Approval and Promulgation of State Implementation Plans (SIP) for Texas: Accelerated Vehicle Retirement (AVR) Program

I. Background

The Act broadly encourages, and in Title I of the Act, mandates, States to develop and facilitate market-based approaches for achieving the environmental goals of the Act for attainment and maintenance of the National Ambient Air Quality Standards, and to meet associated emission reduction milestones. The Agency has developed comprehensive guidance and rules (as required by the Act) for States and individual sources to follow in designing and adopting such programs for inclusion in SIPs. The Economic Incentive Program (EIP) Rules (April 7, 1994, 59 FR 16690-16717) provide a broad framework for the development and use of a wide variety of incentive strategies for stationary, area, and/or mobile sources. One such approach is the generation and trading of ERCs, which historically have been allowed under guidance provided in the 1986 Emission Trading Policy Statement. In certain areas where emission control costs for stationary sources may be high relative to mobile source control costs, creating EIPs which allow for the trading of emission reduction credits from mobile sources to stationary sources can be beneficial. On October 31, 1994, the State of Texas submitted revisions to the SIP making changes to the Texas Administrative Code (30 TAC), Chapter 114: Control of Air Pollution from Motor Vehicles. In this revision, section 114.29, Accelerated Vehicle Retirement Program, was added to the Code. The new section provides specific requirements for the purchase, screening, and processing of scrappage vehicles, so that all emission reductions generated through AVR are creditable, enforceable, surplus, quantifiable, and permanent. The scrappage program requires all potential vehicles to get an ``IM240'' emission test at an I/M testing facility. The AVR program was planned when the State was intending to implement an I/M program which utilized the IM240 emission test in a centralized, test-only setting. The I/M program was designed, developed, and began operation in January 1995, before being halted by the Governor and the Texas Legislature. However, various states, including Texas, desired greater flexibility in implementing their I/M programs. On September 18, 1995, EPA revised and finalized I/M rules that gave states much greater flexibility in implementing I/M programs. One element of the I/M flexibility amendments included a provision for a new low enhanced performance standard that would allow for less stringent I/M programs if overall air quality goals were met. In addition, on November 28, 1995, President Clinton signed the National Highway System Designation Act of 1995 (NHSDA) which allowed even greater flexibility in I/M programs for states, especially in the area of emission reduction estimates. In response to this additional flexibility, the State of Texas, in a letter dated March 12, 1996, submitted its revised I/M program to the Region 6 office within the submission deadlines contained in the NHSDA. The EPA granted conditional interim approval (July 11, 1997, 62 FR 37138) of the revised Texas I/M plan. As a result, the State has implemented a decentralized testing network which allows for both test- and-repair and test-only stations, and includes remote sensing. Testing stations administer a two-speed idle test. This program is referred to as the Texas Motorist Choice Program. With the IM240 test no longer available, the tailpipe emission measurements needed for AVR calculations as outlined in section 114.29 of 30 TAC 114 cannot be obtained. The EPA believes this is a significant deficiency which prohibits approval of the SIP under section 110 of the Act.

II. Evaluation of Accelerated Vehicle Retriement (AVR) SIP

Several key program elements in EIP rules must generally be included in any MERC program to ensure that the EIP principles and requirements are met. One of the elements calls for credible, workable, replicable procedures for quantifying emissions and/or emission-related parameters. In the State's submittal, emission reductions in grams/vehicle/year for each vehicle are calculated using tailpipe emissions, evaporative emissions, vehicle replacement emissions, and vehicle miles traveled. Tailpipe emissions are measured by using the IM240 test. The MERCs are calculated in tons/year from the emission reductions from all vehicles in a scrappage program. The owner of a scrappage vehicle must obtain an IM240 vehicle emission certificate at a testing facility showing that the vehicle has failed the mandated emissions test prior to the sale of the vehicle to a scrappage program. A motorist must submit the vehicle to an emissions test according to specific procedures outlined in the SIP. In the Texas Motorist Choice I/M program, which is in operation, the test stations offer only the idle test. The IM240 test is not an option. Consequently, tailpipe emissions can no longer be quantified according to the procedure outlined in the SIP. This prevents the State from satisfying the program element for obtaining credible emissions data. In summary, the Texas AVR SIP submittal does not reflect current programs which are necessary to implement the scrappage program as designed. Based on the analysis, EPA cannot approve the Texas AVR SIP.

III. Proposed Action

The EPA proposes to disapprove the Texas AVR SIP under sections 110 and 182 since the State failed to update elements of the AVR SIP submitted October 31, 1994. The AVR SIP submittal represents vehicle emission testing for vehicle scrappage using an I/M loaded mode transient emission test (IM240). The Texas Legislature halted the operation of that particular program, and has since chosen to implement a different I/M program, the Texas Motorist Choice Program, which requires a two-speed idle test. This test has not been shown to be equivalent to

the IM240 test. Consequently, the AVR SIP is not applicable to current programs as submitted. This revision is not required by the Act. Therefore, this proposed disapproval action does not impose sanctions for failure to meet Act requirements. The EPA is soliciting public comment on the proposed action discussed in this document or on other relevant matters. These comments will be considered before taking final action. Interested parties may participate in the Federal rule making procedure by submitting written comments to the EPA Regional office listed in the Addresses section of this document. Nothing in today's action should be construed as permitting, allowing, or establishing a precedent for any future request for revision to any SIP. Each request for revision to the SIP shall be considered separately in light of specific technical, economic, and environmental factors and in relation to relevant statutory and regulatory requirements. The Regional Administrator's decision to approve or disapprove the AVR SIP revision will be based on whether it meets the requirements of section 110(a)(2)(A)-(K) and part D of the Act, as amended, and EPA regulations in 40 CFR part 51.

IV. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget has exempted this regulatory action from Executive Order 12866 review.

B. 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. See 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. The EPA's proposed disapproval of the State request under sections 110 and 301, and subchapter I, part D of the Act does not affect any existing requirements applicable to small entities. Any preexisting Federal requirements remain in place after this proposed disapproval. Federal disapproval of the State submittal does not affect its State- enforceability. Moreover, the EPA's disapproval of the submittal does not impose any new Federal requirements. Therefore, the EPA certifies that this proposed 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 impose any new Federal requirements.

C. Unfunded Mandates Act

Under section 202 of the Unfunded Mandate Reform Act of 1995, 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 aggregate; or to the 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. The EPA has determined that the proposed disapproval action 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 does not impose new requirements. Accordingly, no additional costs to State, local, or tribal governments, or private sector, result from this action.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Ozone, Volatile organic compounds.

Dated: December 10, 1997. Lynda F. Carroll, Acting Deputy Regional Administrator, Region VI. [FR Doc. 97-33222 Filed 12-18-97; 8:45 am] BILLING CODE 6560-50-F