Exemption Criteria Policy for Highway Sanctions

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

[FHWA Docket No. 94-29]

Exemption Criteria Policy for Highway Sanctions

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of final policy statement.

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SUMMARY: The purpose of this notice is to establish a policy concerning

exemption criteria used to determine which projects could advance if

the Environmental Protection Agency (EPA) imposes highway sanctions in

accordance with section 179(a) or section 110(m) of the Clean Air Act

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(CAA) and applicable EPA regulations. These exemption criteria define

the requirements which establish the basis for project exemptions, and

describe and clarify the types of projects and programs that are exempt

during highway sanctions.

EFFECTIVE DATE: March 11, 1996.

ADDRESSES: Materials relevant to this final notice are contained in

Docket No. 94-29, FHWA, Room 4232, HCC-10, Office of Chief Counsel, 400

Seventh Street, SW., Washington, DC 20590. The docket may be viewed

between the hours of 8:30 a.m. to 3:30 p.m., e.t., Monday through

Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Mr. Kirk D. Fauver, Office of Environment and Planning, (202) 366-2079,

or Mr. Reid Alsop, Office of Chief Counsel, (202) 366-1371, FHWA.

Office hours are from 7:45 a.m. to 4:15 p.m., et., Monday through

Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: This final notice on the exemption criteria

for highway sanctions provides clarifications regarding the types of

projects (``exempt projects``) listed in section 179(b)(1) of the Clean

Air Act (CAA) as amended in 1990 (42 U.S.C. 7509(b)(1)), that may

continue to advance while an area is subject to highway funding

sanctions. Under section 179(b) and section 110(m) of the CAA, the EPA

Administrator may impose a prohibition on project approvals and grants

made under title 23, United States Code, by the Secretary of

Transportation (``highway sanctions''). The descriptions of exempt

projects contained within this document would apply to sanctions

applied under section 179(a) (``mandatory sanctions'') or section

110(m) (``discretionary sanctions''). Section 110(m) contemplates

circumstances under which EPA may extend highway sanctions to areas not

designated as ``nonattainment''. Hence, the information contained in

this final notice applies to attainment, nonattainment, and

unclassifiable areas. As of this date EPA has published two final rules

related to sanctions. The first was published on January 11, 1994,

entitled ``Criteria for Exercising Discretionary Sanctions Under Title

I of the Clean Air Act`` (59 FR 1476; 40 CFR Part 52). It establishes

the criteria to guide EPA's decision on whether, in a specific

circumstance, to impose discretionary sanctions on a statewide basis

under section 110(m).

A second regulation, ``Selection of Sequence of Mandatory Sanctions

for Findings Made Pursuant to Section 179 of the Clean Air Act,'' was

published on August 4, 1994 (59 FR 39832; 40 CFR Part 52). This

regulation establishes that, following section 179(a) findings, the 2-

to-1 offset sanction on new or modified major stationary sources

applies first, 18 months after the finding (except where EPA reverses

the order through a separate rulemaking), unless EPA has determined

that the State corrected the deficiency that prompted the finding.

Highway sanctions apply second, six months after application of the

offset sanction, unless EPA has determined that the State corrected the

deficiency that prompted the finding.

Thos two final rules (with this final notice on exemption criteria)

effectively supersede the joint DOT/EPA notice of April 10, 1980 (45 FR

24692), ``Federal Assistance Limitation Required by section 176(a) of

the Clean Air Act.'' The EPA also expect to publish another regulation

sometime in the future that would establish the sequence of sanctions

applied under section 502(d)(2)(B) of the Clean Air Act relating to the

EPA's permit program.

Preamble to the Final Criteria Policy Notice

The outline for the contents of the preamble to the final criteria

policy notice is as follows:

I. Requirements which Establish the Basis for Highway Sanction

Exemptions

II. General

III. Discussion of Comments Received by FHWA on Proposed Exemption

Criteria

A. Stand-alone Environmental Projects

B. High Occupancy Vehicle (HOV) Exemptions

C. Maintenance Projects

D. Project Development Actions under the National Environmental

Policy Act (NEPA)

E. Exemptions for Congestion Mitigation and Air Quality

Improvement (CMAQ) Projects and Programs

F. Safety

G. Transportation Planning and Research Activities

H. Use of Supporting Data From Transportation Management Systems

I. Improved Streamlining

J. FHWA's Response to Other Comments Received

IV. Safety Program/Project Requirements Under 23 U.S.C.

I. Requirements Which Establish the Basis for Highway Sanction

Exemptions

Under Section 179(b)(1) of the CAA, the Secretary of Transportation

(as delegated to the FHWA) may make certain project approvals and award

grants, even while the nonattainment area or State is under highway

sanctions. As stated in section 179(b)(1) of the CAA, safety projects

could go forward provided the Secretary of Transportation determines

that, based on accident or other data, the principal purpose of the

project is an improvement in safety to resolve a demonstrated problem

and will likely result in a significant reduction or avoidance of

accidents.

In addition to safety projects, section 179(b)(1) specifically

exempts seven activities from highway sanctions (See ``Congressionally

Authorized Activities'' of this final notice). Projects that the EPA

Administrator, in consultation with the Secretary of Transportation,

determines would contribute to air quality improvement and would not

encourage single occupancy vehicle (SOV) capacity also are exempted.

Programs and projects which are allowed to go forward under section

179(b)(1) should strive to alleviate emissions and congestion problems.

II. General

This preamble discusses the comments received during the 60-day

public comment period, provides FHWA's responses to these comments, and

indicates how resulting changes were incorporated in the final

exemption criteria (originally proposed via 60 FR 34315). The exemption

criteria notice clarifies and establishes types of highway projects

which are exempt (or ``categorically exempt'') from highway sanctions.

Categorical exemptions are title 23-funded or approved transportation

projects that do not need additional information or documentation to

justify them as being ``exempt'' during section 179(a) or 110(m) CAA

highway sanctions. Also, other ``exempt'' title 23-funded or approved

transportation projects are identified in this final notice. These

``exempt'' transportation projects, although not deemed ``categorically

exempt'', could be allowed to move forward (with additional

justification and data provided by the state) in the event of highway

sanctions. Categorically exempt projects were designated under this

final notice because EPA and DOT have determined that such projects

either will improve air quality and not encourage single occupancy

vehicle (SOV) capacity or are statutorily exempt under section 179(b)

of the CAA.

The final exemption criteria also recognize the respective roles

and responsibilities of the FHWA (in consultation with the EPA) in

applying funding and program/approval limitations under section

179(b)(1), when a highway sanction is imposed by EPA under section

179(a) or section 110(m) of the CAA.

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The final exemption criteria are applicable nationwide. Although

the FHWA will consult with EPA to determine whether projects meet the

exemption criteria, the final authority to determine whether a project

is exempt from highway sanctions, under the safety exemption and other

specific statutory exemptions, is the sole responsibility of the

Secretary of Transportation (as delegated to the FHWA). Other

transportation-related projects, not covered under the aforementioned

specific exemptions, may be exempted if the EPA Administrator, in

consultation with the Secretary of Transportation, finds that they will

improve air quality and not encourage SOV capacity under section

179(b)(1)(B)(viii) of the CAA.

III. Discussion of Comments Received by FHWA on Proposed Exemption

Criteria

The following section discusses the significant comments received

by the FHWA in response to the proposed policy on the exemption

criteria published on June 30, 1995 (60 FR 34315) and FHWA's response

to the comments. Twenty one (21) comments on the proposed exemption

criteria were received by FHWA. The comments received by FHWA were sent

by metropolitan planning officials, state departments of

transportation, environmental advocates, highway safety advocates,

county commissioners, and one from a governor's office. Issues ranged

from providing categorical exemptions for ``stand-alone'' environmental

actions, to providing additional exemptions for actions not originally

considered as part of the proposed exemption criteria.

A. Stand-Alone Environmental Projects

The proposed policy statement on exemption criteria requested

comment on eight ``stand-alone'' projects which are likely to have ``de

minimis'' environmental or environmentally beneficial impacts. These

eight ``stand-alone'' projects are not specifically exempt from

sanctions by the CAA. These projects may improve water quality,

mitigate wetland impacts, provide landscaping, preserve historic

structures, reduce noise, and have other aesthetic benefits. While the

proposed policy statement did not exempt these projects, FHWA requested

comment as to whether the following types of projects should be exempt

from highway sanctions because of their ``de minimis'' impact on air

quality. These actions are typically exempted from the CAA

transportation conformity requirements (see 40 CFR sections 51.460 and

93.134). Commenters were requested to include a discussion of the basis

for their position in favor of, or against, such an exemption. The

projects for which exemption status was being considered included:

1. Wetland mitigation;

2. Planting trees, shrubs, wildflowers;

3. Landscaping;

4. Purchase of scenic easements;

5. Billboard and other sign removal;

6. Historic preservation;

7. Transportation enhancements;

8. Noise abatement.

Comments Received by FHWA

Many of the commenters (in response to the proposed exemption

criteria) noted that the stand-alone projects listed above have little

or no impact on increasing vehicle-miles-traveled (VMT), nor can they

be associated with encouraging SOV capacity. Of the twenty one (21)

comments received, thirteen (13) expressed support for including these

types of ``stand-alone'' projects as categorically exempt from highway

funding sanctions. There were no comments received by FHWA that were

opposed to exempting these projects.

Some of the commenters noted that these ``stand-alone'' projects

actually improve or enhance the environment and have minimal or

sometimes even positive impacts on the ambient air quality. In

addition, one commenter stated that these types of projects constituted

only 0.7 percent of their total state highway program. With the

percentage of these types of actions so small, the commenter also added

that the exclusion of these projects would not contribute significantly

to the purpose of highway sanctions under Section 179(a) or 110(m) of

the CAA. Additionally, the other potential environmental benefits of

these ``stand-alone'' projects would not be realized if they were

halted during a possible highway funding sanction scenario.

FHWA's Response to Comments

The FHWA has considered the comments received. The final exemption

criteria generally exempt these ``stand alone'' projects from highway

sanctions for several reasons. The significance of these projects, both

in terms of impacts on air quality and in terms of highway program

expenditures is ``de minimis'', as noted in the comments above, hence

they would not add significantly to any punitive aspect of highway

sanctions. In addition, such projects advance identifiable

environmental or aesthetic goals and do not encourage increases in SOV

capacity. Finally, these types of projects were generally exempted from

the conformity requirements of section 176(c) of the CAA by the

regulations implementing section 176(c) (see EPA's Final Rule on

Transportation Conformity, 40 CFR sections 51.460 and 93.134) because

these projects have no emissions impact, and were considered to be

neutral or ``de minimis''.

However, consistent with the exemptions contained in the conformity

regulations, the transportation enhancement activities (TEA) associated

with the rehabilitation and operation of historic transportation

buildings, structures, or facilities are not categorically exempted

since such activities may, in some cases, have adverse impacts on air

quality and may increase VMT.

A majority of the commenters suggested that flexibility be provided

to allow other typically ``non-exempt'' projects, listed in section B

(60 FR 34318) of the proposed exemption policy criteria, to be

categorically exempt. However, as these projects could lead to expanded

single occupant vehicle capacity, the FHWA believes that they can not

be considered categorically ``exempt'' under the exemption criteria.

B. High Occupancy Vehicle (HOV) Exemptions

The proposed exemption criteria provided categorical exemptions for

the construction of new HOV lanes (only if those lanes were solely

dedicated as 24-hour HOV facilities), and the conversion of existing

lanes for HOV use during peak hours.

Comments Received by FHWA

Comments were received by the FHWA on the issue of providing

exemptions for all HOV lanes, regardless of time-of-day restrictions

(whether 24-hour or peak hour HOVs). One of the commenters noted that

the exemption for HOV facilities presented in the proposed exemption

criteria (60 FR 34319) only applied to the construction of 24-hour HOV

lanes, and suggested that this restriction is ``inappropriately

narrow''. Additionally, the commenter stated that the application of

sanctions to HOV lanes (which are open to non-HOV travel during off-

peak periods) would only serve to limit the States' ability to develop

HOV facilities in a manner receiving broad public acceptance.

FHWA's Response to Comments

Upon further review of section 179(b)(1)(B) of the CAA, the FHWA,

in consultation with EPA, has decided to allow categorical exemptions

for those

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HOV projects described in the proposed criteria (i.e. construction of

24-hour HOV facilities, and the conversion of existing lanes during 24-

hour periods). The construction of new 24-hour HOV facilities or the

conversion of existing lanes to 24-hour HOV facilities are specifically

exempted under this notice, since these actions meet the definition of

``solely for the use of passenger buses or high occupancy vehicles''

per section 179(b)(1)(B)(ii) of the CAA.

Additionally, FHWA and EPA agree that the conversion of existing

lanes during peak hours should also be categorically exempt under

section 179(b)(1)(B)(viii) of the CAA, because these actions would

improve air quality without encouraging SOV capacity. The categorical

exemption, regarding the conversion of existing lanes for HOV use

during peak hours, was originally made under section 179(b)(1)(B)(ii)

and described under ``Congressionally Authorized Activities'' of the

proposed exemption criteria notice. The categorical exemption for these

projects in now made under section 179(b)(1)(B)(viii) of the CAA under

``Air Quality Improvement Programs That Do Not Encourage Single

Occupancy Vehicle Capacity'' of the final exemption criteria, since

these projects more appropriately meet this exemption criterion.

Other HOV projects, that are not categorically exempt under section

179(b)(1)(B)(ii) of the CAA, may be exempted on a case-by-case basis

pursuant to the section entitled ``Air Quality Improvement Programs

That Do Not Encourage Single Occupancy Vehicle Capacity'' of the final

exemption criteria, per section 179(b)(1)(B)(viii) of the CAA. These

categorical exemptions are granted only if the EPA Administrator (in

consultation with the Secretary of Transportation) finds that they

would improve air quality and would not encourage single occupancy

vehicle capacity. In addition, the final exemption criteria also

categorically exempt all transportation control measures (TCMs) in an

EPA-approved SIP or Federal Implementation Plan which have emission

reduction credit and will not encourage SOV capacity (per section

179(b)(1)(B)(viii) of the CAA).

C. Maintenance Projects

The proposed exemption criteria did not provide categorical

exemptions for maintenance and rehabilitation projects, unless the

projects could be shown to have a principal purpose of improving safety

(such as projects from the Highway Safety Improvement Program or the

Highway Bridge Replacement and Rehabilitation Program).

Comments Received by FHWA

The FHWA received several comments which proposed that all highway

maintenance projects (such as resurfacing, restoration, and

rehabilitation) regardless of safety and SOV capacity expansion

concerns, be considered ``exempt'' from highway sanctions. These

comments requested more flexibility and stated that these actions

should be considered exempt, unless ``FHWA can show that air quality

well be adversely affected'' by their implementation. Commenters also

suggested that repaving and resurfacing projects that may be shown to

improve traffic flow and safety be considered ``categorically exempt''

during the highway sanctions, as older deteriorated pavement may add to

additional congestion and ultimately lead to air quality problems.

FHWA's Response to Comments

FHWA examined this issue and found that Congress reviewed the

possibility of exempting resurfacing, restoration, and rehabilitation

(``3-R'') type highway projects during the debates leading toward the

development of the 1990 Clean Air Act Amendments. While there was an

attempt to include a categorical exemption for such projects this

approach was rejected in part because of concerns that a categorical

exemption for all ``3-R'' type projects could become a ``huge

loophole'' for projects exempted from sanctions under the safety

category (Congressional Record; E3700; November 2, 1990). Consequently,

``3-R'' type projects must be reviewed on a case-by-case basis to

ensure that each project's principal purpose is safety.

D. Project Development Actions Under the National Environmental Policy

Act (NEPA)

The proposed exemption criteria described the extent to which

project development actions under NEPA would be considered ``exempt''

from highway sanctions. The proposed criteria stated that project

development activities under NEPA may be exempt from highway sanctions

only if consideration of ``exempt'' alternatives, such as transit or

other transportation demand management (TDM) measures, are actively

being considered as reasonable independent alternatives.

Comments Received by FHWA

One commenter stated his support for providing exemptions for NEPA

studies (if ``exempt'' project alternatives remain under

consideration), because the studies would be considering alternatives

that could help the state ultimately attain the national ambient air

quality standards (NAAQS). One commenter recommended that added

flexibility be provided during the project development process for

those project development actions involving ``neutral'' project

alternatives (which may not be ``highway-related'') that are not

considered to be ``exempt'' under highway sanctions.

FHWA's Response to Comments

The final exemption criteria provide flexibility by allowing a

broad range of TDM measures, TCMs in applicable SIPs (which have

emissions reduction credit and will not encourage SOV capacity), mass

transit, and other ``exempt'' project actions to be advanced as part of

project development studies and activities if they meet the criteria of

this final notice. The final criteria provide for the continued funding

of project development activities during a highway sanctions scenario,

as long as project alternatives that would be ``exempt'' under the

policy statement are still being considered by the project sponsor.

Once all of the project alternatives that could be considered

``exempt'' from highway sanctions are eliminated, then project

development activities for NEPA or other purposes (such as MIS

development studies) are no longer exempt, and additional project

development activities or studies can not be approved or funded under

title 23 while highway sanctions are in effect.

E. Exemptions for Congestion Mitigation and Air Quality Improvement

(CMAQ) Projects and Programs

Categorical exemptions were not provided for all CMAQ projects in

the proposed exemption criteria. Both the proposed and final exemption

criteria provide categorical exemptions for all TCMs in approved SIPs

or Federal Implementation Plans (FIPs) which have emission reduction

credit and will not encourage SOV capacity, and for those CMAQ-funded

projects related to inspection and maintenance facilities and

activities, as well as bicycle/pedestrian and carpool/vanpool programs.

The proposed and final exemption criteria also provide an opportunity

for project exemptions upon review of air quality benefits on a case-

by-case basis, providing the project meets the criteria under ``Air

Quality Improvement Programs That Do Not Encourage Single Occupancy

Vehicle Capacity'' of this final notice.

[[Page 14367]]

Comments Received by FHWA

There were four comments that supported the full blanket exemption

of all CMAQ programs and projects from highway sanctions, since their

primary goal (by definition) is to contribute to the attainment of the

NAAQS. One commenter stated that the process is redundant and

unnecessary, since CMAQ projects can not be authorized unless they

conform to the requirements of federal law and regulation. Because FHWA

requires a project justification and analysis before authorization of

each CMAQ project, the commenter recommended that FHWA grant

categorical exemptions for these CMAQ projects in order to avoid

duplication of effort and to conserve resources.

FHWA's Response to Comments

The final notice on exemptions does not provide for full blanket

CMAQ exemptions. Under the CAA, exempt projects may not encourage SOV

capacity, and in some cases there could be potential SOV capacity

expansion provided by certain CMAQ-funded projects. As noted, the

following four types of projects (which may receive CMAQ funding) are

considered to be ``categorically exempt'' and will not require

additional review by the EPA or FHWA in the event of highway sanctions:

1. TCMs contained in an EPA-approved SIP (or Federal Implementation

Plan which have emission reduction credit and will not encourage SOV

capacity);

2. Inspection and maintenance facilities and activities eligible under

CMAQ;

3. Bicycle and pedestrian facilities; and

4. Carpool/Vanpool programs.

Other CMAQ projects may be exempted on a case-by-case basis,

pursuant to the final exemption criteria, if the project can be shown

to improve air quality and not encourage SOV capacity.

F. Safety

The proposed exemption criteria provided for categorical exemptions

for several programs which have been established under title 23,

U.S.C., expressly for the purpose of addressing safety objectives,

either through programs targeted at driver behavior or safety projects

intended to remediate structures or facilities, or to prevent loss of

human life.

Some of these safety programs will need to provide justification to

show that the project is related to safety (unless the project is drawn

out of a statewide safety program or is related to the programs

administrated by National Highway Traffic Safety Administration

(NHTSA)). These ``additional justification'' projects include capital

projects involving elimination of safety hazards, emergency relief (ER)

projects that involve added capacity, improving safety deficiencies,

and other programs such as pavement resurfacing for skid resistance.

Comments Received by FHWA

One of the commenters expressed support for flexibility in

determining whether the ``principal purpose'' of a project activity is

improving safety. The commenter stated that a ``strict application of a

test which requires showing that safety be the `principal purpose'

could preclude projects which have a significant impact on other

factors.'' A highway safety advocate expressed strong concern about the

designation of ``improvements to, or reconfiguration of, existing

interchanges'' as ``non-exempt'' under the section entitled ``Typically

Nonexempt Projects''. The commenter suggested that this designation may

lead to safety concerns related to the perpetuation of older

substandard geometric designs during highway sanctions.

Another commenter stated that the safety program provisions

(dealing with exempt actions) were too focused on the NHTSA programs,

and not title 23 federal-aid safety programs administered by the FHWA

(without NHTSA participation). The commenter suggested that ``FHWA-

only'' programs should be included in the exempt criteria.

FHWA Response to Comments

Consistent with section 179(b)(1) of the CAA, the final exemption

criteria allow certain exemptions for ``specific'' safety projects and

programs, that are not from a statewide safety program, once

justification is provided to demonstrate that they improve safety. This

data may be derived from accident data drawn out of a safety or bridge

management system (under this final notice). Flexibility was provided

in both the proposed and final criteria to allow exemptions of

``specific'' safety projects and programs that can be shown to be

exempt (on the grounds of safety) based upon national experience.

Allowable exemptions for ``specific'' safety projects under the

exemption criteria may involve upgrading obsolete geometric designs

(for improving limited sight distance), replacement of substandard

guardrail, rehabilitation for skid resistance, or address other safety

needs and purposes, as outlined in the exemption criteria.

Categorical exemptions of ER projects (which do not involve

substantial functional, locational, or capacity changes) are considered

important and have been included in the final criteria. Following a

catastrophic event such as an earthquake or flood, it would not be in

the public interest to require project sponsors to provide additional

safety information or data. Therefore, FHWA has agreed to categorically

exempt all ER projects which do not involve substantial functional,

locational, or capacity changes funded under title 23 in order to

provide flexible administrative relief in the event of a natural

disaster, civil unrest, or terrorist act. Such projects for the repair

of damage that follows such catastrophic events are considered to be

``exempt'' safety projects. It is noted that, for conformity purposes,

ER projects are ``exempt'' under the EPA conformity rule if the project

does not involve substantial functional, locational, or capacity

changes.

Title 23 ER projects discussed in the final notice are authorized

expenditures by the Secretary of the DOT, as defined under section 125

of title 23, United States Code (23 U.S.C.). The eligible activities

under the ER program include the repair or reconstruction of highways,

roads, and trails which the Secretary has found to be seriously damaged

as the result of a natural disaster (e.g., floods, hurricanes, tidal

waves, earthquakes, severe storms, or landslides, etc.). ER funds

cannot be used for purposes of repairing or reconstructing bridges that

have been closed to all vehicular traffic by the State or responsible

local official due to structural deficiencies, lack of maintenance, or

physical deterioration. Provisions for the ER program can be found

under 23 CFR part 668.

The proposed exemption criteria did not intend to place stronger

emphasis on the exempted NHTSA programs than on the applicable exempt

title 23 safety programs and projects funded under the ISTEA (or other

title 23 programs). Although specific identification of a highway

safety project from an obvious safety-related program such as the

Highway Safety Improvement Program or the Hazard Elimination Program

(23 U.S.C. 152) was mentioned in the proposed exemption criteria, it

was not meant to eliminate other ``exempt'' title 23 safety programs or

projects that may be funded under the Surface Transportation Program

(STP) or the National Highway System (NHS) or any other ISTEA (or title

23) funded program. Title 23 safety projects, however, must meet the

criteria for ``exempt'' status (whether individually

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or as part of a statewide program) as defined in the final notice on

exemption criteria.

G. Transportation Planning and Research Activities

Comment Received by FHWA

One commenter stated that it was not clear as to whether all

transportation research is exempt (because it may in some way benefit

air quality or safety) or whether only those research projects that

directly benefit air quality or safety are exempt.

FHWA's Response to Comment

As indicated in the proposed notice and carried forth under the

final exemption criteria, all transportation planning and research

activities are exempt from highway sanctions.

H. Use of Supporting Data From Transportation Management Systems

Section 1034 of the ISTEA amended title 23, United States Code, by

adding section 303, Management Systems. Section 303 requires State

development, establishment, and implementation of a system for managing

each of the following: highway pavement of Federal-aid highways (PMS);

bridges on and off Federal-aid highways (BMS); highway safety

management system (SMS); traffic congestion (CMS); public

transportation facilities and equipment (PTMS); and intermodal

transportation facilities and systems (IMS). An interim final rule for

these systems was published on December 1, 1993, as 23 CFR part 500.

On July 20, 1995, the FHWA and FTA issued a joint memorandum

regarding updated compliance dates for the six management systems. The

NHS Designation Act was signed by the President on November 28, 1995

which amended 23 U.S.C. 303(c) to allow States, at any time, to elect

to not implement, in whole or part, any one or more of the ISTEA

management systems under section 303. However, in accordance with

section 134(i)(3) of title 23 United States Code (as amended by the

ISTEA of 1991), transportation management areas (TMAs) must include a

congestion management system (CMS) as part of their transportation

planning process.

The proposed exemption criteria suggested that data generated from

bridge management systems or safety management systems could be used to

justify exemptions for safety projects and programs in the event of

highway sanctions. The preamble of the proposed exemption criteria also

discussed the implementation dates required by the interim final rule

on the ISTEA management systems issued on December 1, 1993 (as 23 CFR

part 500). The National Highway System (NHS) Designation Act of 1995

has made the development and implementation of one or more of the ISTEA

management systems optional for the States. However, in accordance with

section 134(i)(3) of title 23 United States Code (as amended by the

ISTEA of 1991), transportation management areas (TMAs) must include a

congestion management system as part of their transportation planning

process.

Comments Received by FHWA

In reference to the implementation dates for the six management

systems required under the ISTEA legislation (via 23 CFR part 500),

three commenters correctly noted that the FHWA and FTA have

subsequently published revised deadlines as part of the government-wide

regulatory streamlining effort. One commenter suggested that if the

output of management systems is going to be used as a basis for

determining sanction exemptions, then highway sanctions should only

apply to the NHS routes.

FHWA's Response to Comments

The commenters's assumption regarding the application of sanctions

to NHS System projects is incorrect as each air basin or region or

subregion that is under highway sanctions issued by the EPA under

Section 179(a) or 110(m) of the CAAs would be subject to sanctions for

all federal-aid title 23 programs and projects (that are not exempt

under this exemption criteria), regardless of the facility-type or

route designation, within the applicable area or region. The CAA and

EPA implementing regulations do not limit highway funding sanctions

only to NHS routes or any other facility type funded under the ISTEA

(or title 23). Despite the changes to the management system

requirements made by the NHS Designation Act, information from the

safety or bridge management systems may be used for the purpose of

providing data to support safety exemptions under this final criteria

notice.

I. Improved Streamlining

One of the more critical comments received was in the area of

improved streamlining for project delivery during the highway sanctions

period by the DOT and EPA. During a highway sanctions scenario, the

State departments of transportation will be responsible for reviewing

and forwarding a listing of ``exempt'' highway projects to the FHWA

prior to FHWA approval, and the subsequent authorization of title 23

funds. The FHWA will review the State departments' of transportation

lists of ``exempt'' programs and projects (in consultation with EPA)

and make its determination of exemptions prior to issuing federal

approvals or authorizations to proceed. The FHWA will provide the EPA

with a 14-day review and comment period prior to federal approval and

subsequent authorization of funds.

J. FHWA's Response to Other Comments Received

The FHWA received a few additional comments. They ranged from

questions related to the redistribution of title 23 highway funds to

unsanctioned areas, general views on VMT growth and air quality trends,

and other general discussions unrelated to the proposed or final

exemption criteria. Since these comments could not be addressed by FHWA

in the scope of the final exemption criteria and were not directly

related to (nor influenced) the development of the exemption criteria,

the FHWA did not believe it was pertinent to address them as part of

this final exemption criteria.

IV. Safety Program/Project Requirements Under 23 U.S.C.

Several programs have been established under title 23, U.S.C.,

expressly for the purpose of addressing safety objectives, either

through programs targeted at driver behavior or safety projects

intended to remediate structures, facilities, or prevent loss of human

life. These programs include: the Highway Safety Improvement Program as

defined under 23 CFR Part 924; the Highway Bridge Replacement and

Rehabilitation Program (HBRRP) as defined under 23 CFR Part 650,

Subpart D; and grant programs whose principal purpose is to improve

safety and which do not include any capital improvements, including all

programs established in Chapter I or IV or 23 U.S.C. that are

administered by the NHTSA.

Additionally, the Transportation Management and Monitoring Systems

defined under 23 CFR Part 500 (58 FR 63475, December 1, 1993) defined

requirements for the six management systems and the Traffic Monitoring

System. As mentioned earlier, the NHS Designation Act of 1995 made the

implementation of the ISTEA management systems optional for the States.

The final notice allows States the flexibility to justify the

exemptions of safety or bridge projects using data from their own

safety or bridge management

[[Page 14369]]

systems. This information may be used to supplement existing data or,

as it is developed, may improve existing data or information currently

available.

Programs or projects stemming from the following provisions could

be exempt on the basis of an established safety-related project need

meeting section 179(b) requirements. Title 23 of the Code of Federal

Regulations sets forth the requirements for eligibility for federal

funding for projects under the Highway Safety Improvement Program (23

CFR Part 924) and the HBRRP (23 CFR Part 650 Subpart D) and programs

administered by NHTSA (Chapters II and III of 23 CFR).

These programs have been established with the purpose of addressing

safety objectives and may be used to establish justification for the

safety exemptions under the CAA if the section 179(b) requirements and

those of this final notice are fully met.

A. Highway Safety Improvement Program (23 CFR Part 924)

The Highway Safety Improvement Program requires each State to

develop and implement a program which has as its goal reducing the

number and severity of accidents and decreasing the potential of

accidents on all highways. The program is to be continuous and its

components consist of planning, implementation, and evaluation of

safety programs and projects.

The implementation of the highway safety improvement program is

subject to procedures set forth in 23 CFR Part 630, Subpart A, Federal-

aid Programs Approval and Project Authorization, and the priorities

developed in conjunction with 23 CFR part 924, section 924.9-Planning.

The planning components of the program shall incorporate a process

for collecting and maintaining a record of accident data; a process for

analyzing available data to identify hazardous locations on the basis

of accident experience or accident potential; a process for conducting

engineering studies to develop highway safety improvements; and

projects considering the potential reduction in the number and severity

of accidents.

B. The Highway Bridge Replacement Program (HBRRP)

This program is administered in accordance with 23 U.S.C. 144.

Eligible work under this program includes the total replacement of a

structurally deficient or functionally obsolete bridge, a nominal

amount of approach work sufficient to connect the bridge to the roadway

or major work required to restore the structural integrity of a bridge

as well as work necessary to correct major safety defects. Bridge

projects eligible for funding under the bridge replacement and

rehabilitation program must be supported by bridge inventory data and

evaluation of the bridge inventory.

Projects are submitted by the State to the FHWA in accordance with

23 CFR part 630, Subpart A, Federal-aid Programs Approval and

Authorization. Priority consideration is given to those projects which

will remove from service those highway bridges most in danger of

failure.

C. Highway Safety Programs Administered by NHTSA

NHTSA administers (independently or cooperatively with other

Federal agencies) programs whose principal purpose is to improve

highway safety and which do not include any capital improvements. Under

these programs, the agency awards either grants, contracts, or

cooperative agreements. These programs include, but are not limited to,

programs authorized under chapter IV of title 23, U.S.C., such as:

--Section 402, Highway Safety Programs, under which the agency

promulgates guidelines and awards grants to States having approved

highway safety programs designed to reduce traffic accidents and

deaths, injuries and property damage;

--Section 403, Highway Safety Research and Development, under which the

agency engages in research on all phases of highway safety and traffic

conditions and other related research and development activities which

will promote highway safety;

--Section 410, Alcohol Impaired Driving Countermeasures, under which

the agency makes grants to States which adopt and implement effective

programs to reduce traffic safety problems resulting from persons

driving under the influence of alcohol or a controlled substance.

NHTSA programs also include, but are not limited to, programs

authorized under Chapter I of title 23, U.S.C. such as: Section 153,

Use of Safety Belts and Motorcycle Helmets, under which the agency has

made grants to States with effective safety belt and motorcycle helmet

use laws and under which States may be subject to the transfer of

certain highway construction funds to section 402 programs for not

having safety belt laws in effect.

The final highway sanction exemption criteria policy is as follows.

Memorandum

U.S. Department of Transportation

Federal Highway Administration

Date:

Reply to Attn of: HEP-40

Subject: Policy for Exemption Criteria to be Used to Determine

Which Projects Can Advance if the Environmental Protection Agency

Imposes the Highway Funding Sanction Under section 179(a) or 110(m) of

the Clean Air Act (CAA), as Amended in 1990.

From: Rodney E. Slater, Federal Highway Administrator.

U.S. Department of Transportation.

To: Regional Federal Highway Administrators; Federal Lands Highway

Program Administrator

This policy memorandum defines the exemption criteria that will be

used to determine which projects can go forward and which grants can be

awarded in the event EPA imposes highway sanctions under section 179(a)

or section 110(m) of the CAA. This policy memorandum contains a

description of the criteria for exemptions and clarification of the

types of projects and programs that are exempt. Projects for which

exemptions cannot be granted are also included in this policy

memorandum.

General Description

Highway sanctions, when applied, halt the approval of projects and

the award of any grants funded under Title 23, United States Code,

except as defined in section 179(b) and as clarified by this policy

memorandum. This applies to the following major funding programs:

1. Surface Transportation Program (STP).

2. National Highway System.

3. Interstate Maintenance.

4. Bridges.

5. Interstate Construction.

6. Interstate Substitution.

7. Congestion Mitigation and Air Quality Improvement Program (CMAQ).

Projects funded under all other Title 23 programs and other

authorizations are also subject to sanctions, including demonstration

projects identified by Congress and specified in the ISTEA of 1991

under sections 1103-1108 or in other laws, unless they meet the

criteria set forth in this policy memorandum. Additionally, other Title

23 projects to be funded under previously authorized programs (prior to

passage of the ISTEA, such as the Federal-aid Urban, Federal-aid

Secondary Programs, etc.) may also be subject to certain highway

funding restrictions under highway sanctions.

Projects funded under Title 49, U.S.C. chapter 53, the Federal

Transit Act, as amended, are categorically exempt from

[[Page 14370]]

sanctions by law as are other transportation programs authorized by

statutes other than Title 23.

Typical Nonexempt Projects

The following types of projects generally do not meet the exemption

criteria in section 179(b)(1) and would not be allowed to be federally

funded or approved under Title 23 unless it is demonstrated that they

meet one or more of the exemption criteria. These include projects that

expand highway or road capacity, nonexempt project development

activities, and any other project that does not explicitly meet the

criteria in this policy memorandum. These may include activities for:

1. The addition of general purpose through lanes to existing roads.

2. New highway facilities on new locations.

3. New interchanges on existing highways.

4. Improvements to, or reconfiguration of existing interchanges.

5. Additions of new access points to the existing road network.

6. Increasing functional capacity of the facility.

7. Relocating existing highway facilities.

8. Repaving or resurfacing except for safety purposes, as defined

by section 179(b).

9. Project development activities, including NEPA documentation and

preliminary engineering, right-of-way purchase, equipment purchase, and

construction solely for non-exempt projects.

10. Transportation enhancement activities associated with the

rehabilitation and operation of historic transportation buildings,

structures, or facilities not categorically exempted.

Project Exemptions

Under section 179(b)(1) of the CAA, once EPA imposes highway

sanctions, the FHWA may not approve or award any grants in the

sanctioned area except those which generally meet the criteria within

this memorandum. Congress specifically exempted projects which fall

under three categories: (1) safety programs and projects (under section

179(b)(1)(A)); (2) seven congressionally-authorized activities (under

section 179(b)(1)(B)(i-vii); and, (3) air quality improvement projects

that would not encourage SOV capacity (under section 179(b)(1)(B)(viii)

of the CAA). This policy memorandum further interprets and clarifies

these statutory exemption provisions.

1. Safety Programs and Projects

Safety projects are those for which the principal purpose is an

improvement in safety but the projects may also have other important

benefits. These projects must resolve a demonstrated safety problem

with the likely result being a significant reduction in or avoidance of

accidents as determined by the FHWA. Such demonstration must be

supported by accident or other data submitted by the State or

appropriate local government.

Four general types of categories of safety-based programs and

projects potentially meet the exemption criteria: grant programs and

related activities; Emergency Relief (ER) projects; statewide safety

improvement programs; and specific projects outside of a statewide

safety program. Each category calls for varying levels of

justification.

a. Programs administered by NHTSA qualify for blanket exemptions,

on the basis that their principal purpose is to improve safety and do

not include any capital improvements. Programs that fall within this

category include but are not limited to: (1) Use Safety Belts and

Motorcycle Helmets (23 U.S.C. 153); (2) Highway Safety Programs (23

U.S.C. 402); (3) Highway Safety Research and Development (23 U.S.C.

403); and (4) Alcohol-Impaired Driving Countermeasures (23 U.S.C. 410).

b. ER projects funded by Title 23 to repair facilities damaged or

destroyed by natural disasters, civil unrest, or terrorist acts are

exempt without further justification, provided that such projects do

not involve substantial functional, locational, or capacity changes.

c. Statewide safety improvement programs include specific safety

projects that can be justified on the basis of State or national level

data, which will be additionally supported by data and analysis

stemming from the State (or ISTEA) management system requirements once

the systems are fully operational. Projects meeting this exemption

category would come out of the Highway Safety Improvement Program (23

CFR Part 924) and the Highway Bridge Replacement and Rehabilitation

Program (23 CFR Part 650, Subpart D). The Highway Safety Improvement

Program also includes the Hazard Elimination Program (23 U.S.C. 152).

d. Specific projects for which justification is needed to show that

the project is related to safety, unless the project is drawn out of a

statewide safety program and would be likely to reduce accidents, would

include capital projects such as:

--Elimination of, and safety features for, railroad-highway grade

crossings.

--Changes in vertical or horizontal alignment.

--Increasing sight distance.

--Elimination of high hazard locations or roadside obstacles.

--Shoulder improvements, widening narrow pavements.

--Adding or upgrading guardrail, medians and barriers, crash cushions,

fencing.

--Pavement resurfacing or rehabilitation to improve skid resistance.

--Replacement or rehabilitation of unsafe bridges.

--Safety roadside rest areas, truck size and weight inspection

stations.

--Addition and upgrading of traffic control devices, (traffic signals,

signs, and pavement markings).

--Lighting improvements.

--Truck climbing lanes.

Justification for an exemption on the grounds of safety must be

based on accident or other data such as the data derived from a State's

safety and bridge management system, the Highway Safety Improvement

Program, or the Highway Bridge Replacement and Rehabilitation Program.

Such data need not be specific to the proposed project's location, but

may be based on accident or other data from similar conditions,

including national experience where such projects have been implemented

to remove safety hazards. For example, rigid highway sign posts were

identified in the past as a safety hazard causing unnecessary deaths

and injuries. The identification of this hazard led to national policy

requiring rigid posts to be replaced with breakaway poles.

Projects exempted under the safety provision may not involve

substantial functional (such as upgrading major arterial to freeways),

locational, or capacity changes except when the safety problem could

not otherwise be solved.

2. Congressionally Authorized Activities

Seven project types are identified specifically in the CAA section

179(b)(1) as exempt from highway sanctions. Essentially, these are

projects that generally do not result in increased SOV capacity, or

improve traffic flow (e.g., intersection improvements or turning lanes)

in ways that reduce congestion and emissions:

a. Capital programs for public transit. These include any capital

investment for new construction, rehabilitation, replacement, or

reconstruction of facilities and acquisition of vehicles and equipment.

b. Construction or restriction of certain roads or lanes solely for

the use of passenger buses or High Occupancy Vehicles (HOV). Exempt

projects include construction of (or conversion of existing lanes to)

new HOV lanes, if

[[Page 14371]]

those lanes are solely dedicated as 24-hour HOV facilities.

c. Planning for requirements for employers to reduce employee work-

trip related vehicle emissions. This includes promotional and other

activities associated with this type of program that are eligible under

Title 23.

d. Highway ramp metering, traffic signalization, and related

programs that improve traffic flow and achieve a new emission

reduction.

e. Fringe and transportation corridor parking facilities serving

multiple occupancy vehicle programs or transit operations (this

includes the construction of new facilities and the maintenance of

existing facilities).

f. Programs to limit or restrict vehicle use in downtown areas or

other areas of emission concentration, particularly during periods of

peak use, through road use charges, tolls, parking surcharges, or other

pricing mechanisms, vehicle restricted zones or periods, or vehicle

registration programs. Exempt projects include all activities of these

types that are eligible under existing funding programs.

g. Programs for breakdown and accident scene management, non-

recurring congestion, and vehicle information systems, to reduce

congestion and emissions.

The FHWA will consult with EPA on any project claimed to reduce

emissions (e.g., with projects falling under paragraphs c, d, and g,

above). However, the final authority to determine whether a project

meets the criteria in this memorandum and is exempt from highway

sanctions rests with the FHWA.

3. Air Quality Improvement Programs That Do Not Encourage Single

Occupant Vehicle (SOV) Capacity

Transportation programs not otherwise exempt that improve air

quality and which would not encourage SOV capacity (as determined by

EPA in consultation with DOT) are also exempt from highway sanctions.

For example, projects listed in section 108(f) of the CAA and projects

funded under 23 U.S.C. 149, the CMAQ program, are projects which EPA

and DOT may, after individual review of each project, find to be exempt

from highway sanctions. For these projects to advance while highway

sanctions are in place, the State must submit to DOT an emissions

reduction analysis similar to that required under the CMAQ program.

Upon receipt, DOT will forward it to EPA. The EPA will complete its

review and make its finding regarding air quality and SOV capacity

within 14 days of receipt of such information.

The EPA and DOT have agreed that the following projects will be

categorically exempt from highway sanctions, and will not require

additional EPA review or an individual finding by EPA:

a. The TCMs contained in an EPA-approved State Implementation Plan

or Federal Implementation Plan which have emission reduction credit and

will not encourage SOV capacity.

b. Inspection and maintenance facilities and activities eligible

for CMAQ funding.

c. Bicycle and pedestrian facilities and programs.

d. Carpool/Vanpool programs.

e. Conversion of existing lanes for HOV use during peak hour

periods, including capital costs necessary to restrict existing lanes

(barriers, striping, signage, etc.).

In considering exempt projects, States should seek to ensure

adequate access to downtown and other commercial and residential areas,

and should strive to avoid increasing or relocating emissions and

congestion.

4. Projects That Have a ``De Minimis'' Air Quality Impact and Provide

Other Environmental or Aesthetic Benefits

The following projects are likely to have ``de minimis''

environmental or environmentally beneficial impacts, provide other

aesthetic benefits, do not promote SOV capacity, and are, therefore

considered exempt from highway sanctions:

a. Wetland Mitigation.

b. Planting Trees, Shrubs, Wildflowers.

c. Landscaping.

d. Purchase of Scenic Easements.

e. Billboard and Other Sign Removal.

f. Historic Preservation.

g. Transportation Enhancement Activities (except rehabilitation and

operation of historic transportation buildings, structures, or

facilities).

h. Noise Abatement.

Planning and Research Activities

Planning and research activities for transportation and/or air

quality purposes are exempt from highway sanctions (except as noted in

the Project Development Activities section). Such planning and research

is critical for the development of projects that improve safety and

address an area's transportation/air quality needs. Planning and

research activities may include development of an Environmental Impact

Study or Environmental Assessment (under NEPA) in conjunction with a

major investment study. Major investment studies are planning studies

which normally take a multimodal approach in considering transportation

alternatives, and are therefore exempt from sanctions under this

criteria.

Research activities also include those research, development,

testing, and planning projects involving the National Intelligent

Transportation Systems (ITS) Program funded by part B of Title 6 of the

1991 ISTEA. The goal of the ITS Program is to use advanced technology

to improve travel and roadway safety without expanding existing

infrastructure. The ITS activities are generally done under seven broad

categories: (1) Transportation management and traveller information;

(2) travel demand management; (3) public transportation operations; (4)

electronic payment; (5) commercial vehicle operations; (6) emergency

management; and (7) advanced vehicle control and safety systems.

Therefore, planning and research activities associated with the ITS

Program are also exempt from sanctions under this criteria.

Project Development Activities

Development and completion of studies to meet requirements under

NEPA are exempt from highway sanctions as long as consideration of

projects that would be exempt under this policy memorandum, such as

transit or other Transportation Demand Management (TDM) measures, are

actively pursued as reasonable independent alternatives. Once all

alternatives that could be considered exempt from highway sanctions

under this policy memorandum are eliminated, project development

activities for NEPA or other purposes are no longer exempt and can no

longer be approved or funded under Title 23. For example, if prior to

completion of NEPA documentation, all TDM measures are eliminated from

consideration and the sole remaining question is the determination of

an alignment for a highway capacity-expanding project (which may

include TDM), subsequent project development activities are not exempt

from highway sanctions.

The FHWA may not approve preliminary engineering for final design

of a project, nor can approval be granted for a project's plans,

specifications, and estimates after initiation of highway sanctions for

projects that are not exempt under this policy memorandum. Neither

right-of-way nor any necessary equipment may be purchased or leased

with Federal funds for nonexempt projects while an area is under

sanction. Federally-funded construction may not in any way begin on a

project that does

[[Page 14372]]

not meet the exemption criteria described in this policy memorandum

while an area is under sanction.

Highway sanctions apply to those projects whose funds have not yet

been obligated by FHWA by the date the highway sanction applies. Those

projects that have already received approval to proceed and had

obligated funds before EPA imposes the prohibition may proceed even

while the area is under sanction, if no other FHWA action is required

to proceed. In the case of a phased project, only those phases that

have been approved and had obligated funds prior to the date of

sanction application may proceed. For example, if preliminary

engineering for a project was approved and funds were obligated prior

to application of sanctions but no approval was secured for later

project phases (such as right-of-way acquisition, construction, etc.),

preliminary engineering could proceed while the highway sanction

applies, but no subsequent phases of the project could proceed with

FHWA funds unless the total project meets the exemption criteria in

this policy memorandum. These restrictions pertain only to project

development activities that are to be approved or funded by FHWA under

title 23. Activities funded under title 49, U.S.C., or through State or

other funds, may proceed even after highway sanctions have been imposed

unless: (1) Approval or action by FHWA under title 23 is required; and

(2) they do not meet the exemption criteria of this policy memorandum.

Other Environmental Requirements

Exemption of a transportation project from the section 179(b)(1)

highway sanctions does not waive any applicable requirements under NEPA

(e.g., environmental documents), section 176(c) of the CAA (conformity

requirement), or other Federal law.

Authority: 42 U.S.C. 7509(b); 23 U.S.C. 315; and 49 CFR 1.48.

Issued on: March 25, 1996.

Rodney E. Slater,

Federal Highway Administrator.

[FR Doc. 96-7821 Filed 3-29-96; 8:45 am]

BILLING CODE 4910-22-M