UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


ENV DEF FUND

v.

EPA


97-1637a

D.C. Cir. 1999


*	*	*


Tatel, Circuit Judge: Petitioner challenges several provi- sions of the
1997 Final Rule issued by the Environmental  Protection Agency
pursuant to the 1990 amendments to the  Clean Air Act. That statute
prohibits a metropolitan plan- ning organization from approving and
the Department of  Transportation from funding any transportation
project un- less it comes from a regional transportation plan and
program  that conform to applicable state-level air quality standards.
 Because the challenged "conformity" and "grandfather" regu- lations
allow both local approval and federal funding of trans- portation
projects that satisfy neither this requirement nor  the single
exception the statute permits, we hold that these  regulatory
provisions violate the Clean Air Act. In addition,  we remand the
regulations which allow conformity to be  based on emissions budgets
unapproved or disapproved by  EPA for further proceedings to harmonize
those regulations  with the statute's general conformity requirements.
Finally,  we hold that the regulation which allows conformity to be 
based on revised budgets that include "safety margin" emis- sions
violates the statute's requirement that conformity be  evaluated
against approved or applicable air quality stan- dards.


I


The Clean Air Act establishes a joint state and federal  program for
regulating the nation's air quality. The Act  requires EPA to
establish National Ambient Air Quality  Standards ("NAAQS") for
various pollutants. See 42 U.S.C.  s 7409 (1994). It also requires
each state to adopt a State  Implementation Plan (known as a "SIP")
that "provides for  implementation, maintenance, and enforcement of


in each air quality control region (or portion thereof) within  such
State." Id. s 7410(a)(1). SIPs must include "enforce- able emission
limitations and other control measures, means,  or techniques ... , as
well as schedules and timetables for  compliance, as may be necessary
or appropriate" to meet the  NAAQS. Id. s 7410(a)(2)(A). "[A]fter
reasonable notice and  public hearings," each state must submit a SIP
with such  pollution control strategies to EPA. Id. s 7410(a)(1). EPA 
typically approves SIPs pursuant to notice-and-comment rule- making.


In 1977, Congress amended the Clean Air Act to ensure  that
transportation planning at the local level conforms to  pollution
controls contained in approved SIPs. To accomplish  this, the 1977
amendments prohibit federal agencies from  assisting, approving, or
supporting "any [transportation] ac- tivity which does not conform to
[an applicable SIP]." Pub.  L. No. 95-95, tit. I, sec. 129(b), s
176(c), 91 Stat. 745, 750  (1977).


Because Congress "offered little guidance" on the 1977  conformity
requirement, and because federal agencies "large- ly ... ignored" it,
Clean Air Conference Report, 136 Cong.  Rec. 36,103, 36,105-06 (1990),
Congress amended the Act  again in 1990 to expand the content and
scope of this require- ment. See Pub. L. No. 101-549, tit. I, sec.
101(f), 110(4),  s 176(c), 104 Stat. 2409, 2470 (1990) (codified at 42
U.S.C.  s 7506(c)). The focus of this case, the 1990 amendments do 
two things. First, they establish general criteria for deter- mining
whether a transportation activity conforms to a SIP:


(1) .... Conformity to an implementation plan means--


(A) conformity to an implementation plan's purpose  of eliminating or
reducing the severity and number of  violations of the national
ambient air quality standards  and achieving expeditious attainment of
such stan- dards; and


(B) that such activities will not--


(I) cause or contribute to any new violation of any  standard in any
area;


(ii) increase the frequency or severity of any exist- ing violation of
any standard in any area; or


(iii) delay timely attainment of any standard or any  required interim
emission reductions or other mile- stones in any area.


42 U.S.C. s 7506(c)(1). Heads of federal agencies have "an  affirmative
responsibility" to assure conformity of any feder- ally assisted or
approved activity to an applicable SIP. Id.


Second, the 1990 amendments integrate the attainment and  maintenance
of air quality standards with the specific trans- portation planning
process prescribed by the Urban Mass  Transportation Act. As the Clean
Air Conference Report put  it, "[t]he purpose of the new 'conformity'
requirement is to  ensure that the transportation systems choices made
by the  community and incorporated into the regional transportation 
plan required by [federal transportation statutes] are consis- tent
with achieving the allowable emission targets for each  pollutant
assigned to mobile sources in the SIP." 136 Cong.  Rec. at 36,106
col.2. Under the Urban Mass Transportation  Act, the governor of each
state, in agreement with local  officials, must designate a
metropolitan planning organization  (known as an "MPO") for each urban
area with more than  50,000 people. See 49 U.S.C. s 5303(c)(1). The
MPO plans  for the transportation needs of that area. It develops a
long- range transportation plan (referred to in the statute as a 
"plan") which specifies the facilities, services, financing tech-
niques, and management policies that will comprise the area's 
transportation system over a 20-year period, see id. s 5303(f),  as
well as a short-term transportation improvement program  (referred to
in the statute as a "program" and in the regula- tions as a "TIP")
which identifies and prioritizes the specific  transportation projects
to be carried out over the next three  years, see id. s 5304(b). The
heart of the Clean Air Act's  1990 conformity requirements consists of
the following re- strictions on approval and funding of transportation


(2) Any transportation plan or program developed  pursuant to Title 23
or the Urban Mass Transportation  Act shall implement the
transportation provisions of any 


applicable implementation plan ... applicable to all or  part of the
area covered by such transportation plan or  program. No Federal
agency may approve, accept or  fund any transportation plan, program
or project unless  such plan, program or project has been found to
conform  to any applicable implementation plan in effect under this 
chapter. In particular--


(A) no transportation plan or transportation im- provement program may
be adopted by a [MPO], or be  found to be in conformity by a [MPO]
until a final  determination has been made that emissions expected 
from implementation of such plans and programs are  consistent with
estimates of emissions from motor  vehicles and necessary emissions
reductions contained  in the applicable implementation plan ...;


....


(C) a transportation project may be adopted or ap- proved by a [MPO] or
any recipient of funds designat- ed under Title 23 or the Urban Mass
Transportation  Act, or found in conformity by a [MPO] or approved, 
accepted, or funded by the Department of Transporta- tion only if it
meets either the requirements of subpar- agraph (D) or the following
requirements--


(I) such a project comes from a conforming plan  and program;


....


(D) Any project not referred to in subparagraph (C)  shall be treated
as conforming to the applicable imple- mentation plan only if it is
demonstrated that the  projected emissions from such project, when
consid- ered together with emissions projected for the con- forming
transportation plans and programs within the  nonattainment area, do
not cause such plans and pro- grams to exceed the emission reduction
projections  and schedules assigned to such plans and programs in  the
applicable implementation plan.


42 U.S.C. s 7506(c)(2). According to the Agency, these provi- sions
apply only to "nonattainment" areas (i.e., areas that 


have not met an air quality standard for a particular pollu- tant) and
to "maintenance" areas (i.e., former nonattainment  areas that have
met the appropriate standard). See 40  C.F.R. ss 93.101, 93.102(b)
(1998).


In addition to specifying general conformity criteria and  imposing
restrictions on regional transportation planning, the  1990 amendments
establish conformity criteria that apply to  transportation plans,
programs, and projects prior to Agency  approval of a submitted SIP.
See 42 U.S.C. s 7506(c)(3).  The amended Act also authorizes EPA to
promulgate criteria  and procedures for determining conformity,
provided that "in  no case shall [conformity] determinations for
transportation  plans and programs be less frequent than every three
years."  Id. s 7506(c)(4)(B)(ii).


EPA first issued criteria and procedures for making con- formity
determinations in 1993. See 58 Fed. Reg. 62,188  (1993). It then
amended those procedures in a series of  rulemakings. See 60 Fed. Reg.
40,098 (1995); 60 Fed. Reg.  57,179 (1995). In recent years, this
court has heard two  challenges to these amended rules. See Sierra
Club v. EPA,  129 F.3d 137 (D.C. Cir. 1997) (invalidating one-year
exemp- tion from statutory conformity requirements for transporta-
tion activities in nonattainment areas); Environmental De- fense Fund,
Inc. v. EPA, 82 F.3d 451 (D.C. Cir. 1996)  (upholding various
regulations as reasonable interpretations  of the statute).


In this case, petitioner Environmental Defense Fund ar- gues that
various provisions of EPA's most recent Final Rule,  see 62 Fed. Reg.
43,780 (1997) (codified at 40 C.F.R.  ss 93.100-93.128), violate the
conformity requirements set  forth in the 1990 amendments to the Clean
Air Act. Specifi- cally, petitioner contends: (1) that section
93.121(a)(1) of the  regulations unlawfully permits local authorities
to approve  transportation projects in the absence of a currently
conform- ing transportation plan and program; (2) that section 
93.102(c)(1) suffers from the same defect with respect to  federal
funding of transportation projects; and (3) that sec-


tions 93.118(e)(1), 93.120(a)(2), and 93.124(b) unlawfully re- quire
or permit conformity determinations to be based on  emissions budgets
in SIPs that EPA has disapproved or not  yet approved.


Applying Chevron's two-step inquiry, we take up each claim  in turn. We
begin by asking "whether Congress has directly  spoken to the precise
question at issue." Chevron U.S.A. Inc.  v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842  (1984). If so, "that is the end of
the matter; for the court, as  well as the agency, must give effect to
the unambiguously  expressed intent of Congress." Id. at 842-43.
However, if  "the statute is silent or ambiguous with respect to the
specific  issue," we must defer to the Agency's construction of the 
statute as long as it is reasonable. Id. at 843.


II


We start with EDF's challenge to section 93.121(a)(1) of the 
regulations, which provides that an MPO or other recipient of  federal
funds may adopt or approve a regionally significant  transportation
project if "[t]he project was included in the  first three years of
the most recently conforming transporta- tion plan and TIP (or the
conformity determination's regional  emissions analyses), even if
conformity status is currently  lapsed." 40 C.F.R. s 93.121(a)(1).
Conformity status of a  transportation plan or program lapses when
more than three  years pass without a new conformity determination by
an  MPO or the Department of Transportation. See 42 U.S.C.  s
7506(c)(4); 40 C.F.R. s 93.104(b)(3), (c)(3). Under section 
93.121(a)(1), local officials may approve a transportation pro- ject
as long as it once appeared in a conforming plan and  program, even if
the plan and program no longer conform at  the time of project
approval. By authorizing this result,  petitioner argues, section
93.121(a)(1) violates the Clean Air  Act's requirement that projects
"come[ ] from a conforming  plan and program." 42 U.S.C. s


At the outset, we think it important to make clear that this  dispute
over the legality of section 93.121(a)(1) relates only to 


approval of non-federally funded projects. The Agency's rule  makes
clear that local transportation projects receiving feder- al funds
must satisfy a more stringent conformity require- ment than section
93.121(a)(1). Federally funded projects  may not proceed unless there
exists "a currently conforming  transportation plan and currently
conforming TIP at the time  of project approval." 40 C.F.R. s 93.114
(emphasis added).  In other words, during a plan or program conformity
lapse,  an MPO may not find a federally funded project to be in 
conformity, and therefore that project may not go forward.  The
question here is whether non-federally funded projects-- defined as
"projects which are funded or approved by a  recipient of federal
funds ... but which do not rely at all on  any [federal] funding or
approvals," 62 Fed. Reg. at 43,788-- may attain conformity status in
the absence of a currently  conforming plan and program.


We begin with the text of the Clean Air Act. Under  section
7506(c)(2)(C), an MPO may find a local transportation  project to
conform with an applicable SIP only if the project  meets one of two
requirements: Either it must "come[ ] from  a conforming plan and
program," id. s 7506(c)(2)(C)(i), or its  "projected emissions...,
when considered together with emis- sions projected for the conforming
transportation plans and  programs within the nonattainment area,
[must] not cause  such plans and programs to exceed the emission
reduction  projections and schedules assigned to such plans and pro-
grams in the applicable [SIP]," id. s 7506(c)(2)(D). Claiming  that
the requirement that a project "come from a conforming  plan and
program" is ambiguous, EPA insists that it has  reasonably construed
this requirement to permit project ap- proval during a conformity
lapse, as long as the project comes  from the first three years of a
once-conforming plan and  program. This approach, EPA argues, strikes
the proper  balance between protecting air quality and avoiding
disrup- tion to the transportation planning process. According to 
petitioner, the statutory text leaves no ambiguity: A project  that
"comes from a conforming plan and program" means a  project that comes
from a currently conforming plan and  program. Therefore, EDF argues,


proval of any projects, federally funded or not, during a  conformity
lapse.


Giving these words their ordinary meaning, we interpret  the phrase
"comes from a conforming plan and program"--a  phrase entirely in the
present tense--to refer to projects that  come from a currently
conforming plan and program. But  even were it possible to read the
phrase, as EPA and our  dissenting colleague do, to refer to projects
that come from a  previously conforming plan and program, we think
this inter- pretation is foreclosed by Congress's use of the terms
"con- forming plan and program" in section 7506(c)(2)(D), by the 
general conformity criteria of section 7506(c)(1), and by the 
legislative history of the conformity requirements.


Section 7506(c)(2)(D) states that a project not included in a 
conforming plan and program may be found to conform only  if its
projected emissions "when considered together with  emissions
projected for the conforming transportation plans  and programs within
the nonattainment area," do not exceed  the SIP emissions budget. 42
U.S.C. s 7506(c)(2)(D). This  provision enables a project to attain
conformity status "only if  the regional plans and programs are in
conformity at the time  the project is reviewed." Clean Air Conference
Report, 136  Cong. Rec. at 36,108 col.1. Indeed, in its 1996 notice of
 proposed rulemaking, which led to the Final Rule challenged  here,


[t]he option provided in section [7506](c)(2)(D) for new  projects that
were not previously included in a transpor- tation plan/TIP or
supporting regional emissions analysis  to demonstrate conformity
cannot apply during a trans- portation plan/TIP conformity lapse,
because it requires  a demonstration that "conforming transportation
plans  and TIPs" would still conform when the emissions of the  new
project are considered. Without a conforming  transportation plan and
TIP in place, this cannot be  demonstrated.


61 Fed. Reg. 36,112, 36,120 col.2 (1996). We thus have no  doubt that
the word "conforming" in section 7506(c)(2)(D)  means presently
conforming. Since section 7506(c)(2)(D) pro-


vides an alternative means of demonstrating project conformi- ty when
a project does not "come from a conforming plan and  program," it
would be quite odd to read the word "conform- ing" in section
7506(c)(2)(C) to mean something different from  what it means in
section 7506(c)(2)(D).


Moreover, were we to read the word "conforming" the way  EPA suggests,
then there would be no assurance that pro- jects approved under
section 7506(c)(2)(C) would help elimi- nate, reduce, or prevent
violations of national ambient air  quality standards, as required by
section 7506(c)(1). Accord- ing to that provision, a "conforming"
transportation project is  one that will contribute to "eliminating or
reducing the severi- ty and number of violations of the [NAAQS] and
achieving  expeditious attainment of such standards," 42 U.S.C.  s
7506(c)(1)(A), and that "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 or any required interim
emission reductions or other  milestones in any area," id. s
7506(c)(1)(B). Though doubt- ing the applicability of section
7506(c)(1) to projects approved  under section 7506(c)(2), the dissent
nevertheless concedes  that section 7506(c)(2)(A) expressly
incorporates the require- ments of section 7506(c)(1)(B) and makes
them applicable to  projects approved under section 7506(c)(2). See
Dissenting  Opinion ("Dissenting Op.") at 7. Absent a currently
conform- ing plan and program, there is no certainty that a regionally
 significant transportation project will satisfy any of the sec- tion
7506(c)(1)(B) conformity criteria. EPA's interpretation  of section
7506(c)(2)(C) thus eviscerates the requirements of  section
7506(c)(1)(B) and therefore also the requirements of  section
7506(c)(2)(A), creating an untenable inconsistency not  only between
section 7506(c)(1) and section 7506(c)(2), but  also within section


Our dissenting colleague accuses us of "embrac[ing] an  argument"
raised by petitioner "in two sentences of its 'Sum- mary of Argument,'
but not at all thereafter." Dissenting Op.  at 4. With all due
respect, we think the dissent unfairly 


characterizes petitioner's brief. It is true that petitioner first 
sets forth this argument in the "Summary of Argument":


The rule ... undermines Congress' decision to ensure  that long-term
investment of resources in regional trans- portation systems
contribute to 'eliminating or reducing  the severity and number of
[NAAQS violations]' (re- quired by s 176(c)(1)(A)) by requiring
re-assessment of  the conformity of the planned regional
transportation  system every three-years [sic]. 42 U.S.C.  s
7506(c)(4)(B)(ii). By allowing projects from a plan that  no longer
meets regional emission budgets to be ap- proved, the rule allows
elements of the non-conforming  plan to be implemented which can
interfere with prog- ress toward attaining the NAAQS.


EDF Br. at 13 (alteration in original). But far from failing to 
mention this argument later in its brief, petitioner devotes  three
pages of its "Argument" section to developing the claim.  See id. at
23-25. EDF opens this discussion by citing section  7506(c)(4)(B)(ii)
for the proposition that "conformity determi- nations for a plan
and/or program expire at least every three  years by operation of
law." Id. at 23. It then argues that  "[t]he three-year limit on
transportation plans and TIPs plays  an important role by assuring
that plans and TIPs continue to  reflect the latest emission targets
for a region," specifically  mentioning emission reduction targets
related to statutorily- prescribed ozone and carbon monoxide
attainment goals. Id.  at 24. "Without the obligation to renew
conformity findings  every 3 years," EDF concludes, "regions could
continue im- plementing transportation systems designed to meet older 
emission targets no longer adequate to attain the NAAQS."  Id. In
addition to paraphrasing the claim first stated in the  "Summary of
Argument," which explicitly invokes section  7506(c)(1), this last
sentence plainly manifests petitioner's  belief that EPA's rule fails
to ensure that transportation  plans, programs, and projects will help
"achieve expeditious  attainment of [NAAQS]" and will not "delay
timely attain- ment of any [NAAQS]," as section 7506(c)(1) requires.
42  U.S.C. s 7506(c)(1)(A), (c)(1)(B)(iii). We think that petitioner


has adequately challenged EPA's regulation under section 


The legislative history of the 1990 conformity requirements  provides
one final reason why we think the phrase "conform- ing plan and
program" refers to currently conforming plans  and programs. Congress
imposed new conformity require- ments in order to integrate
transportation planning at the  local level with attainment and
maintenance of air quality  standards at the state level. See Clean
Air Conference  Report, 136 Cong. Rec. at 13,106 col.1 (noting that
the statute  "will require transportation planning agencies to view
their  task as the development of a transportation system that  meets
... both mobility needs and air quality objectives").  By requiring
plans and programs to conform to applicable  SIPs at the time of
project approval, Congress sought to  ensure that "transportation
plans and programs [would] serve  as part of the pollution control
strategy for the metropolitan  area." Id. To be sure, plans and
programs could also serve  this pollution control function, as EPA
explains, by "ac- count[ing] for and offset[ting] if necessary the
emissions of  any non-federal projects that are implemented during a
con- formity lapse." 62 Fed. Reg. at 43,790 col.1. But that  approach
would invite local decision-makers to approve trans- portation
projects while deferring development of pollution  control strategies
during conformity lapses, thereby subvert- ing Congress's intent that
the two processes--transportation  planning and pollution
control--occur simultaneously. See  136 Cong. Rec. at 36,107 col.2
(regional planning process  should identify "the comprehensive
transportation system for  a metropolitan area" in the context of a
"comprehensive  consideration of alternatives ... and careful analysis
of op- tions that can contribute toward achieving the air quality 


The Conference Report also describes section 7506(c)(2)(D)  as an
"exception"--indeed, it is the only exception--to the  general rule of
section 7506(c)(2)(C). Id. at 36,108 col.1.  Under section
7506(c)(2)(D), an excluded project may go  forward only if its
expected emissions, together with the  expected emissions from
currently conforming plans and 


programs, do not exceed the emissions ceilings in the applica- ble
SIP. As we indicated earlier, both Congress and EPA  interpret the
word "conforming" in this provision to mean  currently conforming. See
supra at 9. Section 7506(c)(2)(D)  thus shows that Congress wanted no
transportation projects  to proceed without assurance that they would
not undermine  attainment or maintenance of current air quality
standards.  Directly contravening this mandate, the Agency's rule
allows  local officials to approve transportation projects included in
 plans and programs that previously conformed but presently  do not.
See 40 C.F.R. s 93.121(a)(1). Because the conformi- ty status of such
projects bears no relation to current air  quality attainment or
maintenance goals, their approval car- ries no guarantee that their
emissions will neither violate  current standards nor contribute to
existing violations. In- deed, in the preamble to the 1997 Final Rule,
EPA admits-- without qualification and contrary to its position in
this case-- that "projects cannot be approved if the plan and TIP have
 lapsed." 62 Fed. Reg. at 43,797 cols.1-2.


EPA offers two additional justifications for its interpreta- tion of
section 7506(c)(2)(C). Neither survives scrutiny.  First, the Agency
points out that under a regulation effective  since 1995, a certain
category of transportation projects called  transportation control
measures ("TCMs") may proceed even  in the absence of a currently
conforming plan and program.  See 40 C.F.R. s 93.114(b). According to
the Agency, this  exemption shows that section 7506(c)(2)(C) of the
statute  requires no currently conforming plan and program at the 
time of project approval. But we see no reason to extend the 
exemption for TCMs to ordinary transportation projects,  since the
former reduce pollution, see id. s 93.101, while the  latter add to
it. TCMs are "specifically identified and com- mitted to in the
applicable implementation plan," id., and  exempted from the
requirements of section 7506(c)(2)(C) be- cause, as the Agency
explained in the preamble to the 1995  rule, "[b]y definition, a TCM
in an approved SIP conforms to  the SIP because it is contained in the
SIP." 60 Fed. Reg. at  57,180 col.2. This rationale has no


projects because such projects never appear in SIPs. See id.  at 57,180
col.3.


Second, the Agency argues that although the statute re- quires plan and
program conformity determinations at least  once every three years,
see 42 U.S.C. Sec. 7506(c)(4)(B)(ii), the  statute contains no such
requirement for project conformity  determinations. Inferring from
this that Congress intended  project conformity to be determined not
more than once,  EPA maintains that a project included in a previously
con- forming plan and program retains its conformity status, even  if
conformity of that plan and program eventually lapses. We  disagree.
Although the statute suggests that Congress did  not intend project
conformity determinations to occur every  three years, it does not
follow that Congress intended project  conformity determinations to
occur only once. Based on our  analysis above, we read the statute to
require non-federally  funded projects to follow the three-year
conformity determi- nation schedule applicable to transportation plans
and pro- grams up to the point of MPO approval. After MPO approv- al,
non-federally funded projects need undergo no further  conformity


In sum, the language and history of the statute's conformi- ty
requirements show that Congress intended transportation  planning and
air quality management to proceed in lock step.  By allowing local
approval of transportation projects in the  absence of currently
conforming plans and programs, the  Agency's regulation undermines
section 7506(c)(2)(C)'s crite- ria for demonstrating conformity of
regionally significant  transportation projects to state-level air
quality standards.  Finding clear congressional intent and thus no
need to pro- ceed to Chevron's second step, we hold that section 
93.121(a)(1) of the regulations violates the Clean Air Act.


III


Next, petitioner challenges section 93.102(c)(1) of the regu- lations,
which provides that


[p]rojects subject to this subpart for which the NEPA  process and a
conformity determination have been com-


pleted by DOT may proceed toward implementation  without further
conformity determinations unless more  than three years have elapsed
since the most recent  major step (NEPA process completion; start of
final  design; acquisition of a significant portion of the right-of-
way; or approval of the plans, specifications and esti- mates)


40 C.F.R. s 93.102(c)(1). Known as the "grandfather" rule,  this
section reflects the Agency's view that "there should only  be one
point in the transportation planning process at which a  project-level
conformity determination is necessary." 62 Fed.  Reg. at 43,783 col.2.
According to petitioner, this regulation,  like the one discussed
above, violates section 7506(c)(2)(C) of  the statute because it
allows transportation projects to re- ceive federal funding in the
absence of a currently conforming  plan and program. Again, we


To understand how the "grandfather" rule works, consider  the following
hypothetical: In 1993, an MPO approves and  adopts a regional highway
project--for example, an urban  beltway. At the time, the beltway is
included in both a  conforming plan and a conforming program. Three
years  later, in 1996, the conformity status of the plan and program 
lapses. In 1997, the MPO acquires a significant portion of  the
right-of-way for the beltway. Today, ready to start  building, the MPO
seeks funding from the Department of  Transportation. EPA's
"grandfather" rule would allow DOT  to fund the beltway, since a
"major step"--acquisition of  right-of-way--occurred within the past
three years. But  section 7506(c)(2)(C)'s conformity requirement
expressly pro- hibits DOT from "approv[ing], accept[ing], or
fund[ing]" the  beltway unless it "comes from a conforming plan and
pro- gram." This means that no transportation project may re- ceive
federal funds in the absence of a currently conforming  plan and
program. See supra Part II. Therefore, to the  extent that section
93.102(a)(1) of the regulations allows pro- jects to receive federal
funds during plan and program con- formity lapses, it violates the


Defending its "grandfather" rule, EPA cites Environmen- tal Defense
Fund, Inc. v. EPA, supra. But that case sus- tained the "grandfather"
rule only as a transition measure "to  avoid immediate 'retroactive'
implementation of the new  [1990] conformity requirement which would
impose a substan- tial and unforeseen burden on federal projects that
had  already satisfied existing federal requirements [i.e., NEPA 
review]." 82 F.3d at 456. Nothing in that decision supports  what the
Agency has done here--forever exempting a project  from further
conformity determinations where the project's  most recent conformity
determination occurred more than  three years ago and where a "major
step" occurred within the  past three years.


While invalidating section 93.102(a)(1) with respect to fed- erally
funded projects, we note that the statute does not  preclude the
"grandfather" clause from applying to non- federally funded projects.
Although section 7506(c)(2)(C) of  the statute prohibits MPO or DOT
approval of non-federally  funded projects during a plan and program
conformity lapse,  it nowhere prohibits implementation of such
projects as long  as their approval occurred prior to the conformity


IV


We turn finally to petitioner's challenge to those sections of  the
regulations that permit or require plan, program, and  project
conformity to be based on motor vehicle emissions  budgets in SIP
revisions that a state has submitted to EPA,  but that EPA has not yet
approved or has disapproved. See  40 C.F.R. ss 93.118(e)(1),
93.120(a)(2), 93.124(b). Under  these regulations, if EPA disapproves
a submitted SIP revi- sion without a "protective finding"--i.e., a
determination that  the submission "contains adopted control measures
or written  commitments to adopt enforceable control measures that
fully  satisfy the [relevant statutory] emissions reductions require-
ments," id. s 93.101--then "[d]uring the first 120 days follow- ing
[such] disapproval..., transportation plan, TIP, and pro- ject
conformity determinations shall be made using the motor  vehicle
emissions budget(s) in the disapproved control strate-


gy implementation plan." Id. s 93.120(a)(2). Emissions bud- gets
contained in a submitted SIP revision also guide con- formity
determinations when EPA makes no finding within 45  days of submission
regarding the adequacy of the budgets.  See id. s 93.118(e)(1); see
also id. s 93.124(b) (allowing con- formity to be based on submitted
but not-yet-approved SIP  revisions). Submitted budgets, however, do
not supersede  emissions budgets in an approved SIP for the years
covered  by the SIP. See id. s 93.118(e)(1).


Conceding that the Clean Air Act generally requires con- formity to be
evaluated against approved SIPs, the Agency  argues that these
regulations represent reasonable responses  to statutory silence as to
how conformity should be deter- mined when no approved SIP exists or
when the approved  SIP contains no adequate motor vehicle emissions
budget.  We disagree. Although the statute nowhere explicitly dic-
tates how conformity should be determined under the circum- stances
EPA describes, any attempt by the Agency to fill  these gaps must
satisfy section 7506(c)(1)(B)'s generally appli- cable conformity
requirements. Where EPA disapproves a  SIP revision without a
protective finding, i.e., without deter- mining that it contains
adequate measures to reduce emis- sions to statutorily required
levels, see 40 C.F.R.  s 93.120(a)(2), or where EPA fails to determine
the adequacy  of motor vehicle emissions budgets in a SIP revision
within 45  days of submission, see id. s 93.118(e)(1), 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. s 7506(c)(1)(B). Indeed, nothing in  the regulations requires
MPOs to show that an area's project- ed emissions would be lower if
plans and programs conform- ing to a submitted budget were implemented
than if they  were not. See 62 Fed. Reg. at 43,781 col.2 (noting that 
submitted budgets replaced "build/no-build test" as measure  of
conformity under Final Rule). Even if it were true that  section


budgets conforming to law, see Dissenting Op. at 10, the  regulation
would still violate the statute by allowing conformi- ty
determinations to take effect where federal agencies and  MPOs have
not discharged their "affirmative responsibility"  to provide an
"assurance of conformity." 42 U.S.C.  s 7506(c)(1). To be sure,
section 93.118(e)(6) of the regula- tions provides that "the MPO and
DOT's conformity determi- nations [based on unapproved or disapproved
SIPs] will be  deemed to be a statement that the MPO and DOT are not 
aware of any information that would indicate that emissions 
consistent with the motor vehicle emissions budget" would  violate
section 7506(c)(1)(B)'s conformity criteria. But how  can an MPO or
DOT satisfy its "affirmative responsibility" to  provide an "assurance
of conformity" through a "deemed"  statement indicating mere ignorance
of non-conformity? For  these reasons, we grant petitioner's request
that we remand  sections 93.118(e)(1) and 93.120(a)(2) to EPA for
further  rulemaking to harmonize these regulations with section 


Section 93.124(b) is also inconsistent with the Clean Air  Act, but for
a different reason. That provision reads:


If an applicable implementation plan submitted before  November 24,
1993, demonstrates that emissions from all  sources will be less than
the total emissions that would  be consistent with attainment and
quantifies that "safety  margin," the State may submit an
implementation plan  revision which assigns some or all of this safety
margin  to highway and transit mobile sources for the purposes of 
conformity. Such [a SIP] revision ... may be used for  the purposes of
transportation conformity before it is  approved by EPA.


Id. s 93.124(b). Unlike sections 93.118(e)(1) and 93.120(a)(2),  which
apply when there is no applicable SIP or no SIP with  an applicable
emissions budget, section 93.124(b) applies when  there is an
applicable SIP--i.e., it does not purport to fill a  statutory gap.
While it may be true that plans and programs  conforming to a SIP
revision under section 93.124(b) "will not 


cause, worsen, or prolong violations of air quality standards," 
Dissenting Op. at 13, the statute nevertheless requires con- formity
determinations to be based on a SIP "approved or  promulgated under
section 7410 of this title" where such a  SIP exists. 42 U.S.C. s
7506(c)(1); see also id. s 7506(c)(2)  (requiring transportation
plans, programs, and projects "to  conform to any applicable
implementation plan in effect under  this chapter"). Indeed, EPA
itself has said that it "does not  believe that it is legal to allow a
submitted SIP to supersede  an approved SIP for years addressed by the
approved SIP."  62 Fed. Reg. at 43,783 col.3; see also 40 C.F.R. s
93.118(e)(1).  Because section 93.124(b) would allow a submitted but
unap- proved SIP revision to supersede an approved SIP, it violates 


V


Our dissenting colleague charges that our conclusions today  frustrate
EPA's goal of allowing greater flexibility in the  conformity
determination process. See Dissenting Op. at 1.  Whatever the Agency's
policy goals, our job is to interpret  the statute. Here, the statute
imposes an elaborate array of  requirements that, according to the
dissent, amount to "a  congressional effort to micromanage local
transportation  planning." Id. at 1. If this legislative scheme is too
onerous,  it is up to Congress to provide relief, not this court.


We grant EDF's petition for review and hold that sections  93.121(a)(1)
and 93.102(c)(1) of EPA's regulations are unlawful  because they
depart from the criteria for demonstrating  project conformity
established in section 7506(c)(2)(C) of the  Clean Air Act. In
addition, we remand sections 93.118(e)(1)  and 93.120(a)(2) of the
regulations for the Agency to align  these regulations with the
general conformity criteria of  section 7506(c)(1)(B). Finally, we
hold that section 93.124(b)  of the regulations violates section
7506(c)(1)-(2) of the Act by  allowing a submitted SIP revision to
supersede an approved  or applicable SIP.


So ordered.


Williams, Circuit Judge, dissenting: The 1990 conformity  amendments to
the Clean Air Act ("CAA") were intended to  harmonize the
transportation planning process for polluted  metropolitan areas with
air quality plans (technically, "state  implementation plans" or
"SIPs") established by state author- ities. In particular, the
conformity amendments prohibit  certain transportation activities from
going forward unless  relevant entities have determined that the
activities are "in  conformity"--that is, that they meet certain
criteria relating  to air quality. The Act's conformity requirements
are aston- ishingly confusing, and could if interpreted as stringently
as  possible seriously disrupt state and local transportation plan-
ning. That would "frustrate the process of state and federal 
cooperation and the integrated planning that section 176(c)(1)  was
created to foster." EDF v. EPA, 82 F.3d 451, 468 (D.C.  Cir. 1996).
The EPA attempted in this rule to reduce disrup- tion and make the
conformity determination process "more  logical and feasible" 62 Fed.
Reg. 43,780, 43,781 (1997), by  allowing greater flexibility than it
had permitted in its 1993  conformity regulations. See 62 Fed. Reg. at
43,780. In  accepting all the petitioners' challenges to the rule, the
major- ity undoes much of what EPA intended to accomplish. Al- though
I believe there are three respects in which the EPA  has not
adequately explained itself, I cannot find it guilty of  the
thoroughgoing misunderstanding of the statute that leads  the majority


Of course when a congressional effort to micromanage local 
transportation planning in as much detail as this statute is  followed
by a judicial decision that the agency must put states  and localities
in an even tighter straightjacket, one may feel  that Congress asked
for it. But one cannot say the same for  the hapless citizens who must
live with the results.


I.Local approval of nonfederal projects not from currently  conforming
plan and program


The first regulation the majority strikes down is 40 CFR  s
93.121(a)(1). It allows certain nonfederal entities to adopt  or
approve projects contained in the first three years of a 


transportation plan and program (i.e., designated for imple- mentation
within those years) that was once in conformity,  even if conformity
has since lapsed. I disagree with the  majority here because I think
the regulation reflects a rea- sonable interpretation of 42 U.S.C. s
7506(c)(2)(C). That  provision prohibits metropolitan planning
organizations  (known as "MPOs") and other recipients of federal funds
 from approving certain transportation projects, including  those
covered by the challenged regulation, unless the pro- jects "come[ ]
from a conforming plan and program." The  majority holds that this
phrase requires the projects in  question to come from a plan and
program that conforms at  the time of approval.


EPA argues that the phrase allows approval of any project  that comes
from a plan and program that conformed at one  time, even if the
approval is given after conformity has  lapsed. The statutory text
permits EPA's view, and the  agency's interpretation is reasonable in
light of its goal of  protecting localities from disruption caused by
conformity  lapses, which appear frequently to be beyond local
control.  The Department of Transportation must redetermine the 
conformity of plans and programs every three years, and  must also
make a new conformity determination within 18  months of EPA approval
of a SIP revision that establishes or  changes emissions budgets,
among other circumstances. If  the DOT fails to make the required
determinations within the  prescribed time frames, conformity will
lapse. See 40 CFR  ss 93.104(b)(3), 93.104(e).


The majority argues that since the phrase "comes from a  conforming
plan and program" is in the present tense, its  "ordinary meaning" is
"comes from a currently conforming  plan and program." Maj. Op. at 9.
But that is too simple;  the phrase is ambiguous. "Comes from X" can
mean "has its  origin in X," and when the phrase is used that way, the
time  for determining X's qualities can be the time of origination.  A
Belfaster who 10 years from now says he "comes from a  bleeding land"
will be understood--no matter how effective  the recent peace accord.
A layabout who says he "comes 


from a hard-working family" can be telling the truth even if  all his
relatives are dead.1


The majority advances three arguments against EPA's  interpretation
here--one based on the use of the word "con- forming" elsewhere in the
statute, another on the require- ments of another statutory provision
dealing with conformity,  and the third on the legislative history.
None is persuasive.


First, the majority appeals to the use of the word "con- forming" as an
adjective in s 7506(c)(2)(D). This argument  starts with the decision
that the "conforming" is used in that  provision to mean "currently
conforming." Next, the majori- ty argues that since (c)(2)(D) and
(c)(2)(C) provide alternate  ways of determining project conformity,
the term should be  read to mean the same thing in each paragraph.
Together,  these propositions lead the majority to the conclusion that
 (c)(2)(C) also requires a "currently conforming" plan.


The determination that (c)(2)(D) requires a "currently con- forming"
plan is surely contestable.2 But even if it is correct,  it was
reasonable for EPA to decide that this stricture did not  carry over
to (c)(2)(C). First, the provisions differ in lan- 


__________

n 1 It might be said that transportation projects do not "originate" 
in transportation plans or programs; projects in a plan may be  more
like stories in an anthology than chapters in a novel. But the 
hypothesis is not strong enough to give the phrase "comes from a 
conforming plan" the clear meaning that the majority finds. The 
statute establishing the federal transportation planning process 
prescribes the designation of MPOs to carry out a "continuing, 
cooperative, and comprehensive" planning process, 23 U.S.C.  s 134(a),
by developing plans and programs that contain the pro- jects to be
implemented, id. s 134(h)(2)(A). This language, if  anything, suggests
the novel metaphor more than the anthology; in  any event, it cannot
be said to establish the anthology metaphor  with the clarity
necessary for the majority's interpretation. 2 The majority cites two
pieces of evidence for its idea that the  plan must be currently
conforming, the Clean Air Conference  Report and a statement by EPA.
Assertions contained in the  former document, despite what the
majority says, are not interpre- tations by "Congress," Maj. Op. at
12-13, but by committee draft- spersons. With respect to the EPA's
statement, even if the majori- ty were correct that the agency has
contradicted itself in its  interpretations of (c)(2)(D) and


guage: the former provision lacks the phrase "comes from,"  and has no
other linguistic hook suggesting that one should  look back to an
earlier time of origin. Second, I find nothing  "odd," Maj. Op. at 10,
from a substantive point of view about  the difference EPA's
interpretation creates between the two  ways of determining project
conformity. Section  7506(c)(2)(C) governs projects that were included
in plans and  programs that have gone through a conformity
determination,  while (c)(2)(D) governs projects that were never
before con- sidered in such a determination. In light of the intent of
the  Clean Air Act amendments to foster state-federal partner- ship,
it is not unreasonable for EPA to protect states' reliance  interest
where a project has already been considered in a  conformity
determination; no such reliance interest exists for  projects that


The majority next finds EPA's regulation flawed because it  allows
approval of projects that violate s 7506(c)(1), which  defines
conformity in general terms and applies to all federal  activities,
not just transportation-related ones. In its essence  s 7506(c)(1)
forbids federal activities that will cause, worsen,  or prolong
violations of air quality standards. It also forbids  MPO approval of
projects with such effects.


The majority holds that because EPA's rule allows MPO  approval of
transportation projects from transportation plans  that are not in
conformity at the time of approval, it allows  MPOs to approve
projects that do not meet s 7506(c)(1)'s  requirements and thus
violates that section.


In doing so, the majority embraces an argument that  EDF's opening
brief raised only in a novel and somewhat  deceptive way. It mentioned
the claim in two sentences of its  "Summary of Argument," but not at
all thereafter. See EDF  Br. at 13. In its main argument, instead, EDF
claimed that  s 93.121 violated s 7506(c)(2). Its only argument from 
s 7506(c)(1) was a general one--that EPA should issue fur-




__________

n contradiction tells us at most that one of the interpretations must 
be wrong--not that the EPA's reading of (c)(2)(D) must be right.


ther regulations implementing that provision; and on that  subject it
didn't mention s 93.121, although it gave examples  of other
regulations that in its view showed that the new  conformity rule
allowed violations of s 7506(c)(1). Unsurpris- ingly, EPA did not
respond to the (c)(1) argument.


The majority argues that EDF did come through with an  elaboration of
its (c)(1) claim at pages 23-25 of its brief. But  the referenced
argument is quite distinct. It is based on a  perceived tension
between EPA's interpretation of (c)(2)(C)  and another statutory
provision, s 7506(c)(4). There is no  explicit mention of (c)(1) in
the passage, nor is there an  implicit claim that EPA's interpretation
violates (c)(1). In- stead, the discussion elaborates on the supposed
problems for  EPA's interpretation created by s 7506(c)(4), which
calls for  periodic redetermination of the conformity of
transportation  plans and programs. EDF's heading says that the EPA's 
regulation "Eviscerates Congress' Decision to Set Time Lim- its on
Plan, TIP and Project Conformity," EDF Br. at 23, and  the text goes
on immediately to cite s 7506(c)(4), which  indeed sets such time
limits. Raising one argument is not an  implicit raising of the


The closest EDF comes to making the (c)(1) argument is its  claim that
EPA's interpretation allows regions to "continue  implementing
transportation systems designed to meet older  emissions targets no
longer adequate to attain the NAAQS."  EDF Br. at 24. This sentence
appears in the midst of the  (c)(4) argument and is best read as an
illustration of the  alleged tension between that provision and EPA's
regulation,  not as raising a claim based on (c)(1). Though the
sentence  does contain the word "attainment," which also appears in 
(c)(1), there is no other textual reference to the statutory 
provision, and no implicit reference is obvious. A project  does not
violate the relevant provisions of (c)(1) unless it  actually causes,
worsens, or prolongs a violation of the  NAAQS, or is not in
"conformity to [the relevant SIP's]  purpose of ... achieving
expeditious attainment" of the  NAAQS. It is by no means clear that
progress toward  targets that are "no longer adequate" fits into any
of those  categories. The vaguely drafted last category (requiring 


"conformity to [a plan's] purpose of ... achieving expeditious 
attainment") is the most likely candidate, but EDF never  even hints
at an explanation of how a purpose is thwarted by  inadequate
contribution to its realization. That judges are  able to find a dim
connection between EDF's argument and  (c)(1)--after the fact--is
hardly a showing that EDF raised a  (c)(1) argument.


In the interests of fairness to parties and avoidance of  improvident
decisions, we normally refuse to consider argu- ments that are raised
only in the reply brief. See, e.g.,  Doolin Sec. Sav. Bank v. OTS, 156
F.3d 190, 191 (D.C. Cir.  1998). This rule also extends to arguments
raised in only a  conclusory fashion in the opening brief and not
addressed by  appellee. See Texas Rural Legal Aid, Inc. v. Legal
Servs.  Corp., 940 F.2d 685, 697-98 (D.C. Cir. 1991). The rule is 
especially compelling when the statutory and regulatory  scheme
presents as many opportunities for error as this one.


In any event, even if the argument had been properly  raised it should
have been rejected. To understand why, we  have to look at the overall
structure of s 7506(c). Section  7506(c)(1) is a general requirement
covering federal activities.  It forbids federal entities to engage in
activities that do not  conform to an applicable SIP and, in
subparagraphs (A) and  (B), gives a definition of conformity. Sections
7506(c)(2) and  (3) both address transportation and provide rules for
con- formity determinations in that context. Section 7506(c)(3) 
establishes interim rules, and s 7506(c)(2) is the main trans-
portation conformity provision.


The majority's opinion assumes that situations governed by  (c)(2) are
also governed by (c)(1). But the statute can  reasonably be read to
say that (c)(2) and (c)(3) govern exclu- sively in their own domains.
On this reading, s 93.121(a)(1),  which governs a situation covered by
(c)(2)(C), would not be  subject to invalidation under (c)(1).


The most obvious support for this reading comes from the  fact that the
specific transportation conformity requirements  are not entirely
consistent with the general conformity re- quirements, so that
applying (c)(1) to all situations governed 


by (c)(2) and (c)(3) produces contradiction. Section 7506(c)(3),  for
instance, provides that "conformity" of a plan "will be  demonstrated"
if the plan contributes to annual emissions  reductions of ozone and
carbon monoxide and meets certain  other requirements not relevant
here. See  s 7506(c)(3)(A)(iii). Thus, a plan allowing activities that
 cause a violation of (for example) particulate matter stan- dards is
in conformity under (c)(3) as long as the other  requirements are met.
Not so under the general rules of  (c)(1), since that provision
forbids activities that cause viola- tions of "any standard." See s
7506(c)(1)(B)(i). The  transportation-specific (c)(3) rule triumphs in
this conflict.  Each statutory provision is normally presumed to serve
a  function; thus a specific provision governing a set of circum-
stances entirely within a more general one must, within its  own
scope, prevail over the more general. Otherwise it  would be deprived
of its function. Cf. Hemenway v. Peabody  Coal Co., 159 F.3d 255, 264
(7th Cir. 1998) (noting that where  the scope of one provision is not
completely contained within  the scope of the other it is impossible
to call either "more  specific"). That is the case here. Subsection
(c)(1) nominally  covers all federal activities, and (c)(3) covers
only transporta- tion activities, and those only for a limited time.


Section 7506(c)(2)(A) also supports the view that the specif- ic
requirements replace the general ones. It requires a  finding that a
transportation plan or program "will conform to  the requirements of
[s 7506(c)(1)(B)]" before the plan or  program can be found in
conformity. The majority dubs my  observation to this effect a
"concession." Maj. Op. at 10.  But since the issue here is what
(c)(2)(C) requires, (c)(2)(A)'s  specific imposition of the
requirement makes clear that the  draftsmen, contrary to the majority,
understood that the  generality of (c)(2) situations did not require


Thus, it appears that it would be reasonable for EPA to  find that
(c)(1)'s requirements do not apply to situations  governed by (c)(2)
and (c)(3) except where specifically incor- porated. There is no such
specific incorporating language in  (c)(2)(C), the transportation
project conformity provision that 


governs here. I cannot find any assertion of this analysis in  the
record of the rulemaking, but as EDF did not properly  raise the
issue, EPA has had no real opportunity to explain  its view of how
(c)'s subsections relate to each other.


Finally, the majority points to statements in the legislative  history.
In general these say that one purpose of the CAA  amendments was to
promote integration of the air quality and  transportation planning
processes, a proposition with which  neither EPA nor anyone else has
any quarrel. And the  majority ends as it began, with an appeal to
(c)(2)(D)'s  purported requirement of a "currently conforming" plan.
As  I explained above, this stricture, if it exists, does not bind 
EPA in interpreting (c)(2)(C).


Thus, Congress has not "directly addressed the precise  question at
issue" in this case, Chevron U.S.A. Inc. v. NRDC,  467 U.S. 837, 843
(1984), so we must uphold the EPA's  resolution of the statutory
ambiguities if it is reasonable.  And it is, given the Act's overall
purpose to promote a  cooperative regime of integrated planning.


Although the EPA's treatment of non-federally funded  projects seems to
me reasonable as a matter of statutory  interpretation, I have found
nothing in the record adequately  explaining its different treatment
of federally and non- federally funded projects. Under s 93.121(a)(1),
a project  that is not federally funded may be approved by an MPO as 
long as it comes from the first three years of a transportation  plan
that once was in conformity. But a federally funded  project may not
be approved unless there is a "currently  conforming transportation
plan and currently conforming TIP  at the time of project approval."
See 40 CFR s 93.114.  Nothing in the statute appears to justify such a
distinction,  and EPA's only explanation for the disparate treatment
ap- pears to be that "the existence of a conforming plan and TIP  is
not necessary to facilitate the implementation of [nonfeder- al]
projects." 62 Fed. Reg. 43,780, 43,790 (1997). It is  undisputed that
nonfederal projects can be funded without a  currently conforming plan
and TIP in place, while federal  projects cannot. 42 U.S.C. s
7506(c)(2) provides that "[n]o 


Federal agency may ... fund any ... project unless such ...  project
has been found to conform to any applicable imple- mentation plan....
", while no such restriction covers non- federal projects. But EPA has
not explained why that differ- ence is relevant to the project
approval, as to which the  statutory requirements draw no evident
distinction between  federal and nonfederal contexts. Because the EPA
may be  able to explain the difference, and if not might adopt for 
federal projects the rule it has chosen for non-federal ones,  and in
order to avoid the disruption that would be caused by  an interim
change that might itself be changed, I would  simply remand for
further explanation. See A.L. Pharma,  Inc. v. Shalala, 62 F.3d 1484,


II.Grandfathering of federally funded projects unless three  years
elapse between major steps


40 CFR s 93.102(c)(1) provides that transportation projects  that have
been once determined to be in conformity may  proceed toward
completion without further conformity deter- minations unless more
than three years elapse between "ma- jor steps" of the project. The
majority invalidates this so- called "grandfathering" provision on the
basis of the same  construction of the statute that leads it to
invalidate  s 93.121(a)(1)--its reading of the words "comes from a
con- forming plan and program" in s 7506(c)(2)(C)(i). For the  reasons
given in the preceding section, I disagree.


III.Use of emissions budgets from unapproved/disapproved  SIP revisions
and reallocation of safety margins


The majority next addresses three regulations that allow  conformity to
be determined on the basis of emissions bud- gets contained in SIP
revisions that EPA has not approved,  remanding two and vacating one.
The first of these, 40 CFR  s 93.118(e)(1), allows an MPO or DOT to
show consistency  with emissions budgets in unapproved SIP revisions
in con- formity determinations starting 45 days after submission of 
the revision. In short, anticipating that sometimes it will be  unable
to pass on proposed SIP revisions promptly, the  agency provides for
use of a second-best substitute after 45  days.


The majority's sole basis for remanding this provision is  the
proposition that the regulation is insufficient to ensure  compliance
with 42 U.S.C. s 7506(c)(1)(B), the government- wide conformity
requirements. The theory is faulty. Even if  we assume that (c)(1)
applies generally to transportation  projects covered by ss 7506(c)(2)
and (3) (contrary to my  analysis in part I), s 93.118(e)(1) does not
allow violations of  (c)(1).3


Section 7506(c)(1) makes it the "affirmative responsibility"  of an
agency engaging in or supporting a federal activity to  assure that
the activity does not cause, exacerbate, or prolong  any violation of
air quality standards. For various reasons  s 93.118(e)(1) is adequate
to ensure that the DOT (and  MPOs) carry out this mandate when
emissions budgets have  been submitted but not yet approved. First,
because EPA  will approve SIP revisions only if the revised SIP,
including  the budgets, includes enforceable control measures to reach
 and maintain air quality standards by specified dates, see 42  U.S.C.
ss 7410(a)(1), (a)(2)(A), (k)(3), states have an incentive  not to
submit the "inflated emissions budget[s]" about which  EDF is
concerned. EDF Br. at 33. Furthermore, EPA's  regulations require a
public hearing and consultation between  state, federal, and local
agencies before the SIP revision can  be submitted. See 62 Fed. Reg.


Just as the substantive rules and procedural controls on  SIP revisions
create some probability that states will file  emissions budgets
conforming to law, s 93.118(e)(6) makes  the MPOs and DOT a further
screen. It provides that when  conformity determinations are made
under s 93.118(e)(1),  "the MPO and DOT's conformity determinations




__________

n 3 The EPA argues that s 93.118(e)(1) covers a gap between  (c)(2) and
(c)(3). If so, then even if (c)(2) and (c)(3) preempt (c)(1)  where
they apply, (c)(1) might spring to life for areas left blank by  them.
On the other hand, (c)(2) and (c)(3) might preempt (c)(1)'s 
independent effect over the entire field of transportation, including 
any gaps. Because I find that s 93.118(e)(1) is sufficient to guard 
against violations of (c)(1), I need not reach that argument here.


deemed to be a statement that the MPO and DOT are not  aware of any
information that would indicate that emissions  consistent with the
motor vehicle emissions budget" would  violate (c)(1). If an MPO or
DOT official is legally deemed to  be making such a statement,
presumably he or she will be  reasonably careful that its factual
underpinnings are valid-- on pain, surely, of at least a bureaucratic
black eye if later  experience should falsify the implicit


Taken together, ss 93.118(e)(1) and (e)(6) establish a high 
probability that submitted emissions budgets meet the re- quirements
of (c)(1). And a decent probability is all that any  system can
assure: even the EPA might err in giving an  approval. In light of the
purpose of the Clean Air Act to  "foster" a "process of state and
federal cooperation," EDF v.  EPA, 82 F.3d 451, 468 (D.C. Cir. 1996),
and the procedures  nurturing sound state decisionmaking, it is hardly
unreason- able for EPA to allow the implied representation of an MPO 
or DOT as fulfilling its "affirmative responsibility" to assure 


The majority emphasizes the fact that the MPO or DOT  bears an
"affirmative responsibility" to assure conformity.  But "affirmative"
can be used essentially as an intensifier that  emphasizes the
existence of a responsibility, rather than as a  prescription of some
means for its accomplishment. See, e.g.,  Dayton Bd. of Educ. v.
Brinkman, 443 U.S. 526, 538-39  (1979); CBS v. DNC, 412 U.S. 94,


EDF's principal argument against s 93.118(e)(1)--not ad- dressed by the
majority--is that that the regulation illegally  allows conformity
determinations to be made on the basis of  something other than the
"applicable implementation plan,"  as required by s 7506(c)(2) or
(c)(3), or an implementation  plan that has been "approved," as
required by s 7506(c)(1),  because it allows a submitted SIP revision
to be treated as  approved before approval. This somewhat overstates
the  case. The regulation provides only that the emissions bud- gets
are to be used to determine conformity; neither the  regulation nor
EPA's comments state that the revision may  be treated as approved.
The potential problem with the 


regulation is that it does not provide a reasonable way of 
determining conformity with the "applicable," that is, exist- ing,
SIP--not that it illegally allows revisions to be treated as  approved
before they actually are. And the regulation does  provide a
reasonable basis for determining conformity with  the applicable SIP,
at least in some cases.


Section 93.118(e)(1) applies only when the most recent  approved SIP
contains no motor vehicle emissions budgets.  In the absence of
emissions budgets, the only possible rele- vant statutory provisions
for finding conformity with the  "applicable implementation plan" are
ss 7506(c)(3), which  governs an interim period that began with the
passage of the  CAA amendment, and (c)(1), which as I argued at 15 n.3
 above, may govern any gap between the end of the (c)(3)  interim
period and the approval of SIPs with emissions  budgets. My conclusion
above that ss 93.118(e)(1) and (e)(6)  together provide a reasonable
means of determining conform- ity addresses any application of


That leaves the possible application of (c)(3). EPA has  included no
requirement that the entity making the conformi- ty finding consider
the activity's consistency with (c)(3). So  there may be a deficiency
here. But it is not clear whether  s 93.118(e)(1) and s 7506(c)(3) are
ever in effect at the same  time; some statements of EPA in the
rulemaking suggest  that the interim period (c)(3) covers is over
before the emis- sions budget submission that triggers s 93.118(e)(1)
takes  place. See 58 Fed. Reg. 62,188, 62,191/1 (1993) (stating that 
although the interim period lasts only until the "conformity  SIP
revisions are approved, EPA is extending the interim  requirements
until the control strategy SIPs [i.e., the SIPs  with emissions
budgets] are submitted"). Since no party has  briefed the issue and
the present record is insufficient to  answer the question, I would
remand the issue for further  explanation.


The next regulation that the majority remands, 40 CFR  s 93.120(a)(2),
allows use of emissions budgets in SIP revi- sions that EPA has
disapproved for 120 days after the  disapproval. The majority rejects
it on the same ground as 


s 93.118(e)(1)--failure to ensure compliance with (c)(1). I  agree with
the majority that if (c)(1) is applicable,  s 93.120(a)(2) cannot be
said to satisfy it. Unlike  s 93.118(e)(1), this section cannot be
defended as governing  cases where there are reasonable guarantees
that the permit- ted transportation activities will not violate s
7506(c)(1); the  budgets at issue have actually been rejected as
inadequate.  If (c)(3) is applicable to situations covered by s
93.120(a)(2),  that section is likely violated as well; (c)(3)(A)(iii)
requires  plans and programs to "contribute to annual reductions" in 
ozone and carbon monoxide nonattainment areas, and there is  no reason
to believe that emissions budgets specifically disap- proved without a
protective finding meet that criterion. It is  possible, however, that
none of (c)(1), (2), or (3) apply. Per- haps (c)(2) and (3) entirely
preempt (c)(1) with respect to  transportation and s 93.120(a)(2)
applies only during a gap  that may, as I explained above, exist
between those two  provisions. Although EPA argues that s 93.120(a)(2)
exists  in a statutory gap, its brief and rulemaking statements fail
to  explain just why such a gap exists. Thus, I would require  further
explanation of the statutory basis for this regulation  as well.


The last of the challenged regulations, 40 CFR s 93.124(b),  applies to
states with SIPs that indicate that emissions from  all sources are
less than the total emissions that would be  consistent with
attainment of air quality standards and that  quantify that "safety
margin." The regulation allows such  states to submit a SIP revision
that assigns some of the  safety margin to transportation sources and
to use the revi- sion for conformity purposes before it is approved by
EPA.  The majority invalidates this provision for the same reason  EDF
argues the last two provisions should be invalidated-- the regulation
violates the requirement that conformity deter- minations be "based on
a SIP 'approved or promulgated  under section 7410 of this title.' "
Maj. Op. at 19. Here, it  seems clear that activities found in
conformity on the basis of  the "safety margin" will not cause,
worsen, or prolong viola- tions of air quality standards, and thus
that they conform to  the applicable implementation plan under s


has given no reason to doubt this conclusion, or to believe  that
activities producing emissions within the "safety margin"  violate s
7506(c)(3). Thus, as above, the regulation can rea- sonably be read to
authorize the "use" of the revision as a  reasonable alternate means
of finding conformity with the  existing SIP, rather than an
illegitimate means of premature- ly amending one.


I dissent.