in Motor Vehicle Inspection Programs 
             Jeopardize Attainment of the Ozone Standard
      DATE:  06/15/98
   SUBJECT:  Air pollution control
             Motor vehicle pollution control
             State programs
             Safety standards
             Environmental monitoring
             Hazardous substances

             
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Cover
================================================================ COVER


Report to the Ranking Minority Member, Committee on Government Reform
and Oversight, House of Representatives

June 1998

AIR POLLUTION - DELAYS IN MOTOR
VEHICLE INSPECTION PROGRAMS
JEOPARDIZE ATTAINMENT OF THE OZONE
STANDARD

GAO/RCED-98-175

Motor Vehicles Inspection Programs

(160393)


Abbreviations
=============================================================== ABBREV

  EPA - Environmental Protection Agency
  I&M - inspection and maintenance
  VOC - volatile organic compounds

Letter
=============================================================== LETTER


B-279850

June 15, 1998

The Honorable Henry A.  Waxman
Ranking Minority Member
Committee on Government Reform
 and Oversight
House of Representatives

Dear Mr.  Waxman: 

Although the United States has significantly improved its air quality
since the 1970s, air pollution problems, such as ozone and carbon
monoxide, continue to threaten the health of millions of Americans.\1
Motor vehicles are responsible for up to half of the emissions of
volatile organic compounds (VOC) that affect ozone levels and up to
90 percent of the carbon monoxide emissions found in urban areas.\2
Title I of the Clean Air Act Amendments of 1990 (P.L.  101-549, Nov. 
15, 1990) requires the states with the most serious ozone and carbon
monoxide problems--23 states have been identified--to implement
enhanced inspection and maintenance (I&M) programs to reduce the
emissions from motor vehicles.\3 Under the amendments, these states
were required to have their programs implemented by November 1992. 
However, in November 1992, despite this requirement, the
Environmental Protection Agency (EPA) issued a regulation that
postponed the required implementation date until January 1995.  I&M
programs test vehicles' emissions to ensure that the vehicles are
adequately maintained and working properly.  If the vehicles pass
these tests, they are assumed not to be emitting excessive amounts of
VOCs and carbon monoxide. 

Because of concerns about the implementation of the enhanced I&M
programs, you asked us to determine the status of the states'
programs.  Specifically, we examined (1) the progress made by the 23
states that are required to implement enhanced I&M programs,
including the difficulties that the states have encountered, and (2)
the impact that delays in implementing enhanced I&M programs may have
on the states' ability to comply with the national air quality
standard for ozone.  In order to address these issues, we used a mail
survey to obtain information from the 23 states.  (App.  I presents
the survey we used.) We also met with officials from EPA's program
and regional offices, as well as with officials from two states, to
discuss the implementation of the enhanced I&M programs. 


--------------------
\1 The health effects of exposure to ozone and carbon monoxide
include eye, nose, and throat irritation, as well as bronchitis,
emphysema, and other serious lung diseases. 

\2 Volatile organic compounds are a major contributor to the
formation of ground-level ozone (urban smog).  Ozone is formed by
sunlight and high temperature acting on volatile organic compounds
and nitrogen oxide. 

\3 Twenty-two states and the District of Columbia are required to
implement enhanced I&M programs.  Hereafter, we refer to the District
as one of the 23 states. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Two of the 23 states had begun testing vehicles by the January 1995
deadline that EPA set for implementing enhanced inspection and
maintenance programs, and 12 had begun testing vehicles as of April
1998.  A number of factors have contributed to delays in implementing
programs.  Opposition to EPA's enhanced inspection and maintenance
regulation--including the reluctance of some state legislatures to
provide the legislative authority and funding needed to implement
these programs--caused most of the 23 states to delay implementation. 
In addition, the states had difficulty in obtaining new testing
equipment and software support from vendors. 

The delays in implementing enhanced inspection and maintenance
programs have jeopardized the states' ability to meet the deadlines
for attaining the national ozone standard.  EPA has allowed the
states to claim credit for future reductions in emissions of volatile
organic compounds from their enhanced inspection and maintenance
programs, provided they demonstrate that they will achieve the
required reductions as soon as practical after November 1996.  If
states cannot demonstrate that reductions in volatile organic
compounds can be obtained from the mandatory enhanced inspection and
maintenance programs, they may have to look to other mobile sources
as well as stationary sources to meet their goals for reducing these
emissions.  However, achieving further reductions from other sources
will be costly and take longer than achieving the reductions from
enhanced inspection and maintenance programs. 


   BACKGROUND
------------------------------------------------------------ Letter :2

EPA determined that 23 states needed enhanced I&M programs in order
to meet national air quality standards.  Figure 1 shows the 23 states
that are required to implement enhanced I&M programs. 

   Figure 1:  States Required to
   Implement Enhanced I&M Programs

   (See figure in printed
   edition.)

   Source:  GAO's analysis of
   EPA's and states' data.

   (See figure in printed
   edition.)

Because the ozone levels in many areas exceeded the national ozone
standard, the Congress recognized that reducing ozone levels would be
a long-term effort for some states and established interim goals and
milestones in title I of the Clean Air Act Amendments of 1990.  Areas
that exceeded the national ozone standard were classified as
"nonattainment areas," and according to the severity of their ozone
problems, states were given future dates ranging from 3 to 20 years
to attain the ozone standard.  Title I required most ozone
nonattainment areas to develop plans for EPA's approval that showed
which control measures they would need to achieve a 15-percent
reduction in VOC emissions by November 1996.  Furthermore, the states
with serious to extreme nonattainment areas were required to prepare
plans showing how they would achieve additional VOC reductions beyond
1996. 

Enhanced I&M programs are designed to measure the pollution that
vehicles release when they are operated under simulated driving
conditions.  EPA issued an enhanced I&M regulation in November 1992
that required the states to meet or exceed a stated performance
standard based on a model program that included IM-240 testing
equipment.\4 Although the amendments required the states to implement
their enhanced I&M programs by November 1992, EPA's regulation
postponed the required start date to January 1995 and required full
implementation of the program by January 1996.  Appendix II describes
the statutory and regulatory requirements for the enhanced I&M
program. 

In August 1996, EPA recognized that the states' delays in
implementing their enhanced I&M programs would prevent many of them
from achieving the 15-percent reduction in VOC emissions. 
Subsequently, in February 1997, EPA issued guidance to allow the
states that revised their enhanced I&M programs under the September
1995 revised enhanced I&M regulation or the National Highway System
Designation Act of 1995 (P.L.  104-59, Nov.  28, 1995) to have more
flexibility in developing and implementing their programs.  In order
for the states to operate under the relaxed requirement, they had to
demonstrate that their 15-percent reduction in VOC emissions would be
achieved as soon as possible after November 1996, but no later than
November 1999.  The guidance allowed states to resubmit their VOC
reduction plans to show that they would achieve the required
reductions from the implementation of their enhanced I&M programs by
November 1999.  According to EPA, the states that had not implemented
their enhanced I&M programs as of November 1997 may be unable to
demonstrate how they will achieve required VOC reductions. 


--------------------
\4 IM-240 is computer-controlled equipment that simulates actual
driving conditions and measures vehicles' tailpipe emissions for 4
minutes--240 seconds--on a dynamometer--a treadmill-like device. 


   MANY STATES HAVE NOT
   IMPLEMENTED ENHANCED I&M
   PROGRAMS
------------------------------------------------------------ Letter :3

None of the 23 states met the November 1992 statutory date for
implementing their enhanced I&M programs, and only 2 had begun
testing vehicles by EPA's January 1995 deadline for starting their
programs.  In total, 12 states had begun testing vehicles under
enhanced I&M programs by April 1998.  A number of factors account for
the delays in implementing enhanced I&M programs, including
opposition to the stringent requirements of EPA's enhanced I&M
regulation, the reluctance of some state legislatures to provide
authority and funding for the programs, and difficulties in obtaining
test equipment and software support. 

The 12 states that are testing vehicles account for 43 percent of the
52 million vehicles subject to the enhanced I&M testing.\5
Furthermore, several of the other 11 states are scheduled to start
testing vehicles within the next few months.\6 For example,
California and Georgia, which have 9.4 million vehicles that will be
subject to enhanced I&M testing, are scheduled to start testing in
June 1998 and July 1998, respectively.  Appendix III shows the
implementation and approval status and the number of vehicles subject
to enhanced I&M testing for each of the 23 states. 


--------------------
\5 EPA's Nov.  1992 technical support document for the 1992 enhanced
I&M regulation estimated that 56 million vehicles would be subject to
enhanced I&M testing. 

\6 While some of these states are testing vehicles under an I&M
program, their testing does not meet all of the requirements to
qualify as testing under an enhanced I&M program. 


      STATES HAVE ENCOUNTERED
      DIFFICULTIES IN IMPLEMENTING
      PROGRAMS
---------------------------------------------------------- Letter :3.1

According to EPA, states opposed EPA's enhanced I&M regulation
because the regulation did not allow them enough flexibility in
designing and implementing their programs.  The 1992 regulation
required all enhanced I&M programs to meet or exceed a performance
standard based on a model program that used computer-controlled test
equipment and centralized "test-only" inspection centers.  Some
states believed that centralized programs resulted in fewer
inspection centers, often making the testing programs less convenient
for vehicle owners and potentially resulting in longer delays than
previous I&M programs.  Furthermore, the states believed that
consumers would be inconvenienced by the 1992 enhanced I&M regulation
because of the test-only feature of the model program, which required
the owner of any vehicle that failed the inspection to go elsewhere
to have repairs made and to return to the same inspection center for
retesting.  While the 1992 enhanced I&M regulation permitted the
states to implement decentralized programs that allowed inspection
centers to test and then repair vehicles, EPA determined that these
programs were less effective in identifying and repairing vehicles
with excessive emissions. 

Because of the opposition to the stringency of the 1992 regulation,
EPA issued a revised enhanced I&M regulation in September 1995, and
the Congress enacted the National Highway System Designation Act of
1995, which gave the states more flexibility to develop and implement
their programs.  For example, the revised regulation allowed the
states to implement less stringent enhanced I&M programs if they
could demonstrate emission reductions from other sources.  The
regulation also allowed the states more leeway in inspecting and
repairing failed vehicles.  Eight of the 23 states took advantage of
the flexibility allowed by the revised regulation by implementing
less stringent enhanced programs.  Additionally, the National Highway
System Designation Act of 1995--which prohibited EPA from requiring
the states to have centralized IM-240 enhanced I&M programs--allowed
the states to revise their programs to include decentralized testing
and provided an 18-month interim approval period for them to
demonstrate that their revised programs could achieve the needed
emissions reductions.\7 Eight of the 23 states have implemented or
plan to implement the more flexible enhanced I&M programs under the
act. 

Even though the revised enhanced I&M regulation and the National
Highway System Designation Act of 1995 allowed more flexibility, nine
states indicated in response to our survey that difficulties in
obtaining legislative authority delayed the implementation of their
enhanced I&M programs.  For example, Massachusetts had planned to
start inspecting vehicles under an enhanced I&M program in July 1997. 
However, as of November 1997, the date to which Massachusetts had
committed to begin program operations, the state legislature had not
enacted the needed legal authority for an enhanced I&M program, and
vehicle testing had not begun.  In December 1997, EPA notified
Massachusetts that its enhanced I&M program was disapproved. 
Currently, Massachusetts is planning to begin testing vehicles in May
1999.  Similarly, the Maryland legislature attempted to make the
enhanced I&M program voluntary instead of mandatory, as required by
the Clean Air Act Amendments of 1990, and this attempt delayed the
implementation of the state's program.  However, the governor's veto
of this legislation paved the way for Maryland to start testing
vehicles under its enhanced I&M program in the fall of 1997. 

In response to our survey, 13 states indicated that they have
experienced problems with obtaining needed testing equipment or
software support from vendors, which have delayed the implementation
of their programs.  These problems were especially apparent in late
1997 and early 1998, when several states were scheduled to start
testing vehicles.  According to EPA officials, only a limited number
of vendors supply the testing equipment and the computer software
needed for enhanced I&M inspection centers.  With the high demand for
the equipment in recent months, vendors have been unable to fill all
orders.  For example, Georgia had planned to have 300 inspection
centers operating under an enhanced I&M program by July 1997. 
However, because of the vendor's problem with delivering the
equipment and providing software support, Georgia now plans to start
testing vehicles in July 1998--a year later than originally planned. 

Overall, our survey of the 23 states identified a number of factors
that delayed the states' efforts to implement enhanced I&M programs. 
These included opposition to the stringent requirements of EPA's
initial program, difficulties in obtaining testing equipment, delays
by EPA in issuing the initial regulation, difficulties in obtaining
authority from state legislatures, and difficulties in certifying
inspection centers and technicians.  Figure 2 shows the factors cited
by states as reasons for their delays. 

   Figure 2:  Factors Delaying
   Implementation of Enhanced I&M
   Programs

   (See figure in printed
   edition.)

Source:  GAO's analysis of states' responses to GAO's survey. 


--------------------
\7 An "interim approval" is a time-limited approval action created by
the enhanced I&M provisions of the National Highway System
Designation Act of 1995. 


      PUBLIC ACCEPTANCE OF
      ENHANCED I&M PROGRAMS IS
      IMPORTANT
---------------------------------------------------------- Letter :3.2

The states recognize the importance of informing the public about the
reasons for enhanced I&M programs.  In fact, 14 states said that it
was very or extremely important to educate the public about their
enhanced I&M programs.  Furthermore, seven said that they tried to
educate the general public to a great or very great extent about the
frequency of testing, the costs of tests, testing locations, and
other pertinent information about the program.  Seven states also
said that they tried to educate the general public to a great or very
great extent about the reasons for implementing enhanced I&M
programs. 

For example, in implementing an enhanced I&M program, Georgia
contracted with an advertising agency to develop and disseminate
information through television and radio spots and distributed
printed materials through community groups and organizations.  A
recent survey of the effectiveness of Georgia's public information
campaign for its I&M program showed that consumers believe that cars
are the largest contributing factor to air pollution.  The study also
showed that 88 percent of Georgia's consumers were aware of the
current I&M program, and 76 percent believed that the program was
doing a good job. 

In contrast, Maine initially tried to implement an enhanced I&M
program in 1994 with little or no public relations efforts.  After
very strong public opposition to the program, the governor cancelled
it.  According to EPA, the opposition to the program was caused, in
part, by the perception that the enhanced I&M program was being
implemented as an alternative to imposing control measures on certain
stationary sources.  As of April 1998, Maine's enhanced I&M program
had been disapproved because the state's revised plan for it did not
meet all of EPA's requirements.  Even though some states have been
more successful than others in overcoming public opposition and other
obstacles to implementing their enhanced I&M programs, EPA has made
only a limited effort to identify the practices these successful
states have used and to share them with other states that are in the
early stages of developing and implementing their programs. 


   DELAYS IN IMPLEMENTING ENHANCED
   I&M PROGRAMS HAVE SLOWED
   EFFORTS TO REDUCE OZONE LEVELS
------------------------------------------------------------ Letter :4

Because of delays in implementing enhanced I&M programs, 19 of the 23
states are in jeopardy of not meeting deadlines for attaining the
national ozone standard.\8 The 19 states are relying on the enhanced
I&M programs to reduce VOC emissions.  In August 1996, EPA recognized
that the states could not achieve a significant portion of their
15-percent VOC reductions by November 1996 because of delays in
implementing enhanced I&M programs.  It therefore examined other
available control measures for reducing VOC emissions.  EPA required
the states to demonstrate in their VOC reduction plans that enhanced
I&M programs were the most practical way for them to achieve the
15-percent reduction in VOC emissions.  EPA then allowed the states
to revise their enhanced I&M programs to claim credit for the
emissions reductions that are based on the future implementation of
their programs, provided they demonstrated that the required VOC
reductions would be achieved as soon as possible after November 1996
but no later than November 1999.  EPA also allowed the states to
resubmit their VOC reduction plans to show that they would achieve
the required VOC reductions from implementing their enhanced I&M
programs by November 1999.  EPA encouraged the states to customize
their revised VOC reduction plans to include other control measures
that would be the most practical for their areas to implement in
achieving the required reduction in VOC emissions. 

Even with the relaxed requirement, 11 of the 19 states are at risk of
not meeting the required VOC reductions specified under title I of
the Clean Air Act Amendments of 1990 because they had not started
testing vehicles as of April 1998.  According to EPA, the states that
had not implemented their enhanced I&M programs as of November 1997
may be unable to demonstrate how they will achieve required VOC
reductions, and are at risk of having their VOC reduction plans
disapproved because of the anticipated shortfall in VOC reductions. 
For example: 

  -- EPA's conditional interim approval\9 of New Jersey's enhanced
     I&M program, which accounts for 26 percent of the state's
     planned reductions in VOC emissions, required the program to
     begin by November 15, 1997, in order for all vehicles to be
     tested by November 1999 and for the state to receive full credit
     for the VOC reductions from the program.  New Jersey officials
     advised EPA that they would not select a contractor to operate
     the program until April 1998.  In December 1997, EPA notified
     New Jersey that its 15-percent reduction plan was disapproved
     because the state failed to meet the required November 1997
     start date for its enhanced I&M program.  According to a New
     Jersey official, it is unclear how the state will make up the
     shortfall in VOC reductions caused by its failure to implement
     an enhanced I&M program. 

  -- The District of Columbia is required to reduce VOC emissions by
     133 tons per day to attain the ozone standard by November 1999. 
     Even though the District is relying heavily upon its enhanced
     I&M program to provide 48 percent of the overall VOC reductions,
     it does not plan to start inspecting vehicles under an enhanced
     I&M program until April 1999.  While control measures are
     available to the District for reducing VOC emissions from other
     mobile and stationary sources, many of these measures have
     already been implemented, and, according to EPA officials,
     imposing further controls on these sources will not produce the
     reductions that the District is expecting to achieve with an
     enhanced I&M program. 

Many of the states that are required to implement enhanced I&M
programs must achieve the required VOC reductions by November 1999
but still do not have final approval for their VOC reduction plans. 
Table 1 shows the approval status of the states' VOC reduction plans
as of April 1998. 



                                         Table 1
                         
                            Approval Status of the States' VOC
                            Reduction Plans, as of April 1998

                                     Approval status of VOC reduction plans
                        -----------------------------------------------------------------
                Testin
                g
                vehicl
State           es      15-percent reduction plan               Post-1996 reduction plan
--------------  ------  --------------------------------------  -------------------------
California      No      Approved\a                              Approved

Connecticut     Yes     Proposed conditional approval\b         Submitted--complete

Delaware        Yes     Conditional approval                    Submitted--complete

District of     No      Submitted--complete                     Submitted--complete
Columbia

Georgia         No      Proposed conditional interim approval   Submitted--complete

Illinois        No      Approved                                Submitted--complete

Indiana         Yes     Approved                                Submitted--complete

Louisiana       No      Approved                                Submitted--complete

Maine           No      Submitted--complete                     Not required

Maryland        Yes     Conditional approval                    Submitted--complete

Massachusetts   No      Proposed conditional interim approval   Proposed conditional
                                                                interim approval

New Hampshire   No      Proposed approval                       Submitted--complete

New Jersey      No      Disapproved                             Disapproved

New York        No      Submitted--complete                     Submitted--complete

Pennsylvania    Yes     Conditional interim approval            Not submitted

Rhode Island    No      Limited disapproval                     Submitted--no action

Texas           Yes     Approved--Beaumont/Port Arthur          Proposed disapproved
                        Proposed conditional interim approval-
                        -Dallas/Ft. Worth, El Paso, and
                        Houston

Virginia        Yes     Conditional approval                    Submitted--complete

Wisconsin       Yes     Approved                                Submitted--complete
-----------------------------------------------------------------------------------------
\a All but one of California's nine nonattainment areas that are
required to submit 15-percent VOC reduction plans have had their
plans approved.  The ninth nonattainment area--Mojave Desert--has
submitted a plan, but EPA has not yet acted on it. 

\b A "conditional approval" is a formal approval action taken on an
enhanced I&M program plan that meets most but not all relevant
requirements for enhanced I&M programs.  A state must make a
commitment to correct the deficiencies within 12 months of the
conditional approval action. 

Source:  GAO's analysis of information provided by EPA and the
states. 

Even though most of the states are planning to have their enhanced
I&M programs account for a significant amount of the required
reductions in VOC emissions, EPA and the states will not know how
much of the needed VOC reductions will be met by enhanced I&M
programs until each program is fully approved and operational.  Thus,
further delays by the states in implementing enhanced I&M programs
jeopardize their efforts to achieve the required VOC reductions. 

While the states can use mobile and stationary sources in conjunction
with the mandated enhanced I&M programs to attain the ozone standard
these sources, especially stationary sources, have already made
significant reductions in their VOC emissions, and, according to EPA,
further reductions from them will be costly and take some time to
achieve.  In 1992, EPA estimated that the cost to reduce VOC
emissions with an enhanced I&M program was $879 per ton compared with
$5,000 per ton from stationary sources.  According to EPA officials,
with the less stringent requirements of many of the current programs,
the cost per ton of VOC reductions from the enhanced I&M programs is
probably higher, but not as high as further reductions from other
mobile sources or stationary sources.  However, EPA is not aware of
any data that show current costs. 


--------------------
\8 Four states do not have to meet deadlines for attaining the
national ozone standard.  Colorado, Nevada, and Washington are
required to implement enhanced I&M programs to reduce carbon monoxide
emissions to help them attain the national carbon monoxide standard,
and Vermont is required to have an enhanced I&M program because of
VOC emissions that are transported from other states. 

\9 A "conditional interim approval" is a formal action taken on an
enhanced I&M program plan submitted under the National Highway System
Designation Act of 1995 that meets most but not all requirements for
enhanced I&M programs. 


   CONCLUSIONS
------------------------------------------------------------ Letter :5

While enhanced I&M programs are an integral part of the effort to
significantly reduce emissions from motor vehicles, states' efforts
to implement their programs have been slow and troubled by numerous
delays.  Recognizing that states have encountered a variety of
challenges in implementing enhanced I&M programs, we believe that EPA
could expand its efforts at helping some of the states that are
experiencing the most significant problems by sharing the best
practices, such as public relations campaigns, adopted by the states
with approved and/or operating programs. 

Furthermore, because of delays in implementing enhanced I&M programs,
states have not realized the reductions in VOC emissions that they
were statutorily required to achieve by 1996, nor are they likely to
achieve additional reductions that EPA is now requiring by November
1999 to enable them to attain the national ozone standard. 
Therefore, states will have to look to other mobile sources as well
as stationary sources to meet their goals for reducing VOC emissions. 
However, obtaining the required reductions from other sources will be
difficult because many of them, especially stationary sources, have
already made major reductions in their VOC emissions, and any further
reductions may be costly and take some time to achieve. 


   RECOMMENDATION
------------------------------------------------------------ Letter :6

In view of the pivotal role that enhanced I&M programs play in
reducing VOC emissions and the delays experienced to date in
implementing these programs, as well as the possibility of future
delays, we recommend that the Administrator of EPA compile
information on the more successful practices, such as public
relations campaigns, used by the states that have implemented their
enhanced I&M programs and share the information with those states
that are in the early stages of developing and implementing their
programs. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

We provided copies of a draft of this report to EPA for review and
comment.  In commenting for the agency, the Director of the Office of
Mobile Sources agreed with the information presented and suggested a
few editorial changes to clarify points but did not comment on the
recommendation.  We included EPA's comments as appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

We gathered data on the enhanced I&M programs in the 23 states
required to implement the programs under the Clean Air Act Amendments
of 1990.  Data were obtained through the use of a survey mailed to
the environmental offices in each of the 23 states.  The survey was
pretested by officials from the states of Georgia, Maryland, and
Washington, and subsequently mailed in late January 1998.  Completed
surveys were returned by all 23 states.  A copy of the survey is in
appendix I.\10 In addition to our analyses of the data gathered from
the survey, we asked EPA to update the data for some questions. 

We also reviewed notices in the Federal Register that provided
information on the status of the states' enhanced I&M programs as
well as other pertinent documentation.  Additionally, we visited
EPA's regional offices in Boston, Massachusetts; Philadelphia,
Pennsylvania; and Atlanta, Georgia to obtain background information
on issues concerning the enhanced I&M programs.  We also visited
EPA's Office of Mobile Sources in Ann Arbor, Michigan, and the Office
of Air Quality Planning and Standards in Durham, North Carolina, and
interviewed officials about the enhanced I&M program as well as
issues concerning attaining the ozone standard.  We met with
officials in Massachusetts and Georgia to discuss the implementation
of their enhanced I&M programs.  We measured progress in terms of the
states with operating programs that were testing vehicles as of April
1998.  We did not use EPA's approval status to measure progress
because a state's approval status is subject to change. 

We performed our work from July 1997 through May 1998 in accordance
with generally accepted government auditing standards. 


--------------------
\10 Because much of the data are not reported in an aggregated
format, and many of the questions asked for information unique to a
particular state, data are not reported in the survey presented in
app.  I. 


---------------------------------------------------------- Letter :8.1

As arranged with your office, unless you announce its contents
earlier, we plan no further distribution of this report until 15 days
from the date of this letter.  At that time, we will send copies to
the appropriate congressional committees; the Administrator of the
Environmental Protection Agency; and the Director of the Office of
Management and Budget.  We will also make copies available to others
on request. 

Please call me at (202) 512-6111 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
IV. 

Sincerely yours,

Peter F.  Guerrero
Director, Environmental
 Protection Issues




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SURVEY
============================================================== Letter 



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CHANGES IN REQUIREMENTS FOR THE
ENHANCED INSPECTION AND
MAINTENANCE PROGRAM
========================================================== Appendix II

This appendix describes the statutory and regulatory changes leading
to the Environmental Protection Agency's (EPA) current requirements
for enhanced inspection and maintenance (I&M) programs. 


      THE CLEAN AIR ACT AMENDMENTS
      OF 1990
------------------------------------------------------ Appendix II:0.1

Title I of the Clean Air Act Amendments of 1990 (P.L.  101-549--Nov. 
15, 1990) required the 23 states with the most serious ozone and
carbon monoxide problems to implement enhanced I&M programs. 
Specifically, the states with serious, severe, or extreme ozone
nonattainment areas with 1980 urban populations of 200,000 or more;
serious and certain moderate carbon monoxide nonattainment areas with
urban populations of 200,000 or more; and areas with a population of
100,000 or more in the Ozone Transport Region, regardless of their
attainment status; were required to implement enhanced I&M
programs.\11 The enhanced I&M programs were required to have
centralized inspection centers and perform annual inspections unless
the state demonstrated to EPA that a decentralized or biennial
program would be equally effective.  Title I also required EPA to
issue regulations for the enhanced I&M program by November 15, 1991,
and the states to implement their enhanced I&M programs by November
15, 1992. 

Title I divided all of the ozone nonattainment areas into five
categories--marginal, moderate, serious, severe, and extreme--and set
time frames for each category to reach attainment.  The attainment
dates ranged from 3 years (marginal) to 20 years (extreme) after the
act was enacted.  Title I also required the states to demonstrate how
they would reduce volatile organic compounds (VOC) emissions--one of
the major pollutants that contribute to the formation of ozone.  The
states with moderate to extreme ozone nonattainment areas were
required to prepare implementation plans by November 1993 that showed
how they would reduce VOC emissions by 15 percent within 6 years
after enactment.  The states with serious to extreme nonattainment
areas also had to prepare plans showing how they would achieve
additional VOC reductions.  The plans to reduce VOC emissions after
1996 were due by November 1994 and were to show how the states
planned to achieve 3-percent VOC reductions annually until the
nonattainment areas reach attainment. 


--------------------
\11 The Ozone Transport Region includes 12 states in the northeastern
United States that have significant ozone nonattainment problems
because much of the ozone originates in other states and is
transported to these states by the eastern air flow patterns.  These
states are Connecticut, Delaware, Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont,
and the Consolidated Metropolitan Statistical Area that includes the
District of Columbia. 


      ENHANCED INSPECTION AND
      MAINTENANCE PROGRAM
      REGULATION
------------------------------------------------------ Appendix II:0.2

EPA issued its regulation for the enhanced I&M program on November 5,
1992.  The regulation required the states with areas switching from
test-and-repair to test-only requirements to implement programs that
would begin testing 30 percent of all vehicles that were subject to
enhanced I&M in the nonattainment areas in January 1, 1995, and all
areas to begin testing all vehicles by January 1, 1996.  The
regulation also required the states to meet or exceed a performance
standard that was based on a model program for an annual, centralized
enhanced I&M program that included IM-240 test equipment, or an
equivalent test protocol approved by EPA, and covered all 1968 and
later model cars and light-duty trucks.  The states that elected to
implement decentralized programs or a program consisting of
centralized and decentralized inspection facilities were to have
their emission reduction credits discounted by approximately 50
percent for the decentralized portion of their programs, unless they
could demonstrate that their programs were as effective as a
centralized program.  The regulation also included the requirement
under the Clean Air Act Amendments of 1990 that a minimum expenditure
of $450 for emission-related repairs was required for vehicles to
qualify for a waiver of further repairs.  According to EPA, a typical
urban area adopting the model program established by the regulation
would, by 2000, reduce the levels of air pollutants more than they
would have reduced them without an enhanced I&M program:  for carbon
monoxide, the additional reduction would be 31 percent, for VOCs, 28
percent, and for nitrogen oxides, 9 percent. 


      ENHANCED INSPECTION AND
      MAINTENANCE FLEXIBILITY
      REGULATION
------------------------------------------------------ Appendix II:0.3

In response to strong public opposition to its initial enhanced I&M
regulation, EPA issued a regulation known as the
Inspection/Maintenance Flexibility Amendments on September 18, 1995. 
This regulation created a less stringent enhanced I&M program by
allowing certain states more flexibility in implementing their
programs.  Specifically, the revised regulation allowed the states
that can meet the requirements of the Clean Air Act Amendments of
1990 for VOC reductions and attainment without an enhanced I&M
program as effective as the one adopted by EPA in the 1992 regulation
to meet a less stringent low enhanced performance standard.  The new
standard, referred to as the low enhanced standard, did not include
the IM-240 test as part of its model program.  The regulation also
modified other requirements of the 1992 regulation, such as extending
the implementation of the minimum expenditure of $450 until January
1998. 


      NATIONAL HIGHWAY SYSTEM
      DESIGNATION ACT OF 1995
------------------------------------------------------ Appendix II:0.4

The National Highway System Designation Act of 1995 (P.  L.  104-59,
Nov.  28, 1995) also responded to public opposition to the 1992
enhanced I&M regulations.  Specifically, the act prohibited EPA from
requiring a centralized, IM-240 enhanced I&M program and stopped
EPA's use of the 50-percent discount rate for decentralized or hybrid
programs.  Additionally, the act allowed states to submit, within 120
days after enactment, revisions to their enhanced I&M programs by
proposing interim enhanced I&M programs.  The act required EPA to
approve enhanced I&M programs on an interim basis if the proposed
credits for each element of the program reflected good-faith
estimates and the revised programs complied with the Clean Air Act
Amendments of 1990.  The act further provided an 18-month period for
the states to demonstrate that the credits they had proposed were
appropriate, with no opportunity to extend the 18-month period. 


      ENHANCED INSPECTION AND
      MAINTENANCE OZONE TRANSPORT
      REGION FLEXIBILITY
      AMENDMENTS REGULATION
------------------------------------------------------ Appendix II:0.5

On July 25, 1996, EPA issued the Inspection and Maintenance Ozone
Transport Region Flexibility Amendments regulation.  The regulation
created a special low-enhanced standard for areas within the Ozone
Transport Region that would be exempt from I&M requirements if they
were not located in the region.  These areas included attainment
areas, marginal ozone nonattainment areas, and certain moderate
nonattainment areas with populations under 200,000 within the
12-state Ozone Transport Region.  Emission reduction goals in these
areas were lower than those required for low enhanced I&M and basic
I&M programs.  The regulation provided flexibility to certain Ozone
Transport Region states to implement a broader range of I&M programs
than allowed under earlier regulations.  Elements of the program
include performing annual tests of 1968 and newer vehicles, checking
on-board computer equipment for 1996 and newer vehicles, conducting
remote sensing tests of 1968 through 1995 model year vehicles, and
visual inspection of various control components on 1968 and newer
vehicles. 


STATES' PROGRESS IN PERFORMING
MANDATORY ENHANCED INSPECTION AND
MAINTENANCE TESTING, AS OF APRIL
1998
========================================================= Appendix III

                      Approval status
                      of enhanced            Actual/planned          Number of vehicles
State                 I&M programs           testing start date           (in millions)
--------------------  ---------------------  --------------------  --------------------
Testing vehicles as of April 1998\a
---------------------------------------------------------------------------------------
Colorado              Approved               January 1995                          1.69

Connecticut           Conditional approval   January 1998                          1.20

Delaware              Conditional approval   October 1995                          0.30

Indiana               Approved               January 1997                           .56

Maryland              Conditional approval   October 1997                          2.40

Nevada                Approved               January 1995                          0.75

Pennsylvania          Conditional interim    October 1997                          6.00
                      approval

Texas                 Conditional interim    July 1996                             4.30
                      approval

Washington            Approved               June 1993                             2.20

Wisconsin             Approved               December 1995                         1.10

Vermont               Status pending         January 1997                          0.50

Virginia              Conditional Interim    February 1998                         1.30
                      Approval

=======================================================================================
Subtotal                                                                          22.30


Not testing\b
---------------------------------------------------------------------------------------
California            Interim approval       June 1998                             7.00

District of Columbia  Status pending         April 1999                            0.24

Georgia               Disapproved            July 1998                             2.40

Illinois              Approved               December 1998                         2.50

Louisiana             Disapproved            Unknown\c                             0.27

Maine                 Disapproved            Unknown\c                             1.20

Massachusetts         Disapproved            May 1999                              4.20

New Hampshire         Disapproved            January 1999                          1.00

New Jersey            Disapproved            October 1998                          5.00

New York              Interim approval       November 1998                         5.50

Rhode Island          Disapproved            Unknown\c                             0.70

=======================================================================================
Subtotal                                                                          30.01

=======================================================================================
Total                                                                             52.31
---------------------------------------------------------------------------------------
\a These states had begun testing vehicles under an enhanced I&M
program. 

\b While some of these states are testing vehicles under an I&M
program, their testing does not meet all of the requirements to
qualify as testing under an enhanced I&M program. 

\c The state has not submitted a revised enhanced I&M program plan
that show a planned start date. 

Source:  GAO's analysis of information provided by EPA and the 23
states. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

RESOURCES, COMMUNITY, AND ECONOMIC
DEVELOPMENT DIVISION WASHINGTON,
D.C. 

William F.  McGee, Assistant Director
Harry C.  Everett, Evaluator-in-Charge
Joseph L.  Turlington, Senior Evaluator
Lynn M.  Musser, Technical Advisor
Kellie O.  Schachle, Evaluator


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