[Federal Register Volume 65, Number 69 (Monday, April 10, 2000)]
[Rules and Regulations]
[Pages 18911-18918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8712]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 93

[FRL-6574-7]
RIN 2060-AI76


Transportation Conformity Amendment: Deletion of Grace Period

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: In this final rule we (EPA) are eliminating a provision of the 
transportation conformity rule that was overturned by the U.S. Court of 
Appeals for the District of Columbia Circuit (Sierra Club v. EPA, et 
al., 129 F.3d 137 (D.C. Cir. 1997)). In compliance with the court's 
ruling, today's final rule formally deletes the 1995 amendment that 
allowed new nonattainment areas a one-year grace period before 
transportation conformity began applying.
    In addition, we discuss in the preamble four issues that were 
raised in

[[Page 18912]]

a Petition for Reconsideration of the original transportation 
conformity rule that was finalized November 24, 1993. Although we are 
not taking any regulatory action in response to these issues at this 
time, the preamble clarifies our policies on the issues raised in the 
Petition.
    Transportation conformity is a Clean Air Act requirement for 
transportation plans, programs, and projects to conform to state air 
quality plans. Conformity to a state air quality plan means that 
transportation activities will not produce new air quality violations, 
worsen existing violations, or delay timely attainment of the national 
air quality standards.
    Our transportation conformity rule establishes the criteria and 
procedures for determining whether or not transportation activities 
conform to the state air quality plan.

EFFECTIVE DATE: May 10, 2000.

ADDRESSES: Docket No. A-99-35 contains materials relevant to today's 
action and is located at the U.S. Environmental Protection Agency, 401 
M Street, SW, Washington, DC 20460 in Room M-1500, Waterside Mall 
(ground floor). The docket is open and supporting materials are 
available for review between 8:00 a.m. and 5:30 p.m. on all federal 
government workdays . You may have to pay a reasonable fee for copying 
docket materials.

FOR FURTHER INFORMATION CONTACT: Denise Kearns, Transportation and 
Market Incentives Group, Transportation and Regional Programs Division, 
U.S. Environmental Protection Agency, 2000 Traverwood Road, Ann Arbor, 
MI 48105, [email protected]. (734-214-4240).

SUPPLEMENTARY INFORMATION: The text of this rulemaking and certain 
supporting documents used to develop the rule also can be accessed and 
downloaded from the Internet at http://www.epa.gov/docs/fedrgstr/EPA-AIR/ (either select desired date or use Search feature) OR http://www.epa.gov/OMSWWW/ (look in What's New or under the Conformity file 
area). Please note that there may be format changes in the documents on 
the web due to differences in software.

Regulated Entities

    Entities potentially regulated by the conformity rule are 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
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Local government.............  Local transportation and air quality
                                agencies.
State government.............  State transportation and air quality
                                agencies.
Federal government...........  Department of Transportation (Federal
                                Highway Administration and Federal
                                Transit Administration).
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by this 
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, consult the person listed in the 
preceding FOR FURTHER INFORMATION CONTACT section.
    The contents of this preamble are listed in the following outline:

I. Background
II. How Soon Does Conformity Apply to a New Nonattainment Area?
III. What Are the Effects of Deleting the Grace Period and EPA's 
Response to Comments?
IV. What Are the Issues From the Petition for Reconsideration and 
EPA's Response to Comments?
    A. Fiscal Constraint
    B. Horizon Years for Hot-Spot Analyses
    C. Assumptions Regarding Regional Distribution of Emissions
    D. Credit for Delayed TCMs
V. How Would This Action Affect Conformity SIPs?
VI. Administrative Requirements and EPA's Response to Comments on 
Small Business and Environmental Justice Impacts of Rule
    A. Executive Order 12866
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Analysis and EPA's Response to 
Comments on Impact of Grace Period Deletion on Small Entities
    D. Unfunded Mandates
    E. National Technology Transfer and Advancement Act of 1995
    F. Executive Order 13045
    G. Executive Order 13084
    H. Executive Orders on Federalism
    I. Executive Order 12898 and EPA's Response to Comments on 
Environmental Justice Impacts of Grace Period Deletion
    J. Submission to Congress and the Comptroller General
    K. Petitions for Judicial Review

I. Background

    The original conformity rule was finalized on November 24, 1993 (58 
FR 62188). That rule has been subsequently amended on August 7, 1995 
(60 FR 40098), November 14, 1995 (60 FR 57179), and August 15, 1997 (62 
FR 43780).
    In 1998, we entered into a settlement with Environmental Defense 
(ED) in response to litigation. In that settlement, we agreed to repeal 
the grace period which had been established by the November 14, 1995 
amendments and was permitted under 40 CFR 93.102(d) of the conformity 
rule. This grace period was overturned by the United States Court of 
Appeals in 1997.
    We also agreed to respond to four issues raised in a Petition for 
Reconsideration that was submitted by the ED, Natural Resources Defense 
Council, and Sierra Club. That petition was filed with us on May 26, 
1994 and addressed various provisions of the original conformity rule 
(58 FR 62188).
    The Notice of Proposed Rulemaking for today's rule was published on 
November 30, 1999 (64 FR 66832). The comment period for the proposal 
ended December 30, 1999.
    We received four comments on our proposal. Most commenters 
addressed issues relating to the rule's effect in areas subject to 
conformity. However, one commenter focused exclusively on our 
discussion of the four issues raised in the 1994 petition. Copies of 
the comments in their entirety can be obtained from the docket for this 
rule (see ADDRESSES).
    This docket also includes a complete Response to Comments document 
for this rule. We summarize our response to comments below in parts 
III, IV and V of this preamble.

II. How Soon Does Conformity Apply to a New Nonattainment Area?

    Conformity applies as soon as we formally designate an area 
nonattainment. In this final rule we are deleting Sec. 93.102(d), which 
had provided a one-year grace period following nonattainment 
designation. On November 4, 1997, the U.S. Court of Appeals for the 
District of Columbia Circuit overturned Sec. 93.102(d) of the 
conformity rule, and ruled that the

[[Page 18913]]

Clean Air Act requires conformity to apply upon designation. Because 
the court overturned Sec. 93.102(d), we must delete this provision from 
our rules.
    Therefore, as soon as a nonattainment designation is effective for 
your area, you must have a conforming transportation plan and 
transportation improvement plan (TIP) in order to approve 
transportation projects. This plan and TIP must conform with respect to 
all pollutants for which the area is designated nonattainment. You may 
have to delay approving projects until this is done.

III. What Are the Effects of Deleting the Grace Period and EPA's 
Response to Comments?

    Under today's rule, new nonattainment areas must have a conforming 
plan and TIP in place as soon as their designations become effective. 
As a practical matter, this requirement has been in effect since 
November 14, 1997, when the court ruled to delete the one-hour grace 
period.
    Two commenters expressed concern that transportation planning 
agencies will not have enough time to respond to a new nonattainment 
designation and ensure that their plans and TIPs conform. These 
commenters were concerned that without a grace period, virtually all 
transportation projects in new nonattainment areas could be stopped 
upon the effective date of a designation.
    We believe that new nonattainment areas will have ample time to 
develop a conforming plan and TIP before nonattainment designations are 
final and effective. There are generally several opportunities for 
transportation agencies to become aware that we are preparing to 
designate an area nonattainment, and as a consequence to prepare for 
conformity as needed.
    For example, on October 25, 1999, we published a proposal to 
reinstate the one-hour ozone standard in areas that had previously been 
designated nonattainment. In that proposal, we stated that designations 
would not become effective until 90 days after we publish the final 
rule reinstating our one-hour ozone standard. In these areas, state and 
local transportation agencies will have been notified more than six 
months in advance of our decision to reinstate the nonattainment 
designations.
    In addition, we point out that we do pursue a public process before 
we formally designate an area as nonattainment for the first time. We 
seek recommendations from the state regarding nonattainment 
designations and boundaries. If we modify the state's recommendations, 
we notify the state at least 120 days before finalizing the 
designation.
    State and local transportation agencies and air quality agencies 
also are working to coordinate their planning processes and avoid 
situations that would result in a conformity lapse. We and the U.S. 
Department of Transportation (DOT) will work with areas to process 
their conformity determinations expeditiously. Although we acknowledge 
the timing issues and other concerns expressed by commenters regarding 
the deletion of the grace period, we believe that all partners involved 
in the conformity process can share information and effectively find 
ways to avoid significant delays in transportation projects resulting 
from the court's interpretation of the Clean Air Act.
    We also note some transportation projects can proceed in the 
absence of a conforming plan and TIP, including exempt projects 
(Secs. 93.126 and 93.127) and transportation control measures in an 
approved state implementation plan. These projects would not be 
affected by a new nonattainment designation.

IV. What Are the Issues From the Petition for Reconsideration and 
EPA's Response to Comments?

    On May 26, 1994, Environmental Defense (ED), Natural Resources 
Defense Council, and Sierra Club Legal Defense Fund submitted to us a 
Petition for Reconsideration of the November 1993 conformity rule. We 
have responded to all issues raised in this petition through previous 
conformity amendments, with the exception of four issues addressed in 
this preamble. In a 1998 court settlement, EPA and ED agreed to address 
these four issues through today's rulemaking. A copy of the 1998 
settlement and the full Petition for Reconsideration are included in 
the docket for this rulemaking see         (ADDRESSES). As proposed, we 
are not taking any regulatory action in today's rule in response to the 
four issues raised in the 1994 Petition. However, in the discussion 
below we do clarify certain existing EPA policies, where we feel such 
clarification is necessary to address concerns raised by commenters on 
our proposed response to the Petition for Reconsideration.

A. Fiscal Constraint

1. What Is the Issue?
    As discussed in the November proposal, in issue 6 of the Petition 
for Reconsideration, the petitioners requested that we adopt our own 
regulatory language requiring transportation plans and TIPs to be 
fiscally constrained, rather than referencing the Department of 
Transportation's (DOT's) metropolitan planning regulations. The 
existing conformity rule requires plans and TIPs to be fiscally 
constrained as required by DOT's metropolitan planning rule at 23 CFR 
part 450. These DOT regulations require that proposed projects in plans 
and TIPs be consistent with already available or projected sources of 
revenue.
2. What Comments Did EPA Receive on Fiscal Constraint, and What Is 
EPA's Response?
    In response to our proposal, one of the petitioners reiterates 
their position that by referencing DOT's planning regulations, we have 
unlawfully delegated our rulemaking authority to DOT. Another commenter 
on the issue concurs with our belief that it is not necessary for us to 
establish our own language regarding fiscal constraint.
    As we discussed in the proposal, we believe it is appropriate to 
refer to DOT's regulations on fiscal constraint for several reasons. 
First, we believe DOT's definition of fiscal constraint substantively 
meets the goals of our conformity rule. We also maintain that by 
referencing DOT's definition, we have met our procedural obligation to 
provide criteria and procedures for determining conformity, as required 
under section 176(c)(4)(A) of the Clean Air Act. We disagree with the 
commenter's contention that the Clean Air Act directs us to issue 
regulations specifically regarding fiscal constraint.
    Again, we note that we rely on many other DOT definitions and 
rules, including some that are even more fundamental to the 
implementation of conformity (e.g., DOT definitions and requirements 
for plans and TIPs). We also note that the petitioner's comments agree 
with us that DOT's existing fiscal constraint definition is acceptable 
for the purposes of conformity.
    The commenter's real concern seems to be that future changes to the 
definition may be unacceptable, and that the conformity rule will 
automatically incorporate any future changes without EPA action. To 
remedy this situation, the commenter suggests that we adopt by 
reference DOT's existing definition of fiscal constraint and 
specifically exclude any changes that may be made in future DOT rules.
    Although we agree that we do not have a concurrence role on DOT's 
metropolitan planning rule, we point out that there are effective, non-

[[Page 18914]]

statutory mechanisms in place to ensure federal coordination. We are 
fully utilizing these mechanisms and actively working with DOT on their 
new metropolitan planning regulations, including those provisions that 
address the definition of fiscal constraint. DOT is proposing to amend 
these regulations under the Transportation Equity Act for the 21st 
Century. Petitioners will have an opportunity to comment directly on 
any changes DOT may propose to their regulation on fiscal constraint 
through DOT's regulatory process.
    As described in the proposal, we also believe that it is 
appropriate and efficient to rely on DOT's definition of fiscal 
constraint. It would be impractical to require plans and TIPs to 
satisfy two different definitions of fiscal constraint. If we refer 
only to the current definition of fiscal constraint, to ensure 
consistency we would have to amend the conformity rule whenever DOT's 
regulations change.
    In summary, we believe that by referencing DOT's fiscal constraint 
definition we are meeting our statutory duty under the Clean Air Act. 
We also believe that it is reasonable to rely on the framework for 
federal coordination to ensure that DOT's regulations are appropriate 
in the conformity context. Lastly, we also believe that wherever it 
makes sense, we have a responsibility to provide state and local 
agencies involved in transportation conformity with clear and 
consistent rules. By referencing DOT's regulations in this case, and 
coordinating with DOT on any changes they may be contemplating, we 
believe the goals of conformity and the needs of the public will be 
effectively met.

B. Horizon Years for Hot-Spot Analyses

1. What Is the Issue?
    As discussed in the proposal, issue 9B of the Petition for 
Reconsideration requested that we require hot-spot analyses to examine 
the 20-year timeframe of the transportation plan. The existing 
transportation conformity rule does not clearly specify the horizon for 
hot-spot analyses.
2. What Comments Did We Receive on the Hot-Spot Analysis Issue?
    One of the petitioners explained that their intention was to 
request that EPA require hot-spot reviews of transportation projects to 
be consistent with plan and TIP time horizons, and with the time 
horizons for emissions analyses required by our general conformity 
rule. To ensure that projects do not cause or worsen hot-spots during 
the timeframe of the transportation plan, the petitioner suggests that 
we require an analysis to be conducted for the year during which peak 
emissions from the action are expected.
3. What Is Our Policy on the Horizon for Hot-Spot Analysis?
    As discussed in the proposal to this rule, the conformity rule 
allows flexibility for areas to decide through the interagency 
consultation process how to demonstrate that hot-spots are not caused 
or worsened in any area. Although most areas conduct hot-spot analyses 
for the year of project completion, many areas also examine other 
analysis years in the future. For example, some areas do analyze the 
last year of a currently conforming transportation plan, or another 
year within the timeframe of that plan, whichever year emissions are 
highest.
    In response to comments on the proposal, we acknowledge the need to 
clarify that the hot-spot analysis must demonstrate that no hot-spots 
will be caused or worsened during the timeframe of the transportation 
plan. Nonetheless, we continue to believe that the specific year 
examined in the hot-spot analysis to make this demonstration should be 
decided through interagency consultation, as appropriate to the 
individual area, on a case-by-case basis. This is allowed by our 
conformity rule. We also reiterate that it is not necessary in all 
cases to model the last year of the transportation plan in a hot-spot 
analysis. Rather, the hot-spot analysis should examine the year in 
which peak emissions are expected, which may not necessarily be the 
last year of the conforming plan.
    We believe that it would be useful for Sec. 93.116 of the 
conformity rule to specify that a demonstration that local violations 
will not be caused or worsened should cover the timeframe of the 
transportation plan. We agree that without this clarification, it is 
difficult for implementers to decide which years to examine in order to 
demonstrate that the conformity requirement is satisfied. For example, 
some could read the existing requirement to mean that the demonstration 
regarding local violations must consider only the year of project 
completion, or in contrast that it consider all future years.
    Because we need to propose a regulatory clarification before 
finalizing it, we are not making any changes to Sec. 93.116 or 
Sec. 93.123 in this rule. However, we will propose clarifying 
regulatory text on this issue in an upcoming proposal to amend the 
conformity rule in response to the March 2, 1999 court decision 
(Environmental Defense Fund v. EPA, et al., 167 F. 3d 641, D.C. Cir. 
1999). That proposal would codify existing EPA guidance, issued in a 
May 14, 1999 memorandum from Gay MacGregor, Director of the Regional 
and State Programs Division in the Office of Transportation and Air 
Quality, to Regional Air Division Directors, ``Conformity Guidance on 
Implementation of March 2, 1999 Conformity Court Decision.'' Based on 
the court's decision that guidance outlines our approach for notifying 
and providing the public an opportunity to participate in the 
conformity process. It also provides criteria for transportation 
projects that may proceed during a conformity lapse.
    In the interim, until this proposal is advanced, we believe our 
interpretation of Sec. 93.116 and Sec. 93.123 is consistent with our 
existing conformity rule, and that selection of the year of peak 
emissions should continue to be decided through the consultation 
process. We and DOT will implement the hot-spot requirements of the 
conformity rule as described in this preamble in all future conformity 
determinations.

C. Assumptions Regarding the Regional Distribution of Emissions

1. What Is the Issue?
    In issue 12 of the Petition for Reconsideration, petitioners 
requested that we require metropolitan planning organizations (MPOs) to 
demonstrate that regional land use policies and proposed transportation 
plans achieve the same spatial distribution of motor vehicle emissions 
as was used in the state implementation plan (SIP) for demonstrating 
attainment. As discussed in the proposed rule, we had interpreted issue 
12 of the Petition for Reconsideration to mean that the petitioners 
were in effect requesting that we should always require SIPs to 
establish subarea budgets that MPOs would have to conform to.
2. What Are the Conformity Rule's Requirements on the Use of Subarea 
Budgets?
    Our existing conformity rule does not require states to establish 
subarea budgets in their SIPs. However, the conformity rule does 
support the development and use subarea budgets where states choose to 
do so, and it requires conformity to such budgets if they are 
established.
3. What Comments Did We Receive?
    One commenter supported our current requirement that subarea 
budgets be established only at the state's

[[Page 18915]]

discretion. One of the petitioners commented that we had misconstrued 
this issue as presented in the Petition for Reconsideration.
    The petitioner states that they did not mean to request that 
subarea budgets be established in all cases. Rather, the petitioner 
intended to request that we require MPOs to determine whether the 
emissions it projects for an area are going to be spatially distributed 
in the same way their distribution has been assumed in a SIP, whether 
or not there are subarea budgets. The petitioner also suggests that we 
develop screening criteria to help MPOs identify what is a significant 
magnitude of variance. In cases where the variance is significant, the 
petitioner believes we should require MPOs to perform an updated air 
quality analysis.
4. What Is Our Response to These Comments?
    We do not believe that the Clean Air Act directs us to require 
analyses of spatial distribution or regional air quality analyses as a 
means for ensuring that transportation activities will not cause or 
contribute to new or increased violations, or delay timely attainment. 
The Clean Air Act simply requires a comparison with the SIP's estimates 
of emissions. We do not believe that the Clean Air Act ever intended 
MPOs to routinely perform regional air quality analyses, such as 
photochemical grid modeling, as part of a conformity determination.\1\
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    \1\ One state has opted to require dispersion modeling for 
conformity for its own purposes.
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    As a practical matter, we also note the SIP's assumptions about 
spatial distribution of emissions would not necessarily be clear to an 
MPO unless subarea budgets had been established. This is because not 
all SIPs are required to specifically document their assumptions about 
spatial distribution, and these assumptions are not always developed or 
presented in a form that is useful for other agencies, such as MPOs. 
Spatial distributions of emissions in SIPs are generally developed 
strictly to serve as an input to the SIP's dispersion modeling, and 
these emissions distributions are not designed or required to be used 
for any other purpose.
    Again, neither the Clean Air Act nor the conformity rule requires 
states to develop subarea budgets. We have always interpreted the Clean 
Air Act to allow for a single budget for a nonattainment area for a 
given criteria pollutant or precursor, although states have the option 
to disaggregate and establish subarea budgets at their discretion (see 
our General Preamble for the Implementation of Title I of the Clean Air 
Act Amendments of 1990 at 57 FR 13448, April 16, 1992).
    To conclude, we do not believe that the Clean Air Act directs us to 
require the analysis suggested in the petitioner's comments as a means 
to ensuring that conformity is properly implemented. We also believe 
that the analysis suggested by petitioners would in effect require 
states to establish subarea budgets. Although EPA recognizes that there 
may be some areas that would benefit by conducting emissions analyses 
that rely on subarea budgets, we believe these areas will be identified 
through the interagency consultation process and that it is not 
necessary for us to issue regulations imposing these kinds of 
requirements.

D. Credit for Delayed TCMs

1. What Is the Issue?
    As described in issue 15 of the Petition for Reconsideration, the 
petitioners believe that where a transportation control measure (TCM) 
has been delayed beyond the scheduled implementation date(s) in the 
SIP, an area's conformity determination should not be allowed to take 
emissions reduction credit for the TCM until after the TCM has actually 
been brought into service.
2. What Are the Conformity Rule's Requirements on the Timely 
Implementation of TCMs?
    Under the current conformity rule, emission reduction credit may be 
taken at ``such time as implementation has been assured'' (see 
Sec. 93.122(a)(2)). Once implementation has been assured, emissions 
analyses can take credit for the TCM in the analysis years during which 
the TCM would actually be in service (under the revised schedule). In 
the preamble discussion of the November 30, 1999 proposed rule, we 
clarified that an assurance of implementation would require at least 
the following: (a) Past obstacles to implementation of the TCM have 
been overcome; (b) state and local agencies are giving maximum priority 
to approval or funding of TCMs over other projects within their 
control; (c) funding for the TCM is identified and reasonably expected 
to be available; and (d) the legal or regulatory authority necessary to 
implement the TCM has been secured or appropriate commitments are in 
place.
3. What Comments Did EPA Receive on the Timely Implementation of TCMs, 
and What Is EPA's Response?
    In response to our discussion on requirements for assuring the 
timely implementation of TCMs in the proposal, commenters seemed 
satisfied that EPA's existing requirements were appropriate. However, a 
petitioner suggested that we include the criteria listed in the 
November 1999 proposal as a regulatory definition for assurance of 
implementation.
    EPA does not believe that it is necessary to amend the conformity 
rule to include such a regulatory definition. We believe that 
Sec. 93.113 of the conformity rule as written is clear, and that this 
preamble is an appropriate place to elaborate on the rule. We note that 
a previous preamble discussion on the timely implementation of TCMs (58 
FR 62197, November 24, 1993) has provided additional guidance on our 
implementation of the conformity rule to date. EPA and DOT have 
effectively used this 1993 preamble discussion to implement conformity, 
and we will continue to do so with the language in today's preamble.

V. How Would This Action Affect Conformity SIPs?

    Clean Air Act section 176(c)(4)(C) requires states to submit 
revisions to their SIPs in order to include the criteria and procedures 
for determining conformity.
    If we approved your area's conformity SIP and it includes a 
provision for a one-year grace period (Sec. 93.102(d)), that provision 
cannot be implemented. This has been the case ever since the November 
4, 1997, court decision, which found such provisions to be inconsistent 
with the Clean Air Act. Future conformity SIP submissions may not 
include Sec. 93.102(d).
    If your area has submitted a conformity SIP to us that contains 
this provision (and we have not yet approved the conformity SIP), we 
will not approve such a provision as part of the SIP.

VI. Administrative Requirements and EPA's Response to Comments on 
Small Business and Environmental Justice Impacts of Rule

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

[[Page 18916]]

``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 of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof;
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Paperwork Reduction Act

    This 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 Analysis and EPA's Response to Comments on 
Impact of Grace Period Deletion on Small Entities

    The Regulatory Flexibility Act, as amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996, requires the agency to 
conduct a regulatory flexibility analysis of any significant impact a 
rule will have on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit organizations 
and small government jurisdictions. EPA has determined that today's 
regulations will not have a significant impact on a substantial number 
of small entities.
    One commenter questioned our determination that the proposal to 
delete the grace period will not have a significant impact on a 
substantial number of small entities within the meaning of the 
Regulatory Flexibility Act (RFA). We found no such impact because the 
conformity rules only apply directly to Federal agencies and 
metropolitan planning organizations (MPOs), which by definition are 
designated only for metropolitan areas with population of at least 
50,000 and thus do not meet the definition of small entities under the 
RFA. The commenter alleged that both the RFA, the courts, and our own 
implementing guidance require us to consider the indirect impacts of a 
proposed rule as well.
    We do not agree with the commenter that the agency must consider 
the indirect impacts of a regulation under the RFA. EPA has 
consistently interpreted the RFA as requiring the agency only to assess 
the impacts of proposed rules on the small entities directly regulated 
by the proposed rule, and this position has been upheld by the courts. 
See Mid-Tex Electric Cooperative, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 
1985) (agency's certification need only consider the rule's impact on 
entities subject to the requirements of the rule); American Trucking 
Associations, Inc., et al., v. EPA, et al., 175 F.3d 1027 (D.C. Cir. 
1999) (court has consistently interpreted RFA to impose no obligation 
on agency to assess impacts on entities it does not regulate).
    In addition, the commenter misreads EPA's guidance concerning 
consideration of indirect impacts. The sentence the commenter quotes 
from EPA's guidance directs agency staff to consider indirect impacts 
as part of any broader economic analysis conducted for the rule, such 
as a Regulatory Impact Analysis if one is conducted. However, the 
immediately preceding sentence of the guidance clarifies that if a rule 
is applicable only to large entities but indirectly impacts small 
entities, the agency can still certify no significant impact on small 
entities under the RFA. See Revised Interim Guidance for EPA 
Rulewriters: Regulatory Flexibility Act, March 29, 1999, p. 17. In any 
event, the document to which the commenter refers is only guidance; it 
does not establish any legally binding requirements.
    It is also clear that the conformity rule applies directly only to 
federal agencies and MPOs and does not directly regulate small 
entities, such as the road builders represented by the commenter. These 
entities will only be adversely effected by the deletion of the grace 
period if DOT and the MPOs fail to develop a conforming transportation 
plan and program by the effective date of a nonattainment designation. 
In light of the advance warning areas will have of pending designations 
during the notice and comment period, and the delayed effective date 
EPA intends to provide for such designations, EPA believes that DOT and 
MPOs will be able to develop conforming plans and programs in a timely 
fashion.
    Finally, the commenter's allegation is incorrect that the court 
which ordered EPA to delete the grace period determined that such a 
change would adversely effect small entities. The court in Sierra Club 
did find that the fact that an intervening governmental agency could 
alleviate any potential impact on private individuals was not 
sufficient to deprive such individuals of standing to challenge the 
grace period in court. However, the standard for showing harm 
sufficient to support legal standing to sue has no bearing on the 
impact necessary to mandate a finding of significant impacts under the 
RFA. The RFA only requires an agency to assess the impacts of a 
proposed rule on entities directly subject to the proposed rule. The 
analysis under the RFA need not cover any entities not directly subject 
to the proposed rule notwithstanding any indirect impacts that may 
result to other entities, regardless of whether any such impacts could 
support legal standing to challenge the rule.
    EPA therefore concludes that it correctly interpreted the RFA and 
correctly found that the proposal to delete the grace period would not 
have a significant impact on a substantial number of 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 economic impact on a substantial number of small entities.

D. Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules

[[Page 18917]]

with ``Federal mandates'' that may result in expenditures to State, 
local, and tribal governments, in the aggregate, or to the private 
sector, of $100 million or more in any one year. Before promulgating an 
EPA rule for which a written statement is needed, section 205 of the 
UMRA generally requires EPA to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, most 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule. The provisions of section 205 do not apply when 
they are inconsistent with applicable law. Moreover, section 205 allows 
EPA to adopt an alternative other than the least costly, most cost-
effective or least burdensome alternative if the Administrator 
publishes with the final rule an explanation why that alternative was 
not adopted. Before EPA establishes any regulatory requirements that 
may significantly or uniquely affect small governments, including 
tribal governments, it must have developed under section 203 of the 
UMRA a small government agency plan. The plan must provide for 
notifying potentially affected small governments, enabling officials of 
affected small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    EPA has determined that this rule does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. Furthermore, this rule simply formalizes what 
the court has already decided as a legal matter, and which is already 
being implemented in practice.
    This rule affects only those areas that are newly designated as 
nonattainment, and it simply applies conformity one year earlier than 
our previous rule had required. Therefore, this rule could require a 
limited number of areas to perform perhaps one additional 
transportation plan/TIP conformity determination each.
    A 1992 DOT survey of metropolitan planning organizations (MPOs) 
found that most MPOs spend less than $50,000 per transportation plan/
TIP conformity determination. The largest MPOs (serving a population 
over one million) spent up to $250,000. Thus, even if EPA were to 
designate 200 areas as nonattainment in one year and each one incurred 
the maximum costs, the expenditures would not exceed $100 million.
    Thus, today's rule is not subject to the requirements of sections 
202 and 205 of the UMRA.

E. National Technology Transfer and Advancement Act of 1995

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 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 proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

F. Executive Order 13045

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This rule is not subject to Executive Order 13045 because it is not 
economically significant within the meaning of Executive Order 12866.

G. Executive Order 13084

    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 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 officials 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.''
    The Clean Air Act requires conformity to apply in nonattainment and 
maintenance areas, and the U.S. Court of Appeals for the District of 
Columbia Circuit has determined that the Clean Air Act requires 
conformity to apply immediately upon nonattainment designation. As a 
result, this regulatory change is required by statute. Furthermore, 
today's rule would not significantly or uniquely affect the communities 
of Indian tribal governments. Accordingly, the requirements of section 
3(b) of Executive Order 13084 do not apply to this rule.

H. Executive Orders on Federalism

    Executive Order 13132, Federalism (64 FR 43255, August 10, 1999), 
revokes and replaces Executive Orders 12612 (Federalism) and 12875 
(Enhancing the Intergovernmental Partnership). Executive Order 13132 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by State and local officials in the development of 
regulatory policies that have federalism implications.'' ``Policies 
that have federalism implications'' is defined in the Executive Order 
to include regulations that have ``substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government.'' Under Executive Order 13132, EPA may 
not issue a regulation that has federalism implications, that imposes 
substantial direct compliance costs, and that is not required by 
statute, unless the Federal government provides the funds necessary to 
pay the direct compliance costs incurred by State and local 
governments, or EPA consults with State and local officials early in 
the process of developing the regulation. EPA also may not issue a 
regulation that has federalism implications and that preempts State law 
unless the Agency

[[Page 18918]]

consults with State and local officials early in the process of 
developing the proposed regulation.
    If EPA complies by consulting, Executive Order 13132 requires EPA 
to provide to the Office of Management and Budget (OMB), in a 
separately identified section of the preamble to the rule, a federalism 
summary impact statement (FSIS). The FSIS must include a description of 
the extent of EPA's Prior consultation with State and local officials, 
a summary of the nature of their concerns and the Agency's position 
supporting the need to issue the regulation, and a statement of the 
extent to which the concerns of State and local officials have been 
met. Also, when EPA transmits a draft final rule with federalism 
implications to OMB for review pursuant to Executive Order 12866, EPA 
must include a certification from the Agency's Federalism Official 
stating that EPA has met the requirements of Executive Order 13132 in a 
meaningful and timely manner.
    This final rule, which is required by statute, will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. The Clean Air Act requires 
conformity to apply in nonattainment and maintenance areas, and the 
U.S. Court of Appeals for the District of Columbia Circuit has 
determined that the Clean Air Act requires conformity to apply 
immediately upon nonattainment designation. As a result, this rule is 
codifying in regulation the statutory interpretation by the court that 
is currently in effect. Consequently, this rule is required by statute, 
and by itself will not have substantial impact on States. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

I. Executive Order 12898 and EPA's Response to Comments on 
Environmental Justice Impacts of Grace Period Deletion

    One commenter indicated that we failed to consider the 
disproportionate impact the deletion of the grace period would have on 
minority and low income groups as required by Executive Order 12898 on 
environmental justice. The commenter argued that we recently found that 
minorities and low income populations were disproportionately 
represented in nonattainment areas, and that we are required by the 
Executive Order to consider the economic impact on such populations of 
job loss resulting from deletion of the grace period.
    We do not agree that Executive Order 12898 requires us to consider 
the economic impact of the grace period deletion on minorities and low 
income populations in this case. The Executive Order only requires 
agencies to assess adverse impacts on minorities and low income 
populations where the action the agency is taking will cause 
disproportionate human health or environmental impacts on such 
populations. In this case the regulatory action we are taking to delete 
the grace period from our conformity regulations will not have such 
impacts, since we are only formally correcting our regulations to 
reflect the action taken by the United States Court of Appeals in 1997. 
Any potential adverse impacts on minority and low income populations 
resulting from deletion of the grace period were caused by the court 
when it found the grace period to be illegal and overturned it. Since 
the court decision in 1997, the grace period has effectively been 
nullified and any areas newly redesignated to nonattainment have been 
subject to conformity requirements immediately upon the effective date 
of any redesignation. In addition, since this deletion is mandated by 
the court's ruling, we could not effectively address any potential 
adverse impacts from EPA action even if an environmental justice 
analysis disclosed any.

J. 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).

K. 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 June 9, 2000. 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 
proceeding to enforce its requirements. (See section 307(b)(2) of the 
Administrative Procedures Act.)

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 31, 2000.
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.


Sec. 93.102  [Amended]

    2. In Sec. 93.102, paragraph (d) is removed.

[FR Doc. 00-8712 Filed 4-7-00; 8:45 am]
BILLING CODE 6560-50-P