This report explains the Clean Air Act requirement that federal departments and agencies demonstrate that their activities—including projects that they fund—"conform" to state plans for achieving air quality standards. The report explains the statutory requirements, reviews the recent history of their implementation, and examines how conformity requirements might affect areas designated "nonattainment" for a revised ozone air quality standard. The Environmental Protection Agency (EPA) proposed such a revision in December 2014, and is under court order to finalize its review by October 1, 2015. Transportation conformity, which is required by Section 176(c) of the Clean Air Act (CAA), was established by Congress as a means of insuring that federal actions, including the provision of federal funds for transportation projects, not undermine air quality in areas that have not attained national ambient air quality standards (NAAQS) and in areas that were nonattainment, but have been redesignated as maintenance areas under CAA Section 175A. By potentially withholding federal funds for non-conforming projects, conformity serves as an important stimulus for state and local governments to assess potential air quality impacts of projects and, if necessary, modify them to assure that they not interfere with progress toward or maintenance of clean air. Under Section 176(c), departments and agencies of the federal government are prohibited from engaging in, supporting or providing financial assistance for, licensing, permitting, or approving any activity that does not conform to a State Implementation Plan (SIP) after such a plan has been submitted and approved. SIPs are a key element in achieving CAA standards. Under the act, depending on the NAAQS and the classification of the nonattainment area, states are required to develop SIPs within 18 months to four years of EPA's designation of an area as nonattainment. In general, in areas that have not attained one or more of the six NAAQS established by EPA (currently more than 100 areas with a combined population of 143 million ) the state must develop a SIP providing for implementation, maintenance, and enforcement of the NAAQS. In most cases, a SIP contains an inventory of existing emissions, projections of future emissions (generally including a motor vehicle emissions budget), and an identification of measures that will be taken to reduce the emissions in order to reach attainment by the statutory deadline. Deadlines vary, depending on the severity of the pollution, but generally a nonattainment area must demonstrate that it is making annual emission reductions sufficient to reach attainment. (For a more extended discussion of the requirements for nonattainment areas, see CRS Report RL30853, Clean Air Act: A Summary of the Act and Its Major Requirements .) Once an area has attained the NAAQS, it can be redesignated as a "maintenance" area if it revises its SIP to demonstrate how it will maintain compliance over a 20-year period. Conformity requirements apply to both nonattainment and maintenance areas. The act contains seven pages of detail regarding what constitutes a conforming project, and the requirements are further elaborated in the Code of Federal Regulations at 40 C.F.R. Part 93. In general, conformity to a SIP means that a proposed project or program "will not produce new air quality violations, worsen existing violations, or delay timely attainment of the national ambient air quality standards or delay interim milestones." Although a wide range of federal funding and programs is subject to conformity, it is transportation planning (and ultimately highway funding) that is most commonly affected. Transportation makes a substantial contribution to ambient concentrations of four of the six NAAQS pollutants: ozone, carbon monoxide, nitrogen dioxide, and particulate matter. Before a new transportation plan or transportation improvement program (TIP) can be approved by the Federal Highway Administration or Federal Transit Administration or a new non-exempt project can receive federal funding, a regional emissions analysis must generally demonstrate that the emissions of these pollutants or their precursors projected from the entire transportation system, including the new projects, are consistent with the emissions ceilings established in the SIP. Conformity must be demonstrated for the period ending on either the final year of the area's long range transportation plan, or at the election of the metropolitan planning organization (MPO), after consultation with the air pollution control agency, the longest of: the first 10 years of the transportation plan; the latest year in the SIP that contains a motor vehicle emissions budget; or the year after completion of a regionally significant project. Conducting this analysis can involve federal, state, regional, and local transportation and environmental planners. Ultimately, the Federal Highway Administration and Federal Transit Administration make conformity determinations for the transportation plan, TIP, and/or project. The conformity determinations are based on the most recent estimates of emissions, population, employment, travel, and traffic congestion provided by a variety of agencies. Combining these data, the MPO or state DOT must estimate vehicle miles traveled and emissions, generally by using an approved EPA mobile source emissions model. These models are periodically updated to reflect the current mix of vehicles and their emission characteristics. To reflect the changing nature of both economic and environmental inputs, both the statute and the regulations require that a nonattainment area's long-range Transportation Plan and its TIP demonstrate conformity at least every four years. The statute and regulations also require that MPOs re-determine conformity of transportation plans and programs not later than two years after approval of a new State Implementation Plan or motor vehicle emissions budget. In practice, many urban areas obtain a new determination that their TIP conforms on an annual basis. In the absence of conformity, the regulations provide that a limited set of exempt projects can go forward. The list includes 20 categories of highway safety projects, rehabilitation and reconstruction of transit facilities, purchase of replacement buses and rail cars, noise attenuation projects, and pedestrian and bicycle facilities. It does not include most new transit or highway projects, however. EPA's Office of Transportation and Air Quality (OTAQ) defined the exempt projects as those that are "air quality neutral"—that is, they neither improve nor degrade air quality. In addition to projects that are exempt by regulation, projects that were already approved and funded in the previous TIP may continue to be funded during a conformity lapse, provided that approval is not sought for a new phase of the project. Phases of a project include, among others, determination of environmental impacts under the National Environmental Policy Act, right-of-way acquisition, final design, and construction. Activities within each of those phases can continue for projects that were found to conform in the previous TIP. Transportation Control Measures (TCMs) listed in an approved State Implementation Plan are also allowed to proceed during a conformity lapse. These projects can include programs for improved public transit, construction of HOV (high occupancy vehicle) lanes, traffic flow improvement programs, fringe parking, idling reduction programs, and pedestrian facilities. In general, the statute and regulations assume that projects requiring a conformity determination will be located in urban or suburban areas, because most nonattainment areas have an urban or suburban core. But there are some nonattainment areas that are not urban or suburban. These areas would only need to demonstrate conformity if they had a non-exempt project that required federal funding or approval—a rare occurrence. Unlike areas with MPOs, they are not required to demonstrate conformity every four years. For the few rural areas that may have a federally funded project, EPA has developed separate procedures in 40 C.F.R. 93.109(f) that may deal with conformity. The section, which addresses "areas with insignificant motor vehicle emissions," states: ... an area is not required to satisfy a regional emissions analysis ... for a given pollutant/precursor and NAAQS, if EPA finds through the adequacy or approval process that a SIP demonstrates that regional motor vehicle emissions are an insignificant contributor to the air quality problem for that pollutant/precursor and NAAQS. The SIP would have to demonstrate that it would be unreasonable to expect that such an area would experience enough motor vehicle emissions growth in that pollutant/precursor for a NAAQS violation to occur. Such a finding would be based on a number of factors, including the percentage of motor vehicle emissions in the context of the total SIP inventory, the current state of air quality as determined by monitoring data for that NAAQS, the absence of SIP motor vehicle control measures, and historical trends and future projections of the growth of motor vehicle emissions. Most rural areas are unlikely to need to demonstrate conformity: the absence of monitoring data will mean that EPA cannot designate a rural area nonattainment in most cases. A nonattainment designation is based on the availability of three years of quality-controlled data from EPA-certified monitors. Approximately 814 U.S. counties (26% of the total) had ozone monitors reporting data to EPA in 2013; 2330 counties (74%), generally in less-populated areas, had no ozone monitoring. As a result, the majority of the nation's counties are termed "unclassifiable" by EPA, and are not subject to conformity. Nonattainment areas that have not demonstrated conformity by the applicable deadline fall into one of two groups: those in a grace period, and those in a conformity lapse. In the 2005 surface transportation law, Congress amended Section 176(c) of the Clean Air Act to provide that areas that do not make a conformity determination for a transportation plan or TIP by the applicable deadline are given a 12-month grace period to demonstrate compliance before conformity will lapse. As shown in Table 1 , since 2007, 34 areas in 18 states have used this grace period. As a result of this, as well as cooperation between air quality and transportation planners, all but seven areas in six states ( Table 2 ) have been able to demonstrate conformity without incurring a lapse.