[Federal Register Volume 64, Number 52 (Thursday, March 18, 1999)]
[Rules and Regulations]
[Pages 13476-13483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6654]



[[Page 13475]]

_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 93



Transportation Conformity Rule Amendment for the Transportation 
Conformity Pilot Program; Final Rule

  Federal Register / Vol. 64, No. 52 / Thursday, March 18, 1999 / Rules 
and Regulations  

[[Page 13476]]



ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 93

[FRL-6309-6]
RIN 2060-AG79


Transportation Conformity Rule Amendment for the Transportation 
Conformity Pilot Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

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]
BILLING CODE 6560-50-U