Transportation Equity Act for the 21st Century; Interim Implementation of the Congestion Mitigation and Air Quality Improvement Program

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

Federal Transit Administration

[FHWA Docket No. FHWA-98-4317]

Transportation Equity Act for the 21st Century; Interim

Implementation of the Congestion Mitigation and Air Quality Improvement

Program

AGENCY: Federal Highway Administration (FHWA), Federal Transit

Administration (FTA), DOT.

ACTION: Notice; request for comments.

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SUMMARY: This document publishes interim implementation guidance on

section 1110 of the Transportation Equity Act for the 21st Century

(TEA-21), Pub. L. 105-178, 112 Stat. 107, for the congestion mitigation

and air quality improvement program (CMAQ) to offer the opportunity for

comment into the development of final guidance on this program. The

interim guidance provides informational items on issues related the

reauthorized CMAQ program, new provisions regarding eligible geographic

areas under TEA-21, and guidance related to projects now eligible for

CMAQ funds. With the exception of the issues discussed in this interim

guidance, all provisions of the policy guidance issued on March 7, 1996

(61 FR 50890, September 27, 1996) continue to apply. The FHWA and the

FTA intend to issue final, comprehensive guidance on the new CMAQ

program following opportunity for interested parties to comment. In

addition, the FHWA and the FTA will host four forums in the near future

to provide an opportunity for those directly involved to assist in

developing the final guidance.

DATES: This interim guidance is effective October 26, 1998.

Comments on the development of final guidance must be received on

or before Monday, November 30, 1998.

ADDRESSES: Your signed, written comments must refer to the docket

number appearing at the top of this document and you must submit the

comments to the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400

Seventh Street, SW., Washington, DC 20590-0001. All comments received

will be available for examination at the above address between 10 a.m.

and 5 p.m., e.t., Monday and Friday, except Federal holidays. Those

desiring notification of receipt of comments must include a self-

addressed, stamped envelope or postcard.

FOR FURTHER INFORMATION CONTACT: For the FHWA program office: Mr.

Michael J. Savonis, Office of Environment and Planning, (202) 366-2080;

For the FTA program office: Mr. Abbe Marner, Office of Planning, (202)

366-4317; For legal issues: Mr. S. Reid Alsop, (202) 366-1371. Office

hours are from 8 a.m. to 4:30 p.m., e.t., Monday through Friday, except

Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

Internet users can access all comments received by the U.S. DOT

Dockets, Room PL-401, by using the universal resource locator (URL):

http://dms.dot.gov. It is available 24 hours a day, 365 days each year.

Please follow the instructions online for more information and help.

An electronic copy of this document may be downloaded using a modem

and suitable communications software from the Government Printing

Office's Electronic Bulletin Board Service at (202) 512-1661. Internet

users may reach the Federal Register's home page at: http://

www.nara.gov/fedreg and the Government Printing Office's database at:

http://www.access.gpo.gov/nara.

Background

In addition to the interim guidance which is included in this

notice, the FHWA and the FTA would like input on a number of questions

and issues related to the new flexibilities in the CMAQ program under

TEA-21. Specific questions are listed later in this notice and

interested parties are urged to provide written comments. Also,

comments on any othe aspect of the CMAQ program are welcomed and will

be taken into account in the development of final guidance.

(Authority: 23 U.S.C. 315; sec. 1110, Pub. L. 105-178, 112 Stat.

107 (1998); 49 CFR 1.48 and 1.51)

Issued on: October 7, 1998.

Kenneth R. Wykle,

Gordon J. Linton,

FHWA Administrator.

FTA Administrator.

The text of the interim implementation on the CMAQ program reads as

follows:

I. Interim Implementation of the Congestion Mitigation and Air

Quality Improvement Program

Information: Interim Implementation of the Congestion Mitigation

and Air Quality Improvement (CMAQ) Program.

Associate Administrator for Program Development, FHWA HEP-40/TPL-12

Associate Administrator for Planning, FTA

Regional Federal Transit Administrators

[[Page 57155]]

Regional Federal Highway Administrators

Federal Lands Highway Program Administrator

The CMAQ program was reauthorized in the recently enacted

Transportation Equity Act for the 21st Century (TEA-21). The primary

purpose of the CMAQ program remains the same: to fund projects and

programs in nonattainment and maintenance areas which reduce

transportation-related emissions. Some changes to the CMAQ program were

included in TEA-21 however, and those changes are the subject of this

Interim Guidance. The FHWA and FTA intend to issue final, comprehensive

guidance on the new CMAQ program by December 1998 and will initiate a

process for receiving stakeholder input on that guidance in the near

future.

This Interim Guidance provides: (1) Informational items on issues

related to the reauthorized CMAQ program, (2) new provisions regarding

eligible geographic areas under TEA-21, and (3) guidance related to

projects now eligible for CMAQ funds. With the exception of the issues

discussed in this Interim Guidance, all provisions of the March 7,

1996, Guidance on the CMAQ program continue to apply.

1. Informational Items

1. a. Authorization Levels and Apportionment Formula

Table 1 shows the CMAQ authorization levels by fiscal year (FY) as

included in TEA-21. The CMAQ funds will be apportioned to States each

year based upon the adopted apportionment formula as shown in Table 2.

Following the apportionments, States are encouraged to suballocate CMAQ

funds to the nonattainment and maintenance areas in each State. The

States need to be mindful that the highest priority for CMAQ funds

continues to be transportation control measures (TCMs) identified in

the State implementation plan (SIP).

Table 1.--TEA-21 CMAQ Authorization levels

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Amount

Fiscal year authorization authorized

------------------------------------------------------------------------

FY 1998.............................................. $1,192,619,000

FY 1999.............................................. 1,345,415,000

FY 2000.............................................. 1,358,138,000

FY 2001.............................................. 1,384,930,000

FY 2002.............................................. 1,407,474,000

FY 2003.............................................. 1,433,996,000

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Table 2.--TEA-21 CMAQ Apportionment Formula

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Classification at the time of annual

Pollutant apportionment Weighting factor

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Ozone (O3) or Carbon Monoxide (CO). Maintenance.................................... .8

Ozone.............................. Submarginal.................................... .8

Marginal....................................... 1.0

Moderate....................................... 1.1

Serious........................................ 1.2

Severe......................................... 1.3

Extreme........................................ 1.4

Carbon Monoxide.................... Nonattainment (for CO only).................... 1.0

Ozone and Carbon Monoxide.......... Ozone nonattainment or maintenance and CO 1.1 x O3 factor

maintenance.

Ozone nonattainment or maintenance and CO 1.2 x O3 factor

nonattainment.

All States--minimum apportionment.. \1/2\ of 1 percent total annual apportionment N/A

of CMAQ funds.

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1.b. Minimum Guarantee

The TEA-21 provides a minimum guarantee that requires each State to

receive funding in an amount not less than 90.5 percent of the

estimated annual Federal gasoline tax payments that State pays into the

Highway Trust Fund. Due to the minimum guarantee, the annual

authorizations listed in Table 1 are the basic authorization levels and

could be increased depending on actual Highway Trust Fund receipts.

1.c. Apportionment Formula

The CMAQ funds are apportioned according to a formula based on air

quality need which is calculated in the following manner. The

population of each area in a State, that at the time of apportionment

is a nonattainment or maintenance area for ozone and/or carbon monoxide

(CO), is multiplied by the appropriate factor listed in Table 2. Key

changes in the apportionment formula under TEA-21 are noted below.

Areas that are designated and classified as submarginal

and maintenance areas for ozone are now explicitly included in the

apportionment formula;

There are new weighting factors for CO nonattainment

areas;

The upper limit on the amount of CMAQ funds that the

largest States (California, New York, and Texas) could receive is now

lifted, ensuring that CMAQ apportionments more closely reflect needs

based upon nonattainment and maintenance area designations and

classifications in each State; and

The freeze related to the apportionment formula due to

language in the National Highway System Designation Act of 1995 has

been lifted. This freeze had the effect of apportioning CMAQ funds

based on nonattainment status as of 1994, regardless of whether

redesignation had occurred. This approach has now been replaced by a

formula using current designations and classification at the time of

apportionment.

1.d. Minimum Apportionments

Each State is guaranteed at least \1/2\ of 1 percent of each year's

CMAQ authorized funding regardless of whether the State has any

nonattainment or maintenance areas.

[[Page 57156]]

1.d.1. States Without a Nonattainment Area

If a State does not have, and has never had, a nonattainment area,

the State may use its minimum apportionment for any projects eligible

under the STP, in addition to projects eligible under the CMAQ program.

As noted in the March 7, 1996, guidance, such States are encouraged to

give priority to the use of CMAQ program funds for the development of

congestion management systems, public transportation facilities and

equipment, and intermodal facilities and systems, as well as the

implementation of projects and programs produced by those systems.

1.d.2. States With a Nonattainment Area

Some of the States receiving minimum apportionments have

nonattainment or maintenance areas. The population in these areas when

weighted by the severity of the pollution is insufficient to bring

these States CMAQ funds up to the minimum apportionment levels.

Additional flexibility is granted under TEA-21 for these States.

Specifically, a State receiving the minimum apportionment may use that

portion of the funds not based on its nonattainment and maintenance

area population for any project in the State eligible under the Surface

Transportation Program (STP). The FHWA will provide a list of these

States and a description of the flexibility granted them at a future

date.

1.e. Transferability of CMAQ Funds

States may transfer CMAQ funds to other programs according to the

following provision. An amount not to exceed 50 percent of the State's

annual apportionment may be transferred less the amount the State would

have received if the CMAQ program was authorized at $1,350,000,000. Any

transfer of such funds must still be obligated in nonattainment and

maintenance areas. This increment of transferable funds will differ

from year-to-year and State-to-State depending on overall authorization

levels. Each year the FHWA and the FTA will inform each State how much

of their CMAQ funding is transferable, if any.

1.f. Study on the Effectiveness of the CMAQ Program

The TEA-21 directs the Secretary of Transportation and the EPA

Administrator to enter into arrangements with the National Academy of

Sciences to conduct a study on the effectiveness of the CMAQ program.

Among other things, the study will evaluate the emissions reductions

attributable to CMAQ funded projects. The results of the study will be

provided to Congress not later than January 1, 2001. The study will be

funded by deducting $500,000 per year from the total CMAQ

apportionments for FY 1999 and FY 2000. More information about the

status of this effort will be provided as the details and scope of this

study are fully developed.

2. Eligible Geographic Areas

2.a. Maintenance Areas

Maintenance areas that were designated nonattainment, but have

since met the air quality standards are now explicitly eligible to

receive CMAQ funding. Such areas must have met the classification

requirements of the 1990 Clean Air Act Amendments when designated

nonattainment (see 2.c. below) in order to be eligible.

If a State has ozone or CO maintenance areas only, the State must

now exclusively use its CMAQ funding in those areas contained within

its borders. Previous guidance allowed such States flexibility to use

their CMAQ funding for projects eligible under the STP if a State could

demonstrate that it had sufficient funding to meet its air quality

commitments within a maintenance area. Such flexibility is no longer

allowed since maintenance areas are now included in the apportionment

formula and the eligibility provisions require that CMAQ funding be

used in nonattainment and maintenance areas.

2.b. Particulate Matter (PM-10) Nonattainment and Maintenance Areas

Nonattainment and maintenance areas for PM-10 are also now

explicitly eligible to receive CMAQ funding. Under the previous

guidance, CMAQ funding had been extended to such areas under

administrative discretion provided that two requirements were met.

First, the EPA had to attest that progress toward attainment of the

ozone and/or CO standards would not be delayed by funding PM-10

mitigation projects under the CMAQ program. And second, the State had

to notify all nonattainment and maintenance areas that PM-10 projects

were to be funded. Now that the law explicitly recognizes these areas

as eligible, such requirements are lifted.

States that have PM-10 nonattainment or maintenance areas only

(i.e., no ozone or CO nonattainment or maintenance areas) are granted

additional flexibility under TEA-21. Since these areas are not included

in the CMAQ apportionment calculation, the State may use its minimum

apportionment for projects eligible under the STP or the CMAQ program

anywhere in the State. However, such States are encouraged to use their

CMAQ funds in the PM-10 nonattainment and maintenance areas.

2.c. Classification Criteria

An area that is designated as a nonattainment area for ozone, CO or

PM-10 under the Clean Air Act prior to December 31, 1997, is eligible

for CMAQ funds provided that the area is also classified in accordance

with sections 181(a), 186(a), or 188(a) or (b) of the Clean Air Act.

This means that ozone nonattainment areas must be classified

``marginal'' through ``extreme,'' and CO and PM-10 nonattainment areas

must be classified either ``moderate'' or ``serious'' to be eligible

for CMAQ funding. Submarginal ozone nonattainment areas are now

included in the CMAQ apportionment formula, but are not mentioned in

the eligibility criteria of TEA-21. To resolve this apparent oversight,

we are extending CMAQ eligibility to submarginal ozone nonattainment

areas. Areas that were designated with these classifications and

subsequently redesignated to maintenance areas are also eligible.

2.d. Revised National Ambient Air Quality Standards (NAAQS)

The CMAQ eligibility provisions under TEA-21 allow that any area

designated as nonattainment after December 31, 1997, be eligible for

CMAQ funding even though it may not be classified in accordance with

the sections of the Clean Air Act cited above (see section 2.c.). This

provision ensures that any areas designated nonattainment as a result

of the revised ozone and PM air quality standards, promulgated in 1997,

will be eligible for CMAQ funding. Such areas, however, will not be

included in the apportionment formula since they will not be given

classifications identified in the Clean Air Act Amendments of 1990

(sections 181(a), 186(a), or 188(a) and (b)). Such areas that are

subsequently redesignated to maintenance areas are also eligible.

2.e. Revocation of the 1-Hour Ozone Standard

As part of the transition to the 8-hour ozone standard, EPA

recently revoked the 1-hour standard in areas that had the requisite 3

years of ``clean'' monitoring data. The list of areas for which the 1-

hour standard has been revoked is found in the June 5, 1998, Federal

Register. Among this group, those areas that had approved maintenance

plans by the effective date of the revocation June 5, 1998 will

continue to have their

[[Page 57157]]

maintenance plans in full force. As maintenance areas, they will

continue to be eligible for CMAQ funds and will be included in the

annual apportionment formula. The conformity requirements will also

continue to apply in these areas.

Other areas among the group for which the 1-hour ozone standard has

been revoked do not have approved maintenance plans. They may not have

submitted a maintenance plan or the plan may not have been approved by

June 5. These areas, then, are no longer designated nonattainment or

maintenance relative to the 1-hour standard. As such, these areas will

not be subject to the conformity requirements and they will no longer

be able to meet the basic statutory requirement for CMAQ eligibility

unless they are designated nonattainment or maintenance for CO and/or

PM. In order to provide continuity in the transportation/air quality

planning process, the FHWA and the FTA are establishing an interim

period for these areas providing some continued eligibility under the

CMAQ program. Air quality improvement projects in the first 3 years of

the Transportation Improvement Program (TIP) will remain eligible for

CMAQ funding, subject to the usual State and local direction regarding

project selection. The metropolitan planning organizations (MPOs) in

these areas will have 4 months from the date of this guidance to amend

their TIPs in response to this guidance. After this time frame, CMAQ

funding will be restricted to only CMAQ-eligible projects in the first

3 years of the TIP.

At the time of issuance of this interim guidance, EPA's policies

regarding the revocation of the PM-10 standard were still under

development. Issues affecting the distribution of CMAQ and eligibility

under the program for areas affected by the revocation of the PM-10

standard will be addressed in the final program guidance.

3. Newly Eligible Projects

3.a. Extreme Low-Temperature Cold Start Programs

Projects intended to reduce emissions from extreme cold-start

conditions are now eligible for CMAQ funding. This TCM is listed in

Clean Air Act Section 108(f)(A)(1) and was heretofore excluded from

eligibility for CMAQ funding. Examples of such projects include:

Retrofitting vehicles and fleets with water and oil

heaters; and

Installing electrical outlets and equipment in publicly-

owned garages or fleet storage facilities.

3.b. Magnetic Levitation Transportation Technology Deployment Programs

The CMAQ funds may be used to fund a portion of the full project

costs (including planning, engineering, and construction) pursuant to

Section 1218-Magnetic Levitation Transportation Technology Deployment

Program of TEA-21. For these projects, the Federal share may be up to

100 percent of the eligible costs.

3.c. Public Private Partnerships

The TEA-21 provides greater access to CMAQ funds for projects which

are cooperatively implemented by the public and private sectors and/or

non-profit entities. Public/private initiatives are addressed in the

existing CMAQ guidance (see section II.A.13); however, the new

statutory language leads to several important changes regarding the

eligibility of joint public/private initiatives.

Proposed programs or projects no longer are required to be under

the primary control of the cooperating public agency. Also, two of the

three criteria which helped to define eligibility for joint public/

private ventures in the March 1996 CMAQ guidance will no longer apply

since the restrictions are not supported by the new statutory language.

These criteria were: That the activity normally be a public sector

responsibility, and that private ownership be shown to be cost-

effective. The third criterion, noting the public agency's

responsibility to oversee and protect the investment of Federal funds

in a public/private partnership, continues to apply.

Eligible activities under the public/private partnership provisions

include:

Ownership or operation of land, facilities or other

physical assets;

Cost-sharing of project expenses;

Carrying out administration, construction management or

operational duties associated with a project; and

Any other form of participation approved by the U.S. DOT

Secretary.

While the new statute provides greater latitude in funding projects

initiated by private or non-profit entities, it also raises concerns

about the use of public funds to benefit a specific private entity.

Since the public benefit is in air quality improvement, it is expected

that future funding proposals involving private entities will

demonstrate strong emission reduction benefits. Furthermore, this new

flexibility requires that greater emphasis be placed on an open,

participatory process leading up to the selection of projects for

funding. Because of concerns about the equitable use of public funds,

the FHWA and the FTA consider it essential that all interested parties

have full and timely access in the process of selecting projects for

CMAQ funding. This could involve open solicitation for project

proposals; objective criteria developed for rating candidate projects;

and announcement of selected projects.

Until more comprehensive guidance is issued, all requests for CMAQ

funding involving public/private initiatives must be forwarded by the

FHWA and the FTA field offices to Headquarters for review and prior

concurrence prior to project approval.

Eligible costs under this section may not include costs to fund an

obligation imposed on private sector or non-profit entities under the

Clean Air Act or any other Federal law. For example, CMAQ funds may not

be used to fund mandatory control measures such as Stage II Vapor

Recovery requirements placed on fuel sellers.

The TEA-21 contained special provisions for alternative fuel

projects that are part of a public/private partnership. For purchase of

privately-owned vehicles or fleets using alternative fuels, activities

eligible for CMAQ funding is limited to the incremental cost of an

alternative fueled vehicle compared to a conventionally fueled vehicle.

Further, if other governmental funds are used for vehicle purchase in

addition to CMAQ funds, such governmental funds must be applied to the

incremental cost before CMAQ funds are applied. For transit vehicles

and other publicly-owned vehicles or fleets, the provisions of the

March 7, 1996, Guidance continue to apply. Fleet conversions no longer

need to be specifically identified or included in the SIP or

maintenance plan in order to be eligible for CMAQ funding. It is

recommended however, that consideration of such projects be coordinated

with air quality agencies prior to selection for funding under the CMAQ

program. This coordination will ensure that such projects are

consistent with SIP strategies to attain the NAAQS or in maintenance

plans to ensure continued maintenance of the NAAQS.

Decisions over which projects and programs to fund under CMAQ

should continue to be made through a cooperative process involving the

State departments of transportation, affected MPOs, and State and local

air quality agencies. All projects funded with CMAQ funds must be

included in conforming transportation plans and TIPs in accordance with

the

[[Page 57158]]

metropolitan planning regulations of October 28, 1993 (23 CFR 450.300)

and the transportation conformity requirements (40 CFR parts 51 and 93,

August 15, 1997).

4. Other Provisions--Federal Share Increase for Transit Vehicle Control

Systems

The TEA-21 amends 23 U.S. C. 120 (c) to allow an increased Federal

share for transit vehicle priority control systems. Section 120 of

Title 23 (see Attachment 3) is amended to provide that the Federal

share of funding for priority control systems for transit vehicles may

be up to 100 percent.

II. Questions and Issues on Which the FHWA and the FTA Seek Input

The FHWA and the FTA would like comments on the following questions

from interested parties, as well as suggestions on how these issues

might be addressed in final CMAQ guidance:

1. Public-Private Partnerships: TEA-21 provides greater access to

CMAQ funds for projects which are cooperatively implemented by the

public and private sectors and/or non-profit entities. The new statute

now allows private and non-profit entities to own and operate land,

vehicles, and facilities with CMAQ program funds. Three key changes to

eligibility follow: (1) Proposed programs or projects no longer are

required to be under the primary control of the cooperating public

agency; (2) the activity to be funded no longer is required to be

normally a public-sector responsibility; and (3) it is no longer

necessary to demonstrate that private ownership of a CMAQ-funded

project is cost-effective. Below are key questions raised by this new,

broad flexibility now available to fund public-private initiatives.

1.a. Concerns arise about unfair competitive advantage when public

funds will be used for a project owned and/or operated by a private

entity. Are there ways to ensure that the public funding (CMAQ) is

limited to the production of a public benefit--air quality improvement?

1.b. In implementing this provision, the FHWA and the FTA believe

it is important to maintain an open and participatory process in the

selection of projects or activities to receive CMAQ funding. How can

the Federal, State, and local agencies insure that an open process for

project selection is preserved?

1.c. What safeguards, agreements or other mechanisms should be

employed to protect the public investment and insure that joint public/

private projects funded under the CMAQ program are used for their

intended public purpose, which is to improve air quality?

1.d What are the implications of these new flexibilities on the

transportation/air quality planning process? For transportation

conformity?

2. Telecommuting: Currently, eligibility for expenses related to

telecommuting programs is limited to planning, technical and

feasibility studies, training, coordination and promotion. Purchase of

computer and office equipment for public agencies and related

activities are not eligible. Should CMAQ eligibility be expanded to

include these costs?

3. Alternative Fuel Vehicles: Under the interim guidance and under

TEA-21, CMAQ eligibility under the public-private partnership

provisions is limited to the incremental cost of a new alternative fuel

vehicles as compared to a conventionally fueled vehicle of the same

type. Should this policy be extended to projects that will provide for

the use of alternative fuels for publicly owned vehicles and vehicle

fleets (other than vehicles used for public transit services)?

4. Traffic Calming Measures: While traffic calming is generally

considered to have positive environmental impacts, when viewed in the

context of the speed-emissions profiles inherent in the MOBILE 5a

model, traffic calming measures appear to increase hydrocarbon and CO

emissions by lowering speeds. Should traffic calming projects be

categorically excluded from CMAQ funding or should they be considered

for eligibility on a case-by-case basis?

5. Experimental Pilot Projects: A July 1995 revision to the CMAQ

Guidance created the flexibility to fund ``experimental pilot''

projects. The types of projects were not specified. The hope was to

encourage innovative activities that held promise for reducing

emissions. To date, this provision has been little used. What can the

FHWA and the FTA do to encourage the implementation of experimental

projects under this provision?

6. Fare/Fee Subsidy Program: The current CMAQ Guidance allows for

partial, short-term subsidies of transit/paratransit fares as a means

of encouraging transit use. Transit agencies have used this provision

to offer reduced fares on ``ozone alert'' days. Should this provision

be changed to allow ``free fares''? Should the provision be loosened to

allow a broader period of coverage, i.e., throughout the high-ozone

season rather that individual episodes?

7. High Occupancy Toll (HOT) Lanes: A congestion pricing strategy

that allows limited use of High Occupancy Vehicle (HOV) lanes by single

occupant vehicles is known as a HOT lane. Should projects to fund the

development and/or operation of HOT lanes be eligible under the CMAQ

program?

8. Reporting Requirements: The reporting requirements under ISTEA

have enabled the FHWA and the FTA to collect valuable information about

the uses of CMAQ funds and benefits of CMAQ-funded projects. Do you

have any suggestions on how to improve upon the quality of data and

information provided in annual reports? Would you use an electronic

reporting format if that option were available to you? Do you have any

suggestions on how to improve the reporting requirements and minimize

the administrative burden of reporting on CMAQ-funded projects?

[FR Doc. 98-28475 Filed 10-23-98; 8:45 am]

BILLING CODE 4910-22-P