[Federal Register Volume 66, Number 219 (Tuesday, November 13, 2001)]
[Rules and Regulations]
[Pages 56944-56958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27722]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN136-2; FRL-7088-5]


Approval and Promulgation of Air Quality Plans; Indiana; Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is fully approving State Implementation Plan (SIP) 
revisions submitted by the Indiana Department of Environmental 
Management (IDEM) for attainment of the 1-hour ozone standard in the 
Chicago-Gary-Lake County ozone nonattainment area. These SIP revisions 
are required by Section 182 of the Clean Air Act. This action approves 
the following: An ozone attainment demonstration; a plan demonstrating 
how progress in emission reductions will be achieved by specified 
milestone years through the area's attainment date of 2007 (i.e. a 
post-1999 Rate of Progress Plan (ROP)); a contingency measures plan for 
both the ozone attainment demonstration and the post-1999 ROP plan; a 
reasonably available control measure (RACM) analysis; NOX 
waiver revisions; motor vehicle emissions budgets; and commitments to 
complete a mid-course review and to recalculate the motor vehicle 
emissions budgets using MOBILE6. Also, EPA is incorporating into the 
SIP a portion of an agreed order between U.S. Steel (currently USX 
Corporation) and the IDEM to establish a coke plant process water 
treatment plant at its Gary Works. We proposed approval of these SIP 
revision elements on August 3, 2001 (66 FR 40802).

DATES: This final rule is effective December 13, 2001.

ADDRESSES: You can access copies of the SIP revision request and 
documents relevant to this rulemaking at the following address: U.S. 
Environmental Protection Agency, Region 5, Air and Radiation Division, 
77 West Jackson Boulevard, Chicago, Illinois 60604. (We recommend that 
you telephone Patricia Morris at (312) 353-8656 before visiting the 
Region 5 Office).

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

SUPPLEMENTARY INFORMATION: Throughout this document, wherever ``we,'' 
``us,'' or ``our'' are used, we mean EPA.
    The supplemental information is organized in the following order:

I. What Is EPA Approving In This Action?
II. What Previous Action Has Been Taken Or Proposed On This SIP 
Revision?
III. Are There Related Elements that Need to be Federally Approved?
IV. What Public Comments were Received on the Proposed Approval of 
Indiana's 1-hour Ozone Attainment Demonstration?
    A. Comments on the August 3, 2001, proposal.
    B. Comments on the December 16, 1999, proposed conditional 
approval.
V. Final Rulemaking Action.
VI. Administrative Requirements.

I. What Is EPA Approving in This Action?

    The EPA is approving SIP revisions submitted by the State of 
Indiana on December 21, 2000, for purposes of attainment of the 1-hour 
ozone standard in the Chicago-Gary-Lake County ozone nonattainment area 
(the Indiana portion of this bi-state ozone nonattainment area includes 
Lake and Porter Counties, Indiana). We are approving (1) an ozone 
attainment demonstration demonstrating attainment by 2007, (2) a post-
1999 ozone ROP plan with associated ROP conformity budgets, (3) a 
revision to the NOX waiver, (4) a contingency measures plan 
for both the ozone attainment demonstration and the post-1999 ROP plan, 
(5) the motor vehicle emissions budgets for the 2007 attainment year, 
until such time that a revised budget is submitted and found adequate 
for conformity purposes as called for by the state in its commitment to 
recalculate and apply a revised budget for conformity within two years 
of the formal release of MOBILE6, (6) a RACM analysis, (7) a commitment 
to conduct a mid-course review of the ozone attainment plan, and (8) an 
agreed order between U.S. Steel (currently USX Corporation) and the 
IDEM signed by IDEM on March 22, 1996, which requires U.S. Steel to 
establish a coke plant process water treatment plant at its Gary Works. 
Today's action finalizes full approval of Indiana's 1-hour ozone 
attainment demonstration SIP revision as meeting the requirements of 
sections 182(c)(2) and (d) of the Clean Air Act (CAA).

II. What Previous Action Has Been Taken or Proposed on This SIP 
Revision?

    EPA published a Notice of Proposed Rulemaking (NPR) for the Indiana 
ozone attainment demonstration SIP for the Lake and Porter Counties 
portion of the Chicago ozone nonattainment area on December 16, 1999 
(64 FR 70514). In that NPR, we proposed to conditionally approve the 1-
hour ozone attainment demonstration SIP revision submitted by Indiana 
on April 30, 1998. This proposed conditional approval was based on the 
State's submitted ozone modeling analysis and the State's commitments 
to adopt and submit a final ozone attainment demonstration and a post-
1999 ROP plan, including the necessary State air pollution control 
regulations, by December 31, 2000. We proposed, in the alternative, to 
disapprove this attainment demonstration plan, if, by December 31, 
1999, the State did not select an emissions control strategy associated 
with its submitted ozone modeling analysis and submit adequate motor 
vehicle emissions budgets for VOC and NOX for the ozone 
nonattainment area that complied with EPA's conformity regulations and 
that supported attainment of the 1-hour ozone standard. We also 
provided that the State should submit, by December 31, 1999, an 
enforceable commitment to conduct a mid-course review of the ozone 
attainment plan in 2003.
    The State met the submittal requirements of the proposed 
conditional approval, and submitted a final ozone attainment 
demonstration and post-1999 ROP plan on December 21, 2000.
    Since the State largely replaced the April 30, 1998 ozone 
attainment demonstration in the December 21, 2000 submittal, the August 
3, 2001 NPR primarily focused on the more recent ozone attainment 
demonstration. As such, this final rule also focuses on the December 
21, 2000 version of the ozone

[[Page 56945]]

attainment demonstration and the comments received on EPA's August 3, 
2001 proposal. This notice of final rulemaking (NFR), however, also 
addresses the public comments received with regard to the December 16, 
1999 NPR.
    The attainment demonstration we are approving today demonstrates 
attainment of the 1-hour ozone standard by the 2007 attainment year.

III. Are There Related Elements That Need To Be Federally Approved?

    There are a number of related elements which are part of the ROP 
and attainment demonstration. These related elements are detailed in 
this section along with the citations for approval. Several elements 
have been acted upon in final form by EPA in previous notices and 
several are being acted upon in today's notice.
    The attainment demonstration SIP revision depends significantly on 
the new NOX emission reductions resulting from the 
implementation of NOX emission control regulations for major 
EGUs, major non-EGU boilers and turbines, and major cement kilns. Other 
State emission control regulations, applicable in Lake and Porter 
Counties, affecting the attainment of the ozone standard and the post-
1999 ROP in the ozone nonattainment area have previously been adopted 
by the State and approved by the EPA.
    On September 27, 2001 EPA signed the final rule approving Indiana's 
NOX emission control regulations for major EGUs, major non-
EGU boilers and turbines, and major cement kilns. The approval of these 
State NOX control rules is being addressed in a separate 
rulemaking action.
    In the September 14, 2001 Federal Register (66 FR 47887) EPA 
approved Indiana's Cold Cleaner Degreasing rule (326 IAC 8-3-8). This 
rule and the reductions from this rule are part of the ROP and 
contingency measure reductions. The approval was effective on October 
15, 2001.
    In today's notice EPA is taking final action on the post-1999 ROP 
plan. EPA is also taking final action on all outstanding contingency 
plan requirements. As proposed in the August 3, 2001 notice, the 
current ROP plan is adequate to cover the prior contingency 
requirements. The post-1999 ROP plan meets all outstanding contingency 
plan requirements, and the State has met all contingency planning 
requirements. As noted in the August proposal, the post-1999 ROP plan 
contains excess emission reductions sufficient to provide contingency 
measures for the 15 percent and post-1996 ROP plans. It is therefore 
not necessary for the State to revisit the contingency plans for the 15 
percent ROP plan and the post-1996 ROP plan. In this action EPA is 
approving contingency requirements for those plans as effectively being 
met by the current ROP and contingency plans.
    Other related SIP actions are being acted upon in this final 
notice. These include the Mid-Course Review Commitment from IDEM, and 
the commitment to recalculate the mobile source transportation 
conformity budgets within one or two years after MOBILE6 is officially 
released.
    Indiana committed to revise within two years after the official 
release of MOBILE6, the 2007 attainment demonstration budgets and to 
revise the ROP conformity budgets. The State air agency (IDEM) has 
discussed the commitment with the transportation community and has 
discussed the fact that no new conformity determinations can be made in 
the second year of the commitment without an adequate MOIBLE6 budget. 
As we proposed on July 28, 2000 (65 FR 46383), the final approval 
action we are taking today on the 2007 attainment demonstration budgets 
will be effective for conformity purposes only until revised motor 
vehicle emissions budgets are submitted and we have found them 
adequate. In other words, the budgets we are approving today as part of 
the attainment demonstration will apply for conformity purposes only 
until there are new, adequate budgets consistent with the States' 
commitments to revise the budgets. The revised budgets will apply for 
conformity purposes as soon as we find them adequate.
    We are limiting the duration of our approval in this manner because 
the States have committed to revise them. Therefore, once we have 
confirmed that the revised budgets are adequate, they will be more 
appropriate than the budgets we are approving for conformity purposes 
now. If the revised budgets raise issues about the sufficiency of the 
attainment demonstration, EPA will work with States on a case-by-case 
basis.
    In this notice EPA is approving the mobile source emissions budgets 
submitted with both the post-1999 ROP and the attainment demonstration. 
The budgets for the 2007 attainment year are 9.4 TPD of VOC and 24.29 
TPD of NOX. The VOC budget for the ROP for 2002 is 13.13 TPD 
and the VOC budget for 2005 is 10.99 TPD. These budgets were found 
adequate effective June 13, 2001, as posted on the EPA website at 
www.epa.gov/otaq/traq (once there, click on the ``conformity'' button).
    The Mid-Course Review commitment and MOBILE6 commitment are 
discussed in detail in the August 3, 2001, proposed rulemaking. In 
today's action, EPA is approving the commitments to conduct a Mid-
Course Review and to revise the motor vehicle emissions budgets.
    All required State emission control regulations and related SIP 
elements needed to support the ozone attainment demonstration and the 
post-1999 ROP plan have been approved by the EPA.

IV. Did We Receive Public Comments on the Proposed Approval of 
Indiana's 1-Hour Ozone Attainment Demonstration?

    We published a proposed approval of Indiana's 1-hour ozone 
attainment demonstration SIP revision on August 3, 2001 (66 FR 40802). 
The public comment period closed on September 4, 2001. We received one 
set of comments on the proposed rulemaking. Although the comments were 
not sent to the person listed in the Federal Register notice as the one 
to receive comments, we determined that the commenter intended to 
submit them in respect to the proposal and, thus are responding to the 
comments here. A closely related rulemaking was published on December 
16, 1999 (64 FR 70514). In that notice, we proposed conditional 
approval of an earlier 1-hour ozone attainment demonstration, submitted 
by Indiana on April 30, 1998. We received a number of comments on the 
December 1999 proposed rulemaking. The 1-hour ozone attainment 
demonstration SIP revision package submitted by Indiana in December 
2000 essentially replaced their earlier 1998 submittal. However, in 
this final rulemaking, we also address the relevant comments received 
on our December 1999 proposed conditional approval.

A. Comments on the August 3, 2001 Proposal

    Comment: The commenter states that the plan represents a very 
important step forward for improving air quality in Lake and Porter 
Counties, Indiana and that they have long advocated that LaPorte County 
(to the east of Porter County) should also be designated as 
nonattainment and included in the SIP.
    Response: The USEPA agrees that the attainment demonstration plan 
represents an important step forward for improving air quality in Lake 
and Porter Counties and indeed for improving air quality in the entire 
Lake Michigan basin.
    The commenter's statement that LaPorte County should be designated 
nonattainment is outside the scope of

[[Page 56946]]

this rulemaking. This rulemaking addresses the approvability of the 1-
hour ozone attainment demonstration for the existing nonattainment area 
and does not address redesignating existing areas. Although LaPorte 
County has experienced exceedances of the 1-hour standard, it is not 
monitoring nonattainment for the 1-hour ozone standard. During the past 
three years (1998 through 2000) the monitoring in LaPorte County 
recorded only one exceedance day. LaPorte County would need to 
experience more than three exceedance days over a three-year period to 
violate the 1-hour ozone standard. Nor does the preliminary 2001 ozone 
monitoring data indicate a violation of the 1-hour standard. Therefore, 
the monitoring data does not indicate that LaPorte County should be 
designated nonattainment for the 1-hour standard. Moreover, EPA sees no 
need to include LaPorte County as part of the Chicago nonattainment 
area. It is important to note that LaPorte County is part of the Lake 
Michigan modeling domain which has been modeled as part of the Chicago-
Gary-Lake County attainment demonstration modeling. Thus, the ozone 
modeling for the Chicago and Milwaukee nonattainment areas (Indiana, 
Illinois and Wisconsin) indicates that the SIPs for these areas are 
expected to reduce emissions to an extent that the entire domain will 
be attaining the 1-hour ozone standard.
    Comment: A commenter has been an active participant in the Indiana 
NOX rulemaking which will provide important contributions to 
meeting the 1-hour ozone standard. The commenter would like to be 
notified if EPA does not approve the rules or if they are approved with 
conditions.
    Response: The NOX SIP rules submitted by Indiana in 
final form on August 20, 2000, were proposed for approval by the EPA on 
July 2, 2001, (66 FR 34864). The final rule approving these State rules 
was signed by the EPA on September 27, 2001 and will be published in a 
separate rulemaking action.
    Comment: The commenter urges the EPA to recommend that Indiana use 
the deterministic test for the required ozone attainment demonstration. 
The commenter also urges both EPA and IDEM to provide for adequate, 
local public information and opportunity for comment on the mid-course 
review now promised for the end of 2004.
    Response: As noted in the August 3, 2001 NPR (66 FR 40802), Indiana 
has demonstrated attainment of the 1-hour ozone standard using the UAM. 
Indiana used UAM data and a statistical approach, as defined in EPA's 
June 1996 Guidance on Use of Modeled Results to Demonstrate Attainment 
of the Ozone NAAQS (EPA-454/B-95-007), to demonstrate attainment of the 
1-hour ozone standard in the Chicago-Gary-Lake County nonattainment 
area by November 15, 2007.
    The commenter is objecting to the State demonstrating attainment of 
the 1-hour ozone standard via procedures differing from the 
deterministic test as discussed in the June 1996 guidance. However, as 
discussed in more detail in the June 1996 guidance and elsewhere in 
this final rule, the deterministic test is not the only attainment 
demonstration test supported by the attainment demonstration 
requirements of the CAA. The CAA is not prescriptive as to the specific 
nature of the attainment demonstration, other than that the use of a 
photochemical dispersion model, such as UAM, is required for serious 
and above ozone nonattainment areas. The CAA does not prevent the 
consideration of additional data to support the attainment 
demonstration. In addition, the EPA has found that the simple use of 
the photochemical dispersion model through only the deterministic test 
may not be appropriate for some areas.
    The modeled attainment test compares model predicted 1-hour daily 
maximum ozone concentrations in all grid cells for the attainment year 
to the level of the NAAQS. The results may be interpreted through 
either of two modeled attainment or exceedance tests: a deterministic 
test or a statistical test. Under the deterministic test, a predicted 
concentration above 0.124 parts per million (ppm) ozone indicates that 
the area is expected to exceed the standard in the attainment year and 
a prediction at or below 0.124 ppm indicates that the area is expected 
to not exceed the standard. Under the statistical test, attainment is 
demonstrated when all predicted (i.e., modeled) 1-hour ozone 
concentrations inside the modeling domain are at, or below, an 
acceptable upper limit above the NAAQS permitted under certain 
conditions (depending on the severity of the episode modeled).\1\
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    \1\ Guidance on the Use Of Modeled Results to Demonstrate 
Attainment of the Ozone NAAQS. EPA-454/B-95-007, June 1996.
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    In 1996, EPA issued guidance \2\ to update the 1991 guidance 
referenced in 40 CFR 50 App. W, to make the modeled attainment test 
more closely reflect the form of the NAAQS (i.e., the statistical test 
described above), to consider the area's ozone design value and the 
meteorological conditions accompanying observed exceedances, and to 
allow consideration of other evidence to address uncertainties in the 
modeling databases and application. When the modeling does not 
conclusively demonstrate attainment, EPA has concluded that additional 
analyses may be presented to help determine whether the area will 
attain the standard. As with other predictive tools, there are inherent 
uncertainties associated with air quality modeling and its results. The 
inherent imprecision of the model means that it may be inappropriate to 
view the specific numerical result of the model as the only determinant 
of whether the SIP controls are likely to lead to attainment. The EPA's 
guidance recognizes these limitations, and provides a means for 
considering other evidence to help assess whether attainment of the 
NAAQS is likely to be achieved. The process by which this is done is 
called a weight of evidence (WOE) determination. Under a WOE 
determination, the state can rely on, and EPA will consider in addition 
to the results of the modeled attainment test, other factors such as 
other modeled output (e.g., changes in the predicted frequency and 
pervasiveness of 1-hour ozone NAAQS exceedances, and predicted change 
in the ozone design value); actual observed air quality trends (i.e. 
analyses of monitored air quality data); estimated emissions trends; 
and the responsiveness of the model predictions to further controls.
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    \2\ Ibid.
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    EPA has applied WOE determinations to all of the current 
demonstrations under proposal, although except for the Chicago-Gary-
Lake County and Milwaukee attainment demonstrations, the modeling 
results submitted do not pass the recommended ``modeled attainment 
test.'' These determinations were made based on EPA's best 
understanding of the problem and relied on a qualitative assessment as 
well as quantitative assessments of the available information.
    With regard to the commitment for a Mid-Course Review and public 
input on the MCR, EPA intends to issue guidance to the States on the 
MCR. We appreciate the commenter's concern that the public remain 
informed including the opportunity for comment on the mid-course 
review. We will consider your request as the guidance to the States is 
drafted and finalized.
    Comment: A commenter agrees with EPA's decision to revisit the 
existing NOX waiver. That waiver was strenuously objected to 
by a number of local and regional organizations. The commenter urges 
EPA to remove the waiver for Reasonably Available Control Technology 
(RACT), New Source

[[Page 56947]]

Review (NSR), transportation and general conformity and Inspection and 
Maintenance (I/M) for Lake and Porter Counties.
    Response: EPA has carefully reconsidered the basis for the 
NOX waiver for the Chicago-Gary-Lake County area both in the 
notice which proposed approval of the attainment demonstration and also 
in this notice. It should be noted that the August 3, 2001 proposed 
rule (66 FR 40802) proposed to change the basis for the continuance of 
the NOX waiver from an ozone benefit/dis-benefit basis to an 
avoidance of excess NOX emissions reduction basis under 
section 182(f)(2) of the CAA. Since the State has demonstrated 
attainment of the 1-hour ozone standard without the use of all possible 
NOX emission controls, the State, under section 182(f)(2) of 
the CAA qualifies for a NOX emissions control waiver for 
those NOX controls not relied on in the ozone attainment 
demonstration. Since the State does not rely on NOX emission 
reductions from NOX RACT, NOX NSR, and certain 
mobile source emission controls under I/M and conformity in the ozone 
attainment demonstration for the Chicago-Gary-Lake County ozone 
nonattainment area, the area qualifies for a NOX waiver of 
these NOX emission controls. The determination that certain 
control measures are ``excess'' is based on the attainment 
demonstration and is independent of the ozone impacts of the control 
measures subject to the NOX waiver. Therefore, even if ozone 
control benefits are achievable from some of these NOX 
controls, this is not a basis for denying or withdrawing the 
NOX waiver for these emission control measures.

B. Comments Received on the December 16, 1999, Proposed Conditional 
Approval

    Comment: We received a number of comments about the process and 
substance of EPA's review of the adequacy of motor vehicle emissions 
budgets for transportation conformity purposes.
    Response: EPA's adequacy process for these SIPs has been completed, 
and we have found the motor vehicle emissions budgets in all of these 
SIPs to be adequate. We have already responded to any comments related 
to adequacy when we issued our adequacy findings, and therefore we are 
not listing the individual comments or responding to them here. Our 
findings of adequacy and responses to comments can be accessed at 
www.epa.gov/otaq/traq (once there, click on the ``conformity'' button).
    Comment: A commenter notes that EPA has been working toward 
promulgation of a revised 8-hour ozone NAAQS because the Administrator 
deemed attaining the 1-hour ozone NAAQS is not adequate to protect 
public health. Therefore, EPA must ensure that measures be implemented 
now that will be sufficient to meet the 1-hour standard and that make 
as much progress toward implementing the 8-hour ozone standard as the 
requirements of the CAA and implementing regulations allow.
    Response: Although the 8-hour ozone standard has been adopted by 
the EPA, implementation of this standard has been delayed while certain 
aspects of the standard remain before the United States Circuit Court 
of Appeals. The States and the EPA have yet to define the 8-hour ozone 
nonattainment areas and the EPA has yet to issue guidance and 
requirements for the implementation of the 8-hour ozone standard. In 
the meantime, it is assumed by the EPA that emission controls 
implemented to attain the 1-hour ozone standard will be beneficial 
towards attainment of the 8-hour ozone standard as well. This is 
particularly true regarding the implementation of NOX 
emission controls resulting from EPA's NOX SIP call.
    Comment: A commenter asks that EPA require full compliance with 
regulatory requirements now in place that govern the development of 
attainment strategies, and rigorous implementation of statutory 
requirements for RACT and RACM.
    Response: As noted in responses to other comments in this final 
rule and in the August 3, 2001 proposed rule, the Indiana SIP meets the 
CAA requirements for the implementation of RACM. In addition, it is 
noted that the State of Indiana has implemented all required RACT 
controls for VOC sources in the ozone nonattainment areas in Indiana. 
As noted elsewhere in this final rule and in the August 3, 2001 
proposed rule, the Chicago-Gary-Lake County nonattaiment area is 
currently covered by a waiver from NOX RACT controls.
    Section 172(c)(1) of the CAA requires SIPs to contain RACM and 
provides for areas to attain as expeditiously as practicable. EPA has 
previously provided guidance interpreting the requirements of section 
172(c)(1). See 57 FR 13498, 13560. In that guidance, EPA indicated its 
interpretation that potentially available measures that would not 
advance the attainment date for an area would not be considered to be 
RACM. EPA also indicated in that guidance that States should consider 
all potentially available emission control measures to determine 
whether they are potentially available for implementation in an area 
and whether they would advance the attainment date. Further, States 
should indicate in their SIPs whether emission control measures 
considered were reasonably available or not, and, if measures are 
reasonably available, they must be adopted by the States as RACM. 
Finally, EPA indicated that States could reject emission control 
measures as not being RACM because they would cause substantial 
widespread and long-term adverse impacts, or would be economically or 
technologically infeasible. The EPA also issued a recent memorandum re-
confirming the principles in the earlier guidance. The newer memorandum 
is titled, `` Guidance on the Reasonably Available Control Measures 
(RACM) Requirement and Attainment Demonstration Submissions for Ozone 
Nonattainment Areas,'' from John S. Seitz, Director, Office of Air 
Quality Planning and Standards. November 30, 1999. Web site Planning 
and Standards. November 30, 1999. Web site: http://www.epa.gov/ttn/oarpg/tlpgm.html.
    As noted in the August 3, 2001 proposed rule, the State's SIP has 
addressed the implementation of RACM, and we have determined that the 
SIP adequately meets the RACM requirements of the CAA. We addressed the 
implementation of emission control measures in the Lake and Porter 
County area for both mobile and stationary sources. We determined that 
the State could not significantly advance the 1-hour ozone standard 
attainment date through the implementation of emission controls not 
already adopted by the State. In addition, as we noted in the August 3, 
2001 proposed rule, although we encourage areas to implement available 
RACM as potentially cost-effective methods to achieve emission 
reductions in the short term, we do not believe that section 172(c)(1) 
of the CAA requires implementation of potential RACM measures that 
either needlessly require costly implementation efforts or produce 
relatively small emissions reductions that will not be sufficient to 
allow an area to achieve attainment in advance of full implementation 
of all other required measures.
    In addition to emission control measures already implemented 
locally, Indiana relies in large part on emission reductions from 
outside of the area resulting from EPA's NOX SIP call rule 
or section 126 NOX rule (65 FR 2674, January 18, 2000) to 
reach attainment of the ozone standard. In the NOX SIP call 
(63 FR 57356), we concluded that NOX emission reductions 
from various upwind States were necessary to

[[Page 56948]]

provide for timely attainment of the 1-hour ozone standard in 
nonattainment areas in various downwind States, including Indiana on 
both counts. The NOX SIP call established requirements for 
control of sources of significant emissions in the relevant upwind 
States. These NOX emission reductions are not expected to be 
fully implemented until May 2004.
    The ozone attainment demonstration for Indiana indicates that the 
ozone reduction benefit expected to be achieved from the regional 
NOX emission reductions is substantial. We have seen no 
evidence for similar ozone benefits resulting from Indiana-specific 
emission controls not already adopted by the State that would 
significantly advance the attainment date for the Chicago-Gary-Lake 
County ozone nonattainment area earlier than 2007. Therefore, EPA 
concludes, based on the available documentation, that the emission 
reductions from additional emission control measures will not advance 
attainment, and, thus, none of the possible additional emission control 
measures can be considered to be RACM for the purposes of section 
172(c)(1) of the CCA.
    Given the above, it is concluded that Indiana has met the 
requirements for RACT and RACM as requested by the commenter.
    Comment: The commenter states that none of the air quality plans 
for severe ozone nonattainment areas demonstrate attainment in the 
manner required by section 182(c)(2)(A) of the CAA. Each State's 
photochemical grid modeling clearly predicts continued nonattainment of 
the 1-hour ozone standard, with predicted ozone peak concentrations 
well above the NAAQS. The Weight-Of-Evidence (WOE) approach does not 
satisfy the CAA's mandate to assure attainment of the ozone standard by 
the deadline, nor does it comply with the requirement of a modeled 
demonstration of attainment. EPA may not lawfully approve SIPs based on 
modeling that has been expressly prohibited by the rule.
    Note that a number of commenters made related comments on the ozone 
attainment demonstrations (including those from states other than 
Indiana) reviewed in the December 16, 1999 proposed rules. These 
related comments are also addressed here.
    Response: Under section 182(c)(2) and (d) of the CAA, serious and 
severe ozone nonattainment areas were required to submit by November 
15, 1994, demonstrations of how they would attain the 1-hour ozone 
standard. Section 182(c)(2)(A) of the CAA provides that ``[t]his 
attainment demonstration must be based on photochemical grid modeling 
or any other analytical method determined by the Administrator, in the 
Administrator's discretion, to be at least as effective.'' As described 
in more detail below, the EPA allows states to supplement their 
photochemical modeling results, with additional evidence designed to 
account for uncertainties in the photochemical modeling, to demonstrate 
attainment. This approach is consistent with the requirement of section 
182(c)(2)(A) of the CAA that the attainment demonstration ``be based on 
photochemical grid modeling,'' because the modeling results constitute 
the principal component of EPA's analysis, with supplemental 
information designed to account for uncertainties in the model. This 
interpretation and application of the photochemical modeling 
requirement of section 182(c)(2)(A) finds further justification in the 
broad deference Congress granted EPA to develop appropriate methods for 
determining attainment, as indicated in the last phrase of section 
182(c)(2)(A).
    The flexibility granted to EPA under section 182(c)(2)(A) of the 
CAA is reflected in the regulations EPA promulgated for modeled 
attainment demonstrations. These regulations provide, ``The adequacy of 
a control strategy shall be demonstrated by means of applicable air 
quality models, data bases, and other requirements specified in [40 CFR 
part 51 Appendix W] (Guideline on Air Quality Models).'' \3\ 40 CFR 
51.112(a)(1). However, the regulations further provide, ``Where an air 
quality model specified in appendix W * * * is inappropriate, the model 
may be modified or another model substituted [with approval by EPA, and 
after] notice and opportunity for public comment * * *.'' Appendix W, 
in turn, provides that, ``The Urban Airshed Model (UAM) is recommended 
for photochemical or reactive pollutant modeling applications involving 
entire urban areas,'' but further refers to EPA's modeling guidance for 
data requirements and procedures for operating the model. 40 CFR 51 
App. W section 6.2.1.a. The modeling guidance discusses the data 
requirements and operating procedures, as well as interpretation of 
model results as they relate to the attainment demonstration. This 
provision references guidance published in 1991, but EPA envisioned the 
guidance would change as we gained experience with model applications, 
which is why the guidance is referenced, but does not appear, in 
Appendix W. With updates in 1996 and 1999, the evolution of EPA's 
guidance has led us to use both the photochemical grid model, and 
additional analytical methods approved by EPA.
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    \3\ The August 12, 1996 version of ``Appendix W to Part 51--
Guideline on Air Quality Models'' was the rule in effect for these 
attainment demonstrations. EPA is proposing updates to this rule, 
that will not take effect until the rulemaking process for them is 
complete.
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    The modeled attainment test compares model predicted 1-hour daily 
maximum ozone concentrations in all grid cells for the attainment year 
to the level of the NAAQS. The results may be interpreted through 
either of two modeled attainment or exceedance tests: the deterministic 
test or the statistical test. Under the deterministic test, a predicted 
(attainment year, 2007 for the Chicago-Gary-Lake County ozone 
nonattainment area) 1-hour ozone concentration above 0.124 parts per 
million (ppm) indicates that the area is expected to exceed the 
standard in the attainment year and a prediction at or below 0.124 ppm 
indicates that the area is expected to not exceed the standard. Under 
the statistical test, attainment is demonstrated when all predicted 
(i.e., modeled) 1-hour ozone concentrations inside the modeling domain 
are at, or below, an acceptable upper limit above the NAAQS permitted 
under certain conditions (depending on the severity of the episode 
modeled).\4\
---------------------------------------------------------------------------

    \4\ Guidance on the Use Of Modeled Results to Demonstrate 
Attainment of the Ozone NAAQS. EPA-454/B-95-007, June 1996.
---------------------------------------------------------------------------

    In 1996, EPA issued guidance \5\ to update the 1991 guidance 
referenced in 40 CFR 50 App. W, to make the modeled attainment test 
more closely reflect the form of the NAAQS (i.e., the statistical test 
described above), to consider the area's ozone design value and the 
meteorological conditions accompanying observed exceedances, and to 
allow consideration of other evidence to address uncertainties in the 
modeling databases and application. When the modeling does not 
conclusively demonstrate attainment, EPA has concluded that additional 
analyses may be presented to help determine whether the area will 
attain the standard. As with other predictive tools, there are inherent 
uncertainties associated with air quality modeling and its results. The 
inherent imprecision of the model means that it may be inappropriate to 
view the specific numerical result of the model as the only determinant 
of whether the SIP controls are likely to lead to attainment. The EPA's 
guidance recognizes these limitations, and provides a means for

[[Page 56949]]

considering other evidence to help assess whether attainment of the 
NAAQS is likely to be achieved. The process by which this is done is 
called a Weight-Of-Evidence (WOE) determination. Under a WOE 
determination, the state can rely on, and EPA will consider in addition 
to the results of the modeled attainment test, other factors such as 
other modeled output (e.g., changes in the predicted frequency and 
pervasiveness of 1-hour ozone NAAQS exceedances, and predicted change 
in the ozone design value); actual observed air quality trends (i.e., 
analyses of monitored air quality data); estimated emissions trends; 
and the responsiveness of the model predictions to further emission 
controls.
---------------------------------------------------------------------------

    \5\ Ibid.
---------------------------------------------------------------------------

    In 1999, EPA issued additional guidance \6\ that makes further use 
of model results for base case and future emission estimates to predict 
a future design value. This guidance describes the use of an additional 
component of the WOE determination, which requires, under certain 
circumstances, additional emission reductions that are or will be 
approved into the SIP, but that were not included in the modeling 
analysis, that will further reduce the modeled ozone design value. An 
area is considered to monitor attainment if each monitor site has air 
quality observed ozone design values (4th highest daily maximum ozone 
using the three most recent consecutive years of data) at or below the 
level of the standard. Therefore, it is appropriate for EPA, when 
making a determination that a control strategy will provide for 
attainment, to determine whether or not the model predicted future 
design value is expected to be at or below the level of the standard. 
Since the form of the 1-hour NAAQS allows exceedances, it did not seem 
appropriate for EPA to require the test for attainment to be ``no 
exceedances'' in the future model predictions. The method outlined in 
EPA's 1999 guidance uses the highest measured design value across all 
sites in the nonattainment area for each of three years. These three 
``design values'' represent the air quality observed during the time 
period used to predict ozone for the base emissions. This is 
appropriate because the model predicts the change in ozone from the 
base period to the future attainment date. The three yearly design 
values (highest across the area) are averaged to account for annual 
fluctuations in meteorology. The result is an estimate of an area's 
base year design value. The base year design value is multiplied by a 
ratio of the peak model predicted ozone concentrations in the 
attainment year (i.e., average of daily maximum concentrations from all 
days modeled) to the peak model predicted ozone concentrations in the 
base year (i.e., average of daily maximum concentrations from all days 
modeled). The result is an attainment year design value based on the 
relative change in peak model predicted ozone concentrations from the 
base year to the attainment year. Modeling results also show that 
emission control strategies designed to reduce areas of peak ozone 
concentrations generally result in similar ozone reductions in all core 
areas of the modeling domain, thereby providing some assurance of 
attainment at all monitors.
---------------------------------------------------------------------------

    \6\ ``Guidance for Improving Weight of Evidence Through 
Identification of Additional Emission Reductions, Not Modeled.'' 
U.S. Environmental Protection Agency, Office of Air Quality Planning 
and Standards, Emissions, Monitoring, and Analysis Division, Air 
Quality Modeling Group, Research Triangle Park, NC 27711. November 
1999. Web site: http://www.epa.gov/ttn/scram.
---------------------------------------------------------------------------

    In the event that the attainment year design value is above the 
standard, the 1999 guidance provides a method for identifying 
additional emission reductions, not modeled, which at a minimum provide 
an estimated attainment year design value at the level of the standard. 
This step uses a locally derived factor which assumes a linear 
relationship between ozone and the precursors.
    A commenter on our December 1999 proposed ozone rules criticized 
the 1999 guidance as flawed on grounds that it allows the averaging of 
the three highest air quality sites across a region, whereas EPA's 1991 
and 1996 modeling guidance requires that attainment be demonstrated at 
each site. This has the effect of allowing lower air quality 
concentrations to be averaged against higher concentrations thus 
reducing the total emission reduction needed to attain at the higher 
site. The commenter does not appear to have described the guidance 
accurately. The guidance does not recommend averaging across a region 
or spatial averaging of observed data. The guidance does recommend 
determination of the highest site in the region for each of the three-
year periods, determined by the base year modeled. For example, if the 
base year is 1990, it is the amount of emissions in 1990 that must be 
adjusted or evaluated (by accounting for growth and controls) to 
determine whether attainment results. These 1990 emissions contributed 
to three ozone design value periods (1988-90, 1989-91 and 1990-92). 
Under the approach of the guidance document, EPA determined the design 
value for each of those three-year periods, and then averaged those 
three design values, to determine the area's base ozone design value. 
This approach is appropriate because, as just noted, the 1990 emissions 
contributed to each of those periods, and there is no reason to believe 
the 1990 (episodic) emissions resulted in the highest or lowest of the 
three design values. Averaging the three years is beneficial for 
another reason: It allows consideration of a broader range of 
meteorological conditions--those that occurred throughout the 1988-1992 
period, rather than the meteorology that occurs in one particular year 
or even one particular ozone episode within that year. Further more, 
EPA relied on three-year averaging only for purposes of determining one 
component, i.e.--the small amount of additional emission reductions not 
modeled--of the WOE determination. The WOE determination, in turn, is 
intended to be part of a qualitative assessment of whether additional 
factors (including the additional emissions reductions not modeled), 
taken as a whole, indicate that the area is more likely than not to 
attain.
    A commenter on our December 1999 proposed ozone rules criticized 
the component of this WOE factor that estimates ambient improvement 
because it does not incorporate complete modeling of the additional 
emissions reductions. However, the regulations do not mandate, nor does 
EPA guidance suggest, that States must model all control measures being 
implemented. Moreover, a component of this technique--the estimation of 
the future ozone design value--should be considered a model predicted 
estimate. Therefore, results from this technique are an extension of 
``photochemical grid'' modeling and are consistent with Section 
182(c)(2)(A). Also, a commenter believes EPA has not provided 
sufficient opportunity to evaluate the calculations used to estimate 
additional emission reductions. EPA provided a full 60-day period for 
comment on all aspects of the proposed rules. EPA has received several 
comments on the technical aspects of the approach and the results of 
its application, as discussed above and in the responses to the 
individual SIPs.
    A commenter states that application of the method of attainment 
analysis in the December 16, 1999 guidance will yield a lower control 
estimate than if we relied entirely on reducing maximum predictions in 
every grid cell to less than or equal to 124 ppb on every modeled day. 
However, the commenter's approach may overestimate needed emission 
controls because the form of the standard allows

[[Page 56950]]

up to 3 exceedances in 3 years at every monitoring site, and, 
therefore, in every grid cell. If the model over-predicts observed 
concentrations, predicted controls may be further overestimated. EPA 
has considered other evidence, as described above through the weight of 
evidence determination.
    When reviewing a SIP, the EPA must make a determination that the 
control measures adopted are reasonably likely to lead to attainment. 
Reliance on the WOE factors allows EPA to make this determination based 
on a greater body of information presented by the States and available 
to EPA. EPA's decision was further strengthened by each State's 
commitment to check progress towards attainment in a mid-course review 
and to adopt additional measures, if the anticipated progress is not 
being made.
    A commenter further criticized EPA's technique for estimating the 
ambient impact of additional emissions reductions not modeled on 
grounds that EPA employed a rollback modeling technique that, according 
to the commenter, is precluded under EPA regulations. The commenter 
explained that 40 CFR 51 App. W section 6.2.1.e. provides, 
``Proportional (rollback/forward) modeling is not an acceptable 
procedure for evaluating ozone control strategies.'' Section 14.0 of 
appendix W defines ``rollback'' as ``a simple model that assumes that 
if emissions from each source affecting a given receptor are decreased 
by the same percentage, ambient air quality concentrations decrease 
proportionately.'' Under this approach if 20 percent improvement in 
ozone is needed for the area to reach attainment, it is assumed a 20 
percent reduction in VOC emissions would be required. There was no 
approach for identifying NOX reductions. The ``proportional 
rollback'' approach is based on a purely empirically/mathematically 
derived relationship. EPA did not rely on this approach in its 
evaluation of the attainment demonstrations. The prohibition in 
Appendix W applies to the use of a rollback method which is 
empirically/mathematically derived and independent of model estimates 
or observed air quality and emissions changes as the sole method for 
evaluating control strategies. For the demonstrations under proposal, 
EPA used a locally derived (as determined by the model and/or observed 
changes in air quality) ratio of change in emissions to change in ozone 
to estimate additional emission reductions to achieve an additional 
increment of ambient improvement in ozone. For example, if monitoring 
or modeling results indicate that ozone was reduced by 25 ppb during a 
particular period, and that VOC and NOX emissions fell by 20 
tons per day and 10 tons per day respectively during that period, EPA 
developed a ratio of ozone improvement related to reductions in VOC and 
NOX. This formula assumes a linear relationship between the 
precursors and ozone for a small amount of ozone improvement, but it is 
not a ``proportional rollback'' technique. Further, EPA uses these 
locally derived adjustment factors as a component to estimate the 
extent to which additional emissions reductions \7\--not the core 
control strategies--would reduce ozone levels and thereby strengthen 
the weight of evidence test. EPA uses the UAM to evaluate the core 
control strategies. This limited use of adjustment factors is more 
technically sound than the unacceptable use of proportional rollback to 
determine the ambient impact of the entire set of emissions reductions 
required under the attainment SIP. The limited use of adjustment 
factors is acceptable for practical reasons: It obviates the need to 
expend more time and resources to perform additional modeling. In 
addition, the adjustment factor is a locally derived relationship 
between ozone and its precursors based on air quality observations and/
or modeling which is more consistent with recommendations referenced to 
in Appendix W and does not assume a direct proportional relationship 
between ozone and its precursors. In addition, the requirement that 
areas perform a mid-course review (a check of progress toward 
attainment) provides a margin of safety.
---------------------------------------------------------------------------

    \1\ Not applicable to the Chicago area ozone attainment 
demonstration addressed in this final rule, but applicable for other 
ozone nonattainment areas for which EPA is also publishing final 
rules.
---------------------------------------------------------------------------

    A commenter expressed concerns that EPA used a modeling technique 
(proportional rollback) that was expressly prohibited by 40 CFR part 51 
Appendix W without expressly proposing to do so in a notice of proposed 
rulemaking. However, the commenter is mistaken. As explained above, EPA 
did not use or rely on a proportional rollback technique in the 
relevant rulemaking \8\ but used UAM to evaluate the core control 
strategies and then applied its WOE guidance. Therefore, because EPA 
did not use an ``alternative model'' to UAM, it did not trigger an 
obligation to modify Appendix W. Furthermore, EPA did propose to use 
the November 1999 guidance, ``Guidance for Improving Weight of Evidence 
Through Identification of Additional Emission Reductions, Not 
Modeled,'' in the December 16, 1999 NPR and has responded to all 
comments received on that guidance elsewhere in this final rule.
---------------------------------------------------------------------------

    \8\ The rulemaking referred to here is not a proposed rule 
covering the ozone attainment demonstration for the Chicago-Gary-
Lake County nonattainment area. Rather, the rulemaking referred to 
here is a proposed rule for an area found to have a shortfall in a 
state's ozone attainment demonstration. This type of proposed rule 
generally applied to one of the Northeastern States. This paragraph 
of the response is not applicable to the Indiana ozone attainment 
demonstration.
---------------------------------------------------------------------------

    A commenter also expressed concern that EPA applied unacceptably 
broad discretion in fashioning and applying the WOE determinations. For 
all of the attainment submittals proposed for approval in December 1999 
concerning serious and severe ozone nonattainment areas, EPA first 
reviewed the UAM results. In all cases, the UAM results did not pass 
the deterministic test. In two cases--Milwaukee and Chicago--the UAM 
results passed the statistical test; in the rest of the cases, the UAM 
results failed the statistical test. The UAM has inherent limitations 
that, in EPA's view, were manifest in all these cases. These 
limitations include: Only selected time periods were modeled, not the 
entire three-year period used as the definitive means for determining 
an area's attainment status. Also, there are inherent uncertainties in 
the model formulation and model inputs such as hourly emission 
estimates, emissions growth projections, biogenic emission estimates, 
and derived wind speeds and directions. As a result, for all areas, 
even Milwaukee and Chicago, EPA examined additional analyses to 
indicate whether additional SIP controls would yield meaningful 
reductions in ozone values. These analyses did not point to the need 
for additional emission reductions for Springfield, Greater 
Connecticut, Metropolitan Washington DC, Chicago and Milwaukee, but did 
point to the need for additional reductions, in varying amounts, in the 
other areas. As a result, the other areas submitted control 
requirements to provide the indicated level of emissions reductions. 
EPA applied the same methodology in these areas, but because of 
differences in the application of the model to the circumstances of 
each individual area, the results differed on a case-by-case basis.
    As another WOE factor, for areas within the NOX SIP Call 
domain, results from the EPA regional modeling for NOX 
controls as well as the Tier2/Low Sulfur program were considered. Also, 
for all of the areas, EPA considered recent changes in air quality and 
emissions. For some areas, this was helpful because there were emission

[[Page 56951]]

reductions in the most recent years that could be related to observed 
changes in air quality, while for other areas there appeared to be 
little change in either air quality or emissions. For areas in which 
air quality trends, associated with changes in emissions levels, could 
be discerned, these observed changes were used to help decide whether 
or not the emission controls in the plan would provide progress towards 
attainment.
    A commenter also complained that EPA has applied the WOE 
determinations to adjust modeling results only when those results 
indicate nonattainment, and not when they indicate attainment. First, 
we disagree with the premise of this comment: EPA does not apply the 
WOE factors to adjust model results. EPA applies the WOE factors as 
additional analysis to compensate for uncertainty in the air quality 
modeling. Second, EPA has applied WOE determinations to all of the 
attainment demonstrations proposed for approval in December 1999. 
Although for most of them, the air quality modeling results by 
themselves indicated nonattainment, for two metropolitan areas--Chicago 
and Milwaukee, including parts of the States of Illinois, Indiana, and 
Wisconsin, the air quality modeling did indicate attainment on the 
basis of the statistical test.
    A commenter further criticized EPA's application of the WOE 
determination on grounds that EPA ignores evidence indicating that 
continued nonattainment is likely, such as, according to the commenter, 
monitoring data indicating that ozone levels in many cities during 1999 
continue to exceed the NAAQS by margins as wide or wider than those 
predicted by the UAM. EPA has reviewed the evidence provided by the 
commenter. The 1999 monitor values do not constitute substantial 
evidence indicating that the SIPs will not provide for attainment. 
These values do not reflect either the local or regional control 
programs which are scheduled for implementation in the next several 
years. Once implemented, these controls are expected to lower emissions 
and thereby lower ozone values. Moreover, there is little evidence to 
support the statement that ozone levels in many cities during 1999 
continue to exceed the NAAQS by margins as wide or wider than those 
predicted by the UAM. Since areas did not model 1999 ozone levels using 
1999 meteorology and 1999 emissions which reflect emission reductions 
anticipated for control measures that are or will be approved into the 
SIP, there is no way to determine how the UAM predictions for 1999 
compare to the 1999 air quality. Therefore, we can not determine 
whether the monitor values exceed the NAAQS by a wider margin than the 
UAM predictions for 1999. In summary, there is little evidence to 
support the conclusion that high exceedances in 1999 will continue to 
occur after adopted control measures are implemented.
    In addition, a commenter argued that in applying the WOE 
determinations, EPA ignored factors showing that the SIPs under-predict 
future emissions, and the commenter included as examples certain mobile 
source emissions sub-inventories. EPA did not ignore possible under-
prediction in mobile emissions. EPA is presently evaluating mobile 
source emissions data as part of an effort to update the computer model 
for estimating mobile source emissions. EPA is considering various 
changes to the model, and is not prepared to conclude at this time that 
the net effect of all these various changes would be to increase or 
decrease emissions estimates. For attainment demonstration SIPs that 
rely on the Tier 2/Sulfur program for attainment or otherwise (i.e., 
reflect these programs in their motor vehicle emissions budgets), 
States have committed to revise their motor vehicle emissions budgets 
after the MOBILE6 model is released. EPA will work with States on a 
case-by-case basis if the new emission estimates raise issues about the 
sufficiency of the attainment demonstration. If analysis indicates 
additional measures are needed, EPA will take the appropriate action.
    Comment: A commenter notes that the SIP revisions addressed in the 
December 16, 1999 proposed rules claim emission reduction credits from 
relatively recent national EPA rulemakings for surface coatings and 
consumer products. In most cases, the emission reduction credit claimed 
is based on EPA estimates of emission reductions from proposed versions 
of these rules. The final versions of these rules, however, are weaker 
than the proposed rules in a number of key respects. Therefore, the 
emission credits claimed for these national rules must be recalculated 
to reflect only the actual emission reductions that can be expected 
under the EPA rules as finally adopted.
    Response: We respond to this comment by addressing each of EPA's 
rules for surface coatings and consumer products.

Architectural and Industrial Maintenance (AIM) Coatings

    EPA's March 22, 1995 memorandum \9\ allowed States to claim a 20 
percent reduction in VOC emissions from the AIM coatings category in 
ROP and attainment plans based on the anticipated promulgation of a 
national AIM coatings rule. In developing the attainment and ROP SIPs 
for their nonattainment areas, States relied on this memorandum to 
estimate emission reductions from the anticipated national AIM rule. 
EPA promulgated the final AIM rule in September 1998, codified at 40 
CFR Part 59 Subpart D. In the preamble to EPA's final AIM coatings 
regulation, EPA estimated that the regulation will result in 20 percent 
reduction of nationwide VOC emissions from AIM coatings categories (63 
FR 48855). The estimated VOC reductions from the final AIM rule 
resulted in the same level as those estimated in the March 1995 EPA 
policy memorandum. In accordance with EPA's final regulation, States 
have assumed a 20 percent reduction from AIM coatings source categories 
in its attainment and ROP plans. AIM coatings manufacturers were 
required to be in compliance with the final regulation within one year 
of promulgation, except for certain pesticide formulations which were 
given an additional year to comply. Thus all manufacturers were 
required to comply, at the latest, by September 2000. EPA believes that 
all emission reductions from the AIM coatings national regulation will 
occur by 2002, and, therefore, are creditable in the attainment and ROP 
plans.
---------------------------------------------------------------------------

    \9\ ``Credit for the 15 Percent Rate-of-Progress Plans for 
Reductions from the Architectural and Industrial Maintenance (AIM) 
Coating Rules,'' March 22, 1995, from John S. Seitz, Director, 
Office of Air Quality Planning and Standards to Air Division 
Directors, Regions I-X.
---------------------------------------------------------------------------

Autobody Refinish Coatings Rule

    According to EPA's guidance \10\ and proposed national rule, many 
States have claimed a 37 percent VOC emission reduction from this 
source category based on a proposed rule. However, EPA's final rule, 
``National Volatile Organic Compound Emission Standards for Automobile 
Refinish Coatings,'' published on September 11, 1998 (63 FR 48806), did 
not regulate lacquer topcoats and will result in a smaller emission 
reduction of around 33 percent overall nationwide. The 37 percent 
emission reduction from EPA's

[[Page 56952]]

proposed rule was an estimate of the total nationwide emission 
reduction. Since this number was an overall average, it was not 
applicable to any specific area. For example, in California the 
reduction from the national rule is zero because its rules are more 
stringent than the national rule. In the proposed rule, the estimated 
percentage reduction for areas that were unregulated before the 
national rule was about 40 percent. If an area were unregulated before 
the national rule, the 40 percent emission reduction would be our 
estimate except for one rule change made between proposal and final: 
The exemption of lacquer topcoats. As a result of that exemption, the 
estimated percentage reduction for previously unregulated areas is 
about 36 percent. Therefore, most areas will need to make up the 
approximately 1 percent difference in the reductions to be achieved 
from the final program and those assumed based on the proposed program. 
This emission reduction shortfall, is not considered to be the basis 
for disapproval of the current ozone attainment demonstration and post-
1999 ROP plan, which contain total emission reduction surpluses 
exceeding this shortfall.
---------------------------------------------------------------------------

    \10\ ``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,'' November 27, 1994, 
John S. Seitz, Director OAQPS, to Air Division Directors, Regions I-
X.
---------------------------------------------------------------------------

Consumer Products Rule

    According to EPA's guidance \11\ and proposed national rule, States 
have claimed a 20-percent VOC emission reduction from this source 
category. The final rule, ``National Volatile Organic Compound Emission 
Standards for Consumer Products,'' (63 FR 48819), published on 
September 11, 1998, will result in a 20-percent emission reduction. 
Therefore, the reductions obtained by States from the final national 
rule are consistent with the emission reduction credit which was 
claimed.
---------------------------------------------------------------------------

    \11\ ``Regulatory Schedule for Consumer and Commercial Products 
under Section 183(e) of the Clean Air Act'', June 22, 1995, John S. 
Seitz, Director OAQPS, to Air Division Directors, Regions I--X.
---------------------------------------------------------------------------

    Comment: A commenter states that the attainment and ROP 
demonstrations in most States are flawed because they assume a vehicle 
fleet mix that does not accurately reflect the growing proportion of 
sport utility vehicles (SUVs) and gasoline trucks, which pollute more 
than conventional cars. EPA and the States have not followed a 
consistent practice in updating ozone modeling to account for changes 
in vehicle fleets. The underestimation of emissions from this can be 
significant. Therefore, if the motor vehicle emissions inventory has 
not been updated to prepare the current SIP submission, the SIP should 
be disapproved.
    Response: All of the SIPs on which we are taking final action are 
based on the most recent vehicle data available at the time the SIP was 
submitted. Indiana uses the default vehicle mix in the most recent 
MOBILE model because local data is not available. The SIPs use the same 
vehicle fleet characteristics that were used in the most recent 
periodic inventory update. EPA requires the most recent available data 
to be used, but we do not require it to be updated on a specific 
schedule. Therefore, different SIPs base their fleet mix on different 
years of data. Our guidance does not suggest that SIPs should be 
disapproved on this basis. Nevertheless, we do expect that revisions to 
these SIPs that are submitted using MOBILE6 (as required in those cases 
where the SIP is relying on emissions reductions from the Tier 2 
standards) will use updated vehicle registration data appropriate for 
use with MOBILE6, whether it is updated local data or the updated 
national default data that will be part of MOBILE6.
    Comment: A commenter (as well as other commenters responding to 
EPA's December 16, 1999 ozone proposed rules) notes that the CAA 
requires nonattainment plans to provide for implementation of all RACM 
as expeditiously as practicable. The SIPs at issue in the December 16, 
1999 proposed rules do not meet these requirements. The plans contain 
only a limited set of emission control measures, and fail to offer any 
justification for the States' failure to adopt numerous available 
measures that were specifically identified by EPA and others. In 
addition, the SIPs contain no demonstration or claim that the emission 
control schedules are the earliest practicable ones.
    The commenter notes that the Phase II NOX limits agreed 
to by Ozone Transport Commission States are clearly RACM, as they are 
widely in effect. States that have adopted such measures have not 
adopted enforceable NOX RACT limits for all relevant 
facilities within their jurisdiction. It is not sufficient for States 
to assert that they will adopt additional NOX emission 
controls if needed. The CAA requires each SIP to include all RACM now, 
and to show that such measures have been adopted in legally enforceable 
forms.
    Response: Section 172(c)(1) of the CAA requires SIPs to contain 
RACM as necessary to provide for attainment as expeditiously as 
practicable. EPA has previously provided guidance interpreting the RACM 
requirements of 172(c)(1). See 57 FR 13498, 13560. In that guidance, 
EPA indicated its interpretation that potentially available measures 
that would not advance the attainment date for an area would not be 
considered RACM. EPA concluded that a measure would not be reasonably 
available if it would not advance attainment. EPA also indicated in 
that guidance that states should consider all potentially available 
measures to determine whether they were reasonably available for 
implementation in the area, and whether they would advance the 
attainment date. Further, states should indicate in their SIP 
submittals whether measures considered were reasonably available or 
not, and if measures are reasonably available they must be adopted as 
RACM. Finally, EPA indicated that states could reject potential RACM 
measures either because they would not advance the attainment date, 
would cause substantial widespread and long-term adverse impacts, or 
for various reasons related to local conditions, such as economics or 
implementation concerns. The EPA also issued a recent memorandum on 
this topic, ``Guidance on the Reasonably Available Control Measures 
(RACM) Requirement and Attainment Demonstration Submissions for Ozone 
Nonattainment Areas.'' John S. Seitz, Director, Office of Air Quality 
Planning and Standards. November 30, 1999. Web site: http://www.epa.gov/ttn/oarpg/t1pgm.html.
    More specifically with respect to the Chicago-Gary-Lake County 
nonattainment area, as noted elsewhere in this final rule and in the 
August 3, 2001 proposed rule, we have determined that the Indiana SIP 
does provide for the implementation of RACM. The State has been granted 
a waiver from adopting and implementing NOX RACT 
requirements in the nonattainment area. Therefore, these emission 
controls are not RACM for this area. Finally, the State has adopted and 
is implementing regional NOX controls, which have been 
demonstrated to support the attainment of the ozone standard.
    Although EPA encourages areas to implement available RACM measures 
as potentially cost effective methods to achieve emissions reductions 
in the short term, EPA does not believe that section 172(c)(1) requires 
implementation of potential RACM measures that either require costly 
implementation efforts or produce relatively small emissions reductions 
that will not be sufficient to allow any of the four areas to achieve 
attainment in advance of full implementation of all other required 
measures. Because we believe that additional control measures

[[Page 56953]]

are not reasonably available for the Lake and Porter Counties 
nonattainment area, EPA believes that the attainment date proposed for 
approval is as expeditious as practicable.
    Comment: A commenter states that the air quality plans are 
deficient with respect to Transportation Control Measures (TCMs). The 
plans contain no or few serious new measures to reduce growth in 
vehicle travel. Most plans do not seriously consider the possibility of 
major expansion of transit service, reduced or zero transit fares, 
pricing strategies, etc. There is also substantial evidence that 
significant air quality benefits can be achieved by modifying land 
development patterns to limit urban sprawl and to facilitate transit 
use. The commenter cites several examples that would apply to this 
issue. The States have generally not included any of these types of 
measures in their SIPs, and have have offered no justification for the 
failure to do so.
    Response: EPA has long advocated that States consider the kinds of 
control measures that the commenters have suggested, and EPA has indeed 
provided guidance on those measures. See, e.g., http://www.epa.gov/otaq/transp.htm. In order to demonstrate that they will attain the 1-
hour ozone NAAQS as expeditiously as practicable, some areas may need 
to consider and adopt a number of measures-including the kind that EPA 
itself evaluated in the RACM analysis for the three serious areas--that 
even collectively do not result in many emission reductions. 
Furthermore, EPA encourages areas to implement technically available 
and economically feasible measures to achieve emissions reductions in 
the short term-even if such measures do not advance the attainment 
date-since such measures will likely improve air quality. Also, over 
time, emission control measures that may not be RACM now for an area 
may ultimately become feasible for the same area due to advances in 
control technology or more cost-effective implementation techniques. 
Thus, areas should continue to assess the state of control technology 
as they make progress toward attainment and consider new control 
technologies that may in fact result in more expeditious improvement in 
air quality.
    The EPA's approach toward TCMs as RACM and the RACM requirement is 
grounded in the language of the Clean Air Act. Section 172(c)(1) states 
that a SIP for a nonattainment area must meet the following 
requirement, ``In general.--Such plan provisions shall provide for the 
implementation of all reasonably available control measures as 
expeditiously as practicable (including such reductions in emissions 
from existing sources in the area as may be obtained through the 
adoption, at a minimum, of reasonably available control technology) and 
shall provide for attainment of the national primary ambient air 
quality standards.'' [Emphasis added.] The EPA interprets this language 
as tying the RACM requirement to the requirement for attainment of the 
national primary ambient air quality standard. The CAA provides that 
the attainment date shall be ``as expeditiously as practicable but no 
later than * * * the deadlines specified in the CAA. EPA believes that 
the use of the same terminology in conjunction with the RACM 
requirement serves the purpose of specifying RACM as the way of 
expediting attainment of the NAAQS in advance of the deadline specified 
in the CAA. As stated in the ``General Preamble'' (57 FR 13498 at 
13560, April 16, 1992), ``The EPA interprets this requirement to impose 
a duty on all nonattainment areas to consider all available control 
measures and to adopt and implement such measures as are reasonably 
available for implementation in the area as components of the area's 
attainment demonstration.'' [Emphasis added.] In other words, because 
of the construction of the RACM language in the CAA, EPA does not view 
the RACM requirement as separate from the attainment demonstration 
requirement. Therefore, EPA believes that the CAA supports its 
interpretation that measures may be determined to not be RACM if they 
do not advance the attainment date. In addition, EPA believes that it 
would not be reasonable to require implementation of measures that 
would not in fact advance attainment. See 57 FR 13560.
    The term ``reasonably available control measure'' is not actually 
defined in the definitions in the CAA. Therefore, the EPA 
interpretation that potential measures may be determined not to be RACM 
if they require an intensive and costly effort for numerous small area 
sources is based on the common sense meaning of the phrase, 
``reasonably available.'' A measure that is reasonably available is one 
that is technologically and economically feasible and that can be 
readily implemented. Ready implemention also includes consideration of 
whether emissions from small sources are relatively small and whether 
the administrative burden, to the States and regulated entities, of 
controlling such sources was likely to be considerable. As stated in 
the General Preamble, EPA believes that States can reject potential 
measures based on local conditions including cost. 57 FR 13561.
    As described in the August 3, 2001 proposal, Indiana has considered 
a wide range of TCMs for the Lake and Porter County area. Indiana has 
implemented a number of TCMs using the Congestion Mitigation and Air 
Quality Program funds. These TCMs have not been included for credit in 
the SIP. Indiana has not included TCMs in the SIP, however, Indiana has 
met the ROP requirements and can meet the attainment demonstration 
requirements without taking credit for the generally small pollutant 
reductions from the implemented TCMs. The EPA has concluded that 
Indiana has considered and implemented all reasonably available TCMs. 
Any measures that have not been implemented and included would provide 
only marginal air quality improvements at significantly greater expense 
or with significant implementation barriers. All additional TCMs will 
not advance the attainment date because the TCMs will give only 
marginal improvements or are unreasonable because they are too 
difficult to implement.
    Comment: A commenter noted that a 1993 STAPPA report recommended 
adoption of a California or South Coast Air Quality Management District 
(SCAQMD) controls or emission limits for various source categories. The 
commenter mentions further possible control measures as well, and notes 
that none of the States offered consideration of these emission control 
measures accompanied by reasoned explanations for their rejection.
    Response: The State has completed the adoption of the ozone 
attainment demonstration and its associated emissions control strategy. 
We have determined that the SIP, as currently adopted by the State, 
addresses the implementation of RACM. Section 172(c)(1) of the CAA 
requires SIPs to contain RACM and provides for areas to attain as 
expeditiously as practicable. EPA has previously provided guidance 
interpreting the requirements of section 172(c)(1). See 57 FR 13498, 
13560. In that guidance, EPA indicated its interpretation that 
potentially available measures that would not advance the attainment 
date for an area would not be considered to be RACM. EPA also indicated 
in that guidance that States should consider all potentially available 
emission control measures to determine whether they are potentially 
available for implementation in an area and whether they would advance 
the attainment date. Further, States should indicate in their SIPs 
whether emission control measures considered were

[[Page 56954]]

reasonably available or not, and, if measures are reasonably available, 
they must be adopted by the States as RACM. Finally, EPA indicated that 
States could reject emission control measures as not being RACM because 
they would cause substantial widespread and long-term adverse impacts, 
or would be economically or technologically infeasible. This policy has 
been detailed in other comments addressing RACM and comments suggesting 
other measures that could have been considered for implementation.
    As stated in the August 3, 2001 proposal, the State of Indiana, 
along with the other Lake Michigan Air Directors Consortium (LADCO) 
states,\12\ considered a wide range of measures for their reduction 
potential, cost and ease of implementation. The State of Indiana has 
implemented measures which have met the required ROP reductions and 
have also been modeled to achieve attainment of the 1-hour ozone 
standard in the attainment demonstration, which demonstrates that the 
Lake Michigan area can achieve attainment of the 1-hour ozone standard 
by the 2007 attainment date. Indiana relies in large part on emission 
reductions from outside of the Lake and Porter County area resulting 
from EPA's NOX SIP call rule or section 126 NOX 
rule (65 FR 2674, January 18, 2000) to reach attainment of the ozone 
standard. In the NOX SIP call (63 FR 57356), we concluded 
that NOX emission reductions from various upwind States were 
necessary to provide for timely attainment of the 1-hour ozone standard 
in nonattainment areas in various downwind States, including Illinois 
on both counts. The NOX SIP call established requirements 
for control of sources of significant emissions in the relevant upwind 
States. These NOX emission reductions are not expected to be 
fully implemented until May 2004. The ozone attainment demonstration 
for Indiana indicates that the ozone reduction benefit expected to be 
achieved from the regional NOX emission reductions is 
substantial. We have seen no evidence for similar ozone benefits 
resulting from Indiana-specific emission controls not already adopted 
by the State that would significantly advance the attainment date for 
the Chicago-Gary-Lake County ozone nonattainment area earlier than 
2007. Therefore, EPA concludes, based on the available documentation, 
that the emission reductions from additional emission control measures 
will not advance attainment, and, thus none of the possible additional 
emission control measure can be considered to be RACM for the purposes 
of section 172(c)(1) of the CCA.
---------------------------------------------------------------------------

    \12\ To find regional solutions to the ozone nonattainment 
problems in the Lake Michigan, the States of Illinois, Indiana, 
Michigan, and Wisconsin have organized and participated in LADCO, in 
which all four States are represented in various ozone modeling 
analyses and control strategy reviews.
---------------------------------------------------------------------------

    Comment: A commenter states that MVEBs in the State plans are by 
definition inadequate because the plans do not demonstrate timely 
attainment or contain the emission reductions required for all RACM. 
The commenter asserts that the EPA may not find as adequate a MVEB that 
is derived from a SIP that is inadequate for the purposes for which it 
is submitted. The commenter believes that none of the MVEBs in the 
state plans addressed in the December 16, 1999 proposed rules are 
consistent with either the level of emissions achieved by 
implementation of all RACM, nor are they derived from SIPs that provide 
for attainment.
    Response: As noted above and in the August 3, 2001 proposed rule, 
we have determined that the State's air quality plan does reflect the 
adoption and implementation of RACM. The plan also contains MVEBs based 
on the plan's ozone attainment demonstration. Therefore, we disagree 
with the commenters assertion that we cannot approve the plan's MVEBs.
    Comment: A commenter notes that the CAA requires the SIPs to 
include a program to provide for the enforcement of the adopted control 
measures. Most plans address this requirement, however, none of the 
plans clearly set out programs to provide for enforcement of the 
various emission control strategies relied on for emission reduction 
credit.
    Response: State enforcement program elements are contained in SIP 
revisions previously approved by EPA under obligations for enforceable 
emission limitations set out in section 110 of the CAA. Once approved 
by the EPA, there is no need for States to readopt and resubmit their 
enforcement programs with each and every SIP revision generally 
required by other sections of the CAA.
    To the extent that the ozone attainment demonstration and ROP plan 
depends on specific State emission control regulations, it must be 
noted that the individual regulations have undergone review by the EPA. 
The regulations (rules) contain specific enforcement mechanisms, such 
as record keeping and reporting requirements, which the EPA has 
approved. These regulations also provide for periodic State inspections 
and reviews of the affected sources. EPA's reviews of these regulations 
includes reviews of the enforceability of the regulations. Rules that 
are not enforceable are generally not approved by the EPA. It is not 
necessary for the State to submit separate enforcement program plans 
for these regulations other than those required under section 110 of 
the CAA, as noted above.
    Comment: For States that need additional VOC emission reductions, 
this commenter recommends a process to achieve these VOC emission 
reductions, which involves the use of HFC-152a (1,1 difluoroethane) as 
the blowing agent in the manufacture of polystyrene products, such as 
food trays and egg cartons. HFC-152a could be used instead of 
hydrocarbons as a blowing agent. Use of HFC-152a, which is classified 
as a non-VOC (VOC exempt), would eliminate nationwide the entire 25,000 
tons per year of VOC emissions from this industry.
    Response: EPA met with the commenter and discussed the technology 
described in the comment. Since the HFC-152a is VOC exempt, its use 
would give a VOC reduction compared to the use of VOCs, such a pentane 
or butane, as blowing agents. EPA, however, has not studied this 
technology exhaustively. It is each State's prerogative to specify 
which measures it will adopt in order to achieve the additional VOC 
reductions it needs. In evaluating the use of HFC-152a, States may want 
to consider claims that products made with this blowing agent are 
comparable in quality to products made with other blowing agents. Also, 
the question of the over-all long term environmental effect of 
encouraging emissions of fluorine compounds would be relevant to 
consider. This is a technology which States may want to consider, but 
ultimately, the decision of whether to require this particular 
technology to achieve the necessary VOC emissions reductions must be 
made by each affected State. Finally, EPA notes that under the 
Significant New Alternatives Policy (SNAP) program, created under CAA 
section 612, EPA has identified acceptable foam blowing agents, many of 
which are not VOCs (http://www.epa.gov/ozone/title6/snap/).
    Comment: A commenter agrees with the concept of a mid-course 
review, but recommends that it be done in 2004 rather than 2003. In 
2003, anticipated NOX controls will have only been in effect 
for one ozone season. IDEM does not believe that critical planning 
decisions should be based on a single year's worth of data, given how 
weather dependent ozone levels can be. USEPA should revise the approval 
to provide

[[Page 56955]]

that the mid-course review is done in 2004, after a second year of 
ozone season data is available.
    Response: EPA understands the issue of timing. However, the timing 
issue involves balancing two critical factors. On the one hand, for a 
MCR to be useful in flagging the need to make changes to an emissions 
control strategy in time to affect attainment by the attainment date 
(by November 15, 2007 for the Chicago nonattainment area), it needs to 
be done sufficiently in advance of the attainment date. On the other 
hand, the MCR would be able to discern more accurately whether progress 
is being made if there were sufficient emission reductions that 
occurred in the time period between the attainment demonstration 
modeling and the time the MCR is performed. Thus, in reviewing a 
state's commitment regarding the performance of a MCR for any specific 
area, EPA must appropriately accommodate these two factors. In general, 
EPA believes that the states should perform the MCR for ozone 
nonattainment areas within the NOX SIP Call region (which 
includes Illinois) immediately following the first ozone season (April 
15 through October 15 for the Chicago nonattainment area) during which 
sources are required to comply with the state's NOX SIP. 
Because the Court extended the source compliance deadline for the 
NOX SIP Call until May 31, 2004, EPA generally believes that 
for areas in the Eastern United States, the most appropriate time to 
perform the MCR would be following the 2004 ozone season.
    The December 16, 1999 NPRs for the ten serious and severe ozone 
nonattainment areas noted that, for serious areas with an attainment 
date extension to 2005 or earlier, it would be impracticable to perform 
a mid-course review per se. The NPRs asked the states to commit instead 
to an early assessment of whether attainment will be achieved. See for 
example 64 FR 70319 at 70325 (NPR for the Western Massachusetts ozone 
nonattainment area). Thus, EPA did not base its recommendation for the 
MCR in 2003 on the assumption that the 18 to 24 month period between 
completion of the MCR and November 2005 would be a sufficient period to 
ensure attainment for serious nonattainment areas by 2005. EPA, 
however, continues to believe that for areas with an attainment date of 
2007, the best balance in terms of timing for the MCR is to ensure that 
the area has several years between completion of the MCR and its 
attainment date in order for the state and EPA to assess the need for 
the state (or perhaps upwind states) to adopt and implement additional 
controls. Due to the court-ordered delay in the mandatory source 
compliance date under the NOX SIP Call, EPA believes that 
performing the MCR by the end of 2004 best accommodates the need for 
emission controls to be implemented and the need for EPA and states to 
have time to take action in response to the MCR.
    With regard to the timing of the MCR for severe nonattainment areas 
versus serious nonattainment areas, as noted above, we conceptually 
agree with the commenter. Performing the MCR after the implementation 
of significant emission controls and after assessing the ozone data for 
the time period following the implementation of these emission controls 
would provide a more robust MCR with fewer assumptions regarding the 
impacts of the emission controls on ozone levels. Nonetheless, to allow 
for sufficient time to prepare and implement supplemental emission 
controls, if needed, prior to the ozone standard attainment deadline, 
the MCR must be conducted several years prior to the attainment 
deadline. A sufficient lead time of 2 to 3 years is believed to be 
reasonable. Therefore, for a severe ozone nonattainment area with a 
2007 attainment deadline, the MCR should be conducted no later than 
late 2004. Indiana's commitment to conduct the MCR by the end of 2004 
meets this recommendation.
    Please note from the August 3, 2001 proposed rule that we are 
proposing to approve Indiana's commitment to conduct the MCR by the end 
of 2004, after the implementation of the State's NOX 
emission control rules in compliance with EPA's NOX SIP 
Call. This timing may not allow the State to collect and quality assure 
ozone data from the entire 2004 ozone season (the State is allowed up 
to 90 days following a calendar quarter to quality assure the ozone 
data and submit the data to the EPA) following ``normal'' quality 
assurance schedules and to include all of these data in the 2004 MCR. 
The State may have to expedite the quality assurance of the 2004 ozone 
data to include as many of the 2004 ozone data as possible in the MCR. 
On the other hand, the State should be able to project the impacts of 
the NOX emission control rules using new or available ozone 
modeling and the 2001-2003 ozone data to draw some MCR conclusions.
    Conducting a MCR by the end of 2004 will make it difficult for the 
State to fully quality assure and incorporate the ozone season ozone 
data for 2004 into the MCR while still allowing time for preparation of 
the MCR and public review and input into this process. Nonetheless, as 
noted above, the use of current ozone data is only one metric that may 
be taken into consideration in this process. In addition, the State 
will be able to take into consideration ozone data through 2003 which 
should be quality assured well before the production of the MCR. The 
State may also choose to pursue expedited quality assurance of the 2004 
data if the State considers that to be an overwhelming need for the 
purposes of preparing the MCR, although such data use is not required 
by the EPA.
    We assume that the State will use all available data in the 
preparation of the MCR. To the extent 2004 data are available, the 
state is encouraged to make use of such data.
    Comment: Given the current status of the EPA's NOX SIP 
Call rule, a commenter recommends that the EPA continue to allow 
Indiana and the other LADCO states the flexibility to adjust their 
plans for ozone and precursor emission reductions from upwind areas.
    Response: Since this comment was submitted the ``status'' of the 
NOX SIP Call has largly been resolved. On March 3, 2000, the 
U.S. Court of Appeals for the District of Columbia Circuit (D.C. 
Circuit) upheld EPA's rules in most respects. EPA and the States are 
moving forward to implement those portions of the rule that have been 
upheld. The court remanded two issues to EPA, and EPA has provided that 
the States did not need to address in the SIPs due in October 2000, the 
small portion of the budget allocated with these remanded issues. EPA 
intends to address these remanded issues through notice and comment 
rulemaking and, as appropriate, establish a schedule for states to 
submit SIPs addressing those outstanding portions of the SIP Call 
budgets.
    Comment: A commenter believes that it is unnecessary to force 
states to rely upon the level of NOX reductions anticipated 
from the NOX SIP Call to achieve their attainment goals if 
more recent modeling and monitoring data show that sufficient 
reductions can be attained by other less stringent means.
    Response: EPA's modeling to determine the region-wide impacts of 
the NOX SIP call clearly shows regional transport of ozone 
and its precursors is impacting nonattainment areas several states away 
and NOX control benefits for lowered downwind ozone 
concentrations are not limited to nearby nonattainment areas. 
Reductions in ozone transport associated with the collective 
application of the NOX emission budgets in upwind States are 
expected to provide substantial benefits in downwind areas, 63 FR 
57447. The purpose of the NOX SIP Call was to address long 
range ozone transport. EPA

[[Page 56956]]

has not mandated that any State rely on NOX emissions from 
the NOX SIP call as part of their attainment demonstration. 
However, a decision by a State not to rely on these reductions for 
purposes of attainment does not alleviate that State's burden to reduce 
NOX emissions to benefit downwind nonattainment areas in 
other States.
    Comment: A commenter urges EPA not to include language in the 
rulemaking that will hinder the LADCO states efforts to achieve their 
goals. These states are continuing to evaluate both the level and type 
of controls in their respective states to solve the 1-hour ozone 
problem and the longer range ozone transport issue.
    Response: This final approval approves rules and modeling which the 
State has chosen to address the 1-hour ozone problem. This final rule, 
in no way, hinders the LADCO States from considering additional 
emission controls to further lower local ozone concentrations and to 
further reduce the transport of ozone downwind.
    Note that this comment was made relative to our December 16, 1999 
proposed rule. This proposed rule was essentially replaced by the 
August 3, 2001 proposed rule, and, subsequent to the publication of the 
December 16, 1999 proposed rule, Indiana has completed its ozone 
nonattainment demonstration for the Chicago-Gary-Lake County ozone 
nonattainment area and has adopted the NOX emission control 
rules required by EPA's NOX SIP Call to reduce the downwind 
transport of ozone.
    Comment: The commenter supports the efforts of the EPA to help 
bring the Chicago-Gary-Lake County nonattainment area into compliance 
with the 1-hour ozone NAAQS and applauds the efforts of the LADCO 
states to cooperatively address this regional problem.
    Response: The EPA appreciates the support of the commenter and 
agrees that LADCO has done an excellent job of selecting and evaluating 
ozone attainment strategies.
    Comment: We received a number of comments about the process and 
substance of EPA's review of the adequacy of motor vehicle emissions 
budgets for transportation conformity purposes.
    Response: We have completed our review of the adequacy of these 
SIPs, and we have found the motor vehicle emissions budgets in all of 
these SIPs to be adequate. We responded to all comments related to 
adequacy when we issued our adequacy findings, and therefore we are not 
listing the individual comments or responding to them here. You may 
access our findings of adequacy and responses to comments at 
www.epa.gov/otaq/traq (once there, click on the ``conformity'' button). 
EPA regional contacts are identified on the web site.
    Comment: One commentor generally supports a policy of requiring 
motor vehicle emissions budgets to be recalculated when revised MOBILE 
models are released.
    Response: The Phase II attainment demonstrations that rely on Tier 
2 emission reduction credit contain commitments to revise the motor 
vehicle emissions budgets after MOBILE6 is released. As noted elsewhere 
in this final rule, Indiana has committed to revising the motor vehicle 
emission budgets within two years after EPA releases the MOBILE6 
emission factor model.
    Comment: The revised budgets calculated using MOBILE6 will likely 
be submitted after EPA has approved the MOBILE5 budgets. EPA's policy 
is that submitted SIPs may not replace approved SIPs.
    Response: This is the reason that EPA proposed in the July 28, 
2000, Supplemental Notice of Proposed Rulemaking (65 FR 46383) that the 
approval of the MOBILE5 budgets for conformity purposes would last only 
until MOBILE6 budgets had been submitted and found adequate. In this 
way, the MOBILE6 budgets can apply for conformity purposes as soon as 
they are found adequate.
    Comment: If a state submits additional control measures that affect 
the motor vehicle emissions budget, but does not submit a revised motor 
vehicle emissions budget, EPA should not approve the attainment 
demonstration.
    Response: EPA agrees. The motor vehicle emissions budgets in the 
Indiana ozone attainment demonstration reflect the motor vehicle 
control measures in the attainment demonstration.
    Comment: A commenter states that EPA should make it clear that the 
motor vehicle emissions budgets used for conformity purposes will be 
determined from the total motor vehicle emissions reductions required 
in the SIP, even if the SIP does not explicitly quantify a revised 
motor vehicle emissions budget.
    Response: EPA will not approve SIPs without motor vehicle emissions 
budgets that are explicitly quantified for conformity purposes. The 
Indiana attainment demonstration contains explicitly quantified motor 
vehicle emissions budgets.
    Comment: If a state fails to follow through on its commitment to 
submit the revised motor vehicle emissions budgets using MOBILE6, EPA 
could find a failure to submit a portion of a SIP, which would trigger 
a sanctions clock under section 179.
    Response: If a state fails to meet its commitment, EPA could find a 
failure to implement the SIP, which would start a sanctions clock under 
section 179 of the Act.
    Comment: If the budgets recalculated using MOBILE6 are larger than 
the MOBILE5 budgets, then attainment should be demonstrated again.
    Response: As EPA proposed in its December 16, 1999 notices, we will 
work with states on a case-by-case basis if the new emissions estimates 
raise issues about the sufficiency of the attainment demonstration.
    Comment: If the MOBILE6 emission budgets are smaller than the 
MOBILE5 emission budgets, the difference between the budgets should not 
be available for reallocation to other sources, unless air quality data 
show that the area is in attainment of the standard and a revised 
attainment demonstration is submitted that demonstrates that the 
increased emissions are consistent with attainment and maintenance. 
Similarly, the MOBILE5 budgets should not be retained (when MOBILE6 is 
used for conformity demonstrations) unless the above conditions are 
met.
    Response: EPA agrees that if recalculation using MOBILE6 shows 
lower motor vehicle emissions than MOBILE5, then these motor vehicle 
emission reductions cannot be reallocated to other sources or assigned 
to the motor vehicle emissions budget as a safety margin unless the 
area reassesses the analysis in its attainment demonstration and shows 
that it will still attain. In other words, the area must assess how its 
original attainment demonstration is impacted by using MOBILE6 versus 
MOBILE5 before it reallocates any apparent motor vehicle emission 
reductions resulting from the use of MOBILE6. Since Illinois has 
committed to submit MOBILE6 budgets within two years of the model's 
release and EPA's approval of the MOBILE5 budgets is limited, the 
MOBILE5 budgets will not be retained once the MOBILE6 budgets have been 
found adequate.
    Comment: We received a comment on whether the grace period before 
MOBILE6 is required in conformity determinations will be consistent 
with the schedules for revising SIP motor vehicle emissions budgets 
(``budgets'') within one or two years of MOBILE6's release.
    Response: This comment is not germane to this rulemaking, since the

[[Page 56957]]

MOBILE6 grace period for conformity determinations is not explicitly 
tied to EPA's SIP policy and approvals. However, EPA understands that a 
longer grace period would allow some areas to better transition to new 
MOBILE6 budgets. EPA is considering the maximum two year grace period 
allowed by the conformity rule, and EPA will address this in the future 
when we release the final MOBILE6 emissions model and policy guidance.
    Comment: One commenter asked EPA to clarify in the final rule 
whether MOBILE6 will be required for conformity determinations once new 
MOBILE6 budgets are submitted and found adequate.
    Response: This comment is not germane to this rulemaking. However, 
it is important to note that EPA intends to clarify its policy for 
implementing MOBILE6 in conformity determinations when we release the 
final MOBILE6 model. EPA believes that MOBILE6 should be used in 
conformity determinations once new MOBILE6 budgets are found adequate.
    Comment: One commenter did not prefer the additional option for a 
second year before the state has to revise the conformity budgets with 
MOBILE6, since new conformity determinations and new transportation 
projects could be delayed in the second year.
    Response: EPA proposed the additional option to provide further 
flexibility in managing MOBILE6 budget revisions. The supplemental 
proposal did not change the original option to revise budgets within 
one year of MOBILE6's release. State and local governments may continue 
to use the one-year option, if desired, or submit a new commitment 
consistent with the alternative two-year option. EPA expects state and 
local agencies to consult on which option is appropriate, and consider 
the impact on future conformity determinations. Indiana has committed 
to revise its budgets within two years of MOBILE6's release.

V. Final Rulemaking Action

    In this rulemaking action, we are fully approving Indiana's 1-hour 
ozone attainment demonstration SIP submitted on December 21, 1999, as 
meeting the requirements of sections 182(c)(2) and (d) of the CAA. 
Specifically, we are approving the following elements of the SIP: 1) 
the modeled attainment demonstration, 2) a post-1999 ozone ROP plan 
with associated ROP motor vehicle emissions budgets, 3) a revision to 
the NOX waiver, 4) contingency measure plans for both the 
ozone attainment demonstration and the post-1999 ROP plan, 5) the motor 
vehicle emissions budgets for the 2007 attainment year, until such time 
that a revised budget is submitted and found adequate for conformity 
purposes as called for by the state in its commitment to recalculate 
and apply a revised budget for conformity within two years of the 
formal release of MOBILE6, 6) the RACM analysis, 7) the commitment to 
conduct a mid-course review of the attainment status of the Lake 
Michigan area, and 8) an agreed order between U.S. Steel (currently USX 
Corporation) and the IDEM signed by IDEM on March 22, 1996, which 
requires U.S. Steel to establish a coke plant process water treatment 
plant at its Gary Works. Today's action finalizes approval of Indiana's 
1-hour ozone attainment demonstration SIP revision.

VI. Administrative Requirements

    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. For this 
reason, 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). This action 
merely approves state law as 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. Sec. 601 et seq.). 
Because this rule approves 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 (Public Law 104-4). This rule also 
does 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 (65 FR 67249, November 9, 2000), nor will it 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), because it 
merely approves a state rule implementing a federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. This rule also is 
not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), 
because it is not economically significant.
    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's 
action does not require the public to perform activities conducive to 
the use of VCS. As required by section 3 of Executive Order 12988 (61 
FR 4729, February 7, 1996), in issuing this rule, EPA has taken the 
necessary steps to eliminate drafting errors and ambiguity, minimize 
potential litigation, and provide a clear legal standard for affected 
conduct. EPA has complied with Executive Order 12630 (53 FR 8859, March 
15, 1988) by examining the takings implications of the rule in 
accordance with the ``Attorney General's Supplemental Guidelines for 
the Evaluation of Risk and Avoidance of Unanticipated Takings'' issued 
under the executive order. This rule does not impose an information 
collection burden under the provisions of the Paperwork Reduction Act 
of 1995 (44 U.S.C. Sec. 3501 et seq.).
    The Congressional Review Act, 5 U.S.C. section 801 et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit 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 United States 
prior to publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
Sec. 804(2).
    This rule will be effective December 13, 2001.
    Under section 307(b)(1) of the Act, petitions for judicial review 
of this action must be filed in the United States

[[Page 56958]]

Court of Appeals for the appropriate circuit by January 14, 2002. 
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, Incorporation by 
reference, Intergovernmental relations, Nitrogen Oxides, Ozone, 
Volatile Organic Compounds.

    Dated: October 15, 2001.
David A. Ullrich,
Deputy Regional Administrator, Region 5.

    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 et seq.

Subpart P--Indiana

    2. Section 52.770 is amended by adding paragraph (c)(145) to read 
as follows:


Sec. 52.770  Identification of Plan.

* * * * *
    (c) * * *
    (145) Indiana submitted on December 17, 1997, as part of the 9% 
Rate of Progress Plan, an agreed order between U.S. Steel and the 
Indiana Department of Environmental Management. Section 3 of Exhibit E 
requires U.S. Steel to establish a coke plant process water treatment 
plant at its Gary Works.
    (i) Incorporation by Reference.
    (A) Section 3 of Exhibit E of the March 22, 1996, Agreed Order 
between U.S. Steel (currently USX Corporation) and the Indiana 
Department of Environmental Management.

    3. Section 52.777 is amended by adding paragraph (y) to read as 
follows:


Sec. 52.777  Control strategy: photochemical oxidants (hydrocarbons).

* * * * *
    (y) Lake and Porter Counties Attainment Demonstration Approval--On 
December 21, 2000, Indiana submitted a 1-hour ozone attainment 
demonstration plan as a requested revision to the Indiana State 
Implementation Plan. This approval includes: A modeled demonstration of 
attainment, a plan to reduce ozone precursor emissions by 3 percent per 
year from 2000 to 2007, and associated conformity budgets for 2002 and 
2005, a revision to the NOX waiver, a contingency measures 
plan for both the ozone attainment demonstration and the post-1999 ROP 
plan, the conformity budgets for the 2007 attainment year, until such 
time that revised budgets are submitted and found adequate for 
conformity purposes as called for by the state in its commitment to 
recalculate and apply a revised budget for conformity within two years 
of the formal release of MOBILE6, the RACM analysis, the commitment to 
conduct a mid-course review of the attainment status of the Lake 
Michigan area, and an agreed order between U.S. Steel (currently USX 
Corporation) and the IDEM signed by IDEM on March 22, 1996, which 
requires U.S. Steel to establish a coke plant process water treatment 
plant at its Gary Works. Today's action finalizes approval of Indiana's 
1-hour ozone attainment demonstration SIP revision.

[FR Doc. 01-27722 Filed 11-9-01; 8:45 am]
BILLING CODE 6560-50-P