[Federal Register Volume 67, Number 26 (Thursday, February 7, 2002)]
[Notices]
[Pages 5882-5885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2957]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

Federal Transit Administration


Revised Guidance for Implementing the March 1999 Circuit Court 
Decision Affecting Transportation Conformity

AGENCIES: Federal Highway Administration (FHWA), Federal 
TransitAdministration (FTA), DOT.

ACTION: Notice; issuance of revised guidance.

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SUMMARY: The Federal Highway Administration (FHWA) and Federal Transit 
Administration (FTA) have issued revised guidance for implementing a 
March 1999 Circuit Court decision affecting transportation conformity. 
In previous guidance issued on June 18, 1999, the FHWA and FTA 
indicated that projects that had received funding commitments for 
construction prior to the conformity lapse could proceed during a 
lapse. However, project development activities such as right-of-way 
(ROW) acquisition and design that had received funding commitments 
prior to the conformity lapse could not proceed. After reviewing the 
implementation and effectiveness of the previous guidance, the FHWA and 
FTA decided to supplant the previous guidance and allow completion of 
all project phases during a conformity lapse, if such activities were 
approved prior to the lapse. The FHWA and FTA believe the revision is 
necessary for consistency and will help in streamlining the 
transportation planning and development process.

DATES: This revised guidance was effective on January 2, 2002.

FOR FURTHER INFORMATION CONTACT: For FHWA: Ms. Cecilia Ho, Office of 
Natural Environment (HEPN), (202) 366-9862; Mr. Gary Jensen, Office of 
Natural Environment (HEPN), (202) 366-2048; or Mr. Reid Alsop, Office 
of the Chief Counsel (HCC-30), (202) 366-1371. For FTA: Mr. Abbe 
Marner, Office of Planning (TPL-30), (202) 366-4317; or Mr. Scott 
Biehl, Office of the Chief Counsel (TCC-30), (202) 366-0748. Both 
agencies are located at 400 Seventh Street, SW., Washington, DC 20590. 
Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through 
Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Government Printing 
Office Electronic Bulletin Board Service at (202) 512-1661. Internet 
users may reach the Office of the Federal Register's home page at 
http://www.nara.gov/fedreg and the Government Printing Office's Web 
page at http://www.access.gpo.gov/nara. A copy of this guidance can be 
obtained by accessing the FHWA Web site at
http://www.fhwa.dot.gov/environment/conformity/con_mdash;guid.htm.

March 2, 1999, Court Decision

    Under section 176 of the Clean Air Act (CAA) as amended, the U.S. 
Department of Transportation (U.S. DOT) cannot approve or fund any 
activity that does not conform to the State implementation plan (SIP) 
in nonattainment and maintenance areas. The CAA provides that 
conformity to an implementation plan means conformity to a SIP's 
purpose of eliminating or reducing the severity and number of 
violations of the national ambient air quality standards and achieving 
expeditious attainment of such standards. Conformity to an 
implementation plan also means that such activities will not cause or 
contribute to any new violation of any standard in any area; increase 
the frequency or severity of any existing violation of any standard in 
any area; or delay timely attainment of any standard or any required 
interim emission reductions or other milestones in any area. The FHWA 
and FTA funded activities must come from a transportation plan and 
transportation improvement program (TIP) that have been found to 
conform.
    On March 2, 1999, the United States Court of Appeals for the 
District of Columbia Circuit issued a decision on the Environmental 
Protection Agency's (EPA) August 1997 transportation conformity 
amendments in response to a case brought by the Environmental Defense 
Fund (EDF) (EDF v. EPA, 167 F.3d 641 (DC Cir. 1999)). The court ruled 
that CAA Section 176(c)(2)(C) prohibits the U.S. DOT from approving or 
funding new projects in the absence of a conforming plan and TIP. The 
decision also held that, among other things, projects that had 
previously been found to conform and had completed the National 
Environmental Policy Act (NEPA) process (``grandfathered'' projects) 
may not be advanced (that is, such projects should not be approved or 
funded) in a nonattainment or maintenance area if there is no currently 
conforming transportation plan and TIP for the area. The court did not 
rule on the issue of how active right-of-way (ROW) acquisition and 
design projects

[[Page 5883]]

should be treated during a conformity lapse.

Previous Guidance From the FHWA and FTA Concerning the March 2, 
1999, Court Decision

    On March 31, 1999, the FHWA and FTA issued interim guidance \1\ 
implementing this court decision, which was supplemented by additional 
guidance \2\ on May 7, 1999. On June 18, 1999, the FHWA and FTA issued 
an additional memorandum \3\ that replaced the previously issued 
guidance. In the June 18, 1999, guidance, the FHWA and FTA indicated 
that projects that received funding commitments for construction prior 
to the conformity lapse could proceed during a lapse.
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    \1\ The March 31, 1999, interim guidance entitled ``Interim 
Guidance for the Implementation of the Circuit Court Decision 
Affecting Transportation Conformity'' may be obtained by contacting 
Mr. Gary Jensen, Office of Natural Environment (HEPN), Federal 
Highway Administration, 400 Seventh Street, SW., Washington, DC 
20590, (202) 366-2048.
    \2\ The May 7, 1999, supplemental guidance entitled 
``Supplemental Guidance for the Implementation of the Circuit Court 
Decision Affecting Transportation Conformity'' is available at the 
following URL: http://www.fhwa.dot.gov/environment/gdad--int.htm.
    \3\ The June 18, 1999, supplemental additional guidance entitled 
``Additional Supplemental Guidance for the Implementation of the 
Circuit Court Decision Affecting Transportation Conformity'' is 
available at the following URL: http://www.fhwa.dot.gov/environment/
gdad--add.htm.
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    For the FHWA, a funding commitment means there is a project 
agreement, which is a contractual obligation by the Federal Government 
to reimburse the Federal share of expenses on a Federal-aid highway 
project. A project agreement includes approval of plans, 
specifications, and estimates. For the FTA, a funding commitment means 
there is a full funding grant agreement (FFGA). For transit projects 
not covered by FFGAs, the construction commitment occurs after the FTA 
grant is made and a local contract for construction or vehicle purchase 
has been approved.
    The June 18, 1999, guidance also stated that the FHWA could not 
continue to reimburse with Federal funds active highway design and ROW 
acquisition activities, except for exempt projects, during a conformity 
lapse, even though these activities were approved before the conformity 
lapse. Likewise, funding for active transit design and land acquisition 
activities, except for exempt projects, which received a grant, other 
than a FFGA, could not continue unless: (1) The FTA approved the grant 
before the conformity lapse; and (2) the grantee had awarded a contract 
for construction or for vehicle acquisition like procurement of rolling 
stock before the lapse.
    Since the release of the June 18, 1999, guidance, the FHWA and FTA 
have had the opportunity to review the implementation and effectiveness 
of that guidance. As a result of our review, the FHWA and FTA decided 
to revise the guidance concerning the March 2, 1999, court decision to 
allow completion of a project development activity during a conformity 
lapse, if that activity was approved prior to the lapse (e.g., final 
design or ROW acquisition). We consulted with the EPA in the 
development of the following revised guidance.
    The revised guidance does not allow new ROW acquisition or final 
design approvals to occur during a conformity lapse. The revisions only 
allow ROW acquisition and design activities that had received approvals 
and funding commitments before a lapse to be federally reimbursed 
during a lapse. We believe this is a reasonable interpretation that is 
consistent with the March 2, 1999, court decision.

Reasons for Revising the June 19, 1999, Guidance

    The FHWA and FTA believe that we can and should provide flexibility 
and consistency, by allowing Federal reimbursement of previously 
authorized ROW acquisition and design activities, as well as previously 
authorized construction activities, to proceed during a conformity 
lapse. There are several reasons for this revision.
    First, our June 18, 1999, guidance provides that when the CAA says 
that the U.S. DOT cannot ``fund'' a project unless it conforms, 
``fund'' actually means the point at which the U.S. DOT commits to 
funding the project. For the FHWA, this point is the project agreement 
and for the FTA, it is the FFGA or equivalent authorization.
    The June 18, 1999, guidance made a distinction between the 
construction phase and ROW acquisition and design activities phases. 
According to the June 18, 1999, guidance, projects that received 
funding commitments for construction prior to the conformity lapse 
could proceed during the conformity lapse. However, reimbursements for 
previously authorized ROW acquisition and design activities could not 
proceed during a conformity lapse. In other words, the Federal 
Government had to suspend its previously authorized commitment to these 
activities.
    The FHWA and FTA have concluded that guidance concerning Federal 
authorizations should be consistent, regardless of whether our 
authorization is for construction, ROW acquisition, or design 
activities. By treating each phase of a project similarly in the 
revised guidance, we consistently apply the principle that ``fund'' 
actually means the point at which the U.S. DOT commits to funding a 
phase of the project, not just the point the U.S. DOT commits to 
funding the construction of the project.
    Second, streamlining transportation planning and development 
processes continues to be a priority of the U.S. DOT. Suspending 
Federal reimbursement of active ROW acquisition and design activities 
is an onerous process that can be time and resource intensive for the 
project sponsor, and, as discussed, was not directly addressed by the 
court in its March 2, 1999, decision.
    Third, although the FHWA and FTA discouraged it, under the June 18, 
1999, guidance these activities could be continued using State or local 
funds. Also, projects using design-build contracting could proceed with 
all project phases that were included in the design-build contract, 
which the FHWA authorized before the lapse.
    Finally, ROW acquisition and design activities will not affect 
regional motor vehicle emissions until such time as the project is 
constructed and completed. The construction of non-exempt projects 
utilizing such acquired ROW or designs cannot be authorized until a new 
conformity analysis and conforming plan and TIP are adopted and the 
conformity lapse has ended. Therefore, this revised guidance will not 
lessen the air quality protection afforded by the transportation 
conformity provisions of the CAA.

Other Information Regarding Revised Guidance

    The June 18, 1999, guidance contained a detailed discussion on how 
the court decision affected areas that relied on submitted, but not yet 
approved, motor vehicle emission budgets for their most recent 
conformity determination. This discussion is no longer needed, as all 
areas, except one where conformity has remained suspended, have now 
determined conformity based on budgets that have been found adequate or 
approved by EPA, or based on the appropriate emissions reductions 
test(s). For guidance on the process EPA currently uses to review and 
decide whether motor vehicle emissions budgets are adequate and can be 
used for conformity, refer to EPA's May 14, 1999, ``Conformity Guidance 
on Implementation of March 2, 1999

[[Page 5884]]

Conformity Court Decision'' which is available at the following URL: 
http://www.epa.gov/otaq/transp/conform/epaguidf.pdf.

    Authority: 23 U.S.C. 106; 23 U.S.C. 134; 42 U.S.C. 7506; 23 
U.S.C. 315; and 49 CFR 1.48.

    Issued on: January 31, 2002.
Mary E. Peters,
Federal Highway Administrator.
Jennifer L. Dorn,
Federal Transit Administrator.
    The text of the revised guidance for implementing the March 1999 
Circuit Court decision affecting transportation conformity and dated 
January 2, 2002 reads as follows:

Information

Revised Guidance for Implementing the March 1999 Circuit Court Decision 
Affecting Transportation Conformity, HEPN-10
Mary E. Peters, Administrator, FHWA
Jennifer L. Dorn, Administrator, FTA
FHWA Division Administrators
Federal Lands Highway Division Engineers
FTA Regional Administrators

    On March 2, 1999, the United States Court of Appeals for the 
District of Columbia Circuit issued a decision on EPA's August 1997 
transportation conformity amendments in response to a case brought by 
the Environmental Defense Fund. The EPA will be providing revised 
conformity regulations that implement this ruling in the near future. 
This memorandum supersedes and replaces all previous FHWA and FTA 
guidance implementing this ruling, including the Additional 
Supplemental Guidance issued on June 18, 1999. The FHWA and FTA 
consulted with EPA on the development of this guidance. This guidance 
does not supersede any existing settlement agreements that address this 
subject. In addition, guidance on other issues addressed by the March 
1999 court decision can be found in EPA's ``Conformity Guidance on 
Implementation of March 2, 1999 Conformity Court Decision,'' published 
on May 14, 1999 (http://www.epa.gov/otaq/transp/conform/epaguidf.pdf).

Projects That Can Proceed During a Conformity Lapse

    The court decision held that projects that had previously been 
found to conform and had completed the National Environmental Policy 
Act (NEPA) process (``grandfathered'' projects) may not be advanced 
(that is, such projects should not be approved) in nonattainment and 
maintenance areas which do not have a currently conforming 
transportation plan and transportation improvement program (TIP). Thus, 
in such areas, no new approvals or grants for further development of 
projects (i.e., NEPA, final design, right-of-way acquisition, or 
construction) should be made. The only projects which can receive 
further approvals or grants during a plan and TIP conformity lapse are: 
(1) Projects exempt from the conformity process; and (2) transportation 
control measures (TCMs) which are included in an approved State 
implementation plan (SIP).
    A non-exempt project is any project that is not listed as exempt in 
the transportation conformity rule at 40 CFR 93.126 or 93.127, or the 
project is not a TCM in an approved SIP.
    For FHWA-funded projects, project phases (i.e., design, right-of-
way acquisition, or construction) that received funding commitments or 
an equivalent approval or authorization prior to a conformity lapse may 
continue during the lapse. The execution of a project agreement (which 
includes Federal approval of the plans, specifications, and estimates) 
indicates funding commitment.
    For FTA, the largest projects are handled with a full funding grant 
agreement (FFGA). If the FFGA was executed prior to a conformity lapse, 
the project can continue to utilize Federal funding during the lapse. 
If the FFGA was not completed by the date of the lapse, the project 
sponsor may only complete the current stage of project development 
(e.g., final design or land acquisition), but may not use Federal funds 
to proceed further. Transit projects not handled with FFGAs may proceed 
during a lapse if, prior to the lapse, FTA approved a grant and the 
project sponsor awarded a contract for construction or vehicle 
acquisition. If a local contract was not approved by the date of the 
lapse, the project sponsor may only complete the current stage of 
project development with Federal funds.
    Subsequent phases of a project for which FHWA or FTA has not taken 
an approval action or awarded a grant may not proceed in the absence of 
conformity. For transportation project phases not requiring a project 
specific project agreement/authorization approval, the State or local 
transportation agency should not take any action committing the State 
or local agency to proceed with the project phase during a lapse unless 
the project phase had already received full approval or authorization 
for funding before the lapse.
    Preliminary engineering for project development activities that are 
necessary to assess social, economic, and environmental effects of the 
proposed action or alternatives as part of the NEPA process for a non-
exempt project may continue during the lapse, according to 40 CFR 
93.126. However, FHWA or FTA cannot approve a categorical exclusion, 
finding of no significant impact, final environmental impact statement, 
or a record of decision for a non-exempt project during a conformity 
lapse. The NEPA process can be completed for exempt projects and TCMs 
in an approved SIP during a conformity lapse.
    When a community is facing a conformity lapse within 6 months, 
FHWA, FTA, and EPA will meet and jointly evaluate the potential 
consequences of the lapse and assess any concerns. The FHWA, FTA, and 
EPA will meet at least 90 days before a conformity lapse to determine 
which projects could receive funding commitments before the lapse, and 
which projects could potentially be delayed, and the actions that would 
be necessary to correct the lapse. In preparation for these 
discussions, FHWA and FTA offices, in consultation with project 
sponsors, should review the current TIP to identify the current status 
of development of non-exempt projects being advanced in the 
nonattainment or maintenance area. As you know, some nonattainment 
areas include more than one metropolitan planning organization (MPO).
    When a conformity lapse is imminent, FHWA Division Administrators 
and FTA Regional Administrators shall notify the Governor or the 
Governor's designee immediately to inform him/her of the consequences, 
and potential solutions to minimize disruptions to the transportation 
programs in the respective nonattainment and maintenance areas. The 
FHWA and FTA will consult with EPA regional offices before notifying 
the Governor or the Governor's designee of conformity consequences and 
solutions.
    Coordination between FHWA, FTA and EPA prior to a conformity lapse 
is detailed in the April 19, 2000, National Memorandum of Understanding 
(MOU) Between the U.S. DOT and the U.S. EPA (http://www.fhwa.dot.gov/environment/cnfmou.htm). Appendix A of the MOU also discusses how to 
meet the transportation planning requirements during a lapse in order 
to continue funding exempt projects and TCMs until conformity is 
reestablished. Therefore, in the event of a conformity lapse, an MPO 
must create an interim plan and TIP for any projects that can be 
federally-funded and approved during the lapse, including exempt 
projects and

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TCMs in an approved SIP. Please see the MOU for more information 
regarding the requirements for including projects in an interim plan 
and TIP.

Other Issues

    To address other issues related to the Court ruling, on May 14, 
1999, EPA issued ``Conformity Guidance on Implementation of March 2, 
1999 Conformity Court Decision'' which provides more details about 
using submitted budgets, projects requiring Federal approval, non-
Federal projects, SIP disapprovals, and reallocation of a SIPs safety 
margin. Areas should reference this guidance for specific information 
on these other issues. The EPA, in coordination with DOT, will be 
working to formalize the guidance through the rulemaking process to 
amend the conformity regulation.
    If you have questions on this guidance, please contact Ms. Cecilia 
Ho (202) 366-9862 or Mr. Gary Jensen (202) 366-2048 of FHWA, or Mr. 
Abbe Marner (202) 366-4317 of FTA.

cc: Directors of Field Services

[FR Doc. 02-2957 Filed 2-6-02; 8:45 am]
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