[Federal Register Volume 68, Number 41 (Monday, March 3, 2003)]
[Rules and Regulations]
[Pages 9892-9895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5024]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN 140-3; FRL-7457-3]


Conditional Approval of Implementation Plan; Indiana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Indiana Department of Environmental Management (IDEM) has 
submitted to EPA requested revisions to its Prevention of Significant 
Deterioration (PSD) State Implementation Plan (SIP). Due to the receipt 
of adverse comments, EPA is withdrawing its January 15, 2003 direct 
final action, which conditionally approved the state's submission. In 
this action, EPA responds to the public comments received, and takes 
final action to conditionally approve Indiana's PSD provisions.

DATES: This rule is effective on April 2, 2003.

ADDRESSES: Copies of the documents relevant to this action are 
available for inspection during normal business hours at the following 
location: Permits and Grants Section, Air Programs Branch (AR-18J), 
U.S. Environmental Protection Agency, Region 5, 77 West Jackson 
Boulevard, Chicago, Illinois, 60604. Please contact Julie Capasso at 
(312) 886-1426 before visiting the Region 5 office. Written comments 
should be sent to: Pamela Blakley, Chief, Permits and Grants Section 
(IL/IN/OH), Air Programs Branch (AR-18J), U.S. Environmental Protection 
Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Julie Capasso, Environmental 
Scientist, Permits and Grants Section (IL/IN/OH), Air Programs Branch, 
(AR-18J), U.S. Environmental Protection Agency, Region 5, 77 West 
Jackson Boulevard, Chicago, Illinois 60604, telephone (312) 886-1426.

SUPPLEMENTARY INFORMATION: This supplementary information section is 
organized as follows:

A. What is the background of this action?
B. What comments did EPA receive and what are EPA's responses?
C. What action is EPA taking today?
D. Statutory and Executive Order Reviews

A. What Is the Background of This Action?

    EPA is approving revisions to Indiana's SIP for PSD. IDEM submitted 
these revisions to EPA on February 1, 2002, following an informal 
review by EPA in which a number of issues were identified and resolved 
by the two agencies. On January 15, 2003, EPA published a direct final 
rule conditionally approving these revisions (68 FR 1970). On the same 
date, EPA also proposed to approve the revisions (68 FR 1998). In a 
separate action, we withdrew the direct final rule because we received 
adverse comments. The proposed approval remained in effect. Today we 
are responding to those comments and taking final action to 
conditionally approve Indiana's SIP revision request.
    In our January 15, 2003 direct final rulemaking, we discussed the 
history of Indiana's PSD program, the contents of the State's 
submission and our analysis. Please consult that document for further 
information on those matters.
    On December 31, 2002, EPA published revisions to its New Source

[[Page 9893]]

Review (NSR) regulations, including PSD (67 FR 80186). These revisions, 
which do not take effect until March 3, 2003, will change existing NSR 
requirements in a number of ways. States which have approved programs 
under 40 CFR part 51 (as Indiana now has as a result of today's 
action), will have up to three years in which to adopt and submit 
revisions implementing the new requirements.

B. What Comments Did EPA Receive and What Are EPA's Responses?

    EPA received the comments described below from a number of parties, 
including corporations, trade associations and private citizens.
    Comment: The proposed SIP does not comport with current EPA 
requirements because it does not incorporate the alternative fuel/raw 
material exemption of 40 CFR 51.166(b)(2)(iii)(e). The commentor 
contends that this omission is significant because it means that 
Indiana's rule fails to provide an exemption for ``certain anticipated 
operational fluctuations, thereby potentially triggering [NSR] in 
Indiana for otherwise federally exempt minor modifications.''
    Response: As noted in EPA's January 15, 2003 direct final 
rulemaking notice, this provision may inadvertently allow changes 
prohibited in a previously-issued minor construction permit to qualify 
for the alternative fuel/raw material exemption. Indiana's regulatory 
language does not prevent minor sources from applying this provision 
when appropriate to avoid PSD applicability. As EPA also previously 
noted, Indiana has agreed to address this inadvertent omission within 
one year of the effective date of approval (68 FR 1971). EPA does not 
believe that this minor, inadvertent omission warrants the disapproval 
of the rules.
    Comment: Indiana's rule fails to address ``pollution control 
projects.''
    Response: Currently, federal PSD regulations provide an exemption 
only for pollution control projects installed at electric utility steam 
generating units. As a result, Indiana did not submit to EPA for 
approval of its provision extending the exemption to non-utility 
sources; and EPA, therefore, could not take any action on the State's 
provision.
    Comment: The Indiana regulations include a definition of 
``pollution control project.'' In addition, Indiana regulations omit 
the word ``utility'' from the term ``electric utility steam generating 
unit'' in the pollution control project exclusion portion of the 
definition of ``major modification'' in 326 IAC 2-2-1(x)(2)(H).
    Response: As stated above, IDEM did not submit its pollution 
control project provision to EPA. Therefore, this definition is merely 
extraneous. In addition, any comments relative to this provision are 
not relevant.
    Comment: IDEM's Office of Environmental Adjudication (OEA) does not 
provide the same amount of time to file an appeal of a PSD 
determination as does EPA's Environmental Appeals Board under 40 CFR 
124.19. In addition, if an appellant sought to stop construction of a 
facility, the OEA would require the posting of an appeal bond, 
something not required under the federal procedures in 40 CFR part 124.
    Response: After communications with IDEM's Office of Legal Counsel, 
it is EPA's understanding that, although there is no provision for an 
extension of the 15-day filing period, a party may amend and supplement 
its timely petition for review after filing. EPA also understands that, 
under Indiana law, a party appealing a PSD permit to the OEA may 
request a stay of that permit, and that no appeal bond is required.
    Comment: 326 IAC 2-1.1-6(a)(5) is written as if a public hearing is 
optional. The Indiana regulations do not meet or exceed the 
requirements of 40 CFR 51.166(q)(2)(iii) and do not provide informed 
public participation in accordance with congressional intent. There 
appears to be no provision under the Indiana PSD rules for the 
extension of comment time (see 40 CFR 124.13).
    Response: With respect to public participation, Indiana's rules 
conform with applicable EPA regulations at 40 CFR 51.166. In addition, 
under Indiana Code 4-21.5, IDEM must individually notify potentially 
affected parties (which include all commentors) of its final decision. 
Historically, IDEM's practice has been to go beyond the minimum legal 
requirements by providing internet postings of applications received, 
permits subject to public notice and permits issued. IDEM also directly 
notifies potentially affected parties, which would include previous 
commentors and contiguous landowners. Also, IDEM has historically 
granted additional public comment time when it deems it necessary. 40 
CFR 124.13 does not mandate that the permitting authority automatically 
grant additional public comment time upon any request. As a result of 
the above, EPA does not believe that any procedural differences which 
may exist between the state and federal programs warrant disapproval.
    Comment: There is nothing in 40 CFR part 52, as it is now or as 
amended by this final approval, stating that Indiana is or would be an 
approved State to issue PSD permits. EPA has not amended 40 CFR 52.793, 
which incorporated the federal PSD rules into Indiana's SIP.
    Response: Our final action amends the SIP at 40 CFR 52.770(c)(147) 
to incorporate the Indiana PSD rules into the SIP.
    This amendment approves the Indiana PSD program as part of the SIP, 
thus giving Indiana the authority to issue PSD permits under its own 
regulations. Our approval of the SIP, therefore, supercedes 40 CFR 
52.793.
    Comment: Indiana omitted the word ``national'' from the term 
``ambient air quality standards'' in 326 IAC 2-2-5(a)(1), so as to be 
able to invoke 326 IAC 1-3 rather than 40 CFR part 50, the national 
ambient air quality standards.
    Response: Indiana has incorporated the national ambient air quality 
standards from 40 CFR part 50 into 326 IAC 1-3. The omission of the 
word ``national'' has no bearing on the approvability of 326 2-2-
5(a)(1).
    Comment: Indiana regulations have no text resembling 40 CFR 50.10 
and 40 CFR part 51, Appendix I, the revised 8-hour ozone standard.
    Response: States are not currently required to address the revised 
ozone standard in their PSD SIPs.
    Comment: A number of commentors asserted that EPA should not 
approve Indiana's current PSD program, but instead rely on the PSD/NSR 
rules published in the Federal Register on December 31, 2002. They 
further claimed that failure to do so would: (1) Put both the State and 
Indiana sources at a disadvantage; (2) subject Indiana sources to 
conflicting PSD obligations; (3) preclude Indiana sources from 
``tak[ing] advantage of the improvements'' under the December 31, 2002 
rules, including provisions for ``plant-wide applicability limits'' and 
``clean units;'' and (4) delay implementation of new rules by three 
years. One commentor also noted that this makes EPA's conditional 
approval of Indiana's PSD program problematic because the Indiana 
regulations must be compared to the 2002 revisions to the Federal NSR 
rules when the conditional approval issue is corrected and submitted to 
EPA for approval.
    Response: On September 11, 1980, EPA delegated to IDEM the 
authority to implement and enforce the Federal PSD program. Since that 
time, Indiana has devoted considerable time and energy to develop its 
own regulations, for approval by EPA and incorporation into Indiana's 
SIP. For the reasons provided in EPA's January 15, 2003 direct final 
rulemaking and in today's action, EPA believes that Indiana's revisions 
are

[[Page 9894]]

approvable under the currently effective regulations at 40 CFR 51.166; 
and that EPA, in fact, has no choice but to approve them.
    The state rules EPA is approving today are now effective as a 
matter of Federal and state law, providing clarity and certainty to 
subject Indiana sources. Once the 2002 revisions to the Federal NSR 
rules become effective, Indiana will then have the opportunity--if it 
so desires--of revising its rules and submitting them for Federal 
approval into the SIP. More specifically, Indiana will have up to 
January 2, 2006 in which to review and analyze the new Federal rules, 
and then determine whether to adopt and submit the same rules, or 
``customize'' its program with ``different but equivalent regulations'' 
(67 FR 80241).
    With regard to the impact of NSR revisions on the ``conditional'' 
nature of this approval, EPA notes that there is actually only one 
provision at issue: Indiana's omission of rule language that would 
specifically exclude changes prohibited in a previously-issued minor 
construction permits from the alternative fuel/raw material exemption 
under the definition of ``major modification.'' In response to the 
commentor's question as to how EPA could fully approve Indiana's 
program once revised Federal NSR rules are in effect, EPA notes that 
the revised Federal NSR rules to which the commentor refers actually 
adopt the same approach with regard to the applicable definition, i.e., 
that provision would not be revised. Furthermore, and given the 
uncertainty as to what the applicable Federal requirements may be in 
one year, disapproval of Indiana's submission because of such a minor 
omission is not warranted.
    Comment: Once comments have been addressed, EPA should provide an 
additional opportunity for public input.
    Response: The Administrative Procedure Act guarantees opportunities 
for public review and comment in the SIP approval process, and we make 
every effort to provide opportunity for meaningful and extensive public 
participation. For this action, we provided a public comment period 
from January 15, 2003, to February 14, 2003. Once the public has 
commented, we must respond to issues raised, reach a final decision, 
and take action. Since we are responding to all comments we received 
regarding the SIP approval of the Indiana PSD program and we have 
determined that the commentors have not raised any issues warranting 
disapproval, we must take final action.
    Comment: Indiana has issued a permit which does not conform with 
the applicable requirements.
    Response: This comment is not relevant to today's action.
    We also received comments regarding the experience and background 
of the OEA judges which are not relevant to the approvability of the 
Indiana PSD regulations. Therefore, we are not responding to those 
comments in this action. In addition, a commentor requested, as a 
response to comments, information on previous instances of PSD 
injunctive relief and information on work hours invested by EPA 
regarding the Indiana PSD regulations. These requests are not relevant 
to the approvability of the Indiana PSD regulations and we are not 
responding to these requests in this action. Requests for information 
from EPA should be made using the appropriate Freedom of Information 
Act procedures.

C. What Action Is EPA Taking Today?

    EPA is conditionally approving the following rules as part of 
Indiana's SIP: 326 IAC 2-2-1, Definitions; 326 IAC 2-2-2, 
Applicability; 326 IAC 2-2-3, Control technology; 326 IAC 2-2-4, Air 
quality analysis; 326 IAC 2-2-5, Air quality impact; 326 IAC 2-2-6, 
Increment consumption requirements; 326 IAC 2-2-7, Additional analysis; 
326 IAC 2-2-8, Source obligation; 326 IAC 2-2-9, Innovative control 
technology; 326 IAC 2-2-10, Source information; 326 IAC 2-2-11, Stack 
height provisions; 326 IAC 2-2-12, Permit recission; 326 IAC 2-2-13, 
Area designation and redesignation; 326 IAC 2-2-14, Sources impacting 
Federal Class I areas: additional requirements; 326 IAC 2-2-15, Public 
participation; 326 IAC 2-2-16, Ambient air ceilings; 326 IAC 2-1.1-6, 
Public notice, and 326 IAC 2-1.1-8, Time periods for determination on 
permit applications.
    As noted in EPA's January 15, 2003 direct final rulemaking, EPA 
believes that it is appropriate to grant conditional approval. However, 
should Indiana fail to correct the identified deficiency within one 
year of this action, EPA will initiate withdrawal of this approval. In 
addition, while EPA is approving Indiana's PSD SIP, EPA recognizes that 
it has a responsibility to insure that all states properly implement 
their preconstruction permitting programs. EPA's approval of the 
State's PSD program does not divest the Agency of the duty to continue 
appropriate oversight to insure that PSD determinations made by Indiana 
are consistent with the requirements of the CAA, EPA regulations, and 
the SIP. EPA's authority to oversee PSD program implementation is set 
forth in sections 113, 167, and 505(b) of the Act. For example, section 
167 provides that EPA shall issue administrative orders, initiate civil 
actions, or take whatever other enforcement action may be necessary to 
prevent construction of a major stationary source that does not 
``conform to the requirements of'' the PSD program. Similarly, section 
113(a)(5) provides for administrative orders and civil actions whenever 
EPA finds that a State ``is not acting in compliance with'' any 
requirement or prohibition of the Act regarding construction of new or 
modified sources. Likewise, section 113(a)(1) provides for a range of 
enforcement remedies whenever EPA finds that a person is in violation 
of an applicable implementation plan.
    Enactment of Title V of the CAA and the EPA objection opportunity 
provided therein has added new tools for addressing deficient new 
source review decisions by states. Section 505(b) requires EPA to 
object to the issuance of a permit issued pursuant to Title V whenever 
the Administrator finds during the applicable review period, either on 
her own initiative or in response to a citizen petition, that the 
permit is ``not in compliance with the requirements of an applicable 
requirement of this Act, including the requirements of an applicable 
implementation plan.''
    Regardless of whether EPA addresses deficient permits using 
objection authorities or enforcement authorities or both, EPA cannot 
intervene unless the state decision fails to comply with applicable 
requirements. Thus, EPA may not intrude upon the significant discretion 
granted to states under new source review programs, and will not 
``second guess'' state decisions. Rather, in determining whether a 
Title V permit incorporating PSD provisions calls for EPA objection 
under section 505(b) or use of enforcement authorities under sections 
113 and 167, EPA will consider whether the applicable substantive and 
procedural requirements for public review and development of supporting 
documentation were followed. In particular, EPA will review the process 
followed by the permitting authority in determining best available 
control technology, assessing air quality impacts, meeting Class I area 
requirements, and other PSD requirements, to ensure that the required 
SIP procedures (including public participation and Federal Land Manager 
consultation opportunities) were met. EPA will also review whether any 
determination by the permitting authority was made on reasonable

[[Page 9895]]

grounds properly supported on the record, described in enforceable 
terms, and consistent with all applicable requirements. Finally, EPA 
will review whether the terms of the PSD permit were properly 
incorporated into the operating permit.

D. Statutory and Executive Order Reviews

    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. 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 (Pub. L. 104-4).
    This rule also does not have tribal implications because it will 
not have a substantial direct effect on one or more Indian tribes, on 
the relationship between the Federal Government and Indian tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000). This action also does not have Federalism 
implications because it does not have substantial direct effects on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 13132 (64 
FR 43255, August 10, 1999). This action merely 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 
``Protection of Children from Environmental Health Risks and Safety 
Risks'' (62 FR 19885, April 23, 1997), because it is not economically 
significant.
    In reviewing SIP submissions, EPA's role is to approve State 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not 
impose an information collection burden under the provisions of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    The Congressional Review Act, 5 U.S.C. 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. 
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by May 2, 2003. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rulefor 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 dioxide, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides, 
Volatile organic compounds.

    Dated: February 24, 2003.
Thomas V. Skinner,
Regional Administrator, Region 5.

    For the reasons stated in the preamble, part 52, chapter I of 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.


    2. Section 52.770 is amended by adding (c)(147) to read as follows


Sec.  52.770  Identification of plan.

* * * * *
    (c) * * *
    (147) On February 1, 2002, Indiana submitted its Prevention of 
Significant Deterioration rules as a revision to the State 
implementation plan.
    (i) Incorporation by reference.
    (A) Title 326 of the Indiana Administrative Code, Rules 2-2-1, 2-2-
2, 2-2-3, 2-2-4, 2-2-5, 2-2-6, 2-2-7, 2-2-8, 2-2-9, 2-2-10, 2-2-11, 2-
2-12, 2-2-13, 2-2-14, 2-2-15, 2-2-16. Filed with the Secretary of State 
on March 23, 2001, effective April 22, 2001. (B) Title 326 of the 
Indiana Administrative Code, Rules 2-1.1-6 and 2-1.1-8. Filed with the 
Secretary of State on November 25, 1998, effective December 25, 1998. 
Errata filed with the Secretary of State on May 12, 1999, effective 
June 11, 1999.
[FR Doc. 03-5024 Filed 2-28-03; 8:45 am]
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