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THE HIGHWAY FUND SANCTION APPLIES ONLY WHEN EPA FINDS THAT THE GOVERNOR OF A NONATTAINMENT STATE HAS NOT SUBMITTED OR AT LEAST IS NOT MAKING REASONABLE EFFORTS TO SUBMIT A PART D SIP REVISION CONTAINING TRANSPORTATION CONTROLS. OUR VIEW IS THAT. USE OF THE SANCTION IS CONFINED TO CONTINUING MAJOR DEFICIENCIES IN THE JULY 1. SECS. 7501-08) ARE ALSO KNOWN AS PART D OF THE ACT. WAS ALLOWED IF A STATE SHOWED EARLIER ATTAINMENT WAS NOT POSSIBLE AND IT SUBMITTED AN ADDITIONAL SIP REVISION. THIS ADDITIONAL SIP REVISION WAS REQUIRED BY LAW TO CONTAIN (1) AN ANALYSIS OF ALTERNATIVES TO CONSTRUCTION AT MAJOR EMITTING FACILITIES. SIP REVISIONS WERE TO BE ADOPTED IN THE FORM OF "ENFORCEABLE MEASURES.".

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B-221421, FEB 28, 1986, 65 COMP.GEN. 366

ENVIRONMENTAL PROTECTION AND IMPROVEMENT - CLEAN AIR ACT - ENVIRONMENTAL PROTECTION AGENCY AUTHORITY - STATE IMPLEMENTATION PLANS - REVISIONS - FAILURE TO REVISE GENERAL ACCOUNTING OFFICE (GAO) DISAGREES WITH ENVIRONMENTAL PROTECTION AGENCY (EPA) TENTATIVE LEGAL CONCLUSION THAT THE HIGHWAY FUND SANCTION IN PART D OF THE CLEAN AIR ACT (42 U.S.C. 7506(A)) CAN BE INVOKED TO PENALIZE EITHER: 1) NONATTAINMENT AREAS THAT REFUSE TO COMPLY WITH EPA'S CALL FOR ADDITIONAL SIP REVISIONS REQUESTED PER 42 U.S.C. 74LO(A)(2)(H) AND EPA'S NOV. 1983 POLICY STATEMENT; OR 2) AREAS WITH APPROVED JULY 1, 1982, SIP REVISIONS (42 U.S.C. 7502(A)(2) AND (B)(11) THAT REVOKE STATUTORILY REQUIRED ELEMENT OF THOSE SIP REVISIONS. THE HIGHWAY FUND SANCTION APPLIES ONLY WHEN EPA FINDS THAT THE GOVERNOR OF A NONATTAINMENT STATE HAS NOT SUBMITTED OR AT LEAST IS NOT MAKING REASONABLE EFFORTS TO SUBMIT A PART D SIP REVISION CONTAINING TRANSPORTATION CONTROLS. B-208593, DEC. 30, 1982, APR. 21, 1983, AND JAN. 7, 1986, AFFIRMED.

TO: THE HONORABLE JOHN D. DINGELL, CHAIRMAN, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, COMMITTEE ON ENERGY AND COMMERCE, HOUSE OF REPRESENTATIVES, FEB. 28, 1986:

YOUR LETTER OF DECEMBER 2, 1985, REQUESTED OUR VIEWS ON THE ENVIRONMENTAL PROTECTION AGENCY'S (EPA) TENTATIVE LEGAL CONCLUSIONS SUPPORTING LIBERAL USE OF THE HIGHWAY FUNDING SANCTION IN SECTION 176 OF THE CLEAN AIR ACT TO PROMOTE COOPERATION WITH EPA S POST PART D ENFORCEMENT EFFORTS. OUR VIEW IS THAT, AT THIS TIME, USE OF THE SANCTION IS CONFINED TO CONTINUING MAJOR DEFICIENCIES IN THE JULY 1, 1982, EXTENSION STATE IMPLEMENTATION PLAN (SIP) REVISIONS.

BACKGROUND

WHEN CONGRESS AMENDED THE CLEAN AIR ACT IN 1977, IT BACKED UP EXTENDED ATTAINMENT DEADLINES WITH EXPLICIT REQUIREMENTS TO REVISE SIPS AND NEW SANCTIONS FOR FAILURE TO COMPLY WITH THE ACT'S REQUIREMENTS. PUB.L. NO. 95-95, 91 STAT. 685, 746-51 (ADDING NEW SECS. 171-78 TO THE ACT OF JULY 14, 1955, CH. 360, 69 STAT. 322). SECTIONS 171-78 (CODIFIED AT 42 U.S.C. SECS. 7501-08) ARE ALSO KNOWN AS PART D OF THE ACT.

SPECIFICALLY, THE 1977 AMENDMENTS REQUIRED PREPARATION OF ADDITIONAL SIP REVISIONS AS A CONDITION OF EXTENDING ATTAINMENT DATES FOR THE NATIONAL PRIMARY AMBIENT AIR QUALITY STANDARDS (NAAQSS) UNTIL DECEMBER 31, 1982. IN THE CASE OF CARBON MONOXIDE AND OZONE AN EXTRA EXTENSION TO DECEMBER 31, 1987, WAS ALLOWED IF A STATE SHOWED EARLIER ATTAINMENT WAS NOT POSSIBLE AND IT SUBMITTED AN ADDITIONAL SIP REVISION. DUE JULY 1, 1982, THIS ADDITIONAL SIP REVISION WAS REQUIRED BY LAW TO CONTAIN (1) AN ANALYSIS OF ALTERNATIVES TO CONSTRUCTION AT MAJOR EMITTING FACILITIES; (2) A SPECIFIC SCHEDULE FOR IMPLEMENTING A VEHICLE INSPECTION AND MAINTENANCE PROGRAM; AND (3) "OTHER MEASURES" NEEDED FOR ATTAINMENT BY DECEMBER 31, 1987. MOREOVER, THE ABOVE REQUIREMENTS OF THE JULY 1, 1982, SIP REVISIONS WERE TO BE ADOPTED IN THE FORM OF "ENFORCEABLE MEASURES." SECTION 172, 42 U.S.C. SEC. 7502 (1982).

IN ADDITION TO INTRODUCING STIFF NEW PLANNING REQUIREMENTS, PART D ALSO ADDED NEW PENALTIES INTENDED TO PROMOTE PLANNING, IMPLEMENTATION AND ULTIMATE ATTAINMENT. OF PARTICULAR CONCERN TO EPA AT PRESENT IS SECTION 176(A), THE HIGHWAY FUND SANCTION. THIS SECTION READS AS FOLLOWS:

THE ADMINISTRATOR SHALL NOT APPROVE ANY PROJECTS OR AWARD ANY GRANT AUTHORIZED BY THIS CHAPTER AND THE SECRETARY OF TRANSPORTATION SHALL NOT APPROVE ANY PROJECTS OR AWARD ANY GRANT UNDER TITLE 23, OTHER THAN FOR SAFETY, MASS TRANSIT, OR TRANSPORTATION IMPROVEMENT PROJECT RELATED TO AIR QUALITY IMPROVEMENT OR MAINTENANCE, IN ANY AIR QUALITY CONTROL REGION--

(1) IN WHICH ANY NATIONAL PRIMARY AMBIENT AIR QUALITY STANDARD HAS NOT BEEN ATTAINED,

(2) WHERE TRANSPORTATION CONTROL MEASURES ARE NECESSARY FOR THE ATTAINMENT OF SUCH STANDARD, AND

(3) WHERE THE ADMINISTRATOR FINDS AFTER JULY 1, 1979, THAT THE GOVERNOR HAS NOT SUBMITTED AN IMPLEMENTATION PLAN WHICH CONSIDERS EACH OF THE ELEMENTS REQUIRED BY SECTION 7502 OF THIS TITLE OR THAT REASONABLE EFFORTS TOWARD SUBMITTING SUCH AN IMPLEMENTATION PLAN ARE NOT BEING MADE (OR, AFTER JULY 1, 1982, IN THE CASE OF AN IMPLEMENTATION PLAN REVISION REQUIRED UNDER SECTION 7502 OF THIS TITLE TO BE SUBMITTED BEFORE JULY 1, 1982). 42 U.S.C. SEC. 7506(A).

THIS PENALTY IS PROBABLY THE MOST POTENT SANCTION IN THE ACT. FOR THIS REASON IT IS A VERY USEFUL TOOL TO MOTIVATE THE FULL PERFORMANCE OF THE ACT'S REQUIREMENTS. HOWEVER, AS DISCUSSED IN DETAIL BELOW, IT IS STRICTLY LIMITED IN ITS APPLICATION.

GAO HAS ALREADY ISSUED OPINIONS CONCERNING THE REQUIREMENTS OF THE EXTENSION SIPS, DUE JULY 1, 1982, ON THE APPROPRIATE USE OF PENALTIES CONTAINED IN THE ACT, AND ON EPA'S ENFORCEMENT POSTURE. (B208593, DEC. 30, 1982; APR. 21, 1983; AND JAN. 7, 1986.) WE STAND BY THE ANALYSIS IN THESE OPINIONS. THEY ARE PERTINENT TO THE QUESTIONS AT HAND.

EPA MEMORANDUM

THE DRAFT MEMORANDUM YOU ASKED US TO REVIEW TAKES THE POSITION THAT THE HIGHWAY FUND SANCTION IS CURRENTLY AVAILABLE TO INDUCE COMPLIANCE WITH THE ADDITIONAL ROUND OF SIP REVISIONS EPA REQUESTED IN LIEU OF ENFORCING SANCTIONS AGAINST NONATTAINMENT AREAS AFTER DECEMBER 31, 1982, AND ALSO THAT THE SANCTION CAN BE USED TO PUNISH STATES THAT REVOKE A PART OF THEIR JULY 1, 1982 SIP REVISIONS AFTER EPA APPROVED THEM. THE MEMORANDUM MAKES THREE ARGUMENTS IN FAVOR OF ITS CONCLUSIONS, WHICH WE WILL COMMENT ON IN TURN.

(1) USING THE SANCTION IS NOT INCONSISTENT WITH EPA'S CURRENT POLICY

THE MEMORANDUM RECOGNIZES A POSSIBLE CONFLICT BETWEEN THE EPA NOVEMBER 1983 STATEMENT WHICH ANNOUNCED EPA'S POLICY TO FOREGO APPLICATION OF SANCTIONS AND A DECISION TO INVOKE THE HIGHWAY FUND PENALTY FOR FAILURE TO COOPERATE IN SUBMITTING A POST PART D SIP REVISION. HOWEVER, IT DISMISSES THE CONFLICT AS MINOR AND/OR CURABLE.

WE DISAGREE GENERALLY WITH THE NOVEMBER 1983 POLICY (B-208593, JAN. 7, 1986), BUT WHEN EPA FOUND THAT THE HIGHWAY FUND SANCTION WAS INAPPROPRIATE TO ENFORCE THE POST PART D SIP REVISIONS, IT MADE THE RIGHT DECISION. FED.REG. 50691. THE POLICY STATEMENT IDENTIFIED THE SIP REVISIONS BEING CALLED FOR AS REVISIONS UNDER SECTION 110(A)(2)(H) OF THE STATUTE. THAT CASE, SECTION 110(C)(10)(C) DICTATES THE PROPER AGENCY RESPONSE TO A FAILURE TO COMPLY WITH A REQUESTED SIP REVISION. THE STATUTE PRESCRIBES PROMPT FEDERAL ISSUANCE OF REGULATIONS PROMULGATING THE SIP MATERIAL THE STATE HAS FAILED TO REVISE ON ITS OWN AS REQUESTED.

MOREOVER, SECTION 176(A) ITSELF SPECIFIES THE CIRCUMSTANCES IN WHICH IT IS TO BE USED. THE SANCTION IS TRIGGERED BY THE ADMINISTRATOR'S FINDING THAT THE STATE HAS NOT SUBMITTED A SIP REVISION THAT CONSIDERS ALL THE ELEMENTS OF SECTION 172. IT FOLLOWS FROM THIS LANGUAGE THAT THE SANCTION ONLY APPLIES TO PART D SIP REVISIONS, NOT TO REVISIONS UNDER SECTION 110. IT IS TRUE AS THE MEMORANDUM SUGGESTS, THAT THE HIGHWAY FUND SANCTION WAS ONLY A SECONDARY CONSIDERATION IN THE NOVEMBER 1983 POLICY AND ALSO THAT THE AGENCY CAN CHANGE THAT POLICY IF IT WISHES, BUT THE STATUTE SEEMS TO CONTRADICT SUCH ACTION.

(2) EXTRA SIP REVISIONS ARE UNDER PART D

THE MEMORANDUM EXPLAINS THAT BECAUSE SECTION 110(A)(2)(H) ALLOWED THE ADMINISTRATOR TO REQUEST SIP REVISIONS FOR THE PURPOSE OF COMPLIANCE WITH REQUIREMENTS OF THE 1977 AMENDMENTS TO THE CLEAN AIR ACT (WHICH AMENDMENTS ADDED PART D), THE POST PART D SIP REVISIONS ARE ACTUALLY REVISIONS "UNDER PART D." IT GOES ON TO CONCLUDE THAT THE HIGHWAY FUND PENALTY IS AVAILABLE TO PROMOTE ALL PART D PLANNING, INCLUDING THE POST PART D SIP REVISIONS.

WE DO NOT AGREE WITH THAT ANALYSIS FOR TWO REASONS. FIRST, THE ADMINISTRATOR DID NOT CALL FOR SIP REVISIONS TO COMPLY WITH THE 1977 AMENDMENTS. RATHER, THE REASON STATED IN THE NOVEMBER 1983 POLICY WAS THAT EXISTING PLANS WERE "SUBSTANTIALLY INADEQUATE TO ACHIEVE ATTAINMENT." SECONDLY, WE NOTE THAT THE POST PART D SIP REVISIONS WERE ONLY AVAILABLE TO PROMOTE THE SECTION 172 (A)(1) AND (2) SIP REVISIONS WHICH ARE REFERENCED BOTH BY SECTION NUMBER AND BY DUE DATE. WE DO NOT THINK THE PENALTY APPLIES TO ANY OTHER SIP REVISIONS, EVEN IF THEY ARE REVISIONS "UNDER PART D."

THE MEMORANDUM ARGUES THAT PART D CREATED A "RENEWABLE PLANNING OBLIGATION," AND THEREFORE, THE POST PART D SIP REVISIONS RELATE BACK TO THE ORIGINAL SECTION 172 SUBMISSION, AND FALL UNDER THE HIGHWAY FUND PENALTY IN THAT WAY. WHATEVER RENEWABLE OBLIGATIONS PART D IMPOSES, SECTION 176(A) IS TRIGGERED ONLY BY THE FAILURE TO SUBMIT A COMPLETE PLAN ON THE PROPER DATES, AND SUBMISSION IS CLEARLY A ONE-TIME, NOT A "RENEWABLE" EVENT.

(3) CONGRESS WOULD HAVE ALLOWED THE HIGHWAY FUND SANCTION TO BE USED

THE MEMORANDUM ARGUES THAT CONGRESS DID NOT ANTICIPATE CONTINUED NONATTAINMENT OR THE NECESSITY TO CALL FOR MORE SIP REVISIONS. IF IT HAD, IT WOULD HAVE ALLOWED THE HIGHWAY FUND PENALTY TO BE USED TO SANCTION NONCOOPERATION WITH A CALL FOR POST PART D SIP REVISIONS UNDER SECTION 110(A)(2)(H).

SEVERAL OF OUR PAST OPINIONS TO YOU ON THIS MATTER HAVE STATED OUR VIEW THAT THE POST-DEADLINE ACTION REQUIRED BY THE ACT IS ENFORCEMENT OF THE CONSTRUCTION BAN IN SECTION 110(A)(2)(I). SINCE THE ACT SPECIFICALLY PROVIDES A POST-DEADLINE RESPONSE TO NONATTAINMENT, WE DO NOT AGREE THAT THE CONGRESS WOULD HAVE DONE SOMETHING ELSE IF IT HAD ANTICIPATED THE NEED TO APPLY SANCTIONS FOR FAILURE TO SUBMIT ADEQUATE POST PART D SIP REVISIONS.

EPA IS ALSO CONSIDERING USING THE HIGHWAY FUND SANCTION AGAINST REGIONS THAT SUBMITTED PART D SIP REVISIONS, BUT REVOKED SOME PART OF THE SIP AFTER EPA APPROVED IT. UNPOPULAR INSPECTION AND MAINTENANCE (I&M) PROGRAMS THAT HAD REQUIRED STATE LEGISLATIVE ACTION TO CREATE WOULD BE PRIME TARGETS FOR REPEAL OR INDEFINITE POSTPONEMENT.

IN B-208593, DEC. 30, 1982, WE SAID THAT ENFORCEABLE VEHICLE I&M WAS A STATUTORY REQUIREMENT OF THE JULY 1, 1982, SIP REVISIONS. A STATE LEGISLATURE'S REPEAL OF VEHICLE I&M AUTHORITY THEREFORE COULD NOT FORM THE BASIS FOR A SIP REVISION, BECAUSE A STATE MAY NOT REVOKE STATUTORY ELEMENTS OF ITS SIP. (SECTION 110(A)(3)(A).) SUCH A CASE IS OBVIOUSLY AN IMPLEMENTATION FAILURE, NOT A SIP REVISION OR APPROVAL PROBLEM. PART D CONTAINS A SPECIFIC PENALTY FOR NONIMPLEMENTATION: CUT-OFF OF ALL CLEAN AIR GRANTS.

SECTION 176(B) PROVIDES FOR THE HALTING OF ALL CLEAN AIR ACT GRANTS AS A PENALTY FOR NONIMPLEMENTATION OF A SIP. BUT BECAUSE THESE FUNDS ARGUABLY HAVE A LESS IMMEDIATE AND LESS VISIBLE IMPACT ON THE PUBLIC, THEIR CUT OFF MAY BE PERCEIVED AS A LESS SERIOUS THREAT THAN IS THE HIGHWAY FUNDS SANCTION FOR FAILURE TO SUBMIT A PLAN. AS A MATTER OF POLICY, WE THINK NONIMPLEMENTATION IS JUST AS SERIOUS AS NONSUBMISSION. NONETHELESS, CONGRESS SPECIFIED DIFFERENT PENALTIES FOR THE TWO TYPES OF FAILURES AND EPA MUST ABIDE BY THE STATUTORY PLAN.

FURTHERMORE, THE LEGISLATIVE HISTORY OF THE 1977 AMENDMENTS MAKES IT CLEAR THAT THE HIGHWAY FUNDS SANCTION WAS NOT TO BE USED TO PENALIZE NONIMPLEMENTATION. SENATOR GRAVEL, WHO AUTHORED THE SANCTION, CONFIRMED THIS INTERPRETATION OF HIS AMENDMENT IN A COLLOQUY WITH SENATOR STEVENS:

MR. STEVENS. IF YOU HAVE AN IMPLEMENTATION PLAN, WHETHER YOU IMPLEMENT IT OR NOT, THERE WILL BE NO LOSS OF HIGHWAY FUNDS.

MR. GRAVEL. THAT IS RIGHT. ***" 123 CONG. REC. 18476 (1977).

WE DISCUSSED THE MEANING OF EPA APPROVAL OF PART D SIP REVISIONS AS RELATED TO SECTION 176(A) IN B-208593, APR. 21, 1983. ADDRESSING THE QUESTION OF WHETHER EPA APPROVAL OF A PART D SIP WOULD CONSTITUTE AN ESTOPPEL AGAINST THE IMPOSITION OF THE HIGHWAY FUNDING SANCTION IN THE FUTURE, WE SAID:

*** AS WE INDICATED IN OUR DECEMBER 30, 1982, LETTER (B-208593), EPA APPROVAL MAY NOT MEAN THAT THE SIP REVISION ABSOLUTELY COMPLIES WITH ALL THE STATUTORY REQUIREMENT, INCLUDING TRANSPORTATION CONTROLS. MOREOVER, IF CHALLENGED, THE ADMINISTRATOR'S APPROVAL OF SIPS IS SUBJECT TO JUDICIAL REVIEW. ACT, SECTION 307; SEE CONNECTICUT FUND FOR THE ENVIRONMENT V. EPA, 612 F.2D 998 (2D CIR. 1982). THEREFORE, EPA APPROVAL DOES NOT ABSOLUTELY GUARANTEE IMMUNITY FROM HIGHWAY FUND RESTRICTIONS. WE ARE SATISFIED, HOWEVER, THAT EPA APPROVAL OR CONDITIONAL APPROVAL MUST MEAN AT LEAST THAT THE ADMINISTRATOR HAS DETERMINED THAT REASONABLE EFFORTS WERE MADE TO SUBMIT AN ACCEPTABLE SIP REVISION. THUS, EPA APPROVAL OR CONDITIONAL APPROVAL WOULD, ABSENT EITHER A FINDING OF CHANGED CIRCUMSTANCES (WHERE EPA APPROVAL WAS BASED NOT ON AN ACTUAL SUBMISSION BUT ON REASONABLE EFFORT TO SUBMIT WHICH WERE SUBSEQUENTLY ABANDONED) OR SUBSEQUENT JUDICIAL ACTION, PRECLUDE THE LATER APPLICATION OF THIS SANCTION.

MOREOVER, WE NOTE THAT THE MINIMUM REQUIREMENT TO STAY THE SANCTION IS REASONABLE EFFORT TO SUBMIT AN APPROVABLE PART D SIP REVISION. APPROVAL ITSELF HAS NEVER BEEN REQUIRED TO STAY THE SANCTION.

PROPER USE OF THE HIGHWAY FUND SANCTION

HAVING RULED OUT USE OF THE HIGHWAY FUND SANCTION TO INDUCE STATES TO SUBMIT POST PART D SIP REVISIONS AND FOR PUNISHMENT OF STATES THAT REVOKE PARTS OF THEIR PART D SIPS, THE QUESTION ARISES WHETHER THERE IS ANY REMAINING USE FOR THIS SANCTION. A FINDING OF NO REASONABLE EFFORTS TO SUBMIT COULD STILL TRIGGER THE SANCTION IF IT FOLLOWED EITHER A DISAPPROVED INITIAL SUBMISSION OR NONSUBMISSION. HOWEVER, THE PASSAGE OF TIME AND THE APPROACHING EXPIRATION OF EVEN THE EXTENDED ATTAINMENT DEADLINE MAKES IT LESS AND LESS LIKELY THAT THE SANCTION CAN BE USED IN A WAY THAT HELPS ACHIEVE HEALTHFUL AIR.

CONCLUSION

IN OUR VIEW, EPA'S PROPOSAL TO INVOKE THE HIGHWAY FUND SANCTION TO PROMOTE COOPERATION WITH ITS POST PART D SIP REVISIONS AND TO PENALIZE NONIMPLEMENTATION IS NOT AUTHORIZED BY THE STATUTE. EPA SHOULD INSTEAD USE THE CONSTRUCTION MORATORIUM, FEDERAL PROMULGATION OF SIPS, AND SECTION 176(B) CLEAN AIR GRANTS SANCTIONS TO ACHIEVE THE GOAL OF EXPEDITIOUS POST- DEADLINE ATTAINMENT. IF IN EPA'S JUDGMENT THESE METHODS ARE TOO ECONOMICALLY OR ADMINISTRATIVELY BURDENSOME, IT SHOULD SEEK EITHER LEGISLATIVE RELIEF FROM ENFORCEMENT RESPONSIBILITY OR NEW STATUTORY PENALTIES AS WARRANTED.

WE HOPE THE FOREGOING IS HELPFUL TO YOU. UNDER OUR USUAL AGREEMENT, THIS OPINION WILL BE AVAILABLE TO THE PUBLIC 30 DAYS FROM ITS DATE, UNLESS YOU RELEASE IT SOONER.

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