Approval and Promulgation of an Implementation Plan for Vehicle Miles Traveled; Indiana

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN22-4-6825; FRL-5265-2]

Approval and Promulgation of an Implementation Plan for Vehicle

Miles Traveled; Indiana

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: On November 2, 1994, the United States Environmental

Protection Agency (USEPA) proposed to approve a November 17, 1993,

request for a State Implementation Plan (SIP) revision, addressing the

Lake and Porter County ozone nonattainment area, submitted by the State

of Indiana for the purpose of offsetting growth in emissions from

growth in vehicle miles traveled (VMT) or number of vehicle trips, and

to attain reduction in motor vehicle emissions, in combination with

other emission

[[Page 38719]]

reduction requirements, as necessary to comply with Reasonable Further

Progress (RFP) milestones and attainment requirements of the Clean Air

Act (Act). Public comments were solicited on the proposed SIP revision,

and on USEPA's proposed rulemaking action. The public comment period

ended on December 2, 1994, and one public comment letter was received.

This rulemaking action approves, in final, the VMT Offset SIP revision

request for Lake and Porter Counties, Indiana as requested by Indiana.

EFFECTIVE DATE: This final rulemaking becomes effective on August 28,

1995.

ADDRESSES: Copies of the documents relevant to this action are

available for inspection during normal business hours at the following

location: Regulation Development Section, Regulation Development Branch

(AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West

Jackson Boulevard, Chicago, Illinois, 60604.

Please contact Patricia Morris at (312) 353-8656 before visiting

the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Patricia Morris, Regulation

Development Section, Regulation Development Branch (AR-18J), U.S.

Environmental Protection Agency, Region 5, 77 West Jackson Boulevard,

Chicago, Illinois 60604, (312) 353-8656.

SUPPLEMENTARY INFORMATION:

I. Background

Section 182(d)(1)(A) of the Act, as amended in 1990 (Act), requires

States containing ozone nonattainment areas classified as ``severe''

pursuant to section 181(a) of the Act to adopt transportation control

measures (TCMs) and transportation control strategies to offset any

growth in emissions from growth in VMT or number of vehicle trips, and

to attain reductions in motor vehicle emissions (in combination with

other emission reduction requirements) as necessary to comply with the

Act's RFP milestones and attainment requirements. The requirements for

establishing a VMT Offset program are discussed in the April 16, 1992,

General Preamble to Title I of the Act (57 FR 13498), in addition to

section 182(d)(1)(A) of the Act.

The VMT Offset provision requires that States submit by November

15, 1992, specific enforceable TCMs and strategies to offset any growth

in emissions from growth in VMT or number of vehicle trips sufficient

to allow total area emissions to comply with the RFP and attainment

requirements of the Act.

As described in the November 2, 1994, proposed rule (see 59 FR

54866, 54867), the USEPA has observed that these three elements (i.e.,

offsetting growth in mobile source emissions, attainment of the RFP

reduction, and attainment of the ozone National Ambient Air Quality

Standards (NAAQS)) can be divided into three separate submissions that

could be submitted on different dates.

Under this approach, the first element, the emissions offset

element, was due on November 15, 1992. The USEPA believes this element

is not necessarily dependent on the development of the other elements.

The State could submit the emissions growth offset element independent

of an analysis of that element's consistency with the periodic

reduction and attainment requirements of the Act. Emissions trends from

other sources need not be considered to show compliance with this

offset requirement. As submitting this element in isolation does not

implicate the timing problem of advancing deadlines for RFP and

attainment demonstrations, USEPA does not believe it is necessary to

extend the statutory deadline for submittal of the emissions growth

offset element.

The second element, which requires the VMT Offset SIP to comply

with the 15 percent RFP requirement of the Act, was due on November 15,

1993, which is the same date on which the 15 percent RFP SIP itself was

due under section 182(b)(1) of the Act. The USEPA believes it is

reasonable to extend the deadline for this element to the date on which

the entire 15 percent SIP was due, as this allows States to develop the

comprehensive strategy to address the 15 percent reduction requirement

and assure that the TCM elements required under section 182(d)(1)(A)

are consistent with the remainder of the 15 percent demonstration.

Indeed, USEPA believes that only upon submittal of the broader 15

percent plan can a State have had the necessary opportunity to

coordinate its VMT strategy with its 15 percent plan.

The third element, which requires the VMT Offset SIP to comply with

the post-1996 RFP and attainment requirements of the Act, was due on

November 15, 1994, the statutory deadline for those broader

submissions. The USEPA believes it is reasonable to extend the deadline

for this element to the date on which the post-1996 RFP and attainment

SIPs are due for the same reasons it is reasonable to extend the

deadline for the second element. First, it is arguably impossible for a

State to make the showing required by Section 182(d)(1)(A) for the

third element until the broader demonstrations have been developed by

the State. Moreover, allowing States to develop the comprehensive

strategy to address post-1996 RFP and attainment by providing a fuller

opportunity to assure that the TCM elements comply with the broader RFP

and attainment demonstrations, will result in a better program for

reducing emissions in the long term.

On November 17, 1993, Indiana submitted to USEPA documentation to

fulfill the first and second elements of the VMT-Offset SIP. A public

hearing was held on December 14, 1993, and documentation on the public

hearing was submitted to complete the SIP revision request. Indiana

does not at this time anticipate the need for additional TCMs to meet

the attainment demonstration requirement but will submit any necessary

TCMs with the attainment demonstration SIP.

II. Evaluation of the State Submittal

Section 182(d)(1)(A) of the Act requires the State to offset any

growth in emissions from growth in VMT. As discussed in the General

Preamble, the purpose is to prevent a growth in motor vehicle emissions

from canceling out the emission reduction benefits of the federally

mandated programs in the Act. The USEPA interprets this provision to

require that sufficient measures be adopted so that projected motor

vehicle volatile organic compound (VOC) emissions will never be higher

during the ozone season in one year than during the ozone season in the

year before. When growth in VMT and vehicle trips would otherwise cause

a motor vehicle emissions upturn, this upturn must be prevented. The

emissions level at the point of upturn becomes a ceiling on motor

vehicle emissions. This requirement applies to projected emissions in

the years between the submission of the SIP revision and the attainment

deadline, and is above and beyond the separate requirements for the RFP

and the attainment demonstrations. The ceiling level is defined,

therefore, up to the point of upturn, as motor vehicle emissions that

would occur in the ozone season of that year, with VMT growth, if all

measures for that area in that year were implemented as required by the

Act. When this curve begins to turn up due to growth in VMT or vehicle

trips, the ceiling becomes a fixed value. The ceiling line would

include the effects of Federal measures such as new motor vehicle

standards, phase II RVP controls, and reformulated gasoline, as well as

the Act-mandated SIP requirements.

[[Page 38720]]

The State of Indiana has demonstrated in its submittal of November

17, 1993, that the predicted growth in VMT in Lake and Porter Counties,

Indiana, is not expected to result in a growth in motor vehicle

emissions that will negate the effects of the reductions mandated by

the Act. Further, Indiana has projected motor vehicle emissions to the

year 2007 and, using the most current socioeconomic data, has not

predicted an upturn in motor vehicle emissions. In the event that the

projected socioeconomic data and associated VMT grow more rapidly than

currently predicted, Indiana is required by Section 182(c)(5) to track

actual VMT starting with 1996 and every three years thereafter to

demonstrate that the actual VMT is equal to or less than the projected

VMT. TCMs will be required to offset VMT that is above the projected

levels (section 182(c)(5)).

The VMT offset submittal from Indiana dated November 17, 1993,

contains the final report ``TCMs to Offset Emissions from VMT Growth in

Northwestern Indiana.'' The report used the most current socioeconomic

data and the travel network model in conjunction with the MOBILE5a to

estimate mobile source emissions to the attainment year of 2007.

This report also documents the progress Indiana has made in

evaluating TCMs to reduce growth in VMT and thus reduce emissions.

Indiana may choose to take credit for TCM emission reductions as part

of the post-1996 RFP requirement or to meet the attainment requirement.

Not only has Indiana evaluated the effectiveness and predicted impact

of a number of TCMs, but actual implementation of selected TCMs has

been ongoing. Several examples are cited in the proposed rule.

These specific TCMs, however, are not a part of the current SIP

revision request and are not a required portion of this SIP revision.

Thus, Indiana is not currently taking credit for the emission

reductions from these TCM measures and the State is not bound to

implement or continue to implement any specific TCMs. These measures,

however, illustrate Indiana's work in evaluating and implementing TCMs

to meet the goals of the Act. Also, the TCMs may be used in subsequent

SIP submittals as necessary to meet the post 1996 RFP requirement or

the attainment requirement.

Indiana submitted a 15 percent RFP SIP for northwest Indiana to the

USEPA in November 1993, but the submittal was found incomplete in a

letter dated January 25, 1994. The RFP SIP lacked enforceable

regulations and a public hearing. The public hearing was held on March

29, 1994.

On June 26, 1995, Indiana submitted an updated 15 percent SIP which

contained all enforceable regulations. Indiana's submitted 15 percent

SIP was found complete by the USEPA in a letter dated July 7, 1995. The

submittal details the adopted enforceable regulations that have been

submitted to support the 15 percent RFP demonstration. The SIP

submission contains a menu of adopted emissions reductions measures

that the State believes will achieve the 15 percent reduction

requirement by November 15, 1996. Also, Indiana is moving forward with

implementation of the 15 percent measures including the enhanced

inspection and maintenance program. In the submission, Indiana does not

rely upon TCMs in order to satisfy the 15 percent reduction

requirement. Rather, the majority of the reduction would be obtained

from stationary source shutdowns and the enhanced inspection and

maintenance program. Indiana believes that TCMs will not be necessary

to attain the 15 percent reduction requirement.

The attainment demonstration and post-1996 RFP plans, were

submitted on December 5, 1994, and became complete by operation of law

under 110(k)(1)(B) on June 5, 1995. Indiana is planning to use the

Phase I and II approach to submission of the attainment demonstration

and post-1996 RFP as described in the March 2, 1995, memorandum from

Mary Nichols. The USEPA is reserving action on the third element of the

VMT Offset SIP until such time as the phase I and II attainment

submittals are complete.

Indiana has met the first and second elements of the VMT offset SIP

requirements of section 182(d)(1)(A). Regarding the first element,

Indiana has identified and evaluated TCMs to reduce VMT, and has shown

that VMT growth will not result in a growth of motor vehicle emissions

that will negate the effects of the reductions required under the Act

and that there will not be an upturn of motor vehicle emissions.

Regarding the second element, Indiana has submitted a complete 15

percent SIP that does not rely upon TCMs to make its proffered showing

that the 15 percent reduction will be achieved. Consequently, USEPA

does not believe it is necessary to delay taking action on this second

element of the VMT SIP, and that the Agency can at this point rely upon

Indiana's submitted 15 percent SIP to make a judgment that TCM's will

not be necessary to satisfy the second VMT SIP element. However, if in

evaluating the 15 percent SIP for approval it is determined that

Indiana would in fact have to implement TCMs to meet the 15 percent RFP

requirement, and a subsequent submission of a revised 15 percent SIP is

required, EPA would have to reevaluate its approval of the second

element of the VMT SIP.

The third requirement is for Indiana to use TCMs as necessary to

attain the standard. This third requirement will be submitted with the

attainment demonstration SIP and will be addressed in a future Federal

Register notice.

III. Public Comments

On November 2, 1994, the USEPA proposed to approve the first and

second elements of the Indiana VMT Offset SIP and requested public

comment. The public comment period closed on December 2, 1994, and the

Natural Resources Defense Council (NRDC) submitted comments on December

2, 1994. The following summarizes NRDC's comments and USEPA's response

to these comments:

Comment 1: The Act requires TCMs to offset emissions resulting from

all growth in VMT above 1990 levels, and USEPA is required by the Act

to ensure emission reductions despite an increase in VMT. The

legislative history states that ``[t]he baseline for determining

whether there has been a growth in emissions due to increased VMT is

the level of vehicle emissions that would occur if VMT held constant in

the area.'' See H.Rep. No. 101-490, Part I, 101st Cong., 2nd Sess. at

242, and S.Rep. No. 101-228, 101st Cong., 1st Sess. at 44.

Response: As discussed in the General Preamble, USEPA believes that

section 182(d)(1)(A) of the Act requires the State to ``offset any

growth in emissions'' from growth in VMT but not, as suggested by the

comment, all emissions resulting from VMT growth (see 57 FR 13498,

13522-13523, April 16, 1992). The purpose is to prevent a growth in

motor vehicle emissions from canceling out the emission reduction

benefits of the federally mandated programs in the Act. The baseline

for emissions is the 1990 level of vehicle emissions and the subsequent

reductions in emission levels required to reach attainment. Thus, the

anticipated benefits from the mandated measures such as the Federal

motor vehicle pollution control program, lower reid vapor pressure,

enhanced inspection and maintenance and all other motor vehicle

emission control programs are included in the ceiling line calculation

used by Indiana in the VMT Offset SIP. Table 13 in the Indiana SIP

submittal demonstrates how motor vehicle emissions will decline

substantially from 136.63 tons per day (tpd) in 1990 to 25.04 tpd in

2007 and

[[Page 38721]]

will not begin to turn up. Emission reductions are expected every year

through the year 2007.

The ceiling line approach does not ``tolerate increases in traffic

of a magnitude that would wipe out the air quality gains'' as suggested

by the comment. In fact, the ceiling line level decreases from year to

year as the State implements various control measures and the

decreasing ceiling line prevents an upturn in mobile source emissions.

Dramatic increases in VMT that could wipe out the benefits of motor

vehicle emission reduction measures will not be allowed and will

trigger the implementation of TCMs. This prevents mere preservation of

the status quo, and ensures emissions reductions despite an increase in

VMT such that the rate of emissions decline is not slowed by increases

in VMT or number of trips. To prevent future growth changes from

adversely impacting emissions from motor vehicles, Indiana is required

by section 182(c)(5) to track actual VMT starting with 1996 and every

three years thereafter to demonstrate that the actual VMT is equal to

or less than the projected VMT. TCMs will be required to offset VMT

that is above the projected levels (section 182(c)(5)).

Under the commenter's approach to section 182(d)(1)(A), Indiana

would have to offset VMT growth even while vehicle emissions are

declining. Although the statutory language could be read to require

offsetting any VMT growth, EPA believes that the language can also be

read so that only actual emissions increases resulting from VMT growth

need to be offset. The statute by its own terms requires offsetting of

``any growth in emissions from growth in VMT.'' It is reasonable to

interpret this language as requiring that VMT growth must be offset

only where such growth results in emissions increases from the motor

vehicle fleet in the area.

While it is true that the language of the legislative history

appears to support the commenter's interpretation of the statutory

language, such an interpretation would have drastic implications for

Indiana if the State were forced to ignore the beneficial impacts of

all vehicle tailpipe and alternative fuel controls. Although the

original authors of the provision and the legislative history may in

fact have intended this result, EPA does not believe that the Congress

as a whole, or even the full House of Representatives, believed at the

time it voted to pass the 1990 Amendments to the Act that the words of

this provision would impose such severe restrictions.

Given the susceptibility of the statutory language to these two

alterative interpretations, EPA believes it is the Agency's role in

administering the statute to take the interpretation most reasonable in

light of the practical implications of such interpretation and the

purposes and intent of the statutory scheme as a whole. In the context

of the intricate planning requirements Congress established in title I

to bring areas towards attainment of the ozone NAAQS, and in light of

the absence of any discussion of this aspect of the VMT offset

provision by the Congress as a whole (either in floor debate or in the

Conference Report), EPA concludes that the appropriate interpretation

of section 182(d)(1)(A) requires offsetting VMT growth only when such

growth would result in actual emissions increases.

Comment 2: Section 182(d)(1)(A) of the Act requires that emissions

of oxides of nitrogen (NOX) as well as VOCs resulting from VMT

growth must be offset.

Response: USEPA disagrees with the commenter's interpretation that

section 182(d)(1)(A) requires NOx emissions from VMT growth to be

offset. While that section provides that ``any growth in emissions''

from growth in VMT must be offset, USEPA believes that Congress clearly

intended that the offset requirement be limited to VOC emissions.

First, section 182(d)(1)(A)'s requirement that a State's VMT TCMs

comply with the ``periodic emissions reduction requirements'' of

sections 182(b) and (c) the Act indicates that the VMT offset SIP

requirement is VOC-specific. Section 182(c)(2)(B), which requires

reasonable further progress demonstrations for serious ozone

nonattainment areas, provides that such demonstrations will result in

VOC emissions reductions; thus, the only ``periodic emissions reduction

requirement'' of section 182(c)(2)(B) is VOC-specific. In fact, it is

only in section 182(c)(2)(C)--a provision not referenced in section

182(d)(1)(A)--that Congress provided States the authority to submit

demonstrations providing for reductions of emissions of VOCs and

NOX in lieu of the SIP otherwise required by section 182(c)(2)(B).

Moreover, the 15 percent periodic reduction requirement of section

182(b)(1)(A)(i) applies only to VOC emissions, while only the separate

``annual'' reduction requirement applies to both VOC and NOX

emissions. USEPA believes that Congress did not intend the terms

``periodic emissions reductions'' and ``annual emissions reductions''

to be synonymous, and that the former does not include the latter. In

section 176(c)(3)(A)(iii) of the Act, Congress required that conformity

SIPs ``contribute to annual emissions reductions'' consistent with

section 182(b)(1) (and thus achieve NOX emissions reductions), but

does not refer to the 15 percent periodic reduction requirement.

Conversely, section 182(d)(1)(A) refers to the periodic emissions

reduction requirements of the Act, but does not refer to annual

emissions reduction requirements that require NOX reductions.

Consequently, USEPA interprets the requirement that VMT SIPs comply

with periodic emissions reduction requirements of the Act to mean that

only VOC emissions are subject to section 182(d)(1)(A) in severe ozone

nonattainment areas.

Finally, USEPA notes that where Congress intended section 182 ozone

SIP requirements to apply to NOX as well as VOC emissions, it

specifically extended applicability to NOX. Thus, references to

ozone or emissions in general in section 182 do not on their own

implicate NOX. For example, in section 182(a)(2)(C), the Act

requires States to require preconstruction permits for new or modified

stationary sources ``with respect to ozone''; Congress clearly did not

believe this reference to ozone alone was sufficient to subject

NOX emissions to the permitting requirement, since it was

necessary to enact section 182(f)(1) of the Act, which specifically

extends the permitting requirement to major stationary sources of

NOX. Since section 182(d)(1)(A) does not specifically identify

NOX emissions requirements in addition to the VOC emissions

requirements identified in the provision, USEPA does not believe States

are required to offset NOX emissions from VMT growth in their

section 182(d)(1)(A) SIPs.

IV. Final Rulemaking Action

Based on the State's submittal request and in consideration of the

public comments received in response to the proposed rule, USEPA is

approving the SIP revision submitted by the State of Indiana as

satisfying the first two of the three VMT offset plan requirements.

The Office of Management and Budget 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 any SIP shall be

considered separately in light of specific technical, economic, and

environmental factors and in relation to relevant statutory and

regulatory requirements.

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

[[Page 38722]]

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 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 SIPs on such grounds.

See 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 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, the

USEPA must prepare a budgetary impact statement to accompany any

proposed or final rule that includes a Federal mandate that may result

in estimated costs to State, local, or tribal governments in the

aggregate; or to the private sector, of $100 million or more. Under

Section 205, the USEPA must select the most cost-effective and least

burdensome alternative that achieves the objectives of the rule and is

consistent with statutory requirements. Section 203 requires the USEPA

to establish a plan for informing and advising any small governments

that may be significantly or uniquely impacted by the rule.

The USEPA has determined that the approval action promulgated today

does not include a Federal mandate that may result in estimated costs

of $100 million or more to either State, local, or tribal governments

in the aggregate, or to the private sector.

This Federal action approves pre-existing requirements under State

or local law, and imposes no new Federal requirements. Accordingly, no

additional costs to State, local, or tribal governments, or the private

sector, result from this action.

Under Section 307(b)(1) of the Act, petitions for judicial review

of this action must be filed in the United States Court of Appeals for

the appropriate circuit by September 26, 1995. 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, Ozone.

Dated: July 14, 1995.

Valdas V. Adamkus,

Regional Administrator.

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 52.777 is amended by adding paragraph (h) to read as

follows:

Sec. 52.777 Control Strategy: Photochemical oxidents (hydrocarbons).

* * * * *

(h) On November 17, 1993, Indiana submitted two of three elements

required by section 182(d)(1)(A) of the Clean Air Amendments of 1990 to

be incorporated as part of the vehicle miles traveled (VMT) State

Implementation Plan intended to offset any growth in emissions from a

growth in vehicle miles traveled. These elements are the offsetting of

growth in emissions attributable to growth in VMT which was due

November 15, 1992, and, any transportation control measures (TCMs)

required as part of Indiana's 15 percent reasonable further progress

(RFP) plan which was due November 15, 1993. Indiana satisfied the first

requirement by projecting emissions from mobile sources and

demonstrating that no increase in emissions would take place. Indiana

satisfied the second requirement by determining that no TCMs were

required as part of Indiana's 15 percent RFP plan.

[FR Doc. 95-18521 Filed 7-27-95; 8:45 am]

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