£i CDA                                                    Office of Mobile Sources
                                                                      EPA420-S-99-007
                                                                         December 1999
                             Model-Year Exemption Policy

Is it legal for states to exempt new cars?

•      Yes. EPA fulfilled its statutory requirement in this regard by designing performance
       standards that addressed the minimum elements outlined in the Clean Air Act. Provided a
       state designs a program which gets the same or better emission reductions as the
       performance standard (and includes those elements which are statutorily required), it is
       approvable.

•      Since model year coverage is not statutorily defined, Section 51.356 (Vehicle Coverage)
       of the  1992 I/M rule states: "Special exemption may be permitted for certain subject
       vehicles provided a demonstration is made that the performance standard will be met."
       All model year exemptions are covered by this provision.


What is our policy?

•      Other than the above, little formal policy exists on this issue, since the number of model
       years that can be exempted varies considerably depending on the age mix of the local
       fleet (for example, a fleet where older vehicles predominate — like California — can
       exempt more of the newer model years while losing relatively little in the way  of
       emission reductions).

•      While it is neither policy nor a regulation, the MOBILES model  automatically assumes
       that vehicles are not tested (i.e., are exempt) until they are one year old. For biennial
       programs, we've generally assumed that vehicles get their first test when they are two
       years old (though there is no explicit requirement that this be the case).

•      There  is no I/M regulatory language that specifically recommends exempting vehicles for
       two or more years. Unfortunately, in the preamble to the I/M OBD rule, a citation is
       given to the 1992 rule which suggests that such regulatory language exists. This citation
       is in error.
What have we recommended to states generally?

•      When asked for guidance on the issue, we've generally told states that they can exempt as
       many model years as they want — provided they can still meet the relevant performance
       standard.

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       Historically, OMS has been a bit hesitant to recommend the exemption of new model
       years beyond one year since this can deprive vehicle owners' of the opportunity to get
       I/M repairs under the two-year warranty.
What have we said to specific states?

•      The first serious discussion of exempting vehicles four or more years old since
       promulgation of the 1992 rule occurred during EPA's discussions with California in late
       1993/early 1994 regarding acceptable alternative program designs.

•      Using California's age mix (which has a proportionally smaller number of new vehicles
       because of the car-friendly climate), we showed that they could exempt vehicles up to
       four years old without having a significant impact on their emissions reductions.

•      During discussions with New Jersey in late 1994/early  1995, the possibility of exempting
       vehicles anywhere from four to six years old was discussed. However, New Jersey
       decided to adopt a hybrid program and require these newer vehicles to be tested as part of
       a test-and-repair program component.

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