[Federal Register Volume 78, Number 67 (Monday, April 8, 2013)]
[Proposed Rules]
[Pages 20856-20868]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-08122]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 81

[EPA-R05-OAR-2009-0839; FRL-9799-5]


Approval and Promulgation of Air Quality Implementation Plans; 
Indiana; Redesignation of the Indianapolis Area to Attainment of the 
1997 Annual Standard for Fine Particulate Matter

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule; supplemental.

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SUMMARY: EPA is issuing a supplement to its proposed approval of the 
State of Indiana's request to redesignate the Indianapolis area to 
attainment for the 1997 annual National Ambient Air Quality Standards 
(NAAQS or standard) for fine particulate matter (PM2.5). 
This supplemental proposal revises and expands the basis for proposing 
approval of the state's request, in light of developments since EPA 
issued its initial proposal on September 27, 2011. This supplemental 
proposal addresses four issues, including the effects of two decisions 
of the United States Court of

[[Page 20857]]

Appeals for the District of Columbia (D.C. Circuit or Court): the 
Court's August 21, 2012 decision to vacate and remand to EPA the Cross-
State Air Pollution Control Rule (CSAPR) and the Court's January 4, 
2013 decision to remand to EPA two final rules implementing the 1997 
PM2.5 standard. In this supplemental proposal, EPA is also 
proposing to approve a supplement to the emission inventories 
previously submitted by the state. EPA is proposing that the 
inventories for ammonia and Volatile Organic Compounds (VOC), in 
conjunction with the inventories for nitrogen oxides (NOX), 
direct PM2.5, and sulfur dioxide (SO2) that EPA 
previously proposed to approve, meet the comprehensive emissions 
inventory requirement of the Clean Air Act (CAA). Finally, this 
supplemental proposal solicits comment on the state's January 17, 2013 
submission of Motor Vehicle Emissions Budgets (MVEBs) developed using 
EPA's Motor Vehicle Emissions Simulator (MOVES) 2010a emissions model 
to replace the MOBILE6.2 based MVEBs previously submitted as part of 
the PM2.5 maintenance plan for the Indianapolis area. EPA is 
seeking comment only on the issues raised in its supplemental proposal, 
and is not re-opening for comment other issues raised in its prior 
proposal.

DATES: Comments must be received on or before April 29, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2009-0839, by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. Email: Aburano.Douglas@epa.gov.
    3. Fax: (312) 408-2279.
    4. Mail: Doug Aburano, Chief, Attainment Planning and Maintenance 
Section, Air Programs Branch (AR-18J), U.S. Environmental Protection 
Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.
    5. Hand delivery: Doug Aburano, Chief, Attainment Planning and 
Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental 
Protection Agency, 77 West Jackson Boulevard, 18th floor, Chicago, 
Illinois 60604. Such deliveries are only accepted during the Regional 
Office normal hours of operation, and special arrangements should be 
made for deliveries of boxed information. The Regional Office official 
hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., 
excluding Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-
2009-0839. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or email. The 
www.regulations.gov Web site is an ``anonymous access'' system, which 
means EPA will not know your identity or contact information unless you 
provide it in the body of your comment. If you send an email comment 
directly to EPA without going through www.regulations.gov, your email 
address will be automatically captured and included as part of the 
comment that is placed in the public docket and made available on the 
Internet. If you submit an electronic comment, EPA recommends that you 
include your name and other contact information in the body of your 
comment and with any disk or CD-ROM you submit. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
instructions on submitting comments, go to Section I of this document, 
``What Should I Consider as I Prepare My Comments for EPA?''
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in www.regulations.gov or in hard copy at the Environmental Protection 
Agency, Region 5, Air and Radiation Division, 77 West Jackson 
Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 
a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. 
We recommend that you telephone Kathleen D'Agostino, Environmental 
Engineer, at (312) 886-1767 before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Kathleen D'Agostino, Environmental 
Engineer, Attainment Planning and Maintenance Section, Air Programs 
Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West 
Jackson Boulevard, Chicago, Illinois 60604, (312) 886-1767, 
dagostino.kathleen@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This supplementary information 
section is arranged as follows:

I. What should I consider as I prepare my comments for EPA?
II. What is the background for the supplemental proposal?
III. On what specific issues is EPA taking comments?
    A. Effect of the August 21, 2012 D.C. Circuit Decision Regarding 
EPA's CSAPR
    1. Background
    2. Supplemental Proposal on This Issue
    B. Effect of the January 4, 2013 D.C. Circuit Decision Regarding 
PM2.5 Implementation Under Subpart 4
    1. Background
    2. Supplemental Proposal on This Issue
    a. Applicable Requirements for Purposes of Evaluating the 
Redesignation Request
    b. Subpart 4 Requirements and Indiana's Redesignation Request
    c. Subpart 4 and Control of PM2.5 Precursors
    d. Maintenance Plan and Evaluation of Precursors
    C. Ammonia and VOC Comprehensive Emissions Inventories
    D. MVEBs
    1. How are MVEBs developed and what are the MVEBs for the 
Indianapolis area?
    2. What are safety margins?
IV. Summary of Proposed Actions
V. Statutory and Executive Order Reviews

I. What should I consider as I prepare my comments for EPA?

    When submitting comments, remember to:
    1. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date, and page number).
    2. Follow directions--EPA may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information 
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    6. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.

[[Page 20858]]

    8. Make sure to submit your comments by the comment period deadline 
identified.

II. What is the background for the supplemental proposal?

    On October 20, 2009, the Indiana Department of Environmental 
Management (IDEM) submitted a request to EPA to redesignate the 
Indianapolis nonattainment area (Hamilton, Hendricks, Johnson, Marion, 
and Morgan counties) to attainment for the 1997 annual PM2.5 
NAAQS, and for EPA approval of Indiana's State Implementation Plan 
(SIP) revision containing an emissions inventory and a maintenance plan 
for the area. IDEM supplemented its submission on May 31, 2011.
    On September 27, 2011, EPA published notices of proposed (76 FR 
59599) and direct final (76 FR 59512) rulemaking determining that the 
Indianapolis area has attained the 1997 annual PM2.5 
standard and that the area has met the requirements for redesignation 
under section 107(d)(3)(E) of the CAA. In those rules EPA proposed 
several related actions. First, EPA proposed to approve the request 
from IDEM to change the legal designation of the Indianapolis area from 
nonattainment to attainment for the 1997 annual PM2.5 NAAQS. 
EPA also proposed to approve Indiana's PM2.5 maintenance 
plan for the Indianapolis area as a revision to the Indiana SIP because 
the plan meets the requirements of section 175A of the CAA. In 
addition, EPA proposed to approve 2006 emissions inventories for 
primary PM2.5, NOX, and SO2, 
documented in Indiana's May 31, 2011 PM2.5 redesignation 
request supplemental submittal as satisfying the requirement in section 
172(c)(3) of the CAA for a comprehensive, current emission inventory. 
Finally, EPA found adequate and proposed to approve 2015 and 2025 
direct PM2.5 and NOX MVEBs for the Indianapolis 
area. EPA subsequently received adverse comments on the direct final 
rule and withdrew it on November 27, 2011 (76 FR 70361). The proposal 
was not withdrawn.
    EPA today is issuing a supplement to its September 27, 2011 
proposed rulemaking. This supplemental proposal addresses four separate 
issues which affect the proposed redesignation and which have arisen 
since the issuance of the proposal: two recent decisions of the D.C. 
Circuit, the State of Indiana's supplemental submission of 
comprehensive ammonia and VOC emissions inventories, and the State of 
Indiana's supplemental submission of revised MVEBs.
    In the first of the two Court decisions, the D.C. Circuit, on 
August 21, 2012, issued EME Homer City Generation, L.P. v. EPA, 696 
F.3d 7 (D.C. Cir. 2012), which vacated and remanded CSAPR and ordered 
EPA to continue administering the Clean Air Interstate Rule (CAIR) 
``pending * * * development of a valid replacement.'' EME Homer City at 
38. The D.C. Circuit denied all petitions for rehearing on January 24, 
2013. In the second decision, on January 4, 2013, in Natural Resources 
Defense Council v. EPA, the D.C. Circuit remanded to EPA the ``Final 
Clean Air Fine Particle Implementation Rule'' (72 FR 20586, April 25, 
2007) and the ``Implementation of the New Source Review (NSR) Program 
for Particulate Matter Less than 2.5 Micrometers (PM2.5)'' 
final rule (73 FR 28321, May 16, 2008). 706 F.3d 428 (D.C. Cir. 2013).
    In a supplemental submission to EPA on March 18, 2013, Indiana 
submitted 2007/2008 ammonia and VOC emissions inventories to supplement 
the emissions inventories that had previously been submitted. In a 
separate supplemental submission dated January 17, 2013, the state 
submitted MVEBs developed using EPA's MOVES 2010a emissions model to 
replace the MOBILE6.2 based MVEBs previously submitted as part of the 
PM2.5 maintenance plan for the Indianapolis area. Therefore, 
EPA's supplemental proposal revises and expands the basis for EPA's 
proposed approval of the state's request to redesignate the 
Indianapolis area to attainment for the 1997 PM2.5 standard, 
in light of these developments since EPA's initial proposal.

III. On what specific issues is EPA taking comments?

A. Effect of the August 21, 2012 D.C. Circuit Decision Regarding EPA's 
CSAPR

1. Background
    In its September 27, 2011 proposal to redesignate the Indianapolis 
area, EPA proposed to determine that the emission reduction 
requirements that contributed to attainment of the 1997 annual 
PM2.5 standard in the nonattainment area could be considered 
permanent and enforceable. In the proposal, EPA noted that it had 
recently promulgated CSAPR (76 FR 48208, August 8, 2011), to replace 
CAIR, which had been in place since 2005. See 76 FR 59517. CAIR 
requires significant reductions in emissions of SO2 and 
NOX from electric generating units to limit the interstate 
transport of these pollutants and the ozone and fine particulate matter 
they form in the atmosphere. See 76 FR 70093. The D.C. Circuit 
initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 
2008), but ultimately remanded that rule to EPA without vacatur to 
preserve the environmental benefits provided by CAIR, North Carolina v. 
EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008).
    CSAPR included regulatory changes to sunset (i.e., discontinue) 
CAIR and the CAIR Federal Implementation Plans (FIPs) for control 
periods in 2012 and beyond. See 76 FR 48322. Although Indiana's 
redesignation request and maintenance plan relied on reductions 
associated with CAIR, EPA proposed to approve the request based in part 
on the fact that CAIR was to remain in force through the end of 2011 
and CSAPR would achieve ``similar or greater reductions in the relevant 
areas in 2012 and beyond.'' 76 FR 59517.
    On December 30, 2011, the D.C. Circuit issued an order addressing 
the status of CSAPR and CAIR in response to motions filed by numerous 
parties seeking a stay of CSAPR pending judicial review. In that order, 
the Court stayed CSAPR pending resolution of the petitions for review 
of that rule in EME Homer City Generation, L.P. v. EPA (No. 11-1302 and 
consolidated cases). The Court also indicated that EPA was expected to 
continue to administer CAIR in the interim until judicial review of 
CSAPR was completed.
    On August 21, 2012, the D.C. Circuit issued the decision in EME 
Homer City, to vacate and remand CSAPR and ordered EPA to continue 
administering CAIR ``pending * * * development of a valid 
replacement.'' EME Homer City at 38. The D.C. Circuit denied all 
petitions for rehearing on January 24, 2013. The deadline to file 
petitions for certiorari to the U.S. Supreme Court has not passed.\1\ 
Nonetheless, EPA intends to continue to act in accordance with the EME 
Homer City opinion. EPA is therefore issuing this portion of its 
supplemental proposal to explain the legal status of CAIR and CSAPR, 
and to provide a limited opportunity to comment specifically on the 
impact of the EME Homer City decision on the proposed redesignation of 
the Indianapolis area.
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    \1\ Pursuant to Rule 13 of the U.S. Supreme Court Rules, a 
petition for certiorari must be filed within 90 days of the date of 
denial of rehearing. The Supreme Court may extend this deadline for 
good cause by up to 60 days.
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2. Supplemental Proposal on This Issue
    In light of these unique circumstances and for the reasons 
explained below, EPA in this portion of its supplemental rule is 
seeking comment limited to the impact of the Court's decision in EME

[[Page 20859]]

Homer City on EPA's proposal to approve the redesignation request and 
the related SIP revisions for the Indianapolis area, including 
Indiana's plan for maintaining attainment of the annual 
PM2.5 standard in the area. As explained in greater detail 
below, to the extent that attainment is due to emission reductions 
associated with CAIR, EPA is here determining that those reductions are 
sufficiently permanent and enforceable for purposes of CAA sections 
107(d)(3)(E)(iii) and 175A.
    As directed by the D.C. Circuit, CAIR remains in place and 
enforceable until EPA promulgates a valid replacement rule to 
substitute for CAIR. Indiana's SIP revision lists CAIR as a control 
measure that was adopted by the State in 2006 and required compliance 
by January 1, 2009. CAIR was thus in place and getting emission 
reductions when Indianapolis began monitoring attainment of the 1997 
annual PM2.5 standard during the 2006-2008 time period. The 
quality-assured, certified monitoring data continues to show the area 
in attainment of the 1997 PM2.5 standard through 2011.
    To the extent that Indiana is relying on CAIR in its maintenance 
plan to support continued attainment into the future, the recent 
directive from the DC Circuit in EME Homer City ensures that the 
reductions associated with CAIR will be permanent and enforceable for 
the necessary time period. EPA has been ordered by the Court to develop 
a new rule to address interstate transport to replace CSAPR and the 
opinion makes clear that after promulgating that new rule EPA must 
provide states an opportunity to draft and submit SIPs to implement 
that rule. Thus, CAIR will remain in place until EPA has promulgated a 
final rule through a notice-and-comment rulemaking process, states have 
had an opportunity to draft and submit SIPs in response to it, EPA has 
reviewed the SIPs to determine if they can be approved, and EPA has 
taken action on the SIPs, including promulgating a FIP if appropriate. 
The Court's clear instruction to EPA is that it must continue to 
administer CAIR until a valid replacement exists, and thus EPA believes 
that CAIR emission reductions may be relied upon until the necessary 
actions are taken by EPA and states to administer CAIR's replacement. 
Furthermore, the Court's instruction provides an additional backstop: 
by definition, any rule that replaces CAIR and meets the Court's 
direction would require upwind states to have SIPs that eliminate any 
significant contributions to downwind nonattainment and prevent 
interference with maintenance in downwind areas.
    Moreover, in vacating CSAPR and requiring EPA to continue 
administering CAIR, the D.C. Circuit emphasized that the consequences 
of vacating CAIR ``might be more severe now in light of the reliance 
interests accumulated over the intervening four years.'' EME Homer 
City, 696 F.3d at 38. The accumulated reliance interests include the 
interests of states that reasonably assumed they could rely on 
reductions associated with CAIR which brought certain nonattainment 
areas into attainment with the NAAQS. If EPA were prevented from 
relying on reductions associated with CAIR in redesignation actions, 
states would be forced to impose additional, redundant reductions on 
top of those achieved by CAIR. EPA believes this is precisely the type 
of irrational result the Court sought to avoid by ordering EPA to 
continue administering CAIR. For these reasons also, EPA believes it is 
appropriate to allow states to rely on CAIR, and the existing emissions 
reductions achieved by CAIR, as sufficiently permanent and enforceable 
for regulatory purposes such as redesignations. Following promulgation 
of the replacement rule for CSAPR, EPA will review existing SIPs as 
appropriate to identify whether there are any issues that need to be 
addressed.

B. Effect of the January 4, 2013 D.C. Circuit Decision Regarding 
PM2.5 Implementation Under Subpart 4

1. Background
    As discussed above, on January 4, 2013, in Natural Resources 
Defense Council v. EPA, the D.C. Circuit remanded to EPA the ``Final 
Clean Air Fine Particle Implementation Rule'' (72 FR 20586, April 25, 
2007) and the ``Implementation of the New Source Review (NSR) Program 
for Particulate Matter Less than 2.5 Micrometers (PM2.5)'' 
final rule (73 FR 28321, May 16, 2008) (collectively, ``1997 
PM2.5 Implementation Rule''). 706 F.3d 428 (D.C. Cir. 2013). 
The Court found that EPA erred in implementing the 1997 
PM2.5 NAAQS pursuant to the general implementation 
provisions of subpart 1 of Part D of Title I of the CAA, rather than 
the particulate-matter-specific provisions of subpart 4 of Part D of 
Title I.
2. Supplemental Proposal on This Issue
    In this portion of EPA's supplemental proposal, EPA is soliciting 
comment on the limited issue of the effect of the Court's January 4, 
2013 ruling on the proposed redesignation of Indianapolis to attainment 
for the 1997 annual PM2.5 standard. As explained below, EPA 
is proposing to determine that the Court's January 4, 2013 decision 
does not prevent EPA from redesignating the Indianapolis area to 
attainment, because even in light of the Court's decision, 
redesignation for this area is appropriate under the CAA and EPA's 
longstanding interpretations of the CAA's provisions regarding 
redesignation. EPA first explains its longstanding interpretation that 
requirements that are imposed, or that become due, after a complete 
redesignation request is submitted for an area that is attaining the 
standard, are not applicable for purposes of evaluating a redesignation 
request. Second, EPA then shows that, even if EPA applies the subpart 4 
requirements to the Indianapolis redesignation request and disregards 
the provisions of its 1997 PM2.5 implementation rule 
recently remanded by the Court, the state's request for redesignation 
of this area still qualifies for approval. EPA's discussion takes into 
account the effect of the Court's ruling on the area's maintenance 
plan, which EPA views as approvable when subpart 4 requirements are 
considered.
a. Applicable Requirements for Purposes of Evaluating the Redesignation 
Request
    With respect to the 1997 PM2.5 Implementation Rule, the 
Court's January 4, 2013 ruling rejected EPA's reasons for implementing 
the PM2.5 NAAQS solely in accordance with the provisions of 
subpart 1, and remanded that matter to EPA, so that it could address 
implementation of the 1997 PM2.5 NAAQS under subpart 4 of 
Part D of the CAA, in addition to subpart 1. For the purposes of 
evaluating Indiana's redesignation request for the Indianapolis area, 
to the extent that implementation under subpart 4 would impose 
additional requirements for areas designated nonattainment, EPA 
believes that those requirements are not ``applicable'' for the 
purposes of CAA section 107(d)(3)(E), and thus EPA is not required to 
consider subpart 4 requirements with respect to the Indianapolis 
redesignation. Under its longstanding interpretation of the CAA, EPA 
has interpreted section 107(d)(3)(E) to mean, as a threshold matter, 
that the part D provisions which are ``applicable'' and which must be 
approved in order for EPA to redesignate an area include only those 
which came due prior to a state's submittal of a complete redesignation 
request. See ``Procedures for Processing Requests to Redesignate Areas 
to Attainment,'' Memorandum from John

[[Page 20860]]

Calcagni, Director, Air Quality Management Division, September 4, 1992 
(Calcagni memorandum). See also ``State Implementation Plan (SIP) 
Requirements for Areas Submitting Requests for Redesignation to 
Attainment of the Ozone and Carbon Monoxide (CO) National Ambient Air 
Quality Standards (NAAQS) on or after November 15, 1992,'' Memorandum 
from Michael Shapiro, Acting Assistant Administrator, Air and 
Radiation, September 17, 1993 (Shapiro memorandum); Final Redesignation 
of Detroit-Ann Arbor, (60 FR 12459, 12465-66, March 7, 1995); Final 
Redesignation of St. Louis, Missouri, (68 FR 25418, 25424-27, May 12, 
2003); Sierra Club v. EPA, 375 F.3d 537, 541 (7th Cir. 2004) (upholding 
EPA's redesignation rulemaking applying this interpretation and 
expressly rejecting Sierra Club's view that the meaning of 
``applicable'' under the statute is ``whatever should have been in the 
plan at the time of attainment rather than whatever actually was in the 
plan and already implemented or due at the time of attainment'').\2\ In 
this case, at the time that Indiana submitted its redesignation 
request, requirements under subpart 4 were not due, and indeed, were 
not yet known to apply.
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    \2\ Applicable requirements of the CAA that come due subsequent 
to the area's submittal of a complete redesignation request remain 
applicable until a redesignation is approved, but are not required 
as a prerequisite to redesignation. Section 175A(c) of the CAA.
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    EPA's view that, for purposes of evaluating the Indianapolis 
redesignation, the subpart 4 requirements were not due at the time 
Indiana submitted the redesignation request is in keeping with the 
EPA's interpretation of subpart 2 requirements for subpart 1 ozone 
areas redesignated subsequent to the D.C. Circuit's decision in South 
Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882 (D.C. Cir. 2006). In 
South Coast, the Court found that EPA was not permitted to implement 
the 1997 8-hour ozone standard solely under subpart 1, and held that 
EPA was required under the statute to implement the standard under the 
ozone-specific requirements of subpart 2 as well. Subsequent to the 
South Coast decision, in evaluating and acting upon redesignation 
requests for the 1997 8-hour ozone standard that were submitted to EPA 
for areas under subpart 1, EPA applied its longstanding interpretation 
of the CAA that ``applicable requirements'', for purposes of evaluating 
a redesignation, are those that had been due at the time the 
redesignation request was submitted. See, e.g., Proposed Redesignation 
of Manitowoc County and Door County Nonattainment Areas (75 FR 22047, 
22050, April 27, 2010). In those actions, EPA therefore did not 
consider subpart 2 requirements to be ``applicable'' for the purposes 
of evaluating whether the area should be redesignated under section 
107(d)(3)(E).
    EPA's interpretation derives from the provisions of CAA Section 
107(d)(3). Section 107(d)(3)(E)(v) states that, for an area to be 
redesignated, a state must meet ``all requirements `applicable' to the 
area under section 110 and part D''. Section 107(d)(3)(E)(ii) provides 
that the EPA must have fully approved the ``applicable'' SIP for the 
area seeking redesignation. These two sections read together support 
EPA's interpretation of ``applicable'' as only those requirements that 
came due prior to submission of a complete redesignation request. 
First, holding states to an ongoing obligation to adopt new CAA 
requirements that arose after the state submitted its redesignation 
request, in order to be redesignated, would make it problematic or 
impossible for EPA to act on redesignation requests in accordance with 
the 18-month deadline Congress set for EPA action in section 
107(d)(3)(D). If ``applicable requirements'' were interpreted to be a 
continuing flow of requirements with no reasonable limitation, states, 
after submitting a redesignation request, would be forced continuously 
to make additional SIP submissions that in turn would require EPA to 
undertake further notice-and-comment rulemaking actions to act on those 
submissions. This would create a regime of unceasing rulemaking that 
would delay action on the redesignation request beyond the 18-month 
timeframe provided by the Act for this purpose.
    Second, a fundamental premise for redesignating a nonattainment 
area to attainment is that the area has attained the relevant NAAQS due 
to emission reductions from existing controls. Thus, an area for which 
a redesignation request has been submitted would have already attained 
the NAAQS as a result of satisfying statutory requirements that came 
due prior to the submission of the request. Absent a showing that 
unadopted and unimplemented requirements are necessary for future 
maintenance, it is reasonable to view the requirements applicable for 
purposes of evaluating the redesignation request as including only 
those SIP requirements that have already come due. These are the 
requirements that led to attainment of the NAAQS. To require, for 
redesignation approval, that a state also satisfy additional SIP 
requirements coming due after the state submits its complete 
redesignation request, and while EPA is reviewing it, would compel the 
state to do more than is necessary to attain the NAAQS, without a 
showing that the additional requirements are necessary for maintenance.
    In the context of the Indianapolis redesignation, the timing and 
nature of the Court's January 4, 2013 decision in NRDC v. EPA compound 
the consequences of imposing requirements that come due after the 
redesignation request is submitted. While Indiana submitted its 
redesignation request in 2009 and EPA proposed to approve it in 2011, 
the Court did not issue its decision remanding EPA's 1997 
PM2.5 implementation rule concerning the applicability of 
the provisions of subpart 4 until January 2013.
    To require Indiana's fully-completed and long-pending redesignation 
request to comply now with requirements of subpart 4 that the Court has 
just announced would be to give retroactive effect to such requirements 
when the State had no notice that it was required to meet them. The 
D.C. Circuit recognized the inequity of this type of retroactive impact 
in Sierra Club v. Whitman, 285 F.3d 63 (D.C. Cir. 2002),\3\ where it 
upheld the District Court's ruling refusing to make retroactive EPA's 
determination that the St. Louis area did not meet its attainment 
deadline. In that case, petitioners urged the Court to make EPA's 
nonattainment determination effective as of the date that the statute 
required, rather than the later date on which EPA actually made the 
determination. The Court rejected this view, stating that applying it 
``would likely impose large costs on States, which would face fines and 
suits for not implementing air pollution prevention plans * * * even 
though they were not on notice at the time.'' Id. at 68. Similarly, it 
would be unreasonable to penalize Indiana by rejecting its 
redesignation request for an area that is already attaining the 1997 
PM2.5 standard and that met all applicable requirements 
known to be in effect at the time of the request. For EPA now to reject 
the redesignation request solely because the state did not expressly 
address subpart 4 requirements of which it had no notice, would inflict 
the same unfairness

[[Page 20861]]

condemned by the Court in Sierra Club v. Whitman.
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    \3\ Sierra Club v. Whitman was discussed and distinguished in a 
recent D.C. Circuit decision that addressed retroactivity in a quite 
different context, where, unlike the situation here, EPA sought to 
give its regulations retroactive effect. National Petrochemical and 
Refiners Ass'n v. EPA. 630 F.3d 145, 163 (D.C. Cir. 2010), rehearing 
denied 643 F.3d 958 (D.C. Cir. 2011), cert denied 132 S. Ct. 571 
(2011).
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b. Subpart 4 Requirements and Indiana's Redesignation Request
    Even if EPA were to take the view that the Court's January 4, 2013 
decision requires that, in the context of pending redesignations, 
subpart 4 requirements were due and in effect at the time the State 
submitted its redesignation request, EPA proposes to determine that the 
Indianapolis area still qualifies for redesignation to attainment. As 
explained below, EPA believes that the redesignation request for the 
Indianapolis area, though not expressed in terms of subpart 4 
requirements, substantively meets the requirements of that subpart for 
purposes of redesignating the area to attainment.
    With respect to evaluating the relevant substantive requirements of 
subpart 4 for purposes of redesignating the Indianapolis area, EPA 
notes that subpart 4 incorporates components of subpart 1 of part D, 
which contains general air quality planning requirements for areas 
designated as nonattainment. See Section 172(c). Subpart 4 itself 
contains specific planning and scheduling requirements for 
PM10 \4\ nonattainment areas, and under the Court's January 
4, 2013 decision in NRDC v. EPA, these same statutory requirements also 
apply for PM2.5 nonattainment areas. EPA has longstanding 
general guidance that interprets the 1990 amendments to the CAA, making 
recommendations to states for meeting the statutory requirements for 
SIPs for nonattainment areas. See, ``State Implementation Plans; 
General Preamble for the Implementation of Title I of the Clear Air Act 
Amendments of 1990,'' 57 FR 13498 (April 16, 1992) (the ``General 
Preamble''). In the General Preamble, EPA discussed the relationship of 
subpart 1 and subpart 4 SIP requirements, and pointed out that subpart 
1 requirements were to an extent ``subsumed by, or integrally related 
to, the more specific PM-10 requirements.'' 57 FR 13538 (April 16, 
1992). EPA's previously published proposal for this redesignation 
action addressed how the Indianapolis area meets the requirements for 
redesignation under subpart 1. These subpart 1 requirements include, 
among other things, provisions for attainment demonstrations, 
reasonably available control measures (RACM), reasonable further 
progress (RFP), emissions inventories, and contingency measures.
---------------------------------------------------------------------------

    \4\ PM10 refers to particulates nominally 10 
micrometers in diameter or smaller.
---------------------------------------------------------------------------

    For the purposes of this redesignation, in order to identify any 
additional requirements which would apply under subpart 4, we are 
considering the Indianapolis area to be a ``moderate'' PM2.5 
nonattainment area. Under section 188 of the CAA, all areas designated 
nonattainment areas under subpart 4 would initially be classified by 
operation of law as ``moderate'' nonattainment areas, and would remain 
moderate nonattainment areas unless and until EPA reclassifies the area 
as a ``serious'' nonattainment area.\5\ Accordingly, EPA believes that 
it is appropriate to limit the evaluation of the potential impact of 
subpart 4 requirements to those that would be applicable to moderate 
nonattainment areas. Sections 189(a) and (c) of subpart 4 apply to 
moderate nonattainment areas and include the following: (1) An approved 
permit program for construction of new and modified major stationary 
sources (section 189(a)(1)(A)); (2) an attainment demonstration 
(section 189(a)(1)(B)); (3) provisions for RACM (section 189(a)(1)(C)); 
and (4) quantitative milestones demonstrating RFP toward attainment by 
the applicable attainment date (section 189(c)).
---------------------------------------------------------------------------

    \5\ Section 188(a) also provides that EPA publish a notice 
announcing the classification of each area under subpart 4.
---------------------------------------------------------------------------

    The permit requirements of subpart 4, as contained in section 
189(a)(1)(A), refer to and apply the subpart 1 permit provisions 
requirements of sections 172 and 173 to PM10, without adding 
to them. Consequently, EPA believes that section 189(a)(1)(A) does not 
itself impose for redesignation purposes any additional requirements 
for moderate areas beyond those contained in subpart 1.\6\ In any 
event, in the context of redesignation, EPA has long relied on the 
interpretation that a fully approved nonattainment new source review 
program is not considered an applicable requirement for redesignation, 
provided the area can maintain the standard with a prevention of 
significant deterioration (PSD) program after redesignation. A detailed 
rationale for this view is described in a memorandum from Mary Nichols, 
Assistant Administrator for Air and Radiation, dated October 14, 1994, 
entitled, ``Part D New Source Review Requirements for Areas Requesting 
Redesignation to Attainment.'' See also rulemakings for Detroit, 
Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, 
Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 
FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-
31837, June 21, 1996).
---------------------------------------------------------------------------

    \6\ The potential effect of section 189(e) on section 
189(a)(1)(A) for purposes of evaluating this redesignation is 
discussed below.
---------------------------------------------------------------------------

    With respect to the specific attainment planning requirements under 
subpart 4,\7\ when EPA evaluates a redesignation request under either 
subpart 1 and/or 4, any area that is attaining the PM2.5 
standard is viewed as having satisfied the attainment planning 
requirements for these subparts. For redesignations, EPA has for many 
years interpreted attainment-linked requirements as not applicable for 
areas attaining the standard. In the General Preamble, EPA stated that:
---------------------------------------------------------------------------

    \7\ I.e., attainment demonstration, RFP, RACM, milestone 
requirements, contingency measures.

    The requirements for RFP will not apply in evaluating a request 
for redesignation to attainment since, at a minimum, the air quality 
data for the area must show that the area has already attained. 
Showing that the State will make RFP towards attainment will, 
---------------------------------------------------------------------------
therefore, have no meaning at that point.

``General Preamble for the Interpretation of Title I of the Clean Air 
Act Amendments of 1990''; (57 FR 13498, 13564, April 16, 1992).

    The General Preamble also explained that

[t]he section 172(c)(9) requirements are directed at ensuring RFP 
and attainment by the applicable date. These requirements no longer 
apply when an area has attained the standard and is eligible for 
redesignation. Furthermore, section 175A for maintenance plans * * * 
provides specific requirements for contingency measures that 
effectively supersede the requirements of section 172(c)(9) for 
these areas.

Id.

    EPA similarly stated in its 1992 Calcagni memorandum that, ``The 
requirements for reasonable further progress and other measures needed 
for attainment will not apply for redesignations because they only have 
meaning for areas not attaining the standard.''
    It is evident that even if we were to consider the Court's January 
4, 2013 decision in NRDC v. EPA to mean that attainment-related 
requirements specific to subpart 4 should be imposed retroactively \8\ 
and thus are now past due, those requirements do not apply to an area 
that is attaining the 1997 PM2.5 standard, for the purpose 
of evaluating a pending request to redesignate the area to attainment. 
EPA has consistently enunciated this interpretation of applicable 
requirements under section 107(d)(3)(E) since the General Preamble

[[Page 20862]]

was published more than twenty years ago. Courts have recognized the 
scope of EPA's authority to interpret ``applicable requirements'' in 
the redesignation context. See Sierra Club v. EPA, 375 F.3d 537 (7th 
Cir. 2004).
---------------------------------------------------------------------------

    \8\ As EPA has explained above, we do not believe that the 
Court's January 4, 2013 decision should be interpreted so as to 
impose these requirements on the states retroactively. Sierra Club 
v. Whitman, supra.
---------------------------------------------------------------------------

    Moreover, even outside the context of redesignations, EPA has 
viewed the obligations to submit attainment-related SIP planning 
requirements of subpart 4 as inapplicable for areas that EPA determines 
are attaining the standard. EPA's prior ``Clean Data Policy'' 
rulemakings for the PM10 NAAQS, also governed by the 
requirements of subpart 4, explain EPA's reasoning. They describe the 
effects of a determination of attainment on the attainment-related SIP 
planning requirements of subpart 4. See ``Determination of Attainment 
for Coso Junction Nonattainment Area,'' (75 FR 27944, May 19, 2010). 
See also Coso Junction proposed PM10 redesignation, (75 FR 
36023, 36027, June 24, 2010); Proposed and Final Determinations of 
Attainment for San Joaquin Nonattainment Area (71 FR 40952, 40954-55, 
July 19, 2006; and 71 FR 63641, 63643-47 October 30, 2006). In short, 
EPA in this context has also long concluded that to require states to 
meet superfluous SIP planning requirements is not necessary and not 
required by the CAA, so long as those areas continue to attain the 
relevant NAAQS.
    In its September 27, 2011 proposal for this action, EPA proposed to 
determine that the Indianapolis area has attained the 1997 
PM2.5 standard and therefore meets the attainment-related 
plan requirements of subpart 1. Under its longstanding interpretation, 
EPA is proposing to determine here that the area also meets the 
attainment-related plan requirements of subpart 4.
    Thus, EPA is proposing to conclude that the requirements to submit 
an attainment demonstration under 189(a)(1)(B), a RACM determination 
under section 172(c) and section 189(a)(1)(c), and a RFP demonstration 
under 189(c)(1) are satisfied for purposes of evaluating the 
redesignation request.
c. Subpart 4 and Control of PM2.5 Precursors
    The D.C. Circuit in NRDC v. EPA remanded to EPA the two rules at 
issue in the case with instructions to EPA to re-promulgate them 
consistent with the requirements of subpart 4. The Court's opinion 
raises the issue of the appropriate approach to addressing 
PM2.5 precursors in this and future EPA actions. While past 
implementation of subpart 4 for PM10 has allowed for control 
of PM10 precursors such as NOX from major 
stationary, mobile, and area sources in order to attain the standard as 
expeditiously as practicable, CAA section 189(e) specifically provides 
that control requirements for major stationary sources of direct 
PM10 shall also apply to PM10 precursors from 
those sources, except where EPA determines that major stationary 
sources of such precursors ``do not contribute significantly to 
PM10 levels which exceed the standard in the area.''
    EPA's 1997 PM2.5 implementation rule, remanded by the 
D.C. Circuit, contained rebuttable presumptions concerning certain 
PM2.5 precursors applicable to attainment plans and control 
measures related to those plans. Specifically, in 40 CFR 51.1002, EPA 
provided, among other things, that a state was ``not required to 
address VOC [and ammonia] as * * * PM2.5 attainment plan 
precursor[s] and to evaluate sources of VOC [and ammonia] emissions in 
the State for control measures.'' EPA intended these to be rebuttable 
presumptions. EPA established these presumptions at the time because of 
uncertainties regarding the emission inventories for these pollutants 
and the effectiveness of specific control measures in various regions 
of the country in reducing PM2.5 concentrations. EPA also 
left open the possibility for such regulation of VOC and ammonia in 
specific areas where that was necessary.
    The Court in its January 4, 2013 decision made reference to both 
section 189(e) and 40 CFR 51. 1002, and stated that, ``In light of our 
disposition, we need not address the petitioners' challenge to the 
presumptions in [40 CFR 51.1002] that volatile organic compounds and 
ammonia are not PM2.5 precursors, as subpart 4 expressly 
governs precursor presumptions.'' NRDC v. EPA, at 27, n.10.
    Elsewhere in the Court's opinion, however, the Court observed:

    Ammonia is a precursor to fine particulate matter, making it a 
precursor to both PM2.5 and PM10. For a 
PM10 nonattainment area governed by subpart 4, a 
precursor is presumptively regulated. See 42 U.S.C. Sec.  7513a(e) 
[section 189(e)].

Id. at 21, n.7.

    For a number of reasons, EPA believes that the Court's decision on 
this aspect of subpart 4 does not preclude EPA's approval of Indiana's 
redesignation request for the 1997 PM2.5 NAAQS. First, while 
the Court, citing section 189(e), stated that ``for a PM10 
area governed by subpart 4, a precursor is `presumptively regulated,''' 
the Court expressly declined to decide the specific challenge to EPA's 
1997 PM2.5 implementation rule provisions regarding ammonia 
and VOC as precursors. The Court had no occasion to reach whether and 
how it was substantively necessary to regulate any specific precursor 
in a particular PM2.5 nonattainment area, and did not 
address what might be necessary for purposes of acting upon a 
redesignation request.
    However, even if EPA takes the view that the requirements of 
subpart 4 were deemed applicable at the time the state submitted the 
redesignation request, and disregards the implementation rule's 
rebuttable presumptions regarding ammonia and VOC as PM2.5 
precursors, the regulatory consequence would be to consider the need 
for regulation of all precursors from any sources in the area to 
demonstrate attainment and to apply the section 189(e) provisions to 
major stationary sources of precursors. In the case of Indianapolis, 
EPA believes that doing so would not affect the approvability of the 
proposed redesignation of the area for the 1997 PM2.5 
standard. Indianapolis has attained the standard without any specific 
additional controls of VOC and ammonia emissions from any sources in 
the area.
    Precursors in subpart 4 are specifically regulated under the 
provisions of section 189(e), which requires, with important 
exceptions, control requirements for major stationary sources of 
PM10 precursors.\9\ Under subpart 1 and EPA's prior 
implementation rule, all major stationary sources of PM2.5 
precursors were subject to regulation, with the exception of ammonia 
and VOC. Thus we must address here whether additional controls of 
ammonia and VOC from major stationary sources are required under 
section 189(e) of subpart 4 in order to redesignate the Indianapolis 
area for the 1997 PM2.5 standard. As explained below, we do 
not believe that any additional controls of ammonia and VOC are 
required in the context of this redesignation.
---------------------------------------------------------------------------

    \9\ Under either subpart 1 or subpart 4, for purposes of 
demonstrating attainment as expeditiously as practicable, a state is 
required to evaluate all economically and technologically feasible 
control measures for direct PM emissions and precursor emissions, 
and adopt those measures that are deemed reasonably available.
---------------------------------------------------------------------------

    In the General Preamble, EPA discusses its approach to implementing 
section 189(e). See 57 FR 13538-13542. With regard to precursor 
regulation under section 189(e), the General Preamble explicitly stated 
that control of VOCs under other Act requirements may suffice to 
relieve a state from the need to adopt precursor controls under section 
189(e). 57 FR 13542. EPA in this supplemental proposal proposes to

[[Page 20863]]

determine that the Indiana SIP has met the provisions of section 189(e) 
with respect to ammonia and VOCs as precursors. This proposed 
supplemental determination is based on our findings that (1) the 
Indianapolis area contains no major stationary sources of ammonia, and 
(2) existing major stationary sources of VOC are adequately controlled 
under other provisions of the CAA regulating the ozone NAAQS.\10\ In 
the alternative, EPA proposes to determine that, under the express 
exception provisions of section 189(e), and in the context of the 
redesignation of the Indianapolis area, which is attaining the 1997 
annual PM2.5 standard, at present ammonia and VOC precursors 
from major stationary sources do not contribute significantly to levels 
exceeding the 1997 PM2.5 standard in the Indianapolis area. 
See 57 FR 13539-13542.
---------------------------------------------------------------------------

    \10\ The Indianapolis area has reduced VOC emissions through the 
implementation of various control programs including VOC Reasonably 
Available Control Technology regulations and various on-road and 
non-road motor vehicle control programs.
---------------------------------------------------------------------------

    EPA notes that its 1997 PM2.5 implementation rule 
provisions in 40 CFR 51.1002 were not directed at evaluation of 
PM2.5 precursors in the context of redesignation, but at SIP 
plans and control measures required to bring a nonattainment area into 
attainment of the 1997 PM2.5 NAAQS. By contrast, 
redesignation to attainment primarily requires the area to have already 
attained due to permanent and enforceable emission reductions, and to 
demonstrate that controls in place can continue to maintain the 
standard. Thus, even if we regard the Court's January 4, 2013 decision 
as calling for ``presumptive regulation'' of ammonia and VOC for 
PM2.5 under the attainment planning provisions of subpart 4, 
those provisions in and of themselves do not require additional 
controls of these precursors for an area that already qualifies for 
redesignation. Nor does EPA believe that requiring Indiana to address 
precursors differently than they have already would result in a 
substantively different outcome.
    Although, as EPA has emphasized, its consideration here of 
precursor requirements under subpart 4 is in the context of a 
redesignation to attainment, EPA's existing interpretation of subpart 4 
requirements with respect to precursors in attainment plans for 
PM10 contemplates that states may develop attainment plans 
that regulate only those precursors that are necessary for purposes of 
attainment in the area in question, i.e., states may determine that 
only certain precursors need be regulated for attainment and control 
purposes.\11\ Courts have upheld this approach to the requirements of 
subpart 4 for PM10.\12\ EPA believes that application of 
this approach to PM2.5 precursors under subpart 4 is 
reasonable. Because the Indianapolis area has already attained the 1997 
PM2.5 NAAQS with its current approach to regulation of 
PM2.5 precursors, EPA believes that it is reasonable to 
conclude in the context of this redesignation that there is no need to 
revisit the attainment control strategy with respect to the treatment 
of precursors. Even if the Court's decision is construed to impose an 
obligation, in evaluating this redesignation request, to consider 
additional precursors under subpart 4, it would not affect EPA's 
approval here of Indiana's request for redesignation of the 
Indianapolis area. In the context of a redesignation, the area has 
shown that it has attained the standard. Moreover, the state has shown 
and EPA has proposed to determine that attainment in this area is due 
to permanent and enforceable emissions reductions on all precursors 
necessary to provide for continued attainment. It follows logically 
that no further control of additional precursors is necessary. 
Accordingly, EPA does not view the January 4, 2013 decision of the 
Court as precluding redesignation of the Indianapolis area to 
attainment for the 1997 PM2.5 NAAQS at this time.
---------------------------------------------------------------------------

    \11\ See, e.g., ``Approval and Promulgation of Implementation 
Plans for California--San Joaquin Valley PM-10 Nonattainment Area; 
Serious Area Plan for Nonattainment of the 24-Hour and Annual PM-10 
Standards,'' 69 FR 30006 (May 26, 2004) (approving a PM10 
attainment plan that impose controls on direct PM10 and 
NOX emissions and did not impose controls on 
SO2, VOC, or ammonia emissions).
    \12\ See, e.g., Assoc. of Irritated Residents v. EPA et al., 423 
F.3d 989 (9th Cir. 2005).
---------------------------------------------------------------------------

    In sum, even if Indiana were required to address precursors for the 
Indianapolis area under subpart 4 rather than under subpart 1, as 
interpreted in EPA's remanded PM2.5 implementation rule, EPA 
would still conclude that the area had met all applicable requirements 
for purposes of redesignation in accordance with section 
107(d)(3(E)(ii) and (v).
d. Maintenance Plan and Evaluation of Precursors
    With regard to the redesignation of Indianapolis, in evaluating the 
effect of the Court's remand of EPA's implementation rule, which 
included presumptions against consideration of VOC and ammonia as 
PM2.5 precursors, EPA in this supplemental proposal is also 
considering the impact of the decision on the maintenance plan required 
under sections 175A and 107(d)(3)(E)(iv). To begin with, EPA notes that 
the area has attained the 1997 PM2.5 standard and that the 
state has shown that attainment of that standard is due to permanent 
and enforceable emission reductions.
    In its prior proposal notice for this action, EPA proposed to 
determine that the State's maintenance plan shows continued maintenance 
of the standard by tracking the levels of the precursors whose control 
brought about attainment of the 1997 PM2.5 standard in the 
Indianapolis area. EPA therefore believes that the only additional 
consideration related to the maintenance plan requirements that results 
from the Court's January 4, 2013 decision is that of assessing the 
potential role of VOC and ammonia in demonstrating continued 
maintenance in this area. As explained below, based upon documentation 
provided by the State and supporting information, EPA believes that the 
maintenance plan for the Indianapolis area need not include any 
additional emission reductions of VOC or ammonia in order to provide 
for continued maintenance of the standard.
    First, as noted above in EPA's discussion of section 189(e), VOC 
emission levels in this area have historically been well-controlled 
under SIP requirements related to ozone and other pollutants. Second, 
total ammonia emissions throughout the Indianapolis area are very low, 
estimated to be less than 4,000 tons per year. See Table 4 below. This 
amount of ammonia emissions appears especially small in comparison to 
the total amounts of SO2, NOX, and even direct 
PM2.5 emissions from sources in the area. Third, as 
described below, available information shows that no precursor, 
including VOC and ammonia, is expected to increase over the maintenance 
period so as to interfere with or undermine the State's maintenance 
demonstration.
    Indiana's maintenance plan shows that emissions of direct 
PM2.5, SO2, and NOX are projected to 
decrease by 1,048 tons per year (tpy), 11,301 tpy, and 39,894 tpy, 
respectively, over the maintenance period. See Tables 1-3 below. In 
addition, emissions inventories used in the regulatory impact analysis 
(RIA) for the 2012 PM2.5 NAAQS show that VOC and ammonia 
emissions are projected to decrease by 14,551 tpy and 99 tpy, 
respectively between 2007 and 2020. See Table 4 below. While the RIA 
emissions inventories are only projected out to 2020, there is no 
reason to believe that this downward trend would not continue through 
2025. Given that the Indianapolis area is already attaining the 1997 
PM2.5 NAAQS even with the

[[Page 20864]]

current level of emissions from sources in the area, the downward trend 
of emissions inventories would be consistent with continued attainment. 
Indeed, projected emissions reductions for the precursors that the 
State is addressing for purposes of the 1997 PM2.5 NAAQS 
indicate that the area should continue to attain the NAAQS following 
the precursor control strategy that the state has already elected to 
pursue. Even if VOC and ammonia emissions were to increase unexpectedly 
between 2020 and 2025, the overall emissions reductions projected in 
direct PM2.5, SO2, and NOX would be 
sufficient to offset any increases. For these reasons, EPA believes 
that local emissions of all of the potential PM2.5 
precursors will not increase to the extent that they will cause 
monitored PM2.5 levels to violate the 1997 PM2.5 
standard during the maintenance period.

  Table 1--Comparison of 2008, 2015, 2020, and 2025 Direct PM2.5 Emission Totals by Source Sector (tpy) for the
                                                Indianapolis Area
----------------------------------------------------------------------------------------------------------------
                                                                           Direct PM2.5
                                                ----------------------------------------------------------------
                     Sector                                                                           Net change
                                                     2008         2015         2020         2025      2008-2025
----------------------------------------------------------------------------------------------------------------
Point..........................................          843          823          806          790          -53
EGU \13\.......................................        1,966        2,568        2,568        2,568          601
Area...........................................           85           82           79           76           -9
Nonroad........................................          805          538          384          282         -524
On-road \14\...................................        1,464          742          571          400       -1,064
                                                ----------------------------------------------------------------
    Total......................................        5,164        4,753        4,408        4,116       -1,048
----------------------------------------------------------------------------------------------------------------


      Table 2--Comparison of 2008, 2015, 2020, and 2025 SO2 Emission Totals by Source Sector (tpy) for the
                                                Indianapolis Area
----------------------------------------------------------------------------------------------------------------
                                                                               SO2
                                                ----------------------------------------------------------------
                     Sector                                                                           Net change
                                                     2008         2015         2020         2025      2008-2025
----------------------------------------------------------------------------------------------------------------
Point..........................................        2,416        1,632        1,605        1,579         -837
EGU............................................       38,027       28,315       28,314       28,314       -9,713
Area...........................................        1,830        1,778        1,732        1,687         -143
Nonroad........................................          576          166           89           57         -519
On-road \15\...................................          654          498          532          565           88
                                                ----------------------------------------------------------------
    Total......................................       43,503       32,389       32,272       32,202      -11,301
----------------------------------------------------------------------------------------------------------------


      Table 3--Comparison of 2008, 2015, 2020, and 2025 NOX Emission Totals by Source Sector (tpy) for the
                                                Indianapolis Area
----------------------------------------------------------------------------------------------------------------
                                                                               NOX
                                                ----------------------------------------------------------------
                     Sector                                                                           Net change
                                                     2008         2015         2020         2025      2008-2025
----------------------------------------------------------------------------------------------------------------
Point..........................................        6,259        6,268        6,183        6,099         -161
EGU............................................        7,184        6,865        6,864        6,863         -321
Area...........................................        4,886        4,809        4,727        4,646         -240
Nonroad........................................       10,954        7,147        4,961        3,545       -7,409
On-road \14\...................................       43,389       22,013       16,819       11,625       -31,76
                                                ----------------------------------------------------------------
    Total......................................       72,672       47,101       39,554       32,778      -39,894
----------------------------------------------------------------------------------------------------------------

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

    \13\ Electric generating units.
    \14\ Emissions projections for the on-road sector were generated 
using the MOVES model. Indiana submitted the MOVES based 
NOX and direct PM2.5 emissions projections and 
MVEBs for the on-road sector on January 17, 2013, to replace the 
MOBILE6.2 based on-road emissions projections and MVEBs submitted as 
part of the maintenance plan.
    \15\ On-road sector emissions were projected using the MOBILE6.2 
emissions model.

[[Page 20865]]



Table 4--Comparison of 2007 and 2020 VOC and Ammonia Emission Totals by Source Sector (tpy) for the Indianapolis
                                                    Area \16\
----------------------------------------------------------------------------------------------------------------
                                                     VOC                                  Ammonia
                                   -----------------------------------------------------------------------------
              Sector                                           Net change                             Net change
                                        2007         2020      2007-2020       2007         2020      2007-2020
----------------------------------------------------------------------------------------------------------------
Point.............................        1,699        1,716           17           58           68           10
Area..............................       27,618       27,516         -102        3,056        3,198          142
Nonroad...........................        7,114        4,121       -2,993           11           14            3
On-road...........................       17,972        6,499      -11,473          636          382         -254
Fires.............................          113          113            0            8            8            0
                                   -----------------------------------------------------------------------------
    Total.........................       54,516       39,965      -14,551        3,769        3,670          -99
----------------------------------------------------------------------------------------------------------------

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

    \16\ These emissions estimates were taken from the emissions 
inventories developed for the RIA for the 2012 PM2.5 
NAAQS.
---------------------------------------------------------------------------

    In addition, available air quality modeling analyses show continued 
maintenance of the standard during the maintenance period. The current 
air quality design value for the area is 13.1 micrograms per cubic 
meter ([micro]g/m\3\) (based on 2009-11 air quality data), which is 
well below the 1997 annual PM2.5 NAAQS of 15 [micro]g/m\3\. 
Moreover, the modeling analysis conducted for the RIA for the 2012 
PM2.5 NAAQS indicates that the design value for this area is 
expected to continue to decline through 2020. In the RIA analysis, the 
2020 modeled design value for the Indianapolis area is 10.4 [micro]g/
m\3\. Given that precursor emissions are projected to decrease through 
2025, it is reasonable to conclude that monitored PM2.5 
levels in this area will also continue to decrease through 2025.
    Thus, EPA believes that there is ample justification to conclude 
that the Indianapolis area should be redesignated, even taking into 
consideration the emissions of other precursors potentially relevant to 
PM2.5. After consideration of the D.C. Circuit's January 4, 
2013 decision, and for the reasons set forth in this supplemental 
notice, EPA continues to propose approval of the State of Indiana's 
maintenance plan and its request to redesignate the Indianapolis area 
to attainment for the 1997 PM2.5 annual standard.

C. Ammonia and VOC Comprehensive Emissions Inventories

    EPA in this supplemental proposal also addresses the State of 
Indiana's supplemental submission that provides additional information 
concerning ammonia and VOC emissions in the Indianapolis area in order 
to meet the emissions inventory requirement of CAA section 172(c)(3). 
Section 172(c)(3) of the CAA requires states to submit a comprehensive, 
accurate, and current emissions inventory for a nonattainment area. For 
purposes of the PM2.5 NAAQS, this emissions inventory should 
address not only direct emissions of PM2.5, but also 
emissions of all precursors with the potential to participate in 
PM2.5 formation, i.e., SO2, NOX, VOC 
and ammonia.
    In the September 27, 2011 proposed rule, EPA proposed to approve 
the emissions inventory information for direct PM2.5, 
NOX, and SO2 submitted by IDEM as meeting the 
emissions inventory requirement for the Indianapolis area. On March 18, 
2013, IDEM supplemented its submittal with 2007/2008 emissions 
inventories for ammonia and VOC. The additional emissions inventory 
information provided by the State addresses emissions of VOC and 
ammonia from the general source categories of point sources, area 
sources, on-road mobile sources, and nonroad mobile sources. The state-
submitted emissions inventories were based upon information generated 
by the Lake Michigan Air Directors Consortium (LADCO) in conjunction 
with its member states and are presented in Table 5 below.
    LADCO ran the EMS model using data provided by the State of Indiana 
to generate point source emissions estimates. The point source data 
supplied by the state was obtained from Indiana's source facility 
emissions reporting.
    For area sources, LADCO ran the EMS model using the 2008 National 
Emissions Inventory (NEI) data provided by Indiana. LADCO followed 
Eastern Regional Technical Advisory Committee (ERTAC) recommendations 
on area sources when preparing the data. Agricultural ammonia emissions 
were not taken from NEI; instead emissions were based on Carnegie 
Mellon University's Ammonia Emission Inventory for the Continental 
United States (CMU). Specifically, the CMU 2002 annual emissions were 
grown to reflect 2007 conditions. A process-based ammonia emissions 
model developed for LADCO was then used to develop temporal factors to 
reflect the impact of average meteorology on livestock emissions.
    Non-road mobile source emissions were generated using the NMIM2008 
emissions model. LADCO also accounted for three other non-road 
categories not covered by the NMIM model: commercial marine vessels, 
aircraft, and railroads. Marine emissions were based on reports 
prepared by Environ entitled ``LADCO Nonroad Emissions Inventory 
Project for Locomotive, Commercial Marine, and Recreational Marine 
Emission Sources, Final Report, December 2004'' and ``LADCO 2005 
Commercial Marine Emissions, Draft, March 2, 2007.'' Aircraft emissions 
were provided by Indiana and calculated using AP-42 emission factors 
and landing and take-off data provided by the Federal Aviation 
Administration. Rail emissions were based on the 2008 inventory 
developed by ERTAC.
    On-road mobile source emissions were generated using EPA's 
MOVES2010a emissions model.
    EPA notes that the emissions inventory developed by LADCO is 
documented in ``Regional Air Quality Analyses for Ozone, 
PM2.5, and Regional Haze: Base C Emissions Inventory'' 
(September 12, 2011).

Table 5--Indianapolis Area Ammonia and VOC Emissions (tpy) for 2007/2008
                            by Source Sector
------------------------------------------------------------------------
                     Sector                         Ammonia       VOC
------------------------------------------------------------------------
Point...........................................       41.73    1,284.14
Area............................................    3,139.54   27,646.25
Non-road........................................       10.51    8,277.20
On-road.........................................      685.41   21,866.66
                                                 -----------------------
    Total.......................................    3,877.19   59,074.25
------------------------------------------------------------------------

    EPA has concluded that the 2007/2008 ammonia and VOC emissions

[[Page 20866]]

inventories provided by the State are complete and as accurate as 
possible given the input data available for the relevant source 
categories. EPA also believes that these inventories provide 
information about VOC and ammonia as PM2.5 precursors in the 
context of evaluating redesignation of the Indianapolis area under 
subpart 4. Therefore, we are proposing to approve the ammonia and VOC 
emissions inventories submitted by the State, in conjunction with the 
NOX, direct PM2.5, and SO2 emissions 
inventories that EPA previously proposed to approve, as fully meeting 
the comprehensive inventory requirement of section 172(c)(3) of the CAA 
for the Indianapolis area for the 1997 annual PM2.5 
standard. Since EPA's prior proposal addressed other precursor 
emissions inventories, EPA in this supplemental proposal is seeking 
comment only with respect to the additional inventories for VOC and 
ammonia that Indiana has submitted.

D. MVEBs

1. How are MVEBs developed and what are the MVEBs for the Indianapolis 
area?
    On January 17, 2013, Indiana submitted to EPA a request to revise 
its maintenance plan for the Indianapolis area by replacing the 
previously submitted MOBILE6.2 based MVEBs with budgets developed using 
EPA's MOVES 2010a emissions model.
    Under the CAA, states are required to submit, at various times, 
control strategy SIP revisions and maintenance plans for nonattainment 
areas and for areas seeking redesignation to attainment for a given 
NAAQS. These emission control strategy SIP revisions (e.g., RFP and 
attainment demonstration SIP revisions) and maintenance plans create 
MVEBs based on on-road mobile source emissions for the relevant 
criteria pollutants and/or their precursors, where appropriate, to 
address pollution from on-road transportation sources. The MVEBs are 
the portions of the total allowable emissions that are allocated to on-
road vehicle use that, together with emissions from all other sources 
in the area, will provide for attainment, RFP, or maintenance, as 
applicable. The budget serves as a ceiling on emissions from an area's 
planned transportation system. Under 40 CFR part 93, a MVEB for an area 
seeking a redesignation to attainment is established for the last year 
of the maintenance plan. See the September 27, 2011 notice of direct 
final approval for a more complete discussion of MVEBs. (76 FR 59512).
    EPA's substantive criteria for determining the adequacy of MVEBs 
are set out in 40 CFR 93.118(e)(4). Additionally, to approve a motor 
vehicle emissions budget, EPA must complete a thorough review of the 
SIP, in this case the PM2.5 maintenance plan, and conclude 
that with the projected level of motor vehicle and all other emissions, 
the SIP will achieve its overall purpose, in this case providing for 
maintenance of the 1997 annual PM2.5 standard.
    EPA's process for determining adequacy of a MVEB consists of three 
basic steps: (1) Providing public notification of a SIP submission; (2) 
providing the public the opportunity to comment on the MVEB during a 
public comment period; and, (3) EPA taking action on the MVEB. The 
process for determining the adequacy of submitted SIP MVEBs is codified 
at 40 CFR 93.118.
    The maintenance plan revision submitted by Indiana for the 
Indianapolis area contains primary PM2.5 and NOX 
MVEBs for the area for the years 2015 and 2025.
    IDEM has determined the 2015 MVEBs for the Indianapolis area to be 
853.76 tpy for primary PM2.5 and 25,314.49 tpy for 
NOX. IDEM has determined the 2025 MVEBs for the Indianapolis 
area to be 460.18 tpy for primary PM2.5 and 13,368.60 tpy 
for NOX. These MVEBs exceed the on-road mobile source 
primary PM2.5 and NOX emissions projected by IDEM 
for 2015 and 2025, as summarized in Table 6 below. IDEM decided to 
include ``safety margins'' as provided for in 40 CFR 93.124(a) 
(described further below) of 111.36 tpy and 60.02 tpy for primary 
PM2.5 and 3,301.89 tpy and 1,743.73 tpy for NOX 
in the 2015 and 2025 MVEBs, respectively, to provide for on-road mobile 
source growth. Indiana did not provide emission budgets for 
SO2, VOC, and ammonia because it concluded, consistent with 
the presumptions regarding these precursors in the conformity rule at 
40 CFR 93.102(b)(2)(v), which predated and was not disturbed by the 
litigation on the PM2.5 implementation rule, that emissions 
of these precursors from motor vehicles are not significant 
contributors to the area's PM2.5 air quality problem.
    EPA issued conformity regulations to implement the 1997 
PM2.5 NAAQS in July 2004 and May 2005 (69 FR 40004, July 1, 
2004 and 70 FR 24280, May 6, 2005, respectively). Those actions were 
not part of the final rule recently remanded to EPA by the Court of 
Appeals for the District of Columbia in NRDC v. EPA, No. 08-1250 (Jan. 
4, 2013), in which the Court remanded to EPA the implementation rule 
for the PM2.5 NAAQS because it concluded that EPA must 
implement that NAAQS pursuant to the PM-specific implementation 
provisions of subpart 4 of Part D of Title I of the CAA, rather than 
solely under the general provisions of subpart 1. That decision does 
not affect EPA's proposed approval of the Indianapolis MVEBs.
    First, as noted above, EPA's conformity rule implementing the 1997 
PM2.5 NAAQS was a separate action from the overall 
PM2.5 implementation rule addressed by the Court and was not 
considered or disturbed by the decision. Therefore, the conformity 
regulations were not at issue in NRDC v. EPA.\17\ In addition, as 
discussed in section III.B., the Indianapolis area is attaining the 
1997 annual standard for PM2.5 with a 2009-2011 design value 
of 13.1 [micro]g/m\3\, which is well below the annual PM2.5 
NAAQS of 15 [micro]g/m\3\. The modeling analysis conducted for the RIA 
for the 2012 p.m. NAAQS indicates that the design value for this area 
is expected to continue to decline through 2020. Further, the State's 
maintenance plan shows continued maintenance through 2025 by 
demonstrating that NOX, SO2, and direct 
PM2.5 emissions continue to decrease through the maintenance 
period. For VOC and ammonia, RIA inventories for 2007 and 2020 show 
that both on-road and total emissions for these pollutants are expected 
to decrease, supporting the state's conclusion, consistent with the 
presumptions regarding these precursors in the conformity rule, that 
emissions of these precursors from motor vehicles are not significant 
contributors to the area's PM2.5 air quality problem and the 
MVEBs for these precursors are unnecessary. With regard to 
SO2, the 2005 final conformity rule (70 FR 24280) based its 
presumption concerning on-road SO2 motor vehicle emissions 
budgets on emissions inventories that show that SO2 
emissions from on-road sources constitute a ``de minimis'' portion of 
total SO2 emissions. As shown elsewhere in this supplemental 
proposal, on-road emissions in 2025 are less than 2% of total 
SO2 emissions in the area. While on-road SO2 
emissions reach a low point in 2015 and gradually begin to increase, 
these increases are small in the context of the entire SO2

[[Page 20867]]

inventory and, even with those increases, the on-road emissions are 
lower in 2025 than in the base year. Moreover, the revised MVEBs simply 
update the budget calculations using MOVES, as explained above.
---------------------------------------------------------------------------

    \17\ The 2004 rulemaking addressed most of the transportation 
conformity requirements that apply in PM2.5 nonattainment 
and maintenance areas. The 2005 conformity rule included provisions 
addressing treatment of PM2.5 precursors in MVEBs. See 40 
CFR 93.102(b)(2). While none of these provisions were challenged in 
the NRDC case, EPA also notes that the Court declined to address 
challenges to EPA's presumptions regarding PM2.5 
precursors in the PM2.5 implementation rule. NRDC v. EPA, 
at 27, n. 10.

                      Table 6--On-road Mobile Source Emissions Estimates (tpy) and Budgets
----------------------------------------------------------------------------------------------------------------
                                                     NOX                                   PM2.5
                                   -----------------------------------------------------------------------------
                                     Emissions                   Safety     Emissions                   Safety
                                      estimate      Budget       margin      estimate      Budget       margin
----------------------------------------------------------------------------------------------------------------
2008..............................    43,388.93  ...........  ...........     1,463.72  ...........  ...........
2015..............................    22,012.60    25,314.49     3,301.89       742.40       853.76       111.36
2025..............................     11624.87    13,368.60     1,743.73       400.16       460.18        60.02
----------------------------------------------------------------------------------------------------------------

2. What are safety margins?
    A ``safety margin'' is the difference between the attainment level 
of emissions (from all sources) and the projected level of emissions 
(from all sources) in the maintenance plan. As shown in Table 3, 
NOX emissions in the Indianapolis area are projected to have 
safety margins of 25,571 tpy and 39,894 tpy in 2015 and 2025, 
respectively (the difference between the attainment year, 2008, 
emissions and the projected 2015 and 2025 emissions for all sources in 
the Indianapolis area). Table 1 shows direct PM2.5 emissions 
in the Indianapolis area are projected to have a safety margin of 412 
tpy and 1,048 tpy in 2015 and 2025, respectively. Even if emissions 
reached the full level of the safety margin, the area would still 
demonstrate maintenance since emission levels would equal those in the 
attainment year.
    The transportation conformity rule allows areas to allocate all or 
a portion of a ``safety margin'' to the area's motor vehicle emissions 
budgets (40 CFR 92.124(a)). The MVEBs requested by IDEM contain 
NOX and direct PM2.5 safety margins for mobile 
sources in 2015 and 2025 smaller than the allowable safety margins 
reflected in the total emissions inventory for the Indianapolis area. 
Thus, the State is not requesting allocation to the MVEBs of the entire 
available safety margins reflected in the demonstration of maintenance. 
Therefore, even though the State has submitted MVEBs that exceed the 
projected on-road mobile source emissions for 2015 and 2025 contained 
in the demonstration of maintenance, the differences between the MVEBs 
and the projected on-road mobile source emissions are well within the 
safety margins of the PM2.5 maintenance demonstration. 
Further, once allocated to mobile sources, these safety margins will 
not be available for use by other sources.
    EPA has reviewed the submitted budgets for 2015 and 2025, including 
the added safety margins using the conformity rule's adequacy criteria 
found at 40 CFR 93.118(e)(4) and the conformity rule's requirements for 
safety margins found at 40 CFR 93.124(a). EPA has determined that the 
area can maintain attainment of the 1997 annual PM2.5 NAAQS 
for the relevant maintenance period with on-road mobile source 
emissions at the levels of the MVEBs since total emissions will still 
remain under attainment year emission levels. EPA is therefore 
proposing to approve the MOVES based MVEBs submitted by Indiana for use 
in determining transportation conformity in the Indianapolis area.

IV. Summary of Proposed Actions

    After fully considering the DC Circuit's decisions in EME Homer 
City on EPA's CSAPR rule, and NRDC v. EPA on EPA's 1997 
PM2.5 Implementation rule, EPA in this supplemental notice 
is proposing to proceed with approval of the request to redesignate the 
Indianapolis area to attainment for the 1997 annual PM2.5 
NAAQS and of the associated maintenance plan. In this supplemental 
notice, EPA is also proposing to approve the 2007/2008 ammonia and VOC 
emissions inventories as meeting, in conjunction with the 
NOX, direct PM2.5 and SO2 inventories 
that EPA previously proposed to approve, the comprehensive emissions 
inventory requirements of section 172(c)(3) of the CAA. Finally, EPA is 
proposing to approve Indiana's MOVES-based NOX and direct 
PM2.5 MVEBs for 2015 and 2025 for the Indianapolis area for 
transportation conformity purposes. EPA is seeking comment only on the 
issues raised in its supplemental proposals, and is not re-opening 
comment on other issues addressed in its prior proposal.

V. Statutory and Executive Order Reviews

    Under the CAA, redesignation of an area to attainment and the 
accompanying approval of a maintenance plan under section 107(d)(3)(E) 
are actions that affect the status of a geographical area and do not 
impose any additional regulatory requirements on sources beyond those 
imposed by state law. A redesignation to attainment does not in and of 
itself create any new requirements, but rather results in the 
applicability of requirements contained in the CAA for areas that have 
been redesignated to attainment. Moreover, the Administrator is 
required to approve a SIP submission that complies with the provisions 
of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 
CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to 
approve state choices, provided that they meet the criteria of the CAA. 
Accordingly, these proposed actions do not impose additional 
requirements beyond those imposed by state law and the CAA. For that 
reason, these proposed actions:
     Are not ``significant regulatory actions'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     do not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     are certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     do not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     do not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     are not economically significant regulatory actions based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     are not significant regulatory actions subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     are not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement

[[Page 20868]]

Act of 1995 (15 U.S.C. 272 note) because application of those 
requirements would be inconsistent with the CAA; and
     do not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this proposed rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because a determination of attainment is an action that affects the 
status of a geographical area and does not impose any new regulatory 
requirements on tribes, impact any existing sources of air pollution on 
tribal lands, nor impair the maintenance of ozone national ambient air 
quality standards in tribal lands.

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Particulate matter.

40 CFR Part 81

    Environmental protection, Air pollution control, National parks, 
Wilderness areas.

    Dated: March 28, 2013.
Susan Hedman,
Regional Administrator, Region 5.
[FR Doc. 2013-08122 Filed 4-5-13; 8:45 am]
BILLING CODE 6560-50-P