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(2) He must determine as a result of the study that such a program is likely to be effective in reducing or minimizing mobile source-related air pollution.

Within three months of completion of the study the Administrator is to propose regulations requiring adoption by specified States of indirect source review programs and within six months he is to promulgate final regulations. Affected States must submit plans to implement indirect source reviews within nine months after promulgation of final regulations, and within eight months after submission the Administrator must approve or disapprove the State's plan.

No indirect source may be constructed after the expiration of three months from the date required for approval or disapproval of a State plan unless construction complies with an approved plan. The Administrator may not disapprove a previously approved plan unless the State has failed to carry out its provisions in a substantial number of instances.

The Administrator may not revoke or withdraw any permit granted by a State or local government which has an approved plan so long as the holder of the permit has complied with its terms and conditions. No person commencing construction of an indirect source within six months of the date a review program is required to be in effect is required to get a permit.

The Administrator is prohibited from promulgating regulations relating to indirect source reviews except with respect to federally assisted highways, airports or other indirect sources assisted, owned or operated by the federal government.

Regulations issued by the Administrator must allow a Governor to grant variances for projects which encourage transportation programs that over the long-run improve air quality and are energy efficient, or that prevent the indirect source review program from creating an economic inbalance among geographic areas. Variances must terminate by January 1, 1985, and may be granted only if the indirect source will not contribute to levels of mobile source-related pollutants in excess of the primary standard on or after expiration of the variance.

"[S]ewage treatment works" are defined as an indirect source for the purposes of this section.

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In addition, the House Report includes an extensive

discussion of this provision.

24/

By requiring that there be a determination that an indirect source review program is "necessary" and basing this determination of necessity on the assumptions that the auto has been cleaned up as required by the 1970 Act and that all feasible stationery source controls and all practicable transportation control measures have been implemented, this provision assures that indirect sources will carry their fair burden of cleaning the air but will not be penalized by delays in compliance by the automobile and others.

By requiring that there must be a determination that an indirect source review program will be effective before it can be implemented and basing this determination on an NAS study, the provision assures that indirect source review programs which are technically deficient and which have a perverse impact on air quality will not be required.

By providing that indirect source review programs be implemented by the states and localities, that Governors be given authority to grant variances where air quality improvements will result, and that there be a schedule for the development of regulations that allows for input from the NAS study, the states and localities and concerned citizens, the provision assures that indirect source review programs will be as technically sound and as politically acceptable as is possible.

24/ See Appendix II.

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For these and other reasons, we believe that the provision dealing with indirect sources included in S. 253 and in last year's Conference Report is sound, fair and workable. eliminates the disortions in the Act caused by the delays

It

in cleaning up the automobile and stationery sources and allows for the development of sound and effective indirect source review regulations which can be implemented where necessary and which will have the desired effect of improving air quality.

We urge that this provision be included in the
Amendments to the Clean Air Act to be passed this session.

To move forward with this provision in the form included
The particular

in the Conference Report has several advantages:
language of the provision is the product of long and arduous study
and work by both bodies, it has been agreed to by the representa-
tives of both bodies in Conference, and it has wide support among
both those who would regulate--the states and localities--and
those who would be regulated. Because of this, there should be
no delay in coming to an agreement on the terms of this particular
provision.

It is important to move forward promptly with legislation in this area in order to end the confusion and uncertainty that has plagued the states, localities and the development industry for almost four years. It is even more important to give relief in this area before the EPA appropriation limitation lapses and EPA reimposes or is forced to reimpose its indirect source and parking management regulations.

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Not only will the imposition of these inequitable, infeasible and counterproductive regulations have a disasterous effect on development with a resulting impact on jobs and the economy, but their imposition also will have a perverse effect on air quality. Ironically, the impact will be more severe in both

cases because of the delays in cleaning up the automobile that

will be granted this year.

Provisions For Rule-Making and Judicial Review

Many of the land use and transportation control regulations which have been promulgated by EPA have been subject to petitions of review filed pursuant to Section 307 of the Act. The federal appeals courts have found that many of these regulations lack an adequate technical foundation. In fact,

several of the transportation control plans that have been 25/ reviewed have been remanded to the EPA for more work.

We believe that these problems can be traced in part

to the deadlines to which the Agency has been held by the Act and by the courts. But at least in part, the problems are also rooted in the very nature of the rule-making and judicial review provisions applicable to the development of the regulations.

Affected groups and individuals are given

25

See South Terminal Corp. v. EPA, 6 ERC 2025 (1st Cir. 1974);
Friends of the Earth v. EPA, 6 ERC 1781 (2nd Cir. 1974);
Commonwealth of Pennsylvania v. EPA, 6 ERC 1769 (3rd Cir.
1974).

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the opportunity to participate in the rule-making process in only a cursory fashion. The rule-making process produces a skimpy and inadequate record for review by the courts of appeal. And the Agency does not face a meaningful test of its performance on review.

The shortcomings of the present provisions for rulemaking and judicial review have drawn the attention of the judges who have heard the petitions for review. Thus, Judges Clark and Boyle of the U.S. Court of Appeals for the Fifth Circuit, in an unusual concurring opinion filed in the State of Texas case for the "sole purpose of [highlighting] the adverse effects flowing from the legislative mandate that judicial review proceedings be injected into the court system at the appellate level," described the problems they encountered in reviewing a "record" of over 10,000 pages:

No formal hearing has ever been held
in this highly technical, factually complex
matter. The administrative 'record' upon
which we had to base our review was comprised
of only the sparest of documentation, for it
essentially evolved from an act of agency
rule-making. To accentuate the problem the
agency contracted the services of a private
firm for the formulation of most of the rule
requirements it ultimately adopted here, so
that not even intra-agency background for
these actions was available. The writing
judge was required to hold both pre- and
post-argument conferences with counsel for
the parties to enable the three of us as
a court to comprehend the substance of the
issues and conduct a minimally meaningful
review.

The subject matter of this action involves the health and welfare of millions of citizens, the continued business vitality of tens of thousands of firms and compliance expenditures costing billions of dollars.