2010-20583. Disapproval and Promulgation of Air Quality Implementation Plans; Indiana; Addition of Incentive for Regulatory Flexibility for Its Environmental Stewardship Program

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

On July 6, 2007, the Indiana Department of Environmental Management (IDEM) submitted a request to EPA to amend its State Implementation Plan (SIP) to add incentives for regulatory flexibility for participants in its Environmental Stewardship Program (ESP) and Comprehensive Local Environmental Action Network (CLEAN) Community Challenge Program. Indiana requested that EPA approve the following for ESP and CLEAN members: The incorporation by reference of certain incentives under the National Environmental Performance Track (NEPT) Program, monthly averaging of volatile organic compound (VOC) coating limits, and the processing of pollution prevention projects as minor permit revisions. For the reasons discussed below, EPA is proposing to disapprove these three incentives.

DATES:

Comments must be received on or before September 20, 2010.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R05-OAR-2006-0716, by one of the following methods:

1. http://www.regulations.gov: Follow the on-line instructions for submitting comments.

2. E-mail: [e-mail].

3. Fax: [phone].

4. Mail: Steven Rosenthal, 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: Steven Rosenthal, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, 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-2006-0716. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://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 http://www.regulations.gov or e-mail. The http://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 e-mail comment directly to EPA without going through http://www.regulations.gov your e-mail 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 the SUPPLEMENTARY INFORMATION section of this document.

Docket: All documents in the docket are listed in the http://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 http://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 Steven Rosenthal at [phone] before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT:

Steven Rosenthal, Environmental Engineer, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, [phone], [e-mail].

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 purpose and background for this action?

III. What is EPA's analysis of Indiana's rule amendment?

IV. What action is EPA taking?

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.

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

II. What is the purpose and background for this action?

The ESP is Indiana's voluntary program designed to recognize and reward Indiana regulated entities that have met a standard of environmental compliance, implemented and maintained an environmental management system, and committed to continuous environmental improvement. In return for meeting the above criteria, these establishments receive program incentives including regulatory flexibility, public recognition, and networking opportunities. The CLEAN Community Challenge Program is a similar program for local Indiana governments.

Indiana is requesting that EPA approve the following incentives for its ESP and CLEAN Community Challenge Programs into its SIP: Incorporation by reference of certain provisions under the NEPT Program, monthly averaging of volatile organic compound (VOC) coating limits, and allowing pollution prevention projects that do not result in a net increase in potential emissions of more than certain SIP significance levels to be processed as minor permit revisions.

III. What is EPA's analysis of Indiana's rule amendment?

NEPT Incentives

Indiana rule 326 IAC 25-2-1 incorporates by reference the Performance Track provisions at 40 CFR 63.2, 40 CFR 63.10, and 40 CFR 63.16. The incentives in these Federal rules are only available to members of the NEPT Program. EPA is proposing to disapprove this provision because in a May 14, 2009, Federal Register notice (74 FR 22741), it announced its decision to terminate the Performance Track Program, effective as of the date of the May 14, 2009, notice.

Monthly Averaging

Indiana rule 326 IAC 25-2-3 establishes monthly compliance methods for determining VOC emissions in 326 IAC 8-1-2(a)(7). Under such a methodology, coatings or inks may exceed their applicable VOC emission limits if emissions increases are sufficiently offset by decreases in other coatings or inks such that total emissions are below the applicable limits. This approach constitutes a relaxation of existing emissions limits and is inconsistent with section 110(a) of the Clean Air Act. Consequently, EPA has established very narrow and specific circumstances under which a longer averaging period than daily would be acceptable. See January 20, 1984, memorandum from John R. O'Connor titled “Averaging Times for Compliance with VOC Emission Limits-SIP Revision Policy” and a January 20, 1987, memorandum from G.T. Helms titled “Determination of Economic Feasibility.” Under these policies, daily averaging must be used unless recordkeeping is an insurmountable problem, in which case the shortest feasible averaging time should be used, not to exceed monthly averaging. The determination of the shortest feasible averaging time is made by EPA and cannot be delegated to a State. Indiana has not made such a showing, and EPA is, therefore, proposing to disapprove this provision.

Pollution Prevention Projects

As part of the ESP, the State has also submitted for approval 326 IAC 25-2-4, as it applies to pollution prevention projects, as defined in 326 IAC 2-1.1-1(14). This provision would allow pollution prevention projects for sources that are not subject to title V of the Clean Air Act and that do not result in a net increase in potential emissions above the Prevention of Significant Deterioration (PSD)/Nonattainment New Source Review (NNSR) significance levels identified in 326 IAC 2-2-1(xx) to be processed by Indiana as minor permit revisions under the State minor operating permit provisions in 326 IAC 2-6.1-6(h) and the Federally enforceable operation permit provisions in 326 IAC 2-8-11.1(e). These pollution control projects would not be subject to public notice.

The existing Indiana SIP-approved minor construction permit rules require public notice for modifications with emission increases of greater than 25 tons per year (tpy). The proposed public notice exemption, however, would be available for projects with net emission increases of up to the PSD/NNSR threshold, e.g., 40 tpy of volatile organic compounds, 40 tpy of sulfur dioxide, and 100 tpy of carbon monoxide. This would represent a relaxation over the existing SIP-approved minor source public notice requirements for Indiana, and be inconsistent with 40 CFR 51.161, which requires public notice for such modifications. Indiana has not provided EPA with a justification for relaxing existing SIP requirements, nor shown that such revisions would only have a de minimis impact. See, e.g., 64 FR 61046-47 (November 9, 1999). Therefore, EPA is proposing to disapprove this provision.

IV. What action is EPA taking?

EPA is proposing to disapprove IDEM's request for an amendment to the Indiana SIP for incentives for regulatory flexibility for its ESP and CLEAN Community Challenge Program. EPA is proposing to disapprove the incorporation by reference of Federal incentives for NEPT members because EPA has discontinued its NEPT program. EPA is proposing to disapprove monthly averaging of VOC coating limits because this would constitute a relaxation that could exacerbate high ozone levels and contribute to violations of the ozone standard. EPA is proposing to disapprove the third incentive, which affects public notice requirements for pollution prevention projects, because it relaxes the existing SIP-approved public notice requirements and is inconsistent with EPA minor new source rule requirements.

V. Statutory and Executive Order Reviews

Executive Order 12866: Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget.

Paperwork Reduction Act

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Regulatory Flexibility Act

This action merely disapproves State law as not meeting Federal requirements and imposes no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).

Unfunded Mandates Reform Act

Because this rule disapproves pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it does 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).

Executive Order 13132: Federalism

This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely disapproves a State rule, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act (CAA).

Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

This rule also does not have Tribal implications because it will not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes, as specified by Executive Order 13175 (59 FR 22951, November 9, 2000).

Executive Order 13045: Protection of Children From Environmental Health and Safety Risks

This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it disapproves a State rule.

Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use

Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001).

National Technology Transfer Advancement Act

In reviewing State submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a State submission, to use VCS in place of a State submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Incorporation by reference
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Reporting and recordkeeping requirements
• Volatile organic compounds

Dated: August 6, 2010.

Susan Hedman,

Regional Administrator, Region 5.