Transportation Conformity Rule Amendment for the Transportation Conformity Pilot Program

SUMMARY: EPA is finalizing the amendment to the transportation

conformity rule which allows EPA to create and implement a conformity

pilot program. The conformity rule requires that transportation

activities conform to state air quality implementation plans and

establishes the criteria and procedures for determining whether or not

they do. Conformity to an air quality plan means that transportation

activities will not produce new air quality violations, worsen existing

violations, or delay timely attainment of national ambient air quality

standards.

EPA and DOT will select up to six areas to participate in the pilot

program. Each selected pilot area must submit its pilot procedures to

EPA as a conformity SIP revision; if approved, these alternative

procedures will be enforceable and replace the sections of the federal

conformity rule that are addressed by each pilot program. Each pilot

area will implement its pilot procedures for the three-year duration of

the program. Today's action also describes the final application and

selection process.

The conformity pilot program allows state and local transportation

and air quality agencies the additional flexibility to seek out and

test the conformity procedures that work best in their area.

Participating areas' experiences will be evaluated and it is possible

that successful pilot programs may ultimately lead to further changes

in the conformity rule.

Along with recent amendments to the conformity rule, the pilot

program is part of an EPA and DOT strategy to provide states and

localities greater flexibility in meeting federal transportation

conformity requirements while reinforcing Clean Air Act transportation

and air quality commitments.

DATES: This rule is effective on April 19, 1999. EPA has been accepting

applications since July 9, 1996, and the deadline for submitting

applications and expressions of interest is open-ended.

ADDRESSES: Materials relevant to this rulemaking are contained in

Docket No. A-95-55. The docket is located in room M-1500 Waterside Mall

(ground floor) at the Environmental Protection Agency, 401 M Street

S.W., Washington, DC 20460. The docket may be inspected from 8 a.m. to

5:30 p.m., Monday through Friday, including all non-government

holidays. See SUPPLEMENTARY INFORMATION for obtaining an electronic

version of the final rule.

FOR FURTHER INFORMATION CONTACT: Meg Patulski, Transportation and

Market Incentives Group, Regional and State Programs Division, U.S.

Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI

48105, (734) 214-4842.

SUPPLEMENTARY INFORMATION:

Electronic Version of Final Rule

The final rule is available electronically from the EPA internet

web site. Users are able to access and download files using a personal

computer according to the following information:

Internet Web Sites

http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired

date or use Search feature) OR http://www.epa.gov/oms/traq (look in

What's New or under the Conformity file area)

The electronic version of this final rule should be available today

on any of the above-listed sites. For informational purposes, areas

which submit expressions of interest and applications will be listed on

the Conformity file area at the above web address. Please note that due

to differences between the software used to develop the final rule and

the software into which the document may be downloaded, changes in

format, page length, etc. may occur.

Regulated Entities

Entities potentially regulated by the conformity rule are primarily

those which adopt, approve, or fund transportation plans, programs, or

projects under title 23 U.S.C. or title 49 U.S.C. Regulated categories

and entities include:

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

Category Examples of regulated entities

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

Local government..................... Local transportation and air

quality agencies.

State government..................... State transportation and air

quality agencies.

Federal government................... EPA, 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 potentially affected by this rule.

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 requirements in Sec. 93.102 of the

conformity rule. If you have questions regarding the applicability of

this action to a particular entity, see the FOR FURTHER INFORMATION

CONTACT section.

The contents of today's preamble are listed in the following

outline:

I. Background on Transportation Conformity

II. Discussion of Major Changes From the Proposal: Conformity SIPs

A. Description of Final Rule

B. Rationale and Response to Comments

C. Implications for Applicants and Participants

D. Responses to Other Comments

III. Conformity SIP Revisions for Selected Pilot Areas

A. Content of Conformity SIPs in Pilot Areas

B. Existing Requirements for Conformity SIP Revisions

IV. Application and Selection Process: General Overview

A. Application Process

B. Selection Criteria

C. Selection Process

V. Administrative Requirements

A. Executive Order 12866

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Submission to Congress and the Comptroller General

E. Unfunded Mandates

F. Petitions for Judicial Review

G. Children's Health Protection

H. National Technology Transfer and Advancement Act

[[Page 13477]]

I. Executive Order 12875: Enhancing Intergovernmental

Partnerships

J. Executive Order 13084: Consultation and Coordination with

Indian Tribal Governments

I. Background on Transportation Conformity

Today's action creates a transportation conformity pilot program by

amending the transportation conformity rule, as most recently amended

on August 15, 1997 (62 FR 43780). Required under section 176(c) of the

Clean Air Act, the transportation conformity rule established the

criteria and procedures by which the Federal Highway Administration

(FHWA), the Federal Transit Administration (FTA), and local

metropolitan planning organizations (MPOs) determine the conformity of

federally funded or approved highway and transit plans, programs, and

projects to state air quality 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

transportation activities must conform to the SIP's purpose of

attaining and maintaining these standards.

Since publication of the original 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. This

experience has led EPA and DOT to streamline the conformity process

through today's action and several past amendments to the conformity

rule. EPA finalized minor amendments to the rule on August 7, 1995 (60

FR 40098), and November 14, 1995 (60 FR 57179). EPA also finalized a

more significant third set of conformity amendments on August 15, 1997

(62 FR 43780). The amendments and the conformity pilot program were

created through a stakeholder process which has included both federal

agencies, state and local air and transportation planning agencies, and

environmental and transportation interest groups.

The Notice of Proposed Rulemaking (NPRM) for today's rule was

published in the Federal Register on July 9, 1996 (61 FR 35994). EPA

worked with conformity stakeholders in developing the proposal, with

input from the National Governors' Association (NGA), state DOTs, state

and local environmental agencies, MPOs, environmentalists, other local

officials, and DOT. In December of 1995, EPA circulated a draft of the

proposal to stakeholders for comment, and a conference call was held to

discuss the draft proposal.

The NPRM described an application and selection process and

proposed regulatory text to create the pilot program. The proposal also

opened the pilot program's application period and requested that

interested areas submit a non-binding expression of interest letter for

the pilot program.

The proposal's comment period ended August 8, 1996. EPA received

three comments on the proposal. EPA has received expressions of

interest in the pilot program from the following five agencies: the

Southern California Association of Governments (SCAG); the Washington

State Department of Ecology; the Birmingham Regional Planning

Commission in Alabama; the Idaho Division of Environmental Quality; and

the Las Vegas Regional Transportation Commission. In addition to these

letters, SCAG submitted a brief draft paper outlining its potential

ideas for a pilot program. As of today's final rule, EPA has not

received any formal applications to the pilot program. Copies of all

present and future comments, expression of interest letters,

applications, and other submitted documents for the pilot program in

their entirety can be obtained from the EPA docket for the final rule

(see Addresses). The docket also includes a complete Response to

Comments document for this rulemaking.

As described in the proposal, the pilot program allows areas to

submit applications that propose specific flexibility for three aspects

of the conformity rule: modeling, consultation, and coordination of the

Intermodal Surface Transportation Efficiency Act (ISTEA) schedules and

procedures with conformity deadlines and schedules. EPA and DOT will

also consider applications proposing to extend flexibility to other

aspects of the conformity rule. EPA and DOT will award $25,000 to each

selected pilot program to facilitate in the implementation of a pilot

area's proposed flexibility.

During the third year of the pilot program, EPA and DOT will

conduct a national evaluation to see if transportation policy, project

selection and investment choices changed as a result of a more flexible

approach to meeting the Clean Air Act's conformity provisions; if

interagency consultation and public participation improved as a result

of new procedures; and if Clean Air Act compliance costs were reduced

and efficiencies implemented while still ensuring that Clean Air Act

goals and requirements were met. Selected pilot areas will also propose

methods for self-evaluation of their conformity pilot program and

cooperate with the national evaluation.

II. Discussion of Major Changes From the Proposal: Conformity SIPs

A. Description of Final Rule

As proposed, today's final rule allows no more than six areas to

participate in the transportation conformity pilot program for no more

than three years. The final rule enables selected pilot areas to

substitute their alternative conformity procedures for the relevant

requirements of the federal conformity rule for the three-year duration

of the pilot program.

The final rule changes the proposal by requiring that each selected

pilot area submit a conformity SIP revision containing the area's

alternative conformity procedures, and requiring that EPA approve the

conformity SIP revision before a pilot area can implement these new

procedures. The proposed application requirements, selection criteria,

and the majority of the selection process has not changed in the final

rule.

EPA proposed that selected pilot areas submit their alternative

procedures as project agreements, which would have undergone a 30-day

public comment period but would not have been processed through notice-

and-comment rulemaking as formal conformity SIP revisions. Under the

proposal, EPA and DOT would have finalized project agreements after the

completion of the public comment period (assuming that no adverse

comments were received and that the agreements met the established

criteria). These agreements would then have been fully enforceable

under the Clean Air Act.

In response to comments, EPA has revised how pilot programs will be

finalized. Under the final rule, each selected pilot area must submit

its alternative pilot procedures to EPA as a formal conformity SIP

revision. If such SIPs are approved, these procedures will replace the

sections of the federal conformity rule or previously approved

conformity SIP that the area has chosen to address in its pilot program

as the federally enforceable conformity requirements for the area. The

alternative conformity procedures must achieve results equivalent to or

better than the requirements of 176(c) of the Clean Air Act. Only

selected pilot areas will be required to submit conformity

[[Page 13478]]

SIP revisions pursuant to the pilot program. EPA and DOT are not

requiring that interested areas submit their initial pilot applications

as conformity SIP revisions. EPA and DOT will jointly select up to six

pilot programs. If fewer than six participants are selected in the

first iteration of the selection process, EPA and DOT will continue to

process applications on a rolling basis.

After EPA's approval of a pilot area's conformity SIP, an area will

implement its pilot procedures for three years. After the pilot program

has expired, pilot areas will again be subject to all of the

requirements of the existing federal transportation conformity rule (40

CFR Parts 51 and 93) and/or previously approved conformity SIPs. EPA

may revise 40 CFR Parts 51 and 93 to incorporate elements of effective

pilot programs based on results from evaluating the first two years of

program implementation.

Selected pilot areas must also submit a conformity SIP revision in

a timely manner according to Sec. 51.390 of the conformity rule, which

requires all nonattainment and maintenance areas to submit a SIP

revision incorporating all of the federal conformity requirements in

the August 15, 1997 rule amendments. Conformity SIP revisions for pilot

programs will fulfill the SIP submission requirement of Sec. 51.390 for

the duration of the pilot program for only those sections/paragraphs

that are addressed by the area's alternative pilot procedures.

Since 1993, the transportation conformity rule has been included in

40 CFR part 51 and largely duplicated in 40 CFR part 93. At the time of

the pilot program proposal, EPA proposed to amend both parts 51 and 93

because of this duplication in the CFR. However, the August 15, 1997

conformity rule amendments streamlined the CFR and eliminated all but

Sec. 51.390 from part 51. Therefore, today's action only amends 40 CFR

part 93. The pilot program proposal had not proposed any changes to

Sec. 51.390.

B. Rationale and Response to Comments

EPA has changed the proposal and required selected pilot areas to

submit their alternative conformity procedures as conformity SIP

revisions for several reasons. First, EPA agrees with commenters that

Congress clearly intended that conformity SIPs be used to establish

state and local conformity procedures in all areas subject to

conformity requirements, pursuant to Clean Air Act section

176(c)(4)(C).

Because EPA will approve conformity procedures for selected pilot

areas through the SIP process, the final rule addresses commenters'

concerns that pilot area conformity procedures must be subject to the

Administrative Procedures Act's (APA) notice-and-comment requirements.

One commenter stated that adequate public comment would not be

available under the proposal because selected pilot areas would only

have been required to hold a 30-day local public comment period on

final pilot project agreements, instead of the national comment period

provided for EPA conformity SIP approvals. Since selected pilot areas

would use alternative procedures as a substitute for the existing

federal conformity rule, some commenters believed that pilot procedures

should be subject to the same APA process as the existing rule. The

final rule addresses these concerns because conformity SIP revisions

must be subject to APA notice-and-comment requirements before they can

be approved. Requiring conformity SIP revisions for selected pilot

areas also ensures that the rights and responsibilities of state and

local agencies and the public are made clear. For example, a conformity

SIP specifies what agencies make conformity determinations as well as

who distributes information to the public prior to a conformity

determination.

The final rule also addresses a commenter's suggestion that a

selected pilot program's alternative conformity procedures must be

approved as a SIP revision in order to be fully enforceable under the

Clean Air Act. EPA believes that the pilot area's final conformity

procedures would not necessarily have to be contained in a SIP revision

to be enforceable. EPA believes that Clean Air Act section 113(a)(3)

would have allowed pilot conformity procedures in a project agreement

to be enforceable by EPA under the federal conformity rule until they

were included in a SIP, as was proposed. Nevertheless, EPA believes

that the final rule's requirement for conformity SIPs addresses the

original comment by removing the potential ambiguity about

enforceability and clarifying that pilot procedures will be enforceable

both by EPA under section 113 and by citizen suit under section 304, as

applicable.

Requiring conformity SIP revisions for selected pilot areas will

also address the procedural inequities that would have occurred under

the proposal. The proposal would have allowed selected pilot areas that

had not yet submitted any conformity SIP to immediately participate in

the pilot program, whereas selected areas with approved conformity SIPs

would have had to amend their existing conformity SIPs prior to

participating in the pilot program. Under the final rule, the

procedures for gaining EPA and DOT approval are now the same regardless

of whether an area has a previously approved conformity SIP; all areas

participating in the pilot program will need to submit a conformity SIP

revision and have it approved by EPA before they can participate in the

pilot program.

Today's final rule also addresses concerns that the proposal

violated specific Clean Air Act requirements for conformity SIPs. One

commenter believed that EPA could not propose to exempt selected pilot

areas from submitting the conformity SIP revisions (required by

Sec. 51.390 of the conformity rule) during the three years of the pilot

program. According to this commenter, EPA also has an obligation to

take final action on previously submitted conformity SIPs within 12

months of submission (Clean Air Act section 110(k)(2)), and pilot areas

cannot withdraw these required conformity SIPs in order to participate

in the pilot program, as was proposed. Furthermore, the commenter

believed that the 18-month SIP failure sanctions clock should be

started if a state withdraws a previously submitted conformity SIP in

order to participate in the pilot program. In light of the comments

submitted, EPA agrees that Clean Air Act section 176(c)(4)(C) cannot be

waived or modified, and EPA is addressing all of these comments in the

final rule by requiring conformity SIP revisions for both alternate

pilot procedures and the August 15, 1997 rule amendments.

By eliminating all of the above concerns through provisions for

notice-and-comment approval of each alternative pilot procedure, EPA

believes that future legal challenges to either individual pilot sites

or the overall pilot program will be minimized. In addition, because

the SIP process is an established process that requires interagency

consultation and public participation, using the SIP process to approve

pilot procedures will minimize potential confusion. State and local

agencies and the general public are already familiar with their roles

in the SIP process, whereas the proposal would have created an ad hoc

process for the pilot program that could have introduced confusion

regarding the roles and responsibilities of state and local agencies

and the general public. At the same time, EPA also believes that the

final rule imposes minimal additional administrative burdens on

selected pilot areas, as described in more detail below.

[[Page 13479]]

C. Implications for Applicants and Participants

As a practical matter, the final rule does not impose significant

additional burden on selected pilot areas when compared to the

proposal. The proposal's application and selection processes have not

changed; only the project finalization stage of the pilot program has

changed in the final rule. Thus, changes from the proposal will only

affect the areas that EPA and DOT actually select for the conformity

pilot program.

In the project finalization stage, EPA, DOT, and each selected

pilot area will still negotiate the details of the pilot area's

alternative conformity procedures, as was proposed. However, the final

alternative conformity procedures must be submitted to EPA as a

conformity SIP revision prior to implementation, for the reasons

described above. EPA had originally proposed that pilot areas submit

project agreements, not conformity SIPs. Under the final rule, EPA,

DOT, and each pilot area will agree about the content of each

conformity SIP prior to its submission, including what the alternative

conformity procedures will be and what aspects of the federal

conformity rule will be addressed by these alternative procedures.

As with any SIP submission, selected pilot areas will need to

comply with the SIP completeness criteria contained in 40 CFR part 51,

Appendix V. In addition to other documentation, pilot areas must

include with their conformity SIP submission: a formal letter of

submittal from the Governor or his/her designee and evidence that a

state public hearing was held and sufficient public notice for the

hearing occurred. EPA believes that the public input requirements are

still similar under the proposal and today's final rule. The pilot

proposal would have required a 30-day local comment period on final

project agreements, whereas the final rule requires that a public

hearing be held, as is always required in the SIP process. Since EPA

approval through notice-and-comment rulemaking is now required for all

selected pilot areas, the time period before areas will be able to

implement their pilot programs may be lengthened. However, EPA believes

that this will only have a short-term impact on the implementation

schedule of each pilot program. In general, EPA intends to use a SIP

processing technique known as parallel processing to approve conformity

SIP revisions in order to reduce the length of time necessary before

EPA SIP approval, as described more fully below. Finally, EPA notes

that the final rule change does not impact all potential pilot areas

since formal notice-and-comment rulemaking would have been required

under the proposal in any case for pilot areas that already have

approved conformity SIP revisions.

EPA is committed to expediting the review and approval of

conformity SIP revisions for the pilot program. To accomplish this, EPA

intends to parallel process conformity SIPs for the pilot program where

possible. Under parallel processing, states would submit their proposed

conformity SIP to EPA, and the state and EPA would then request public

comment on the proposed conformity SIP at the same time. If no adverse

comments are received at either the state or federal levels, EPA would

then finalize approval as soon as possible after formal state adoption

and submittal occurs, as long as no substantive changes have occurred

and the conformity SIP is still approvable. If there are adverse

comments or changes in the state procedures, EPA may reconsider the

proposed approval or issue a supplemental proposal at the federal level

based on response to comment or revised state requirements prior to

approving the conformity SIP. States need to request parallel

processing when submitting to EPA the proposed conformity SIP revision

for each pilot program. They must also include a schedule for the

state's final adoption or issuance of the SIP.

D. Responses to Other Comments

1. Endorsement of Pilot Applications

One commenter stated that EPA should maintain the proposal's

requirement that pilot applications be endorsed by all affected state

and local air and transportation agencies. EPA agrees and is retaining

this requirement.

2. Purpose of the Pilot Program

One commenter believed that the current conformity rule already

provides for flexibility in modeling, consultation, and coordination of

ISTEA and conformity schedules, and EPA did not adequately justify in

the proposal why additional conformity flexibility is necessary under a

pilot program. Others commented that the pilot program would be a

significant step in EPA providing states and cities greater flexibility

in meeting conformity requirements.

Although the August 15, 1997 conformity rule amendments streamline

and simplify the conformity process, EPA believes that there may be

additional opportunities that are unique to local processes. During EPA

and DOT's original stakeholder process, many conformity stakeholders

expressed their desire for further flexibility in implementing the

conformity rule.

3. Selection Criteria

A commenter suggested that any state that has not yet submitted a

conformity SIP should automatically be excluded from consideration for

participation in the pilot program. This commenter believed that his/

her viewpoint was supported by one of the proposal's selection criteria

that stated that EPA must consider ``whether the area has adequately

demonstrated its intent to comply with Clean Air Act objectives'' (61

FR 35997). The commenter believed that even with the delay in the

promulgation of the original conformity rule, conformity SIPs should

have been submitted by November, 1994, and therefore, EPA should not

select any area that has not yet complied with this requirement.

EPA does not believe that compliance with the intent of the Clean

Air Act should be solely measured by whether an area has submitted a

conformity SIP. There are many ways that an area can comply with the

intent of the Clean Air Act, including whether an area has submitted

the appropriate control strategy SIPs. Furthermore, EPA believes that

the degree to which an area is complying with the federal

transportation conformity rule (e.g., modeling or consultation

requirements) is more relevant than whether it has submitted a

conformity SIP. In addition, EPA is aware that many areas delayed

submitting conformity SIPs to save local resources because EPA was in

the process of revising the federal conformity rule, which would

necessitate revisions to any adopted state conformity requirements.

Therefore, EPA will not automatically eliminate an applicant from

possible participation in the pilot program if an area has not

submitted past conformity SIPs.

4. National Consistency of Pilot Procedures

A commenter stated that the pilot program contradicts Congress'

desire for uniform procedures between federal agencies and among MPOs

and states when making conformity determinations; Congress did not

authorize major exemptions from EPA regulations such as those proposed

under the pilot program. EPA does not believe that Congress intended

complete national uniformity for all conformity requirements because it

specifically required local conformity SIPs, which

[[Page 13480]]

allow areas to tailor aspects of their conformity processes. EPA

believes that this final rule does not inhibit national consistency

because the final rule requires all pilot procedures to fulfill the

requirements of section 176(c) of the Clean Air Act, as all areas

subject to the federal conformity rule are required to do.

III. Conformity SIP Revisions for Selected Pilot Areas

A. Content of Conformity SIPs in Pilot Areas

The conformity SIP revisions for selected pilot areas must contain

substitute regulatory language for those sections and/or paragraphs of

the current transportation conformity rule that would be replaced by

the pilot area's alternative conformity procedures. In order for EPA to

review the conformity SIP revision, the sections of the current rule

that are being proposed to be replaced as well as the new pilot

sections must be clearly identified.

EPA will accept conformity SIP revisions in any fully enforceable

form, including state laws or memorandums of understanding (MOUs),

provided the state can demonstrate to EPA's satisfaction that, as a

matter of state law, the state has adequate authority to compel

compliance with the requirements of the state pilot conformity

procedures.

Selected pilot areas must also include language incorporating

Sec. 93.129 in their conformity SIPs, in addition to those sections/

paragraphs of the federal rule that will be addressed by each pilot

area's alternative conformity procedures. EPA cannot exempt pilot areas

from the otherwise applicable federal conformity requirements without

pilot areas including this section in their conformity SIPs, since

Sec. 93.129 grants EPA the authority to implement individual pilot

programs. Only selected pilot areas will be required to incorporate

Sec. 93.129 in their conformity SIPs.

B. Existing Requirements for Conformity SIP Revisions

Section 176(c)(4)(C) of the Clean Air Act requires that all states

with areas subject to conformity must submit a SIP revision that

establishes state conformity procedures. Conformity SIP revisions

address how DOT, MPOs, and other state and local agencies will assess

the conformity of transportation plans, programs, and projects to the

SIP; conformity SIPs also define the conformity requirements for

recipients of federal funds. Section 51.390 of the conformity rule

outlines what needs to be addressed in the conformity SIP, including

how interagency consultation and public participation will occur. In

addition, Sec. 51.390 requires that SIP revisions incorporating

amendments to the conformity rule be submitted within one year of the

publication of those actions. Aside from conformity SIP revisions for

selected pilot areas, the federal conformity rule presently only

requires that states submit SIP revisions within one year of the

publication of the August 15, 1997 rule amendments, because these

amendments supersede all past conformity rulemakings.

As part of the pilot program, selected pilot areas that currently

have an EPA-approved conformity SIP revision will only need to revise

those sections/paragraphs of the approved conformity SIP that are being

addressed in the area's pilot procedures. Separately, the federal

conformity rule will still require pilot areas with currently approved

conformity SIPs to revise the other sections of their approved

conformity SIP according to the August 15, 1997 conformity rule

amendments.

If a selected pilot area has previously submitted a conformity SIP

for the original 1993 rule or subsequent rule amendments and EPA has

yet to approve it, then the pilot area would need to indicate in its

new pilot SIP revision which sections/paragraphs of the previously

submitted conformity SIP are being modified. EPA continue to require

that the pilot area update its conformity SIP submission according to

the August 15, 1997 rule amendments (62 FR 43780) within one year of

the publication of the amendments, for the conformity rule sections not

addressed by the pilot program. Selected pilot areas that have

previously submitted a conformity SIP revision which EPA has not yet

approved would not need to withdraw such a revision in order to

participate in the pilot program. This would have been required under

the proposal. Instead, they may merely update it through SIP

submissions to meet the pilot program and the amended federal rule.

EPA believes that it is appropriate to approve conformity SIPs for

the pilot program that address only a portion of the federal conformity

requirements, even if an area doesn't yet have an approved conformity

SIP revision for the recent rule amendments. The remaining sections/

paragraphs that are not addressed by an area's alternative pilot

procedures must ultimately be addressed by another conformity SIP in a

timely fashion. While an area prepares this additional conformity SIP

revision, the federal conformity rule will continue to apply for the

provisions not covered by the pilot area's conformity SIP, thus

providing continuity in conformity implementation.

Since the alternative procedures will only apply in pilot areas for

up to three years, EPA will insert a three-year sunset date provision

in its approval of each pilot area's conformity SIP at the time of EPA

SIP approval. After this three-year sunset date is reached, those

sections/paragraphs of the approved conformity SIP that are

alternatives to the federal conformity rule would no longer be

federally approved. The federal conformity rule or other relevant

previously approved conformity SIP provisions would instead apply for

those sections/paragraphs until another conformity SIP revision for the

area consistent with the federal rule is approved.

IV. Application and Selection Process: General Overview

A. Application Process

Under the final rule, the application process for the pilot program

will be the same as in the proposal. Applications will not need to be

submitted as conformity SIP revisions; a SIP submission will only be

necessary if an area is selected by EPA and DOT to participate in the

pilot program. All areas subject to the requirements of the

transportation conformity regulation are eligible to apply to the pilot

program.

As stated in the proposal and this final rule, either an MPO, a

local air quality agency, a state air quality agency, or a state

department of transportation may submit an application, acting as the

lead contact for purposes of the pilot program. When submitting its

application, the lead agency must demonstrate that its proposal is

endorsed by all state and local air and transportation agencies that

are eligible to participate in the area's conformity consultation

process. In certain cases (for example, an MPO that covers more than

one nonattainment area or a nonattainment area that covers more than

one state), EPA and DOT may subsequently request further endorsement

from additional agencies affected by the pilot proposal.

As generally stated in the proposal, the following information will

enable EPA and DOT to adequately consider an application: (1) a

description of the alternative conformity methods and/or procedures to

be used in meeting conformity requirements; (2) the rationale for

change, including: (i) the particular problems in the existing

requirements that the proposal intends to address, and (ii) the

benefits that the

[[Page 13481]]

alternative proposal would create (e.g., air quality benefits, resource

savings); (3) a description of how alternative conformity methods and/

or procedures will fulfill the conformity requirements of and achieve

results equivalent to or better than section 176(c) of the Clean Air

Act; (4) the proposed schedule for making conformity determinations

during the pilot program (for a period of up to three years); (5)

evidence that sufficient resources to conduct the pilot program will be

available (e.g., some of the pilot program activities may be eligible

for title 23 State Planning and Research Funds (SPR) or Planning (PL)

funds); (6) discussion of any potential implementation issues that must

be overcome for the pilot program to be successful; (7) suggestions for

self-evaluation of the pilot program; (8) evidence that the proposal is

endorsed by all the state and local air and transportation agencies;

and (9) evidence that key stakeholders (e.g., public, community groups)

have been or will be consulted. In today's action, EPA has clarified

the first and third application elements so that interested areas

understand what should be addressed in pilot applications. This final

rule does not create any new application elements for pilot applicants.

Applications should be in narrative form and should be concise

while still containing sufficient information to fully describe the

proposal. It is EPA and DOT's intent to use the application to conduct

preliminary reviews. If EPA and DOT selected an area for the pilot

program, further details of each pilot proposal would be expanded

during the consultation stage of the selection process and would be

refined in the conformity SIP revision. The application length and the

extent to which the application addresses the information requested

will depend upon the proposal's complexity.

Areas can submit pilot applications at any time. Before an

application is developed, EPA and DOT encourage any interested areas to

send a non-binding expression of interest letter to EPA highlighting

the area's initial interest, and if possible, describing the area's

basic idea for a pilot application. However, an expression of interest

letter is not necessarily required before an area submits a pilot

application. Please send expressions of interest letters and/or

applications to the contact listed in the FOR FURTHER INFORMATION

CONTACT section of today's action.

EPA will maintain a list of areas which have expressed interest or

applied to the pilot program on the EPA conformity web site. All

complete letters and applications will be placed in the EPA docket for

this rulemaking. For more information on how to access the conformity

web site or docket, please see the ADDRESSES section of this final

rule.

B. Selection Criteria

The final rule does not change the proposal's selection criteria by

which EPA and DOT will judge pilot applications. Applications will be

assessed according to the following criteria: (1) whether the proposed

flexibilities fulfill all of the statutory requirements for

transportation conformity; (2) the degree to which the application

fulfills the pilot program's goals of testing innovative methods and

streamlining the conformity process, including, but not limited to,

improved modeling and interagency/public consultation and better

coordination of ISTEA and Clean Air Act requirements; (3) the degree of

key stakeholder and public support in the geographic area affected by

the proposal; (4) whether the applicant has the resources necessary to

effectively implement and evaluate the proposed conformity pilot

program; (5) whether the area has adequately demonstrated its intent to

comply with Clean Air Act objectives; and (6) the degree to which data

and analysis will be provided to help assess air quality, resource

savings, public participation, and other program benefits.

EPA and DOT will attempt to select a group of participants that is

diverse in terms of geographic distribution, pollutants, nonattainment

or maintenance classifications/designations, and rural and urban

development, since both federal agencies believe that the pilot program

should provide an opportunity to test innovative conformity approaches

in a broad range of circumstances.

C. Selection Process

The proposal described a three-stage selection process which would

involve application review, applicant consultation, and project

finalization. Under this final rule, the application review and

applicant consultation stages of the selection process in the proposal

remain the same; only the proposed project agreement finalization stage

is changed from the proposal, as described in section II.

1. Application Stage

Under this final rule, when an application is submitted, EPA and

DOT will review the application and decide whether it should proceed to

the consultation stage. EPA and DOT will notify agencies whether or not

they have been selected to proceed.

2. Consultation Stage

In the consultation stage, EPA and DOT will schedule a conference

call with each applicant to clarify any questions about the applicant's

proposal. EPA and DOT will then arrange for a subset of these

applicants to present their proposals in a review session with federal

agency staff. Representatives of the lead agency submitting the pilot

program application and other public agencies involved in the

applicant's geographic area would participate in the presentation.

Based upon the information presented in the application and

consultation stages, EPA and DOT could select up to six applicants to

participate in the pilot program and proceed to the finalization stage.

3. Project Finalization Stage

As described in section II., an area selected to advance to the

project finalization stage will submit its alternative conformity

procedures as a conformity SIP revision, and this revision must be

formally approved before a pilot area can implement its conformity

pilot program.

V. Administrative Requirements

A. Executive Order 12866

Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the

Agency must determine whether the regulatory action is ``significant''

and therefore subject to OMB review and the requirements of the

Executive Order. The Order defines ``significant regulatory action'' as

one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or

more, or otherwise adversely affect in a material way the economy, a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, local, or tribal

governments or communities;

(2) Create a serious inconsistency or otherwise interfere with

an action taken or planned by another agency;

(3) Materially alter the budgetary impact or entitlements,

grants, user fees, or loan programs or the rights and obligations of

recipients thereof;

(4) Raise novel or policy issues arising out of legal mandates,

the President's priorities, or the principles set forth in the

Executive Order.

Pursuant to the terms of Executive Order 12866, it has been

determined that this rule is not a ``significant regulatory action''

because this action does not have any of the impacts described above or

raise novel legal or

[[Page 13482]]

policy issues arising out of legal mandates, the President's

priorities, and the principles set forth in the Executive Order.

Therefore, this action was not subject to OMB review under the

Executive Order.

B. Paperwork Reduction Act

This final rule does not impose any new information collection

requirements from EPA which require approval by OMB under the Paperwork

Reduction Act of 1980, 44 U.S.C. 3501 et seq. An Agency may not conduct

or sponsor, and a person is not required to respond to a collection of

information unless it displays a currently valid OMB control number.

Burden means the total time, effort, or financial resources

expended by persons to generate, maintain, retain, or disclose or

provide information to or for a federal agency. This includes the time

needed to review instructions; develop, acquire, install, and utilize

technology and systems for the purposes of collecting, validating, and

verifying information, processing and maintaining information, and

disclosing and providing information; adjust the existing ways to

comply with any previously applicable instructions and requirements;

train personnel to be able to respond to a collection of information;

search data sources; complete and review the collection of information;

and transmit or otherwise disclose the information.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980 requires federal agencies to

identify potentially adverse impacts of federal regulations upon small

entities. In instances where significant impacts are possible on a

substantial number of these entities, agencies are required to perform

a Regulatory Flexibility Analysis (RFA).

EPA has determined that today's regulations will not have a

significant impact on a substantial number of small entities. This

regulation affects federal agencies and metropolitan planning

organizations, which by definition are designated only for metropolitan

areas with a population of at least 50,000. These organizations do not

constitute small entities.

Therefore, as required under section 605 of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., I certify that this rule will

not have a significant impact on a substantial number of small

entities.

D. Submission to Congress and the Comptroller General

Under 5 U.S.C. 801(a)(1)(A), as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this rule and other required information to the U.S. Senate,

the U.S. House of Representatives, and the Comptroller General of the

United States prior to the publication of the rule in today's Federal

Register. This rule is not a ``major rule'' as defined by 5 U.S.C.

804(2).

E. Unfunded Mandates

Under Sections 202, 203, and 205 of the Unfunded Mandates Reform

Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22,

1995, EPA must undertake various actions in association with proposed

or final rules that include a federal mandate that may result in

estimated costs of $100 million or more to the private sector, or to

State, local, or tribal governments in the aggregate.

EPA has determined that to the extent this rule imposes any mandate

within the meaning of the Unfunded Mandates Act, this final action does

not include a mandate that may result in estimated costs of $100

million or more to State, local, or tribal governments in the aggregate

or to the private sector. Therefore, EPA has not prepared a statement

with respect to budgetary impacts.

F. Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by May 17, 1999.

Filing a petition for reconsideration by the Administrator of this

final rule does not affect the finality of this rule for the purposes

of judicial review, nor does it extend the time within which a petition

for judicial review may be filed, and shall not postpone the

effectiveness of such rule or action. This action may not be challenged

later in proceedings to enforce its requirements. (See section

307(b)(2) of the Administrative Procedures Act).

G. Children's Health Protection

This final rule is not subject to E.O. 13045, entitled ``Protection

of Children from Environmental Health Risks and Safety Risks'' (62 FR

19885, April 23, 1997), because it does not involve decisions on

environmental health risks or safety risks that may disproportionately

affect children.

H. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement

Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note)

directs EPA to use voluntary consensus standards in its regulatory

activities unless to do so would be inconsistent with applicable law or

otherwise impractical. Voluntary consensus standards are technical

standards (e.g., materials specifications, test methods, sampling

procedures, and business practices) that are developed or adopted by

voluntary consensus standards bodies. The NTTAA directs EPA to provide

Congress, through OMB, explanations when the Agency decides not to use

available and applicable voluntary consensus standards. This action

does not involve technical standards. Therefore, EPA did not consider

the use of any voluntary consensus standards.

I. Executive Order 12875: Enhancing Intergovernmental Partnerships

Under Executive Order 12875, EPA may not issue a regulation that is

not required by statute and that creates a mandate upon a State, local

or tribal government, unless the Federal government provides the funds

necessary to pay the direct compliance costs incurred by those

governments or EPA consults with those governments. If EPA complies by

consulting, Executive Order 12875 requires EPA to provide to the Office

of Management and Budget a description of the extent of EPA's prior

consultation with representatives of affected State, local and tribal

governments, the nature of their concerns, copies of any written

communications from the governments, and a statement supporting the

need to issue the regulation. In addition, Executive Order 12875

requires EPA to develop an effective process permitting elected

officials and other representatives of State, local and tribal

governments ``to provide meaningful and timely input in the development

of regulatory proposals containing significant unfunded mandates.''

Today's rule does not create a mandate on State, local, or tribal

governments. The rule does not impose any enforceable duties on these

entities. Accordingly, the requirements of section 1(a) of Executive

Order 12875 does not apply to this rule.

J. Executive Order 13084: Consultation and Coordination with Indian

Tribal Governments

Under Executive Order 13084, EPA may not issue a regulation that is

not required by statute, that significantly or uniquely affects the

communities of Indian tribal governments, and that imposes substantial

direct compliance costs on those communities, unless the

[[Page 13483]]

Federal government provides the funds necessary to pay the direct

compliance costs incurred by the tribal governments or EPA consults

with those governments. If EPA complies by consulting, Executive Order

13084 requires EPA to provide to the Office of Management and Budget,

in a separately identified section of the preamble to the rule, a

description of the extent of EPA's prior consultation with

representatives of affected tribal governments, a summary of the nature

of their concerns, and a statement supporting the need to issue the

regulation. In addition, Executive Order 13084 requires EPA to develop

an effective process permitting elected and other representatives of

Indian tribal governments ``to provide meaningful and timely input in

the development of regulatory policies on matters that significantly or

uniquely affect their communities.''

Today's rule does not significantly or uniquely affect the

communities of Indian tribal governments. The final rule offers an

opportunity for areas to voluntarily apply into the conformity pilot

program; it is not a mandatory program. In addition, EPA and DOT are

offering seed money for each area that is selected to be in the pilot

program. Accordingly, the requirements of section 3(b) of Executive

Order 13084 do not apply to this rule.

List of Subjects in 40 CFR Part 93

Environmental protection, Administrative practice and procedure,

Air pollution control, Carbon monoxide, Intergovernmental relations,

Nitrogen Dioxide, Ozone, Particulate matter, Transportation, Volatile

Organic Compounds.

Dated: March 10, 1999.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, 40 CFR part 93 is amended

as follows.

PART 93--[AMENDED]

1. The authority citation for part 93 continues to read as follows:

Authority: 42 U.S.C. 7401-7671q.

2. Subpart A is amended by adding Sec. 93.129 to read as follows:

Sec. 93.129 Special exemptions from conformity requirements for pilot

program areas.

EPA and DOT may exempt no more than six areas for no more than

three years from certain requirements of this subpart if these areas

are selected to participate in a conformity pilot program and have

developed alternative requirements that have been approved by EPA as an

implementation plan revision in accordance with Sec. 51.390 of this

chapter. For the duration of the pilot program, areas selected to

participate in the pilot program must comply with the conformity

requirements of the pilot area's implementation plan revision for

Sec. 51.390 of this chapter and all other requirements in 40 CFR parts

51 and 93 that are not covered by the pilot area's implementation plan

revision for Sec. 51.390 of this chapter. The alternative conformity

requirements in conjunction with any applicable state and/or federal

conformity requirements must be proposed to fulfill all of the

requirements of and achieve results equivalent to or better than

section 176(c) of the Clean Air Act. After the three-year duration of

the pilot program has expired, areas will again be subject to all of

the requirements of this subpart and 40 CFR part 51, subpart T, and/or

to the requirements of any implementation plan revision that was

previously approved by EPA in accordance with Sec. 51.390 of this

chapter.

[FR Doc. 99-6654 Filed 3-17-99; 8:45 am]

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