# Transportation Conformity Rule Amendments: Flexibility and Streamlining

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A96-16581

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** July 9, 1996
- **Citation:** 61 FR 36112

## Text

SUMMARY: EPA is proposing a more streamlined and flexible
transportation conformity rule. The conformity rule requires that
transportation plans, programs, and projects conform to state air
quality implementation plans (SIPs) and establishes the criteria and
procedures for determining whether or not they do. Conformity to a SIP
means that transportation activities will not produce new air quality
violations, worsen existing violations, or delay timely attainment of
national ambient air quality standards.
Since publication of the original rule in November 1993, EPA, the
Department of Transportation (DOT), and state and local air and
transportation officials have had considerable experience implementing
the criteria and procedures in the rule. The changes proposed today are
a result of this experience and are intended to make the conformity
rule less complex and make it a more effective planning tool. The
proposed changes will not result in any change in health and
environmental benefits.
This proposed rule would give state and local governments more
authority in setting the performance measures used as tests of
conformity and more discretion when a transportation plan does not
conform to a SIP. The proposal would allow motor vehicle emissions
budgets in a submitted SIP to be used to determine conformity instead
of the ``build/no-build'' test. Modeling requirements would be tailored
for different types of areas, and rural areas would be able to choose
among several conformity tests.

DATES: Comments on this action must be submitted on or before September
9, 1996. EPA will conduct one public hearing on this proposal beginning
at 10 a.m. on Tuesday, August 6, 1996, in Washington, DC. As described
in section XVI. of today's action, the hearing will continue throughout
the day until all testimony has been presented.

ADDRESSES: Interested parties may submit written comments (in
duplicate, if possible) to: Air and Radiation Docket and Information
Center, U.S. Environmental Protection Agency, Attention: Docket No. A-
96-05, 401 M Street, SW., Washington, DC 20460. (Those desiring
notification of receipt of comments must include a self-addressed,
stamped postcard.)
The public hearing will be held in Washington, DC, at the Holiday
Inn Capitol Hill, 550 C Street, SW., Washington, DC 20024, (202) 479-
4000.
Materials relevant to this rulemaking are contained in Public
Docket A-96-05 by EPA. The docket is located at the above EPA address
in room M-1500 Waterside Mall (ground floor) and may be inspected from
8 a.m. to 5:30 p.m., Monday through Friday, including all non-
government holidays.

FOR FURTHER INFORMATION CONTACT: Kathryn Sargeant, Transportation and
Market Incentives Group, Regional and State Programs Division, U.S.
Environmental Protection Agency, 2565 Plymouth Road, Ann Arbor, MI
48105, (313) 668-4441.

SUPPLEMENTARY INFORMATION:

Regulated Entities

Entities potentially regulated by the conformity rule are those
which adopt, approve, or fund transportation plans, programs, or
projects under the Intermodal Surface Transportation Efficiency Act or
Federal Transit Laws. Regulated categories and entities include:

------------------------------------------------------------------------
Examples of regulated
Category entities
------------------------------------------------------------------------
Local government.......................... Local transportation and air
quality agencies.
State government.......................... State transportation and air
quality agencies.
Federal government........................ EPA and Department of
Transportation (Federal
Highway Administration and
Federal Transit
Administration).
------------------------------------------------------------------------

This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. This table lists the types of entities that EPA is now aware
could potentially 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 in Sec. 51.394/Sec. 93.102 of the
conformity rule. If you have questions regarding the applicability of
this action to a particular entity, consult the person listed in the
preceding FOR FURTHER INFORMATION CONTACT section.
The contents of this preamble are listed in the following outline:

I. Background on Transportation Conformity Rule
II. Applicability of the Budget Test and Emission Reduction Tests
III. Implementation of the Budget Test
IV. Non-federal Projects
V. Rural Nonattainment and Maintenance Areas
VI. Modeling Requirements
VII. Consequences of SIP Disapproval
VIII. Mismatch in SIP/Transportation Plan Timeframe
IX. Public Participation
X. Interagency Consultation
XI. Streamlining and Clarification
XII. TCM Flexibility
XIII. PM10 Hot Spots
XIV. Signalization Projects
XV. Conformity SIPs
XVI. Public Hearing
XVII. Administrative Requirements

I. Background on Transportation Conformity Rule

Today's action proposes to amend the transportation conformity
rule, ``Criteria and Procedures for Determining Conformity to State or
Federal Implementation Plans of Transportation Plans, Programs, and
Projects Funded or Approved Under Title 23 U.S.C. or the Federal
Transit Act'' (58 FR 62188, November 24, 1993). Required under section
176(c) of the Clean Air Act, as amended in 1990, the transportation
conformity rule established the criteria and procedures by which the
Federal Highway Administration (FHWA), the Federal Transit
Administration (FTA), and metropolitan planning organizations (MPOs)
determine the conformity of federally funded or approved highway and
transit plans, programs, and projects to state implementation plans
(SIPs). Conformity ensures that transportation plans, programs, and
projects do not produce new air quality violations, worsen existing
violations, or delay timely attainment of national ambient air quality
standards (NAAQS). According to the Clean Air Act, federally supported
activities must conform to the implementation plan's purpose of
attaining and maintaining these standards.
Since publication of the transportation conformity rule in November
1993, EPA, the Department of Transportation (DOT), and state and local
air and transportation officials have had considerable experience
implementing the criteria and procedures in the rule. It is that mutual

[[Page 36113]]

experience which leads to today's proposal, which is the third of a
series of three anticipated amendments to the transportation conformity
rule. In each case, the amendments were needed to clarify ambiguities,
correct errors, or make the conformity process more logical and
feasible. The first set of amendments was published as an interim final
rule on February 8, 1995 (60 FR 7449), and was finalized on August 7,
1995 (60 FR 40098). The first set of amendments aligned the dates of
conformity lapses (i.e., halting of new federally funded highway/
transit projects) due to SIP failures with the application of Clean Air
Act highway sanctions for certain ozone areas and all areas with
disapproved SIPs with a protective finding.
The second set of amendments was proposed on August 29, 1995 (60 FR
44790), and was finalized on November 14, 1995 (60 FR 57179). The
second set of amendments allowed any transportation control measure
(TCM) from an approved SIP to proceed during a conformity lapse;
aligned the date of conformity lapses with the date of application of
Clean Air Act highway sanctions for any failure to submit or submission
of an incomplete control strategy SIP; extended the grace period before
which areas must determine conformity to a submitted control strategy
SIP; established a grace period before which transportation plan and
program conformity must be determined in newly designated nonattainment
areas; and corrected the nitrogen oxides (NOx) provisions of the
transportation conformity rule consistent with the Clean Air Act and
previous commitments made by EPA.
Today's proposal would further amend the conformity rule in
response to several issues raised by conformity implementers and other
interested parties. EPA has worked closely with these conformity
stakeholders to develop this proposal. In March 1995, the National
Governors' Association (NGA) and the Environmental Council of States
(ECOS) hosted a meeting of state DOTs, environmental agencies, EPA, and
DOT to discuss the conformity rule. At this meeting, ECOS presented
nine specific proposals to change the conformity rule. EPA and DOT
committed to address all nine issues. EPA requested that state
workgroups prepare white papers examining four issues in greater depth:
the build/no- build test, non-federal projects, rural nonattainment
areas, and adding non-exempt projects to the transportation plan and
transportation improvement program (TIP) without full regional
analysis. The remaining five issues are being addressed
administratively.
In April 1995, EPA hosted in Washington, DC a conformity
stakeholder meeting of state DOTs, state environmental agencies, MPOs,
environmentalists, industry groups, and other public interest groups.
EPA substantially shaped the meeting's agenda around NGA's four white
papers in order to provide groundwork for stakeholder discussion on
these issues. On June 30, 1995, EPA distributed to conformity
stakeholders draft regulatory language addressing the issues discussed
at the April meeting. EPA received written comments and followed up
with a series of four conference calls in July 1995 to solicit
additional reaction to the June draft language. The draft language and
comments are available in the public docket.
On September 1, 1995, EPA distributed a letter to conformity
stakeholders indicating what EPA and DOT intended to propose regarding
key conformity issues. Today's proposal is based substantially on the
approach described in the September letter.

II. Applicability of the Budget Test and Emission Reduction Tests

A. Description of Proposal

The proposal would change the time periods during which the budget
test and the ``emission reduction tests,'' commonly known as the
``build/no-build test,'' are required. The proposal would eliminate the
requirements for the emission reduction tests once a control strategy
SIP or maintenance plan has been submitted to EPA and EPA has had 45
days to review the adequacy of the SIP submission and its motor vehicle
emissions budget(s). The budget test would replace the emission
reduction tests 45 days after the control strategy SIP or maintenance
plan was submitted to EPA (provided EPA has not found the submission
inadequate), or earlier if EPA has found the submission adequate.
Under the existing transportation conformity rule, both the
emission reduction tests and the budget test are required until EPA's
final approval of the control strategy SIP (or maintenance plan, where
control strategy SIPs are not required). In addition, under the
existing rule EPA has a review period of 90 days before the motor
vehicle emissions budget in a newly submitted SIP may replace a
previously submitted motor vehicle emissions budget.
The proposal would streamline the conformity process by eliminating
the existing transportation conformity rule's reliance on the
classification system of ``Phase II interim period,'' ``transitional
period,'' ``control strategy period,'' and ``maintenance period'' to
determine whether the budget test and/or emission reduction tests
apply.
1. Applicability of Nitrogen Oxides (NOX) Emission Reduction
Tests and Budget Tests in Ozone Areas
Under the proposal, the budget test would replace the emission
reduction tests only for those pollutants for which the submitted SIP
establishes a motor vehicle emissions budget. For example, 15% SIPs for
ozone areas are only required to address volatile organic compounds
(VOC), and as a result, most will not address NOX or establish a
NOX emissions budget. In these areas, the VOC emission reduction
tests (``build/no-build'' and less-than-1990 tests) would no longer be
required, but the NOX emission reduction tests would continue to
be required until a NOX budget is established in a submitted SIP
(unless the area had received a NOX waiver). In ozone
nonattainment areas, Phase II attainment SIPs will establish NOX
motor vehicle emissions budgets.
A submitted 15% or Phase I attainment SIP would be considered to
establish a NOX motor vehicle emissions budget if the submitted
SIP contains an explicit NOX budget that is intended to act as a
ceiling on future NOX emissions and if the NOX budget
represents a net reduction from 1990 NOX emissions levels. A
submitted SIP that achieves 15% or reasonable further progress
reductions by substituting some NOX reductions for the required
VOC reductions would establish a NOX motor vehicle emissions
budget.
2. EPA 45-Day Review Period
This proposal would allow conformity to be determined based on
consistency with a submitted SIP's motor vehicle emissions budget(s),
once the submitted SIP had been reviewed by EPA. (Of course, the
submitted SIP cannot override the motor vehicle emissions budgets in an
approved SIP for the years addressed by the approved SIP. See Section
III.A.1.) The submitted SIP budget(s) would be used for conformity
purposes beginning 45 days after the SIP's submission to EPA, provided
EPA had not found the SIP and its budget(s) inadequate. The submitted
SIP budget(s) would be used for determining conformity before EPA's 45-
day review period expires if EPA finds the SIP and its budget(s)
adequate before expiration of such 45-day period.
If EPA finds the submitted SIP and its budget(s) to be inadequate,
they could not be used for conformity purposes, and conformity would
have to be

[[Page 36114]]

determined using the previously established SIP budget(s), or the
emission reduction tests, if there are no previously established SIP
budgets. If EPA finds the submitted SIP and its budget(s) to be
inadequate after EPA's 45-day review period and after conformity had
already been determined using the submitted SIP, the conformity
determination would still be valid. However, that submitted SIP and
budget(s) could not be used for future conformity determinations.
Projects would still be considered to come from a conforming plan and
TIP if they were included in the transportation plan and TIP that were
found to conform to a budget that was later declared inadequate.
In order for EPA to consider a submitted SIP's motor vehicle
emissions budget(s) adequate for transportation conformity purposes,
the submitted SIP must have been endorsed by the Governor (or his or
her designee) and have been subject to a public hearing. The emissions
budget(s) would have to be clearly identified and precisely quantified.
Each emissions budget would have to be consistent with reasonable
further progress, attainment, or maintenance, based upon a
consideration of all emissions sources. The emissions budget(s) would
have to be consistent with the area's emissions inventory and modeling
assumptions for all sources and show a clear relationship between the
control measures, the emissions reductions, and the resulting budgets.
Each revision to a previously submitted SIP would have to identify the
impacts on point, area, and mobile source emissions, as well as changes
to any established safety margins. Changes to previously submitted
budgets and the reasons for the changes would have to be explained and
documented, including the basis for any changes related to emission
factors or estimates of vehicle miles traveled (VMT), and what those
changes imply for control strategies. If the revised emissions budget
requires additional emission control strategies to demonstrate
attainment or maintenance, such new strategies would have to be
specified in the SIP submission. The SIP submission would have to
contain a quantification of the emissions impacts of such new
strategies and, at a minimum, commitments by appropriate agencies to a
schedule for adoption and implementation, and the draft regulations or
other relevant documents. Consultation among federal, state, and local
agencies would have to occur and full documentation and justifications
would have to be provided to EPA before the SIP is submitted. Any EPA
concerns would have to be addressed before submission if the SIP and
its budget(s) are to be found adequate for conformity purposes. If a
SIP submission does not satisfy these conditions, EPA may find it
inadequate for conformity purposes.
EPA's review of the adequacy of a SIP submission for transportation
conformity purposes is separate from EPA's completeness review. EPA may
find a SIP incomplete after 45 days or after finding the SIP submission
adequate for transportation conformity purposes. An incomplete SIP may
still have appropriate motor vehicle emissions budgets for use in the
conformity process, as recognized by EPA's use of ``protective
findings'' under the November 1993 transportation conformity rule. If
the SIP submission is both incomplete and inadequate for transportation
conformity purposes, EPA would have to declare the submission
inadequate for conformity purposes in addition to finding it
incomplete.
3. Areas That Are Not Required to Submit Control Strategy SIPs
Background. Under the existing transportation conformity rule,
areas that are not required to submit control strategy SIPs have two
options for demonstrating conformity. The first option is to satisfy
the ``build/no-build'' and less-than-1990 emission reduction tests; the
second is to submit a SIP that demonstrates attainment and use the
budget test to determine conformity. In the latter option, such an area
would be required under the existing rule to satisfy both of the
emission reduction tests until the SIP is approved by EPA.
Areas affected by proposal. Marginal and below ozone nonattainment
areas, not classified carbon monoxide (CO) nonattainment areas, and
moderate CO nonattainment areas with a design value of 12.7 ppm or less
are not required by the Clean Air Act to submit control strategy SIPs.
These classifications are listed in Secs. 51.464 and 93.136 of the
existing transportation conformity rule.
In addition, some moderate and above ozone nonattainment areas that
are meeting the ozone NAAQS are not required to submit control strategy
SIPs (see May 10, 1995, memorandum from John S. Seitz, Director of the
Office of Air Quality Planning and Standards, to Regional Air Division
Directors, entitled ``Reasonable Further Progress, Attainment
Demonstration, and Related Requirements for Ozone Nonattainment Areas
Meeting the Ozone National Ambient Air Quality Standard'').
Through today's action, EPA is proposing alternatives for
demonstrating conformity for particular pollutants if areas are not
required to submit control strategy SIPs for that pollutant. The first
alternative is currently allowed under the existing transportation
conformity rule and would continue to be available under this proposal
with some additional flexibilities. The second and third options would
provide new alternatives to these areas for demonstrating conformity.
EPA would require these areas to satisfy only one of the alternatives
described below in order to demonstrate conformity.
Create a budget through the SIP process and use the budget test. As
stated above, the existing transportation conformity rule and this
proposal would allow these areas to submit a SIP that establishes a
motor vehicle emissions budget consistent with attainment or
maintenance. These areas would then be required to satisfy the budget
test for each emissions budget. However, unlike the existing rule, this
proposal would allow the SIP budget to be used after the SIP has been
submitted to EPA and before EPA approval. The emission reduction tests
would not be required once a SIP is submitted and EPA's 45-day review
period has occurred (as described above).
Default budget for clean data areas. This proposal would provide
another alternative for demonstrating conformity in areas that are not
required to submit control strategy SIPs, and have monitoring data
indicating attainment of the standard (``clean data''), but have not
yet submitted a maintenance plan. These clean data areas could
demonstrate conformity using the budget test instead of the emission
reduction tests, using as a ``motor vehicle emissions budget'' the
motor vehicle emissions levels in the most recent year of clean data.
The motor vehicle emissions levels in the most recent year of clean
data would be determined by the state air quality agency through the
interagency consultation process. This default ``budget'' would not
have to be submitted as a SIP revision and would not require special
public participation in addition to that otherwise required by the
transportation conformity rule. If a clean data area wishes to use a
budget other than emissions levels in the most recent year of clean
data, the area could submit that budget through the SIP process as
described above.
Emission reduction test flexibility. Today's action would allow
areas that are not required to submit control strategy SIPs another
alternative when demonstrating conformity. If these areas

[[Page 36115]]

do not have a SIP with a motor vehicle emissions budget, this proposal
would allow these areas a choice of emission reduction tests.
Specifically, this proposal would allow them to demonstrate conformity
by either satisfying the build/no-build test or demonstrating that
annual motor vehicle emissions will not be greater than 1990 levels
(i.e., the ``1990 test'').
Under the existing transportation conformity rule, these areas are
required to satisfy both the build/no-build and less-than-1990 emission
reduction tests in the absence of a budget. For the reasons explained
below, this proposal would offer CO and ozone areas not required to
submit control strategy SIPs the same flexibility currently available
to PM10 (particles with an aerodynamic diameter of less than or
equal to a nominal 10 micrometers) and nitrogen dioxide (NO2)
nonattainment areas, which are required to satisfy either the build/no-
build emission reduction test or ensure that annual motor vehicle
emissions will not be greater than 1990 levels.

B. Rationale

1. Elimination of the Emission Reduction Tests
A broad consensus of conformity implementers and interested parties
have advised EPA that the ``build/no-build test'' has limited value in
demonstrating contribution to emission reductions, or serving as the
primary criterion on which conformity is based. Because of the
limitations of currently available modeling tools, the build/no-build
test may yield only slight differences in emissions, well within the
range of modeling error. The parties have indicated that when motor
vehicle emissions budget(s) have been established in submitted SIPs,
they provide a more relevant basis for conformity determinations.
EPA agrees with this assessment by the transportation conformity
stakeholders. EPA originally created the ``build/no build test'' and
less-than-1990 tests (required by Secs. 51.436-51.446 of the November
1993 transportation conformity rule) in order to implement the emission
reduction requirements of Clean Air Act section 176(c)(3)(A)(iii) (for
ozone and CO nonattainment areas), and to ensure that transportation
activities would not increase the frequency or severity of existing
violations (for PM10 and NO2 nonattainment areas), as
required by Clean Air Act section 176(c)(1)(B)(ii). In light of the
stakeholders' input, EPA now believes that consistency with the motor
vehicle emissions budget(s) in a submitted control strategy SIP or
maintenance plan is sufficient to satisfy these Clean Air Act
requirements.
Clean Air Act section 176(c)(3)(A)(iii) requires transportation
plans, TIPs, and projects in ozone and CO nonattainment areas to
contribute to annual emissions reductions consistent with sections
182(b)(1) and 187(a)(7). EPA believes that consistency with the motor
vehicle emissions budgets in a submitted ozone or CO attainment SIP
satisfies Clean Air Act section 176(c)(3)(A)(iii), because these
budgets are intended to represent the emissions reductions necessary to
attain the ozone or CO standard, as required by sections 182(b)(1) and
187(a)(7). Similarly, consistency with a submitted maintenance plan's
emissions budgets fulfills the requirement to contribute to emissions
reductions necessary to attain the standard, because the maintenance
plan's emissions budgets represent emission levels consistent with
attainment.
EPA carefully considered whether the motor vehicle emissions
budget(s) established by an ozone area's submitted 15% SIP or post-1996
reasonable further progress SIP are sufficient to satisfy the
requirements of Clean Air Act section 176(c)(3)(a)(iii), because such
budgets do not necessarily represent the full emissions reductions
necessary to attain the ozone standard. However, the motor vehicle
emissions budgets in these SIPs do represent VOC emission reductions
from 1990 levels. As a result, EPA believes that consistency with such
a VOC budget is sufficient to satisfy the requirement of Clean Air Act
section 176(c)(3)(A)(iii) for contribution to necessary emissions
reductions.
EPA considered not allowing a submitted 15% SIP or post-1996
reasonable further progress SIP to establish a NOX motor vehicle
emissions budget that would be used for determining conformity instead
of the NOX emission reduction tests. The Clean Air Act does not
require such SIPs to address NOX, so a NOX emissions budget
in such a SIP could be unconstrained and would not necessarily be
sufficient to satisfy section 176(c)(3)(A)(iii)'s requirement to
contribute to annual emissions reductions. However, if a state
establishes a NOX emissions budget that it intends to constrain
future emissions and that does represent emissions reductions from 1990
levels, EPA now believes this budget would be a better basis for
determining conformity than the ``build/no-build test.'' As a result,
EPA is proposing that a 15% SIP or post-1996 reasonable further
progress SIP (Phase I attainment SIP) that addresses NOX would be
considered to establish a NOX emissions budget for the purposes of
transportation conformity only if that budget represented net emission
reductions from 1990. Whether or not a SIP establishes a NOX motor
vehicle emissions budget should be determined in consultation with the
SIP agency and the EPA Region.
For PM10 and NO2 nonattainment areas, the ``build/no-
build test'' and the less-than-1990 test were intended to satisfy the
general definition of conformity in section 176(c)(1)(B)(ii) that
transportation activities not increase the frequency or severity of any
existing violation. EPA believes that consistency with the motor
vehicle emissions budget(s) established in the submitted attainment SIP
or maintenance plan ensures that existing violations will not be
worsened by transportation projects, because these budgets represent
emissions levels that are consistent with attainment of the standards.
2. Adequacy of Submitted (But Not Approved) Budgets
The November 1993 transportation conformity rule requires emission
reduction tests as well as budget tests until EPA approves the
submitted SIP, because EPA believed it could not be certain that
submitted emissions budgets are consistent with Clean Air Act
requirements for reasonable further progress, attainment, and
maintenance until EPA approves the SIP. In contrast, this proposal
would allow the motor vehicle emissions budgets established by
submitted SIPs to be the basis of conformity determinations. (Of
course, the submitted SIP cannot override the motor vehicle emissions
budgets in an approved SIP for the years addressed by the approved SIP.
See Section III.A.1.)
EPA now believes this is appropriate because a submitted SIP is a
product of a state's interagency consultation process, which encourages
discussion among state and local air quality and transportation
agencies, and is ultimately endorsed by the Governor (or his/her
designee). During the SIP process, states also gather information and
comment from environmental groups and other interested parties at
public hearings. EPA believes that these processes would ensure the
credibility of a submitted SIP (and its motor vehicle emissions
budgets) for the purposes of transportation conformity especially where
the only alternative conformity test is the emission reduction tests.
Given the limitations to the usefulness of the emission reduction
tests, a submitted SIP's motor vehicle

[[Page 36116]]

emissions budgets are likely to be at least as good a basis for making
conformity determinations, even if they are not yet approved by EPA.
EPA's proposed 45-day review period for newly submitted SIPs is
intended to prevent conformity from being based on motor vehicle
emissions budgets that are clearly not consistent with attainment,
maintenance, or reasonable further progress. If EPA was not consulted,
given sufficient information, or EPA's concerns were not satisfied
prior to SIP submission sufficient for EPA to determine that the motor
vehicle emissions budgets are adequate for conformity purposes during
this 45-day review period, EPA could declare the motor vehicle
emissions budgets inadequate and prevent their use for conformity
purposes. In addition, if EPA finds the motor vehicle emissions budgets
inadequate even after the 45-day review period, further conformity
determinations may not be based on those budgets.
EPA considered a range of review periods after which submitted
motor vehicle emissions budgets could replace emission reduction tests
for determining conformity. Under the November 1993 transportation
conformity rule, EPA has used a 90-day review period before a newly
submitted SIP budget could replace a previously submitted budget. Many
conformity stakeholders suggested a 30-day review period. EPA is
proposing a 45-day review period as a compromise to balance the
conflicting goals of using submitted SIP budgets as quickly as possible
and preventing transportation investments from being made based on
budgets that are not consistent with attainment, maintenance, or
reasonable further progress. If budgets are found inadequate after
conformity has already been determined, future plans and TIPs would
have to offset the emissions from grandfathered projects that may have
been inappropriately allowed under the inadequate budgets. This
disruption could be avoided by allowing EPA enough time initially to
determine the adequacy of budgets and prevent the use of inadequate
budgets.
Regardless of the 45-day review period, EPA cannot ultimately
ensure that a submitted SIP's motor vehicle emissions budget is
consistent with reasonable further progress, attainment, or
maintenance--and thus adequate to fulfill the conformity requirements
of Clean Air Act section 176(c)--until EPA fully approves the SIP
through notice-and-comment rulemaking. As a result, the proposal
provides that reliance on a submitted SIP's motor vehicle emissions
budgets for determining conformity is deemed to be a statement by the
MPO and DOT that they are not aware of any information that would
indicate that emissions consistent with such budgets would cause or
contribute to any new violation of the relevant standard(s); increase
the frequency or severity of any existing violation of the relevant
standard(s); or delay timely attainment of the relevant standards or
any required interim emissions reductions or other milestones. (This
provision clarifies that, in the absence of EPA approval of the SIP,
the MPO and DOT may not base conformity determinations on submitted
SIPs that they have reason to believe do not satisfy Clean Air Act
requirements.)
3. Areas Not Required to Submit Control Strategy SIPs
EPA has received public comment to extend certain flexibilities to
areas that are not required to submit control strategy SIPs. The
existing transportation conformity rule requires these areas to either
satisfy the ``build/no-build'' and less-than-1990 emission reduction
tests or submit a control strategy SIP or maintenance plan and satisfy
the budget test. Today's action proposes additional flexibilities for
areas that are not required to submit control strategy SIPs, including
marginal and below ozone nonattainment areas, not classified CO
nonattainment areas, moderate CO nonattainment areas with a design
value of 12.7 ppm or less, and some moderate and above ozone areas that
are meeting the ozone standard. Please refer to section II.A.3. for
additional background material.
Create a budget through the SIP process and use the budget test.
Although the areas discussed in this section are not required by the
Clean Air Act to submit control strategy SIPs, these areas could choose
to submit a control strategy SIP or maintenance plan (which contains a
motor vehicle emissions budget) and demonstrate conformity by using the
budget test. The existing transportation conformity rule requires
consistency with the SIP's motor vehicle emissions budget as stipulated
in Clean Air Act section 176(c)(2)(A). This option is available both in
the existing transportation conformity rule and this proposal.
Default budget for clean data areas. This proposal would allow
areas with clean monitoring data but no submitted or approved budget to
determine conformity using the budget test, with the motor vehicle
emissions levels in the most recent year of clean data serving as the
``budget.'' In order for data to be considered ``clean,'' it must meet
EPA's requirements and guidance for acceptable monitoring. EPA is also
proposing this second option because many areas would prefer to
determine conformity using a budget test rather than the emission
reduction tests, but are nevertheless unwilling to devote resources to
creating a motor vehicle emissions budget through the SIP process. The
motor vehicle emissions in the most recent year with clean data is an
adequate ``default budget'' that can be determined without using the
formal SIP process. This level of motor vehicle emissions does not
automatically demonstrate attainment, because it does not consider the
levels of emissions from other sources. However, these areas are not
required by the Clean Air Act to submit attainment demonstrations.
Furthermore, this level of motor vehicle emissions does produce clean
data. Therefore, EPA believes that requiring consistency with the level
of motor vehicle emissions in the most recent year of clean data is a
reasonable test, and one that is likely to be more meaningful than the
emission reduction test (for the reasons discussed earlier).
Emission reduction test flexibility. This proposed alternative
would allow areas that are not required to submit control strategy SIPs
that do not choose the other two options in this section to satisfy
either the build/no-build test or demonstrate that annual motor vehicle
emissions will not be greater than 1990 levels (i.e., the ``1990
test''), provided these areas do not have an approved budget in a
control strategy SIP or maintenance plan. EPA is proposing this
flexibility because conformity stakeholders have indicated that, like
PM10 and NO2 areas, the ozone and CO classifications listed
in Secs. 51.464 and 93.136 of the transportation conformity rule and
moderate and above ozone nonattainment areas that are affected by the
May 10, 1995, EPA memorandum (see section II.A.3. for more information)
are not subject to sections 182(b)(1) and 187(a)(7) of the Clean Air
Act.
The existing transportation conformity rule requires that areas
without motor vehicle emissions budgets must satisfy both the build/no-
build and less-than-1990 emission reduction tests in order to
demonstrate conformity. EPA originally created these tests in order to
implement the emission reduction provisions of Clean Air Act section
176(c)(3)(A)(iii), which requires ozone and CO areas to contribute to
annual emission reductions consistent with sections 182(b)(1) and
187(a)(7). However, sections 182(b)(1) and 187(a)(7) only apply to
moderate and above ozone nonattainment areas and

[[Page 36117]]

CO nonattainment areas that are moderate greater than 12.7 ppm.
PM10 and NO2 areas are similarly not required to satisfy
the annual emission reduction provisions of Clean Air Act section
176(c)(3)(A)(iii). The existing transportation conformity rule and this
proposal require PM10 and NO2 areas to satisfy either the
build/no-build or 1990 test in order to demonstrate conformity.
EPA originally required both the build/no-build and less-than-1990
tests for all ozone and CO areas in order to ensure that transportation
planning does not produce new air quality violations, worsen existing
violations, or delay timely attainment of the NAAQS, as required by
Clean Air Act section 176(c)(1)(B). However, EPA now believes that, for
these areas which were never subject to the emission reduction mandate
of section 176(c)(3)(A)(iii), either the build/no-build test or the
1990 test is sufficient to satisfy the requirements of the Clean Air
Act.

III. Implementation of the Budget Test

A. Which Budgets Apply?

1. Approved SIPs Versus Submitted SIPs
Years that are directly addressed by the approved SIP. Motor
vehicle emissions budgets in an approved SIP (i.e., the applicable
implementation plan) must always be used for demonstrating satisfaction
of the budget test for those years in the timeframe of the
transportation plan that are addressed by the approved SIP. That is, if
the approved SIP establishes a motor vehicle emissions budget for a
year in the timeframe of the transportation plan, consistency with that
budget must be demonstrated for that year. A submitted SIP cannot
override the motor vehicle emissions budgets in an approved SIP for the
years addressed by the approved SIP.
Clean Air Act section 176(c) specifically requires conformity to
approved implementation plans. The provisions of an implementation plan
that EPA has approved under Clean Air Act section 110 are enforceable
and cannot be changed on the basis of a submission. As a result,
although some conformity implementers and interested parties requested
that they be permitted to replace approved SIP budgets with submitted
SIP budgets, EPA believes that this cannot be legally allowed. In
addition, approved SIP budgets have been subject to full technical
review and public comment and should not be replaced by budgets that
have not yet been fully analyzed and reviewed.
Years that are not directly addressed by the approved SIP. However,
this proposal would allow a submitted SIP's motor vehicle emissions
budgets to be used instead of the approved SIP's budgets for those
years not directly addressed by the approved SIP. For example, for a
serious ozone nonattainment area, the approved 15% SIP's VOC budget
would have to be used to demonstrate the budget test for 1996, but the
submitted attainment SIP's budget would be used to demonstrate the
budget test for the attainment year (1999).
Similarly, this proposal would allow a submitted maintenance plan's
motor vehicle emissions budgets to be used for the years after the
attainment year, instead of continuing to use the approved attainment
year budget for those subsequent years. Under the existing
transportation conformity rule, a submitted maintenance plan's motor
vehicle emissions budget(s) may not be used for transportation
conformity purposes until the maintenance plan has been approved.
EPA believes this flexibility is appropriate because any given
approved SIP is only intended to address a certain period of time. In
general, attainment SIPs address only the period through the attainment
year, and maintenance plans address at a minimum a ten-year period. EPA
believes that the Clean Air Act's reference to conformity to ``approved
implementation plans'' applies to the years which the approved SIP
addresses, and that this language should not prohibit using as the
relevant test of conformity subsequent SIP submissions that address
later years. EPA believes that the submitted maintenance plan's motor
vehicle emissions budgets are more relevant to the years after the
attainment year than the attainment year budget in the approved
attainment SIP. Similarly, a submitted attainment SIP's budget is more
relevant for the attainment year than an approved post-1996 SIP budget.
EPA had previously required use of the last budget in the approved SIP
for all subsequent years only because there was no other budget against
which to determine conformity. Once such a budget is submitted, it
provides the most relevant basis for testing conformity.
If no SIP is submitted that addresses the years after the approved
SIP, the approved SIP's budget(s) would continue to apply for the
future years in the timeframe of the transportation plan.
Changes to approved SIPs. This proposal would not alter the fact
that proposed changes to an approved SIP cannot be used for the
purposes of transportation conformity until those changes are approved.
For example, if an area submits a proposed revision to a SIP with an
attainment year budget to replace the approved attainment SIP, that SIP
submission cannot be used until it is approved by EPA.
2. Multiple SIP Submissions
How soon can a newly submitted SIP replace a previously submitted
SIP? Under this proposal, the most recent SIP submissions would replace
other prior SIP submissions that have not yet been approved. If an area
submits a SIP to revise motor vehicle emissions budgets in a SIP that
has not yet been approved, the most recent SIP submission would be used
for demonstrating the budget test beginning 45 days after submission to
EPA (provided EPA has not found the submission inadequate), or earlier,
if EPA has found the submission to be adequate.
Under the existing transportation conformity rule, a newly
submitted SIP is not permitted to replace a complete SIP submission for
90 days. If EPA found the newly submitted SIP complete in less than 90
days, either SIP submission could be used for conformity determinations
made during the first 90 days after SIP submission. This proposal would
require the most recent SIP submission to be used for conformity
purposes after 45 days (if it has not been found inadequate), or as
soon as it has been found adequate, if this occurs in less than 45 days
after submission to EPA.
EPA is proposing this change for several reasons. First, due to
conformity stakeholder suggestions that submitted SIPs should be used
sooner for conformity purposes, EPA is proposing to shorten the
existing transportation conformity rule's 90-day grace period to 45
days. In addition, EPA is interested in streamlining the transportation
conformity rule and reducing ambiguity in its implementation. There has
been substantial confusion in implementation of the existing
transportation conformity rule regarding which submitted SIP's budgets
should be used for conformity purposes, and at which times. EPA
believes that it is simpler and truer to the spirit of conformity to
require the most recently submitted SIP (that has undergone 45-day EPA
review) to be used for determining conformity.
EPA believes that the simplicity gained from this change outweighs
any potential limitation to the flexibility of areas to choose among
SIP submissions in the first few weeks after submission. In many
instances, SIP submissions intended to replace previous SIP submissions
were either inspired by conformity considerations or represent a more
accurate basis for conformity. As

[[Page 36118]]

a result, most areas would not choose to use the previous SIP
submission even if given the opportunity.
In addition, the protection EPA originally intended the 90-day
grace period to provide is under the state's control. EPA did not
originally require newly submitted SIPs to be used in the first 90
days, because EPA did not want conformity determinations that were
underway at the time of the SIP submission to be disrupted. However,
this protection is not necessary in the conformity rule itself, because
the state controls when it submits a SIP, and the interagency
consultation process gives state and local agencies an opportunity to
coordinate conformity determinations and SIP submissions to avoid
disruption of the conformity process. EPA believes that the ambiguity
regarding which SIP submission is used for conformity is more
problematic than the remote possibility that a SIP submission would
interfere with a conformity determination that was underway.
When should different submitted SIPs be used? When a series of
control strategy SIPs have been submitted to fulfill different Clean
Air Act requirements for a particular pollutant, the budget test would
be demonstrated using each relevant submitted SIP that is adequate for
conformity purposes. For example, the proposal would require the
submitted post-1996 reasonable further progress SIP's motor vehicle
emissions budgets to be used for demonstrating the budget test for
milestone years, and would require the submitted attainment
demonstration's budget(s) to be used for demonstrating the budget test
for the attainment year. SIP budget(s) that address the latest future
year would apply for all subsequent years in the timeframe of the
transportation plan.

B. Control Strategy SIPs and Maintenance Plans That Do Not Establish
Motor Vehicle Emissions Budgets

This proposal would clarify that the emissions budget test must be
satisfied only for those pollutants and pollutant precursors for which
a motor vehicle emissions budget is established. Normally, a control
strategy SIP or maintenance plan would by its nature include a motor
vehicle emissions budget for each pollutant and pollutant precursor for
which the area was designated nonattainment. These budgets are created
by the control strategy SIP or maintenance plan even if they are not
clearly identified, and failure to clearly identify a motor vehicle
emissions budget does not relieve the requirement to satisfy the budget
test. However, as explained further below, there are some cases in
which a SIP could specifically provide that no motor vehicle emissions
budget was established for transportation conformity purposes, and in
such cases, the budget test would not have to be satisfied for that
pollutant or precursor.
Certain nonclassifiable ozone areas have the option to submit a
``limited maintenance plan,'' which would not establish motor vehicle
emissions budgets. According to the November 16, 1994, memorandum from
Sally Shaver, Director of EPA's Air Quality Strategies and Standards
Division, to EPA Regional Air Division Directors, entitled ``Limited
Maintenance Plan Option for Nonclassifiable Ozone Nonattainment
Areas,'' nonclassifiable ozone areas whose design values are at or
below 0.106 ppm (85% of exceedance levels of the ozone standard) at the
time of redesignation may choose to submit a less rigorous maintenance
plan than required for other areas. This ``limited maintenance plan''
would not be required to project emissions over the maintenance period,
and as a result, no motor vehicle emissions budget would be
established. There are similar policies for CO and PM10 areas that
may also result in no motor vehicle emissions budgets being
established.
In other cases, the control strategy SIP or maintenance plan could
explicitly demonstrate that motor vehicle emissions are not a
significant contributor to the nonattainment problem, and the SIP could
explicitly state that it is not establishing a motor vehicle emissions
budget for transportation conformity purposes. This could occur, for
example, in CO and PM10 areas that are dominated by stationary
sources. In order for EPA to approve or find adequate for conformity
purposes a SIP that makes a claim of insignificance, the SIP would have
to demonstrate that it would be unreasonable to expect that such an
area would experience enough motor vehicle emissions growth for a
violation to occur. Such a demonstration would have to be based on a
number of factors, including the percentage of the inventory comprised
by motor vehicle-related emissions currently and in the future, how
close the monitoring data is to the standard, the absence of SIP motor
vehicle control measures, historical trends in the growth of motor
vehicle emissions and VMT, and projections of motor vehicle emissions
and VMT.
If EPA's 45-day review period expires without EPA finding the SIP
either adequate or inadequate for conformity purposes, the submitted
SIP's claim of insignificance may be used to justify not demonstrating
satisfaction of the budget test (unless or until EPA finds the SIP
inadequate).
When a control strategy SIP or maintenance plan does not establish
motor vehicle emissions budgets, no regional emissions tests would be
required to be satisfied. That is, neither the emissions budget test
nor the emission reduction tests would be required to be satisfied.

C. For Which Years Would the Budget Test Be Demonstrated?

This proposal would clarify (without changing the substance of) the
existing transportation conformity rule's requirements regarding the
years for which the budget test must be demonstrated. The proposal
would explicitly require the budget test to be demonstrated for each
year for which the SIP establishes a motor vehicle emissions budget.
For example, the attainment SIP generally establishes a budget for the
attainment year, and the 15% SIP establishes a VOC budget for 1996.
SIPs may explicitly include motor vehicle emissions budgets for other
years not specifically required to be addressed by the Clean Air Act.
For example, an attainment SIP or a maintenance plan may address more
years than required by the Clean Air Act and explicitly include motor
vehicle emissions budgets for those years. In such cases, the budget
test would have to be demonstrated for the years for which a budget was
specifically established.
The budget test must be demonstrated for the last year of the
maintenance plan and any other years for which the maintenance plan
establishes motor vehicle emissions budgets. An area may choose to
explicitly establish motor vehicle emissions budgets for years in the
timeframe of the maintenance plan other than the last year. In such
cases, compliance with the budget test would have to be demonstrated
for those years. Some maintenance plans may include specific motor
vehicle emissions projections for some or all years in the timeframe of
the maintenance plan, without intending that such projections operate
as limitations on emissions. The budget test would not be required to
be demonstrated for these years unless it was the intent of the
maintenance plan to establish a budget for these years. Such issues
should be addressed when developing the control strategy SIP or
maintenance plan. For control strategy SIPs and maintenance plans that
have already been submitted, the state's intent regarding the use of
motor vehicle emissions budgets may be clarified

[[Page 36119]]

through the interagency consultation process.
In addition to the years for which the SIP establishes a motor
vehicle emissions budget, the budget test must be demonstrated for the
last year of the transportation plan's forecast period. If there are
more than ten years between the years for which the SIP specifically
establishes motor vehicle emissions budgets, the budget test must also
be demonstrated for some intermediate years so that the budget test is
demonstrated at ten-year (or shorter) intervals.
Regional emissions analysis. Satisfaction of the budget test
requires comparison of the motor vehicle emissions budget with regional
emissions predicted for a given year. A regional emissions analysis
must be performed for each pollutant and precursor for the last year of
the transportation plan's forecast period and the attainment year (if
it is in the timeframe of the transportation plan). For the other years
for which the budget test is required to be demonstrated, the estimate
of regional emissions does not necessarily need to be based on a
regional emissions analysis performed for that specific year; the
estimate of regional emissions may be based on an interpolation between
the years for which the regional emissions analysis was performed.
However, the years for which the regional emissions analysis is
performed must be no more than ten years apart.

D. Maintenance Plans

The proposal would require that if the maintenance plan does not
establish motor vehicle emissions budgets for any years other than the
last year of the maintenance plan, the demonstration of consistency
with the motor vehicle emissions budget(s) must be accompanied by a
qualitative finding that there are no factors which would cause or
contribute to a new violation or exacerbate an existing violation in
the years before the last year of the maintenance plan.
Because the maintenance plan is required by the Clean Air Act to
demonstrate maintenance of the standards over a 10-year period, general
consistency between the latest planning assumptions and the maintenance
plan's assumptions and projections is a basis for finding that there
will not be new or worsened violations during that period. Each
maintenance plan will have different assumptions and projections, so
the specific basis for an area's qualitative finding will need to be
determined through the interagency consultation process. The
qualitative finding would be contained in the documentation that
demonstrates that the budget test has been satisfied.
EPA believes a qualitative finding is necessary if the budget only
addresses the last year of the maintenance plan, because the budget
test alone is not sufficient to determine, as required by the Clean Air
Act, that the transportation action will not cause a new violation. The
emissions impacts in the initial ten years of the maintenance plan must
be considered in some manner in order to determine conformity.
EPA believes that requiring a qualitative finding is preferable to
requiring maintenance plans to establish motor vehicle emissions
budgets for specific years. Although maintenance plans contain
projections for intermediate years that could be used as motor vehicle
emissions budgets, EPA believes that the years for which budgets are
established should be decided by the state. EPA is willing to allow
states to establish budgets only for the last year of the maintenance
plan, provided conformity determinations are accompanied by a
qualitative finding addressing the intermediate years. Alternatively,
states could choose to establish motor vehicle emissions budgets for
intermediate years in the maintenance plan, which would then be used to
determine conformity.

IV. Non-federal Projects

A. Description of Proposal

This proposal would allow regionally significant transportation
projects that are funded or approved by a recipient of federal funds
designated under title 23 U.S.C. or the Federal Transit Laws (49 U.S.C.
Chapter 53) which do not rely at all on any FHWA/FTA funding or
approvals (i.e., ``non-federal projects'') to be adopted or approved
during a transportation plan/TIP conformity lapse, provided the project
was included in the regional emissions analysis supporting the most
recent transportation plan and TIP conformity determination. Also, the
project's design concept and scope could not have changed significantly
from that included in the previous emissions analysis.
The existing transportation conformity rule requires a currently
conforming transportation plan and TIP to be in place at the time a
recipient of federal funds adopts or approves a regionally significant
non-federal project. As a result, no regionally significant non-federal
projects can be adopted or approved during a transportation plan/TIP
conformity lapse.
Under both this proposal and the existing transportation conformity
rule, adoption or approval of non-federal projects that are not
regionally significant is not subject to any transportation conformity
requirements. In addition, under both this proposal and the existing
transportation conformity rule, there is a provision for regionally
significant non-federal projects to be added to the existing
transportation plan and TIP's regional emissions analysis, if the
transportation plan and TIP are currently conforming. That is, if a
regionally significant non-federal project has not previously been
included in the regional emissions analysis supporting the
transportation plan and TIP conformity determinations, another regional
emissions analysis could be performed including the transportation plan
and TIP projects and the additional regionally significant non-federal
project. If this analysis demonstrates that the currently conforming
transportation plan and TIP would still conform if the non-federal
project were implemented, the non-federal project could be adopted or
approved.
Some commenters have suggested that if certain non-federal projects
are to be permitted to be adopted or approved during a transportation
conformity lapse as EPA is currently proposing, each such project
should be approved by the Governor. This provision would provide
greater assurance that the emissions consequences of proceeding with
projects during a conformity lapse are consciously accepted. However,
EPA is not proposing this limitation at this time because such a
limitation is not explicitly required by the Clean Air Act, and it is
not clear which state and local government officials should have the
authority to adopt or approve non-federal projects during a conformity
lapse. EPA is interested in receiving comment on this subject.

B. Rationale

EPA is proposing to allow some regionally significant non-federal
projects to be adopted or approved during a conformity lapse in
response to comments from conformity implementers. These comments
stated that state and local governments should have the discretion to
accept the emissions consequences of projects that are under their
control to fund and approve, even when there was not a conforming
transportation plan and TIP. Future transportation plans and TIPs are
required to consider the emissions from regionally significant non-
federal

[[Page 36120]]

projects, so any necessary offsets would ultimately be achieved.
EPA believes this proposal is consistent with the requirements of
Clean Air Act section 176(c). Section 176(c)(2)(C) requires
transportation projects to ``come from a conforming plan and TIP.'' EPA
has interpreted this in the existing conformity rule to mean that a
conforming transportation plan and TIP must be in place at the time of
project adoption or approval, and that the project must be included in
the transportation plan and TIP (or regional emissions analysis
supporting the conformity determination for the transportation plan and
TIP). EPA now believes that because non-federal projects are not
federally funded or approved, it is not necessary for a conforming
transportation plan and TIP to be in place at the time of project
adoption or approval. The transportation plan and TIP are not relevant
as a funding mechanism for non-federal projects. The crucial
requirement for non-federal projects is previous inclusion in the
regional emissions analysis supporting a conforming transportation plan
and TIP. That is, the area had previously considered the emissions of
the non-federal project and concluded that they could be accommodated
in the planned transportation network without adversely affecting air
quality.
The option provided in section 176(c)(2)(D) for new projects that
were not previously included in a transportation plan/TIP or supporting
regional emissions analysis to demonstrate conformity cannot apply
during a transportation plan/TIP conformity lapse, because it requires
a demonstration that ``conforming transportation plans and TIPs'' would
still conform when the emissions of the new project are considered.
Without a conforming transportation plan and TIP in place, this cannot
be demonstrated.
This proposal would require that a regionally significant non-
federal project be included in the regional emissions analysis
supporting the most recent transportation plan and TIP conformity
determinations, rather than any previous conformity determination. This
is because each regional emissions analysis must include all regionally
significant transportation projects in the timeframe of the
transportation plan. Therefore, even if there is no current activity on
a particular non-federal project at the time of the most recent
transportation plan/TIP conformity determination, it still will have
been included in the regional emissions analysis. If a non-federal
project were included in the regional emissions analysis from an older
transportation plan/TIP conformity determination and not from the most
recent, this would indicate that the project is no longer expected to
occur in the timeframe of the transportation plan and TIP. As a result,
it could no longer be assumed that implementation of the project could
be accommodated with no adverse air quality impact.
EPA has received comment opposing the adoption or approval of non-
federal projects during a transportation conformity lapse. Commenters
believe that building new projects during a time when a conforming
transportation plan and TIP has not been developed would only increase
the difficulty of plan/TIP development in the future. However, as
described above, EPA believes that this proposal is consistent with the
Clean Air Act. In addition, the limitation that regionally significant
non-federal projects must have been part of the most recent prior
regional emissions analysis supporting the most recent conforming
transportation plan and TIP ensures that the emissions consequences of
the projects have been considered, and the decision to proceed with
such projects during a conformity lapse could be made with full
knowledge of the possible emissions implications. These non-federal
projects would then have been considered as part of the transportation
planning process, and because these projects are not able to avoid the
scrutiny of the metropolitan planning process during a conformity
lapse, there would not be unequal requirements that would provide an
incentive to shift the funding of projects from federal to non-federal
sources.
EPA has also received comment that any non-federal project, whether
or not it has previously been included in a regional emissions analysis
supporting a transportation plan/TIP conformity determination, should
be allowed to proceed during a transportation plan/TIP conformity
lapse. However, EPA continues to believe, as described in the preamble
to the November 24, 1993, transportation conformity rule, that Clean
Air Act section 176(c)(2)(C)'s requirements for ``transportation
projects'' refer to any highway or transit projects, not just those
that are federally funded or approved. Thus, EPA believes that
regionally significant non-federal projects must have been considered
in a previously conforming emissions analysis in order to be adopted or
approved.

V. Rural Nonattainment and Maintenance Areas

A. Description of Proposal

Isolated rural nonattainment and maintenance areas with submitted
or approved control strategy SIPs or maintenance plans would be
allowed, under this proposal, to choose among several tests for
demonstrating conformity for years after the time period addressed by
the SIP (e.g., years after the attainment year or the last year of the
maintenance plan).
These areas could either (1) demonstrate consistency with the most
recent motor vehicle emissions budget(s), as normally required; (2)
satisfy the emission reduction tests (``build/no-build test'' and/or
less-than-1990 test, depending upon classification); or (3) demonstrate
through air quality dispersion modeling that the FHWA/FTA project, in
combination with all other regionally significant projects expected in
the area in the timeframe of the statewide transportation plan,
satisfies the general definition of conformity in Clean Air Act section
176(c)(1) (i.e., the project will not cause or contribute to any new
violations; increase the frequency or severity of any existing
violation; or delay timely attainment or required interim emission
reductions).
The choice among these conformity tests and the methodology for air
quality dispersion modeling would be determined through the interagency
consultation process and reflect the consensus of the state and local
air and transportation agencies and the project sponsor. EPA and DOT
would also have to be consulted through the usual interagency
consultation process.
Isolated rural areas would be defined as nonattainment and
maintenance areas (or portions thereof) that do not have a metropolitan
transportation plan or TIP and whose projects are not part of the
emissions analysis of any MPO's transportation plan or TIP. This would
not include ``donut'' areas that are outside the metropolitan planning
boundary and inside the nonattainment/maintenance area boundary,
because these projects must be considered in the context of the MPO's
transportation plan and TIP, even if the MPO does not specifically
include them in the transportation plan/TIP or the MPO's own regional
emissions analysis.
Because air quality dispersion modeling for ozone is often complex
and resource-intensive, EPA does not expect that this particular option
will be viable for isolated rural ozone nonattainment and maintenance
areas. However, this is a more realistic option

[[Page 36121]]

for such CO and PM10 nonattainment and maintenance areas and is
being considered at the request of several commenters.
This proposal differs from the existing transportation conformity
rule by offering several options for demonstrating conformity in years
after the time period addressed by the SIP. The existing transportation
conformity rule would require the motor vehicle emissions budget
established for the most recent prior year to be used for the purpose
of demonstrating transportation conformity for all subsequent years in
the timeframe of the transportation plan.

B. Rationale

In response to comments from those implementing conformity as well
as from other interested parties, EPA is proposing flexibility for
isolated rural nonattainment and maintenance areas. The general issue
of conformity for years outside the timeframe of the SIP is explained
below in section VIII., ``Mismatch in SIP/Transportation Plan
Timeframe.'' EPA is here proposing flexibility for isolated rural
nonattainment and maintenance areas, and not for other areas, because
isolated rural areas face unique challenges in addressing this issue.
Isolated rural areas generally do not have a metropolitan
transportation planning process that could serve as a forum for
identifying and addressing long-term growth issues in years not
addressed by the SIP. In addition, regionally significant, federally
funded or approved projects usually occur infrequently in isolated
rural areas. Conformity demonstrations for such areas as required by
the existing conformity rule would place the burden of long-term
planning on a few or even a single transportation project.
EPA believes this places an inappropriately large burden on
sponsors of such federally funded or approved transportation projects.
Although conformity is intended to assure long-term planning, EPA
believes it is appropriate to impose conformity requirements involving
less rigorous long-term planning in areas where comprehensive planning
processes including land use and other issues do not otherwise exist or
are not otherwise required.
Some conformity implementers suggested that the flexibility for
isolated rural areas should apply for ``donut'' areas that are outside
MPO planning boundaries but within urbanized nonattainment areas. EPA
does not believe this is appropriate because donut areas do not face
the same challenges as truly isolated rural areas. Conformity
determinations by the MPO must consider motor vehicle emissions from
all projects in the nonattainment or maintenance area, including
emissions from projects in the donut area. Thus, there is a planning
process that in some manner addresses the donut area. The Intermodal
Surface Transportation Efficiency Act (ISTEA) envisioned that in most
cases, the MPO planning boundary would be consistent with the
nonattainment area boundary. To the extent that conformity poses a
burden on the donut area because the area does not have long-term
planning capabilities, arrangements could be made with the adjacent
MPO.
EPA believes that providing some flexibility for the years not
addressed by the SIP is consistent with the Clean Air Act (see section
VIII. below). The Clean Air Act requirement for consistency with the
SIP's emissions reduction goals could be construed to apply only for
the years that an individual SIP revision addresses. The time period
later than that addressed by SIPs is in some ways analogous to the time
period before SIPs are developed, and as such the emission reduction
tests (``build/no-build'' and less-than-1990 tests) may also be
appropriate for the time period after that addressed by SIPs. Air
dispersion modeling that directly demonstrates satisfaction of the
general definition of conformity is clearly also consistent with Clean
Air Act section 176(c).
EPA is proposing that the choice of conformity tests for isolated
rural areas for years not addressed by a SIP should be made with the
agreement of relevant state and local agencies. EPA believes this is
necessary because MPOs are authorized by the Clean Air Act to determine
conformity and there are no MPOs in isolated rural areas; thus, there
is no single state or local agency with authority for determining
conformity. Various state and local agencies may have differing
perspectives on the practicality and benefits of the different
conformity tests. As a result, EPA believes the method for
demonstrating conformity should be a consensual decision by all
relevant state and local agencies, so that all relevant actors in an
area can weigh the advantages and disadvantages of each method of
demonstrating conformity.
EPA also believes that the methodology for performing air quality
dispersion modeling should have the agreement of all relevant state and
local agencies. The air agency traditionally has responsibility for
performing air quality dispersion modeling, but some other agency may
take responsibility for such modeling with respect to a given project
for the purposes of transportation conformity in rural areas.
Therefore, EPA believes that all agencies should agree on the
methodology to be used.
EPA considered requiring EPA approval of the modeling methodology
used in isolated rural areas, because air quality dispersion modeling
used in SIPs is traditionally governed by EPA guidance and regulations.
If air quality dispersion modeling that is used to demonstrate
conformity with the purpose of the SIP is based on different
assumptions than the SIP itself used, the determination of conformity
could be suspect. However, commenters convincingly argued that
requiring concurrence of the state air agency accomplishes the goal of
assuring consistency with the SIP's air quality dispersion modeling
methodology, and that further concurrence by EPA would be an
unnecessary administrative burden for isolated rural areas.
The option to demonstrate conformity using air quality dispersion
modeling in certain cases was specifically requested by conformity
implementers. Because EPA believes using air quality dispersion
modeling for conformity demonstrations for years not addressed by SIPs
would be consistent with Clean Air Act section 176(c) requirements (see
above), EPA is proposing this additional flexibility for all isolated
rural areas. Areas for which air quality dispersion modeling is too
resource-intensive may of course choose one of the other methods of
demonstrating conformity.
EPA considered allowing isolated rural areas to include non-federal
projects in either the ``build'' or ``no-build'' case when performing
the ``build/no-build test,'' at the discretion of state and local air
and transportation agencies. Conformity implementers and interested
parties had noted that because regionally significant federally funded
or approved transportation projects occur relatively infrequently in
isolated rural areas, considering (and potentially offsetting) the
emissions impacts of non-federal projects posed an unfair burden on the
few federal projects. However, EPA believes that despite the differing
practical considerations for urban and rural areas, there is no legally
defensible distinction between what constitutes a contribution to
emissions reductions in rural vs. urban areas. Because EPA believes
that the ``build/no-build'' test demonstrates contribution to emissions
reductions only when new non-federal projects are included in the
``build'' case, EPA is not proposing to alter the build/no-build test's
treatment of non-federal projects in rural areas.

[[Page 36122]]

Some conformity implementers suggested to EPA that conformity in
isolated rural areas be demonstrated using a project-level ``build/no-
build test.'' Although it is true that isolated rural areas do not have
local transportation plans and TIPs as referred to in Clean Air Act
section 176(c)(2) (C) and (D), EPA believes that it is the intent of
the Clean Air Act for the regional emissions impacts of transportation
projects to be considered in the context of other transportation
projects in the nonattainment or maintenance area. Furthermore, EPA
questions whether it is possible for areas concerned with regional
pollutants to determine whether a project will cause or contribute to
new violations or exacerbate existing violations without considering
other transportation projects planned for the area. Therefore, EPA is
not proposing the option to use a project-level analysis for the build/
no-build test in rural areas.

VI. Modeling Requirements

A. Network Modeling Requirements

1. Deadline for Use of Network Models
This proposal would require that serious CO and serious, severe,
and extreme ozone areas use network models to support conformity
determinations by January 1, 1997. This requirement would apply only to
those metropolitan planning areas with an urbanized area population
over 200,000. Areas that are already using accepted network modeling
practices would be required to continue using them for conformity
analyses performed before January 1, 1997. Areas would continue to be
required to have a consultation process to select regional models and
assumptions.
The existing transportation conformity rule required that all
serious CO and serious and above ozone areas use network modeling for
conformity analyses by January 1, 1995. This proposal extends the
deadline to January 1, 1997. EPA received several comments related to
the ambitious nature of the 1995 deadline, and it has become
increasingly apparent that the original deadline is creating
difficulties for several areas that have been unable to comply by that
date. Based on comments received, EPA has determined that January 1,
1997, would be a reasonable extension of the deadline. EPA believes
that this deadline would allow areas experiencing difficulties to
improve and implement their network models, while requiring that areas
currently using network modeling continue to do so prior to that date.
In serious CO areas and serious and above ozone areas, conformity
determinations may be made after January 1, 1997, based on regional
emissions analysis that does not use network modeling only if that
regional emissions analysis was performed in support of the proposed
conformity determination before January 1, 1997. It is not necessary
for the MPO or DOT to complete its determination process before January
1, 1997, if the regional emissions analysis supporting the
determination was completed before January 1, 1997. It is also
permissible for a proposed transportation plan or TIP, and/or the
regional emissions analysis associated with it, to be modified to a
reasonable degree after January 1, 1997, as a result of the public
participation process.
This interpretation of the deadline for modeling improvements is
described in a December 30, 1994, letter from Philip A. Lorang, EPA's
Director of Emission Planning and Strategies Division, to Cynthia
Burbank, FHWA's Environmental Analysis Division Chief, and Samuel
Zimmerman, FTA's Director of the Office of Planning.
2. Areas Subject to Deadline for Use of Network Models
This proposal would limit the requirement to use network modeling
to metropolitan planning areas with an urbanized area population over
200,000, whereas the existing rule's requirements apply to all
nonattainment areas in these classifications, regardless of population
or urbanization. The proposed limitation results from a general concern
that the modeling requirements are overly burdensome for small and
rural areas within serious ozone nonattainment areas, such as Martha's
Vineyard Island, Massachusetts. EPA considered but is not proposing a
three-tiered scenario in which an area's modeling requirements would
have varying specificity based on its population and whether it was
urban or rural. Commenters believed that such a detailed proposal would
unnecessarily increase the rule's complexity. As a result, EPA decided
to specify requirements only for those serious, severe and extreme
areas with an urbanized area population over 200,000. The 200,000
population level was chosen because it is also the population level
used to delineate transportation management areas (TMAs). EPA believes
that these limitations would ensure that smaller areas no longer are
required to use unnecessarily stringent network modeling procedures and
methods.
EPA received a comment that suggested a specific, two-part process
for network model improvements in serious CO and serious and above
ozone nonattainment areas. The first part recommended an expanded,
tiered set of deadlines based on nonattainment status, population, and
growth rate, with added flexibility through a waiver provision if
mobile sources were clearly not a factor in an area's nonattainment
problem. The second part suggested that the MPO prepare a strategic
plan for the area's modeling improvements. The MPO would also be
responsible for encouraging public participation in this process and
making available for public comment the documentation of conformity
determinations and information relevant to improving the regional
analysis systems.
EPA decided not to propose this approach for several reasons.
First, the tiered deadline concept would expand the modeling
requirements to areas not currently affected under the existing rule.
EPA believes that these modeling requirements are not necessary in all
nonattainment areas and that this concept would further increase the
rule's complexity. Second, although EPA agrees with the importance of
strategic planning in modeling improvements, the Agency believes that
the existing interagency consultation process provides areas with the
necessary flexibility in planning for modeling improvements.
3. Content of Modeling Requirements: Request for Comment
In today's proposal, EPA is proposing regulatory text that would
amend the requirements addressing the characteristics of network
models. Under Sec. 51.452(b)(93.130(b)) of the November 1993 conformity
rule, network-based models used in serious and above CO and ozone areas
for conformity analyses are required to possess eleven specific
modeling attributes. EPA originally developed these eleven attributes
in consultation with conformity stakeholders and with the understanding
that they represented modeling procedures that are currently available
and in practice. EPA continues to believe that these modeling
attributes would encourage improved network-based modeling.
However, stakeholders have since suggested that the modeling
requirements in the existing rule create too much complexity and
rigidity in the conformity rule. As a result, EPA is proposing
regulatory text today that would remove these eleven modeling
attributes from the rule and replace them with modeling guidance

[[Page 36123]]

periodically issued by EPA and DOT. Today's proposal is described below
as Option 1.
Since several stakeholders have expressed concern over the primary
option EPA is proposing today (Option 1), two alternative options are
also described below. All three of the options described below would
apply to nonattainment areas with urbanized population over 200,000, as
described above. EPA requests comment on all of these options, and
depending on the public comment received, EPA may finalize one of these
alternative approaches, instead of the primary option EPA is proposing
today.
EPA believes that the conformity rule would still be consistent
with the letter and intent of Clean Air Act section 176(c) if any of
the proposed changes to the modeling requirements are adopted. Since
the statute does not specifically address modeling requirements, EPA
believes that so long as the modeling requirements continue to ensure
that conformity determinations are based on sound quantitative
analysis, EPA has the discretion to determine appropriate methods for
implementing those requirements.
Option 1: Address Network Modeling Attributes in Guidance. EPA
proposes today that the specific attributes of network models that are
required under the existing transportation conformity rule be removed
from the regulatory text and instead be addressed in guidance
documentation. EPA believes that this proposal will simplify the
conformity rule and ensure that areas will be able to choose the
modeling procedures that best match their current modeling and air
quality planning needs, resource constraints, and technical expertise
capability.
In order to ensure that appropriate modeling tools are employed,
EPA and DOT will periodically issue modeling guidance comprised of
technical documentation and other references describing available
modeling procedures. This guidance is likely to be a combination of
existing and new documents or references to technical information taken
from a variety of sources. Many of the detailed attributes required
under the existing transportation conformity rule will be referenced in
this guidance. By issuing technical guidance documents on a regular
basis, EPA and DOT will be able to communicate new modeling practices
and encourage continuous improvement over time.
EPA is aware that removing the regulatory requirements governing
network model performance may be perceived by some to be an endorsement
of less rigorous modeling practices. However, EPA and DOT remain
committed to developing and encouraging improved transportation models
and to ensuring that areas continue to employ good modeling practices.
Today's proposal is intended as a streamlining measure, not a
relaxation of standards for acceptable modeling. EPA believes that
guidance regarding available modeling techniques will facilitate model
improvement at least as well as including specific modeling
requirements in the conformity rule, while responding to local needs
for flexibility. The agencies believe that agreement regarding
appropriate modeling techniques and improvements for each area should
be an important focus of the interagency consultation process as
currently required by Sec. 51.402 (c)(1)(i) and (c)(6) and Sec. 93.105
(c)(1)(i) and (c)(6).
Option 2: Retain Network Model Performance Requirements in Existing
Conformity Rule. This option would retain all of the eleven
characteristics of network models that are required in the November
1993 conformity rule. For example, network models in these areas would
continue to be required to meet performance-based standards such as
capacity-sensitive assignment and reasonable agreement between travel
times used in trip distribution and resulting from assignment. EPA
continues to believe that these modeling attributes reflect the current
consensus in the transportation and air quality planning professions on
minimum acceptable modeling practices.
Option 3: Streamline Existing Modeling Attributes and Address
Additional Attributes in Guidance. This option would streamline the
existing conformity rule, but retain certain requirements that provide
for minimum acceptable model performance.
The streamlined requirements would be as follows: (1) Network-based
models must be validated against observed peak and off-peak ground
counts for a base year that is not more than 10 years prior to the date
of the conformity determination; (2) land use, population, employment,
and other network-based modeling inputs must be based on the best
available information and must be appropriate to the validation base
year; (3) peak and off-peak travel demand and travel times must be
provided, and a capacity-sensitive assignment methodology must be used;
(4) the model(s) must use and document a logical correspondence between
the assumed scenario of land development and use and the future
transportation system for which emissions are being estimated; and (5)
network-based models must be reasonably sensitive to trip-making
changes due to changes in the cost, travel time, capacity, and quality
of all travel choices, if the necessary information is available.
EPA would address the remaining attributes in modeling guidance
that would be jointly issued and regularly updated by EPA and DOT.
Conformity stakeholders would be involved in the development of this
modeling guidance to encourage a wide exchange of ideas about current
and available modeling practices. EPA believes that this process itself
would ensure that the modeling guidance is a useful, effective tool in
informing areas about available modeling improvements.

B. Adding Non-exempt Projects to the Plan/TIP Without Regional Analysis

1. Description of Proposal
This proposal would, under some circumstances, allow a
transportation plan and TIP to be amended to include additional non-
exempt projects without a full-scale regional emissions analysis based
on network modeling. The alternate emissions analysis procedure would
require the concurrence of the federal, state, and local air and
transportation agencies. This flexibility would not become effective
until EPA and DOT have completed their review and evaluation of
alternate procedures that are suggested during the public comment
period (see ``Request for Information for Guidance,'' below) and made
this documentation publicly available. This proposal would still
require a conformity determination for the plan/TIP amendment,
including public participation, interagency consultation, and other
relevant requirements of the transportation conformity rule. This
proposal would only change the rigor of the supporting regional
emissions analysis.
Under the existing rule, every plan/TIP and plan/TIP amendment
requires a conformity determination based on a regional emissions
analysis that meets the requirements of Sec. 51.452/Sec. 93.130. The
regional emissions analysis, which includes projects in the plan/TIP
and all other regionally significant projects in the nonattainment or
maintenance area, is used to demonstrate that the budget test and/or
emission reduction tests are satisfied. Under Sec. 51.452, certain
areas are required to use network modeling to perform this regional
emissions analysis.
This proposal would allow less rigorous analysis to demonstrate
that the plan/TIP as amended satisfies the budget test and/or emission
reduction tests. Subsequent plan/TIP conformity

[[Page 36124]]

determinations based on full regional emissions analysis would, of
course, include the recently added projects, because regional emissions
analysis must include all regionally significant projects that are
planned or underway. Any plan/TIP conformity determination based on
less rigorous analysis would not be considered a conformity
determination for the purposes of Sec. 51.400/Sec. 93.104, ``Frequency
of Conformity Determinations,'' which require that conformity
determinations be made no less frequently than every three years. The
less rigorous analysis would not provide a complete consideration of
projects in the transportation plan and TIP using the latest emissions
projections and assumptions. The transportation plan and TIP would
therefore have to be found to conform based on a full-scale regional
emissions analysis (including network modeling, where required) at
least every three years.
2. Rationale
EPA is proposing this change in response to stakeholder requests
for this flexibility. Some stakeholders commented that it may be costly
and resource-intensive to perform a full-scale regional emissions
analysis to add a regionally significant project to a transportation
plan and TIP. These stakeholders proposed that the conformity rule
allow areas the flexibility to establish alternative procedures for
regional emissions analysis that would demonstrate that an additional
project, when considered with emissions projected for the conforming
transportation plan and TIP, does not cause the plan/TIP to exceed the
motor vehicle emissions budget and/or fail to satisfy the emission
reduction tests. Stakeholders supporting this flexibility suggested
that it is necessary only in extraordinary circumstances and would not
be used on a routine basis. Other stakeholders expressed concern that
such flexibility could be used to advance significant projects without
the full scrutiny of the conformity process.
EPA agrees that there may be limited instances where the impact of
regionally significant non-exempt projects on emissions from the
currently conforming transportation plan and TIP could be determined
without full-scale regional analysis, and that exceptional
circumstances may arise where such flexibility is appropriate. However,
this flexibility is to be exercised as an exception and not on a
regular basis.
EPA would allow this flexibility to be used only after a review and
evaluation of types of alternate procedures has been documented,
because of the potential for this flexibility to undermine the
integrity of the conformity process if improperly used. Conformity's
purpose is to consider the long-term impacts of projects and to make
transportation planning decisions within the context of all proposed
projects, instead of on a project-by-project basis. In almost all
cases, regional emissions impacts cannot be determined on a project-by-
project basis or without considering the aggregate of projects in an
area and the interactions among them. The conformity provisions were in
part a response to the difficulty of assessing air quality impacts on a
project-by-project basis. As a result, it is not clear what type of
limited analysis would be appropriate and under what circumstances.
Areas will need guidance to address these issues. This guidance will be
provided in the review, evaluation, and documentation of alternate
procedures that are suggested during the public comment period, through
periodic updates of reasonable and available measures, and through the
interagency consultation process.
Stakeholders proposed that the federal, state, and local
transportation and air agencies should concur on each use of this
flexibility. EPA agrees with such a concurrence requirement since there
are not well-established, existing alternatives and because the
transportation planning process and the conformity process should not
be compromised if there is not agreement among all of the agencies that
the existing circumstances warrant the use of this flexibility. As
described in the conformity rule's consultation requirements, conflicts
among state agencies or between state agencies and an MPO shall be
escalated to the Governor if they cannot be resolved by the heads of
the involved agencies.
EPA foresees instances where use of this flexibility would not be
appropriate. For example, it would not be appropriate if planning
assumptions have changed, or if other information indicates that the
regional emissions analysis supporting the currently conforming
transportation plan and TIP is not adequate to determine that the
budget test and/or the emission reduction tests would be satisfied. It
would also be inappropriate if the transportation plan and TIP
amendment is not only adding projects, but deleting other projects and
changing implementation dates in order to remain fiscally constrained.
In this case, the plan/TIP amendment's scope would be too broad to
justify a limited emissions analysis.
3. Request for Information for Guidance
EPA and DOT recognize that there may be some alternate procedures
for determining the impact projects would have on regional
transportation-related emissions that are more expeditious and less
costly than a network-based analysis. As a result, EPA and DOT are
requesting suggestions for procedures to add non-exempt projects to the
plan/TIP without a complete network-based analysis. If documentation is
available for these procedures, please provide it if possible.
Reasonable methods or approaches may be included in guidance.
However, EPA and DOT believe that the flexibility for non-exempt
projects (as described above) should not be finalized if reasonable
alternate approaches have not been identified for determining the
regional emissions impacts from individual transportation projects.
Therefore, this flexibility would not be offered unless EPA and DOT
receive comment that identifies such alternate methods or approaches.
Some stakeholders commented about the resources needed to perform a
full-scale regional emissions analysis to add a regionally significant
project. EPA and DOT are therefore requesting information in the
following areas: (1) How often the need arises to add non-exempt
projects between TIP update cycles; (2) the number of projects that may
be delayed without this flexibility; (3) the full-scale network
modeling process currently used for the regional emissions analysis to
support conformity determinations (including number of model runs,
number of emissions model runs, etc.); (4) the difference in effort
required to add a single or limited number of projects as compared to a
full-scale conformity analysis; and (5) which agencies are responsible
for socioeconomic data development, travel modeling, and emissions
modeling, including the percentage of each agency's involvement in
conducting the conformity analysis.

VII. Consequences of SIP Disapproval

A. Description of Proposal

In today's action EPA proposes as a primary alternative regulatory
language that specifies that following a 120-day grace period after
final EPA disapproval of a control strategy SIP or maintenance plan
without a protective finding, the only transportation projects that
could be approved (and thus grandfathered from future conformity
lapses) would be those included in the first three years of the
currently conforming transportation plan and TIP (and exempt projects).
No

[[Page 36125]]

new transportation plans, TIPs, plan/TIP amendments or projects (or
projects in the out-years of the transportation plan and TIP) could be
approved. If any single phase of a transportation project is included
in the first three years of the transportation plan/TIP, all phases of
the project would be able to proceed following a disapproval, provided
that all phases of the project were included in the transportation
plan/TIP conformity analysis. Conformity determinations are required to
analyze entire projects rather than individual phases.
The ``freeze'' on new transportation plans, TIPs, and projects
would be removed once an area submits another control strategy SIP or
maintenance plan to replace the disapproved SIP, provided EPA does not
find the motor vehicle emissions budgets inadequate during its 45-day
review period. If such a replacement SIP does not become applicable to
conformity determinations by the time Clean Air Act highway sanctions
are imposed (two years after EPA's final disapproval), conformity would
lapse, and no new project- level conformity determinations could be
made, even for projects in the first three years of the currently
conforming plan and TIP.
During the 120-day grace period, transportation plans, TIPs, and
projects could be found to conform using the disapproved budgets (if no
replacement SIP applies for transportation conformity purposes). This
120-day grace period is intended to allow areas to complete conformity
determinations that were in process at the time of EPA's final
disapproval.
Under both today's proposal and the existing conformity rule,
consequences would occur following any EPA final disapproval action on
a control strategy SIP or maintenance plan without a protective
finding, even if the disapproval is limited or partial. The motor
vehicle emissions budget is sufficient only if the SIP as a whole
satisfies the Clean Air Act requirements for reasonable further
progress, attainment, or maintenance. If one part of a SIP is
disapproved without a protective finding (even if that part does not
address mobile sources), then there is no overall strategy for
reasonable further progress, attainment, or maintenance, and it is not
possible to determine whether consistency with the motor vehicle
emissions budget will result in a level of emissions consistent with
reasonable further progress, attainment, or maintenance.

B. Request for Comment

Pending the opportunity to consider thoughtful comments from all
interested parties, EPA is proposing today as a primary alternative the
regulatory text discussed above because EPA believes it balances the
conflicting goals articulated by stakeholders. EPA requests comment on
how this proposal addresses stakeholder issues and concerns identified
below. EPA also requests comment on whether other approaches are
preferable, such as aligning the conformity lapse timeframe with the
highway sanctions time clocks for SIP disapprovals without protective
findings to make this process consistent with the conformity lapse
process for other SIP failures. Alternatives to the primary option EPA
is proposing today are described below. Depending on the public comment
received, EPA may finalize one of these alternative approaches, instead
of the primary alternative.

C. Discussion of Issue

Conformity stakeholders have raised the issue of the appropriate
conformity consequences when EPA disapproves a control strategy SIP
without making a protective finding. EPA disapproval of a SIP without a
protective finding is essentially a finding that the SIP does not have
identified strategies to reach attainment (or reasonable further
progress or maintenance), and the motor vehicle emissions budget is not
adequate to satisfy Clean Air Act requirements. Final EPA SIP
disapprovals require full notice-and-comment rulemaking.
The November 1993 transportation conformity rule states that after
a 120-day grace period following final EPA SIP disapproval, no new
transportation plans, TIPs, or projects may be approved. Only
previously approved projects (``grandfathered'' projects) and exempt
projects may proceed. In other words, transportation plan/TIP
conformity lapses. The lapse is removed when a new control strategy SIP
or maintenance plan (including motor vehicle emissions budgets) is
submitted to EPA.
Some stakeholders have suggested that conformity should never lapse
as a result of a SIP failure before Clean Air Act highway sanctions are
imposed, because highway sanctions (not transportation conformity) are
the Clean Air Act mechanism for addressing SIP failures. To a
considerable degree EPA agrees with this reasoning, and EPA has amended
the conformity rule to align conformity lapse with highway sanctions
imposition in the case of all SIP failures except disapproval without a
protective finding.
However, there are substantive conformity issues with respect to
SIP disapproval without a protective finding. If an area does not have
sufficient adopted control strategies to attain the standards or make
reasonable further progress towards attainment, should the area be
committing funds to new transportation projects? If so, on what basis?
Should it proceed with projects that already have been planned and upon
which businesses and the public may already be relying in their own
future plans, but stop creating new plans and expectations? In these
cases, how would an area demonstrate that the transportation plan, TIP,
or project would not increase the frequency or severity of existing
violations, or contribute to new violations, or delay attainment?
These issues are particularly important in the context of the
conformity flexibilities in today's proposal. As described in sections
II. and III. of today's action, EPA is proposing that consistency with
submitted SIP budgets would become the sole emissions-related
conformity test for transportation plans and TIPs, even before EPA
approves the SIP and confirms that consistency with its motor vehicle
emissions budget is sufficient to achieve reasonable further progress,
attainment, or maintenance. Some stakeholders are concerned that
because a significant amount of time is likely to elapse between
initial submission of the control strategy SIP and any subsequent EPA
disapproval, a significant number of transportation projects could be
found to conform (and thus grandfathered) on the basis of an ultimately
unacceptable motor vehicle emissions budget before final EPA
disapproval actually occurs. These stakeholders are concerned about
irreversible commitments that might make Clean Air Act requirements
increasingly difficult to meet.
Other stakeholders emphasize that the disruption to the ongoing
transportation planning process should be minimized. They believe that
people and businesses begin to rely on projects in an approved plan and
TIP even though project-level conformity findings have not been made,
and conformity lapse immediately upon EPA's final disapproval is unduly
disruptive.

D. Discussion of Options

Stakeholders have identified a number of options to address the
consequences of EPA SIP disapproval without a protective finding. These
options address the concerns described

[[Page 36126]]

above to varying degrees. EPA is interested in receiving comments on
the alternative options described below and may finalize one of these
options, instead of the primary option described above.
1. No Project Approvals (Conformity Lapse) Beginning Immediately Upon
EPA Final Disapproval Without a Protective Finding
Some stakeholders have suggested that no more projects should be
approved (grandfathered) once EPA issues a final disapproval. However,
these stakeholders generally accept that projects found to conform
between submission and final disapproval should not be halted, even
once the SIP has been disapproved. This option would minimize
commitments that could ultimately be inconsistent with attainment or
maintenance, until another SIP that would be a better basis for
determining conformity is submitted to EPA.
2. Retain Existing Conformity Rule
As described above, the November 1993 transportation conformity
rule allows transportation plans, TIPs, and projects to be approved for
120 days following EPA's final disapproval of a SIP without a
protective finding. Following the 120-day grace period, no
transportation plans, TIPs, or projects can be approved. This approach
is similar to option 1 above, but the 120-day grace period helps reduce
disruption to approvals that are underway at the time of EPA's final
disapproval.
3. Allow Approval of Projects in the First Two Years of the
Transportation Plan/TIP
Some stakeholders advocate allowing previously planned
transportation projects to be approved and grandfathered, but not
approving new transportation plans, TIPs, or projects until a new SIP
has been submitted to EPA. For example, some stakeholders endorsed a
proposal that no transportation plans, TIPs, or amendments should be
found to conform after EPA's final disapproval of a SIP, and only those
projects scheduled for implementation during the first two years of the
TIP, and projects found by the MPO and the state air agency to
contribute to emissions reductions, should be allowed to proceed.
This option is similar to that being proposed by EPA today as the
primary alternative. This option prevents new commitments from being
made, but allows projects previously planned to occur in the short term
to proceed, in order to minimize disruption to the transportation
planning process.
4. No Consequences Until Clean Air Act Highway Sanctions Are Applied
Other stakeholders advocate allowing new transportation plans,
TIPs, and projects to be approved and grandfathered using the build/no-
build test or the disapproved motor vehicle emissions budget until
Clean Air Act highway sanctions are imposed. Highway sanctions under
section 179 would be imposed two years following EPA's final
disapproval unless the deficiency leading to the disapproval has been
corrected prior to that time. These stakeholders believe that it is
more consistent with the Clean Air Act to have Clean Air Act section
179 highway funding sanctions being the trigger for consequences of a
SIP disapproval. This change would also simplify the conformity rule by
having all conformity lapses associated with SIP failures occur when
highway sanctions are imposed.

E. Rationale for Primary Option Being Proposed

EPA believes that the primary option it is proposing today (as
described in section VII.A.) best balances the concerns expressed by
stakeholders. EPA is proposing to allow projects in the first three
years of the transportation plan/TIP to proceed, instead of those in
the first two years, as suggested in option 3. Some conformity
stakeholders expressed concern that restricting the ``grandfathering''
to the first two years of the transportation plan/TIP would be unduly
disruptive to the transportation planning process, especially because
the TIP normally addresses a minimum of three years. EPA believes that
the primary option provides a better balance between the competing
objectives of minimizing new commitments and minimizing disruption to
the transportation planning process.

VIII. Mismatch in SIP/Transportation Plan Timeframe

A. Description of the Issue

The existing transportation conformity rule requires the conformity
of transportation plans and TIPs to be demonstrated for the entire 20-
year timeframe of the transportation plan. However, control strategy
SIPs and maintenance plans generally address a significantly shorter
timeframe. For example, attainment demonstrations are only required to
address the years through the attainment year, and maintenance plans
are only required to initially address a 10-year period (with a
provision for a second 10-year appraisal).
For the years in the timeframe of the transportation plan that are
not addressed specifically by a SIP, the existing conformity rule
requires emissions to be consistent with the SIP motor vehicle
emissions budget(s) for the last year for which the SIP defines control
strategies and budgets. For example, before a maintenance plan has been
submitted, emissions predicted for the years after the attainment year
must be consistent with the attainment year budget(s). Emissions in
years after the first maintenance plan must be consistent with the
motor vehicle emissions budget(s) for the last year of that maintenance
plan.
Several conformity implementers have commented that there should be
a more flexible conformity test for the years that are not specifically
addressed by the SIP. Conformity implementers have pointed out several
difficulties caused by the existing transportation conformity rule's
requirements for the ``out-years'' of the transportation plan.
First, there are generally no adopted control measures to address
VMT growth in years that are not specifically addressed by the SIP. As
a result, it becomes the burden of the conformity process--and
potentially the MPO alone--to address long-term growth issues and
offset emissions increases. Placing the burden on the MPO to offset
emissions from long-term growth can be problematic because MPOs
generally lack the authority to adopt and enforce areawide emission
controls. In areas such as PM10 areas this problem is particularly
acute, because motor-vehicle-related PM10 emissions are directly
related to VMT. Technological improvements in the motor vehicle fleet
over time do not significantly reduce motor vehicle PM10 emissions
related to reentrained dust.
In addition, the existing conformity rule's requirement to use the
budget established for the last year of the maintenance plan for all
subsequent years poses special difficulties. In many areas, the motor
vehicle emissions budget will decline over the 10 years of the first
maintenance plan. This is generally because newer, cleaner cars will be
added to the motor vehicle fleet as older cars are retired, so the
emissions per VMT decrease. At the same time, emissions from stationary
sources are often related to economic and population growth, and are
thus projected to increase over time. As a result, many areas
demonstrate maintenance of air quality standards with declining motor
vehicle emissions

[[Page 36127]]

budgets and increasing stationary source emissions.
However, over time the effect of fleet turnover decreases, because
all cars in the fleet eventually meet applicable standards. In
addition, increases in VMT may begin to offset the emissions decreases
resulting from fleet turnover. Thus, motor vehicle emissions generally
are projected to increase in the years after the first 10-year
maintenance plan, and the motor vehicle emissions budget established
for the last year of that maintenance plan may in fact represent a low
point in the motor vehicle emissions projected for the 20-year
maintenance period. Requiring motor vehicle emissions in the years
after the first maintenance plan to be consistent with the budget for
the last year of that maintenance plan may be difficult without
additional control measures for stationary or mobile sources.

B. Request for Comment

EPA is not proposing specific regulatory text to address this
``mismatch'' issue at this time. However, EPA requests comment on three
options, and EPA proposes to include one of the options in the
regulatory text of the final rule.
1. Existing Transportation Conformity Rule
The first option is to continue the existing conformity rule's
requirements. According to the Clean Air Act, one of the purposes of
conformity is to ensure that transportation improvements do not cause
or contribute to new violations. The motor vehicle emissions budget for
the attainment year represents the level of motor vehicle emissions
that is consistent with attainment of the standard. Therefore, keeping
motor vehicle emissions in future years equal to or less than that
budget should ensure that motor vehicles will not cause or contribute
to a new violation. If motor vehicle emissions increase above levels
that the SIP identifies as necessary for attainment, it may be
difficult to state that a new violation would not result, as conformity
requires.
Regarding the comments that the existing conformity rule
inappropriately places the burden on the MPO to address long-term
growth issues, it is in fact an important goal of conformity to focus
attention on the long-term impacts of transportation investments and
policies. To the extent that an area has not reconciled the impacts of
growth and transportation policy with air quality goals, it is
appropriate that conformity provide the forum and impetus for state and
local governments to do so. Although the MPO may not itself have the
authority to adopt and enforce necessary measures, conformity is
determined through an interagency process which includes the state and
local governments which do have that authority. It is appropriate that
the long-term growth issues affecting a local area be addressed through
the cooperation of state and local air and transportation agencies. The
fact that the MPO has legal responsibility to determine conformity does
not mean it alone must develop and implement the additional control
measures that are necessary. The state also shares an interest in
developing conforming metropolitan transportation plans and TIPs and
would be expected to share responsibility for facilitating conformity.
Maintaining the existing conformity rule's requirements regarding
the applicability of motor vehicle emissions budgets for future years
would also encourage the SIP process to address longer timeframes,
which is ultimately the preferable solution. Doing so should avoid
costs and burdens of not addressing long-term issues now. The
difficulties associated with demonstrating conformity in years that are
not addressed by the SIP would be reduced if the SIP established
acceptable motor vehicle emission levels for such future years. This
has already occurred in some areas.
The existing conformity rule already has some provisions to address
the difficulties associated with using the budget for the last year of
the maintenance plan for subsequent years. For example, the maintenance
plan could establish larger motor vehicle emissions budgets for years
after the last year of the maintenance plan by projecting motor vehicle
emissions and emissions from other source categories in future years.
Provided the projected total emissions are less than the total
emissions in a previous year with clean data, the motor vehicle
emissions projections could be used to establish a motor vehicle
emissions budget. If the projected total emissions are less than the
total emissions in a previous year with clean data, the difference
(``safety margin'') could also be applied to the motor vehicle
emissions budget.
2. Emission Reduction Tests
A second option would be to require the emission reduction tests
(``build/no-build test'' and less-than-1990 test) for demonstrating
conformity in years not addressed by submitted or approved control
strategy SIPs or maintenance plans. Demonstrating conformity for years
later than those addressed by SIPs is in some ways analogous to the
situation of demonstrating conformity for years before SIPs are
submitted, that is, no budget has been specifically developed for
assessing conformity in such years. The Clean Air Act allows for
``contribution to annual emission reductions'' to serve as the test of
conformity in the latter case, so by extension, it could be argued that
such a test is also appropriate for years later than those addressed by
SIPs. The Clean Air Act requirement for consistency with emissions in
SIPs could be argued to apply only for those years that are
specifically addressed by the SIP.
Although this option provides more flexibility than the existing
rule for emissions increases due to population and economic growth, it
has several disadvantages. First, satisfying the emission reduction
tests would not ensure that motor vehicle emissions are at a level
consistent with attainment or maintenance. Although the conformity test
would ensure that motor vehicle emissions are no greater than they
would have been without further transportation improvements, the focus
is not on attainment or maintenance of air quality standards. As a
result, the impact of long-term growth on attainment and maintenance
will not necessarily be addressed.
The Clean Air Act requires a second 10-year maintenance plan to be
submitted eight years after an area's redesignation to attainment, so
the SIP process in redesignated areas will ultimately address the
emissions in the years after the first 10-year maintenance plan. In the
case of areas that have not yet been redesignated, however, allowing
motor vehicle emissions to increase above the attainment year budget
may make it increasingly difficult to develop a SIP demonstrating
maintenance, and thus may delay or complicate redesignation of such
areas to attainment.
Finally, conformity implementers and other interested parties have
commented that the emission reduction tests are not meaningful
indicators of air quality impacts, particularly because transportation
modeling and emission factor modeling are often not sufficiently
precise to determine significant differences between ``build'' and
``no-build'' scenarios. Experience to date has found that the emission
reduction tests are frustrating and difficult to explain because they
do not address the performance-oriented goals of attainment and
maintenance. Although practical alternatives have not been identified
for use during the period before SIPs have been developed, for years
later than those addressed by SIPs,

[[Page 36128]]

the previously established motor vehicle emissions budgets are
available.
3. Default Motor Vehicle Emissions Budget
A third option is to maintain the existing rule's requirements for
the years after the attainment deadline and before a maintenance plan
has been submitted, but to allow a default motor vehicle emissions
budget for the years outside the maintenance plan's timeframe. Instead
of requiring the motor vehicle emissions budget for the last year of
the maintenance plan to continue to apply for subsequent years, the
motor vehicle emissions budget for subsequent years could be the motor
vehicle emissions in the year of redesignation.
Like the emission reduction tests option, this option would not
ensure that motor vehicle emissions are consistent with maintenance of
air quality standards. Without considering emissions from sources other
than motor vehicles, there is no assurance that the motor vehicle
emissions in the year of redesignation will also be consistent with
continued maintenance of the standard in future years. However, this
problem could be at least somewhat reduced with additional features to
this option. For example, the rule could require the default budget to
be established in the maintenance plan and accompanied by some type of
demonstration that when the default motor vehicle emissions budget is
considered together with expected growth in area and stationary source
emissions, the standard will be maintained.
The default emissions budget option may be preferable to the
emission reduction tests option for the years after those addressed by
maintenance plans for two reasons. First, conformity implementers have
expressed a preference for budget tests instead of the more abstract
emission reduction tests. Second, unlike the emission reduction tests
option, this option would provide a cap on motor vehicle emissions
growth. Although the cap is not necessarily tied to maintenance, it
does not allow emissions due to population and economic growth to
revert back to 1990 levels, as the emission reduction tests allow. As a
result, the conformity process could still provide significant
protection for the public while providing the impetus for serious
consideration of long-term growth effects.
Unlike the emission reduction tests option, this option would
maintain the existing rule's requirements (i.e., the attainment budget
would continue to apply for the years after the attainment deadline)
until a maintenance plan is submitted. This will help prevent delays in
attainment and/or redesignation.
Allowing conformity to be demonstrated using a default emissions
budget that is not part of an overall maintenance strategy that
addresses all emissions sources could be considered inconsistent with
the Clean Air Act section 176(c) and the conformity rule's other
interpretations of those provisions. However, it is also possible to
argue that such an allowance is reasonable and defensible in the
special

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-16581. Public record. Not legal advice.