[Federal Register Volume 59, Number 194 (Friday, October 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-24837]


[[Page Unknown]]

[Federal Register: October 7, 1994]


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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.

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Unless this final rule is withdrawn, no further rulemaking will occur 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