# Transportation Conformity Rule Amendments for the New 8-hour Ozone and PM2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; Transportation Conformity Rule Amendments: Response to Court Decision and Additional Rule Changes > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A04-14213 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** July 1, 2004 - **Citation:** 69 FR 40004 ## Text ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 93 [FRL-7774-6] RIN 2060-AL73; 2060-AI56 Transportation Conformity Rule Amendments for the New 8-hour Ozone and PM 2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; Transportation Conformity Rule Amendments: Response to Court Decision and Additional Rule Changes AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: Today we (EPA) are amending the transportation conformity rule to finalize several provisions that were proposed last year. First, today's final rule includes criteria and procedures for the new 8-hour ozone and fine particulate matter (PM 2.5 ) national ambient air quality standards (NAAQS or “standards”). Transportation conformity is required under Clean Air Act section 176(c) to ensure that federally supported highway and transit project activities are consistent with (“conform to”) the purpose of a state air quality implementation plan (SIP). We are conducting this rulemaking in part to revise the conformity regulation in the context of EPA's broader strategies for implementing the new ozone and PM 2.5 standards. The final rule also addresses a March 2, 1999 ruling by the U.S. Court of Appeals for the District of Columbia Circuit ( Environmental Defense Fund v. EPA , et al. , 167 F. 3d 641, D.C. Cir. 1999). This final rule incorporates into the transportation conformity rule the EPA and Department of Transportation (DOT) guidance that has been used in place of certain regulatory provisions of the rule since the court decision. DOT is EPA's federal partner in implementing the transportation conformity regulation. We have consulted with DOT on the development of this rulemaking, and DOT concurs with this final rule. EPA notes that a supplemental notice of proposed rulemaking will be published in the near future to request additional comment on options related to PM 2.5 and PM 10 hot-spot requirements. EPA is also not finalizing at this time any requirements for addressing PM 2.5 precursors in transportation conformity determinations for PM 2.5 nonattainment and maintenance areas. EPA is considering the transportation conformity rule's PM 2.5 precursor requirements in the context of EPA's broader PM 2.5 implementation strategy. All of these issues will be addressed in a separate final rule to be issued before PM 2.5 designations become effective. EFFECTIVE DATE: August 2, 2004. ADDRESSES: Materials relevant to this rulemaking for the November 5, 2003 proposal (68 FR 62690) are in Public Docket I.D. No. OAR-2003-0049. Materials relevant to this rulemaking for the June 30, 2003 proposal (68 FR 38974) are in Public Docket I.D. No. OAR-2003-0063. For more information about accessing information from the docket, see Section I.B. of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Meg Patulski, State Measures and Conformity Group, Transportation and Regional Programs Division, U.S. Environmental Protection Agency, 2000 Traverwood Road, Ann Arbor, MI 48105, patulski.meg@epa.gov , (734) 214-4842; Rudy Kapichak, State Measures and Conformity Group, Transportation and Regional Programs Division, U.S. Environmental Protection Agency, 2000 Traverwood Road, Ann Arbor, MI 48105, kapichak.rudolph@epa.gov , (734) 214-4574; or Laura Berry, State Measures and Conformity Group, Transportation and Regional Programs Division, U.S. Environmental Protection Agency, 2000 Traverwood Road, Ann Arbor, MI 48105, berry.laura@epa.gov , (734) 214-4858. SUPPLEMENTARY INFORMATION: The contents of this preamble are listed in the following outline: I. General Information I. Background on the Transportation Conformity Rule II. Conformity Grace Period and Revocation of the 1-hour Ozone Standard III. General Changes in Interim Emissions Tests IV. Regional Conformity Tests in 8-hour Ozone Areas That Do Not Have 1-hour Ozone SIPs V. Regional Conformity Tests in 8-hour Ozone Areas That Have 1-hour Ozone SIPs VI. Regional Conformity Tests in PM 2.5 Areas VIII. Consideration of Direct PM 2.5 and pm 2.5 Precursors in Regional Emissions Analyses IX. Re-entrained Road Dust in PM 2.5 Regional Emissions Analyses X. Construction-Related Fugitive Dust in PM 2.5 Regional Emissions Analyses XI. Compliance with PM 2.5 SIP Control Measures XII. PM 2.5 Hot-spot Analyses XIII. PM 10 Hot-spot Analyses XIV. Federal Projects XV. Using Motor Vehicle Emissions Budgets from Submitted SIPs for Transportation Conformity Determinations XVI. Non-federal Projects XVII. Conformity Consequences of Certain SIP Disapprovals XVIII. Safety Margins XIX. Streamlining the Frequency of Conformity Determinations XX. Latest Planning Assumptions XXI. Horizon Years for Hot-spot Analyses XXII. Relying on a Previous Regional Emissions Analysis XXIII. Miscellaneous Revisions XXIV. Comments Not Related to Rulemaking XXV. How Does Today's Final Rule Affect Conformity SIPs? XXVI. Statutory and Executive Order Reviews I. General Information A. Regulated Entities Entities potentially regulated by the conformity rule are those that adopt, approve, or fund transportation plans, programs, or projects under title 23 U.S.C. or title 49 U.S.C. Regulated categories and entities affected by today's action include: Category Examples of regulated entities Local government Local transportation and air quality agencies, including metropolitan planning organizations (MPOs). State government State transportation and air quality agencies. Federal government Department of Transportation (Federal Highway Administration (FHWA) and Federal Transit Administration (FTA)). This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this final rule. This table lists the types of entities of which EPA is aware that potentially could be regulated by the conformity rule. Other types of entities not listed in the table could also be regulated. To determine whether your organization is regulated by this action, you should carefully examine the applicability requirements in § 93.102 of the transportation conformity rule. If you have questions regarding the applicability of this action to a particular entity, consult the persons listed in the preceding FOR FURTHER INFORMATION CONTACT section. B. How Can I Get Copies of This Document? 1. Docket . EPA has established official public dockets for today's final rule. Materials relevant to this rulemaking for the November 5, 2003 proposal (68 FR 62690) are in Public Docket I.D. No. OAR-2003-0049. Materials relevant to this rulemaking for the June 30, 2003 proposal (68 FR 38974) are in Public Docket I.D. No. OAR-2003-0063. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Air Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave., NW, Washington, DC. The Docket telephone number is (202) 566-1742. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744. You may have to pay a reasonable fee for copying docket materials. 2. Electronic Access. You may access this Federal Register document electronically through EPA's transportation conformity Web site at http://www.epa.gov/otaq/transp/traqconf.htm . You may also access this document electronically under the Federal Register listings at http://www.epa.gov/fedrgstr/ . An electronic version of the public docket is available through EPA's electronic public docket and comment system, EPA Dockets. You may use EPA Dockets at http://www.epa.gov/edocket / to view public comments, access the index listing of the contents of the official public docket, and to access those documents in the public docket that are available electronically. Although not all docket materials may be available electronically, you may still access any of the publicly available docket materials through the docket facility identified in Section I.B.1. Once in the EPA electronic docket system, select “search,” then key in the appropriate docket identification number. II. Background on the Transportation Conformity Rule A. What Is Transportation Conformity? Transportation conformity is required under Clean Air Act section 176(c) (42 U.S.C. 7506(c)) to ensure that federally supported highway and transit project activities are consistent with (“conform to”) the purpose of the state air quality implementation plan (SIP). Conformity currently applies under EPA's rules to areas that are designated nonattainment, and those redesignated to attainment after 1990 (“maintenance areas” with plans developed under Clean Air Act section 175A) for the criteria pollutants: ozone, particulate matter with an aerodynamic diameter less than or equal to a nominal 10 micrometers (PM 10 ), carbon monoxide (CO), and nitrogen dioxide (NO 2 ). Today's final rule also applies the conformity rule provisions in fine particulate matter (PM 2.5 ) areas. Conformity to the purpose of the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the relevant national ambient air quality standards (NAAQS or “standards”). EPA's transportation conformity rule establishes the criteria and procedures for determining whether transportation activities conform to the SIP. EPA first promulgated the transportation conformity rule on November 24, 1993 (58 FR 62188), and subsequently published a comprehensive set of amendments on August 15, 1997 (62 FR 43780) that clarified and streamlined language from the 1993 rule. EPA has made other smaller amendments to the rule both before and after the 1997 amendments. Today's final rule includes provisions from two proposals that were published on June 30, 2003 and November 5, 2003, as described below. EPA has consulted with the Department of Transportation (DOT), our federal partner in implementing the transportation conformity regulation, in developing all aspects of this rulemaking, and DOT concurs with this final rule. B. What Did EPA Propose on June 30, 2003 and Why? Today's final rule incorporates existing federal guidance into the conformity regulation consistent with a previous court decision. A decision made on March 2, 1999, by the U.S. Court of Appeals for the District of Columbia Circuit affected several provisions of the August 15, 1997 rulemaking ( Environmental Defense Fund v. EPA, et al. , 167 F. 3d 641, D.C. Cir. 1999; hereinafter referred to as the “court decision”). Specifically, the court's ruling affected provisions that pertain to five aspects of the conformity rule, including: (1) Federal approval and funding of transportation projects in areas without a currently conforming transportation plan and transportation improvement program (TIP); (2) Provisions allowing motor vehicle emissions budgets from submitted SIPs to be used in transportation conformity determinations before the SIP has been approved; (3) The adoption and approval of non-federal transportation projects in areas without a currently conforming transportation plan and TIP; (4) The timing of conformity consequences following an EPA disapproval of a control strategy SIP ( e.g. , reasonable further progress SIPs and attainment demonstrations) without a protective finding; and, (5) The use of submitted safety margins in areas with approved SIPs that were submitted prior to November 24, 1993. In response to the court decision, the EPA and DOT issued guidance 1 to address the provisions directly affected by the court decision. DOT also issued guidance on May 20, 2003, to clarify the conformity requirements as they relate to FHWA/FTA projects that require environmental impact statements. 2 In addition, FTA issued guidance on April 9, 2003, that further clarified which approvals are necessary for transit projects to proceed during a conformity lapse. 3 EPA and DOT consulted on the development of all of the guidance documents that were issued to implement the court decision. 1 May 14, 1999, Memorandum from Gay MacGregor, then-Director of the Regional and State Programs Division of EPA's Office of Transportation and Air Quality, to Regional Air Division Directors, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision”; January 2, 2002, Memorandum from Mary E. Peters, Administrator, Federal Highway Administration (FHWA), and Jennifer L. Dorn, Administrator, Federal Transit Administration (FTA), to FHWA Division Administrators, Federal Lands Highway Division Engineers, and FTA Regional Administrators, “Revised Guidance for Implementing the March 1999 Circuit Court Decision Affecting Transportation Conformity”; February 7, 2002, Notice, Issuance of Revised Guidance for Implementing the March 1999 Circuit Court Decision Affecting Transportation Conformity, Federal Register, 67 FR 5882. 2 May 20, 2003, Memorandum from James M. Shrouds, Director, Office of Natural and Human Environment, FHWA, and Susan Borinsky, Director, Office of Human and Natural Environment, FTA, to FHWA Division Administrators, Federal Lands Highway Division Engineers, and FTA Regional Administrators, “INFORMATION: Clarification of Transportation Conformity Requirements for FHWA/FTA Projects Requiring Environmental Impact Statements.” 3 April 9, 2003, Memorandum from Jennifer L. Dorn, Administrator, FTA, to Regional Administrators, Regions 1-10, “INFORMATION: Revised FTA Procedures for a Conformity Lapse.” This final rule incorporates all of these guidance documents, as proposed in EPA's June 30, 2003 rulemaking entitled, “Transportation Conformity Rule Amendments: Response to Court Decision and Additional Rule Changes” (68 FR 38974). EPA notes that although guidance implementing the court decision will still apply upon the effective date of this final rule, aspects of these guidance documents that are specifically addressed in this rulemaking will be governed by the federal conformity rules when they become effective. In addition to issues affected by the court, the June 30, 2003 proposal and today's final rule include several amendments to other provisions of the conformity regulations. These amendments are aimed at improving the implementation of the conformity program. The June 30, 2003 proposal and the comments received on that proposal serve as the basis for related provisions of today's final rule. The public comment period for the proposed rule ended on July 30, 2003. EPA received 25 sets of public comments on the proposed rule from MPOs; state and local transportation and air quality agencies; and, environmental, transportation and construction industry advocacy groups. Today's final rule makes several minor changes to the June 30, 2003 proposed rule in response to these stakeholder comments. The changes from the June 30, 2003 proposal and EPA's rationale for these changes are stated below. EPA has not, however, restated in this final rule background information and our complete rationale for many of the revisions to the conformity rule that are identical to the June 2003 proposal. The reader is referred to the proposal for such discussions. A copy of the proposal can be downloaded from EPA's transportation conformity website listed in Section I.B.2. of today's rulemaking. C. What Did EPA Propose on November 5, 2003 and Why? This final rule is also based on the November 5, 2003 proposed rule entitled, “Transportation Conformity Rule Amendments for the New 8-Hour Ozone and PM 2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas” (68 FR 62690), and the comments received on that proposal. The public comment period for this proposal ended on December 22, 2003. EPA held one public hearing for this proposal on December 4, 2003. EPA received over 110 sets of public comments on the proposed rule from MPOs, state and local transportation and air quality agencies, and environmental and transportation advocacy groups. EPA also received over 11,000 similar comments on the proposal from public citizens from a mass e-mail campaign. Today's final rule promulgates proposed options and rule revisions in response to these stakeholder comments. This preamble explains EPA's rationale for the selection of certain proposed options described in the November 2003 proposal. A copy of the November 2003 proposal can be downloaded from EPA's transportation conformity website listed in Section I.B.2. of today's rulemaking. EPA's nonattainment area designations for the new 8-hour ozone standard are effective on June 15, 2004 for most areas, and EPA anticipates designating areas for the new PM 2.5 air quality standard in November or December 2004. EPA is conducting this rulemaking to provide clear guidance and rules for implementing conformity for these standards. Some of the conformity rule revisions in this rulemaking will provide more options and flexibility in demonstrating conformity. Other changes apply to existing 1-hour ozone, CO, PM 10 and NO 2 nonattainment and maintenance areas. EPA notes that today's action does not finalize new transportation conformity requirements for PM 2.5 precursors and PM 2.5 hot-spot analyses, or make changes to existing PM 10 hot-spot analysis requirements. EPA is considering requirements for addressing PM 2.5 precursors in transportation conformity determinations in the context of EPA's broader PM 2.5 implementation strategy. EPA will soon be publishing a supplemental notice of proposed rulemaking to request additional comment on options related to PM 2.5 and PM 10 hot-spot requirements. PM 2.5 precursors and PM 2.5 /PM 10 hot-spot analysis requirements will be addressed in a separate final rule to be issued before PM 2.5 designations become effective. See Sections VIII., XII., and XIII. for further information on these topics. Other changes to the conformity program could occur in the future through the reauthorization of the Transportation Equity Act for the 21st Century (TEA-21), which authorizes federal surface transportation programs. EPA will continue to monitor the proposed reauthorization proposals for their potential impact on the conformity regulation. If statutory amendments to the conformity program result from TEA-21 reauthorization, EPA would take appropriate action to address such changes in the future. D. What Parts of the Final Rule Apply to Me? The following table provides a roadmap for determining whether a specific final rule revision included in this rulemaking would apply in your area. This table illustrates which parts of the final rule are relevant for various pollutants and standards. Please note that Sections V.-VII. provide stand-alone descriptions of the regional emissions tests that will apply in PM 2.5 areas and 8-hour ozone areas with and without existing 1-hour ozone SIPs. For example, if your area expects only to be designated nonattainment under the PM 2.5 standard, you should read Section VII. but not Sections V. and VI. (for 8-hour ozone areas). EPA believes that any redundancy between these sections is warranted to assist readers that may not need to read the entire final rule. 4 4 “Subpart 1 areas” are areas that are designated nonattainment under subpart 1 of part D of title 1 of the Clean Air Act. EPA also referred to these areas as “basic” nonattainment areas in its April 30, 2004 final designations rule for the 8-hour ozone standard (69 FR 23862). Type of area Issue addressed in final rule Preamble section Regulatory section 8-hour ozone Conformity grace period III.A. § 93.102(d). Revocation of 1-hour ozone standard III.B. Not applicable. General implementation of new standards III.C. Not applicable. Early Action Compacts III.D. Not applicable. Baseline year test IV.B. § 93.119(b). Build/no-build test (marginal classification and subpart 1 areas 4 ) IV.C. § 93.119(b)(2); § 93.119(g)(2). Regional conformity tests (moderate and above classifications) IV.D. § 93.119(b)(1). Regional conformity tests (areas without 1-hour ozone budgets) V. § 93.109(d). Regional conformity tests (areas with 1-hour ozone budgets) VI. § 93.109(e). Definitions XIV.A. § 93.101. Insignificance XIV.B. § 93.109(k); § 93.121(c). Transportation plan and modeling requirements (moderate and above classifications) XIV.D. § 93.106(b); § 93.122(c). Non-federal projects (for isolated rural areas only) XIV.F. § 93.121(b)(1). PM 2.5 Applicability III.A. § 93.102(b)(1). Conformity grace period III.A. § 93.102(d). Baseline year test IV.B. § 93.119(e). Build/no-build test IV.C. § 93.119(e); § 93.119(g)(2). Regional conformity tests VII. § 93.109(i). Precursors in regional analyses VIII. No regulatory text being finalized. Re-entrained road dust in regional analyses IX. § 93.102(b)(3); § 93.119(f). Construction-related fugitive dust in regional analyses X. § 93.122(f). Compliance with SIP control measures XI. § 93.117. Hot-spots XII. No regulatory text being finalized. Definitions XIV.A. § 93.101. Insignificance XIV.B. § 93.109(k); § 93.121(c). Non-federal projects (for isolated rural areas only) XIV.F. § 93.121(b)(1). 1-hour ozone Revocation of 1-hour ozone standard III.B. No proposed regulatory amendments. Build/no-build test (marginal and below classifications) IV.C. § 93.119(b)(2); § 93.119(g)(2). Regional conformity tests (moderate and above classifications) IV.D. § 93.119(b)(1). Definitions XIV.A. § 93.101. Insignificance XIV.B. § 93.109(k); § 93.121(c). Limited maintenance plans XIV.C. § 93.101; § 93.109(j); § 93.121(c). Transportation plan and modeling requirements (moderate and above classifications) XIV.D. § 93.106(b); § 93.122(c). Non-federal projects (for isolated rural areas only) XIV.F. § 93.121(b)(1). Clarification to use of approved budgets in conformity XIV.G. § 93.109(c). PM 10 Build/no-build test IV.C. § 93.119(d); § 93.119(g)(2). Compliance with SIP control measures (Request for information only) XI. No proposed regulatory amendments. Hot-spots XIII. No regulatory text being finalized. Clarification to Precursors XIV.E. § 93.102(b)(2); § 93.119(f)(5). Definitions XIV.A. § 93.101. Insignificance XIV.B. § 93.109(k); § 93.121(c). Limited maintenance plans XIV.C. § 93.101; § 93.109(j); § 93.121(c). Non-federal projects (for isolated rural areas only) XIV.F. § 93.121(b)(1). Clarification to use of approved budgets in conformity XIV.G. § 93.109(g). CO Build/no-build test (lower CO classifications) IV.C. § 93.119(c); § 93.119(g)(2). Regional conformity tests (higher CO classifications) IV.D. § 93.119(c)(1). Definitions XIV.A. § 93.101. Insignificance XIV.B. § 93.109(k); § 93.121(c). Limited maintenance plans XIV.C. § 93.101; § 93.109(j); § 93.121(c). Transportation plan and modeling requirements (moderate and serious classifications) XIV.D. § 93.106(b); § 93.122(c). Non-federal projects (for isolated rural areas only) XIV.F. § 93.121(b)(1). Clarification to use of approved budgets in conformity XIV.G. § 93.109(f). NO 2 Build/no-build test IV.C. § 93.119(d); § 93.119(g)(2). Definitions XIV.A. § 93.101. Insignificance XIV.B. § 93.109(k); § 93.121(c). Non-federal projects (for isolated rural areas only) XIV.F. § 93.121(b)(1). Clarification to use of approved budgets in conformity XIV.G. § 93.109(h). E. Does This Final Rule Include the Entire Transportation Conformity Regulation? No. The regulatory text in this final rule is limited to changes to affected portions of the conformity rule. However, a complete version of the conformity rule is available to the public on our transportation conformity website listed in Section I.B.2. of this rulemaking. The complete version is intended to help reviewers understand today's final rule in context with other existing rule sections that are not being changed. III. Conformity Grace Period and Revocation of the 1-hour Ozone Standard A. When Will Conformity Apply for the 8-hour Ozone and PM 2.5 Standards? 1. Description of Final Rule Conformity applies one year after the effective date of EPA's initial nonattainment designation for a given pollutant and standard. This one-year conformity grace period is provided by Clean Air Act section 176(c)(6) and § 93.102(d) of the conformity regulation. This final rule adds PM 2.5 to § 93.102(d) of the conformity rule even though the grace period is already available to all newly designated nonattainment areas as a matter of law. Since the 1-hour and 8-hour ozone standards are different NAAQS, every area that was designated nonattainment for the 8-hour ozone standard has a one-year grace period before conformity applies for that standard even if the area was previously designated nonattainment for the 1-hour ozone standard. Areas subject to conformity for the 1-hour ozone standard continue to be subject to all applicable Clean Air Act requirements during the 1-year conformity grace period for the 8-hour ozone standard, as described in B. of this section. EPA designated areas for the 8-hour ozone standard on April 15, 2004, and published the final designations rule on April 30, 2004 (69 FR 23858). Designations for most of these 8-hour areas will be effective on June 15, 2004. Therefore, conformity for the 8-hour ozone standard will begin to apply on June 15, 2005 in most areas. When conformity is done for the 1-hour standard during the grace period for the 8-hour standard, areas should consider whether demonstrating conformity for the 1-hour and 8-hour ozone standards at the same time is possible or advantageous. For example, if a conformity determination is made in September 2004 for a new or revised transportation plan and/or TIP, an area would demonstrate conformity for the 1-hour ozone standard and may choose to address the 8-hour ozone standard at a later date near the end of the one-year grace period, if conformity analyses for the 8-hour standard are not yet completed. In contrast, if a conformity determination is made in January 2005 for a new or revised plan/TIP, an area may be able to complete all the necessary work to demonstrate conformity for both ozone standards at that time. If no new or revised plan/TIP is required during the one-year grace period, conformity could be determined for the 8-hour standard without also making a conformity determination for the 1-hour standard. Whatever the case, a conformity determination for the 8-hour standard must be in place on June 15, 2005 for the plan and TIP, or an area will lapse. Areas should use the interagency consultation process to determine a schedule for conducting regional emissions analyses and demonstrating conformity for the 1-hour and 8-hour ozone standards during the one-year conformity grace period as appropriate. Areas can rely on similar analyses and other work for conformity determinations for existing and new standards, to the extent that such work meets applicable requirements. EPA plans to designate areas for PM 2.5 by November or December of 2004. Similarly, every area that is designated nonattainment for the PM 2.5 standard will have a one-year grace period from the effective date of designations before conformity applies for that standard. It is important to note that PM 10 is a different pollutant than PM 2.5 , and today's final rule does not affect the applicability and continued general implementation of conformity in PM 10 nonattainment and maintenance areas. EPA anticipates that some areas will be designated as nonattainment for both the 8-hour ozone and PM 2.5 standards. In these areas, conformity for the 8-hour ozone standard will apply one year after the effective date of the area's 8-hour ozone designation, while conformity for PM 2.5 will apply one year after the effective date of the area's PM 2.5 designation. As described in the November 5, 2003 proposal, if upon the expiration of the one-year grace period, a metropolitan area does not have a transportation plan and TIP that conform to the applicable standard in place, the conformity status of the area “lapses.” Likewise, within one year after the effective date of an area's initial nonattainment designation, the existing and planned transportation network for any donut 5 portion of an area (as well as for the metropolitan portion of the area) must demonstrate conformity, or conformity of the metropolitan transportation plan and TIP will lapse, and the entire nonattainment area will be unable to obtain additional non-exempt project funding and approvals at that time. During a conformity lapse funding and approval of transportation projects are restricted and only limited types of projects can proceed ( e.g. , safety projects, project phases that were approved before the lapse). 5 As defined in § 93.101 of today's final rule, donut areas are geographic areas outside a metropolitan planning area boundary, but inside the boundary of a nonattainment or maintenance area that contains any part of a metropolitan area(s). These areas are not isolated rural nonattainment and maintenance areas. The November 2003 proposal also stated that the one-year conformity grace period applies in isolated rural nonattainment areas. 6 However, conformity determinations in isolated rural areas are required only when a non-exempt FHWA/FTA project needs funding or approval. Therefore, once the conformity grace period has expired, a conformity determination will only be required in such areas the next time a non-exempt project needs funding or approval. 6 As defined in § 93.101 of today's final rule, isolated rural nonattainment and maintenance areas are areas that do not contain or are not part of any metropolitan planning area as designated under the transportation planning regulations. These areas are not donut areas. For more information on the application of the conformity grace period in metropolitan, donut and isolated rural nonattainment areas, see the November 5, 2003 proposal to this final rule (68 FR 62695-62696). See Section III.C. below for guidance and EPA's responses to comments regarding implementation of the one-year grace period and conformity determinations under the new standards. 2. Rationale and Response to Comments EPA received a number of comments on the one-year conformity grace period and the transition from the 1-hour ozone standard to the 8-hour ozone standard. Most commenters supported the one-year conformity grace period, with some commenters stating that the grace period makes sense and will provide state and local agencies with the time needed to prepare for conformity under the new standards. Another commenter supported the grace period as a means to prevent having to demonstrate conformity to two ozone standards simultaneously. Some commenters, however, believed that the one-year grace period would not allow enough time for some areas to meet the conformity requirements. One of these commenters questioned whether a year would be enough time to implement the interagency consultation process in brand new nonattainment areas or in existing nonattainment and maintenance areas that change in size or complexity. A few other commenters argued that the one-year grace period does not provide adequate time for new MPOs to become familiar with the conformity process or for existing MPOs to complete technical documentation and the public and adoption processes in nonattainment counties that are not within the MPO's jurisdiction ( i.e. , donut areas). To address these concerns, a few commenters suggested approaches for lengthening the conformity grace period. One commenter that was concerned about the lack of experience and resource burden on new and rural nonattainment areas requested that the grace period be extended to two years for these areas. Another commenter suggested that EPA provide a longer 60-day effective date for nonattainment designations, effectively giving areas two additional months before the conformity requirements apply. EPA understands that some areas, including brand new metropolitan areas, donut areas, and complex nonattainment areas ( e.g. , areas with multiple states and/or multiple MPOs) may have additional challenges in conducting the conformity process. However, the Clean Air Act, as amended on October 27, 2000, specifically provides newly designated nonattainment areas with only a one-year grace period, after which conformity applies as a matter of law under the statute. Therefore, we believe that the statutory language precludes EPA from extending the conformity grace period beyond one year for new nonattainment areas. We emphasize, however, that EPA issued letters to the states effectively notifying areas of their proposed 8-hour ozone nonattainment designation in December 2003 and that states submitted their recommendations for nonattainment areas based on monitored data, well before designations became effective. 7 In addition, state and local agencies of potential nonattainment areas have been involved early on in the 8-hour designation process. These new ozone nonattainment areas have already had additional time ahead of the one-year grace period to begin developing consultation procedures, modeling tools and data collections efforts for implementing the conformity regulation. EPA anticipates that areas designated nonattainment under the PM 2.5 standard will have similar advance notice of their pending designations, since state recommendations were due February 15, 2004, and many areas already expect that they will be designated nonattainment for PM 2.5 . 7 Information on 8-hour ozone nonattainment designations, including copies of EPA's December 2003 designation letters, can be accessed from EPA's Web site at http://www.epa.gov/air/oaqps/glo/designations/index.htm . The amount of time between the publication and effective dates of an action is established by EPA on a case-by-case basis for each rulemaking. We generally believe that the time needed for states to implement obligations for the NAAQS is fully considered in the statutory or regulatory provision establishing the compliance timeframe and that the effective date of the designations should not be used as a method for adjusting the compliance timeframes. In the context of promulgating the 8-hour ozone designations, EPA determined that it was appropriate to make the designations effective on June 15, 2004, approximately 45 days following the publication date of the designations. EPA will consider the appropriate effective date for PM 2.5 designations at the time it promulgates those designations. EPA notes that Section III.C. of today's final rule includes guidance on general and specific questions raised by commenters for implementing the new standards. In addition, EPA will release guidance on specific implementation issues that may arise in some of the different types of new nonattainment areas ( e.g. , multi-state and/or multiple MPO areas). We will provide this information in response to requests for clarification raised during the public comment period for this rulemaking. Newly designated nonattainment areas should also consult with their respective EPA regional and DOT division offices for additional guidance and assistance in meeting the conformity requirements within the one-year grace period. In addition, EPA and DOT will be conducting training sessions for the new standards conformity rulemaking in the near future that state and local agencies can attend; areas can also take advantage of existing EPA and DOT conformity 8 and emissions modeling 9 training that is currently available. 8 The National Transit Institute offers a course entitled, “Introduction to Transportation/Air Quality Conformity.” This course was developed by FTA, FHWA and EPA and is designed for federal, state and local agencies involved in the conformity process. In addition, the National Highway Institute offers a course entitled, “Estimating Regional Mobile Source Emissions.” 9 EPA and DOT jointly sponsored seven MOBILE6 training courses across the country in 2002. The training materials for these courses are on EPA's MOBILE6 website and can be downloaded at: http://www.epa.gov/otaq/m6.htm. Other training materials prepared by EPA are also available on this website. B. When Does Conformity Stop Applying for the 1-hour Ozone Standard? 1. Description of Final Rule Conformity for the 1-hour ozone standard will no longer apply in existing 1-hour ozone nonattainment and maintenance areas once that standard and corresponding designations are revoked. Today's final conformity rule and responses to comments with respect to this issue are consistent with EPA's April 30, 2004, 8-hour ozone implementation final rule that revokes the 1-hour standard one year after the effective date of EPA's 8-hour designations (69 FR 23951). Current 1-hour nonattainment and maintenance areas will continue to ensure that transportation activities conform to the existing 1-hour standard, including any applicable existing adequate or approved 1-hour SIP budgets, until that standard is revoked. When the 1-hour standard is revoked, conformity will no longer apply for either ozone standard in areas that are attaining the 8-hour ozone standard. Section 93.109(c) of today's final rule addresses conformity requirements for the 1-hour ozone standard. See EPA's April 30, 2004, 8-hour implementation final rule for more discussion on the revocation of the 1-hour ozone standard (69 FR 23951). 2. Rationale and Response to Comments Many commenters supported the revocation of the 1-hour ozone standard at the time conformity applies for the 8-hour ozone standard. Several commenters believed that requiring conformity for both ozone standards at the same time would be overly burdensome and confusing, and would significantly impact state and local resources and the transportation sector. These commenters supported a final rule that focused on attainment of the 8-hour standard, rather than created duplicative conformity requirements for two ozone standards. One commenter also argued that requiring conformity for both ozone standards at the same time could undermine progress to achieve adequate emission reductions, since new nonattainment areas may have to develop different control strategies for attaining the 8-hour ozone standard. This commenter believed that such a result could leave nonattainment areas extremely vulnerable to litigation. Some commenters stated that EPA's proposal is logical, since the 8-hour ozone standard is presumably a more stringent standard than the 1-hour standard. However, other commenters believed EPA's proposal to revoke the 1-hour standard is unlawful because they believed it would allow large increases in motor vehicle emissions and thus violate the statutory conformity tests. Other commenters stated that if the 1-hour standard was revoked, areas would no longer have to meet the SIP motor vehicle emissions budgets (“budgets”) established for that standard. These commenters were concerned that 8-hour nonattainment areas that were nonattainment or maintenance for the 1-hour standard would be able to determine conformity using less protective conformity tests, such as the build/no-build test, during the time period before new 8-hour SIP budgets are established. These commenters stated that not using existing 1-hour SIP budgets would lead to emissions increases that would later need to be offset by future controls for the 8-hour standard. Commenters also believed that using 1-hour ozone SIP budgets would support current air quality progress and ensure that attainment of the 8-hour standard is not delayed. As stated in the final 8-hour implementation rule (69 FR 23951) and corresponding response to comments document, EPA disagrees that revoking the 1-hour standard is unlawful. Congress gave EPA the authority to create and revise the NAAQS. In Clean Air Act section 109(d)(1), Congress directed EPA to review the standards every five years and “make such revisions in such criteria and standards and promulgate such new standards * * *.” EPA interprets “make such revisions in * * * standards” to mean that EPA has the authority to replace one standard with another. EPA does not believe that Congress intended to have overlapping standards every five years for the same pollutant. If that were the case, states would be required to develop and implement a SIP for each version of the standard. Duplicating these efforts would waste limited resources because the goal of each standard is the same: to protect public health and welfare. EPA promulgated the 8-hour standard in response to the latest data and science regarding ozone, and has determined that the 8-hour ozone standard is more protective of public health and welfare. EPA has made the decision to replace the 1-hour standard with the 8-hour standard, because it may be difficult for states to plan for both standards and because EPA concludes that the 8-hour standard is the more appropriate standard. Implicit in the authority to revise standards is the authority to revoke a standard. The U.S. Supreme Court's ruling (531 U.S. 547 (2001)) in a challenge against EPA's 1997 8-hour ozone implementation strategy certainly did not state otherwise. EPA needs to be able to revoke standards so that states and areas can move on to implementing the new standard and not have to implement old standards in perpetuity. Finally, since the 8-hour standard is the more stringent of the two standards, EPA believes conforming to that standard will be sufficient, as noted by several commenters. As stated in the April 30, 2004 final 8-hour implementation rule (69 FR 23969), EPA believes it is sufficient that conformity be determined for one ozone standard at a time. EPA concludes that focusing conformity requirements on one ozone standard at a time will meet Clean Air Act conformity requirements and use limited state and local resources in an efficient manner. However, EPA agrees that the continued use of existing approved or adequate 1-hour SIP budgets is important for meeting 8-hour conformity requirements before new 8-hour SIPs are established. Section VI. of this final rule provides further information regarding conformity requirements and EPA's rationale for such requirements in 8-hour ozone areas that have existing 1-hour SIP budgets. One commenter supported EPA's proposal to revoke the 1-hour standard for areas that are found to be in attainment of the new 8-hour standard. Based on air quality data and significant reductions from federal and state measures that will continue to remain in place, this commenter believed that revoking the 1-hour standard in the commenter's specific area would not impact ozone emissions. However, two other commenters opposed eliminating conformity in 1-hour ozone nonattainment and maintenance areas that were not designated nonattainment for the 8-hour standard. One of these commenters argued that conformity under the 1-hour maintenance plan helped prevent 8-hour violations, and urged EPA to work with these areas to find an acceptable mechanism to allow those areas that wish to retain conformity as a preventative measure. The other commenter believed that all areas that are covered by one of the ozone standards must continue or start to provide for clean air; the conformity process is a mechanism to accomplish this goal. Conformity cannot apply in 1-hour maintenance areas once the standard is revoked. The Clean Air Act specifically states that conformity applies only in “a nonattainment area* * *” and “an area that was designated as a nonattainment area but that was later redesignated by the Administrator as an attainment area and that is required to develop a maintenance plan under section 7505a of this title* * *” (42 U.S.C. 7506(5)). Clean Air Act section 176(c)(5) restricts conformity to nonattainment areas and areas that are required to submit maintenance plans under section 175A; in these areas, the Federal government's sovereign immunity is waived so that DOT can be required to make conformity determinations. 10 However, after revocation of the 1-hour standard, the areas previously required to submit section 175A maintenance plans under the statute for the 1-hour standard will no longer be required to do so. Thus, conformity can no longer be required in 1-hour maintenance areas, since the Clean Air Act limits conformity to areas that are required to submit section 175A maintenance plans and no longer waives the Federal government's sovereign immunity for these areas after revocation. 10 The concept of sovereign immunity specifies that the federal government can only be subjected to regulation to the extent it voluntarily agrees to become subject. With respect to conformity, in the Clean Air Act, Congress has agreed that the federal government should be subject only one year after designation in areas designated nonattainment or previously designated nonattainment and redesignated to attainment subject to a 175A maintenance plan. Thus, sovereign immunity prevents the mandatory application of conformity requirements either prior to a year after designation or after revocation with respect to a given air quality standard. EPA acknowledged in the June 2, 2003 proposed 8-hour implementation rule (68 FR 32818-32825) that our interpretation that conformity would not apply in 1-hour maintenance areas differs from the approach taken in 1997. In 1997, EPA interpreted revoking the 1-hour standard to mean that conformity would not apply for the 1-hour standard in areas that were nonattainment for the 1-hour standard, but that conformity would continue to apply for the 1-hour standard in areas with a maintenance plan. This interpretation led to an unfair and counter-intuitive result: areas that had attained the standard and had made the effort to establish a maintenance plan would have to continue a required program, but areas that had not attained would not. EPA reconsidered this result and found it to be unfair and inappropriate. Further, upon reanalyzing Clean Air Act section 176(c)(5), this previous interpretation did not fit with the text of the statute. As stated in the April 30, 2004 final 8-hour implementation rule (69 FR 23987), EPA has concluded that the better interpretation of the statute is that conformity would not apply in 1-hour maintenance areas once the 1-hour standard is revoked, because maintenance areas are relieved of the obligation under Clean Air Act section 175A (42 U.S.C. 7505a) to have a maintenance plan. Since these areas are no longer required to have a maintenance plan, conformity no longer applies for the 1-hour standard in these areas as a matter of law, and no waiver of sovereign immunity applies to allow imposition of conformity requirements. It is EPA's conclusion that areas that are in attainment for the 8-hour standard are not subject to conformity because the statute explicitly limits the applicability of conformity to designated nonattainment and maintenance areas for a given pollutant and standard. EPA notes that these areas still have incentive to monitor the growth of emissions from the transportation sector; if these areas violate the 8-hour standard, EPA would designate them nonattainment for the 8-hour standard and conformity would then apply. Although states cannot implement conformity for attainment areas as a matter of federal law, they could still work with their MPOs to estimate regional emissions that would be generated by the planned transportation system to see whether a violation could occur, and to address motor vehicle emissions growth. These type of state activities may be done under state law, when possible, or on a voluntary basis. One commenter suggested that the 1-hour standard should remain in place until the 8-hour standard is fully implemented and no longer subject to legal challenges to ensure that one of the ozone standards is implemented. The commenter believed that this approach would be particularly important for areas impacted by regional transport. Other commenters stated that the 8-hour ozone standard should be delayed if revocation of the 1-hour standard becomes delayed. EPA does not believe, however, that the current statutory and regulatory requirements allow us to extend conformity for the 1-hour standard or delay conformity for the 8-hour standard in the event of legal challenges, for example, as this commenter has suggested. In the April 30, 2004 final 8-hour ozone implementation rule, EPA specifically promulgated rules that will revoke the 1-hour standard one year after the effective date of 8-hour designations. Alternatively, Clean Air Act section 176(c)(6) and conformity rule § 93.102(d) require conformity for the 8-hour standard one year after the effective date of ozone nonattainment designations. Therefore, conformity for the 8-hour standard will apply in areas designated nonattainment for that standard on June 15, 2005. As previously stated, EPA has no statutory authority to extend the one-year conformity grace period and delay the conformity requirements in new 8-hour nonattainment areas. A few commenters recommended that if 8-hour ozone SIP budgets are submitted and found adequate by EPA prior to revocation of the 1-hour standard, they should replace all prior ozone budgets, including those for the 1-hour standard. One commenter supported EPA's proposal to require that 1-hour conformity requirements be met prior to revocation, including adherence to the applicable 1-hour SIP budgets. Another commenter believed that only conformity for the 8-hour standard should apply once designations are made during the one-year grace period, rather than the 1-hour conformity requirements. EPA addressed this issue of revocation as part of its April 30, 2004 final 8-hour implementation rule. EPA did not propose in its June 2, 2003, 8-hour implementation proposal to revoke the 1-hour standard earlier than one year after designations, since EPA intended to align the revocation of the 1-hour standard with the application of conformity requirements for the 8-hour standard one year after the effective date of 8-hour nonattainment designations. Furthermore, EPA did not expect that areas would be able to submit an 8-hour SIP earlier. EPA continues to believe that most areas are unlikely to have adequate budgets that address the 8-hour standard before EPA revokes the 1-hour standard. Such budgets cannot stand alone but have to be associated with adopted control measures and demonstrations of either attainment or reasonable further progress, and EPA believes developing these SIPs will take states some time. Once the SIPs are submitted, EPA must find them adequate, a process which EPA intends to complete within 90 days of receiving a SIP in most cases. It is very unlikely that states will be able to complete the work to submit 8-hour SIPs prior to one year from the effective date of 8-hour designations, and much less likely that states would have submitted them sufficiently in time for EPA to find them adequate before the 1-hour standard is revoked. Given these facts and the fact that EPA did not include in its June 2003 8-hour implementation proposal an option for revoking the standard earlier than one year after 8-hour designations are effective, EPA did not provide for early revocation of the 1-hour standard, nor will EPA require 8-hour areas to expedite development of their 8-hour SIP for this purpose. As described above, the Clean Air Act provides a one-year grace period before conformity for the 8-hour standard applies, so EPA is not able to mandate 8-hour requirements sooner, as suggested by one commenter. Prior to the revocation of the 1-hour standard, new or revised transportation plans and TIPs must conform to the applicable SIP budgets for the 1-hour standard. Finally, one commenter believed that the final rule should address the situation where a new ozone nonattainment area can demonstrate conformity for the 8-hour standard during the grace period, but cannot for the 1-hour standard. EPA has concluded consistent with the April 30, 2004 final 8-hour ozone implementation rule and today's action, the 1-hour standard will remain in effect for one year following the effective date of 8-hour nonattainment designations. EPA believes this is appropriate since 8-hour conformity cannot be required to apply before that time. Therefore, areas currently designated nonattainment or maintenance for the 1-hour ozone standard must demonstrate conformity for the 1-hour standard for any new or revised transportation plan, TIP and project approval during the one-year grace period for the 8-hour standard. In general, if an area must determine plan/TIP conformity during the grace period because of a required deadline and is unable to do so, the nonattainment or maintenance area's conformity for the 1-hour standard will lapse. This lapse would remain in effect until conformity for the 1-hour standard is re-established or the 1-hour standard is revoked, regardless of whether the area conforms for the 8-hour standard during that time period. On the other hand, if an area's plan/TIP meets conformity for the 1-hour standard but cannot meet conformity for the 8-hour standard during the grace period, the area would lapse when the one-year grace period ends, because at that point, conformity applies for the 8-hour standard. C. How Do Areas Implement the One Year Conformity Grace Period and Transition From the 1-hour Ozone Standard? In the November 5, 2003 proposal, EPA provided details on the application of the one-year conformity grace period in metropolitan, donut, and isolated rural nonattainment areas (68 FR 62695-62696). New nonattainment areas should refer to A. of this section and the November 2003 proposal for these discussions. EPA received several questions and comments regarding general implementation for the new standards. The paragraphs below include general information on the implementation of conformity requirements for: • Initial conformity determinations in new nonattainment areas; • regional emissions modeling requirements in new nonattainment areas; • timely implementation of transportation control measures (TCMs) in approved SIPs; • multi-jurisdictional nonattainment areas ( e.g. , multi-state areas and areas with sub-area budgets); and • donut and isolated rural areas. Both the November 2003 proposal's preamble and our response to comments below are based on implementation precedent to date, and do not create any new conformity policy. Section VI. of today's notice provides more details on the use of 1-hour ozone budgets in 8-hour ozone nonattainment areas. EPA will post more detailed implementation guidance on its transportation conformity website for conformity determinations in new standard areas, including 8-hour ozone areas with 1-hour SIP budgets and multi-state/multi-MPO nonattainment areas. Please see Section I.B.2. of this notice for information regarding EPA's conformity website. 1. Initial 8-hour Ozone and PM 2.5 Conformity Determinations As described in A. of this section, areas that are designated nonattainment for the 8-hour ozone and/or PM 2.5 standard must determine conformity of transportation plans and TIPs by the expiration of the one-year conformity grace period for a relevant pollutant and standard. Metropolitan and donut 8-hour ozone and PM 2.5 nonattainment areas must complete all of the tasks that are required for a conformity determination ( e.g. , interagency consultation, regional emissions analyses, public participation, MPO and DOT conformity determinations) during the relevant grace period in order to avoid a conformity lapse upon the expiration of the grace period. 11 Clean Air Act section 176(c)(6) specifically states that conformity will not apply in an area for a particular standard until one year after the area is designated for that standard. Thus, although completing conformity determinations for the new standards is not required prior to the end of the grace period, FHWA, FTA, and MPOs can choose to make determinations early for administrative purposes, when desired. FHWA and FTA have voluntarily agreed that they can make conformity determinations during the grace period even though it is not mandated by the Clean Air Act. 11 As described in A. of this section, isolated rural areas that are designated nonattainment for the 8-hour ozone and/or PM 2.5 standard may not need to demonstrate conformity by the expiration of the one-year grace period. Newly designated isolated rural areas are only required to determine conformity for the first time when a non-exempt federal highway or transit project requires funding or approval after the end of the one-year grace period. Metropolitan areas that are designated nonattainment for the 8-hour ozone and PM 2.5 standards can make transportation plan and TIP conformity determinations during their respective grace periods on a voluntary basis. In order to avoid a lapse, DOT must make its conformity determination prior to the end of the grace period. The timing of the next required plan and TIP conformity determinations will be determined pursuant to the frequency requirements in § 93.104 of the conformity rule, starting from the date of DOT's first conformity determination that includes a new regional emissions analysis under the new standards, even if this occurs prior to the end of the grace period. Thus, conformity determinations will always be conducted at intervals as required by the regulations. Similarly, a conformity determination for a non-exempt FHWA/FTA project in a metropolitan, donut, or isolated rural area could be prepared during the one-year grace period, and submitted to DOT. DOT can make its conformity determination for such a project during the grace period. However, a conformity determination for a new standard might not be necessary if FHWA and FTA take all necessary approval actions prior to the end of the grace period. Once the conformity grace period expires, a project-level conformity determination is required whenever non-exempt projects complete the NEPA process, as defined in 40 CFR 93.101. For projects that complete the NEPA process prior to the end of the conformity grace period without a conformity determination for a new standard, a project-level conformity determination would be required for the next project phase that requires FHWA/FTA approval. 2. Regional Emissions Analysis Requirements in 8-hour Ozone and PM 2.5 Areas One commenter requested clarification on whether different regional emissions analysis requirements will apply under the 1-hour and 8-hour ozone standards. In this rulemaking, EPA did not change the regional emissions analysis requirements in § 93.122 for existing and new nonattainment and maintenance areas. Therefore, new 8-hour ozone and PM2.5 areas must adhere to the same emissions analysis requirements as existing areas. For example, only 8-hour ozone nonattainment areas classified as serious, severe and extreme whose metropolitan planning area contains an urbanized population over 200,000 are required to meet the more rigorous transportation modeling requirements contained in § 93.122(b) of the conformity rule. Based on EPA's April 15, 2004 designations and classifications for 8-hour nonattainment areas as published in the Federal Register on April 30, 2004 (69 FR 23858), all nonattainment areas classified as serious or severe under the 8-hour ozone standard are already meeting these modeling requirements because they had a similar or higher classification under the 1-hour ozone standard. There are no nonattainment areas classified as extreme under the 8-hour standard. However, even if these areas were required to expand the geographic area covered by their transportation model, these expanded areas would have a two-year grace period to revise their model to cover the full 8-hour ozone nonattainment area, as described in Section XXIII. and § 93.122(c) of today's action. Similarly, if there are 8-hour ozone nonattainment areas initially classified as serious or severe with an urbanized population greater than 200,000 that were never previously required to comply with the modeling requirements contained in § 93.122(b), either because their 1-hour classification was lower or their urbanized population was under 200,000, these areas would also have a two-year grace period to develop a new transportation model that satisfies these requirements. During the two-year grace period, affected areas must meet the requirements of § 93.122(d) of the conformity rule. In addition, PM 2.5 nonattainment areas and all other 8-hour ozone nonattainment areas are also required to comply with the transportation modeling requirements contained in § 93.122(d). This section requires these areas to continue to model regional emissions using all of the procedures described in § 93.122(b) where it has been their past practice. In other words, if an area has previously been required to demonstrate conformity and the area's transportation model and modeling practices either fully or partially complied with the requirements of § 93.122(b), the area must continue to model regional emissions for the 8-hour ozone and/or PM 2.5 standard using procedures which continue to meet these same aspects of the § 93.122(b) requirements that were previously met. Otherwise, areas may estimate regional emissions using any appropriate methods that account for growth in vehicle miles traveled (VMT) and consider future economic activity, transit alternatives and transportation system policies, as determined through the interagency consultation process. 3. Timely Implementation of TCMs in Approved SIPs Section 93.113 of the existing conformity rule requires that transportation plans, TIPs, and projects which are not from a conforming plan and TIP must provide for the timely implementation of TCMs from an approved SIP. EPA notes that today's final rule does not change the implementation of these requirements for any existing or new nonattainment or maintenance area, including 8-hour nonattainment areas that have approved 1-hour SIPs that contain TCMs. Clean Air Act section 176(c) requires that TCMs in approved SIPs be implemented in a timely manner according to the schedules in the SIP. This requirement is not contingent on what type of SIP, pollutant, or standard for which the approved TCM was established. Conformity determinations for any pollutant and standard must provide for the timely implementation of TCMs in approved SIPs, including TCMs in approved SIPs for the 1-hour ozone standard after that standard is revoked. Such TCMs can only be removed from the 1-hour SIP through the SIP process. 4. Multi-State Nonattainment Areas and Nonattainment Areas With Sub-Area Budgets Some commenters requested clarification regarding how conformity would be implemented under the new standards in nonattainment areas with multiple MPOs or that cover multiple states. EPA believes that today's action is consistent with its existing conformity rule and historical precedent that provides flexibility to such areas. For example, nonattainment areas with multiple MPOs can establish sub-area motor vehicle emissions budgets in their 8-hour ozone or PM 2.5 SIPs to allow MPOs to do conformity separately, provided that all MPOs in such a nonattainment area continue to have conforming transportation plans and TIPs. EPA will post implementation guidance on its transportation conformity Web site for conformity determinations in multi-state and multi-MPO nonattainment areas. Please see Section I.B.2. of this notice for information regarding EPA's conformity Web site. 5. Donut Areas A few commenters requested clarifications pertaining to conformity implementation in portions of a nonattainment area that are not contained within the area's MPO boundary ( i.e. , “donut areas”). Specifically, one commenter requested that adjacent MPO and donut areas in the same nonattainment area be allowed to submit individual conformity determinations. In general, EPA believes that regional emissions for an entire nonattainment area, including any donut portion, must be considered at the time a conformity determination is made to ensure that all transportation activities in that area conform. Therefore, EPA has not changed the current rule's requirements and existing precedent for donut areas in response to this comment. Areas that contain a donut portion should refer to the November 5, 2003 proposal (68 FR 62695-62696) for more information on the requirements for demonstrating conformity in donut areas. Another commenter requested that EPA designate state transportation and air quality agencies as the lead agencies for conducting and completing conformity determinations for donut areas. This commenter believed that this process for demonstrating conformity in donut areas needs to be formalized through the interagency consultation process and/or a memorandum of understanding. EPA anticipates that the state departments of transportation may take the lead in conducting regional emissions analyses for the donut portion in some nonattainment areas. However, there may be cases where an adjacent MPO is better suited to conduct such analyses or wants to include the donut area's projects in its plan and TIP and supporting regional emissions analysis. Section 93.105(c)(3) of the conformity rule relies on the interagency consultation process (including the MPO and state transportation agency) to determine how best to consider projects that are planned for donut areas located outside the metropolitan area and within the nonattainment or maintenance area in the conformity process. Section 93.105 also requires that such procedures for demonstrating conformity of donut area projects be included in an area's conformity SIP that is approved by EPA. Therefore, EPA believes that the existing rule's requirements and the flexibility provided by this provision remain appropriate and do not need to be revised to address this comment. Another commenter raised concerns that in some nonattainment areas only portions of the donut area may be included in the MPO's transportation model. This commenter also suggested that emissions information for such outlying donut portions may not be readily available. EPA understands that the donut portion of some new nonattainment areas may not be included in the adjacent MPO's transportation model and may not have as up-to-date or detailed planning information as the MPO. The conformity rule provides flexibility for modeling requirements in these areas. In fact, existing methods that are used in donut areas may already be suitable for conformity determinations. EPA does not believe that a travel demand model is required to estimate emissions for donut areas in most cases (provided that § 93.122(b) does not apply to the nonattainment area). See C.2. of this section for more information about the general transportation modeling requirements in 8-hour and PM 2.5 nonattainment areas. In addition, the conformity rule requires the use of the latest planning assumptions and emissions models that are available at the time a conformity analysis begins (§§ 93.110 and 93.111). Today's change to the latest planning assumptions requirements is discussed in Section XX. of this preamble. For most donut areas, the most recently available Highway Performance Monitoring System (HPMS) estimates of VMT may be the only source of travel data available, and thus, should be used. Some donut areas may also need to rely on national default data ( e.g. , speeds and vehicle registration data) included in EPA's most recent emissions model, MOBILE6.2, when estimating emissions if no local data is available for the donut area and it appears that the default data is more representative than the local information for the adjacent metropolitan area. In such a case the conformity determination for the area should contain an explanation of why the default data was used for a portion of the nonattainment area. The interagency consultation process must be used to determine which planning assumptions are considered the latest and best for demonstrating conformity for donut areas prior to the expiration of the one-year conformity grace period. 6. Isolated Rural Areas We received one comment that supported our November 5, 2003 proposal for implementing the conformity grace period in isolated rural areas. This commenter believed that due to the rarity of new non-exempt projects in these areas, requiring a conformity determination for only exempt projects would be a misuse of resources. EPA agrees with this comment, and therefore, clarified in the November 2003 proposal and today's final rule that conformity in isolated rural areas is required only when a non-exempt FHWA/FTA project(s) needs funding or approval. See A. of this section and the November 2003 proposal (68 FR 62696) for more information. D. When and For What Ozone Standard Does Conformity Apply in Areas With an Early Action Compact for the 8-hour Ozone Standard? 1. Description of Final Rule EPA has provisionally deferred into the future the effective date of 8-hour ozone nonattainment designations for areas participating in an Early Action Compact (EAC). The deferral of the 8-hour designation effective date is contingent upon the participating area's adherence to all the terms and milestones of its EAC, as described in EPA's November 14, 2002 memorandum entitled, “Schedule for 8-Hour Ozone Designations and its Effect on Early Action Compacts,” the December 16, 2003 proposed EAC rule (68 FR 70108), and the April 30, 2004 final designations rule (69 FR 23864). Consistent with § 93.102(d) and Clean Air Act section 176(c)(6), conformity for the 8-hour ozone standard will not apply until one year after the effective date of an EAC area's 8-hour nonattainment designation. Therefore, conformity for the 8-hour ozone standard will apply in an EAC area only if the area fails to meet all the terms and milestones of its compact and the nonattainment designation becomes effective. In this case, conformity for the 8-hour standard will be required one year after the effective date of EPA's nonattainment designation that will occur shortly after a missed EAC milestone. Conversely, if the area meets all of the EAC milestones and attains the 8-hour ozone standard by December 2007, conformity for the 8-hour ozone standard would never apply since the area's ultimate effective designation would be attainment for the 8-hour ozone standard. Conformity for the 1-hour ozone standard will continue to apply in EAC areas that are currently 1-hour ozone maintenance areas and are required to demonstrate conformity for that standard. If a maintenance area meets all of its EAC milestones and attains the 8-hour ozone standard by December 2007, conformity for the 1-hour standard will no longer apply once EPA revokes that standard one year after the effective date of EPA's 8-hour attainment designation ( i.e. , spring 2009). If, however, a 1-hour ozone maintenance area fails to meet a milestone in its EAC, EPA would lift its deferral, and the area's 8-hour ozone nonattainment designation would become effective shortly after the missed milestone. Under this scenario, conformity for the 1-hour ozone standard will continue to apply until one year after the effective date of EPA's nonattainment designation. Also occurring at one year after the nonattainment designation will be revocation of the 1-hour ozone standard, expiration of the one-year conformity grace period, and the application of conformity for the 8-hour ozone standard under Clean Air Act section 176(c)(6). 2. Rationale and Response to Comments All commenters who addressed this topic supported EPA's approach for deferring the 8-hour ozone conformity requirements in EAC areas through deferral of the effective date of 8-hour designations. One of these commenters believed that EPA's proposal can yield positive results while imposing minimal constraints on states and localities. Other commenters believed that the EAC policy is a proactive approach for meeting Clean Air Act requirements and should reduce emissions and provide for attainment without the need of the conformity requirements. EPA agrees with these comments. Another commenter raised concerns regarding how conformity would be implemented in 8-hour ozone nonattainment areas that are covered only partially by an EAC. For example, in a nonattainment area that contains a few donut counties that are not covered by a metropolitan area's EAC, this commenter argued that the conformity status of such an EAC would not lapse if the donut counties could not demonstrate conformity by the expiration of the one-year grace period. However, since 8-hour ozone nonattainment areas were not designated as the commenter described, EPA is not providing guidance in today's notice for such a situation. IV. General Changes in Interim Emissions Tests A. Background Conformity determinations for transportation plans and TIPs as well as transportation projects not from a conforming plan and TIP must include a regional emissions analysis that fulfills certain Clean Air Act provisions. Section 176(c) requires that transportation activities in all nonattainment and maintenance areas must not worsen air quality. In addition, transportation activities in ozone and CO nonattainment areas of higher classifications also need to contribute emission reductions towards attainment. The conformity rule provides for several different regional emissions analysis tests that satisfy these Clean Air Act requirements in different situations. Once a SIP with a motor vehicle emissions budget (“budget”) is submitted for an air quality standard and EPA finds the budget adequate or approves it as part of the SIP, conformity is demonstrated using the budget test for that pollutant or precursor, as described in § 93.118 of the conformity rule. Before an adequate or approved SIP budget is available, conformity of the transportation plan, TIP, or project not from a conforming plan and TIP is generally demonstrated with the interim emissions tests, as described in § 93.119. The following subsections describe the final changes to the interim emissions tests (under § 93.119). Sections V., VI., and VII. describe the application of these tests in different 8-hour ozone and PM 2.5 areas (under § 93.109). B. Baseline Year Test for 8-Hour Ozone and PM 2.5 Areas 1. Description of Final Rule We are adding the following tests to the conformity rule for 8-hour ozone and PM 2.5 nonattainment areas: • The “less-than-2002 emissions” test, and • the “no-greater-than-2002 emissions” test. Under these interim emissions tests, conformity would be demonstrated if the emissions from the proposed transportation system are either less than or no greater than 2002 motor vehicle emissions in a given area. Regulatory text for the 2002 baseline year tests can be found in § 93.119. See Sections V.-VII. for how these tests will be applied in various 8-hour ozone and PM 2.5 areas. EPA is not changing the 1990 baseline year tests for 1-hour ozone, CO, PM 10 and NO 2 areas that do not have adequate or approved SIP budgets. However, § 93.119 has been reorganized to include the provisions for new 8-hour ozone and PM 2.5 areas. Consistent with current practice, the interagency consultation process under § 93.105(c)(1)(i) must be used to determine the latest assumptions and models for generating 2002 motor vehicle emissions to complete either baseline year test. All 8-hour and PM 2.5 areas will be submitting baseline SIP inventories for the year 2002. As described in the proposal, the 2002 baseline year test can be completed with the SIP's 2002 motor vehicle emissions inventory, if the SIP has been submitted in time for the current conformity determination. Draft 2002 baseline year emissions from a SIP inventory under development or the consultation process could also be used to develop 2002 baseline year emissions as part of the conformity analysis. EPA believes that a submitted or draft 2002 SIP inventory may be the most appropriate source for completing the 2002 baseline year tests for an area's first conformity determination under the new standards. This is due to the fact that the 2002 SIP inventories should be under development at the same time as these determinations, and such inventories should be based on the latest available data at the time they are developed. Whatever the source, the 2002 baseline year emissions level that is used in conformity must be based on the latest planning assumptions available for the year 2002, the latest emissions model, and appropriate methods for estimating travel and speeds as required by §§ 93.110, 93.111 and 93.122 of the conformity rule. 2. Rationale and Response to Comments Most commenters supported the proposal to use 2002 for the baseline year tests for the new air quality standards. These commenters also supported the use of the interagency consultation process to determine how the 2002 baseline emission level is calculated. However, a few commenters supported using a more recent baseline year ( i.e. , 2003, 2004, 2005) for conformity analyses completed before 8-hour ozone or PM 2.5 SIP budgets are found adequate. These commenters argued that a more recent year should be used when reliable data are available to ensure that additional project approvals are not made during interim years with an artificially high 2002 motor vehicle emissions inventory. EPA continues to believe that the year 2002 is more appropriate than either the 1990 baseline year or a more recent baseline year, as some commenters suggested. EPA believes that it is important to have transportation and air quality planning time frames coordinated. Having consistent baseline years for SIPs, conformity determinations and other emission inventory requirements helps to achieve this goal. This was the rationale for maintaining 1990 as the baseline year for conformity tests in existing areas, and past experience indicates that having similar baseline years for SIP and conformity planning purposes has worked well. As described in the November 2003 proposal, EPA has selected 2002 as the baseline year for SIP inventories under the new 8-hour ozone and PM 2.5 standards. EPA's November 18, 2002 memorandum, “2002 Base Year Emission Inventory SIP Planning: 8-hr Ozone, PM 2.5 , and Regional Haze Programs,” identifies 2002 as the emission inventory base year for the SIP planning process to address both of these pollutants and standards. EPA's April 30, 2004 final 8-hour ozone implementation rule also establishes 2002 as the base year for 8-hour ozone SIP inventories (69 FR 23951), as described in the June 2, 2003 proposal (68 FR 32810). Finally, EPA's Consolidated Emissions Reporting Rule (CERR) requires submission of emission inventories every three years, and 2002 is one of the required years for such updates. EPA continues to believe that coordinating conformity's baseline with other data collection and inventory requirements would allow state and local governments to use their resources more efficiently. In addition, since conformity is to be measured against a SIP it is appropriate to use the baseline year that will be used for SIP planning. Furthermore, a 2002 baseline year is an appropriate measure for meeting Clean Air Act conformity requirements to not worsen air quality prior to adequate SIP budgets being established. EPA notes that emission inventories are generally not submitted until approximately two years after the year for which they are calculated. The 2002 inventories are scheduled to be submitted by the states to EPA in June of 2004, the year designations are made for the 8-hour ozone and PM 2.5 standards. In addition, emission inventories are not expected to vary by much in the few years following 2002. Emission inventories are generally trending downward, but year to year changes are generally small. Any advantage gained by using the most recent available inventory as the baseline for conformity purposes would be offset by the loss of coordination with other agencies and processes that will be possible by the use of 2002 as the baseline year. Therefore, EPA is retaining in this final rule the 2002 baseline year tests for conformity under the new air quality standards. Finally, EPA is responding today to a comment that was raised in the context of the June 2, 2003 proposed 8-hour ozone implementation rule. A commenter supported using only the motor vehicle emissions inventories for the year 2002 as de facto interim motor vehicle emissions budgets for conformity determinations, during the time period before 8-hour areas have adequate or approved SIP budgets for the 8-hour standard. This commenter also suggested that the motor vehicle emissions inventory could be decreased 3% per year between the base year of 2002 and the attainment year, to represent “reasonable further progress” for the transportation sector. EPA understands the commenter's point that the 2002 inventory is similar to a budget, in that both a 2002 baseline inventory and a SIP budget that is established to meet a Clean Air Act requirement serve as an emissions ceiling on future transportation actions. However, EPA does not agree that the 2002 baseline inventory could be used as a “de facto budget” and replace the interim emissions test requirements in today's final rule. As described below, prior to adequate or approved SIP budgets being established, 8-hour ozone areas that are classified as moderate or higher are generally required to complete both the build-less-than-no-build and less-than-2002 interim emissions tests. Areas that are marginal or designated nonattainment under subpart 1 of part D of title 1 of the Clean Air Act (“subpart 1 areas”) could, in general, choose to use either the no-greater-than-2002 or the build-no-greater-than-no-build test prior to an 8-hour SIP. Finally, all 8-hour ozone areas have the option to submit a reasonable further progress SIP with budgets early and use the budget test, instead of the interim emissions test(s). EPA appreciates the commenter's idea to decrease inventories incrementally for the purpose of the baseline year conformity test. However, given that EPA did not propose and receive public comment on this idea, the commenter's suggestion is not included in today's final rule. Furthermore, EPA believes that the option for an area to submit an early 8-hour SIP that meets Clean Air Act requirements provides sufficient flexibility to transition areas quickly to the budget test for future conformity determinations, when desired. Please see Sections V. and VI. of the preamble for more information regarding the regional emissions tests that apply for 8-hour conformity determinations. C. Build/No-Build Test for Certain Existing and New Nonattainment Areas 1. Description of Final Rule EPA is revising the build/no-build test for certain existing and new nonattainment areas. Specifically, the final rule amends § 93.119 to create the “build-no-greater-than-no-build” test, where conformity is demonstrated if emissions from the proposed transportation system (“build” or “action” scenario) are less than or equal to emissions from the existing transportation system (“no-build” or “baseline” scenario). Under today's final rule, the build-no-greater-than-no-build test is available to the following subset of new and existing areas: • 8-hour ozone areas of marginal classification, • 8-hour ozone areas designated nonattainment under subpart 1 of part D of title 1 of the Clean Air Act (“subpart 1 areas”), • All PM 2.5 areas, • 1-hour ozone areas of marginal and below classifications ( i.e. , Section 185A, incomplete data, and sub-marginal areas), • CO areas of moderate classification with design values less than 12.7 ppm, • Not classified CO areas, • All PM 10 areas, and • All NO 2 areas. Sections V., VI., and VII. of this rule provide more detail regarding the application of the build/no-build test in various 8-hour ozone and PM 2.5 areas. For areas that would be using the build-no-greater-than-no-build test, EPA is also modifying the existing rule so that a regional emissions analysis would not be necessary for analysis years where the build and no-build scenarios contain exactly the same transportation projects and are based on exactly the same planning assumptions, for the reasons described below. Such a case may occur in smaller areas that do not have projects planned for earlier years in the regional emissions analysis, and population, land use, economic, and other assumptions do not change between the build and no-build scenarios for those years. Under the final rule, a regional emissions analysis would continue to be required for any applicable years where the action and baseline scenarios contain different projects and are based on different assumptions. This change can be found in § 93.119(g)(2) of the final rule regulatory text. The rule requires that the conformity determination include documentation that a regional emissions analysis is not completed for analysis years in which no new projects are proposed and no change in planning assumptions has occurred. Finally, § 93.119 has been reorganized in general to accommodate the above and other changes articulated in this final rule for new and existing areas. 2. Rationale and Response to Comments As explained in the November 5, 2003 proposal, EPA believes that allowing certain areas to use a build-no-greater-than-no-build test is consistent with Clean Air Act section 176(c)(3)(A)(iii), which specifically requires that transportation plans and TIPs contribute to annual emissions reductions only in the higher classifications of ozone and CO areas. This statutory provision does not apply to other types of nonattainment areas that are required to demonstrate only that transportation activities do not cause or contribute to new violations, increase the frequency or severity of existing violations, or delay timely attainment, pursuant to Clean Air Act section 176(c)(1)(B). EPA believes that if the “build” scenario emissions are no greater than ( i.e. , less than or equal to) the “no-build” scenario emissions, that such a demonstration is made, since only an increase in emissions would worsen air quality. This change to the build/no-build test also makes its implementation consistent with the implementation of the baseline year tests: In ozone and CO areas of higher classifications, expected emissions from the proposed transportation system must be less than emissions in the baseline year, while in all other areas, expected emissions must be no greater than emissions in the baseline year. For further discussion of the rationale for how and where the baseline year tests apply, please refer to the preamble to the January 11, 1993 proposed rule (58 FR 3782-3784), the preamble to the July 9, 1996 proposed rule (61 FR 36116-36117), and the November 5, 2003 proposal (68 FR 62701, 62705). Most commenters supported EPA's proposal to provide the build-no-greater-than-no-build test in certain nonattainment areas. Many of these commenters agreed with EPA's interpretation of the Clean Air Act section 176(c)(3)(A)(iii) that ozone nonattainment areas that are not classified moderate or above, lower classified CO nonattainment areas and all PM 10 , NO 2 and PM 2.5 areas are not required to demonstrate annual emissions reductions for conformity purposes. One commenter stated that, from a practical standpoint, the build and no-build options are often identical and believed that there is no reason to require emissions reductions prior to the submission of a SIP for such areas. A few commenters also believed that this rule revision would provide flexibility and resolve previous conformity issues in areas with few transportation projects, only non-regionally significant projects, or projects planned for only certain years of the transportation plan. EPA agrees with these comments. A few commenters also believed that the proposed build-no-greater-than-no-build test should be available to all 8-hour ozone nonattainment areas, not just marginal or subpart 1 areas. Two of these commenters believed that EPA should extend this flexibility as satisfying the Clean Air Act section 176(c)(1)(B) requirement, that transportation plans only be required to not make air quality worse. However, EPA believes that extending this approach to CO and ozone areas of higher classifications would violate Clean Air Act section 176(c)(3)(A)(iii), which also requires transportation plans and TIPs in these areas to contribute to annual emissions reductions. The build-no-greater-than-no-build test does not satisfy this requirement. In contrast, two commenters did not agree with EPA's proposal to change the previous build-less-than-no-build test to a build-no-greater-than-no-build test in certain nonattainment areas. One of these commenters was concerned that changing the build/no-build test in certain areas may hinder future ozone reductions by not requiring the implementation of transportation activities that would reduce emissions. This same commenter, however, agreed that this proposed revision to the build/no-build test would simplify the planning process. Another commenter did not agree with EPA's proposal because this commenter believed that the conformity requirements should be the same for all parties regardless of size or classification. The commenter believed that all nonattainment and maintenance areas should contribute to reducing emissions not only to improve their own air quality but also to benefit the air quality in nearby airsheds as well. Further, the commenter argued that EPA's proposal could rectify a previous issue with the build/no-build test where the first analysis year is sufficiently close to the present year (the year in which the regional emissions analysis is being conducted) such that all of the non-exempt projects in the action scenario are also in the baseline scenario. EPA believes that the Clean Air Act makes the distinction in requirements between areas of different pollutants and classifications and thus certain areas are not required to contribute reductions towards attainment prior to SIP submission. Therefore, EPA is not changing the final rule in response to these comments. Another commenter requested clarification on the level of precision that is required to demonstrate conformity using the proposed build-no-greater-than-no-build test. For example, if an analysis resulted in emissions from the baseline (no-build) scenario being 9,000 pounds/day (4.500 tons/day) and emissions from the action (build) scenario being 10,998 pounds/day (5.499 tons/day), the commenter asked whether the agency performing the analysis could round both values off to 5 tons/day and claim that the build-no-greater-than-no-build test had been satisfied. This commenter believed that leaving this issue to be resolved through interagency consultation does not recognize that there are separate conformity interagency consultation rules for each region or perhaps each state or metropolitan area. The commenter questioned whether consistency in implementing the build-no-greater-than-no-build test could be maintained without sufficient guidance. EPA believes that, at a minimum, rounding conventions used in conformity should be consistent with the level of precision used for the motor vehicle emissions budget in the local SIP. Rounding conventions should be discussed through the interagency consultation process and consider past conformity practices for the area. EPA notes that today's final rule only addresses how conformity analyses are performed; budgets cannot be rounded or changed from the emissions level that is determined by the SIP. If questions remain or if the area has never developed a local SIP, the interagency consultation process is the correct place to deal with questions of precision and rounding. The precision used in the development of local emissions inventories may vary depending on the size of the area and the resources available for the analysis. Decisions on rounding conventions for conformity analyses need to be consistent with local analysis methods and cannot easily be made at the national level. However, even given local variations in analysis methods, it is clear in the commenter's example that the build scenario produces emissions greater than the no-build scenario, and thus the test is not passed. EPA also notes that the final rule will also reduce the resource burden for analysis years where no new projects are proposed to be completed and assumptions do not change. Under the previous rule, a regional emissions analysis is required for all analysis years, even if no new projects are proposed for analysis years in the distant future. For such analysis years, the emissions from the build and no-build scenarios contain the same projects and assumptions, and therefore, result in exactly the same level of emissions. EPA believes that in such cases it is obvious that the build-no-greater-than-no-build test is passed without calculating the emissions for such analysis years. Furthermore, the Clean Air Act requirements to not worsen air quality or delay timely attainment may be met by documenting in the conformity determination that projects, assumptions, and thus emissions would remain the same for affected analysis years. Most commenters supported EPA's proposal to not require a regional analysis in years where the build and no-build scenarios are exactly the same with the same projects and planning assumptions. Many of these commenters believed that the proposal would reduce burden on small urban areas with relatively few projects and resources for conducting conformity analyses. One commenter also believed that this proposal would prevent conformity lapses and would allow states to focus on those nonattainment areas with more transportation projects and more severe air quality issues. Two commenters believed this flexibility should also be extended to ozone nonattainment areas of higher classifications. EPA agrees that this approach will likely relieve some of the burden of the conformity process on small areas with few projects and less serious air quality problems. However, ozone areas with higher classifications are required to meet a build-less-than-no-build test so this provision of today's final rule does not apply. In these areas, transportation plans and TIPs actually have to reduce emissions from current levels. One commenter raised concerns with our proposal to waive regional analysis requirements for future analysis years when the build and no-build scenarios are exactly the same. This commenter did not agree with EPA's logic for the proposed rule revision, stating that the build and the no-build cases will always contain different assumptions regarding growth. Another commenter pointed out that EPA's proposal would be beneficial only when new projects are programmed in the later years of a plan, and no new projects are planned for the early years of the plan or TIP. However, in the reverse situation when projects are added in the early years of the TIP or plan but not in the later years, the commenter indicated that the effect of those projects would need to be reflected in the build scenario throughout the horizon years of the plan, via different VMT and speed estimates. In this case, the commenter stated that all analysis years should be modeled and included in the conformity determination. EPA agrees with the commenter's understanding that the logic given in the November 5, 2003 proposal for this change was incorrect. We agree that an area would have different projects and assumptions in later years where projects were added in earlier years (these projects would always and only be in the build case for any years). However, we still think there are limited cases where projects and assumptions for both scenarios could be the same such as in earlier years. EPA believes that if the build and no-build scenarios are exactly the same and are based on exactly the same planning assumptions, by definition they cannot contain different assumptions about growth. This provision is intended to only apply in situations when the build and no-build scenarios are exactly the same. If there are any differences in the build and no-build scenarios, including differences in planning assumptions, speed or VMT, this provision would not apply. One commenter believed that this flexibility should be available through the interagency consultation process, and that EPA should modify the conformity regulation to allow it subject to agreement among affected parties though the interagency consultation process. EPA agrees that consultation should be used to determine when this flexibility applies, but no rule change is needed to do that. Finally, several commenters raised general concerns about the build/no-build test and offered other suggested changes to the test to address these concerns. For example, a few commenters did not believe that the “no-build” scenario always provides an appropriate basis for conformity demonstrations, particularly in the outyears of the transportation plan. To address this issue, one commenter proposed that for all analysis years in the second 10 years of the transportation plan, the “no-build” scenario should be the “build” scenario from the previous analysis year. EPA agrees that there are limitations in the usefulness of the build/no-build test for assessing longer-term air quality impacts of highway and transit projects. In fact, this is the primary reason that the build/no-build test is an interim test prior to the availability of an adequate or approved SIP budget. EPA does not believe the suggested changes to the build/no-build test are necessary and would ensure protection of air quality during this interim period. For example, the suggested change proposed by one of the commenters could allow emissions increases. In addition, many commenters supported the flexibility to choose between build/no-build and baseline year tests, as described in Sections V., VI., and VII. Since these general comments were not germane to the proposal, we have included a full response to these comments in the separate response to comments document, which is in Public Docket I.D. no. OAR-2003-0049. D. Test Requirements for Ozone and CO Nonattainment Areas of Higher Classifications 1. Description of Final Rule EPA is retaining the requirement that ozone and CO areas of higher nonattainment classifications must meet both the build-less-than-no-build and less-than-baseline year tests to demonstrate conformity in the period before SIP budgets are available. This provision will affect moderate and above 1-hour and 8-hour ozone areas, moderate CO areas with design values greater than 12.7 ppm, and serious CO areas. This requirement is identical to the requirement of the existing conformity rule for these areas, and was the first of three options proposed for regional emissions analyses before adequate or approved SIP budgets are established. EPA had requested comment on the following proposed options for these areas: (1) Complete both the build-less-than-no-build and less-than-baseline year tests; (2) Complete either the build-less-than-no-build or less-than-baseline year test; or (3) Require that only one of these tests be met and eliminate the second test as an option altogether. The first option, which EPA has selected for the final rule, will retain the current conformity rule requirement that such areas use both the current build-less-than-no-build test and the less-than-baseline year test. Under this option, emissions from the proposed transportation system (build) will have to be less than emissions from the existing system (no build) and less than emissions in 1990 (for higher classification 1-hour ozone and CO areas) or 2002 (for higher classification 8-hour ozone areas). See the proposal for further background information on options 2 and 3 (November 5, 2003, 68 FR 62699-62700). 2. Rationale and Response To Comment Based on our review of the proposal, the existing requirements of the conformity rule, and comments submitted, EPA has concluded that option 1, the existing conformity requirements, will better meet the dual statutory requirements for ozone and CO areas of higher classifications. These areas must demonstrate that transportation activities not cause or contribute to violations of the standards or delay timely attainment of a standard (Clean Air Act section 176(c)(1)(B)) and that such activities also contribute to annual emissions reductions (Clean Air Act section 176(c)(3)(A)(iii)). EPA's proposal was intended to explore potential alternatives in an effort to provide the most flexible and least burdensome way of meeting statutory requirements. When EPA first promulgated the transportation conformity rule (January 11, 1993, 58 FR 3782), EPA determined that moderate and above 1-hour ozone areas and CO areas of higher classifications would have to meet both the build-less-than-no-build test and the less-than-baseline year test to satisfy both applicable statutory requirements that transportation activities not cause or contribute to violations of the standards (Clean Air Act section 176(c)(1)(B)) and that such activities contribute to annual emissions reductions (Clean Air Act section 176(c)(3)(A)(iii)). EPA also discussed our rationale for these areas in a July 9, 1996, proposed rule (61 FR 36116-36117). Although the majority of the comments supported option 2, a choice between either the build/no-build or baseline year test, these commenters primarily supported this option out of a stated desire to obtain greater flexibility in meeting conformity requirements. No commenters provided any further rationale for the option or explained how the statutory requirements could be satisfied with only one test. In contrast, the commenters supporting option 1, continuation of the existing rule requirement to meet both the tests, provided compelling arguments indicating that both tests would be necessary to meet the statutory requirements. Further, comments on option 3 noting why either test would be superior provided additional indication that either test by itself could not meet both statutory obligations. In the face of these comments, as explained below EPA does not believe it can alter the current rule requiring the use of both tests. The totality of the comments led EPA to conclude that if only the baseline test were required, in an area where motor vehicle emissions were declining significantly as a result of technology improvements in vehicle engines and fuels, the transportation plan itself might not be contributing to emissions reductions while the area as a whole was still meeting the baseline test. This would not meet the statutory requirement that such transportation activities themselves must contribute to emissions reductions. In contrast, in ozone and CO areas of higher classifications, the build/no-build test alone would not guarantee that emissions from the planned transportation system are less than emissions in the baseline year, even if emissions from the planned transportation system (the build case) are less than the current transportation system (the no-build case). This could fail to meet the statutory requirement that activities not contribute to violations of the standard. Thus, based on the Agency's reasoning in past conformity rules and the comments submitted in this rulemaking, EPA believes that it must continue to require the use of both the baseline year and build/no-build tests in ozone and CO areas of higher nonattainment classifications prior to the availability of SIP budgets in order to satisfy applicable statutory obligations. In light of this conclusion, EPA is not responding in detail in this preamble to the numerous comments indicating policy choices for which of the two tests should be chosen or how the choice should be made, since EPA is requiring the use of both tests on legal grounds. A full response to all comments is included in the separate response to comments document available in the docket for this final rule. V. Regional Conformity Tests in 8-hour Ozone Areas That Do Not Have 1-Hour Ozone SIPs A. Description of Final Rule This section covers the provisions EPA is finalizing in today's rule for regional emissions analyses in 8-hour ozone areas that do not have an existing 1-hour ozone SIP with applicable budgets. These 8-hour ozone areas either were never designated nonattainment under the 1-hour ozone standard or were 1-hour ozone nonattainment areas that never submitted a control strategy SIP or maintenance plan with approved or adequate budgets. A regional emissions analysis is the part of a conformity determination that assesses whether the emissions produced by transportation activities are consistent with state, local, and federal air quality goals. EPA describes the final rule in four parts, as in the proposal: Conformity when 8-hour budgets are available, conformity before 8-hour budgets are available, conformity in clean data areas, and general implementation of regional emissions tests. 1. Conformity After 8-Hour Ozone SIP Budgets Are Adequate or Approved Once a SIP for the 8-hour ozone standard is submitted with a budget(s) that EPA has found adequate or approved, the budget test must be used in accordance with § 93.118 to complete all future applicable regional emissions analyses for 8-hour conformity determinations. In other words, once EPA finds a budget from an 8-hour ozone SIP adequate or approves an 8-hour ozone SIP that includes such a budget, the interim emissions test(s) will no longer apply for that precursor. This provision is found in § 93.109(d)(1) of today's rule. The first 8-hour ozone SIP could be a control strategy SIP required by the Clean Air Act ( e.g., rate-of-progress SIP or attainment demonstration) or a maintenance plan. However, 8-hour ozone nonattainment areas “are free to establish, through the SIP process, a motor vehicle emissions budget [or budgets] that addresses the new NAAQS in advance of a complete SIP attainment demonstration. That is, a state could submit a motor vehicle emissions budget that does not demonstrate attainment but is consistent with projections and commitments to control measures and achieves some progress towards attainment” (August 15, 1997, 62 FR 43799). A SIP submitted earlier than otherwise required can demonstrate a significant level of emissions reductions from the current level of emissions, instead of the specific percentage required by the Clean Air Act for moderate and above ozone areas. For example, an area could submit an early 8-hour ozone SIP that demonstrates a 5-10% reduction of emissions in the year 2007, from 2002 baseline year emissions. An approvable early 8-hour SIP would include emissions inventories for all emissions sources for the entire 8-hour nonattainment area and would meet applicable requirements for reasonable further progress SIPs. For more information on establishing an early SIP and how it could be used for conformity, please refer to the final 8-hour ozone implementation rule (April 30, 2004, 69 FR 23951). Air quality agencies responsible for developing 8-hour ozone SIPs must consult on their development with the relevant state and local air quality and transportation agencies per § 93.105(b). EPA Regions are available to assist on an “as needed” basis, including consultation on the development of early 8-hour ozone SIPs. 2. Conformity Before 8-Hour Ozone SIP Budgets Are Adequate or Approved Before adequate or approved 8-hour ozone SIP budgets are established in 8-hour ozone areas that do not have 1-hour ozone SIPs, the regional emissions analysis is done using one or two interim emissions tests, depending on the area's classification or designation as described below. These provisions are found in § 93.109(d)(2)-(4) of today's rule. Marginal and below classifications and subpart 1 areas. These 8-hour ozone nonattainment areas include: 8-hour ozone areas classified marginal and 8-hour ozone areas designated nonattainment under Clean Air Act subpart 1. These areas must pass one of the following tests in accordance with § 93.119 for conformity determinations that occur before adequate or approved 8-hour ozone SIP budgets are in place: • The build-no-greater-than-no-build test, or • The no-greater-than-2002 emissions test. That is, emissions in all analysis years from the transportation system, as modified by the proposed transportation plan or TIP, must be less than or equal to emissions from either: • The existing transportation system (the “no-build” case) in each of those analysis years, or • The transportation system in 2002. A discussion of the interim emissions tests can be found in Section IV. See also EPA's April 30, 2004 final 8-hour ozone implementation rule (69 FR 23951) for more information on 8-hour ozone areas designated under Clean Air Act subpart 1 (“subpart 1 areas”). Moderate and above classifications. These areas include: 8-hour ozone nonattainment areas classified as moderate, serious, severe, and extreme. These areas must pass both of the following tests in accordance with § 93.119 for conformity determinations that occur before adequate or approved 8-hour ozone SIP budgets are in place: • The build-less-than-no-build test, and • The less-than-2002 emissions test. That is, emissions in all analysis years from the transportation system, as modified by the proposed transportation plan or TIP, must be less than each of the following comparison cases: • The existing transportation system including projects currently under construction (the “no-build” case) in each of those analysis years, and • The transportation system in 2002. For more information regarding these interim emissions tests for moderate and above ozone areas, please see Section IV.D. 3. Options for 8-Hour Ozone Areas That Qualify for EPA's Clean Data Policy In § 93.109(d)(5) of today's rule, EPA is extending the conformity rule's flexibility for 1-hour moderate and above “clean data areas” to 8-hour areas that meet the criteria of the clean data policy. As described in the November 5, 2003 proposal, EPA issued a policy memorandum on May 10, 1995 that addressed SIP requirements in a small number of moderate and above 1-hour ozone areas (entitled “Reasonable Further Progress, Attainment Demonstrations, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard”). Please see the November 5, 2003 proposal for further background on EPA's existing clean data policy and conformity options (68 FR 62700-62701). Clean data areas under today's final rule are moderate and above ozone areas with three years of clean data for the 8-hour ozone standard that have not submitted a maintenance plan and for which EPA believes it is reasonable to interpret the Clean Air Act's reasonable further progress and attainment demonstration requirements so as not to require areas that are meeting the ozone standard to make certain SIP submissions. In addition, some subpart 1 areas may also be eligible for the clean data policy if they are required to submit control strategy SIPs. Areas that qualify for EPA's clean data policy under the 8-hour standard can use one of the following three options to complete regional emissions analyses: • The interim emissions tests, as described above; • the budget test using the adequate or approved motor vehicle emissions budgets in an 8-hour ozone SIP; or • the budget test using the motor vehicle emissions levels in the most recent year of clean data as budgets, if the state or local air quality agency requests that budgets be established by EPA's clean data rulemaking for the 8-hour ozone standard and EPA approves the request. As stated in Phase 1 of EPA's final 8-hour ozone implementation rule (April 30, 2004, 69 FR 23974), EPA intends to extend the existing clean data policy to applicable 8-hour ozone areas, and will respond on this issue in its future Phase 2 final 8-hour ozone implementation rule. Please note that EPA's clean data policy, and therefore today's provision allowing emissions in the most recent year of clean data to be used as a budget, might not be available in any area for the first 8-hour conformity determination. Newly designated areas may not yet have three years of clean data for the 8-hour standard when the first conformity determination is due for that standard. As discussed in Section III., the first plan/TIP conformity determination is due by June 15, 2005, one year after the effective date of 8-hour designations. 4. General Implementation of Regional Tests Regional emissions analyses for ozone areas must address both ozone precursors, which are nitrogen oxides (NO X ) and volatile organic compounds (VOCs) (40 CFR 93.102(b)(2)(i)). Before budgets are available, areas must meet the appropriate interim emissions test(s) for both VOC and NO X precursors, unless EPA issues a NO X waiver for the 8-hour standard under Clean Air Act section 182(f). This provision is consistent with the conformity rule to date, although in today's final rule the NO X waiver provision is moved to § 93.119(f) (from § 93.119(d)) because of the reorganization of § 93.119. Once an adequate or approved SIP budget is available for the 8-hour standard, it must be used for regional emissions analyses. In general, if a budget is available for only one ozone precursor, the interim emissions test(s) will continue to apply for the other precursor. For example, this situation would occur when a reasonable further progress SIP is submitted with a budget for VOCs only ( e.g. , a 15% SIP), and this case is specifically covered by § 93.109(d)(3). In this example, an area would use the budget test for VOCs and the interim emissions test(s) for NO X , unless it has a NO X waiver as described above. The consultation process must be used to determine the models and assumptions for completing either the interim emissions tests or the budget test, as required by § 93.105(c)(1)(i) of the current rule. B. Rationale and Response to Comments The use of the budget test once budgets are available for an air quality standard is based on the requirements of the Clean Air Act. Once budgets have been found adequate or approved, the budget test provides the best means to determine whether transportation plans and TIPs conform to a SIP and complies with the statutory obligation to be consistent with the emissions estimates in SIPs, according to Clean Air Act section 176(c)(2)(A). Several commenters specifically agreed that once a SIP for the 8-hour ozone standard is submitted with a budget(s) that EPA has found adequate or approved, the budget test should be used. One of these commenters stated that the advantage of the budget test is that areas have a high degree of confidence in attaining and maintaining the standards if emissions are held to budget levels from SIPs demonstrating attainment and maintenance. Another of these commenters strongly supported establishing 8-hour budgets through the submission of early SIPs, as discussed above. Before budgets are available, the final rule's interim emissions test requirements for 8-hour areas are generally consistent with requirements for 1-hour areas. In general, several commenters supported the flexibility provided by the test options for 8-hour marginal and subpart 1 areas that do not have 1-hour ozone SIPs. EPA believes that it is reasonable and credible to provide 8-hour ozone areas that are not classified moderate or above the same flexibility that applies under the 1-hour ozone standard. Several commenters specifically supported allowing these 8-hour ozone areas a choice between the baseline year and build/no-build tests. EPA determined in the 1997 conformity rule that either test could satisfy the statutory test of not causing or contributing to violations or delaying attainment in these areas, and the Agency believes this would continue to be true for new 8-hour areas, as discussed further below. A few commenters requested clarification that the interim emissions test options remain available in subsequent conformity determinations until adequate or approved budgets are in place. These commenters are correct that while no 8-hour ozone budgets are available, areas are free to choose either test for a conformity determination, regardless of what test was used for a prior conformity determination. For example, if an MPO within a marginal 8-hour nonattainment makes a conformity determination based on the build-no-greater-than-no-build test, this would not preclude them, prior to adequate or approved budgets, from making a future conformity determination based on the no-greater-than-2002 emissions test. However, under these final rules, the same test must be used for each analysis year for a given conformity determination. In other words, an MPO may not use the build-no-greater-than-no-build test in one analysis year and the no-greater-than-2002 test in another analysis year within the same conformity determination. EPA believes that sufficient flexibility exists without mixing and matching interim emissions tests for different analysis years within one conformity determination, which is unnecessarily complicated and suggests that the area would not conform using one test consistently. One commenter advocated that state air agencies should have the authority to determine which test is used, because in the commenter's view the state air agency would best be able to choose the test that ensures progress towards attainment. However, EPA believes that it is appropriate for the decision to be made within the interagency consultation process, as has been done to date. Given that MPOs have responsibility for making the conformity determination, and would need to set up the no-build network if the build-no-greater-than-no-build test is used, EPA believes they need to take part in choosing the test. State air agencies are insured a role in the transportation conformity process through interagency consultation, as § 93.105 of the conformity rule sets forth the requirements for state air agencies' participation in the conformity process, as well as a process for resolving conflicts. The state air agency role is also addressed in the preamble to the 1993 rule (November 24, 1993, 58 FR 62201). EPA continues to believe that the conflict resolution process provides a mechanism for the state air agency to elevate issues to the governor if they cannot be resolved by state agency officials, and that the process facilitates collaboration which is essential to cooperative transportation and air quality planning. Therefore, EPA is not changing the final rule in response to this comment. A few commenters supported one or the other of the proposed interim emissions tests in 8-hour marginal or subpart 1 areas. One commenter supported elimination of t [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A04-14213. Public record. Not legal advice.