[Federal Register Volume 60, Number 145 (Friday, July 28, 1995)]
[Rules and Regulations]
[Pages 38718-38722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18521]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

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


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

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: On November 2, 1994, the United States Environmental 
Protection Agency (USEPA) proposed to approve a November 17, 1993, 
request for a State Implementation Plan (SIP) revision, addressing the 
Lake and Porter County ozone nonattainment area, submitted by the State 
of Indiana for the purpose of offsetting growth in emissions from 
growth in vehicle miles traveled (VMT) or number of vehicle trips, and 
to attain reduction in motor vehicle emissions, in combination with 
other emission 

[[Page 38719]]
reduction requirements, as necessary to comply with Reasonable Further 
Progress (RFP) milestones and attainment requirements of the Clean Air 
Act (Act). Public comments were solicited on the proposed SIP revision, 
and on USEPA's proposed rulemaking action. The public comment period 
ended on December 2, 1994, and one public comment letter was received. 
This rulemaking action approves, in final, the VMT Offset SIP revision 
request for Lake and Porter Counties, Indiana as requested by Indiana.

EFFECTIVE DATE: This final rulemaking becomes effective on August 28, 
1995.

ADDRESSES: Copies of the documents relevant to this action are 
available for inspection during normal business hours at the following 
location: Regulation Development Section, Regulation Development Branch 
(AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West 
Jackson Boulevard, Chicago, Illinois, 60604.
    Please contact Patricia Morris at (312) 353-8656 before visiting 
the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Patricia Morris, Regulation 
Development Section, Regulation Development Branch (AR-18J), U.S. 
Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, 
Chicago, Illinois 60604, (312) 353-8656.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 182(d)(1)(A) of the Act, as amended in 1990 (Act), requires 
States containing ozone nonattainment areas classified as ``severe'' 
pursuant to section 181(a) of the Act to adopt transportation control 
measures (TCMs) and transportation control strategies to offset any 
growth in emissions from growth in VMT or number of vehicle trips, and 
to attain reductions in motor vehicle emissions (in combination with 
other emission reduction requirements) as necessary to comply with the 
Act's RFP milestones and attainment requirements. The requirements for 
establishing a VMT Offset program are discussed in the April 16, 1992, 
General Preamble to Title I of the Act (57 FR 13498), in addition to 
section 182(d)(1)(A) of the Act.
    The VMT Offset provision requires that States submit by November 
15, 1992, specific enforceable TCMs and strategies to offset any growth 
in emissions from growth in VMT or number of vehicle trips sufficient 
to allow total area emissions to comply with the RFP and attainment 
requirements of the Act.
    As described in the November 2, 1994, proposed rule (see 59 FR 
54866, 54867), the USEPA has observed that these three elements (i.e., 
offsetting growth in mobile source emissions, attainment of the RFP 
reduction, and attainment of the ozone National Ambient Air Quality 
Standards (NAAQS)) can be divided into three separate submissions that 
could be submitted on different dates.
    Under this approach, the first element, the emissions offset 
element, was due on November 15, 1992. The USEPA believes this element 
is not necessarily dependent on the development of the other elements. 
The State could submit the emissions growth offset element independent 
of an analysis of that element's consistency with the periodic 
reduction and attainment requirements of the Act. Emissions trends from 
other sources need not be considered to show compliance with this 
offset requirement. As submitting this element in isolation does not 
implicate the timing problem of advancing deadlines for RFP and 
attainment demonstrations, USEPA does not believe it is necessary to 
extend the statutory deadline for submittal of the emissions growth 
offset element.
    The second element, which requires the VMT Offset SIP to comply 
with the 15 percent RFP requirement of the Act, was due on November 15, 
1993, which is the same date on which the 15 percent RFP SIP itself was 
due under section 182(b)(1) of the Act. The USEPA believes it is 
reasonable to extend the deadline for this element to the date on which 
the entire 15 percent SIP was due, as this allows States to develop the 
comprehensive strategy to address the 15 percent reduction requirement 
and assure that the TCM elements required under section 182(d)(1)(A) 
are consistent with the remainder of the 15 percent demonstration. 
Indeed, USEPA believes that only upon submittal of the broader 15 
percent plan can a State have had the necessary opportunity to 
coordinate its VMT strategy with its 15 percent plan.
    The third element, which requires the VMT Offset SIP to comply with 
the post-1996 RFP and attainment requirements of the Act, was due on 
November 15, 1994, the statutory deadline for those broader 
submissions. The USEPA believes it is reasonable to extend the deadline 
for this element to the date on which the post-1996 RFP and attainment 
SIPs are due for the same reasons it is reasonable to extend the 
deadline for the second element. First, it is arguably impossible for a 
State to make the showing required by Section 182(d)(1)(A) for the 
third element until the broader demonstrations have been developed by 
the State. Moreover, allowing States to develop the comprehensive 
strategy to address post-1996 RFP and attainment by providing a fuller 
opportunity to assure that the TCM elements comply with the broader RFP 
and attainment demonstrations, will result in a better program for 
reducing emissions in the long term.
    On November 17, 1993, Indiana submitted to USEPA documentation to 
fulfill the first and second elements of the VMT-Offset SIP. A public 
hearing was held on December 14, 1993, and documentation on the public 
hearing was submitted to complete the SIP revision request. Indiana 
does not at this time anticipate the need for additional TCMs to meet 
the attainment demonstration requirement but will submit any necessary 
TCMs with the attainment demonstration SIP.

II. Evaluation of the State Submittal

    Section 182(d)(1)(A) of the Act requires the State to offset any 
growth in emissions from growth in VMT. As discussed in the General 
Preamble, the purpose is to prevent a growth in motor vehicle emissions 
from canceling out the emission reduction benefits of the federally 
mandated programs in the Act. The USEPA interprets this provision to 
require that sufficient measures be adopted so that projected motor 
vehicle volatile organic compound (VOC) emissions will never be higher 
during the ozone season in one year than during the ozone season in the 
year before. When growth in VMT and vehicle trips would otherwise cause 
a motor vehicle emissions upturn, this upturn must be prevented. The 
emissions level at the point of upturn becomes a ceiling on motor 
vehicle emissions. This requirement applies to projected emissions in 
the years between the submission of the SIP revision and the attainment 
deadline, and is above and beyond the separate requirements for the RFP 
and the attainment demonstrations. The ceiling level is defined, 
therefore, up to the point of upturn, as motor vehicle emissions that 
would occur in the ozone season of that year, with VMT growth, if all 
measures for that area in that year were implemented as required by the 
Act. When this curve begins to turn up due to growth in VMT or vehicle 
trips, the ceiling becomes a fixed value. The ceiling line would 
include the effects of Federal measures such as new motor vehicle 
standards, phase II RVP controls, and reformulated gasoline, as well as 
the Act-mandated SIP requirements. 

[[Page 38720]]

    The State of Indiana has demonstrated in its submittal of November 
17, 1993, that the predicted growth in VMT in Lake and Porter Counties, 
Indiana, is not expected to result in a growth in motor vehicle 
emissions that will negate the effects of the reductions mandated by 
the Act. Further, Indiana has projected motor vehicle emissions to the 
year 2007 and, using the most current socioeconomic data, has not 
predicted an upturn in motor vehicle emissions. In the event that the 
projected socioeconomic data and associated VMT grow more rapidly than 
currently predicted, Indiana is required by Section 182(c)(5) to track 
actual VMT starting with 1996 and every three years thereafter to 
demonstrate that the actual VMT is equal to or less than the projected 
VMT. TCMs will be required to offset VMT that is above the projected 
levels (section 182(c)(5)).
    The VMT offset submittal from Indiana dated November 17, 1993, 
contains the final report ``TCMs to Offset Emissions from VMT Growth in 
Northwestern Indiana.'' The report used the most current socioeconomic 
data and the travel network model in conjunction with the MOBILE5a to 
estimate mobile source emissions to the attainment year of 2007.
    This report also documents the progress Indiana has made in 
evaluating TCMs to reduce growth in VMT and thus reduce emissions. 
Indiana may choose to take credit for TCM emission reductions as part 
of the post-1996 RFP requirement or to meet the attainment requirement. 
Not only has Indiana evaluated the effectiveness and predicted impact 
of a number of TCMs, but actual implementation of selected TCMs has 
been ongoing. Several examples are cited in the proposed rule.
    These specific TCMs, however, are not a part of the current SIP 
revision request and are not a required portion of this SIP revision. 
Thus, Indiana is not currently taking credit for the emission 
reductions from these TCM measures and the State is not bound to 
implement or continue to implement any specific TCMs. These measures, 
however, illustrate Indiana's work in evaluating and implementing TCMs 
to meet the goals of the Act. Also, the TCMs may be used in subsequent 
SIP submittals as necessary to meet the post 1996 RFP requirement or 
the attainment requirement.
    Indiana submitted a 15 percent RFP SIP for northwest Indiana to the 
USEPA in November 1993, but the submittal was found incomplete in a 
letter dated January 25, 1994. The RFP SIP lacked enforceable 
regulations and a public hearing. The public hearing was held on March 
29, 1994.
    On June 26, 1995, Indiana submitted an updated 15 percent SIP which 
contained all enforceable regulations. Indiana's submitted 15 percent 
SIP was found complete by the USEPA in a letter dated July 7, 1995. The 
submittal details the adopted enforceable regulations that have been 
submitted to support the 15 percent RFP demonstration. The SIP 
submission contains a menu of adopted emissions reductions measures 
that the State believes will achieve the 15 percent reduction 
requirement by November 15, 1996. Also, Indiana is moving forward with 
implementation of the 15 percent measures including the enhanced 
inspection and maintenance program. In the submission, Indiana does not 
rely upon TCMs in order to satisfy the 15 percent reduction 
requirement. Rather, the majority of the reduction would be obtained 
from stationary source shutdowns and the enhanced inspection and 
maintenance program. Indiana believes that TCMs will not be necessary 
to attain the 15 percent reduction requirement.
    The attainment demonstration and post-1996 RFP plans, were 
submitted on December 5, 1994, and became complete by operation of law 
under 110(k)(1)(B) on June 5, 1995. Indiana is planning to use the 
Phase I and II approach to submission of the attainment demonstration 
and post-1996 RFP as described in the March 2, 1995, memorandum from 
Mary Nichols. The USEPA is reserving action on the third element of the 
VMT Offset SIP until such time as the phase I and II attainment 
submittals are complete.
    Indiana has met the first and second elements of the VMT offset SIP 
requirements of section 182(d)(1)(A). Regarding the first element, 
Indiana has identified and evaluated TCMs to reduce VMT, and has shown 
that VMT growth will not result in a growth of motor vehicle emissions 
that will negate the effects of the reductions required under the Act 
and that there will not be an upturn of motor vehicle emissions. 
Regarding the second element, Indiana has submitted a complete 15 
percent SIP that does not rely upon TCMs to make its proffered showing 
that the 15 percent reduction will be achieved. Consequently, USEPA 
does not believe it is necessary to delay taking action on this second 
element of the VMT SIP, and that the Agency can at this point rely upon 
Indiana's submitted 15 percent SIP to make a judgment that TCM's will 
not be necessary to satisfy the second VMT SIP element. However, if in 
evaluating the 15 percent SIP for approval it is determined that 
Indiana would in fact have to implement TCMs to meet the 15 percent RFP 
requirement, and a subsequent submission of a revised 15 percent SIP is 
required, EPA would have to reevaluate its approval of the second 
element of the VMT SIP.
    The third requirement is for Indiana to use TCMs as necessary to 
attain the standard. This third requirement will be submitted with the 
attainment demonstration SIP and will be addressed in a future Federal 
Register notice.

III. Public Comments

    On November 2, 1994, the USEPA proposed to approve the first and 
second elements of the Indiana VMT Offset SIP and requested public 
comment. The public comment period closed on December 2, 1994, and the 
Natural Resources Defense Council (NRDC) submitted comments on December 
2, 1994. The following summarizes NRDC's comments and USEPA's response 
to these comments:
    Comment 1: The Act requires TCMs to offset emissions resulting from 
all growth in VMT above 1990 levels, and USEPA is required by the Act 
to ensure emission reductions despite an increase in VMT. The 
legislative history states that ``[t]he baseline for determining 
whether there has been a growth in emissions due to increased VMT is 
the level of vehicle emissions that would occur if VMT held constant in 
the area.'' See H.Rep. No. 101-490, Part I, 101st Cong., 2nd Sess. at 
242, and S.Rep. No. 101-228, 101st Cong., 1st Sess. at 44.
    Response: As discussed in the General Preamble, USEPA believes that 
section 182(d)(1)(A) of the Act requires the State to ``offset any 
growth in emissions'' from growth in VMT but not, as suggested by the 
comment, all emissions resulting from VMT growth (see 57 FR 13498, 
13522-13523, April 16, 1992). The purpose is to prevent a growth in 
motor vehicle emissions from canceling out the emission reduction 
benefits of the federally mandated programs in the Act. The baseline 
for emissions is the 1990 level of vehicle emissions and the subsequent 
reductions in emission levels required to reach attainment. Thus, the 
anticipated benefits from the mandated measures such as the Federal 
motor vehicle pollution control program, lower reid vapor pressure, 
enhanced inspection and maintenance and all other motor vehicle 
emission control programs are included in the ceiling line calculation 
used by Indiana in the VMT Offset SIP. Table 13 in the Indiana SIP 
submittal demonstrates how motor vehicle emissions will decline 
substantially from 136.63 tons per day (tpd) in 1990 to 25.04 tpd in 
2007 and 

[[Page 38721]]
will not begin to turn up. Emission reductions are expected every year 
through the year 2007.
    The ceiling line approach does not ``tolerate increases in traffic 
of a magnitude that would wipe out the air quality gains'' as suggested 
by the comment. In fact, the ceiling line level decreases from year to 
year as the State implements various control measures and the 
decreasing ceiling line prevents an upturn in mobile source emissions. 
Dramatic increases in VMT that could wipe out the benefits of motor 
vehicle emission reduction measures will not be allowed and will 
trigger the implementation of TCMs. This prevents mere preservation of 
the status quo, and ensures emissions reductions despite an increase in 
VMT such that the rate of emissions decline is not slowed by increases 
in VMT or number of trips. To prevent future growth changes from 
adversely impacting emissions from motor vehicles, Indiana is required 
by section 182(c)(5) to track actual VMT starting with 1996 and every 
three years thereafter to demonstrate that the actual VMT is equal to 
or less than the projected VMT. TCMs will be required to offset VMT 
that is above the projected levels (section 182(c)(5)).
    Under the commenter's approach to section 182(d)(1)(A), Indiana 
would have to offset VMT growth even while vehicle emissions are 
declining. Although the statutory language could be read to require 
offsetting any VMT growth, EPA believes that the language can also be 
read so that only actual emissions increases resulting from VMT growth 
need to be offset. The statute by its own terms requires offsetting of 
``any growth in emissions from growth in VMT.'' It is reasonable to 
interpret this language as requiring that VMT growth must be offset 
only where such growth results in emissions increases from the motor 
vehicle fleet in the area.
    While it is true that the language of the legislative history 
appears to support the commenter's interpretation of the statutory 
language, such an interpretation would have drastic implications for 
Indiana if the State were forced to ignore the beneficial impacts of 
all vehicle tailpipe and alternative fuel controls. Although the 
original authors of the provision and the legislative history may in 
fact have intended this result, EPA does not believe that the Congress 
as a whole, or even the full House of Representatives, believed at the 
time it voted to pass the 1990 Amendments to the Act that the words of 
this provision would impose such severe restrictions.
    Given the susceptibility of the statutory language to these two 
alterative interpretations, EPA believes it is the Agency's role in 
administering the statute to take the interpretation most reasonable in 
light of the practical implications of such interpretation and the 
purposes and intent of the statutory scheme as a whole. In the context 
of the intricate planning requirements Congress established in title I 
to bring areas towards attainment of the ozone NAAQS, and in light of 
the absence of any discussion of this aspect of the VMT offset 
provision by the Congress as a whole (either in floor debate or in the 
Conference Report), EPA concludes that the appropriate interpretation 
of section 182(d)(1)(A) requires offsetting VMT growth only when such 
growth would result in actual emissions increases.
    Comment 2: Section 182(d)(1)(A) of the Act requires that emissions 
of oxides of nitrogen (NOX) as well as VOCs resulting from VMT 
growth must be offset.
    Response: USEPA disagrees with the commenter's interpretation that 
section 182(d)(1)(A) requires NOx emissions from VMT growth to be 
offset. While that section provides that ``any growth in emissions'' 
from growth in VMT must be offset, USEPA believes that Congress clearly 
intended that the offset requirement be limited to VOC emissions. 
First, section 182(d)(1)(A)'s requirement that a State's VMT TCMs 
comply with the ``periodic emissions reduction requirements'' of 
sections 182(b) and (c) the Act indicates that the VMT offset SIP 
requirement is VOC-specific. Section 182(c)(2)(B), which requires 
reasonable further progress demonstrations for serious ozone 
nonattainment areas, provides that such demonstrations will result in 
VOC emissions reductions; thus, the only ``periodic emissions reduction 
requirement'' of section 182(c)(2)(B) is VOC-specific. In fact, it is 
only in section 182(c)(2)(C)--a provision not referenced in section 
182(d)(1)(A)--that Congress provided States the authority to submit 
demonstrations providing for reductions of emissions of VOCs and 
NOX in lieu of the SIP otherwise required by section 182(c)(2)(B).
    Moreover, the 15 percent periodic reduction requirement of section 
182(b)(1)(A)(i) applies only to VOC emissions, while only the separate 
``annual'' reduction requirement applies to both VOC and NOX 
emissions. USEPA believes that Congress did not intend the terms 
``periodic emissions reductions'' and ``annual emissions reductions'' 
to be synonymous, and that the former does not include the latter. In 
section 176(c)(3)(A)(iii) of the Act, Congress required that conformity 
SIPs ``contribute to annual emissions reductions'' consistent with 
section 182(b)(1) (and thus achieve NOX emissions reductions), but 
does not refer to the 15 percent periodic reduction requirement. 
Conversely, section 182(d)(1)(A) refers to the periodic emissions 
reduction requirements of the Act, but does not refer to annual 
emissions reduction requirements that require NOX reductions. 
Consequently, USEPA interprets the requirement that VMT SIPs comply 
with periodic emissions reduction requirements of the Act to mean that 
only VOC emissions are subject to section 182(d)(1)(A) in severe ozone 
nonattainment areas.
    Finally, USEPA notes that where Congress intended section 182 ozone 
SIP requirements to apply to NOX as well as VOC emissions, it 
specifically extended applicability to NOX. Thus, references to 
ozone or emissions in general in section 182 do not on their own 
implicate NOX. For example, in section 182(a)(2)(C), the Act 
requires States to require preconstruction permits for new or modified 
stationary sources ``with respect to ozone''; Congress clearly did not 
believe this reference to ozone alone was sufficient to subject 
NOX emissions to the permitting requirement, since it was 
necessary to enact section 182(f)(1) of the Act, which specifically 
extends the permitting requirement to major stationary sources of 
NOX. Since section 182(d)(1)(A) does not specifically identify 
NOX emissions requirements in addition to the VOC emissions 
requirements identified in the provision, USEPA does not believe States 
are required to offset NOX emissions from VMT growth in their 
section 182(d)(1)(A) SIPs.

IV. Final Rulemaking Action

    Based on the State's submittal request and in consideration of the 
public comments received in response to the proposed rule, USEPA is 
approving the SIP revision submitted by the State of Indiana as 
satisfying the first two of the three VMT offset plan requirements.
    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any SIP. Each request for revision to any SIP shall be 
considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or 

[[Page 38722]]
final rule on small entities. 5 U.S.C. 603 and 604. Alternatively, 
USEPA may certify that the rule will not have a significant impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and government entities 
with jurisdiction over populations of less than 50,000.
    SIP approvals under section 110 and subchapter I, part D of the Act 
do not create any new requirements, but simply approve requirements 
that the State is already imposing. Therefore, because the Federal SIP-
approval does not impose any new requirements, I certify that it does 
not have a significant impact on small entities affected. Moreover, due 
to the nature of the Federal-state relationship under the Act, 
preparation of a regulatory flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of state action. The 
Act forbids USEPA to base its actions concerning SIPs on such grounds. 
See Union Electric Co. v. U.S. E.P.A. , 427 U.S. 246, 256-66 (S. Ct. 
1976); 42 U.S.C. 7410(a)(2).
    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, the 
USEPA must prepare a budgetary impact statement to accompany any 
proposed or final rule that includes a Federal mandate that may result 
in estimated costs to State, local, or tribal governments in the 
aggregate; or to the private sector, of $100 million or more. Under 
Section 205, the USEPA must select the most cost-effective and least 
burdensome alternative that achieves the objectives of the rule and is 
consistent with statutory requirements. Section 203 requires the USEPA 
to establish a plan for informing and advising any small governments 
that may be significantly or uniquely impacted by the rule.
    The USEPA has determined that the approval action promulgated today 
does not include a Federal mandate that may result in estimated costs 
of $100 million or more to either State, local, or tribal governments 
in the aggregate, or to the private sector.
    This Federal action approves pre-existing requirements under State 
or local law, and imposes no new Federal requirements. Accordingly, no 
additional costs to State, local, or tribal governments, or the private 
sector, result from this action.
    Under Section 307(b)(1) of the Act, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by September 26, 1995. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements. (see Section 307(b)(2)).
List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Ozone.

    Dated: July 14, 1995.
Valdas V. Adamkus,
Regional Administrator.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--[AMENDED]

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

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

Subpart P--Indiana

    2. Section 52.777 is amended by adding paragraph (h) to read as 
follows:


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

* * * * *
    (h) On November 17, 1993, Indiana submitted two of three elements 
required by section 182(d)(1)(A) of the Clean Air Amendments of 1990 to 
be incorporated as part of the vehicle miles traveled (VMT) State 
Implementation Plan intended to offset any growth in emissions from a 
growth in vehicle miles traveled. These elements are the offsetting of 
growth in emissions attributable to growth in VMT which was due 
November 15, 1992, and, any transportation control measures (TCMs) 
required as part of Indiana's 15 percent reasonable further progress 
(RFP) plan which was due November 15, 1993. Indiana satisfied the first 
requirement by projecting emissions from mobile sources and 
demonstrating that no increase in emissions would take place. Indiana 
satisfied the second requirement by determining that no TCMs were 
required as part of Indiana's 15 percent RFP plan.

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