[Federal Register Volume 68, Number 125 (Monday, June 30, 2003)]
[Proposed Rules]
[Pages 38974-38998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15253]



[[Page 38973]]

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Part IV





Environmental Protection Agency





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40 CFR Part 93



Transportation Conformity Rule Amendments: Response to Court Decision 
and Additional Rule Changes; Proposed Rule

  Federal Register / Vol. 68, No. 125 / Monday, June 30, 2003 / 
Proposed Rules  

[[Page 38974]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 93

[FRL-7513-5]
RIN 2060-AI56


Transportation Conformity Rule Amendments: Response to Court 
Decision and Additional Rule Changes

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Today we (EPA) are proposing to amend the transportation 
conformity rule to address a March 2, 1999, ruling by the U.S. Court of 
Appeals for the District of Columbia Circuit (Environmental Defense 
Fund v. EPA, et al., 167 F. 3d 641, DC Cir. 1999; hereinafter referred 
to as the ``court decision''). Our proposal would incorporate into the 
transportation conformity rule the EPA and Department of Transportation 
(DOT) guidance that has been used in place of certain regulatory 
provisions of the rule since the March 1999 court decision. EPA 
consulted with DOT on the development of our implementation strategy to 
address the court's decision and DOT concurs with this proposal.
    Consistent with the court's ruling and existing federal guidance on 
transportation conformity, we are proposing that certain federal and 
non-federal highway and transit projects cannot be advanced in areas 
without a currently conforming transportation plan and transportation 
improvement program (TIP), unless they have previously received 
appropriate approvals and funding commitments. As directed by the 
court, our proposal also would modify the process for deciding whether 
the motor vehicle emissions budgets in newly submitted state air 
quality plans are adequate for use in the conformity process. Other 
provisions affected by the court decision and included in our proposal 
are the timing of conformity consequences following the disapproval of 
certain types of SIPs, and the use of submitted safety margins for 
transportation conformity in areas that have approved SIPs that were 
submitted prior to November 24, 1993.
    The proposal also includes several additional amendments to 
provisions of the rule that the court decision did not directly affect. 
These amendments are being proposed to improve the rule and/or to 
provide clarification of existing requirements.

DATES: Written comments on this proposal must be received on or before 
July 30, 2003.

ADDRESSES: Comments may be submitted by mail to: Air Docket, 
Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania 
Ave., NW., Washington, DC 20460, Attention Docket ID No. OAR-2003-0063. 
Comments may also be submitted electronically, by facsimile, or through 
hand delivery/courier. Follow the detailed instructions as provided in 
section I.C. of the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Angela Spickard, State Measures and 
Conformity Group, Transportation and Regional Programs Division, U.S. 
Environmental Protection Agency, 2000 Traverwood Road, Ann Arbor, MI 
48105, [email protected], (734) 214-4283; or, Meg Patulski, State 
Measures and Conformity Group, Transportation and Regional Programs 
Division, U.S. Environmental Protection Agency, 2000 Traverwood Road, 
Ann Arbor, MI 48105, [email protected], (734) 214-4842.

SUPPLEMENTARY INFORMATION: The contents of this preamble are listed in 
the following outline:

I. General Information
    A. Regulated Entities
    B. How Can I Get Copies of This Document?
    C. How and to Whom Do I Submit Comments?
    D. How Should I Submit CBI to the Agency?
    E. What Should I Consider as I Prepare My Comments for EPA?
II. Background on the Transportation Conformity Rule
III. Federal Projects
    A. What Are We Proposing?
    B. Why Are We Proposing These Changes?
    C. What Is the Practical Impact of the Proposal?
IV. Using Motor Vehicle Emissions Budgets from Submitted SIPs for 
Transportation Conformity Determinations
    A. Background
    B. What Are We Proposing?
    C. Why Are We Proposing These Changes?
    D. EPA's Adequacy Process
    E. Why Is EPA Using the Website Instead of the Federal Register 
to Notify the Public in the Adequacy Process?
    F. What Typical SIP Submissions Will We Review for Adequacy?
    G. Does EPA Review Adequacy of SIPs That Do Not Establish 
Specific Budgets?
V. Non-Federal Projects
    A. What Are Non-federal Projects?
    B. What Are We Proposing?
    C. Why Are We Proposing This Change?
    D. At What Point Is a Regionally Significant Non-federal Project 
``Approved''?
    VI. Conformity Consequences of SIP Disapprovals
    A. What Are the Conformity Consequences of EPA Disapproving a 
Control Strategy SIP Without a Protective Finding?
    B. What Are We Proposing?
    C. Why Are We Proposing This Change?
    D. What Is the Practical Impact of This Change?
VII. Safety Margins
    A. What Is a Safety Margin?
    B. What Are We Proposing?
    C. Why Are We Proposing This Change?
    D. Can Safety Margins Still Be Allocated to Motor Vehicle 
Emissions Budgets for Use in Conformity Determinations?
VIII. Streamlining the Frequency of Conformity Determinations
    A. Eliminating the Requirement for Conformity of the TIP Within 
Six Months of the Transportation Plan
    B. Streamlining the 18-month SIP Triggers for New Conformity 
Determinations
IX. Latest Planning Assumptions
    A. What Are We Proposing?
    B. Why Are We Proposing this Change?
X. Horizon Years for Hot-spot Analyses
    A. What Are We Proposing?
    B. Why Are We Proposing This Clarification?
XI. Additional Changes and Clarifications to the Rule
    A. Definitions
    B. Budget Test Requirements for the Attainment Year
    C. Budget Test Requirements Once a Maintenance Plan is Submitted
    D. Relying on a Previous Regional Emissions Analysis
    E. Exempt Projects
XII. How Does Today's Proposal Affect Conformity SIPs?
XIII.Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children from 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions that Significantly Affect 
Energy Supply, Distribution or Use
    I. National Technology Transfer Advancement Act

I. General Information

A. Regulated Entities

    Entities potentially regulated by the conformity rule are those 
that 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 affected by today's action include:

[[Page 38975]]



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                Category                  Examples of regulated entities
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Local government.......................  Local transportation and air
                                          quality agencies, including
                                          metropolitan planning
                                          organizations (mpos).
State government.......................  State transportation and air
                                          quality agencies.
Federal government.....................  Department of Transportation
                                          (Federal Highway
                                          Administration (FHWA) and
                                          Federal Transit Administration
                                          (FTA)).
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    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 of which EPA is aware that 
potentially could 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 40 CFR 93.102 of 
the transportation conformity rule. If you have questions regarding the 
applicability of this action to a particular entity, consult the 
persons listed in the preceding FOR FURTHER INFORMATION CONTACT 
section.

B. How Can I Get Copies of This Document?

1. Docket
    EPA has established an official public docket for this action under 
Docket ID No. OAR-2003-0063. The official public docket consists of the 
documents specifically referenced in this action, any public comments 
received, and other information related to this action. Although a part 
of the official docket, the public docket does not include Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. The official public docket is the collection of 
materials that is available for public viewing at the Air Docket in the 
EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC. The EPA Docket Center Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
(202) 566-1744, and the telephone number for the Air Docket is (202) 
566-1742. This Docket Facility is open from 8:30 a.m. to 4:30 p.m. 
Monday through Friday, excluding legal holidays. The Docket telephone 
number is 202-566-1742.
2. Electronic Access
    You may access this Federal Register document electronically 
through EPA's Transportation Conformity website at: http://www.epa.gov/otaq/transp/traqconf.htm. You may also access this document 
electronically under the ``Federal Register'' listings at http://www.epa.gov/fedrgstr/.
    An electronic version of the public docket is available through 
EPA's electronic public docket and comment system, EPA Dockets. You may 
use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public 
comments, access the index listing of the contents of the official 
public docket, and to access those documents in the public docket that 
are available electronically. Once in the system, select ``search,'' 
then key in the appropriate docket identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information for which disclosure 
is restricted by statute is not included in the official public docket 
and will not be available for public viewing in EPA's electronic public 
docket. EPA's policy is that copyrighted material will not be placed in 
EPA's electronic public docket but will be available only in printed, 
paper form in the official public docket. To the extent feasible, 
publicly available docket materials will be made available in EPA's 
electronic public docket. When a document is selected from the index 
list in EPA Dockets, the system will identify whether the document is 
available for viewing in EPA's electronic public docket. Although not 
all docket materials may be available electronically, you may still 
access any of the publicly available docket materials through the 
docket facility identified in section I.B.1. above. EPA intends to work 
towards providing electronic access to all of the publicly available 
docket materials through EPA's electronic public docket.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information for which 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the Docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.
    For additional information about EPA's electronic public docket 
visit EPA Dockets online or see 67 FR 38102, May 31, 2002.

C. How and to Whom Do I Submit Comments?

    You may submit comments electronically, by mail, by facsimile, or 
through hand delivery/courier. To ensure proper receipt by EPA, 
identify the appropriate docket identification number in the subject 
line on the first page of your comment. Please ensure that your 
comments are submitted within the specified comment period. Comments 
received after the close of the comment period will be marked ``late.'' 
EPA is not required to consider these late comments.
    1. Electronically
    If you submit an electronic comment as prescribed below, EPA 
recommends that you include your name, mailing address, and an e-mail 
address or other contact information in the body of your comment. Also 
include this contact information on the outside of any disk or CD ROM 
you submit, and in any cover letter accompanying the disk or CD ROM. 
This ensures that you can be identified as the submitter of the comment 
and allows EPA to contact you in case EPA cannot read your comment due 
to technical difficulties or needs further information on the substance 
of your comment. EPA's policy is that EPA will not edit your comment, 
and any identifying or contact information provided in the body of a 
comment will be included as part of the comment that is placed in the 
official public docket, and made available in EPA's electronic public 
docket. If EPA cannot read your

[[Page 38976]]

comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment.
    i. EPA Dockets. Your use of EPA's electronic public docket to 
submit comments to EPA electronically is EPA's preferred method for 
receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and follow the online instructions for submitting comments. To 
access EPA's electronic public docket from the EPA Internet Home Page, 
select ``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once 
in the system, select ``search,'' and then key in Docket ID No. OAR-
2003-0063. The system is an ``anonymous access'' system, which means 
EPA will not know your identity, e-mail address, or other contact 
information unless you provide it in the body of your comment.
    ii. E-mail. Comments may be sent by electronic mail (e-mail) to [email protected], Attention Air Docket ID No. OAR-2003-0063. In 
contrast to EPA's electronic public docket, EPA's e-mail system is not 
an ``anonymous access'' system. If you send an e-mail comment directly 
to the Docket without going through EPA's electronic public docket, 
EPA's e-mail system automatically captures your e-mail address. E-mail 
addresses that are automatically captured by EPA's e-mail system are 
included as part of the comment that is placed in the official public 
docket, and made available in EPA's electronic public docket.
    iii. Disk or CD ROM. You may submit comments on a disk or CD ROM 
that you mail to the mailing address identified in section I.C.2. These 
electronic submissions will be accepted in WordPerfect or ASCII file 
format. Avoid the use of special characters and any form of encryption.
    2. By Mail. Send two copies of your comments to: Air Docket, 
Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania 
Ave., NW, Washington, DC, 20460, Attention Docket ID No. OAR-2003-0063.
    3. By Hand Delivery or Courier. Deliver your comments to: EPA 
Docket Center, Room B102, EPA West Building, 1301 Constitution Avenue, 
NW., Washington, DC., Attention Air Docket ID No. OAR-2003-0063. Such 
deliveries are only accepted during the Docket's normal hours of 
operation as identified in section I.B.1.
    4. By Facsimile. Fax your comments to: (202) 566-1741, Attention 
Docket ID. No. OAR-2003-0063.

D. How Should I Submit CBI to the Agency?

    Do not submit information that you consider to be CBI 
electronically through EPA's electronic public docket or by e-mail. 
Send or deliver information identified as CBI only to the following 
address: Attention: Angela Spickard, U.S. EPA, National Vehicle and 
Fuel Emissions Laboratory, Transportation and Regional Programs 
Division, 2000 Traverwood Drive, Ann Arbor, MI 48105, Docket ID No. 
OAR-2003-0063. You may claim information that you submit to EPA as CBI 
by marking any part or all of that information as CBI (if you submit 
CBI on disk or CD ROM, mark the outside of the disk or CD ROM as CBI 
and then identify electronically within the disk or CD ROM the specific 
information that is CBI). Information so marked will not be disclosed 
except in accordance with procedures set forth in 40 CFR Part 2.
    In addition to one complete version of the comment that includes 
any information claimed as CBI, a copy of the comment that does not 
contain the information claimed as CBI must be submitted for inclusion 
in the public docket and EPA's electronic public docket. If you submit 
the copy that does not contain CBI on disk or CD ROM, mark the outside 
of the disk or CD ROM clearly that it does not contain CBI. Information 
not marked as CBI will be included in the public docket and EPA's 
electronic public docket without prior notice. If you have any 
questions about CBI or the procedures for claiming CBI, please consult 
the person identified in the FOR FURTHER INFORMATION CONTACT section.

E. What Should I Consider as I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments:
    1. Explain your views as clearly as possible.
    2. Describe any assumptions that you used.
    3. Provide any technical information and/or data you used that 
support your views.
    4. If you estimate potential burden or costs, explain how you 
arrived at your estimate.
    5. Provide specific examples to illustrate your concerns.
    6. Offer alternatives.
    7. Make sure to submit your comments by the comment period deadline 
identified.
    8. To ensure proper receipt by EPA, identify the appropriate docket 
identification number in the subject line on the first page of your 
response. It would also be helpful if you provided the name, date, and 
Federal Register citation related to your comments.

II. Background on the Transportation Conformity Rule

    Transportation conformity is required under section 176(c) of the 
Clean Air Act (42 U.S.C. 7506(c)) to ensure that federally supported 
highway and transit project activities are consistent with (``conform 
to'') the purpose of a state air quality implementation plan (SIP). 
Conformity to the purpose of the SIP means that transportation 
activities will not cause new air quality violations, worsen existing 
violations, or delay timely attainment of the national ambient air 
quality standards. EPA's transportation conformity rule establishes the 
criteria and procedures for determining whether transportation 
activities conform to the state air quality plan.
    EPA first published the transportation conformity rule on November 
24, 1993 (58 FR 62188). Minor revisions were made to the rule in 1995 
(60 FR 40098, August 7, 1995, and 60 FR 57179, November 14, 1995), and 
more recently in the spring of 2000 (65 FR 18911, April 10, 2000) and 
on August 6, 2002 (67 FR 50808).
    On August 15, 1997, EPA published a comprehensive set of amendments 
that clarified and streamlined language from the 1993 transportation 
conformity rule (62 FR 43780) and subsequent 1995 amendments. However, 
a decision made on March 2, 1999, by the U.S. Court of Appeals for the 
District of Columbia Circuit affected several provisions of the 1997 
rulemaking (Environmental Defense Fund v. EPA, et al., 167 F. 3d 641, 
DC Cir. 1999; hereinafter referred to as the ``court decision''). 
Specifically, the court's ruling affected provisions that pertain to 
five aspects of the conformity rule, including:
    (1) Federal approval and funding of transportation projects in 
areas without a currently conforming transportation plan and 
transportation improvement program (TIP);
    (2) Provisions allowing motor vehicle emissions budgets from 
submitted SIPs to be used in transportation conformity determinations 
before the SIP has been approved;
    (3) the adoption and approval of non-federal transportation 
projects in areas without a currently conforming transportation plan 
and TIP;
    (4) the timing of conformity consequences following an EPA 
disapproval of a control strategy SIP (e.g., reasonable further 
progress SIPs

[[Page 38977]]

and attainment demonstrations) without a protective finding; and,
    (5) the use of submitted safety margins in areas with approved SIPs 
that were submitted prior to November 24, 1993.
    In response to the court decision, the EPA and U.S. Department of 
Transportation (DOT) issued guidance \1\ to address the provisions 
directly affected by the court decision. DOT subsequently modified its 
June 18, 1999, guidance and replaced it with revised guidance issued on 
January 2, 2002, and announced in the Federal Register on February 7, 
2002, (67 FR 5882).\2\ DOT issued supplemental guidance \3\ in May 2003 
to clarify the conformity requirements as they relate to FHWA/FTA's 
approval of a final environmental impact statement and the National 
Environmental Policy Act (NEPA) process completion. In addition, FTA 
issued guidance on April 9, 2003, that further clarified which 
approvals are necessary for transit projects to proceed during a 
lapse.\4\ The EPA and DOT memoranda serve as the basis for today's 
proposed amendments to the transportation conformity rule. EPA and DOT 
consulted with each other on the development of all guidance documents 
implementing the March 2, 1999, court decision. See EPA's 
transportation conformity web site listed in section I.B.2. to download 
an electronic copy of these guidance documents.
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    \1\ May 14, 1999, Memorandum from Gay MacGregor, then-Director 
of the Regional and State Programs Division of EPA's Office of 
Transportation and Air Quality, to Regional Air Division Directors, 
``Conformity Guidance on Implementation of March 2, 1999, Conformity 
Court Decision'; and, June 18, 1999, Memorandum from Kenneth R. 
Wykle, then-Administrator, Federal Highway Administration (FHWA), 
and Gordon J. Linton, then-Administrator, Federal Transit 
Administration (FTA), to FHWA Division Administrators, Federal Lands 
Highway Division Engineers, and FTA Regional Administrators, 
``Additional Supplemental Guidance for the Implementation of the 
Circuit Court Decision Affecting Transportation Conformity.''
    \2\ January 2, 2002, Memorandum from Mary E. Peters, 
Administrator, Federal Highway Administration (FHWA), and Jennifer 
L. Dorn, Administrator, Federal Transit Administration (FTA), to 
FHWA Division Administrators, Federal Lands Highway Division 
Engineers, and FTA Regional Administrators, ``Revised Guidance for 
Implementing the March 1999 Circuit Court Decision Affecting 
Transportation Conformity''; February 7, 2002, Notice, Issuance of 
Revised Guidance for Implementing the March 1999 Circuit Court 
Decision Affecting Transportation Conformity, Federal Register, 67 
FR 5882.
    \3\ May 2003, Memorandum from Federal Highway Administration and 
Federal Transit Administration, ``INFORMATION: Clarification of 
Transportation Conformity Requirements for FHWA/FTA Projects 
Requiring Environmental Impact Statements.''
    \4\ April 9, 2003, Memorandum from Jennifer L. Dorn, 
Administrator, Federal Transit Administration, to Regional 
Administrators, Regions 1-10, ``INFORMATION: Revised FTA Procedures 
for a Conformity Lapse.''
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    In addition to addressing the impact of the court decision, today's 
proposal would also amend several other provisions of the conformity 
rule. These proposed rule amendments include: New definitions for 
``donut areas'' and ``isolated rural nonattainment and maintenance 
areas'; streamlining of the current requirements affecting frequency of 
conformity determinations; EPA's revised interpretation of the 
requirements for using the latest planning assumptions; clarification 
of the appropriate horizon years for hot-spot analyses; a minor update 
to the current list of exempt projects; and, several minor 
clarifications to Sec.  93.118 of the conformity rule (``Criteria and 
procedures: Motor vehicle emissions budget.'') that are aimed at 
improving the implementation of this section of the conformity 
regulation. Additional background information and rationale for these 
proposed rule changes are included in our discussion below.

III. Federal Projects

A. What Are We Proposing?

    Today's proposal would modify 40 CFR 93.102(c) so that no new 
federal approvals or funding commitments for non-exempt projects can 
occur during a transportation conformity lapse. A conformity lapse 
generally occurs if transportation plan and TIP conformity 
determinations are not made within specified time frames. During a 
conformity lapse no new conformity determinations for FHWA or FTA non-
exempt projects may be made.
    Section 93.102(c)(1) of the 1997 conformity rule (62 FR 43780) 
allowed a highway or transit project to receive additional federal 
approvals and funding commitments during a lapse if the project came 
from a previously conforming plan and TIP, a conformity determination 
for the project had been made and the NEPA process was completed before 
the lapse. Section 93.101 of the rule defines ``NEPA process 
completion'' as ``the point at which there is a specific action to make 
a determination that a project is categorically excluded [CE], to make 
a Finding of No Significant Impact [FONSI], or to issue a record of 
decision on a Final Environmental Impact Statement [FEIS] * * *'' In 
its March 2, 1999, decision, the court held that Sec.  93.102(c)(1) was 
unlawful and remanded this section to EPA for further rulemaking.
    To address the court decision, EPA is eliminating the current Sec.  
93.102(c)(1) provision and proposing new regulatory language under 
Sec.  93.102(c). Under this proposed provision, non-exempt 
transportation project phases that have received all required FHWA or 
FTA approvals or funding commitments and that have met associated 
conformity requirements before a lapse could be implemented during the 
lapse; however, no new federal approvals or funding commitments for 
subsequent or new phases could be made during the lapse.
    Today's proposal would also move Sec.  93.102(c)(2) requirements to 
Sec.  93.104(d) to limit redundancy and improve organization of the 
conformity rule. This proposed organizational change would not change 
the substantive requirements of Sec.  93.102(c)(2). The conformity rule 
would continue to require a new conformity determination when a 
significant change in a project's design concept and scope has 
occurred, a supplemental environmental document for air quality 
purposes is initiated, or three years have elapsed since the most 
recent major step to advance a project. A major step is defined in the 
conformity rule as ``* * * NEPA process completion; start of final 
design; acquisition of a significant portion of the right-of-way; or 
approval of plans, specifications and estimates * * * '' (40 CFR 
93.104(d)).
    Today's proposed changes are consistent with the latest EPA and DOT 
guidance issued to implement the court decision. EPA and DOT consulted 
on the development of these guidance documents. On January 2, 2002, DOT 
revised its guidance on how most projects that receive federal approval 
or funding are affected during a lapse, and announced the release of 
the new guidance in the Federal Register on February 7, 2002 (67 FR 
5882). DOT issued supplemental guidance in May 2003 to clarify the 
conformity requirements as they relate to FHWA/FTA's approval of a 
final environmental impact statement and the NEPA process completion. 
In addition, FTA issued guidance on April 9, 2003, that further 
clarified which approvals are necessary for transit projects to proceed 
during a lapse. DOT's revised guidance and memoranda supersede previous 
guidance issued on June 18, 1999. The revised guidance clarifies that 
only project phases that have met conformity requirements and received 
federal approval or funding commitments before a lapse can proceed 
during a lapse. See EPA's conformity website listed in section I.B.2. 
to download an electronic copy of these guidance documents.

[[Page 38978]]

B. Why Are We Proposing These Changes?

    Today's proposal is necessary to make the conformity regulation 
consistent with the March 1999 court decision. The court held that 
Sec.  93.102(c)(1) of the 1997 conformity rule was inconsistent with 
the Clean Air Act since it allowed transportation projects that had 
previously been found to conform and had completed the NEPA process 
(``grandfathered'' projects) to receive further federal approvals or 
funding commitments and advance towards construction during a lapse. In 
effect, this provision allowed project phases that weren't approved 
prior to a lapse to proceed during the lapse. The D.C. Circuit Court 
ruled that Clean Air Act section 176(c)(2)(C) prohibits FHWA and FTA 
from approving or funding new project phases in nonattainment and 
maintenance areas in the absence of a currently conforming 
transportation plan and TIP. Clean Air Act section 176(c)(2)(C)(i) 
states that project approvals can only occur if ``such a project comes 
from a conforming plan and program.''
    EPA believes that its proposal to allow previously authorized 
project phases to be implemented during a lapse is a reasonable 
interpretation that is consistent with Clean Air Act section 
176(c)(2)(C), since no federal approvals or funding commitments could 
be made for new project phases during a lapse. The court did not 
explicitly rule on the issue of how previously authorized right-of-way 
(ROW) acquisition, final design, or construction projects are affected 
during a lapse, but its decision leads EPA to the conclusion that a 
project phase that has previously received all federal approvals and 
funding commitments can be implemented during a conformity lapse.
    Therefore, today's proposal provides consistency in implementing 
all federal authorizations, as described in DOT's Federal Register 
notice for its January 2, 2002, guidance. The proposal consistently 
applies the principle that to ``fund'' a project actually means the 
point at which DOT commits to funding a particular project phase (e.g., 
ROW acquisition).
    This interpretation differs from what was outlined in DOT's June 
18, 1999, guidance, which asserted that when the Clean Air Act states 
that DOT cannot ``fund'' a project unless it conforms, ``fund'' 
actually meant only the point at which DOT committed to fund a project 
for final construction. As a result, only projects that had received 
funding commitments for final construction prior to a conformity lapse 
could proceed during a lapse. However, under the 1999 guidance, 
reimbursements for previously authorized ROW acquisition and final 
design activities could not proceed during a lapse, resulting in the 
federal government suspending its previously authorized commitments to 
these activities. As explained in DOT's January 2, 2002, revised 
guidance, EPA and DOT now believe that suspending such authorized 
commitments is not required by the Clean Air Act as interpreted in the 
court's decision, and therefore, this proposal does not incorporate the 
superseded June 1999 guidance.

C. What Is the Practical Impact of the Proposal?

    This proposal would only affect those areas that are unable to meet 
a conformity deadline and as a result enter into a conformity lapse. 
Although even short-term conformity lapses can affect transportation 
planning and project development processes, EPA anticipates that this 
proposal would primarily affect areas that are in a conformity lapse 
for a significant period of time. In contrast, this proposal would have 
no impact in areas where a lapse is short or in lapsed areas that have 
few transportation projects if no new FHWA/FTA non-exempt projects are 
pending in these cases.
    When an area has a conformity lapse, no new FHWA/FTA approvals or 
funding commitments for subsequent or new project phases (i.e., NEPA, 
final design, ROW acquisition, or construction) could be made. The only 
projects that can receive further FHWA/FTA approvals or funding during 
a plan and TIP conformity lapse are: (1) Projects exempt from the 
conformity process; and (2) transportation control measures (TCMs) that 
are specifically included in an approved state implementation plan 
(SIP). Exempt projects are FHWA or FTA projects that are listed in 
Sec.  93.126, Sec.  93.127, or Sec.  93.128 of the conformity rule. A 
conformity lapse ends when DOT makes a new transportation plan and TIP 
conformity determination.
    For FHWA-funded non-exempt projects, project phases (i.e., final 
design, ROW 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-funded non-exempt projects, the largest projects are 
handled with a full funding grant agreement (FFGA). If an FFGA was 
executed prior to a conformity lapse, the project can continue to 
utilize all federal grant funds during the lapse. If the FFGA was not 
completed by the date of the lapse, the project sponsor may only 
complete the current phase of project development (e.g., final design 
or land acquisition). Transit projects not handled with FFGAs may 
proceed during a lapse if FTA approved a grant for construction or 
vehicle acquisition prior to the lapse. If a construction grant was not 
approved before the lapse, the project sponsor may only complete the 
current phase of project development.
    Subsequent phases of a project for which FHWA or FTA has not taken 
an approval action or awarded a funding commitment may not proceed in 
the absence of a conforming plan and TIP. For federal 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 has 
already received full approval or authorization for funding before the 
lapse.
    Highway projects using design-build contracting can proceed with 
all project phases that were included in the design-build contract if 
FHWA authorized the contract and determined conformity before the lapse 
(23 CFR 635.309). Similarly, transit projects using design-build 
contracting can proceed with design and construction if a grant for 
design and construction was made by FTA prior to the lapse.
    Highway projects that require federal approval but no federal 
funding can proceed during a lapse if all necessary approvals occurred 
before the lapse. For example, consider a proposed regionally 
significant state toll road that connects to a federal interstate 
highway. The proposed road has received a conformity determination, 
federal NEPA approval, FHWA approval of the new interstate access 
point, and the project does not require FHWA approvals or funding 
commitments for subsequent project phases. In this case where no 
further FHWA actions are required, the project could proceed to 
construction during a conformity lapse, as long as no additional 
approvals by recipients of federal funds are needed. As always, the 
project would continue to be considered in the regional emissions 
analysis for the nonattainment or maintenance area. See Section IV. 
``Non-Federal Projects'' of today's proposal for more information on 
how non-federal project approvals are affected during a conformity 
lapse.

[[Page 38979]]

    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 a lapse, since such activities are 
exempt according to 40 CFR 93.126. However, FHWA or FTA cannot approve 
a categorical exclusion (CE), finding of no significant impact (FONSI), 
or a record of decision (ROD) for a non-exempt project during a 
conformity lapse. The NEPA process for new projects can be completed 
only for exempt projects and TCMs in an approved SIP during a 
conformity lapse.
    When an area is facing a lapse within six months, FHWA, FTA, and 
EPA will meet and jointly evaluate the potential consequences of the 
lapse and assess any concerns. FHWA, FTA, and EPA established 
consultation procedures to be used prior to a lapse in the April 19, 
2000, National Memorandum of Understanding (MOU). The MOU can be found 
on EPA's conformity website as listed in section I.B.2. of this notice. 
As described in the MOU, the FHWA, FTA, and EPA will meet at least 90 
days before a lapse to determine which projects could receive approvals 
or funding commitments before the lapse, which projects could 
potentially be delayed, and which actions would be necessary to correct 
the lapse.

IV. Using Motor Vehicle Emissions Budgets From Submitted SIPs for 
Transportation Conformity Determinations

A. Background

    Control strategy SIPs and maintenance plans in ozone, CO, PM-10, 
and NO2 areas create motor vehicle emission budgets for criteria 
pollutants and/or their precursors. Control strategy SIPs include 
reasonable further progress SIPs and attainment demonstrations. The 
budget is the portion of the total allowable emissions that is 
allocated to highway and transit vehicle use and emissions (40 CFR 
93.101). In a conformity determination, the budget serves as a ceiling 
on emissions from an area's planned transportation system.
    If an area does not have a budget that applies to a particular 
pollutant and standard it uses one or two of the emission reduction 
tests, depending on its classification (see 40 CFR 93.119). Prior to 
the 1997 conformity rule, if an area did not have a budget from an 
approved SIP to use for conformity, it had to use the emission 
reduction test(s). In 1995 and 1996, we consulted with conformity 
implementers and determined that a budget in a submitted SIP is a more 
relevant basis for determining conformity than the ``build/no-build'' 
test, one of the emission reduction tests. (See 62 FR 43781--4 for this 
discussion.) In response to this input, we changed the rule in 1997 to 
allow the budget test to be used when an area had a submitted, but not 
yet approved, SIP. This change eliminated the use of the emission 
reduction test(s) sooner for many areas, since they could use the 
budget for conformity before the SIP is approved. Under the 1997 rule, 
if EPA had not yet made an adequacy finding within 45 days of receiving 
a SIP, the SIP's budgets automatically applied for conformity. The 1997 
conformity rule also included provisions for EPA to review a budget(s) 
from a submitted SIP for adequacy.

B. What Are We Proposing?

    Today's proposal would continue to allow budgets to be used before 
the SIP is approved, but would modify several provisions under 40 CFR 
93.109 and 93.118, which are the sections of the conformity rule that 
address the use of SIP budgets for conformity purposes.
    First, the proposal would eliminate those provisions in Sec. Sec.  
93.109 and 93.118(e) that require areas to use a budget from a 
submitted SIP in 45 days if EPA has not yet made an adequacy finding. 
Instead, we are proposing that before a budget from a submitted SIP can 
be used for conformity, EPA must find it adequate using the criteria in 
Sec.  93.118(e)(4). The budget could not be used until the effective 
date of the Federal Register notice that announces that EPA has found 
the budget adequate, which we propose would be 15 days from the date of 
notice publication.
    Second, today's proposal would incorporate into Sec.  93.118 of the 
conformity rule the basic framework of the adequacy process described 
in EPA's May 14, 1999, guidance. A description of the adequacy process 
and the SIPs that are affected are found in section III.D and sections 
III.F. and G. of this preamble, respectively.
    EPA is also adding a minor clarification to a sentence in Sec.  
93.118(e)(1). In paragraph (e), the rule explains that a submitted SIP 
cannot override an approved SIP until the submitted SIP is approved. 
Today's change more fully describes this point: Budgets from a 
submitted SIP cannot be used for conformity if an area already has an 
approved SIP that addresses the same pollutant and Clean Air Act 
requirement (e.g., rate-of-progress or attainment) and has budgets 
established for the same year. However, budgets from a submitted SIP 
are used for conformity (once they are adequate) if the submitted SIP's 
budgets address either a different Clean Air Act requirement or are for 
a different year than budgets in an approved SIP, i.e., the budgets are 
from an ``initial SIP submission.'' Section III.F. includes further 
explanation. Discussion of initial SIP submissions can also be found at 
66 FR 50956--50957, the preamble of the proposed rule titled, 
``Transportation Conformity Rule Amendments: Minor Revision of 18-Month 
Requirement for Initial SIP Submissions and Addition of Grace Period 
for Newly Designated Nonattainment Areas.''
    Today's proposed changes to these sections are consistent with 
procedures already in place as a result of EPA's May 14, 1999, guidance 
issued to implement the court's decision. The guidance notified 
stakeholders that budgets in submitted SIPs could be used for 
conformity only after EPA has found them adequate. The guidance also 
outlined a process for determining adequacy of budgets that includes an 
opportunity for public comment. Today's proposal is consistent with 
that guidance. Therefore, under this proposed rule existing adequacy 
procedures would remain the same as they have been for the past several 
years.
    We are not proposing any changes to the adequacy criteria in 
today's proposal; the existing criteria are being retained as described 
by the 1997 rule. The adequacy criteria were not affected by the court 
decision. These criteria include consideration of the technical details 
of the SIP, such as whether the budget is consistent with the SIP's 
purpose and the area's emissions inventory for all sources, and whether 
a clear relationship among the budget, control measures, and emissions 
inventory is shown. The adequacy criteria also include procedural 
criteria such as whether the SIP has been endorsed by the State 
governor or designee, whether the SIP was subject to a public hearing, 
and whether interagency consultation has occurred.
    In addition to the adequacy criteria, the rule continues to provide 
that reliance on a submitted budget for determining conformity is 
deemed to be a statement by the MPO and DOT that they are not aware of 
any information that would indicate that emissions consistent with such 
a budget would cause or contribute to any new violation, increase the 
frequency or severity of an existing violation, or delay timely 
attainment of the relevant standards (Sec.  93.118(e)(6)). This 
provision provides another important check that helps to ensure that 
plans

[[Page 38980]]

and TIPs that conform to a submitted budget are consistent with the 
Clean Air Act requirements, and reinforces EPA's position which has 
been endorsed by a court that using an adequate budget for conformity 
prior to full approval of a SIP is consistent with the Clean Air Act. 
See 1000 Friends of Maryland v. Carol Browner, et al., 265 F.3d 216 
(4th Cir. 2001).
    Though today's proposal amends the rule language in Sec.  
93.118(e)(3) to remove the reference that a budget must be used after 
45 days if EPA has not made a finding, the main point of Sec.  
93.118(e)(3) is retained. That is, a conformity determination based on 
budgets that were found adequate remains valid even if EPA later, upon 
further analysis, finds the budgets inadequate. The fact that new 
information subsequently became available that changed the finding of 
adequacy for the future does not affect the validity of a prior 
conformity determination; a subsequent conformity determination would 
have to take the new information into account in that only new, 
adequate budgets could be used.

C. Why Are We Proposing These Changes?

    In its ruling, the court remanded 40 CFR 93.118(e)(1) to EPA for 
further rulemaking consistent with the opinion. This section of the 
conformity rule, among other things, had allowed submitted budgets to 
be used in conformity determinations after 45 days even if EPA had not 
made an adequacy finding on the submitted budgets. However, the court 
stated that a budget could only be used for conformity purposes if EPA 
had found it adequate.
    The court stated specifically that ``where EPA fails to determine 
the adequacy of motor vehicle emissions budgets in a SIP revision 
within 45 days of submission, * * * there is no reason to believe that 
transportation plans and programs conforming to the submitted budgets 
``will not--(i) cause or contribute to any new violation of any 
standard in any area; (ii) increase the frequency or severity of any 
existing violation of any standard in any area; or (iii) delay timely 
attainment of any standard * * *' 42 U.S.C. 7506(c)(1)(B).'' Therefore, 
the court remanded section 93.118(e)(1) to EPA so we could harmonize it 
with these Clean Air Act requirements.
    In response to the court decision, EPA established the current 
process for determining the adequacy of submitted SIPs in its May 14, 
1999, guidance. This guidance has been fully operational since it was 
issued and serves as the basis for this proposal. Under the current 
guidance and proposed rule (Sec.  93.118(e)(1)), budgets from submitted 
SIPs cannot be used in a conformity determination until EPA has found 
them adequate.
    We believe that the court's direction on the use of submitted 
budgets was strictly confined to a need to make an affirmative finding 
on the adequacy of a submitted SIP's budgets before they can be used 
for conformity purposes. The court remanded only the aspect of EPA's 
regulations that allows the use of a budget from a submitted SIP which 
EPA has not yet found adequate. The court did not remand EPA's 
regulations at 40 CFR 93.118(e)(4) establishing criteria for finding a 
budget adequate, 93.118(e)(6) requiring additional findings by Federal 
agencies and MPOs where a conformity determination is made using a 
budget from a submitted SIP, or any other parts of Sec.  93.118(e).
    Therefore, EPA believes that conformity determinations consistent 
with the proposed provisions and the adequacy process are consistent 
with the Act's requirements in 42 U.S.C. 7506(c)(1)(B) and the court's 
opinion. Further, as noted above, a second court of appeals recently 
concluded that showing conformity to submitted SIPs in these 
circumstances was not in violation of the Clean Air Act (1000 Friends 
of Maryland v. Browner, supra). EPA continues to believe the adequacy 
criteria in the conformity rule provide a sound basis for preliminarily 
reviewing submitted motor vehicle emissions budgets for conformity 
purposes prior to EPA's full approval action.
    EPA's adequacy review of budgets from submitted SIPs is separate 
from EPA's completeness review for purposes of SIP processing, and EPA 
uses different criteria for each of these reviews. Similarly, EPA's SIP 
approval process requires a more detailed examination of the SIP's 
control measures and technical analyses than the conformity adequacy 
process. Although the adequacy criteria allow EPA to review submitted 
budgets for conformity purposes, EPA recognizes that other elements 
must also be in the SIP for it ultimately to be approved. EPA's 
adequacy review should not be used to prejudge EPA's approval or 
disapproval of the SIP, since additional information may be submitted 
and more extensive review may change some conclusions. As we have 
stated previously (62 FR 43782), EPA cannot fully ensure that a 
submitted SIP is consistent with reasonable further progress, 
attainment or maintenance until EPA has completed its formal review 
process and the SIP has been approved or disapproved through notice-
and-comment rulemaking. Therefore, a budget that is found adequate in 
our adequacy review could later be disapproved based on further 
analysis when reviewed with the entire SIP submission.

D. EPA's Adequacy Process

1. What Is the General Process EPA Would Use To Examine Adequacy of 
Budgets in a SIP?
    Today's proposal is based on EPA's existing adequacy process 
described in the May 14, 1999, guidance, and consists of three basic 
steps: Public notification of SIP submission, a public comment period, 
and EPA's adequacy finding. These three steps are described below. EPA 
generally intends to review the adequacy of a newly submitted budget 
through this process within 90 days of EPA's receipt of a full SIP 
submission, however the adequacy review could take longer particularly 
when EPA receives significant public comments.
    Notification of SIP submissions: After a State officially submits a 
control strategy SIP or maintenance plan to EPA, we would notify the 
public by posting a notice on EPA's adequacy Web site and would attempt 
to do so within 10 days of submission. EPA's adequacy Web site is the 
central location for adequacy information for the entire U.S. 
Currently, the Web site is found at http://www.epa.gov/otaq/traq/traqconf/adequacy.htm. We would consider a SIP submission to be 
formally submitted on the date that the EPA regional office receives it 
in full. If a member of the public would like to be notified when we 
receive a relevant SIP submission for a particular State or area, he or 
she should contact the EPA regional employee listed on the Web site for 
that particular State. EPA's Web site provides EPA regional contact 
information so that interested parties can arrange or discuss 
notification processes. For example, EPA could use postcards, letters, 
email or phone calls to notify requesters, as agreed on by the 
interested party and EPA. The adequacy Web site also includes 
information on how to obtain a copy of a SIP submission under adequacy 
review.
    Public comment: A 30-day public comment period would start 
immediately upon the posting of the notice on the EPA adequacy Web site 
in either of the following cases: (1) If the State has made the entire 
SIP submission electronically available to the public via a Web site, 
electronic bulletin board, etc.; or (2) if no one has requested copies 
of the SIP within 15 days after the date of EPA posting

[[Page 38981]]

notification. If the SIP submission is available via the internet 
(electronically), EPA would include a link to the State Web site. In 
the case where the SIP is not available via the internet or is only 
available in part, if someone requests a paper copy and EPA receives 
the request within the first 15 days, the 30-day public comment period 
would restart on the date that EPA mails the requested copy. EPA is not 
committing to make SIP submissions electronically available on our 
adequacy Web site. Our Web site will state when the public comment 
period begins and ends, and to whom to send comments. If someone 
requests a copy of the SIP, the Web site would be updated to reflect 
any extension of the public comment period.
    EPA's adequacy determination: After a thorough review of all public 
comments received and evaluation of whether the adequacy criteria have 
been met, the appropriate EPA regional office would conclude that the 
submitted SIP's budgets are adequate or inadequate and send a letter 
indicating EPA's conclusions to the State or local air agency and other 
relevant agencies such as the MPO and State DOT. The EPA regional 
office would also mail or email a copy of the letter and response to 
comments to others who request it.
    The EPA regional office would also subsequently announce the 
adequacy determination in the Federal Register. If EPA finds a budget 
adequate, it can be used for conformity on the effective date of the 
Federal Register notice, which would be 15 days after it is published. 
We would post EPA's adequacy letter, our response to any comments, and 
the Federal Register notice on the EPA adequacy Web site. Adequate 
budgets must be used in all future conformity determinations after the 
effective date of an adequacy finding; budgets cannot be used for 
conformity once EPA finds them inadequate.
2. Will EPA's Adequacy Finding Always Be Announced in the Federal 
Register?
    Yes, EPA will always use the Federal Register to announce that 
budgets are adequate or inadequate. However, in cases where EPA is 
finding budgets adequate, we may use the proposed or final rulemaking 
notice for a control strategy or maintenance plan to announce our 
adequacy determination, instead of first sending a separate letter to 
the relevant agencies and following it with a Federal Register notice.
    For example, if EPA is about to propose or finalize a rulemaking 
action on a control strategy or maintenance plan at the point when we 
are ready to announce our adequacy finding on this SIP, EPA could 
announce its adequacy determination as part of the proposed or final 
rulemaking notice. In this case, EPA would not send a letter to the 
State or other agencies or publish a separate adequacy announcement in 
the Federal Register. Instead, EPA would announce our adequacy finding 
in the Federal Register through a proposed or final rulemaking for that 
same SIP. We would also update the adequacy Web site to reflect this 
finding.
    EPA could also make an adequacy finding via a direct final approval 
of a SIP. When EPA promulgates a direct final approval of a SIP, a 
proposed approval and a direct final approval are published in the 
Federal Register on the same date. The public has at least 30 days to 
comment on EPA's action, and if EPA receives no adverse comments and no 
other information or analysis changes EPA's position in that time 
period, the approval becomes final 60 days after publication according 
to the date indicated in the Federal Register notice. However, if 
adverse comments are received or EPA's position changes as a result of 
further information or analysis, the direct final approval is withdrawn 
prior to its effective date. EPA would then consider the submitted 
comments and address them in a final action just as we would for any 
proposal.
    In cases where EPA would use a direct final rulemaking to make an 
adequacy finding, the adequacy process would be substantively the same 
as that which we have outlined in section III.D.1. EPA would indicate 
that we are using the direct final rulemaking to announce our adequacy 
finding in the Federal Register notices, and would also announce the 
beginning of the public comment period on the adequacy Web site. The 
public would have 30 days to comment on adequacy as well as on the 
approvability of the SIP. If EPA received adverse comments, we would 
withdraw the direct final rule and would address these comments in a 
later final action on the SIP. We would also use the adequacy Web site 
to inform the public when we have found the budgets adequate or if we 
received comments that resulted in withdrawal of our direct final 
approval.
    When EPA employs a direct final rule that receives no adverse 
comments, the budgets are found adequate and the SIP is approved on the 
date indicated in the direct final Federal Register notices. That is, 
the budgets in a SIP approved via a direct final approval can only be 
used on or after the effective date of the direct final rule. This is 
in contrast to the ``typical'' proposal and final rulemaking process, 
where approved budgets can be used for conformity immediately upon 
publication of the final rule. Direct final rules typically include a 
30-day comment period followed by an additional 30-day period for EPA 
to consider any comments received and withdraw the rule if necessary 
before it takes effect. Thus, budgets in a direct final rule can not be 
used upon publication of the final action but may be used only after 
the final rule becomes effective, because, in essence, EPA has not 
taken the final action to approve these budgets until the effective 
date.
3. Could EPA Parallel Process Its Adequacy Review?
    Yes, EPA could parallel process the adequacy review if requested to 
do so by a State. Under parallel processing, a State would submit its 
proposed SIP to EPA, and the State and EPA would then request public 
comment on the proposed SIP and the adequacy of the budgets included in 
the SIP at the same time. If no significant adverse comments are 
received at either the State or Federal levels, EPA could then make an 
adequacy finding as soon as the State formally adopts the SIP and 
submits it to EPA, as long as no substantive changes to the SIP have 
occurred.
    If there are any adverse comments sent either to the State or to 
EPA, EPA would consider them in our adequacy decision, as described in 
Sec.  93.118(e)(5) of the rule, and today's proposed Sec.  93.118(f). 
Section 93.118(e)(5) states that EPA will review the State's 
compilation of public comments and response to comments as part of its 
adequacy decision. Today's proposed Sec.  93.118(f) includes a 
provision for the public to comment directly to EPA on the adequacy of 
a budget.
    In cases where we parallel process the adequacy of a SIP, we would 
post a notice on the adequacy website that we are starting the adequacy 
review process and taking comment on the adequacy of a budget or 
budgets from a proposed SIP that a State is preparing to take to public 
hearing. The website would include information on how to obtain a copy 
of a SIP under adequacy review. Although the State would not have 
formally submitted the SIP for our approval, we would begin to evaluate 
the budgets in the proposed SIP for their adequacy. If the State adopts 
and formally submits that SIP to us for approval and there have been no 
changes that would affect the adequacy of the budgets, we could 
complete the adequacy process quickly because we would have already 
finished the public review portion of the process. However, if the 
formal submission has changed significantly from the proposed

[[Page 38982]]

SIP in a way that affects the adequacy of a budget, the adequacy review 
process would start over: EPA would announce that we have a submitted 
SIP under adequacy review and reopen the comment period through 
notification on the adequacy website.
4. Can EPA Change an Adequacy Finding?
    Yes, EPA can change an adequacy finding from adequate to inadequate 
or from inadequate to adequate. EPA would do so for a specific reason 
such as receiving new information that affects our previous adequacy 
finding. For example, EPA might change a finding if a State submits 
more information after we've found a budget in a SIP submission to be 
inadequate. If the State submits additional materials to clarify or 
support the adequacy of the budget, we will treat this additional 
information as a supplement to the SIP submission. In this situation, 
we would post a notice that we have received new information on the 
adequacy website and begin a new 30-day public comment period. After 
reviewing any comments received, we would make a new finding, as 
appropriate.
    In the case where we find the budgets in a submitted SIP adequate 
but later discover based on additional information or further review 
that they do not meet the criteria for adequacy, we could change our 
finding to inadequate. In these cases where EPA reverses its finding of 
adequate to inadequate, EPA is proposing for the reasons explained 
below to make our subsequent inadequacy finding apply immediately upon 
EPA's written notification to the State and other relevant agencies, 
such as the MPO and State DOT. In EPA's letter to the State we would 
indicate that the finding of inadequacy applies as of the date of our 
letter and we would explain why our finding has changed. We would also 
begin another 30-day comment period to allow the public to consider the 
new information that has caused EPA to reverse its finding to 
inadequate. If, after consideration of any comments received, EPA still 
believes that the submitted SIP is inadequate we would issue a second 
Federal Register notice and update the adequacy website as appropriate.
    EPA is seeking comment on whether the public should be provided an 
opportunity to comment on any new information before EPA can reverse an 
adequacy determination to a finding of inadequacy, or after. In cases 
where we change a finding from adequate to inadequate, we do not 
believe that it is in the best interest of public health to delay our 
inadequacy finding until after the public comment period has ended. 
Rather, we believe that having our inadequacy finding apply immediately 
is necessary to ensure that no further conformity determinations are 
made using budgets that may not be protective of the air quality 
standards. We should note, however, that if conformity of a 
transportation plan or TIP had already been determined by DOT using a 
budget during the time that it was adequate, the conformity 
determination remains valid as provided by Sec.  93.118(e)(3) of the 
current rule.
    Finally, EPA notes that in certain circumstances it could be so 
obvious that a budget has become inadequate that it would be 
unnecessary to provide for the subsequent public comment at all. For 
instance, if a state has submitted a new SIP indicating that the prior 
SIP submission no longer provided for attainment, it would be clear 
that the prior submission is inadequate. Under such circumstances, EPA 
could proceed on a case by case basis to make a final inadequacy 
determination explaining these facts and publish a Federal Register 
notice of that determination.

E. Why Is EPA Using the Website Instead of the Federal Register To 
Notify the Public in the Adequacy Process?

    Today's proposal would codify our adequacy process that has been in 
effect since May 14, 1999, when we published guidance in response to 
the court decision on this matter. In that guidance, one of the key 
components of our process for reviewing the adequacy of a submitted SIP 
budget is to notify the public when EPA regional offices receive a SIP, 
and provide the public with an opportunity to comment on the submitted 
SIP's budgets. In the guidance and in today's proposal we rely on our 
website, rather than the Federal Register, as the primary means for 
requesting public comment and updating the public on the status of our 
adequacy review of submitted SIP budgets.
    EPA previously concluded that the notification and comment 
procedures of the Administrative Procedures Act (APA) do not apply to 
the adequacy review process because adequacy determinations are carried 
out on an informal case-by-case basis rather than through 
rulemaking.\5\ The March 1999 court decision did not address this 
aspect of the adequacy process. Therefore, EPA is not reopening this 
legal conclusion in today's proposal. However, we believe that 
providing some opportunity for public involvement adds value to our 
adequacy review. Specifically, we believe public comment can assist us 
in making more informed decisions regarding submitted budgets and their 
ability to ensure that new transportation activities will not cause or 
contribute to new violations, worsen existing violations, or delay 
timely attainment of the national ambient air quality standards. Our 
existing conformity regulations, at Sec.  93.118(e)(5) of the current 
rule, already require us to review and consider all comments received 
by a State during its development of the SIP. The adequacy process 
provides additional opportunity for comment directly to EPA through the 
web process that focuses specifically on the question of whether the 
SIP submission meets our adequacy criteria.
---------------------------------------------------------------------------

    \5\ August 15, 1997, 62 FR 43782-43783.
---------------------------------------------------------------------------

    The website gives EPA the ability to notify the public and solicit 
comment without undue delay. The intent of the adequacy process is to 
allow areas to use a budget from a SIP even before it is approved. 
Since an emissions budget is a more appropriate measure for achieving 
the air quality standards, we believe using it for a conformity 
determination is preferable to using the emission reduction test(s). 
Using the website allows EPA to meet the dual goals of offering the 
opportunity for public comment and completing the adequacy review in a 
timely way.
    We are proposing to publish notice of our finding of adequacy or 
inadequacy in the Federal Register, as well as on the adequacy Web 
site, so that we can be sure the public is fully informed of our 
finding. We are also proposing to make an adequacy finding effective 15 
days after it is announced in the Federal Register so that the public 
would be aware that a SIP budget has been found adequate before it is 
used in a conformity determination.

F. What Typical SIP Submissions Will We Review for Adequacy?

    In general, EPA adequacy reviews are conducted for SIPs that 
contain motor vehicle emissions budgets, which include control strategy 
SIPs (e.g., reasonable further progress SIPs, attainment 
demonstrations) and maintenance plans. If there is no approved SIP that 
contains a budget for the same Clean Air Act requirement, pollutant, 
and year, a budget from a newly submitted SIP can be used for 
conformity as of the effective date of EPA's adequacy finding. 
Therefore, EPA will review the adequacy of a motor vehicle emissions 
budget from an initial submission of a control strategy SIP or 
maintenance plan. In addition, EPA will review the adequacy of a budget 
from a

[[Page 38983]]

control strategy SIP or maintenance plan that is submitted to revise a 
previously submitted, but not yet approved, SIP. The next few examples 
illustrate these principles.
    First, an area submits a SIP for a different year and Clean Air Act 
requirement. The area has an approved attainment demonstration that 
contains budgets for 2005 and subsequently submits a maintenance plan 
for the same pollutant that contains budgets for 2015. Though the area 
already has an approved budget for the year 2005, the maintenance plan 
addresses a different Clean Air Act requirement and contains budgets 
for a different year. Therefore in this case, EPA would review the 2015 
budgets in the submitted maintenance plan for adequacy.
    In a second example, an area submits new budgets for the same year, 
but for a different Clean Air Act requirement. The area has an approved 
rate-of-progress (ROP) SIP with budgets for the years 1999, 2002, and 
2005 and submits an attainment demonstration with budgets for the year 
2005. EPA would review the 2005 attainment budgets for adequacy, 
because although ROP budgets already exist for the year 2005, the 
submitted attainment budgets address a different Clean Air Act 
requirement than the approved ROP budgets. Once the attainment budgets 
are adequate, both the 2005 ROP budgets and the 2005 attainment budgets 
must be met for the 2005 analysis year. For analysis years beyond the 
2005 attainment year, however, only conformity to the 2005 attainment 
budgets is required (i.e., conformity to the 2005 ROP budgets is not 
required in years after the attainment year, once attainment budgets 
are established).
    In a third example, an area submits a revision to a previously 
submitted SIP, prior to EPA's approval of the first submission. The 
area submits an attainment demonstration and we find it adequate. 
Before it is approved however, the State decides that a revision is 
necessary and submits a revised attainment demonstration to EPA. 
Because the first attainment demonstration had not been approved, EPA 
would review the adequacy of the budget from the revised attainment 
demonstration. If the revised budget is then found to be adequate, the 
revised budget would replace the previous adequate budget for use in 
future conformity determinations on the effective date of the new 
adequacy finding.
    One final example concerns an area with ``outyear'' budgets. EPA 
allows SIPs to establish budgets for conformity purposes for years 
beyond the timeframe that the SIP normally addresses. In this example, 
an area has an approved attainment demonstration with budgets for its 
2005 attainment year. The approved attainment SIP also contains outyear 
budgets for the year 2015. Subsequently, the area submits a maintenance 
plan with budgets for the year 2015. Since the maintenance plan 
addresses a different Clean Air Act provision than the attainment 
demonstration, EPA would review the 2015 budgets from the submitted 
maintenance plan for adequacy even though the area already has budgets 
for the year 2015 in its attainment SIP. If EPA finds the maintenance 
budgets adequate, then both the 2015 outyear budgets and the 2015 
maintenance year budgets must be met for conformity. That is to say, 
the 2015 outyear budgets from the attainment demonstration would 
continue to exist and apply for conformity in years 2015 and beyond, 
unless the State revises the attainment demonstration SIP to remove 
them. The 2015 outyear budgets would continue to apply for conformity 
until EPA approved the SIP revision proposing to remove the outyear 
budgets.
    EPA generally will not review the adequacy of a budget from a 
submitted SIP that revises an existing approved SIP with budgets for 
the same year and Clean Air Act requirement, because as a matter of law 
a submitted SIP may not supersede an approved SIP for the same Clean 
Air Act requirement, year, and pollutant. A budget from such a 
submitted SIP revision would not apply for conformity until EPA 
actually approves the revision.
    Exceptions to this general rule are SIPs for which EPA specifically 
limits the duration of its approval of the motor vehicle emissions 
budgets until replacement budgets have been found adequate. One example 
where EPA limited the duration of our approval was the recently 
approved 1-hour ozone attainment demonstrations and maintenance plans 
that relied on interim MOBILE5-based estimates of Federal Tier 2 
standards (65 FR 6698). In the proposed approvals for these SIPs, EPA 
proposed that because States could not accurately analyze emissions 
from these standards with the MOBILE5 model, EPA would require States 
to revise these SIPs with MOBILE6. EPA also proposed that our approval 
of the MOBILE5-based budgets would be limited such that when the 
MOBILE5-based budgets are revised using MOBILE6, the MOBILE6 budgets 
could be used for conformity on the effective date of our adequacy 
finding. MOBILE6 provides a more accurate estimate of the emission 
benefits of the Tier 2 vehicle and fuel standards, and the revised 
budgets should be used as soon as they are adequate. Therefore, EPA 
will review the adequacy of the MOBILE6 budgets when these SIPs are 
submitted since they will become effective once they are found adequate 
under the terms of our limited approvals of the attainment 
demonstrations.\6\ A second example of where EPA has limited the 
duration of our approval is in the case of certain SIPs in the State of 
California. See 67 FR 69139 for further details on EPA's action that 
limits our approval of these specific SIPs and allows submitted budgets 
that have been found adequate to supersede previously approved budgets 
for conformity.
---------------------------------------------------------------------------

    \6\ For more information, see EPA's January 18, 2002, memorandum 
titled, ``Policy Guidance on the Use of MOBILE6 for SIP Development 
and Transportation Conformity,'' from John Seitz, Director, Office 
of Air Quality Planning and Standards, and Margo Tsirigotis Oge, 
Director, Office of Transportation and Air Quality, to EPA Regional 
Air Division Directors.
---------------------------------------------------------------------------

G. Does EPA Review Adequacy of SIPs That Do Not Establish Specific 
Budgets?

    In addition to SIPs that establish a specific motor vehicle 
emissions budget for a new year or Clean Air Act requirement, there are 
other situations when EPA will conduct an adequacy review. In these 
cases, we will use the same adequacy review process that we use for 
SIPs that include specific budgets.
    First, EPA will review the adequacy of limited maintenance plans. 
Usually, a maintenance plan contains budgets for the last year of the 
maintenance plan. If a maintenance plan does not explicitly identify 
budgets, then EPA has said that the emissions projections for the last 
year of the maintenance plan serve as the budgets (see the discussion 
in the preamble to the November 24, 1993, conformity rule at 58 FR 
62195). Limited maintenance plans, however, do not include budgets nor 
even future motor vehicle emissions projections that could be 
interpreted as budgets. Instead, a limited maintenance plan concludes 
that the area will continue to maintain regardless of the quantity of 
emissions from the on-road transportation sector; essentially, the 
budget is unlimited. For limited maintenance plan submissions, EPA's 
adequacy review will primarily focus on whether the area qualifies for 
the applicable limited maintenance policies for ozone, CO, and PM-10 
areas. In this case, a finding of adequacy means that the area does in 
fact meet the criteria for submitting a limited maintenance plan. If 
so, the area will be considered to automatically meet the budget test 
for future conformity

[[Page 38984]]

determinations because the budget is essentially unlimited. For more 
discussion of limited maintenance plans, please refer to 61 FR 36118 
(the preamble of the July 9, 1996, proposed conformity rule).
    Second, we will also review the adequacy of control strategy SIPs 
and maintenance plans that do not establish budgets because they claim 
that motor vehicle emissions are not a significant contributor to the 
area's air quality problems. Areas submitting these plans are required 
to demonstrate the insignificance of motor vehicle emissions based on a 
number of factors. In these areas, our adequacy review will focus on 
whether the SIP or maintenance plan demonstrates the claim of 
insignificance. In this case, a finding of adequacy means that EPA 
agrees that the motor vehicle emissions are insignificant. Additional 
discussion of SIPs that explicitly demonstrate motor vehicles to be an 
insignificant contributor can be found at 58 FR 62194 (November 24, 
1993, final rule) and 61 FR 36118 (July 9, 1996, proposed rule).
    In contrast, EPA will not review for adequacy a SIP that addresses 
only a localized hot-spot nonattainment problem (for example, in a CO 
area). These SIPs do not establish budgets and are not used as a basis 
for a conformity test for regional emissions. These SIPs only address 
localized emissions in areas where there is no regional air quality 
problem.

V. Non-Federal Projects

A. What Are Non-Federal Projects?

    Non-federal projects are projects that are funded or approved by a 
recipient of federal funds designated under title 23 U.S.C. or the 
Federal Transit Laws (49 U.S.C. Chapter 53) but that do not rely at all 
on any FHWA/FTA funding or approvals. A State DOT or public transit 
agency are examples of routine recipients of federal funds. The 
conformity rule only applies to non-federal projects that are 
considered regionally significant, in that these projects must be 
included in a conforming transportation plan and TIP and/or the 
regional emissions analysis supporting a conforming plan and TIP. 
Regionally significant, non-federal projects are not, however, subject 
to any of the requirements for project-level conformity, such as the 
requirements for hot-spot analysis found at Sec.  93.116 and Sec.  
93.123 of the conformity rule.
    We encourage areas to use the interagency consultation process to 
determine which entities are recipients of federal funds and whether a 
project is regionally significant. The terms ``recipient of funds 
designated under title 23 U.S.C. or the Federal Transit Laws'' and 
``regionally significant project'' are defined under Sec.  93.101 of 
the conformity rule.

B. What Are We Proposing?

    EPA is proposing to amend Sec.  93.121(a) of the 1997 conformity 
rule so that regionally significant non-federal projects can no longer 
advance during a conformity lapse unless they have received all 
necessary State and local approvals prior to the lapse. Under this 
proposal, recipients of federal funds designated under title 23 U.S.C 
or the Federal Transit Laws can not adopt or approve a regionally 
significant, non-federal project unless it is included in a currently 
conforming plan and TIP or in the regional emissions analysis 
supporting a currently conforming plan and TIP.
    By amending Sec.  93.121(a) as proposed, the conformity rule will 
again be consistent with the previous requirements of our 1993 rule. 
Today's proposal is also consistent with our May 14, 1999, guidance 
implementing the court decision, and does not affect the current, 
general implementation of non-federal projects.

C. Why Are We Proposing This Change?

    In its ruling, the court found Sec.  93.121(a)(1) of the 1997 
conformity rule, that allowed State or local approval of transportation 
projects in the absence of a currently conforming plan/TIP, to be in 
violation of section 176(c)(2)(C) of the Clean Air Act. In its ruling 
the court asserted that all non-exempt projects subject to the 
conformity rule, including regionally significant non-federal projects, 
must come from a conforming plan and TIP (or their supporting regional 
emissions analysis). However, the court also noted that once a non-
federal project receives all appropriate State or local approvals, it 
need not meet any further conformity requirements.

D. At What Point Is a Regionally Significant Non-Federal Project 
``Approved''?

    The definition of non-federal project ``approval'' is decided on an 
area-specific basis at the State and local level through the 
interagency consultation process, and should be formalized in the 
area's ``conformity SIP.'' Conformity SIPs are required by 40 CFR 
51.390, and include area-specific conformity procedures tailored to 
State and local agency needs and consistent with our federal 
requirements for conformity. Conformity SIPs do not contain motor 
vehicle emissions budgets. If EPA has not yet approved a conformity SIP 
for an area, the interagency consultation process should be used to 
determine the point of approval for non-federal projects.
    EPA discussed defining non-federal project ``approval'' as a 
national matter in the preamble to the November 24, 1993, 
transportation conformity rule: ``EPA believes that adoption/approval 
is never later than the execution of a contract for site preparation or 
construction. Adoption/approval will often be earlier, for example, 
when an elected or appointed commission or administrator takes a final 
action allowing or directing lower-level personnel to proceed'' (58 FR 
62205, November 24, 1993). Some examples of definitions used by areas 
to identify the point of final adoption/approval for a regionally 
significant highway or transit project include, but are not limited to, 
one of the following actions:
    (a) The final policy board action or resolution that is necessary 
for a regionally significant project to proceed;
    (b) Administrative permits issued under the authority of the 
agency, policy board, or commission for a regionally significant 
project;
    (c) The execution of a contract to construct, or any final action 
by an elected or appointed commission or administrator directing or 
authorizing the commencement of construction of a regionally 
significant project; or
    (d) Providing the grants, loans or similar financial support, 
necessary for the construction of a regionally significant project.
    EPA believes that it is appropriate to define the point at which 
project approval occurs through the interagency consultation process, 
because areas have varying State and local requirements for determining 
when projects are approved. Specific questions about how a particular 
area defines the point of adoption/approval for non-federal projects 
should be directed to the appropriate local or State air or 
transportation agency.
    Finally, as stated above, a regionally significant non-federal 
project must be included in a currently conforming transportation plan 
and TIP, or be included in the supporting regional emissions analysis 
for a conforming plan and TIP, to be approved.

VI. Conformity Consequences of SIP Disapprovals

A. What Are the Conformity Consequences of EPA Disapproving a Control 
Strategy SIP Without a Protective Finding?

    When EPA disapproves a control strategy SIP, we may issue a 
protective

[[Page 38985]]

finding for conformity purposes if the submitted SIP contains adopted 
control measures, or written commitments to adopt enforceable control 
measures, that fully satisfy the emission reduction requirements 
relevant to the statutory provision for which the SIP was submitted 
(see Sec.  93.101 of the conformity rule for the definition of the term 
``protective finding''). A control strategy SIP that is disapproved 
with a protective finding generally possesses deficiencies such as a 
failure to include all control measures in a fully adopted, enforceable 
form. Such SIPs are not fully acceptable for SIP purposes, but are 
sufficient for conformity purposes since the State has adopted or 
committed to all measures necessary to meet all applicable SIP 
requirements.
    In contrast, we will disapprove a submitted SIP without giving it a 
protective finding if it does not contain enough emission reduction 
measures, or commitments to these measures, to achieve its specific 
purpose of either demonstrating further progress or attainment.
    In situations where EPA disapproves a control strategy SIP with a 
protective finding, the submitted motor vehicle emissions budgets can 
still be used in future conformity determinations. Conversely, if the 
EPA disapproves a SIP without giving it a protective finding the 
budgets cannot be used for conformity upon the effective date of EPA's 
disapproval action.
    Control strategy SIPs include reasonable further progress SIPs and 
attainment demonstrations. The 1997 transportation conformity rule 
created a 120-day grace period following our disapproval of a control 
strategy SIP without a protective finding, after which conformity 
freezes. A conformity ``freeze'' means that only projects in the first 
three years of the transportation plan and TIP can proceed. No new 
plans, TIPs, or plan/TIP amendments can be found to conform during a 
conformity freeze. The transportation plan and TIP remain frozen until 
a new control strategy implementation plan fulfilling the same Clean 
Air Act requirement as that which EPA disapproved is submitted, and EPA 
finds the motor vehicle emissions budgets adequate for conformity. 
Failure to submit a new control strategy implementation plan within two 
years of the effective date of EPA's disapproval will result in the 
imposition of highway sanctions and a lapse of conformity. However, a 
conformity lapse could occur sooner, if during a freeze the 
transportation plan or TIP expires. We should also note that a 
conformity freeze does not result from EPA's disapproval of a 
maintenance plan, as the Clean Air Act does not require nonattainment 
areas that have successfully demonstrated achievement of a given air 
quality standard to submit this type of air quality plan unless they 
request redesignation to attainment; i.e., such submissions are 
discretionary. See the preamble to the 1997 conformity rule (62 FR 
43796-43797) for more information about SIP disapprovals, protective 
findings, and conformity freezes.

B. What Are We Proposing?

    We are proposing to change the point at which conformity 
consequences apply when EPA disapproves a control strategy SIP without 
a protective finding. Specifically, we are proposing to delete the 120-
day grace period from Sec.  93.120(a)(2) of the conformity rule, so 
that a conformity freeze would occur immediately upon the effective 
date of EPA's final disapproval.
    Today's proposal, however, retains the 1997 conformity rule's 
flexibility that aligned conformity lapses with Clean Air Act highway 
sanctions. Like the 1997 rule, conformity of the plan/TIP would lapse 
when highway sanctions are imposed (usually two years after the 
effective date of EPA's final disapproval) as a result of a control 
strategy SIP disapproval, or when the applicable update of the plan 
and/or TIP was required under the transportation planning regulations, 
whichever comes first. See sections II. ``Federal Projects'' and IV. 
``Non-federal Projects'' of this proposal for more details on what 
projects can advance during a conformity lapse.
    Finally, this proposal does not impact the 1997 conformity rule's 
provisions for SIP disapprovals with a protective finding. Conformity 
consequences of control strategy SIP disapprovals with a protective 
finding would not occur unless highway sanctions are imposed; i.e., 
conformity of an area's plan and TIP generally would not lapse until 
two years after the effective date of EPA's disapproval action with a 
protective finding.

C. Why Are We Proposing This Change?

    In its ruling, the court found Sec.  93.120(a)(2) of the 1997 
conformity rule to be in violation of the Clean Air Act, section 
176(c)(1), and remanded it to EPA for further rulemaking. Specifically, 
the court said that where EPA disapproves a SIP without a protective 
finding there is no basis to believe that conformity of transportation 
plans and TIPs to the submitted budgets in the disapproved SIP will not 
cause or contribute to new violations, increase the frequency or 
severity of existing violations, or delay timely attainment of the air 
quality standards.
    Under Sec.  93.120(a)(2) of the current rule, if EPA disapproved a 
submitted SIP or SIP revision without a protective finding, areas could 
have used the 120-day grace period to complete a conformity 
determination that was already in progress, and therefore experience 
minimal disruption to the transportation planning process. The court 
felt that this grace period was not authorized by the statute because 
it would allow conformity to be demonstrated to a SIP that was deemed 
not protective of the air quality standards.
    Therefore, after thorough consideration of the court's ruling, we 
are proposing to eliminate the 120-day grace period from the conformity 
rule; this change to the rule is consistent with our May 14, 1999, 
guidance implementing the court decision.

D. What Is the Practical Impact of This Change?

    EPA anticipates minimal practical impacts from this proposed rule 
change. Since promulgating the 1997 conformity rule amendments, EPA has 
disapproved control strategy SIPs without a protective finding in only 
three instances and has no reason to believe that the future number of 
SIP disapprovals will significantly increase. Therefore, we believe 
this proposed rule will impact very few areas as did the guidance.
    We also believe that the overall purpose of the 120-day grace 
period, that is, to minimize disruption to the transportation planning 
process, can still be achieved to an extent under this proposal. The 
notice-and-comment rulemaking process for disapproving SIPs provides 
transportation planners with advanced notice of when a SIP disapproval 
without a protective finding will occur. Prior to a conformity freeze, 
EPA proposes disapproval, provides for public comment, and then issues 
a final disapproval notice only after thorough consideration of any 
comments received has been completed. A proposed disapproval would 
address whether or not EPA plans to issue a protective finding for the 
SIP, so that transportation agencies would know well in advance if a 
conformity freeze is a possibility. This process generally provides 
sufficient notice for transportation agencies to prepare for the 
consequences of a disapproval without a protective finding by, for 
example, quickly completing any pending conformity determinations as 
appropriate.

[[Page 38986]]

    In addition, EPA has administrative discretion, where appropriate, 
to make disapprovals of control strategy SIPs effective 60-90 days 
after the publication of the disapproval in the Federal Register. There 
may be some situations where delaying the effective date for a short 
period of time beyond the usual 30 days is appropriate, for example, 
when transportation agencies are very close to completing a conformity 
determination that was well underway before EPA completed a SIP 
disapproval. Transportation plan and TIP updates and amendments must 
meet transportation planning and conformity requirements and undergo 
public review and comment; these processes typically require a 
significant amount of time. A relatively short delayed effective date 
could assist in finalizing the remaining administrative requirements 
for a determination that is nearing completion at the time of EPA's 
published notice for disapproval.
    Sufficient notice also occurs in the limited case where a 
conditional SIP approval converts to disapproval without a protective 
finding. Unlike other types of SIP actions, conditional approvals 
automatically convert to SIP disapprovals if the condition of EPA's 
approval is not met within a fixed period not to exceed one year. In 
these cases, a conformity freeze would begin immediately upon the 
effective date of EPA's Federal Register notice of the conversion of a 
conditional approval to a disapproval without a protective finding.
    Therefore, conditional approvals, by their very nature, inform 
transportation agencies well in advance that future conformity 
consequences could result if the conditions of the approval are not 
met. Because transportation agencies would be aware of potential 
conformity impacts generally at least one year before they could occur, 
EPA believes that there will be minimal practical impact of not 
providing a delayed effective date in these cases.

VII. Safety Margins

A. What Is a Safety Margin?

    A safety margin is the amount by which the total projected level of 
emissions from all sources identified in a SIP for a given pollutant 
are less than the total emissions that would, at a minimum, satisfy the 
applicable Clean Air Act requirements for reasonable further progress, 
attainment or maintenance. For example, if an area projects that it 
will emit a total of 300 tons per day (tpd) of carbon monoxide (CO) 
from all sources, but the SIP demonstrates that the area can emit up to 
350 tpd of CO and still attain the air quality standard, the area has a 
safety margin of 50 tpd. In this example, CO emissions are estimated 
from all sources, including: Large stationary sources, such as steel 
mills; area sources, such as wood-burning stoves; on-road mobile 
sources, such as cars and trucks; and off-road mobile sources, such as 
construction and farm equipment. This area could allocate, through a 
revision to its SIP, all or some portion of the 50 tpd safety margin to 
their motor vehicle emissions budget for future conformity 
determinations, if desired.

B. What Are We Proposing?

    We are proposing to delete Sec.  93.124(b) of the conformity rule, 
that provided a narrowly targeted flexibility to areas with SIPs that 
had been submitted prior to the original publication date of the 
initial November 24, 1993 conformity rule. Under that provision, if the 
approved SIP had included a safety margin, but did not specify how the 
safety margin was to be used, an area could submit a revision to the 
SIP and specifically allocate all or a portion of the safety margin to 
the SIP's motor vehicle emissions budget(s). The 1997 rule allowed this 
SIP revision to become effective for conformity purposes before the 
revision had been approved by EPA. EPA is not aware of any 
nonattainment or maintenance areas that are currently affected by the 
elimination of this flexibility.

C. Why Are We Proposing This Change?

    The court decision found that Sec.  93.124(b) violates the Clean 
Air Act because it allows a submitted but unapproved SIP revision to 
supersede an approved SIP. The court ruled that EPA must fully approve 
these safety margin allocations into the SIP before they can be used 
for conformity.

D. Can Safety Margins Still Be Allocated to Motor Vehicle Emissions 
Budgets for Use in Conformity Determinations?

    Yes. Although the court eliminated a narrowly targeted flexibility 
related to the use of safety margins in previously approved SIPs in 
Sec.  93.124(b), the majority of areas that have allocated safety 
margins to their emissions budgets after November 24, 1993, are not 
affected by the court's ruling. For most of these areas, either EPA has 
already approved their safety margin allocations or they had no 
previously approved SIP. In general, areas that do not have approved 
SIPs can use submitted safety margins in conformity determinations once 
EPA finds the submitted SIP (and safety margin) adequate. Areas with 
approved SIPs that want to reallocate their safety margin for 
conformity purposes can do so once EPA has approved a SIP revision that 
specifically allocates all or a portion of the safety margin to an 
emissions budget.

VIII. Streamlining the Frequency of Conformity Determinations

    In addition to those provisions directly affected by the U.S. Court 
of Appeals decision, EPA is also proposing several changes to other 
provisions of the conformity regulation in this rulemaking. One of 
these additional proposals would affect several provisions under 40 CFR 
93.104, the section of the rule that describes when conformity 
determinations must be made for transportation plans, TIPs, and 
projects. In the first conformity rule proposal made in January 1993, 
we stated, ``EPA believes conformity determinations should be made 
frequently enough to ensure that the conformity process is meaningful. 
At the same time, EPA believes it is important to limit the number of 
triggers for conformity determinations in order to preserve the 
stability of the transportation planning process'' (58 FR 3775). EPA 
continues to have these dual goals. Today we are proposing to eliminate 
some of the frequency requirements found in Sec.  93.104, and 
streamline others. EPA believes that our proposal would simplify the 
current conformity requirements without compromising the benefits of 
the conformity program.
    Under today's proposal EPA concludes that conformity determinations 
will continue to be required frequently enough to ensure that the 
process is meaningful and consistent with the Clean Air Act. EPA is not 
proposing to change the requirements to determine conformity of new or 
revised plans, TIPs, and projects before they can be adopted, and the 
requirement to determine conformity of transportation plans and TIPs at 
least every three years remains, as required by section 176(c) of the 
Clean Air Act. EPA proposes to eliminate only those frequency 
requirements which are not required by the Clean Air Act and which now 
we believe are either outdated or redundant with other requirements.

A. Eliminating the Requirement for Conformity of the TIP Within Six 
Months of the Transportation Plan

    First, we propose to eliminate Sec.  93.104(c)(4), which requires 
an MPO and DOT to determine conformity of the TIP within six months of 
the date that

[[Page 38987]]

DOT determined conformity of the transportation plan. We propose to 
remove the six-month conformity requirement for TIPs because we believe 
this requirement is not necessary for ensuring air quality goals given 
other existing transportation planning and conformity requirements, as 
described below. When we initially proposed this requirement, we 
anticipated that updating the TIP to match a revised plan would not 
otherwise occur. In the initial January 1993 transportation conformity 
proposal, we stated, ``EPA's proposal allows a reasonable interval of 
six months after a plan is amended or a new plan is adopted during 
which the TIP could be revised and a new conformity determination made 
by the MPO and DOT'' (58 FR 3775). Also, in the proposal to the 1997 
conformity rule, we stated that ``this requirement should be retained 
because of ISTEA's (and hence conformity's) expectation that the TIP 
will flow from, and be consistent with, the transportation plan'' (July 
9, 1996; 61 FR 36129).
    However, EPA now believes that Sec.  93.104(c)(4) is unnecessary 
given other requirements and actual experience in implementing 
conformity. The TIP must already be consistent with the plan according 
to 23 U.S.C. 134(h)(3)(C), so plans and TIPs should always include the 
same projects for years that are covered by both planning documents. 
This statutory provision is also found in DOT's metropolitan planning 
regulations at 23 CFR 450.324(f)(2). Because of this requirement, in 
practice areas typically revise and determine conformity of the plan 
and TIP at the same time. In addition, since the TIP is a subset of the 
plan, the regional emissions analysis for the plan includes all of the 
projects in the TIP. Therefore, the air quality impacts of the TIP are 
essentially assured when conformity of the plan is demonstrated.
    Furthermore, the current conformity rule contains other frequency 
requirements under Sec.  93.104 that ensure that new federally-funded 
or approved transportation activities are consistent with clean air 
goals before they are funded or approved. Such requirements include the 
requirement to determine conformity of new or revised plans, TIPs, and 
projects before they can be adopted, and the requirement to determine 
conformity of transportation plans and TIPs at least every three years. 
As a result of these existing transportation planning and conformity 
requirements, we believe that today's proposal to eliminate the 
specific provision that requires conformity of the TIP to be determined 
within six months of determining conformity of the plan would work to 
simplify the existing conformity rule without compromising its 
benefits.

B. Streamlining the 18-Month SIP Triggers for New Conformity 
Determinations

    EPA is also proposing to make several rule revisions to streamline 
Sec.  93.104(e), which requires new conformity determinations to be 
made within 18 months of certain SIP actions, or ``triggers.'' EPA 
believes that some of the current SIP triggers for conformity can be 
eliminated altogether, and some of them can be simplified to improve 
implementation of the conformity program without any adverse 
consequences in assuring that transportation activities conform to air 
quality plans.
    Specifically, we propose to eliminate Sec.  93.104(e)(1). This 
provision required all nonattainment and maintenance areas to determine 
conformity within 18 months of November 24, 1993, which was the date 
that EPA initially promulgated the conformity rule (58 FR 62188). At 
this point, this requirement is no longer relevant for any area and we 
propose to remove it from the rule for clarity.
    EPA is not proposing any changes to Sec.  93.104(e)(2), as this 
section was recently updated in a final rule published August 6, 2002 
(67 FR 50808). The August 2002 rule realigned the 18-month conformity 
requirement for initial SIP submissions by requiring a conformity 
determination within 18 months of the effective date of EPA's adequacy 
finding on the motor vehicle emissions budgets in an initial SIP 
submission.
    EPA proposes two changes to Sec.  93.104(e)(3), the requirement to 
determine conformity within 18 months of EPA's approval of a SIP that 
establishes or revises a motor vehicle emissions budget. First, we 
propose that this 18-month clock would begin on the effective date of 
EPA's approval of the SIP. This proposed clarification will resolve an 
ambiguity in the current rule as to whether this 18-month clock begins 
on the date that the Federal Register publishes the approval notice or 
the effective date of that notice. This proposed change would also make 
Sec.  93.104(e)(3) consistent with Sec.  93.104(e)(2), which requires 
that conformity be determined within 18 months of the effective date of 
EPA's adequacy finding. Likewise, this change would be consistent with 
our proposed revision to Sec.  93.120, which would require the 
consequences of a SIP disapproval to apply upon the effective date of 
EPA's disapproval. (See section V. ``Conformity Consequences of SIP 
Disapprovals'' for the discussion of EPA's proposed change to Sec.  
93.120.) Having all of these requirements apply as of the effective 
date of the relevant EPA action would provide consistency, avoid 
confusion and thus benefit planners in implementing these specific 
requirements.
    The second change we propose to Sec.  93.104(e)(3) is to require a 
conformity determination within 18 months of EPA's approval of a SIP 
that affects a budget only when a conformity determination has not 
already been made using the budgets from the newly-approved SIP. That 
is, if an area determined conformity using adequate budgets from a 
submitted SIP, and those budgets had not changed when EPA subsequently 
approved the submitted SIP, then the area would not have to redetermine 
conformity within 18 months of EPA's approval of the SIP. EPA believes 
that if the approved budgets have already been used in a conformity 
determination, there is no added environmental benefit in requiring 
another conformity determination to be made within 18 months of EPA's 
approval of a SIP that contains these same budgets. EPA notes that 
budgets are unchanged if they are for the same pollutant or precursor, 
the same quantity of emissions, and the same year.
    EPA also proposes to eliminate Sec.  93.104(e)(4), which requires a 
conformity determination to be made within 18 months of EPA's approval 
of a SIP that adds, deletes, or changes a TCM. EPA believes that this 
requirement is redundant with the requirements in Sec. Sec.  
93.104(e)(2) and (3), and therefore, is unnecessary. That is, if a SIP 
adds, deletes, or changes a TCM and that addition, deletion, or change 
affects a budget in a SIP, then a new conformity determination would be 
triggered by either an adequacy finding on the budget in the submitted 
SIP (if it is an initial SIP) under Sec.  93.104(e)(2), or EPA's 
approval of the SIP (if the budget has not already been used in a 
conformity determination) under Sec.  93.104(e)(3). If the addition, 
deletion, or change to a TCM did not affect any applicable budget, then 
EPA concludes that a new conformity determination would not be needed, 
since such a SIP revision would not result in any new air quality 
information (i.e., a new budget) necessary to include in the 
transportation planning and conformity processes.
    Finally, EPA proposes two changes to Sec.  93.104(e)(5), which 
requires a new conformity determination within 18 months of EPA's 
promulgation of a

[[Page 38988]]

federal implementation plan (FIP). First, we propose to start the clock 
for this requirement on the effective date of EPA's promulgation of a 
FIP, to be consistent with the start date of the other SIP triggers of 
conformity discussed above. Second, EPA proposes to delete the phrase 
``or adds, deletes, or changes TCMs,'' for the same reasons that we 
propose to delete Sec.  93.104(e)(4) as described above. Again, EPA 
believes that the purpose of this provision will be adequately served 
by the requirement to show conformity after EPA promulgation of a FIP 
containing new budgets, or alternatively, the provision would be 
unnecessary if no budget changes are made.

IX. Latest Planning Assumptions

A. What Are We Proposing?

    We are proposing to amend Sec.  93.110(a) to change the point in 
the conformity process when the latest planning assumptions are 
determined. The proposal would allow conformity determinations to be 
based on the latest planning assumptions that are available at the time 
the conformity analysis begins. The current conformity rule requires 
that the determination rely on the latest assumptions available at the 
time of DOT's conformity determination for a transportation plan, TIP, 
or project. EPA and DOT have previously defined the ``latest'' 
assumptions as ``the most current information that is available to 
State and local planners (e.g., the MPO or other agency can obtain the 
information from another agency, the information is appropriate for the 
current conformity determination, the information is readily 
transferable for use in the transportation and/or emissions modeling, 
etc.).'' \7\
---------------------------------------------------------------------------

    \7\ For more information, see Question 2 in the January 18, 
2001, EPA and DOT memorandum entitled, ``Use of Latest Planning 
Assumptions in Conformity Determinations.'' See EPA's conformity web 
site llisted in section I.B.2. of this proprosal to download an 
electronic copy of this guidance document.
---------------------------------------------------------------------------

    EPA intends for the start of the regional conformity analysis to be 
the point at which the MPO begins to model the impact of the proposed 
transportation plan/TIP on travel and/or emissions. The start of the 
conformity analysis should be a point after which significant work 
would be required to incorporate new data. EPA and DOT are asking for 
comment on how MPOs, State departments of transportation, transit 
agencies, and air quality agencies would define the ``start of the 
conformity analysis'' for transportation plan and TIP conformity 
determinations in individual areas.
    Today's proposal would rely on the interagency consultation process 
required by Sec.  93.105(c)(1)(i) to determine when a conformity 
analysis reasonably begins in a given area. Section 93.105(c)(1)(i) 
already requires the consultation process to be used to decide which 
planning assumptions and motor vehicle emissions model are available 
for use by the MPO or other designated agencies responsible for 
conducting conformity analyses.
    Specific interagency consultation procedures are already required 
in nonattainment and maintenance areas to determine such things as 
which projects are regionally significant and to evaluate models and 
methods. During this existing process, the starting date of the 
conformity analysis should be well documented by the interagency 
consultation group and established so that there is sufficient time for 
the MPO to meet transportation planning and conformity requirements, 
including to complete the modeling analysis, prepare documents, conduct 
the public participation process and allow the MPO and DOT to complete 
conformity determinations by any required deadline. New information 
(e.g., population or fleet data) that becomes available after the start 
of the conformity analysis would not be required to be incorporated 
into the current analysis if the analysis is on schedule, although an 
area could voluntarily include the new information at any time as 
appropriate.
    The interagency consultation process should also be used to 
determine whether significant delays in completing the conformity 
analysis would accommodate the inclusion of more recent planning 
assumptions that become available after the initially designated 
conformity analysis start date. If, for example, a substantial delay in 
the conformity process occurs and new planning assumptions become 
available, EPA believes that such assumptions should not be ignored if 
the conformity analysis is in its initial stages.
    State and local transportation and air quality planners should 
align the updates of planning assumptions with the start of the 
conformity analysis whenever possible. The consultation process should 
continue to be used to determine what are the most recent assumptions 
available for SIP development, so that they can be incorporated into 
the conformity process expeditiously. For example, if EPA is expected 
to find a new SIP budget adequate before the MPO or DOT's conformity 
determination, conformity to the new SIP budget would be required for 
the current conformity determination. In such a case, transportation 
planners should use the more recent SIP assumptions and consider them 
at the start of the current conformity analysis, since the more recent 
assumptions would have been available through the consultation process 
when the SIP was being developed. State and local air agencies should 
continue to inform their transportation counterparts of new assumptions 
as they become available.
    The proposal would not change the requirement that DOT's conformity 
determination of the transportation plan and TIP be based on an 
analysis that is consistent with the proposed transportation system. 
For example, if a regionally significant project is significantly 
changed after the start of the conformity analysis, such a change must 
be reflected in the conformity analysis for the current determination. 
Likewise, a significant change in the design concept and scope of an 
emission reduction program would also have to be reflected before DOT 
makes its conformity determination.
    Today's proposal does not change the requirements of Sec.  
93.122(a) which describes when emissions reduction credit can be taken 
in regional emissions analyses. Section 93.122(a)(2) continues to 
require that analyses reflect the latest information regarding the 
implementation of transportation control measures (TCMs) or other 
control measures in an approved SIP, even if a measure is cancelled or 
changed after the start of the conformity analysis. In addition, Sec.  
93.122(a)(3) continues to require that DOT's conformity determination 
only be made when regulatory control programs have been assured and 
will be implemented as described in the SIP. However, today's proposal 
would allow areas to rely upon the latest existing information as 
documented at the start of the conformity analysis regarding the 
effectiveness of SIP control programs that are being implemented as 
described in the SIP (Sec.  93.110(e)).
    Finally, Sec.  93.122(a)(6) is not amended by today's action. The 
conformity rule continues to require that the conformity analysis be 
based on the same ambient temperature and other factors used to 
establish the SIP's motor vehicle emissions budget.

B. Why Are We Proposing This Change?

    Today's proposal would make the conformity rule more workable for 
implementers while continuing to meet the basic Clean Air Act 
requirement that the latest planning assumptions be used in conformity 
determinations. EPA is

[[Page 38989]]

proposing this change for several reasons.
    EPA believes that today's proposal is supported by section 
176(c)(1) of the Clean Air Act which requires that ``[t]he 
determination of conformity shall be based on the most recent estimates 
of emissions, and such estimates shall be determined from the most 
recent population, employment, travel and congestion estimates as 
determined by the metropolitan planning organization or other agency 
authorized to make such estimates.'' However, the Clean Air Act did not 
explicitly define the point in the conformity process when the ``most 
recent estimates'' should be determined. EPA believes that this 
ambiguity in the Clean Air Act allows for a procedural change in how 
the latest planning assumptions requirement is implemented.
    When EPA originally wrote the conformity rule in 1993, we did not 
fully envision how the requirement for the use of latest planning 
assumptions would be implemented in practice. Under the current 
conformity rule, if an MPO has completed a regional emissions analysis 
for its plan and TIP conformity determinations, and new information 
becomes available as late as the day before DOT makes its conformity 
determination, DOT would not be able to complete its action, as the MPO 
would have to re-start the conformity process to incorporate the new 
data. In such a case, significant state and local resources may be 
required to incorporate new data, and the transportation planning 
process may be unnecessarily disrupted. EPA does not believe this is 
appropriate or consistent with the overall intent of the Clean Air Act.
    The proposal would also be more consistent with how EPA applies the 
requirement for the use of the latest motor vehicle emissions model. 
The current conformity rule provides areas a grace period before a new 
emissions model must be used in the conformity process. Section 
93.111(b) states that EPA, in consultation with DOT, will establish a 
grace period ``no less than three months and no more than 24 months 
after notice of availability is published in the Federal Register.'' 
During the grace period, areas can use the previous emissions model for 
conformity. Section 93.111(c) of the conformity rule allows for the use 
of a previous emissions model in conformity analyses for a given length 
of time after a new model has been released. That is, as long as the 
analysis using the previous model has begun before or during the 
established grace period for a new version of the model, the analysis 
is acceptable. Today's proposal for the use of latest planning 
assumptions is similar: Areas would use the latest planning assumptions 
available when they start the analysis, and would be able to complete 
the analysis even if new assumptions become available prior to 
completion. EPA's policy for incorporating the latest emissions models 
into the conformity process was most recently discussed in our January 
18, 2002 guidance for the use of MOBILE6 in SIP development and 
conformity determinations. See EPA's conformity web site listed in 
section I.B.2. to download an electronic copy of this guidance 
document.
    Finally, due to the iterative nature of the conformity process, new 
information that becomes available late in the planning process would 
still be incorporated in the conformity process in a timely manner, as 
the use of such information would be required in the next conformity 
determination.
    EPA seeks comment on this proposal to incorporate new data into the 
conformity process and to determine latest planning assumptions at the 
start of the conformity analysis.

X. Horizon Years for Hot-Spot Analyses

A. What Are We Proposing?

    EPA is clarifying Sec.  93.116 so that future hot-spot analyses 
demonstrate that a project's emissions are not expected to worsen air 
quality during the entire time frame of the transportation plan. The 
current rule requires localized or ``hot-spot'' analyses to demonstrate 
that new projects will not cause or contribute to any new or existing 
violations in CO and PM-10 nonattainment and maintenance areas. 
However, the current rule does not specify what time frame should be 
covered by such analyses.
    Today's proposal would clarify that project-level hot-spot analyses 
in metropolitan nonattainment and maintenance areas must consider the 
full time frame of an area's transportation plan at the time the 
analysis is conducted.\8\ Alternatively, hot-spot analyses for new 
projects in isolated rural nonattainment and maintenance areas, as 
defined in today's proposal, should consider the full time frame of the 
area's regional emissions analysis since these areas are not required 
to develop a transportation plan and TIP under DOT's regulation. All 
areas should use the interagency consultation process to select the 
specific methods and assumptions for conducting both quantitative and 
qualitative hot-spot analyses in accordance with Sec.  93.123 of the 
current rule(Sec.  93.105(c)(1)(i)).
---------------------------------------------------------------------------

    \8\ Under DOT's current planning regulation, transportation 
plans in metropolitan nonattainment and maintenance areas need to be 
updated every three years and cover at least a 20-year planning 
horizon (23 CFR 450.322(a)).
---------------------------------------------------------------------------

    EPA does not anticipate that today's clarification would 
significantly change how project-level analyses are being done in 
practice. To ensure that the requirement for hot-spot analysis is being 
satisfied for all relevant periods, areas should examine the year(s) 
within the transportation plan or regional emissions analysis, as 
appropriate, during which peak emissions from the project are expected 
and a violation would most likely occur due to the cumulative impacts 
of the project and background regional emissions in the project area. 
EPA believes that if areas demonstrate that no hot-spot impacts occur 
in the years of highest expected emissions, then they will have shown 
that no adverse impacts will occur in any years within the time frame 
of the plan (or regional emissions analysis).
    Without this clarification, however, we believe that it is 
difficult for implementers to decide which year(s) to analyze to 
demonstrate that the conformity requirement for hot-spot analysis is 
satisfied. For example, some could read our existing requirement to 
mean that the demonstration regarding local violations must consider 
only the year of project completion, or alternatively, must consider 
every single future year.
    In practice, many areas have examined trends from their regional 
emissions analysis and/or other factors to determine the year(s) 
expected to have the highest emissions. For example, some areas have 
reviewed trends in the future number of projects, changes in emissions 
factors and/or the economic and population growth. The specific 
methodology for selecting the most appropriate analysis year(s) to 
satisfy the hot-spot requirements for new transportation projects 
should be decided through interagency consultation.
    Today's proposal would not change the procedural requirements for 
hot-spot analyses outlined in Sec.  93.123, nor the flexibility for 
areas to decide how best to meet these requirements through interagency 
consultation. We believe our proposed clarification to Sec.  93.116, in 
combination with the rule's existing consultation and modeling 
requirements, is sufficient to ensure that the years of peak emissions 
within the full term of the transportation plan are appropriately 
considered in hot-spot analyses for new transportation projects.

[[Page 38990]]

    Finally, as background, in CO nonattainment and maintenance areas, 
the impact of new transportation projects on local emissions must be 
demonstrated through quantitative or qualitative analysis (40 CFR 
93.123). In PM-10 nonattainment and maintenance areas, the localized 
emissions impact of new projects should be demonstrated through a 
qualitative analysis at this time. According to section Sec.  
93.123(b)(4) of the rule, quantitative PM-10 hot-spot analyses are not 
required until EPA releases modeling guidance on this subject; a 
project's impact on localized PM-10 violations must be qualitatively 
considered until this guidance is issued. On September 12, 2001, DOT 
issued ``Guidance for Qualitative Project Level `Hot Spot' Analysis in 
PM-10 Nonattainment and Maintenance Areas.'' DOT consulted with EPA on 
the development of this guidance; the guidance is available on EPA's 
conformity Web site listed in section I.B.2. of this proposal.

B. Why Are We Proposing This Clarification?

    On May 26, 1994, Environmental Defense, Natural Resource Defense 
Council and Sierra Club collectively submitted to EPA a Petition for 
Reconsideration of the November 1993 conformity rule (58 FR 62188). In 
the preamble to an April 2000 conformity rule amendment (65 FR 18913, 
April 10, 2000), we addressed four remaining issues raised in this 
petition, one of which was the issue regarding horizon years for hot-
spot analyses. Specifically, the petitioners requested that we alter 
the rule to ensure that areas examine the 20-year time frame of the 
transportation plan when conducting hot-spot analyses. The existing 
transportation conformity rule does not clearly specify a time frame to 
be considered for hot-spot analyses.
    In the preamble to the 2000 amendment, we acknowledged that hot-
spot analyses should address the full time frame of the transportation 
plan to ensure that new projects will not cause or worsen any new or 
existing hot-spot violations. In addition, we clarified that in some 
cases modeling the last year of the transportation plan or the year of 
project completion may not be sufficient to satisfy this requirement. 
EPA believes that the most effective means to meet this requirement 
would be to have the hot-spot analysis examine the year(s) during the 
time frame of the plan in which project emissions, in addition to 
background regional emissions in the project area, are expected to be 
the highest.
    In our 2000 amendment, however, we were unable to make the 
described regulatory clarification to Sec.  93.116 because we had not 
previously proposed this change to the rule. Instead, we committed to 
propose this clarification in today's action.

XI. Additional Changes and Clarifications to the Rule

A. Definitions

    EPA is proposing two new definitions for areas known as ``donut 
areas'' and ``isolated rural nonattainment and maintenance areas'' in 
Sec.  93.101. In today's proposal, ``donut areas'' are defined as 
geographic areas outside a metropolitan planning area boundary as 
designated under 23 U.S.C. 134 and 49 U.S.C. 5303, but inside the 
boundary of a designated nonattainment/maintenance area that is 
dominated by a metropolitan area(s). In contrast, ``isolated rural 
nonattainment and maintenance areas'' are defined as any nonattainment 
or maintenance area that does not contain or is not part of any 
metropolitan planning area as designated under 23 U.S.C. 134 and 49 
U.S.C. 5303. Isolated rural areas do not have metropolitan 
transportation plans or TIPs required under 23 U.S.C. 134 and 49 U.S.C. 
5303 and 5304 and do not have projects that are part of the emissions 
analysis of any MPO's metropolitan transportation plan or TIP. Projects 
in such areas are instead included only in statewide transportation 
improvement programs.
    These proposed definitions would be used in conformity rule 
provisions that clarify how areas that are designated nonattainment or 
maintenance, but that are not within the planning boundary of any MPO's 
jurisdiction, should be considered with regard to the applicable 
conformity requirements. The conformity requirements for donut areas 
are generally the same as those for metropolitan areas. However, the 
transportation planning requirements in donut areas may differ. The 
conformity requirements for isolated rural nonattainment and 
maintenance areas are stated in Sec.  93.109(g) of the current rule and 
generally exclude most conformity determination frequency requirements 
and triggers. Conformity determinations in these areas are required 
only when a new non-exempt FHWA/FTA project needs funding or approval. 
State approvals and funding for regionally significant non-federal 
projects would also require that such projects are included in a 
regional emissions analysis that conforms. The requirements for 
isolated rural areas also offer greater flexibility for demonstrating 
conformity in years after the attainment year or after the last year of 
the maintenance plan. Given these differences in conformity 
requirements, EPA believes the proposed definitions will help to 
alleviate confusion over how metropolitan and rural areas are 
distinguished so that the conformity program can be more efficiently 
and practicably implemented in these different areas.

B. Budget Test Requirements for the Attainment Year

    We are proposing a minor revision to clarify how Sec.  93.118(b) 
and (d) should be implemented when a budget is established for a year 
prior to the attainment year. Specifically, we are proposing that once 
an area has any control strategy SIP budget available for conformity 
purposes, conformity must be demonstrated using the ``budget test'' for 
the attainment year if the attainment year is within the time frame of 
the transportation plan. Today's proposal would address questions 
raised by some State and local conformity implementers.
    As background, the ``budget test'' is completed by comparing the 
regional emissions produced by a proposed transportation plan and TIP 
to the SIP's motor vehicle emissions budget(s) for a given year. If the 
emissions from the plan and TIP are equal to or less than the 
applicable SIP budget(s), the plan and TIP conform. Section Sec.  
93.118(d)(2) describes the years for which regional emissions from the 
plan and TIP must be estimated, and Sec.  93.118(b) describes the years 
for which consistency with the budgets must be demonstrated, including 
which submitted or approved budget applies for a given year.
    Section 93.118(d)(2) of the current rule requires a regional 
emissions analysis to be performed for the last year of the 
transportation plan, the attainment year (when it is in the time frame 
of the transportation plan), and any intermediate years so that 
analysis years are no more than 10 years apart. Section 93.118(b) 
requires that the budget test be performed for any year with a budget, 
for the last year of the transportation plan and any relevant 
intermediate years, but it does not explicitly require the budget test 
to be performed for the attainment year when it is in the time frame of 
the transportation plan but does not have a budget. In other words, the 
current rule could be interpreted, in limited cases, to require 
transportation planners to model emissions for the attainment year 
without comparing these estimated emissions to an existing budget from 
a prior year. EPA did not anticipate this

[[Page 38991]]

potential interpretation of the rule when it was drafted and does not 
believe it is appropriate. We believe that this inconsistency must be 
corrected to ensure that the budget test is performed for the 
attainment year whenever it is in the time frame of the transportation 
plan, regardless of whether or not budgets are established for the 
attainment year.
    For example, suppose an ozone area has adequate rate-of-progress 
budgets for the year 2005, but has not yet established budgets for its 
2007 attainment year. Under Sec.  93.118(b) of the current rule, the 
area would demonstrate conformity to the 2005 budgets for 2005, for the 
last year of the transportation plan and any other intermediate years. 
Under today's proposal, the area would also demonstrate conformity for 
the 2007 attainment year, using the 2005 budgets, to ensure that 
emissions from motor vehicles are considered in the year in which the 
area must achieve the national ambient air quality standards. EPA 
believes analyzing the attainment year (provided it is within the time 
frame of the transportation plan) for conformity is critical in 
assuring that areas achieve their air quality goals on time.
    EPA does not anticipate that the proposed change would have a 
practical impact on conformity determinations already underway. PM-10, 
CO, and ozone areas with lower classifications are not required by the 
Clean Air Act to submit reasonable further progress SIPs for years 
prior to the attainment year. Therefore, the case that the proposal 
addresses should not occur in these areas. For the limited number of 
affected areas, it is our understanding that conformity implementers 
are already completing the budget test for the attainment year, since a 
regional emissions analysis is also required for that year. The 
proposal would merely clarify that this should be done in all such 
cases. In addition, the majority of these areas already have adequate 
or approved budgets for the attainment year, so this would require no 
change from current practice.
    This minor rule revision would not change existing requirements 
that the budget test only be performed for years that are within the 
time frame of the transportation plan under review; i.e., retrospective 
analysis would not be required for years prior to those covered by the 
transportation plan even if a budget is established for such years. 
Areas should use the interagency consultation process to determine the 
appropriate years for which the budget test must be performed.

C. Budget Test Requirements Once a Maintenance Plan Is Submitted

    EPA is also making two minor changes to Sec.  93.118(b)(2) to 
clarify which budgets apply when an area has both control strategy SIP 
and maintenance plan budgets. EPA has received questions regarding 
which budgets should be used in a conformity determination after a 
maintenance plan is submitted and EPA finds the submitted maintenance 
budgets adequate. While implementing the conformity regulation to date, 
questions have been raised regarding what budgets apply for analysis 
years prior to the first future year for which adequate or approved 
maintenance budgets have been established. EPA is proposing today's 
clarification to address this confusion regarding the current rule's 
requirements.
    First, EPA is proposing to clarify Sec.  93.118(b)(2)(iii) so that 
the budget test is completed for a submitted adequate control strategy 
SIP budget that is established for a year within the time frame of the 
transportation plan. The current conformity rule only requires areas 
with submitted maintenance plans to show consistency to approved 
control strategy SIPs. In contrast, before a maintenance plan is 
submitted, Sec.  93.118(b)(1)(i) of the current rule requires 
consistency to be shown to any adequate or approved control strategy 
SIP budgets that are still relevant.
    For example, suppose a nonattainment area submitted an attainment 
demonstration with budgets for 2007 that EPA has found adequate but not 
yet approved. The area then submits a maintenance plan with budgets for 
2015, which EPA also determines are adequate. Under the current 
conformity rule, the budget test would be required for the 2015 
budgets, but not for the 2007 adequate budgets (since they are not yet 
approved). Today's proposal would ensure that new transportation plans 
and TIPs conform to all adequate and approved budgets that are 
established for the years of the transportation plan.
    Second, we are proposing to add Sec.  93.118(b)(2)(iv) to clarify 
which budget(s) should be used for any analysis years that are selected 
prior to the last year of the maintenance plan to meet the requirements 
of Sec.  93.118(d)(2). The current conformity rule does not explicitly 
cover the situation where an analysis year is selected for a year prior 
to the last year of the maintenance plan. The proposal would provide 
consistency between the budget test requirements for both control 
strategy SIPs and maintenance plans, since the proposed Sec.  
93.118(b)(2) language would mirror language currently in Sec.  
93.118(b)(1).
    Under the proposal, if an area analyzes a year for which no 
applicable budgets exist (e.g., an intermediate year between an area's 
attainment year and the first maintenance budget year), the area should 
always use the most recent prior adequate or approved budget.
    This rationale would also apply in areas that are submitting their 
second, required 10-year maintenance plan. For example, if an area 
selects an analysis year between the last year of the first maintenance 
plan and the first budget year of the second maintenance plan, the 
budget in the last year of the first maintenance plan would be used to 
demonstrate consistency for that analysis year.
    Neither of these proposed changes would have a practical impact on 
the conformity process, since it is EPA's understanding that conformity 
practitioners are already implementing the budget test as described 
above. Therefore, the proposal should not impose any new requirements; 
it would simply clarify our current implementation of the existing 
conformity rule.

D. Relying on a Previous Regional Emissions Analysis

    EPA is proposing three changes to Sec.  93.122(e), which describes 
when an area can rely on a previous regional emissions analysis for a 
new conformity determination. EPA articulated its intentions regarding 
when transportation planners could rely on a previous emissions 
analysis in the preamble to the November 24, 1993 conformity rule. A 
new regional analysis would not be required ``if the MPO and DOT make a 
finding that the previous analysis is still valid. That is, if the only 
changes to the TIP involve either projects which are not regionally 
significant and which were not or could not be modeled in a regional 
emissions analysis, or changes to project design concept and scope 
which are not significant, the MPO or DOT could document this and use 
data from the previous regional emissions analysis to demonstrate 
satisfaction of the criteria which involve regional analysis'' (58 FR 
62202).
    EPA's first proposed change would allow MPOs to rely on a previous 
emissions analysis for minor transportation plan revisions. Under the 
current rule, conformity determinations for minor TIP amendments can 
rely on a previous emissions analysis if no new regionally significant 
projects are added and significant changes in existing

[[Page 38992]]

projects do not occur. In addition, MPOs can rely on a previous 
emissions analysis for TIP updates that simply move a year of projects 
from the plan into the TIP (i.e., there is no change in the project mix 
or project implementation schedule that would affect regional 
emissions).
    EPA believes it is also appropriate to rely on a previous emissions 
analysis for minor plan revisions, since such revisions do not impact 
regional air quality and usually occur in tandem with minor TIP 
amendments. These minor revisions may include no addition of new 
regionally significant projects, no significant change in the design 
concept and scope of existing projects, and no change to the timeframe 
of the transportation plan. DOT's transportation planning regulations 
require that the TIP only include projects that are consistent with the 
transportation plan (23 CFR 450.324(f)(2)). As a result, when new 
projects are added to the TIP, they are also added to the plan. EPA 
believes it would not be practical to allow a minor TIP amendment to 
rely on a previous emissions analysis, but then require a new regional 
emissions analysis for making the same minor revision to the 
transportation plan.
    Therefore, EPA's proposal provides consistency between the 
transportation planning and conformity processes so that new regional 
emissions analysis is only required for actions that involve 
significant air quality impacts.
    EPA's second proposed change would add Sec.  93.122(e)(3) to 
clarify that a conformity determination that relies on a previous 
analysis does not satisfy the frequency requirements for plans and TIPs 
(40 CFR 93.104). The conformity rule requires a new regional emissions 
analysis at least every three years for an updated transportation plan 
that incorporates the latest planning assumptions and emissions models.
    EPA's third proposed change would add Sec.  93.122(e)(1)(iv) and 
amend Sec.  93.122(e)(2) to clarify that conformity determinations that 
rely on a previous regional emissions analysis must be based on all 
adequate and approved SIP budgets that apply at the time that DOT makes 
its conformity determination. This change would apply to conformity 
determinations for plans, TIPs, and projects not from a conforming plan 
and TIP. Like all conformity determinations, a determination that 
relies on a previous emissions analysis must satisfy the emissions test 
requirements of Sec.  93.118 (or of Sec.  93.119, if no applicable 
adequate or approved budgets exist), and must do so over the time frame 
of the transportation plan. Therefore, EPA believes that pursuant to 
Sec.  93.118(a) of the current rule, any conformity determination that 
relies on a previous emissions analysis must show consistency with all 
applicable adequate or approved budgets that are available for 
conformity purposes at the time the conformity determination is made, 
including those budgets that have become applicable since the previous 
conformity determination. For example, suppose an ozone area has an 
approved conformity determination based on reasonable further progress 
budgets and subsequently submits an attainment demonstration with 
budgets that EPA finds adequate. In its next determination, conformity 
would be demonstrated to the adequate attainment budgets (as well as to 
the reasonable further progress budgets if they are still applicable). 
The area could rely on the previous regional emissions analysis to 
satisfy the requirements of Sec.  93.118 or Sec.  93.119 if the plan 
and TIP had not changed significantly and the previous analysis was 
done to satisfy Sec.  93.118 or Sec.  93.118 requirements. If this is 
not possible, a new regional emissions analysis based on the latest 
assumptions and models is required.
    EPA expects that most conformity implementers already consider new 
budgets when they rely on a previous emissions analysis. Today's 
proposal simply clarifies the rule and ensures that the conformity 
regulation continues to be correctly implemented in the future.
    It is important to note that today's proposal would not change 
other factors in the implementation of Sec.  93.122(e). MPOs can 
continue to rely on a previous emissions analysis if planning 
assumptions have changed, as long as the requirements of Sec.  
93.122(e) are met and no new regional emissions analysis is otherwise 
required (58 FR 3778). In addition, a new regional emissions analysis 
with the latest planning assumptions and models continues to be 
required at least every three years. As clarified in our proposed Sec.  
93.122(e)(3), conformity determinations that rely on a previous 
emissions analysis do not satisfy the frequency requirements for 
transportation plans and TIPs in Sec.  93.104(b)(3) and (c)(3), and 
therefore, do not reset the three-year conformity clock.

E. Exempt Projects

    Finally, we are proposing a minor revision to the list of exempt 
projects in Sec.  93.126 of the conformity rule. On December 21, 1999, 
DOT published a rule revision to its right-of-way regulation (64 FR 
71284) that changed the citation for emergency or hardship advance land 
acquisitions (revised citation: 23 CFR 710.503)--projects that are 
currently exempt from the conformity process. Therefore, we are 
proposing a similar minor revision of Sec.  93.126 to make the 
conformity rule fully consistent with DOT's December 1999 rulemaking 
that addresses these specific right-of-way acquisitions. This proposed 
revision in no way expands or reduces the type of land acquisitions 
that are exempt from transportation conformity; it merely updates the 
cross reference in the conformity rule to be consistent with the 
corresponding DOT regulation for these projects.

XII. How Does Today's Proposal Affect Conformity SIPs?

    Clean Air Act section 176(c)(4)(C) requires states to submit 
revisions to their SIPs to reflect the criteria and procedures for 
determining conformity. States can choose to develop conformity SIPs as 
a memorandum of understanding (MOU), memorandum of agreement (MOA), or 
state rule. Section 51.390(b) of the conformity rule specifies that 
after EPA approves any conformity SIP revision, the federal conformity 
rule no longer governs conformity determinations (for the parts of the 
federal conformity rule that are covered by the approved conformity 
SIP).
    In some areas, EPA has already approved conformity SIPs that 
include provisions from the 1997 transportation conformity rule (62 FR 
43780) that EPA is proposing to revise through this rulemaking. In 
these areas, if EPA finalizes rule amendments in this proposal that are 
not a direct result of the March 1999 court decision (e.g., 
streamlining the frequency of conformity determinations), these 
amendments will be effective only when the State includes them in a 
conformity SIP revision and EPA approves that SIP revision. EPA will 
work with states to approve such revisions as expeditiously as possible 
through flexible administrative techniques such as parallel processing 
or direct final rulemaking.
    In contrast, those rule amendments in this proposal that address 
provisions directly impacted by the March 1999 court decision will 
apply immediately in all nonattainment and maintenance areas upon the 
effective date of EPA's final rule. Although some areas have conformity 
SIPs that were approved prior to March 1999, provisions included in 
these SIPs that the court subsequently remanded to EPA for further 
rulemaking are no longer enforceable by law. As a result, all areas, 
including those with a previously

[[Page 38993]]

approved conformity SIP, have been operating under EPA and DOT's 
guidance that implements the court decision and will be governed by the 
federal rules when they are finalized.

XIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    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 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 proposed rule is not a 
``significant regulatory action'' under the terms of Executive Order 
12866.

B. Paperwork Reduction Act

    This proposal does not impose any new information collection 
requirements from EPA that 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, 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 proposal will not have a 
significant impact on a substantial number of small entities. This 
regulation directly affects federal agencies and metropolitan planning 
organizations that, by definition, are designated only for metropolitan 
areas with a population of at least 50,000. These organizations do not 
constitute small entities. The Regulatory Flexibility Act defines a 
``small governmental jurisdiction'' as the government of a city, 
county, town, school district or special district with a population of 
less than 50,000.
    Therefore, as required under section 605 of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., I certify that this proposed 
rule will not have a significant economic impact on a substantial 
number of small entities.

D. Unfunded Mandates Reform Act

    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 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 proposed 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. The primary purpose of this proposed 
rule is to formalize what the U.S. Court of Appeals for the District of 
Columbia Circuit has already decided as a legal matter, and that is 
currently being implemented in practice. Additional rule amendments 
also addressed in this proposal simply serve to improve the conformity 
regulation by implementing the rule in a more practicable manner and/or 
to clarify conformity requirements that already exist. None of these 
proposed amendments impose any additional burdens; thus, today's 
proposed rule is not subject to the requirements of sections 202 and 
205 of the UMRA and EPA has not prepared a statement with respect to 
budgetary impacts.

E. Executive Order 13132: 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

[[Page 38994]]

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 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 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 proposed rule, that amends a regulation that 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 projects requiring federal approval and funding are 
affected when a nonattainment or maintenance area is unable to 
demonstrate conformity; specifically, under Clean Air Act section 
176(c) those phases (NEPA approval, right-of-way acquisition, final 
design, or construction) in a federal project's development that have 
not received federal approval or funding prior to a conformity lapse 
cannot be granted approval or funding, and thus proceed, during a 
conformity lapse. Furthermore, the court directed EPA to establish new 
procedures for determining the adequacy of motor vehicle emissions 
estimates before such estimates can be used in conformity 
determinations. Similarly, other minor amendments included in today's 
proposal are the result of the court's order and other related 
administrative matters, or have been proposed simply to make the rule 
more workable and/or to clarify requirements that already exist under 
the current conformity regulation.
    In summary, this proposed rule is required primarily by the court's 
interpretation of the Clean Air Act, and by itself will not have a 
substantial impact on States. Thus, the requirements of section 6 of 
the Executive Order do not apply to this proposed rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175: ``Consultation and Coordination with Indian 
Tribal Governments'' (65 FR 67249, November 6, 2000) requires EPA to 
develop an accountable process to ensure ``meaningful and timely input 
by tribal officials in the development of regulatory policies that have 
tribal implications.'' ``Policies that have tribal implications'' is 
defined in the Executive Order to include regulations that have 
``substantial direct effects on one or more Indian tribes, on the 
relationship between the Federal government and the Indian tribes, or 
on the distribution of power and responsibilities between the Federal 
government and Indian tribes.''
    Today's amendments to the conformity rule do not significantly or 
uniquely affect the communities of Indian tribal governments, as the 
Clean Air Act requires transportation conformity to apply in any area 
that is designated nonattainment or maintenance by EPA. Specifically, 
this proposed rule would incorporate into the conformity rule the 
court's interpretation of the Act, as well as several other 
clarifications and improvements, that would not have substantial direct 
effects on tribal governments, on the relationship between the Federal 
government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal government and Indian tribes, as 
specified in Executive Order 13175. Accordingly, the requirements of 
Executive Order 13175 are not applicable to this proposal.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    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 proposed rule is not subject to Executive Order 13045 because 
it is not economically significant within the meaning of Executive 
Order 12866 and does not involve the consideration of relative 
environmental health or safety risks.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution or Use

    This rule is not subject to Executive Order 13211, ``Action 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355; May 22, 2001) because it will not 
have a significant adverse effect on the supply, distribution, or use 
of energy. Further, we have determined that this proposed rule is not 
likely to have any significant adverse effects on energy supply.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer 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, the use of voluntary consensus standards does not apply to 
this proposed rule.

List of Subjects in 40 CFR Part 93

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon monoxide,

[[Page 38995]]

Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate 
matter, Transportation, Volatile organic compounds.

    Dated: June 11, 2003.
Christine Todd Whitman,
Administrator.
    For the reasons set out in the preamble, 40 CFR part 93 is proposed 
to be 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. Section 93.101 is amended by adding, in alphabetical order, the 
definitions for ``Donut areas'' and ``Isolated rural nonattainment and 
maintenance areas'' to read as follows:


Sec.  93.101  Definitions.

* * * * *
    Donut areas are geographic areas outside a metropolitan planning 
area boundary, but inside the boundary of a nonattainment or Clean Air 
Act section 175(a) maintenance plan area that is dominated by a 
metropolitan area(s). These areas are not ``isolated rural 
nonattainment or rural maintenance areas''.
* * * * *
    Isolated rural nonattainment and maintenance areas are areas that 
do not contain or are not part of any metropolitan planning area as 
designated under the transportation planning regulations. Isolated 
rural areas do not have Federally required metropolitan transportation 
plans or TIPs and do not have projects that are part of the emissions 
analysis of any MPO's metropolitan transportation plan or TIP. Projects 
in such areas are instead included in statewide transportation 
improvement programs. These areas are not donut areas.
* * * * *
    3. Section 93.102 is amended by revising paragraph (c) to read as 
follows:


Sec.  93.102  Applicability.

* * * * *
    (c) Limitations. In order to receive any FHWA/FTA approval or 
funding actions, including NEPA approvals, for a project phase subject 
to this subpart, the project must come from a currently conforming 
transportation plan and TIP.
* * * * *
    4. Section 93.104 is amended by:
    a. Removing paragraph (c)(4);
    b. revising paragraph (d); and
    c. removing paragraph (e)(1) and (e)(4) and redesignating 
paragraphs (e)(2), (e)(3) and (e)(5) as paragraphs (e)(1), (e)(2) and 
(e)(3), respectively, and by revising newly designated paragraphs 
(e)(2) and (e)(3).
    The revisions and additions read as follows:


Sec.  93.104  Frequency of conformity determinations.

* * * * *
    (d) Projects. FHWA/FTA projects must be found to conform before 
they are adopted, accepted, approved, or funded. Conformity must be 
redetermined for any FHWA/FTA project if one of the following occurs: A 
significant change in the project's design concept and scope; if three 
years elapse since the most recent major step to advance the project; 
or initiation of a supplemental environmental document for air quality 
purposes. Major steps include NEPA process completion; start of final 
design; acquisition of a significant portion of the right-of-way; and, 
construction (including Federal approval of plans, specifications and 
estimates).
    (e) * * *
    (2) The effective date of EPA approval of a control strategy 
implementation plan revision or maintenance plan which establishes or 
revises a motor vehicle emissions budget if that budget has not yet 
been used in a conformity determination prior to approval; and
    (3) The effective date of EPA promulgation of an implementation 
plan which establishes or revises a motor vehicle emissions budget.
    5. Section 93.109 is amended by:
    a. Revising paragraphs (c)(1) and (c)(2);
    b. revising paragraphs (d)(2) and (d)(3);
    c. revising paragraph (e)(2) and removing paragraphs (e)(3)(i) and 
(e)(3)(ii) and redesignating paragraph (e)(3)(iii) as (e)(3)(ii) and 
adding a new paragraph (e)(3)(i); and
    d. revising paragraphs (f)(1) and (f)(2).
    The revisions and additions read as follows:


Sec.  93.109  Criteria and procedures for determining conformity of 
transportation plans, programs, and projects: General.

* * * * *
    (c) * * *
    (1) In ozone nonattainment and maintenance areas the budget test 
must be satisfied as required by Sec.  93.118 for conformity 
determinations made on or after the effective date of EPA's finding 
that a motor vehicle emissions budget in a submitted control strategy 
implementation plan revision or maintenance plan is adequate for 
transportation conformity purposes.
    (2) In ozone nonattainment areas that are required to submit a 
control strategy implementation plan revision (usually moderate and 
above areas), the emission reduction tests must be satisfied as 
required by Sec.  93.119 for conformity determinations made when there 
is no motor vehicle emissions budget from an applicable implementation 
plan and no adequate motor vehicle emissions budget from a submitted 
control strategy implementation plan revision or maintenance plan.
* * * * *
    (d) * * *
    (2) In CO nonattainment and maintenance areas the budget test must 
be satisfied as required by Sec.  93.118 for conformity determinations 
made on or after the effective date of EPA's finding that a motor 
vehicle emissions budget in a submitted control strategy implementation 
plan revision or maintenance plan is adequate for transportation 
conformity purposes.
    (3) Except as provided in paragraph (d)(4) of this section, in CO 
nonattainment areas the emission reduction tests must be satisfied as 
required by Sec.  93.119 for conformity determinations made when there 
is no motor vehicle emissions budget from an applicable implementation 
plan and no adequate motor vehicle emissions budget from a submitted 
control strategy implementation plan revision or maintenance plan.
* * * * *
    (e) * * *
    (2) In PM10 nonattainment and maintenance areas the 
budget test must be satisfied as required by Sec.  93.118 for 
conformity determinations made on or after the effective date of EPA's 
finding that a motor vehicle emissions budget in a submitted control 
strategy implementation plan revision or maintenance plan is adequate 
for transportation conformity purposes.
    (3) * * *
    (i) If there is no motor vehicle emissions budget from an 
applicable implementation plan and no adequate motor vehicle emissions 
budget from a submitted control strategy implementation plan revision 
or maintenance plan; or
* * * * *
    (f) * * *
    (1) In NO2 nonattainment and maintenance areas the 
budget test must be satisfied as required by Sec.  93.118 for 
conformity determinations made on or after the effective date of EPA's 
finding that a motor vehicle emissions budget in a submitted control 
strategy implementation plan revision or maintenance plan is adequate 
for transportation conformity purposes.
    (2) In NO2 nonattainment areas the emission reduction 
tests must be

[[Page 38996]]

satisfied as required by Sec.  93.119 for conformity determinations 
made when there is no motor vehicle emissions budget from an applicable 
implementation plan and no adequate motor vehicle emissions budget from 
a submitted control strategy implementation plan revision or 
maintenance plan.
* * * * *
    6. Section 93.110(a) is revised to read as follows:


Sec.  93.110  Criteria and procedures: Latest planning assumptions.

    (a) The conformity determination, with respect to all other 
applicable criteria in Sec. Sec.  93.111 through 93.119, must be based 
upon the most recent planning assumptions in force at the time the 
conformity analysis begins. The conformity determination must satisfy 
the requirements of paragraphs (b) through (f) of this section using 
the planning assumptions available at the time the analysis begins as 
determined through the interagency consultation process required in 
Sec.  93.105(c)(1)(i).
* * * * *
    7. Section 93.116 is revised to read as follows:


Sec.  93.116  Criteria and procedures: Localized CO and PM10 
violations (hot spots).

    (a) This paragraph applies at all times. The FHWA/FTA project must 
not cause or contribute to any new localized CO or PM10 
violations or increase the frequency or severity of any existing CO or 
PM10 violations in CO and PM10 nonattainment and 
maintenance areas. This criterion is satisfied if it is demonstrated 
that during the time frame of the transportation plan (or regional 
emissions analysis) no new local violations will be created and the 
severity or number of existing violations will not be increased as a 
result of the project. The demonstration must be performed according to 
the consultation requirements of Sec.  93.105(c)(1)(i) and the 
methodology requirements of Sec.  93.123.
    (b) This paragraph applies for CO nonattainment areas as described 
in Sec.  93.109(d)(1). Each FHWA/FTA project must eliminate or reduce 
the severity and number of localized CO violations in the area 
substantially affected by the project (in CO nonattainment areas). This 
criterion is satisfied with respect to existing localized CO violations 
if it is demonstrated that during the time frame of the transportation 
plan (or regional emissions analysis) existing localized CO violations 
will be eliminated or reduced in severity and number as a result of the 
project. The demonstration must be performed according to the 
consultation requirements of Sec.  93.105(c)(1)(i) and the methodology 
requirements of Sec.  93.123.
    8. Section 93.118 is amended by:
    a. Revising paragraphs (b) introductory text and (b)(2)(iii), and 
adding (b)(2)(iv);
    b. revising paragraphs (e)(1), (e)(2) and (e)(3); and
    c. adding new paragraph (f).
    The revisions and additions read as follows:


Sec.  93.118  Criteria and procedures: Motor vehicle emissions budget.

* * * * *
    (b) Consistency with the motor vehicle emissions budget(s) must be 
demonstrated for each year for which the applicable (and/or submitted) 
implementation plan specifically establishes motor vehicle emissions 
budget(s), for the attainment year (if it is within the timeframe of 
the transportation plan), for the last year of the transportation 
plan's forecast period, and for any intermediate years as necessary so 
that the years for which consistency is demonstrated are no more than 
ten years apart, as follows:
* * * * *
    (2) * * *
    (iii) If an approved and/or submitted control strategy 
implementation plan has established motor vehicle emissions budgets for 
years in the time frame of the transportation plan, emissions in these 
years must be less than or equal to the control strategy implementation 
plan's motor vehicle emissions budget(s) for these years; and
    (iv) For any analysis years before the last year of the maintenance 
plan, emissions must be less than or equal to the motor vehicle 
emissions budget(s) established for the most recent prior year.
* * * * *
    (e) * * *
    (1) Consistency with the motor vehicle emissions budgets in 
submitted control strategy implementation plan revisions or maintenance 
plans must be demonstrated if EPA has declared the motor vehicle 
emissions budget(s) adequate for transportation conformity purposes, 
and the adequacy finding is effective. However, motor vehicle emissions 
budgets in submitted implementation plans do not supersede the motor 
vehicle emissions budgets in approved implementation plans for the same 
Clean Air Act requirement and the period of years addressed by the 
approved implementation plan, unless EPA specifies otherwise in its 
approval of a SIP.
    (2) If EPA has not declared an implementation plan submission's 
motor vehicle emissions budget(s) adequate for transportation 
conformity purposes, the budget(s) shall not be used to satisfy the 
requirements of this section. Consistency with the previously 
established motor vehicle emissions budget(s) must be demonstrated. If 
there are no previous approved implementation plans or implementation 
plan submissions with adequate motor vehicle emissions budgets, the 
emission reduction tests required by Sec.  93.119 must be satisfied.
    (3) If EPA declares an implementation plan submission's motor 
vehicle emissions budget(s) inadequate for transportation conformity 
purposes after EPA had previously found the budget(s) adequate, and 
conformity of a transportation plan or TIP has already been determined 
by DOT using the budget(s), the conformity determination will remain 
valid. Projects included in that transportation plan or TIP could still 
satisfy Sec. Sec.  93.114 and 93.115, which require a currently 
conforming transportation plan and TIP to be in place at the time of a 
project's conformity determination and that projects come from a 
conforming transportation plan and TIP.
* * * * *
    (f) Adequacy review process for implementation plan submissions. 
EPA will use the procedure listed in paragraphs (f)(1) or (f)(2) of 
this section to review the adequacy of an implementation plan 
submission:
    (1) When EPA reviews the adequacy of an implementation plan 
submission prior to EPA's final action on the implementation plan,
    (i) EPA will notify the public through EPA's website when EPA 
receives an implementation plan submission that will be reviewed for 
adequacy.
    (ii) The public will have a minimum of 30 days to comment on the 
adequacy of the implementation plan submission. If the complete 
implementation plan is not accessible electronically through the 
internet and a copy is requested within 15 days of the date of the 
website notice, the comment period will be extended for 30 days from 
the date that a copy of the implementation plan is mailed.
    (iii) After the public comment period closes, the EPA Regional 
Office will inform the State in writing whether EPA has found the 
submission adequate or inadequate for use in transportation conformity, 
or EPA will include the determination of adequacy or inadequacy in a 
proposed or final action approving or disapproving the implementation 
plan under paragraph (f)(2)(iii) of this section.
    (iv) EPA will publish a Federal Register notice to inform the 
public of

[[Page 38997]]

EPA's finding. If EPA finds the submission adequate, the effective date 
of this adequacy finding will be 15 days from the date the notice is 
published.
    (v) EPA will announce whether the implementation plan submission is 
adequate or inadequate for use in transportation conformity on EPA's 
website. The website will also include EPA's response to comments if 
any comments were received during the public comment period.
    (vi) If after EPA has found a submission adequate, EPA has cause to 
find that budget inadequate, EPA will repeat actions described in 
paragraphs (f)(1)(i) through (v) of this section, with one exception. 
EPA will first inform the State in writing of its interim inadequacy 
finding, effective immediately upon the date of EPA's letter. EPA will 
then repeat actions described in paragraphs (f)(1)(i) through (v) of 
this section unless EPA determines that there is no need for additional 
public comment given the deficiencies of the implementation plan 
submission.
    (vii) If after EPA has found a submission inadequate, EPA has cause 
to reconsider the adequacy of that budget, EPA will repeat actions 
described in paragraphs (f)(1)(i) through (v) of this section.
    (2) When EPA reviews the adequacy of an implementation plan 
submission simultaneously with EPA's approval of the implementation 
plan,
    (i) EPA's Federal Register notice of proposed or direct final 
rulemaking will serve to notify the public that EPA will be reviewing 
the implementation plan submission for adequacy.
    (ii) The publication of the notice of proposed rulemaking will 
start a public comment period of at least 30 days.
    (iii) EPA will indicate whether the implementation plan submission 
is adequate and thus can be used for conformity either in EPA's final 
rulemaking or through the process described in paragraphs (f)(1)(iii) 
through (v) of this section. EPA will respond to comments received 
directly and to comments related to adequacy made through the state 
process and include the response to comments in the applicable docket.
    9. Section 93.120 is amended by revising paragraph (a)(2) to read 
as follows:


Sec.  93.120  Consequences of control strategy implementation plan 
failures.

    (a) * * *
    (2) If EPA disapproves a submitted control strategy implementation 
plan revision without making a protective finding, only projects in the 
first three years of the currently conforming transportation plan and 
TIP may be found to conform. This means that beginning on the effective 
date of a disapproval without a protective finding, no transportation 
plan, TIP, or project not in the first three years of the currently 
conforming transportation plan and TIP may be found to conform until 
another control strategy implementation plan revision fulfilling the 
same CAA requirements is submitted, EPA finds its motor vehicle 
emissions budget(s) adequate pursuant to Sec.  93.118, and conformity 
to this submission is determined.
* * * * *
    10. Section 93.121 is amended by revising paragraph (a)(1) and 
redesignating paragraph (a)(2) as (a)(3), and by adding a new paragraph 
(a)(2) and revising newly designated (a)(3) to read as follows:


Sec.  93.121  Requirements for adoption or approval of projects by 
other recipients of funds designated under title 23 U.S.C. or the 
Federal Transit Laws.

    (a) * * *
    (1) The project comes from the currently conforming transportation 
plan and TIP, and the project's design concept and scope has not 
changed significantly from those which were included in the regional 
emissions analysis for that transportation plan and TIP;
    (2) The project is included in the regional emissions analysis for 
the currently conforming transportation plan and TIP conformity 
determination (even if the project is not strictly included in the 
transportation plan or TIP for the purpose of MPO project selection or 
endorsement) and the project's design concept and scope have not 
changed significantly from those which were included in the regional 
emissions analysis; or
    (3) A new regional emissions analysis including the project and the 
currently conforming transportation plan and TIP demonstrates that the 
transportation plan and TIP would still conform if the project were 
implemented (consistent with the requirements of Sec. Sec.  93.118 and/
or 93.119 for a project not from a conforming transportation plan and 
TIP).
* * * * *
    11. Section 93.122 is amended by revising paragraphs (e)(1) and 
(e)(2) and adding new paragraph (e)(3) to read as follows:


Sec.  93.122  Procedures for determining regional transportation-
related emissions.

* * * * *
    (e) * * *
    (1) Conformity determinations for a new transportation plan and/or 
TIP may be demonstrated to satisfy the requirements of Sec. Sec.  
93.118 (``Motor vehicle emissions budget'') or 93.119 (``Emission 
reductions in areas without motor vehicle emissions budgets'') without 
new regional emissions analysis if the previous regional emissions 
analysis also applies to the new plan and/or TIP. This requires a 
demonstration that:
    (i) The new plan and/or TIP contain all projects which must be 
started in the plan and TIP's timeframes in order to achieve the 
highway and transit system envisioned by the transportation plan;
    (ii) All plan and TIP projects which are regionally significant are 
included in the transportation plan with design concept and scope 
adequate to determine their contribution to the transportation plan's 
and/or TIP's regional emissions at the time of the previous conformity 
determination; and
    (iii) The design concept and scope of each regionally significant 
project in the new plan and/or TIP is not significantly different from 
that described in the previous transportation plan.
    (iv) The previous regional emissions analysis is still consistent 
with the requirements of Sec. Sec.  93.118 (including that conformity 
to all currently applicable budgets is demonstrated) and/or 93.119, as 
applicable.
    (2) A project which is not from a conforming transportation plan 
and a conforming TIP may be demonstrated to satisfy the requirements of 
Sec.  93.118 or Sec.  93.119 without additional regional emissions 
analysis if allocating funds to the project will not delay the 
implementation of projects in the transportation plan or TIP which are 
necessary to achieve the highway and transit system envisioned by the 
transportation plan, the previous regional emissions analysis is still 
consistent with the requirements of Sec.  93.118 (including that 
conformity to all currently applicable budgets is demonstrated) and/or 
Sec.  93.119, as applicable, and if the project is either:
    (3) A conformity determination that relies on paragraph (e) of this 
section does not satisfy the frequency requirements of Sec.  93.104(b) 
or (c).


Sec.  93.124  [Amended]

    12. Section 93.124 is amended by removing paragraph (b) and 
redesignating paragraphs (c) through (e) as paragraphs (b) through (d).


Sec.  93.126  [Amended]

    13. In Sec.  93.126, Table 2 is amended under the heading ``Other'' 
by revising the entry for ``Emergency or hardship

[[Page 38998]]

advance land acquisitions (23 CFR 712.204(d))'' to read ``Emergency or 
hardship advance land acquisitions (23 CFR 710.503)''.

[FR Doc. 03-15253 Filed 6-27-03; 8:45 am]
BILLING CODE 6560-50-U