Approval and Promulgation of a New Source Review Implementation Plan; Indiana

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN 40-1-6342A; FRL-5067-4]

Approval and Promulgation of a New Source Review Implementation

Plan; Indiana

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Direct final rule.

-----------------------------------------------------------------------

SUMMARY: The USEPA is approving the State implementation plan (SIP)

revision submitted by the State of Indiana for the purpose of meeting

requirements of the Clean Air Act (Act), as amended in 1990 (amended

Act), with regard to new source review (NSR) in areas that have not

attained the national ambient air quality standards (NAAQS). This SIP

revision was submitted by the State to satisfy Federal requirements for

an approvable nonattainment area NSR SIP for Indiana. The USEPA is

approving the recodified version of the Indiana permitting rules to

replace those in the existing SIP. The USEPA is also removing

references in the Code of Federal Regulations to the construction ban

imposed in Lake and Porter Counties for failure to have an approved

ozone plan since the Clean Air Act Amendments of 1990 removed this ban.

In the proposed rules section of this Federal Register, USEPA is

proposing approval of and soliciting public comment on this requested

SIP revision. If adverse comments are received on this direct final

rule, USEPA will withdraw this final rule and address the comments

received in a final rule on the related proposed rule which is being

published in the proposed rules section of this Federal Register.

Unless this final rule is withdrawn, no further rulemaking will occur

on this requested SIP revision.

DATES: This final rule will be effective December 6, 1994, unless

adverse comments received by December 6, 1994. If the effective date is

delayed, timely notice will be published in the Federal Register.

ADDRESSES: Comments on this rule should be addressed to: J. Elmer

Bortzer, Chief Regulation Development Section, Regulation Development

Branch (5AR-18J), United States Environmental Protection Agency, Region

5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

Copies of the State's submittal, USEPA's analysis of it, and other

information are available for inspection during normal business hours

at the following location: United States Environmental Protection

Agency, Region 5, Air and Radiation Division, Regulation Development

Branch, 77 West Jackson Boulevard, Chicago, Illinois 60604.

A copy of the SIP revision is available for inspection at the

following location: Office of Air and Radiation (OAR) Docket and

Information Center (Air Docket 6102), room M1500, United States

Environmental Protection Agency, 401 M Street SW., Washington, DC

20460, (202) 260-7548.

FOR FURTHER INFORMATION CONTACT: Sam Portanova, Environmental Engineer,

Grants Management and Program Analysis Section, Regulation Development

Branch (5AR-18J), United States Environmental Protection Agency, Region

5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

Anyone wishing to come to the Region 5 offices should first contact

Mr. Portanova at (312) 886-3189.

SUPPLEMENTARY INFORMATION:

I. Background

The air quality planning requirements for nonattainment NSR are set

out in part D of title I of the Act. The USEPA has issued a ``General

Preamble'' describing its preliminary views on how USEPA intends to

review SIPs and SIP revisions submitted under part D, including those

State submittals containing nonattainment area new source review (NSR)

SIP requirements [see 57 FR 13498 (April 16, 1992) and 57 FR 18070

(April 28, 1992)]. Because USEPA is describing its interpretations here

only in broad terms, the reader should refer to the General Preamble

for a more detailed discussion of the interpretations of part D

advanced in this rule and the supporting rationale.

In this final rule on the Indiana nonattainment NSR SIP, USEPA is

applying its interpretations taking into consideration the specific

factual issues presented.

II. This Action

Section 110(k) of the Act sets out provisions governing USEPA's

action on SIP submittals (see 57 FR 13565-13566). Analysis of State

Submission

1. Procedural Background

The Act requires States to observe certain procedural requirements

in developing implementation plans and plan revisions for submission to

USEPA. Section 110(a)(2) of the Act provides that each implementation

plan submitted by a State must be adopted after reasonable notice and

public hearing.1 Section 110(l) of the Act similarly provides that

each revision to an implementation plan submitted by a State under the

Act must be adopted by such State after reasonable notice and public

hearing.

---------------------------------------------------------------------------

\1\Section 172(c)(7) of the Act provides that plan provisions

for nonattainment areas shall meet the applicable provisions of

section 110(a)(2).

---------------------------------------------------------------------------

The USEPA also must determine whether a submittal is complete and

therefore warrants further USEPA review and action (see section

110(k)(1) of the Act and 57 FR 13565). The USEPA's completeness

criteria for SIP submittals are set out at 40 CFR part 51, appendix V

(1991), as amended by 57 FR 42216 (August 26, 1991). The USEPA attempts

to make completeness determinations within 60 days of receiving a

submission. However, a submittal is deemed complete by operation of law

under section 110(b)(1)(B) if a completeness determination is not made

by USEPA within 6 months after receipt of the submission.

The State of Indiana held public hearings on March 22, March 25,

and April 1, 1993, to entertain public comment on the requested NSR SIP

revision. Following the public hearings, the plan was adopted by the

State on July 21, 1993, became effective on December 12, 1993, and was

submitted to USEPA on February 25, 1994, as a requested revision to the

SIP.

The SIP revision was reviewed by USEPA to determine completeness

shortly after its submittal, in accordance with the completeness

criteria referenced above. The submittal was found to be complete on

April 8, 1994, and a letter dated April 8, 1994, was forwarded to the

Governor's designee for SIPs, Timothy J. Method, indicating the

completeness of the submittal and the next steps to be taken in the

review process. In this action, USEPA approves the Indiana

nonattainment new source review SIP submittal, and invites public

comment on the action. At this time USEPA is also approving the

recodified permit rules to replace those in the existing SIP which were

approved as APC 19 at 40 CFR 52.770(c)(24). Since the time of this

approval, Indiana has recodified its air pollution control rules into

Title 326 of the Indiana Administrative Code (326 IAC). As requested by

the State on August 15, 1994, USEPA is approving the incorporation of

recodified rules into the SIP to replace those previously approved as

part of APC 19. This action is intended to make it easier for the

public, the State and USEPA to precisely identify what provisions

covering permits are part of the SIP.

2. General Nonattainment NSR Requirements

The statutory requirements for nonattainment new source review SIPs

and permitting are found at sections 172 and 173 of the Act. The Act

requires States to address a number of nonattainment NSR provisions in

a SIP submittal to meet the requirements of part D of title I of the

Act. What follows is a summary of the requirements and how the Indiana

submittal addresses them. A more detailed analysis is contained in the

Technical Support Document for this rule which is available for

inspection at the Region 5 address listed above.

The Act requires States to submit the following nonattainment NSR

provisions:

a. Provisions to ensure that certain construction bans previously

imposed in States pursuant to section 110(a)(2)(I) are lifted.

The amended Act repealed provisions formerly in section

110(a)(2)(I) which required construction bans in certain nonattainment

areas. A construction ban was imposed in Lake and Porter Counties

pursuant to section 110(a)(2)(I). With some exceptions not applicable

here, the amended Act thus lifted such construction bans, including the

ban in Lake and Porter Counties. This final rule therefore revises the

Code of Federal Regulations to remove references to the construction

ban formerly imposed in Lake and Porter Counties for failure to have an

approvable ozone plan.

b. Provisions, pursuant to section 173(a)(1), to assure that

calculations of emissions offsets are based on the same emissions

baseline used in the demonstration of reasonable further progress. 326

IAC 2-3-3(a)(5) requires emission offsets to result in reasonable

further progress toward attainment of the NAAQS. Also, the definition

of emissions offsets baselines in 326 IAC 2-3-3(b) is consistent with

reasonable further progress.

c. A provision, pursuant to section 173(c)(1), to allow offsets to

be obtained in another nonattainment area if the area has an equal or

higher nonattainment classification and emissions from the other

nonattainment area contribute to a NAAQS violation in the area in which

the source would construct. Indiana has established this provision in

326 IAC 2-3-5.

d. A provision, pursuant to section 173(c)(1), that any emissions

offsets obtained in conjunction with the issuance of a permit to a new

or modified source must be enforceable at the time of permit issuance

and in effect by the time the new or modified source commences

operation. Indiana has established this provision in 326 IAC 2-3-

3(b)(8).

e. A provision, pursuant to section 173(c)(1), to assure that

emissions increases from new or modified sources are offset by real

reductions in actual emissions. Indiana has established this provision

in 326 IAC 2-3-3(a)(5).

f. A provision, pursuant to section 173(c)(2), to prevent emissions

reductions otherwise required by the Act from being credited for

purposes of satisfying part D offset requirements. Indiana has

established this provision in 326 IAC 2-3-3(b)(9).

g. States must establish provisions, pursuant to sections 172(c)(4)

and 173(a)(1)(B), that reflect changes in growth allowances;

specifically, (1) the elimination of existing growth allowances in any

nonattainment area that received a notice prior to the Amendments that

the SIP was substantially inadequate or receives such a notice in the

future; and (2) the restriction of growth allowances to only those

portions of nonattainment areas formally targeted as special zones for

economic development. Indiana does not have any of the above mentioned

growth allowances.

h. A provision, pursuant to section 173(a)(5), that requires an

analysis of alternative sites, sizes, production processes, and

environmental control techniques for proposed sources. This analysis

shall demonstrate that the benefits of the proposed source

significantly outweigh the environmental and social costs imposed as a

result of its location, construction, or modification. This shall be a

prerequisite to issuing any part D permit. Indiana has established this

provision in 326 IAC 2-3-3(a)(4).

i. In accordance with section 173(d), Indiana has committed to

report determinations, from nonattainment new source review permits, to

the RACT/BACT/LAER clearinghouse in the annual Indiana Department of

Environmental Management Air Management Program Workplan.

j. A provision, pursuant to section 173(e), that allows any

existing or modified source that tests rocket engines or motors to use

alternative or innovative means to offset emissions increases from

firing and related cleaning, if four conditions are met: (a) the

proposed modification is for expansion of a facility already permitted

for such purposes, (b) the source has used all available offsets and

all reasonable means to obtain offsets and sufficient offsets are not

available, (c) the testing is essential to national security, and (d)

the source will comply with an alternative measure designed to offset

any emissions increases not directly offset by the source. Indiana has

established this provision in 326 IAC 2-3-3(b)(11).

k. Provisions pursuant to section 819 of the Act that effectively

exempt activities related to stripper wells from the new additional NSR

requirements of new subparts 2, 3, and 4 for particulate matter with an

aerodynamic diameter less than or equal to a nominal 10 micrometers

(PM-10), ozone, or carbon monoxide (CO) nonattainment areas classified

as serious or less and having a population of less than 350,000.

Indiana has not established such provisions. This is acceptable because

there are no stripper well activities in the State of Indiana.

l. Provisions, pursuant to section 328, to assure that sources

located on an outer continental shelf (OCS) and within 25 miles of the

State's seaward boundary, are subject to the same requirements

applicable if the source were located in the corresponding onshore

area. Indiana has not established such provisions. This is acceptable

because Indiana is inland and not located on an OCS.

m. Pursuant to sections 302(z) and 111(a)(3), a definition of

``stationary source'' to include internal combustion engines other than

the newly defined category of ``nonroad engines.'' Indiana has

established a definition consistent with these requirements in 326 IAC

2-3-1(aa).

n. Pursuant to section 415, exemptions from nonattainment NSR

provisions for installation, operation, cessation, or removal of a

qualifying temporary clean coal technology demonstration project. Such

projects must still comply with any applicable SIP and all other

requirements for the attainment and maintenance of NAAQS. Indiana has

established this provision in 326 IAC 2-3-2(i).

o. A provision, pursuant to section 173(a)(3), to assure that

owners or operators of each proposed new or modified major stationary

source demonstrate, as a condition of permit issuance, the compliance

of all other major stationary sources under the same ownership in the

State. Indiana has established this provision in 326 IAC 2-3-3(a)(3).

3. Ozone

Pursuant to section 172(c)(5), SIPs must require permits for the

construction and operation of new or modified major stationary sources.

The statutory permit requirements for ozone nonattainment areas are

generally contained in revised section 173, and in subpart 2 of part D.

These are the minimum requirements that States must include in an

approvable implementation plan. For all classifications of ozone

nonattainment areas and for ozone transport regions, States must adopt

the appropriate major source thresholds and offset ratios. States must

also adopt provisions to ensure that any new or modified major

stationary source of nitrogen oxides (NOX) satisfies the

requirements applicable to any major source of volatile organic

compounds (VOC), unless a special NOX exemption is granted by the

Administrator under the provision of section 182(f). For serious and

severe ozone nonattainment areas, State plans must implement sections

182(c)(6), (7) and (8) with regard to modifications.

For emissions of VOC and NOX in ozone nonattainment areas, the

State of Indiana has established major source thresholds in 326 IAC 2-

3-1(q)(2) and offset ratios in 326 IAC 2-3-3(a)(5)(B) as follows:

------------------------------------------------------------------------

Area Major source

classification threshold Offset ratio NOX provisions

------------------------------------------------------------------------

Marginal.......... 100 tons per year 1.1 to 1......... Included.

Moderate.......... 100 tons per year 1.15 to 1........ Included.

Serious........... 50 tons per year. 1.2 to 1......... Included.

Severe............ 25 tons per year. 1.3 to 1......... Included.

------------------------------------------------------------------------

Indiana does not have an extreme ozone nonattainment area.

In addition, Indiana's plan submittal reflects appropriate

modification provisions in 326 IAC 2-3-1(j), including a de minimis

level of 25 tons for serious and severe ozone nonattainment areas. 326

IAC 2-3-1(j) sets the major modification threshold level (``deminimis

level'') at 25 tons per year (tpy) when the net emissions increase from

the proposed modification is aggregated with all other net emissions

increases from the source over a 5 consecutive calendar year period

prior to, and including, the year of the modification. This meets the

requirements of section 182(c)(6). The registration requirement

exemption levels of 15 pounds per day of VOC and 25 pounds per day of

NOX (326 IAC 2-1-1(b)(2)(B)) are for the purposes of determining

applicability of the registration requirements for new sources and

modifications to existing sources. These exemption levels do not

exclude smaller emissions increases from being counted in the 5 year

aggregated net emissions increase analyses required in serious and

severe ozone nonattainment areas.

4. Carbon Monoxide

The statutory permit requirements for CO nonattainment areas are

generally contained in revised section 173, and in subpart 3 of part D.

These are the minimum requirements that States must include in an

approvable implementation plan. States must adopt the appropriate major

source threshold and offset ratio.

Indiana has established a major source threshold of 100 tpy (in 326

IAC 2-3-1(q)(1)) and an offset ratio of 1 to 1 (in 326 IAC 2-3-

3(a)(5)(A)) for moderate CO nonattainment areas. Indiana does not have

a serious CO nonattainment area.

5. PM-10

The statutory permit requirements for PM-10 nonattainment areas are

generally contained in revised section 173, and in subpart 4 of part D.

These are the minimum requirements that States must include in an

approvable implementation plan. For both classifications of PM-10

nonattainment areas, States must adopt the appropriate major source

threshold, offset ratio, significance level for modifications, and

provisions for PM-10 precursors.

Indiana has established major source thresholds (in 326 IAC 2-3-

1(q)(1)), offset ratios (in 326 IAC 2-3-3(a)(5)(A)), modification

significance levels (in 326 IAC 2-3-1(x)), and PM-10 precursor

provisions as follows:

----------------------------------------------------------------------------------------------------------------

Precursor

Area classification Major source threshold Offset ratio Significance level provisions

----------------------------------------------------------------------------------------------------------------

Moderate............... 100 tpy................ 1 to 1................. 15 tpy................. None.

----------------------------------------------------------------------------------------------------------------

Indiana does not have a serious PM-10 nonattainment area. Also,

Indiana is not required to count PM-10 precursors towards PM-10

emissions. Filter analysis data from ambient monitors in Cook County,

Illinois (the data was collected in 1992) were used to asses the

significance of PM precursors in the Lake County, Indiana PM

nonattainment area. The monitors used are located at the Washington

School and the Bright School in the city of Chicago, Illinois. These

monitors are located approximately .6 and 1.75 miles, respectively,

west the Lake County nonattainment area. Besides the close proximity,

these sites are also appropriate because the source mix in southeast

Chicago closely approximates that of the Lake County nonattainment

area.

The mean sulfate concentration plus the mean nitrate concentration

for the Washington school and Bright school monitors were

13.1g/m\3\ and 14.9g/m\3\ respectively. This compares

to an average annual background PM concentration of 23g/m\3\

in the Lake County nonattainment area. This illustrates the relative

insignificance of the impact of PM precursors, and supports

representing PM precursor impacts as part of the background

concentration.

Further considerations also argue against applying the same control

requirements for precursor sources as for direct emission sources. The

climatology in northwest Indiana is such that precursor emission

control for a particular source would not have a significant effect

until far downwind. In considering the reductions to be achieved by

controlling PM precursors under section 189(e) Congress has indicated

that USEPA should take into account reductions achievable from control

requirements imposed by other sections or titles of the 1990 Clean Air

Act. Title IV of the Clean Air Act mandates significant particulate

precursor emission reductions in Indiana, after which the impacts of

these sources on particulate matter concentrations will be even less

significant.

For these reasons, it is appropriate to conclude that precursors do

not contribute significantly to particulate matter concentrations in

the Lake County nonattainment area. This finding is based on the

current character of the area including, for example, the existing mix

of sources in the area. It is possible, therefore, that future growth

could change the significance of precursors in the area. The USEPA

intends to issue future guidance addressing such potential changes in

the significance of precursor emissions in an area.

6. Sulfur Dioxide

The statutory permit requirements for sulfur dioxide (SO2)

nonattainment areas are generally contained in revised section 173, and

in subpart 5 of part D. These are the minimum requirements that States

must include in an approvable implementation plan. For SO2

nonattainment areas, States must adopt the appropriate major source

threshold, offset ratio, and significance level for modifications.

Indiana has established a major source threshold of 100 tpy (in 326

IAC 2-3-1(q)(1)), an offset ratio of 1 to 1 (in 326 IAC 2-3-

3(a)(5)(A)), and a modification significance level of 40 tpy (in 326

IAC 2-3-1(x)).

7. Lead

The statutory permit requirements for lead nonattainment areas are

generally contained in revised section 173, and in subpart 5 of part D.

These are the minimum requirements that States must include in an

approvable implementation plan. For lead nonattainment areas, States

must adopt the appropriate major source threshold, offset ratio, and

significance level for modifications.

Indiana has established a major source threshold of 25 tpy (in 326

IAC 2-3-1(q)(4)), an offset ratio of 1 to 1 (in 326 IAC 2-3-

3(a)(5)(A)), and a modification significance level of 0.6 tpy (in 326

IAC 2-3-1(x)).

8. Permit Exemption Emission Levels

The Indiana nonattainment rules have exemption levels listed in 326

IAC 2-1-1(b)(2). 326 IAC 2-1-1(b)(2) states that a new source or a

modification to an existing source with emissions above these exemption

levels and below potential emissions of 25 tons per year for any

regulated pollutant shall be registered according to 326 IAC 2-1-2.

Also, 326 IAC 2-1-1(b)(1) establishes exemption levels for requiring

new sources or modifications to existing sources obtain a construction

permit under 326 IAC 2-1-3. The exemption levels are available to

sources for registration applicability purposes. These levels are

applied before any netting calculations. Sources cannot net emissions

increases and decreases and then use net emissions in the exemption

test. These do not affect the provisions for special modifications.

9. Definition of Federally Enforceable

The Indiana 326 IAC regulations do not include a definition of

``federally enforceable''. On July 13, 1994, Pamela Carter, Attorney

General of the State of Indiana, sent a letter to USEPA clarifying

Indiana's interpretation of the definition of federally enforceable.

The letter states that federally enforceable, e.g. as used in 326 IAC

2-3-1, should be interpreted in accordance with the Federal definition

at 40 CFR 51.165(a)(1)(xiv). The USEPA, therefore, interprets

`federally enforceable' as used in the Indiana rules to be defined

according to the Federal definition.

10. Recodification of SIP Approved Regulations

The previous regulations approved into the Indiana SIP establishing

a new source review program were contained in APC-19 and codified at 40

CFR 52.770(c)(24). These regulations provided for a new source review

program pursuant to 40 CFR part 51 subpart I, including both minor and

major new source review. USEPA is approving Indiana's SIP revisions not

only to adopt the changes referenced elsewhere in this notice but also

to recodify the previously approved new source review rules, formerly

in APC-19 and currently in 326 IAC 2, based on a review of the entire

submission, USEPA has determined that the new source review regulations

contained in 326 IAC 2 submitted by the state, including both the rule

changes and the recodification, meet the requirements of part D of

title I of the Act. In addition, these rules are being approved

pursuant to 40 CFR 51 Subpart I, for both major and non-major new

source review except not for PSD requirements in 40 CFR 51.166.

11. Plantwide Source Definition

On October 14, 1981, the USEPA revised the new source review

regulations in 40 CFR Part 51 to give states the option of adopting the

``plantwide'' definition of stationary source which provides that only

physical or operational changes that result in a net increase in

emissions at the entire plant require a NSR permit. For example, if a

plant decreased emissions by the same amount at another piece of

process equipment, then there would be no net increase in emissions at

the plant and therefore, no ``modification'' to the ``source.'' The

plantwide definition is in contrast to the so-called ``dual''

definition [or definition of structure like that in the 1979 offset

ruling (44 FR 3274), which has much the same effect as the dual

definition]. Under the dual definition, the emissions from each

physical or operational change are gauged without regard to reductions

elsewhere at the plant.

In the October 1981 rule, USEPA set forth its rationale for

allowing use of the plantwide definition (46 FR 50766-69). In its view,

allowing use of the plantwide definition was a reasonable accommodation

of the conflicting goals of part D of title I of the Act. The Act

provided for reasonable further progress (RFP) and timely attainment of

National Ambient Air Quality Standards (NAAQS), while also allowing for

maximum state flexibility and economic growth. The USEPA recognized

that the plantwide definition would bring fewer plant modifications

into the nonattainment permitting process, but emphasized that this

generally would not interfere with RFP and timely attainment primarily

because the states under the demands of Part D eventually would have

adequate SIPs in place. For instance, USEPA stated:

Since demonstration of attainment and maintenance of the NAAQS

continues to be required, deletion of the dual definition increases

State flexibility without interfering with timely attainment of the

ambient standards and so is consistent with Part D [46 FR 50767].

USEPA also indicated that under the plantwide definition, new

equipment would still be subjected to any applicable new source

performance standard and that wholly new plants, as well as any

modifications that resulted in a significant net emissions increase,

would still be subject to NSR. Thus, EPA saw no significant

disadvantage in the plantwide definition from the environmental

standpoint, but the advantages from the standpoints of state

flexibility and economic growth. It regarded the plantwide definition

as presenting, at the very worst, environmental risks that were

manageable because of the independent impetus to create adequate Part D

plans.

As a result, EPA ruled that a state wishing to adopt a plantwide

definition generally has complete discretion to do so, and it set only

one restriction on that discretion. If a state had specifically

projected emission reductions from its NSR program as a result of a

dual or similar definition and had relied on those reductions in an

attainment strategy that USEPA later approved, then the state needed to

revise its attainment strategy as necessary to accommodate reduced NSR

permitting under the plantwide definition (46 FR 50767 and 50769).

In 1984, the Supreme Court upheld USEPA's action as a reasonable

accommodation of the conflicting purposes of Part D of Title I of the

Act, and hence, well within USEPA's broad discretion. Chevron, U.S.A.

v. NRDC, 104 S.Ct. 2778 (1984). Specifically, the Court agreed that the

plantwide definition is fully consistent with the Act's goal of

maximizing state flexibility and allowing reasonable economic growth.

Likewise, the Court recognized that USEPA had advanced a reasonable

explanation for its conclusion that the plantwide definition serves the

Act's environmental objectives as well (see 104 S.Ct. at 2792). In this

rule USEPA generally reaffirms the rationales stated in the 1981

rulemaking. Those rationales were left undisturbed by the Supreme Court

decision.

The SIP revision USEPA is approving in this action substitutes a

plantwide definition for a dual definition in Indiana's existing

nonattainment NSR program. In obtaining USEPA approval of its original

part D SIP, Indiana did not rely on any emission reductions from the

operation of its existing NSR program. Also, Indiana uses a plantwide

definition of source. A July 22, 1987 letter from Timothy J. Method,

then Acting Assistant Commissioner, Office of Air Management, Steve

Rothblatt then Chief of the Air and Radiation Branch, states Indiana's

rationale for implementing the plantwide definition. The letter further

states that in obtaining USEPA approval of its original part D SIP,

Indiana did not rely on emission reductions from its existing NSR

program. Indiana has nonattainment areas for sulfur dioxide, lead,

ozone, and fine particulate matter. Indiana has submitted several

revisions required by the amended Act prior to attainment of the NAAQS

by the statutory attainment dates, which range from 1994 to 2007 for

the nonattainment areas in Indiana. For example, Indiana has submitted

revisions for VOC and NOX RACT, Stage II vapor recovery, clean

fuel fleets, and 15% VOC reduction, employee commute options vehicle

inspection and maintenance and the 1990 base year ozone emissions

inventory. These revisions have been or will be acted on by USEPA in

subsequent actions.

Indiana's plantwide definition of source is consistent with the NSR

requirements for ozone nonattainment areas in the Clean Air Act

Amendments of 1990. Lake and Porter Counties are classified as a

``severe'' ozone nonattainment area. Therefore, the attainment date for

the area is now 2007 (see section 181(a)), and Indiana must meet an

independent requirement to reduce VOC emissions by fifteen percent in

the first six years after 1990 and three percent per year thereafter

(see section 182(b)(1) and (c)(2)(B)).

While Indiana must account for the impact of its plantwide

definition of source in the attainment and reasonable further progress

demonstrations it submits under the amended Act, it is clear that

Congress anticipated States could use the plantwide definition of

source when devising such plans.

The amended Act includes provisions regulating the application of

the plantwide definition of source, including a special rule for

serious and severe ozone nonattainment areas for determining ``de

minimis'' net increases in VOC emissions from source modifications

(section 182(c)(6)). It is clear that Congress anticipates states will

often continue to employ USEPA's plantwide definition of source in

ozone nonattainment areas (except in extreme areas, see section

182(e)(2)), provided the states can also meet the new reasonable

further progress requirements in the Act. In addition, it is important

to note that the 1990 Amendments' adoption of new future attainment

deadlines has mooted concerns regarding the approvability of a

plantwide source definition where a state has missed prior attainment

deadlines. Congress has given Indiana additional time to submit a

revised SIP to provide for attainment by the revised deadlines. As

described above, Indiana has already begun to meet its obligations

under the 1990 Amendments.

USEPA expects to publish a proposed rule in late 1994 to implement

the changes under the amended Act in the NSR provisions in parts C and

D of title I of the Act. USEPA may refer to the proposed rule as the

most authoritative guidance available regarding the approvability of

the NSR SIP submittals. USEPA expects to take final action to

promulgate a rule to implement the parts C and D changes sometime

during 1995. At that time, USEPA will review the NSR SIPs of all states

to determine whether further SIP revisions are necessary. Prior to

USEPA approval of a State's NSR SIP submission, the State may continue

permitting only in accordance with the new statutory requirements for

permit applications completed after the relevant SIP submittal date

(e.g. November 15, 1992 for ozone nonattainment areas). This policy was

explained in transition guidance memoranda from John Seitz dated March

11, 1991 and September 3, 1992.

As explained in the March 11 memorandum, USEPA does not believe

Congress intended to mandate the more stringent Title I NSR

requirements during the time provided for SIP development. States were

thus allowed to continue to permit consistent with requirements in

their current NSR SIPs during that period, or apply 40 CFR part 51,

appendix S for newly designated areas that did not previously have NSR

SIP requirements.

The September 3 memorandum also addressed the situation where

States did not submit the part D NSR SIP requirements or revisions by

the applicable statutory deadline. For permit applications complete by

the SIP submittal deadline, States may issue final permits under the

prior NSR rules, assuming certain conditions in the September 3

memorandum are met. However, for applications completed after the SIP

submittal deadline, USEPA will consider the source to be in compliance

with the Act only where the source obtains a permit that is consistent

with the substantive new NSR part D provisions in the amended Act from

the State. USEPA believes this guidance continues to apply to

permitting pending final action on NSR SIP submittals.

III. Rulemaking Action

Section 110(k) of the Act sets out provisions governing USEPA's

action on SIP submittals (see 57 FR 13565-66). The USEPA is taking the

following final rulemaking actions.

1. The USEPA is approving the requested SIP revision submitted on

March 7, 1994. The submittal consists of Title 326 IAC 2-1-1, 2-1-2, 2-

1-3, 2-3-1, 2-3-2, 2-3-3, and 2-3-5. The State of Indiana has submitted

a complete plan to implement the new source review provisions of part

D. Each of the program elements mentioned above was properly addressed.

2. The USEPA is also approving the recodified permitting rules to

replace those in the existing SIP which were approved as APC 19 at 40

CFR 52.770(c)(24). The incorporation of the recodified version of these

Indiana rules into the SIP will make it easier for the public, the

State and USEPA to identify precisely what permitting provisions are

part of the SIP. Some confusion surrounding what State rules were part

of the permitting SIP has existed since Indiana recodified its APC

rules into the Title 325 of the Indiana Administrative Code (IAC) and

subsequently into Title 326 IAC. After the effective date of this final

rule all of Indiana's permitting SIP rules will be contained in Title

326 of the IAC.

3. Consistent with section 110(n)(3) of the amended Act the USEPA

is taking this opportunity to remove references in 52.773(i) and

52.777(d) to the sanctions formerly imposed on Lake and Porter Counties

which were lifted by the 1990 Act amendments.

Because USEPA considers these actions to be noncontroversial and

routine, we are approving them without prior proposal. This action will

become effective on December 6, 1994. However, if we receive adverse

comments on these actions by November 7, 1994, then USEPA will publish

a final rule that withdraws the action, and will address the comments

received in the final rule on the requested SIP revision which has been

proposed for approval in the proposed rules section of this Federal

Register. The public comment period will not be extended or reopened.

IV. Executive Order (EO) 12866

This action has been classified as a Table 2 action by the Regional

Administrator under the procedures published in the Federal Register on

January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993,

memorandum from Michael H. Shapiro, Acting Assistant Administrator for

Air and Radiation. The Office of Management and Budget (OMB) has

exempted this regulatory action from Executive Order 12866 review.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any SIP. Each request for revision to the SIP shall be

considered separately in light of specific technical, economic, and

environmental factors and in relation to relevant statutory and

regulatory requirements.

V. Regulatory Flexibility

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, USEPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

SIP approvals under section 110 and subchapter I, part D of the Act

do not create any new requirements, but simply approve requirements

that the State is already imposing. Therefore, because the Federal SIP-

approval does not impose any new requirements, I certify that it does

not have a significant impact on any small entities affected. Moreover,

due to the nature of the Federal-state relationship under the Act,

preparation of a regulatory flexibility analysis would constitute

Federal inquiry into the economic reasonableness of state action. The

Act forbids USEPA to base its actions concerning SIP's on such grounds.

Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42

U.S.C. 7410(a)(2).

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by December 6, 1994. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

rule or action. This action may not be challenged later in proceedings

to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Incorporation by reference, Intergovernmental relations, New source

review, Nitrogen dioxide, Particulate matter, Reporting and

recordkeeping requirements, Sulfur dioxide, Volatile organic compounds.

Dated: August 25, 1994.

Valdas V. Adamkus,

Regional Administrator.

For the reason stated in the preamble, part 52, chapter I, title 40

of the Code of Federal Regulations is amended as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401-7671q.

Subpart P--Indiana

2. Section 52.770 is amended by adding paragraph (c)(94) to read as

follows:

Sec. 52.770 Identification of plan.

* * * * *

(c) * * *

(94) On February 25, 1994, Indiana requested a revision to the

State Implementation Plan (SIP) in the form of amendments to Title 326:

Air Pollution Control Board of the Indiana Administrative Code (326

IAC) 2-1-1 and 2-1-3 which were intended to satisfy the additional new

source review requirements of the Clean Air Act Amendments of 1990. The

USEPA, at this time, is also approving the incorporation of permitting

rules recodified as Article 2. Permit Review Rules of 326 IAC into the

SIP to replace APC 19 which was incorporated into the Indiana SIP at 40

CFR 52.770 (c)(24).

(i) Incorporation by reference.

(A) Amendments to Title 326 IAC 2-1-1, 2-1-2, 2-1-3, 2-3-1, 2-3-2,

2-3-3, and 2-3-5. Filed with the Secretary of State November 12, 1993,

effective December 13, 1993.

(B) Amendments to Title 326 IAC 2-1-4, 2-1-5, 2-1-6, 2-1-7, 2-1-9,

2-1-10, 2-1-11, 2-1-12, 2-1-13, 2-3-4. Filed with the Secretary of

State March 10, 1988, effective April 9, 1988.

3. Section 52.773 is amended by revising paragraph (i) to read as

follows:

Sec. 52.773 Approval status.

* * * * *

(i) The Administrator finds that Indiana's ozone plan for Lake and

Porter Counties, which was required to be submitted by July 1, 1992,

does not satisfy all the requirements of part D, title 1 of the Clean

Air Act and, thus, is disapproved. See Secs. 52.770(c)(69)and

52.770(d). The disapproval does not affect USEPA's approval (or

conditional approval) of individual parts of Indiana's ozone plan and

they remain approved.

* * * * *

4. Section 52.777 is amended by revising paragraph (d) to read as

follows:

Sec. 52.777 Control strategy: Photochemical oxidants (hydrocarbons).

* * * * *

(d) Part D--Disapproval. The 1982 Indiana plan for Lake and Porter

County is disapproved because it does not assure the attainment and

maintenance of the NAAQS there. See Secs. 52.770(c)(69) and 52.773(i).

The disapproval does not affect USEPA's approval (or conditional

approval) of individual parts of Indiana's ozone plan and they remain

approved.

5. Section 52.780 is amended by adding paragraph (h) to read as

follows:

Sec. 52.780 Review of new sources and modifications.

* * * * *

(h) On March 7, 1994, Indiana requested a revision to the State

Implementation Plan (SIP) for New Source Review (NSR) to satisfy the

requirements of the Clean Air Act Amendments of 1990. The Indiana 326

IAC regulations do not include a definition of ``federally

enforceable''. On July 13, 1994, Pamela Carter, Attorney General of the

State of Indiana, sent a letter to USEPA clarifying Indiana's

interpretation of the definition of federally enforceable. The letter

states that federally enforceable, e.g. as used in 326 IAC 2-3-1,

should be interpreted in accordance with the federal definition at 40

CFR 51.165(a)(1)(xiv). The USEPA took the opportunity of rulemaking on

the State's submittal to recodify the permitting SIP to conform to

Title 326 the Indiana Administrative Code.

[FR Doc. 94-24837 Filed 10-6-94; 8:45 am]

BILLING CODE 6560-50-P