[Federal Register Volume 62, Number 138 (Friday, July 18, 1997)]
[Rules and Regulations]
[Pages 38457-38464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18972]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN53-3; FRL-5860-4]


Approval and Promulgation of State Implementation Plan; Indiana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: On June 26, 1995, and June 13, 1997, the State of Indiana 
submitted a Rate-Of-Progress (ROP) plan to reduce Volatile Organic 
Compounds (VOC) emissions in Lake and Porter Counties by 15 percent (%) 
from 1990 baseline levels by November 15, 1996, as a requested revision 
to the Indiana State Implementation Plan (SIP). On April 3, 1997, EPA 
issued a direct final approval of the Lake and Porter Counties 15% ROP 
plan, 3% contingency plan, and an Indiana Agreed Order requiring VOC 
emission controls on Keil Chemical Division, Ferro Corporation, located 
in Lake County (Keil). On the same day (April 3, 1997) EPA proposed 
approval and solicited public written comment on these requested SIP 
revisions. This proposed rule established a 30-day public comment 
period noting that if adverse comments were received regarding the 
direct final rule EPA would withdraw the direct final rule and publish 
an additional final rule to address the public comments. Adverse 
comments were received during the public comment period relating to the 
Keil SIP revision. EPA withdrew the direct final rule on May 23, 1997. 
In today's action, EPA is finalizing approval of the 15% ROP plan. 
Final action on the 3% contingency plan and the Keil agreed order will 
be addressed in a subsequent rulemaking action. The 15% ROP plan has 
reduced VOC emissions in Lake and Porter Counties by approximately 
68,242 pounds (lbs) per day. VOC emissions combine with oxides of 
nitrogen in the atmosphere to form ground-level ozone, a pollutant 
which can cause inflammation of the lungs, decrease lung capacity, and 
aggravate asthma. The rationale for this rulemaking is discussed below.

DATES: This final rule is effective August 18, 1997.

ADDRESSES: Copies of the SIP revision request are available for 
inspection at the following address: (It is recommended that you 
telephone Mark J. Palermo at (312) 886-6082, before visiting the Region 
5 office.)

U.S. Environmental Protection Agency, Region 5, Air and Radiation 
Division, 77 West Jackson Boulevard, Chicago, Illinois, 60604.

FOR FURTHER INFORMATION CONTACT: Mark J. Palermo, Environmental 
Protection Specialist, Air Programs Branch (AR-18J) (312) 886-6082.

SUPPLEMENTARY INFORMATION:

I. Background on 15% ROP Requirements

    On November 15, 1990, Congress enacted amendments to the 1977 Clean 
Air Act (Act); Public Law 101-549, 104 Stat. 2399, codified at 42 
U.S.C. 7401-7671q. Section 182(b)(1) requires States with ozone 
nonattainment areas classified as moderate and above to submit a SIP 
revision known as a 15% ROP plan. This plan must reflect an actual 
reduction in typical ozone season weekday VOC emissions of at least 15% 
in the area during the first 6 years after enactment (i.e., by November 
15, 1996). The emission reductions needed to achieve the 15% 
requirement must be calculated using a 1990 anthropogenic VOC emissions 
inventory as a baseline, minus emissions that have been reduced by: (1) 
The Federal Motor Vehicle Control Program (FMVCP) measures for the 
control of motor vehicle exhaust or evaporative emissions promulgated 
before January 1, 1990; and (2) gasoline Reid Vapor Pressure (RVP) 
regulations promulgated by November 15, 1990 (55 FR 23666, June 11, 
1990). In addition, the plan must account for net growth in emissions 
within the nonattainment area between 1990 and 1996.
    In Indiana, two ozone nonattainment areas are subject to the 15% 
ROP plan requirement: The Lake and Porter Counties portion of the 
Chicago severe ozone nonattainment area, and the Clark and Floyd 
Counties portion of the Louisville moderate ozone nonattainment area. 
This rulemaking action addresses only the plan for Lake and Porter 
Counties; the Clark and Floyd Counties 15% ROP plan was approved on May 
7, 1997 (62 FR at 24815).

II. Indiana's 15% ROP Submittal

    The Act requires States to observe certain procedural requirements 
in developing SIPs and SIP revisions for submission to EPA. Section 
110(a)(2)

[[Page 38458]]

and section 110(l) of the Act require that each State's SIP revision 
submitted under the Act be adopted by the State after reasonable notice 
and public hearing. The State of Indiana submitted a portion of the 
Lake and Porter Counties 15% ROP SIP revision on January 13, 1994. The 
SIP revision was reviewed by EPA to determine completeness shortly 
after submittal, in accordance with the completeness criteria set out 
at 40 CFR part 51, appendix V (1991), as amended by 57 FR 42216 (August 
26, 1991). However, the submittal was deemed incomplete because the 
plan had not yet gone through public hearing and did not include fully 
adopted rules for all of the plan's control measures. Indiana held a 
public hearing on the plan on March 29, 1994. A summary of comments 
from that hearing and the Indiana Department of Environmental 
Management's (IDEM) response was submitted on July 5, 1994. IDEM sent a 
supplemental submittal on June 26, 1995, which included fully adopted 
rules for the Lake and Porter Counties 15% ROP plan. In a July 17, 
1995, letter to Indiana, the State was notified that the SIP submittal 
was deemed complete.

III. Criteria for 15% ROP Approvals

    The requirements for 15% ROP plans are found in section 182(b)(1) 
of the Act, and the following EPA guidance documents:
    1. Procedures for Preparing Emissions Projections, EPA-450/4-91-
019, Environmental Protection Agency, July 1991.
    2. State Implementation Plans; General Preamble for the 
Implementation of Title I of the Clean Air Act Amendments of 1990; 
Proposed rule (57 FR 13498), Federal Register, April 16, 1992 (General 
Preamble).
    3. ``November 15, 1992, Deliverables for Reasonable Further 
Progress and Modeling Emission Inventories,'' memorandum from J. David 
Mobley, Edwin L. Meyer, and G. T. Helms, Office of Air Quality Planning 
and Standards, Environmental Protection Agency, August 7, 1992.
    4. Guidance on the Adjusted Base Year Emissions Inventory and the 
1996 Target for the 15 Percent Rate of Progress Plans, EPA-452/R-92-
005, Environmental Protection Agency, October 1992.
    5. ``Quantification of Rule Effectiveness Improvements,'' 
memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs 
Branch, Office of Air Quality Planning and Standards, Environmental 
Protection Agency, October 1992.
    6. Guidance for Growth Factors, Projections, and Control Strategies 
for the 15 Percent Rate-of-Progress Plans, EPA-452/R-93-002, March 
1993.
    7. ``Correction to `Guidance on the Adjusted Base Year Emissions 
Inventory and the 1996 Target for the 15 Percent Rate of Progress 
Plans','' memorandum from G.T. Helms, Chief, Ozone/Carbon Monoxide 
Programs Branch, Office of Air Quality Planning and Standards, 
Environmental Protection Agency, March 2, 1993.
    8. ``15 Percent Rate-of-Progress Plans,'' memorandum from G.T. 
Helms, Chief, Ozone/Carbon Monoxide Programs Branch, Office of Air 
Quality Planning and Standards, Environmental Protection Agency, March 
16, 1993.
    9. Guidance on the Relationship Between the 15 Percent Rate-of-
Progress Plans and Other Provisions of the Clean Air Act, EPA-452/R-93-
007, Environmental Protection Agency, May 1993.
    10. ``Credit Toward the 15 Percent Rate-of-Progress Reductions from 
Federal Measures,'' memorandum from G. T. Helms, Chief, Ozone/Carbon 
Monoxide Programs Branch, Environmental Protection Agency, May 6, 1993.
    11. Guidance on Preparing Enforceable Regulations and Compliance 
Programs for the 15 Percent Rate-of-Progress Plans, EPA-452/R-93-005, 
Environmental Protection Agency, June 1993.
    12. ``Correction Errata to the 15 Percent Rate-of-Progress Plan 
Guidance Series,'' memorandum from G. T. Helms, Chief, Ozone and Carbon 
Monoxide Programs Branch, Environmental Protection Agency, July 28, 
1993.
    13. ``Early Implementation of Contingency Measures for Ozone and 
Carbon Monoxide (CO) Nonattainment Areas,'' memorandum from G. T. 
Helms, Chief, Ozone/Carbon Monoxide Programs Branch, Environmental 
Protection Agency, August 13, 1993.
    14. ``Region III Questions on Emission Projections for the 15 
Percent Rate-of-Progress Plans,'' memorandum from G. T. Helms, Chief, 
Ozone/Carbon Monoxide Programs Branch, Office of Air Quality Planning 
and Standards, Environmental Protection Agency, August 17, 1993.
    15. ``Guidance on Issues Related to 15 Percent Rate-of-Progress 
Plans,'' memorandum from Michael H. Shapiro, Acting Assistant 
Administrator for Air and Radiation, Environmental Protection Agency, 
August 23, 1993.
    16. ``Credit Toward the 15 Percent Requirements from Architectural 
and Industrial Maintenance Coatings,'' memorandum from John S. Seitz, 
Director, Office of Air Quality Planning and Standards, Environmental 
Protection Agency, September 10, 1993.
    17. ``Reclassification of Areas to Nonattainment and 15 Percent 
Rate-of-Progress Plans,'' memorandum from John S. Seitz, Director, 
Office of Air Quality Planning and Standards, Environmental Protection 
Agency, September 20, 1993.
    18. ``Clarification of `Guidance for Growth Factors, Projections 
and Control Strategies for the 15 Percent Rate of Progress Plans','' 
memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs 
Branch, Office of Air Quality Planning and Standards, Environmental 
Protection Agency, October 6, 1993.
    19. ``Review and Rulemaking on 15 Percent Rate-of-Progress Plans,'' 
memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs 
Branch, Office of Air Quality Planning and Standards, Environmental 
Protection Agency, October 6, 1993.
    20. ``Questions and Answers from the 15 Percent Rate-of-Progress 
Plan Workshop,'' memorandum from G. T. Helms, Chief, Ozone/Carbon 
Monoxide Programs Branch, Environmental Protection Agency, October 29, 
1993.
    21. ``Rate-of-Progress Plan Guidance on the 15 Percent 
Calculations,'' memorandum from D. Kent Berry, Acting Director, Air 
Quality Management Division, Environmental Protection Agency, October 
29, 1993.
    22. ``Clarification of Issues Regarding the Contingency Measures 
that are Due November 15, 1993 for Moderate and Above Ozone 
Nonattainment Areas,'' memorandum from D. Kent Berry, Acting Director, 
Air Quality Management Division, Environmental Protection Agency, 
November 8, 1993.
    23. ``Credit for 15 Percent Rate-of-Progress Plan Reductions from 
the Architectural and Industrial Maintenance (AIM) Coating Rule,'' 
memorandum from John S. Seitz, Director, Office of Air Quality Planning 
and Standards, Environmental Protection Agency, December 9, 1993.
    24. ``Guidance on Projection of Nonroad Inventories to Future 
Years,'' memorandum from Philip A. Lorang, Director, Emission Planning 
and Strategies Division, Office of Air and Radiation, Environmental 
Protection Agency, February 4, 1994.
    25. ``Discussion at the Division Directors Meeting on June 1 
Concerning the 15 Percent and 3 Percent Calculations,'' memorandum from 
G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, Office of 
Air Quality

[[Page 38459]]

Planning and Standards, Environmental Protection Agency, June 2, 1994.
    26. ``Future Nonroad Emission Reduction Credits for Court-Ordered 
Nonroad Standards,'' memorandum from Philip A. Lorang, Director, 
Emission Planning and Strategies Division, Office of Air and Radiation, 
Environmental Protection Agency, November 28, 1994.
    27. ``Credit for the 15 Percent Rate-of-Progress Plans for 
Reductions from the Architectural and Industrial Maintenance (AIM) 
Coating Rule and the Autobody Refinishing Rule,'' memorandum from John 
S. Seitz, Director, Office of Air Quality Planning and Standards, 
Environmental Protection Agency, November 29, 1994.
    28. ``Transmittal of Rule Effectiveness Protocol for 1996 
Demonstrations,'' memorandum from Susan E. Bromm, Director, Chemical, 
Commercial Services and Municipal Division, Office of Compliance, 
Environmental Protection Agency, December 22, 1994.
    29. ``Future Nonroad Emission Reduction Credits for Locomotives,'' 
memorandum from Philip A. Lorang, Director, Emission Planning and 
Strategies Division, Office of Air and Radiation, Environmental 
Protection Agency, January 3, 1995.
    30. ``Credit for the 15 Percent Rate-of-Progress Plans for 
Reductions from the Architectural and Industrial Maintenance (AIM) 
Coating Rule,'' memorandum from John S. Seitz, Director, Office of Air 
Quality Planning and Standards, Environmental Protection Agency, March 
22, 1995.
    31. ``Fifteen Percent Rate-of-Progress Plans--Additional 
Guidance,'' memorandum from John S. Seitz, Director, Office of Air 
Quality Planning and Standards, Environmental Protection Agency, May 5, 
1995.
    32. ``Update on the Credit for the 15 Percent Rate-of-Progress 
Plans for Reductions from the Architectural and Industrial Maintenance 
Coatings Rule,'' memorandum from John S. Seitz, Director, Office of Air 
Quality Planning and Standards, Environmental Protection Agency, March 
7, 1996.
    33. ``Date by which States Need to Achieve all the Reductions 
Needed for the 15% Plan from Inspection and Maintenance (I/M) and 
Guidance for Recalculation,'' memorandum from Margo Oge, Director, 
Office of Mobile Sources, and John S. Seitz, Director, Office of Air 
Quality Planning and Standards, Environmental Protection Agency, August 
13, 1996.
    34. ``Sample City Analysis: Comparison of Enhanced Inspection and 
Maintenance (I/M) Reductions Versus Other 15 Percent Rate of Progress 
Plan Measures,'' E.H. Pechan and Associates, December 12, 1996.
    35. ``Modeling 15 Percent Volatile Organic Compound (VOC) 
Reduction(s) from I/M in 1999: Supplemental Guidance,'' memorandum from 
Gay MacGregor, Director, Regional and State Programs Division, and 
Sally Shaver, Director, Air Quality Strategies and Standards Division, 
Environmental Protection Agency, December 23, 1996.
    36. ``15% Volatile Organic Compound (VOC) State Implementation Plan 
(SIP) Approvals and the `As Soon As Practicable' Test,'' memorandum 
from John S. Seitz, Director, Office of Air Quality Planning and 
Standards, and Richard B. Ossias, Deputy Associate General Counsel, 
Division of Air and Radiation, Office of General Counsel, Environmental 
Protection Agency, February 12, 1997.
    For a 15% ROP plan SIP to be approved, the plan must adequately 
justify how much emission reduction is needed to achieve 15% emission 
reduction by November 15, 1996, and how the plan's control strategy 
will secure that reduction. The procedure for calculating the needed 
emission reduction is as follows:
    (A) Calculate the ``1990 ROP inventory'' by subtracting from the 
area's ``1990 base year inventory'' 1 biogenic emissions, 
emissions outside of the nonattainment area, and pre-enactment banked 
emission credits;
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    \1\ Sections 172(c)(3) and 182(a)(1) of the Act require that 
nonattainment plan provisions include a comprehensive, accurate 
inventory of actual emissions which occurred in 1990 from all 
sources of relevant pollutants in the nonattainment area. This 
inventory provides an estimate of the amount of VOC and oxides of 
nitrogen produced by emission sources such as automobiles, 
powerplants and the use of consumer solvents in the household. 
Because the approval of such inventories is necessary to an area's 
15% ROP plan and attainment demonstration, the emission inventory 
must be approved prior to or with the 15% ROP plan submission.
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    (B) Calculate the ``1990 adjusted base year inventory'' by 
subtracting from the 1990 ROP inventory any emission reductions from 
the pre-1990 FMVCP and 1990 RVP Federal regulations which occur between 
1990 and 1996; 2
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    \2\ The 1990 adjusted base year inventory represents the 
``baseline emissions'' from which the 15 percent reduction is to be 
calculated, as specified under section 182(b)(1)(B) of the Act. 
Section 182(b)(1)(B) defines baseline emissions to mean the total 
amounts of actual VOC emissions from all anthropogenic sources in 
the ozone nonattainment areas during the calendar year of 1990, 
excluding emissions that are eliminated by the pre-1990 FMVCP and 
1990 RVP regulations. In the General Preamble, EPA interprets 
``calendar year'' emissions to consist of typical ozone season 
weekday emissions, based on the fact that the ozone National Ambient 
Air Quality Standard (NAAQS) (0.12 parts per million, one-hour 
average) is generally exceeded or violated during ozone season 
weekdays when ozone precursor emissions and meteorological 
conditions are most conducive to ozone formation. Ozone seasons are 
typically the summer months.
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    (C) Calculate ``15% of adjusted base year emissions'' by 
multiplying the 1990 adjusted base year inventory by 15%;
    (D) Calculate the ``total required reductions by 1996'' by adding 
emission reductions from the pre-1990 FMVCP and 1990 RVP federal rules 
to 15% of adjusted base year emissions calculation; 3
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    \3\ Under section 182(b)(1)(D), emission reductions pre-1990 and 
1990 RVP regulations are not creditable toward meeting 15%. The 
emission reductions which occurred by 1996 from these regulations 
are added to emissions required to meet 15% to determine the total 
amount of emission reduction by 1996 for the area.
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    (E) Calculate the ``1996 emissions target level'' by subtracting 
from the 1990 ROP base year inventory the total required reductions by 
1996;
    (F) Calculate the ``1996 projected emission estimate'' by either 
adding growth factors to the 1990 adjusted base-year inventory, or 
adding growth factors and required emission reductions to the 1990 ROP 
inventory; and,
    (G) Calculate the ``reduction required by 1996 to achieve 15% net 
of growth'' by subtracting the 1996 target emissions level from the 
1996 projected emissions level.
    In determining what control measures a State can use in its 15% ROP 
plan strategy, the Act provides under section 182(b)(1)(C) that 
emission reductions from control measures are creditable to the extent 
that they have actually occurred before November 15, 1996. In keeping 
with this requirement, the General Preamble states that all credited 
emission reductions must be real, permanent, and enforceable, and that 
regulations needed to implement the plan's control strategy must be 
adopted and implemented by the State by November 15, 1996.

IV. Prior Rulemaking Action

    On April 3, 1997, EPA published a direct final rulemaking action 
approving the Lake and Porter Counties 15% ROP plan and a 3% 
contingency measure plan for Lake and Porter Counties (62 FR 15844). As 
part of the 15% ROP plan, Indiana also submitted an agreed order 
requiring VOC emission controls on Keil Chemical Division, Ferro 
Corporation, located in Lake County (Keil). On the same day (April 3, 
1997), EPA proposed approval and solicited public comment on these 
requested SIP revisions (62 FR 15867). The proposed rule established a 
30-day public comment period, noting that if adverse comments were 
received regarding the

[[Page 38460]]

direct final rule EPA would withdraw the direct final rule and publish 
an additional final rule to address the public comments. The only set 
of comments received during the public comment period was from the 
Ferro Corporation regarding the Keil agreed order. Because these 
comments raised questions about the anticipated emissions reductions of 
the agreed order, EPA withdrew the direct final rulemaking on May 23, 
1997 (62 FR at 28349).
    Indiana originally claimed emission reductions from the Keil agreed 
order in the Lake and Porter 15% plan. The July 29, 1994, agreed order 
(Cause No. A-2250) requires the facility to meet certain control 
requirements. The agreed order was submitted with the 15% ROP plan for 
incorporation into the Indiana SIP so that the State could properly 
take credit for Keil's emission reductions.
    Ferro Corporation's comment supported the Lake and Porter Counties 
15% ROP plan, but requested that EPA recognize that Keil's VOC control 
installed pursuant to the agreed order has achieved more emission 
reductions than required under federal and State control regulations, 
and, consequently, the excess emission reductions ``should be credited 
as a banked pollutant for the future.'' Ferro Corporation also 
indicated that EPA and Indiana are still reviewing Keil's compliance 
determination method for the 25 tons per year VOC emission limit under 
the agreed order. Ferro requested that EPA agree that Keil should not 
be held in violation of the SIP for the 25 tons per year limit if EPA 
and Indiana determine that Keil should use a different compliance 
determination method.
    EPA is currently evaluating the Ferro Corporation comments. To 
expedite final approval of the 15% ROP plan, Indiana submitted a letter 
on June 13, 1997, which states that it has changed the allocation of 
control measure reductions between the Lake and Porter Counties 15% ROP 
plan and the 3% contingency plan. The agreed order emission reductions 
(5327 lbs VOC per day) will be shifted from the 15% ROP plan to the 3% 
contingency plan, and remaining reductions from Inland Steel Flat 
Product's coke oven shutdown (759 lbs VOC per day) and the State's 
automobile refinishing rule (4619 lbs VOC per day) have been shifted 
from the 3% contingency plan to the 15% ROP plan. The amount of 
emission reductions claimed for the coke oven shutdown and automobile 
refinishing rule was found by EPA to be acceptable in the April 3, 
1997, direct final approval.
    In today's action, EPA is promulgating final approval of the 15% 
ROP plan as adjusted by Indiana's June 13, 1997, letter. Because 
shifting emission reduction credit between the two plans does not 
affect the implementation of the plans' control measures, nor the 
achievement of 15% reduction required under the Act, reproposing 
approval of the 15% ROP plan is unnecessary. The 3% contingency plan is 
a separate requirement of the Act, and approval of the 3% contingency 
plan is not a prerequisite for approval of the 15% ROP plan. EPA will 
promulgate a final rulemaking on the 3% contingency plan once EPA 
completes its evaluation of the Ferro Corporation comments.

V. Analysis of Lake and Porter Counties 15% ROP Plan

    Indiana's 15% ROP summary for Lake and Porter Counties is provided 
in the following table. This table has been adjusted from the table 
which appeared in the direct final to reflect the State's June 13, 
1997, letter. (See part IV of this rulemaking).

              15% ROP Summary for Lake and Porter Counties              
------------------------------------------------------------------------
                                                               Lbs Voc/ 
           Calculation of Reduction needs by 1996               DayAY   
------------------------------------------------------------------------
1990 Lake and Porter Counties Total VOC Emissions..........      424,721
1990 ROP Emissions (Anthropogenic only)....................      381,841
1990-1996 Noncreditable Reductions (Reductions from 1990                
 RVP and Pre-1990 FMVCP Regulations).......................       58,838
1990 Adjusted Base Year Emissions (1990 ROP Emissions minus             
 Noncreditable Reductions).................................      323,003
15% of Adjusted Base Year Emissions........................       48,450
Total Required Emission Reductions by 1996 (15% of Adjusted             
 Base Year Emissions plus Noncreditable Reductions)........      107,288
1996 Target Level (1990 ROP Emissions minus Total Required              
 Emission Reductions by 1996)..............................      274,553
1996 Projected Emissions (1990 Adjusted Base Year Emissions             
 plus Growth Factors)......................................      342,683
Reduction needs by 1996 to achieve 15 percent net of growth             
 (1996 Projected Emission minus 1996 Target Level).........       68,130
        Creditable Reduction from Mandatory Controls                    
Mobile Sources:                                                         
    Enhanced Vehicle Inspection and Maintenance (I/M)                   
     Program (326 IAC 13-1.1)..............................        6,817
Federal Reformulated Gasoline Program (40 CFR Part 80,                  
 Subpart D)................................................       14,905
Area Sources:                                                           
    Stage II Gasoline Vapor Recovery (326 IAC 8-4-6).......        9,824
    Federal Architectural and Industrial Maintenance (AIM)              
     Coatings Rule.........................................        2,920
Point Sources:                                                          
    Non-Control Techniques Guideline (CTG) Reasonably                   
     Available Control Technology (RACT) Rule (326 IAC 8-7)        4,559
    Subtotal--Reductions from Mandatory Controls...........       39,025
     Creditable Reductions From Non-Mandatory Controls                  
Point Sources:                                                          
    Coke Oven Battery Shutdowns at Inland Steel Flat                    
     Products (326 IAC 6-1-10.1(k)(5)).....................       23,609
Area Sources:                                                           
    Automobile Refinishing (326 IAC 8-10)..................        4,679
    Residential Open Burning (326 IAC 4-1).................          929
    Subtotal--Reduction From Non-Mandatory Controls........       29,217
                                                            ------------
      Total Creditable Reductions from 15% ROP plan........       68,242
------------------------------------------------------------------------


[[Page 38461]]

A. Calculation of the 1990 Adjusted Base Year Emission Inventory

    To determine the 1990 adjusted base year inventory, Indiana used 
the 1990 base year emission inventory approved by EPA on January 4, 
1995 (60 FR 375), which was found to meet the requirements of sections 
172(c)(3) and 182(a)(1) of the Act for Lake and Porter Counties. Total 
VOC emissions estimated from this inventory are 424,721 lbs VOC/day. 
Indiana subtracted biogenic emissions and emissions from outside Lake 
and Porter Counties from the 1990 base year inventory to determine that 
the 1990 ROP inventory level is 381,841 lbs VOC/day. No pre-enactment 
banked emission credit was included in this inventory.
    Indiana used EPA's Mobile Source Emissions Model (MOBILE)5a to 
calculate the emission reductions from the pre-1990 FMVCP and 1990 RVP 
regulations; these reductions were subtracted from the 1990 ROP 
inventory level to find the 1990 adjusted base year inventory level of 
323,003 lbs VOC/day. Indiana's documentation includes the actual 1990 
motor vehicle emissions using 1990 vehicle miles traveled (VMT) and 
MOBILE5a emission factors, and the adjusted emissions using 1990 VMT 
and the MOBILE5a emission factors in calendar year 1996 with the 
appropriate RVP for the nonattainment area as mandated by EPA. The plan 
includes adequate documentation showing how the MOBILE5a model was run 
to calculate the expected emission reductions from FMVCP and RVP.

B. 1996 ROP Target Emission Level

    To calculate the 1996 target emission level for Lake and Porter 
Counties, Indiana first multiplied the 1990 adjusted base year 
inventory by 0.15 to determine that the 15% required emission reduction 
by 1996 is 48,450 lbs VOC/day. Then, 58,838 lbs VOC/day of reductions 
from non-creditable control measures (pre-1990 FMVCP and 1990 RVP) were 
added to the 15% required reduction to find that the total required 
reductions by 1996 is 107,288 lbs VOC/day. Finally, Indiana subtracted 
the 1996 total required emission reductions from the 1990 ROP emission 
inventory to determine that the 1996 emission target level for Lake and 
Porter Counties is 274,553 lbs VOC/day.
    The 15% ROP plan submittal adequately documents the calculations 
used to determine the Lake and Porter Counties target level by showing 
each step, discussing any assumptions made, and stating the origin of 
the numbers used in the calculations.

C. Projected Emission Inventory

    To determine the 1996 projected emission inventory, Indiana has 
included in the 15% ROP plan the growth factors used together with 
documentation for the assumptions made. The point, area, and non-road 
mobile source emission inventories were projected using either source 
supplied data, population forecasts, historical data, or, where 
historical data were unavailable or not suitable to project, the U.S. 
Department of Commerce Bureau of Economic Analysis (BEA) regional 
growth data were used. The on-road mobile source emission inventory was 
projected using MOBILE5a. The State's calculations for growth in the 
on-road mobile, off-road mobile, industrial, and area source sectors is 
10,180 lbs VOC/day, 1,298 lbs VOC/day, 4,692 lbs VOC/day, and 3,510 lbs 
VOC/day, respectively, for a total of 19,680 lbs VOC/day. These growth 
estimates were calculated in a manner consistent with EPA's guidance 
documents. The projected emissions were added to the 1990 adjusted base 
year inventory to determine that the 1990 projected emission inventory 
level is 342,683 lbs VOC/day.

D. Creditable Reductions from Control Measures

    From the calculation of the 1996 target emission level and 1996 
projected emission level, Indiana must reduce emissions in Lake and 
Porter Counties by 68,130 lbs VOC/day, to secure the 15% ROP reduction. 
The Lake and Porter Counties 15% ROP plan does meet this requirement. 
The total creditable emission reductions achieved by the 15% ROP plan 
are 68,242 lbs VOC/day. Emission reductions not needed to meet the 15% 
ROP requirement will be applied toward achieving post-1996 ROP 
reductions, leading to attainment of the ozone air quality standard.
    The SIP submittal includes documentation indicating the sources or 
source categories which are expected to be affected by each control 
measure, the sources' projected 1996 emissions without controls, and 
the assumptions used to estimate how much the sources' 1996 emissions 
would be reduced by each control measure. These assumptions were 
derived primarily from Midwest Research Institute's April 30, 1993, 
document entitled ``Support Document for Indiana's Lake and Porter 
Nonattainment Area 1996 Rate of Progress Plan,'' which was contracted 
by EPA to assist Indiana in developing the 15% ROP and contingency 
plans. A review of the emission reduction credit taken for each control 
measure follows:

Enhanced I/M Program

    Of the 15% ROP plans originally submitted to EPA, most contain 
enhanced I/M programs because they achieve more VOC emission reductions 
than most, if not all other, control strategies. However, because most 
States experienced substantial difficulties implementing enhanced I/M 
programs, only a few States are currently actually testing cars using 
the original enhanced I/M protocol.
    On September 18, 1995 (60 FR 48029), EPA finalized revisions to its 
enhanced I/M rule allowing States significant flexibility in designing 
I/M programs appropriate for their needs. Further, Congress enacted the 
National Highway Systems Designation Act of 1995 (NHSDA), which 
provides States with more flexibility in determining the design of 
enhanced I/M programs. The substantial amount of time needed by States 
to re-design enhanced I/M programs in accordance with the final 
enhanced I/M rules and/or the guidance contained within the NHSDA, to 
secure State legislative approval when necessary, and set up the 
infrastructure to perform the testing program has precluded States from 
obtaining emission reductions from enhanced I/M by November 15, 1996.
    Given the heavy reliance by many States on enhanced I/M programs to 
help satisfy 15% ROP plan requirements, and the recent NHSDA and 
regulatory changes regarding enhanced I/M programs, EPA has recognized 
that it was not possible for many States to achieve the portion of the 
15% ROP reductions that are attributed to enhanced I/M by November 15, 
1996. Under these circumstances, disapproval of the 15% ROP plan SIPs 
would serve no purpose. Consequently, under certain circumstances, EPA 
will allow States that pursue re-design of enhanced I/M programs to 
receive emission reduction credit from these programs in their 15% ROP 
plans, even though the emission reductions from the I/M program will 
occur after November 15, 1996.
    Specifically, the EPA will approve 15% ROP SIPs if the emission 
reductions from the revised, enhanced I/M programs, as well as from the 
other 15% ROP plan measures, will achieve the 15% level as soon after 
November 15, 1996, as practicable. To make this ``as soon as 
practicable'' determination, the EPA must determine that the 15% ROP 
plan contains all VOC control strategies that are practicable for the 
nonattainment area in question and that

[[Page 38462]]

meaningfully accelerate the date by which the 15% level is achieved. 
The EPA does not believe that measures meaningfully accelerate the 15% 
date if they provide only an insignificant amount of reductions.
    Indiana's enhanced I/M program for Lake and Porter Counties was 
approved by EPA on March 19, 1996 (61 FR 11142), and the State began 
testing vehicles under the new program on January 1, 1997. A single 
contractor, Envirotest, Inc., operates a test-only centralized network 
for inspections and re-inspection. The Indiana I/M program requires 
coverage of all 1976 and newer gasoline powered light duty passenger 
cars and light duty trucks up to 9,000 pounds Gross Vehicle Weight 
Rating (GVWR). All applicable 1981 and newer vehicles will be subject 
to a transient, mass emissions tailpipe test that includes the purge 
and pressure test. All applicable 1976 through 1980 vehicles will be 
subject to a BAR90 single-speed idle test that includes the pressure 
test. The I/M contractor has acquired all the emission test sites 
required under the State I/M contract, and all the test stations 
required have been constructed.
    EPA has analyzed Indiana's enhanced I/M program to predict when the 
emission reductions claimed in the Lake and Porter Counties 15% ROP 
plan for the program will actually be secured. This analysis was based 
on the methodology specified in EPA's policy memoranda, ``Date by Which 
States Need to Achieve all the Reductions Needed for the 15% Plan from 
I/M and Guidance for Recalculation,'' August 13, 1996, and ``Modeling 
15% VOC Reduction(s) from I/M in 1999--Supplemental Guidance,'' 
December 23, 1996. MOBILE5b runs were used to evaluate the credit using 
inputs that reflect actual program startup. Some of the input 
parameters of the modeling included: a January 1, 1997, program start 
date; start-up cutpoints as recommended by EPA; and expected 
evaporative test procedures available at start-up. The State has taken 
credit in the Lake and Porter Counties 15% ROP plan for 6,817 lbs VOC/
day, or 3.41 tons per day reductions from enhanced I/M. Based on EPA's 
analysis, the emission reduction claimed will be secured by November 
1999. See EPA's August 13, 1996, policy memorandum titled ``Date by 
Which States Need to Achieve all the Reductions Needed for the 15% Plan 
from I/M and Guidance for Recalculation,'' for further discussion on 
the November 1999 date.
    To determine whether there are other available potential control 
measures which can meaningfully accelerate the date by which a 15% 
reduction in VOC emissions in Lake and Porter Counties can be achieved, 
EPA compared the Lake and Porter Counties 15% ROP and 3% contingency 
plans with control measures included in 15% ROP plans nation-wide, 
which are listed in EPA's report, ``Sample City Analysis: Comparison of 
Enhanced I/M Reductions Versus other 15 Percent ROP Plan Measures,'' 
December 12, 1996, referenced in EPA's policy document ``15% VOC SIP 
Approvals and the `As Soon As Practicable' Test,'' February 12, 1997. 
Based upon the report, EPA believes there are no other potential 
control measures beyond those already included in the Lake and Porter 
Counties 15% ROP and 3% contingency plans which can secure a 
significant amount of emission reduction before November 1999.
    Because Indiana's enhanced I/M program will secure emission 
reductions claimed under the Lake and Porter Counties 15% ROP plan by 
November 1999, and because there are no other potential control 
measures which can meaningfully accelerate the achievement of a 15% 
reduction in the counties before November 1999, the EPA finds that the 
Lake and Porter Counties 15% ROP plan does secure a 15% emission 
reduction as soon as practicable. On this basis, the emission reduction 
claimed for the Lake and Porter Counties enhanced I/M program under the 
15% ROP plan is approvable.

Federal Reformulated Gasoline Program

    The federal reformulated gasoline program (40 CFR part 80, subpart 
D) requires gasoline providers in Lake and Porter Counties to sell only 
gasoline which meets certain blending requirements to reduce pollution. 
The VOC reduction from reformulated gasoline was determined using the 
MOBILE5a model to estimate the difference between 1996 highway mobile 
source emissions at RVP 9.0, the level of control upon gasoline in Lake 
and Porter Counties before the reformulated gasoline requirement, and 
1996 highway mobile source emissions with reformulated gasoline. 
Indiana has credited a 14,905 lbs VOC/day emission reduction from this 
program, which is acceptable.

Stage II Gasoline Vapor Recovery Rule

    Indiana's Stage II rule (326 IAC 8-4-6) requires facilities that 
sell more than 10,000 gallons of gasoline per month to operate Stage II 
vapor recovery systems certified to have a control effectiveness of at 
least 95%. Indiana has estimated that the rule has a 84% program in-use 
efficiency, accounting for annual inspection program effects and the 
exemption of facilities with a monthly gasoline throughput of less than 
10,000 gallons. Indiana has credited a 9,824 lbs VOC/day emission 
reduction from this rule, which is acceptable.

Federal AIM Coatings Rule

    Pursuant to section 183(e) of the Act, EPA proposed on June 25, 
1996 (61 FR 32729), a national rule requiring manufacturers of AIM 
coatings to meet VOC content limitations. The March 7, 1996, EPA 
memorandum ``Update on the Credit for the 15 Percent Rate-of-Progress 
Plans for Reductions from the Architectural and Industrial Maintenance 
Coatings Rule'' allows States to take credit for a 20% reduction in AIM 
coating emissions, even though promulgation of the rule has been 
delayed. Based on this policy, Indiana has taken an emission reduction 
credit of 2,920 lbs VOC/day, which is acceptable.

Non CTG RACT Rule

    Indiana's Non-CTG RACT rule (326 IAC 8-7) requires VOC controls on 
sources which have the potential to emit 25 tons of VOC emissions per 
year, and are not already covered under an existing CTG or part of a 
post-1990 CTG category.4 Sources subject to this rule are 
allowed to demonstrate compliance by choosing among any one of the 
following three available options: (1) Achieve an overall VOC reduction 
in baseline actual emissions of 98% by the addition of add-on controls 
or documented reduction in VOC-containing materials used; (2) achieve a 
level of reduction equal to 81% of baseline actual emission by the same 
means as stated above, where it is demonstrated that a 98% reduction in 
source emissions is not achievable; or (3) achieve an alternative 
overall emission reduction by the application of RACT as determined by 
the State and EPA. Indiana estimates that the rule's overall control 
efficiency is 81%, and has a rule effectiveness of 80%. Indiana has 
credited 4,559 lbs VOC/day in emission reductions from this rule, which 
is acceptable.
---------------------------------------------------------------------------

    \4\ RACT is the lowest emission limitation that a particular 
source is capable of meeting by the application of control 
technology that is reasonably available, considering technological 
and economic feasibility. CTGs are EPA documents which provide 
recommendations on what EPA considers the presumptive norm for RACT 
for particular industries. Indiana was required to adopt the Non-CTG 
RACT rule by section 182(b)(2) of the Act.
---------------------------------------------------------------------------

Coke Oven Battery Shutdowns at Inland Steel Flat Products

    Inland Steel is required under Indiana's Particulate Matter rule 
326 IAC 6-1-10.1(k)(5) to shut down

[[Page 38463]]

numbers 6 through 11 coke batteries before 1996. The 1990 base year 
inventory emissions from these coke batteries, 23,609 lbs VOC/day, are 
being credited as emission reductions. These reductions are acceptable.

Residential Open Burning Rule

    Under Indiana's rule 326 IAC 4-1, residential open burning is 
banned in Lake and Porter Counties. Indiana estimates 80% emission 
reduction and 80% rule effectiveness from this rule. An emissions 
reduction credit of 929 lbs VOC/day from the rule is acceptable.

Automobile Refinishing Rule

    The State rule 326 IAC 8-10 requires automobile and mobile 
equipment refinishing shops to use lower VOC coatings, less-emitting 
spray-gun and spray-gun cleaning equipment, and improved work practices 
to reduce VOC. To improve rule effectiveness, this rule also requires 
refinishing coating suppliers in the area to sell only coatings which 
meet the VOC limits required in the rule. In addition to documentation 
contained in the submittal, Indiana submitted supplemental 
documentation which indicates that an overall 77.8% emission reduction 
can be expected from all the control measures required by this rule, 
with 100% rule effectiveness. This documentation has been included in 
the docket for this rulemaking. Indiana has taken an emission reduction 
credit of 4,679 lbs VOC/day from this rule, which is acceptable.

E. Enforceability Issues

    All measures and other elements in the SIP must be enforceable by 
the State and EPA (See sections 172(c)(6), 110(a)(2)(A) of the Act, and 
57 FR 13556). The EPA criteria addressing the enforceability of SIPs 
and SIP revisions were stated in a September 23, 1987 memorandum (with 
attachments) from the Assistant Administrator for Air and Radiation 
(see 57 FR 13541). Nonattainment area plan provisions must also contain 
a program that provides for enforcement of the control measures and 
other elements in the SIP (see section 110(a)(2)(C) of the Act).
    The control measures included in the Lake and Porter 15% ROP plan 
have been fully adopted by Indiana and have been submitted to EPA as 
revisions to the State's ozone SIP. The EPA has independently reviewed 
each control measure to determine conformance with SIP requirements 
under section 110 and part D of the Act, and the overall enforceability 
of the measure's requirements. Rulemaking action on each control 
measure is as follows:

------------------------------------------------------------------------
            Control measure                    Date of EPA approval     
------------------------------------------------------------------------
Enhanced I/M Program (326 IAC 13-1.1)..  March 19, 1996 (61 FR 11142).  
Reformulated Gasoline (40 CFR Part 80,   Federal regulation promulgated 
 Subpart D).                              February 16, 1994 (59 FR      
                                          7716).                        
Stage II Gasoline Vapor Recovery (326    April 28, 1994 (59 FR 21942).  
 IAC 8-4-6).                                                            
Federal AIM Coatings Rule..............  Proposed federal regulation for
                                          which Indiana can take credit.
                                          (See memorandum dated March 7,
                                          1996, from John Seitz,        
                                          Director, Office of Air       
                                          Quality Planning and Standards
                                          to Regional Air Division      
                                          Directors).                   
Non-CTG RACT (326 IAC 8-7).............  July 5, 1995 (60 FR 34857).    
Residential Open Burning Ban (326 IAC 4- February 1, 1996 (61 FR 3581). 
 1).                                                                    
Auto Refinishing (326 IAC 8-10)........  June 13, 1996 (61 FR 29965).   
Coke Oven Battery Shutdown (326 IAC 6-1- June 15, 1995 (60 FR 31412).   
 10.1(k)(5)).                                                           
------------------------------------------------------------------------

F. Transportation Conformity 1996 Mobile Source Emissions Budget

    Section 176(c) requires States to submit SIP revisions establishing 
the State's criteria and procedures for assessing the conformity of 
federal actions (transportation and general) to the SIP's purpose of 
eliminating or reducing the severity and number of violations of the 
NAAQS and achieving expeditious attainment of such standards, and that 
such activities will not: (1) Cause or contribute to any new violation 
of any standard in any area, (2) increase the frequency or severity of 
any existing violation of any standard in any area, or (3) delay timely 
attainment of any standard or any required interim emission reductions 
or other milestones in any area. To assure conformity with the SIP, 
conformity analyses for transportation projects must take into account 
the amount of on-road mobile source emissions that can be emitted in 
accordance with SIP emission reduction milestones. For the purposes of 
EPA transportation conformity determinations, the 1996 emission level 
for on-road mobile sources that is achieved from the 15% ROP plan, 
constitutes the 1996 VOC mobile source emission budget for Lake and 
Porter Counties. This level, which is derived from MOBILE5a using 1996 
projected on-road mobile source emissions with reformulated gasoline 
and enhanced I/M, is 50,015 lbs VOC/day. Therefore, final approval of 
the 15% ROP plan also approves the 1996 mobile source VOC emission 
budget of 50,015 lbs VOC/day.
    For years after 1996, conformity determinations addressing VOCs 
must demonstrate consistency with this plan revision's motor vehicle 
emissions budget, and satisfaction of the build/no-build test, as 
defined under 40 CFR part 93.

G. Concluding Statement on 15% ROP Plan

    The EPA has reviewed the Lake and Porter Counties 15% ROP plan SIP 
revision submitted to EPA as described above, and finds that the plans 
satisfy the requirements of section 182(b)(1) of the Act, as well as 
EPA guidance for such plans. Therefore, the EPA, in this action, is 
approving this plan as a revision to the Indiana ozone SIP.

VI. Final Rulemaking Action

    The EPA approves Indiana's 15% ROP plan for Lake and Porter 
Counties, as a revision to the SIP. For transportation conformity 
purposes, final approval of the 15% ROP plan also approves the 1996 
mobile source emission budget of 50,015 lbs VOC/day. This action will 
be effective on August 18, 1997.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. Each request for revision to the SIP shall be considered 
separately in light of specific technical, economic, and environmental 
factors and in relation to relevant statutory and regulatory 
requirements.

VII. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.

B. Regulatory Flexibility

    Under the Regulatory Flexibility Act, 5 U.S.C. section 600 et seq., 
EPA must prepare a regulatory flexibility analysis

[[Page 38464]]

assessing the impact of any proposed or final rule on small entities. 5 
U.S.C. sections 603 and 604. Alternatively, EPA 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, the Administrator 
certifies that it does not have a significant impact on any small 
entities affected. Moreover, due to the nature of the Federal-State 
relationship under the Act, preparation of a flexibility analysis would 
constitute Federal inquiry into the economic reasonableness of the 
State action. The Clean Air Act forbids EPA to base its actions 
concerning SIPs on such grounds. Union Electric Co. v. EPA., 427 U.S. 
246, 256-66 (1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995, 
signed into law on March 22, 1995, EPA must undertake various actions 
in association with 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. This Federal action approves pre-existing requirements under 
state or local law, and imposes no new requirements. Accordingly, no 
additional costs to state, local, or tribal governments, or the private 
sector, result from this action.

D. Submission to Congress and the General Accounting Office

    Under section 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives and the Comptroller General of the 
General Accounting Office prior to publication of the rule in today's 
Federal Register. This rule is not a major rule as defined by section 
804(2).

E. Petitions for Judicial Review

    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 16, 1997. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements. (See section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental relations, Ozone.

    Dated: July 8, 1997.
Michelle D. Jordan,
Acting Regional Administrator.

    For the reasons stated in the preamble, part 52, chapter I, title 
40 of the Code of Federal Regulations is amended as follows:

PART 52--[AMENDED]

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

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

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


Sec. 52.777  Control Strategy: Photochemical Oxidants (hydrocarbon).

* * * * *
    (k) On June 26, 1995, and June 13, 1997, Indiana submitted a 15 
percent rate-of-progress plan for the Lake and Porter Counties portion 
of the Chicago-Gary-Lake County ozone nonattainment area. This plan 
satisfies the counties' requirements under section 182(b)(1) of the 
Clean Air Act, as amended in 1990.

[FR Doc. 97-18972 Filed 7-17-97; 8:45 am]
BILLING CODE 6560-50-P