ATTACHMENT - F 
lndiana Register 

TITLE 326 AIR POLLUTION CONTROL BOARD 

Proposed Rule 

LSA Document #05-232 

DIGEST 

Adds 326 IAC 25 concerning voluntary performance based leadership programs. Effective 30 days after filing 

with the Publisher. 

HISTORY 

First Notice of Comment Period: September 1, 2005, lndiana Register (28 IR 3665). 

Continuation of First Notice: April 1, 2006, lndiana Register (29 IR 2373). 

Second Notice: June 1, 2006, lndiana Register (29 IR 3109). 

Notice of First Hearing: June 1, 2006, lndiana Register (29 IR 3121). 

Change of Hearing Notice: September 6, 2006, lndiana Register (20060906-IR-326050232CHA). 

Date of First Hearing: October 19, 2006. 

PUBLIC COMMENTS UNDER IC 13-14-9-4.5 

IC 13-14-9-4.5 states that a board may not adopt a rule under IC 13-14-9 that is substantively different from 

the draft rule published under IC 13-14-9-4 until the board has conducted a third comment period that is at least 

21 days long. 

' REQUEST FOR PUBLIC COMMENTS 

This proposed (preliminarily adopted) rule is substantively different from the draft rule published on June 1, 

2006, at 29 IR 3109. The lndiana Department of Environmental Management (IDEM) is requesting comment on 

the entire proposed (preliminarily adopted) rule. 

The proposed rule contains numerous changes from the draft rule that make the proposed rule so 

substantively different from the draft rule that public comment on the entire proposed rule is advisable. This notice 

requests the submission of comments on the entire proposed rule, including suggestions for specific 

amendments. These comments and the department's responses thereto will be presented to the board for its 

consideration at final adoption under IC 13-14-9-6. Mailed comments should be addressed to: 

#05-232 ESPICLEAN 

Christine Pedersen Mail Code 61-50 

c/o Administrative Assistant 

Rule Development Section 

Office of Air Quality 

lndiana Department of Environmental Management 

100 North Senate Avenue 

Indianapolis, lndiana 46204-2551. 

Hand delivered comments will be accepted by the receptionist on duty at the Office of Air Quality, Tenth Floor 

East, 100 North Senate Avenue, Indianapolis, Indiana. Comments may also be submitted by facsimile to (31 7) 

233-2342, Monday through Friday, between 8:15 a.m. and 4:45 p.m. Please confirm the timely receipt of faxed 

comments by calling the Rule Development Section at (31 7) 233-0426. 

COMMENT PERIOD DEADLINE 

Comments must be postmarked, faxed, or hand delivered by January 17, 2007. 

SUMMARYIRESPONSE TO COMMENTS FROM THE SECOND COMMENT PERIOD 

The lndiana Department of Environmental Management (IDEM) requested public comment from June 1, 

2006, through July 3, 2006, on IDEM's draft rule language. IDEM received comments from the following parties: 

Eli Lilly and Company, Inc. (ELC) 

Improving Kid's Environment (IKE) 

lndiana members of the National Environmental Performance Track Program (NEPT) 

United States Environmental Protection Agency (USEPA) 

Following is a summary of the comments received and IDEM's responses thereto: 

General Comments 

Comment: IKE agrees that it is good public policy to encourage and recognize activities by public and private 

regulated entities that go beyond full compliance with all applicable regulatory requirements. There are companies 

and municipalities in lndiana that practice proactive environmental stewardship and thrive in doing so. Increasing 

the number of entities that take it upon themselves to maintain 100% compliance and go beyond is good for the 

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health of the citizens of lndiana and our neighbors, is good for our natural resources. and is aood for business. 

IDEM can focus limited resources on companies where they are most needed, and proactivecompanies can 

focus their resources on business activities and further environmental stewardship. That works for everyone. IKE 

appreciates the opportunity to discuss the draft rule and ask questions provided by IDEM at a recent public 

meeting. The staff provided ample time for all questions to be raised and were forthcoming in their responses. 

Comment: We are pleased that IDEM has reached out to the lndiana Performance Track membership and all 

lndiana citizens for input to the proposed lndiana Environmental Stewardship Program (ESP) rule. This clearly 

demonstrates the comm~tment of IDEM leadersh~p and staff to embrace a culture of sustainable development 

through continuous improvement initiatives that can take lndiana beyond mere compliance. This will clearly 

establish lndiana as a leader in developing creative, substantive solutions to achieve environmental improvement 

not possible through regulation alone. Voluntary commitments through the ESP will allow the regulated 

community and all lndiana citizens to identify and select initiatives that will support both environmental 

improvement and business growth. ESP clearly has the potential to create a competitive business environment 

and an opportunity to leverage the talent and expertise of IDEM, non-governmental organizations and lndiana 

business and industry to achieve our mutual commitment to protection and improvement of the environmental 

health of our state. We applaud IDEM efforts to develop this program and support this new and timely initiative. 

We encourage the Board to adopt the new rules as written. (NEPT) 

Response: IDEM appreciates the positive feedback on ESP and CLEAN and the agency's involvement of 

interested stakeholders. The agency also looks forward to this initiative being the starting point for developing 

partnerships to improve the environment and economic climate in lndiana and encourages those that have been 

involved, to stay involved as the agency looks to optimize these and other programs for the benefit of Hoosiers. 

Comment: lndiana companies, cities, and towns that have already demonstrated a strong commitment to 

environmental stewardship should be recognized and provided flexibility where appropriate by IDEM. However, 

IKE is worried about entities eager for the incentives and willing to commit to the requirements of the program 

without any assurance, based on past behavior, that they will comply with them over the long term. IDEM's 

proposed program would allow entities into the program based upon a commitment for future action, not a 

demonstrated history of commitment to environmental stewardship. Requiring some demonstration of willingness 

to go beyond compliance before accepting an entity into the program will not dissuade entities from seeking the 

benefits of the program. 

An applicant must have developed and implemented an EMS and must commit to implement a specified 

number of "continuous environmental improvement initiatives" after acceptance into the program. However, there 

is no requirement that a company demonstrate proper implementation of the EMS over time or for a company to 

have demonstrated any commitment to environmental proactivity prior to applying for acceptance into the 

program. (These are two instances where the proposed state program differs from the National Performance 

Track Program. In each case, the proposed state program would be less rigorous than the federal counterpart.) 

IKE agrees with comments made by IDEM staff that the projects undertaken by companies must be appropriate in 

scope and sophistication to the size and type of company undertaking them. It is also very important that the 

public, especially members of the community, have an opportunity to understand and provide input on the 

projects being proposed by applicants and considered by IDEM. 

IKE believes that adoption and demonstrated implementation of an Environmental Management System, a 

strong compliance history, and demonstrated commitment to environmental proactivity are essential eligibility 

requirements. A program like this must be rigorous. The public relies on IDEM to ensure that regulated entities 

with pollution discharges either comply with all requirements or are compelled to do so through compliance and 

enforcement activities. A program that offers less regulatory attention to companies that may be responsible for 

significant amounts of toxic pollutants and subject to dozens of complex technical and legal requirements must be 

rigorous to assure the public that its health and welfare are fully protected. That means that eligibility criteria 

should be high. In order to benefit from the recognition, special treatment, and increased flexibility offered, a 

company or municipality should truly be a demonstrated leader in environmental stewardship. (IKE) 

Response: Both ESP and CLEAN are environmental leadership programs. It is IDEM's position that those 

entities that have implemented an EMS and made a commitment to continuous environmental improvement 

through these programs have demonstrated environmental stewardship. Taking these steps is being 

environmentally proactive. The federal program (NEPT) has not successfully recruited small and medium-sized 

entities, largely due to the required "track record" of demonstrated performance. IDEM desires to convince 

lndiana entities, especially small and medium-sized businesses, that there is now an ~ncentive to take that next 

step in the evolution of managing their environmental responsibilities from basic compliance with the regulations 

to proactive environmental management and continuous improvement. For those willing to take this proactive 

step, joining such programs is a business decision. There must be value in joining such programs, available within 

a reasonable amount of time of making that decision. Both the EMS and environmental improvement initiatives 

must be approved and will be subject to annual evaluation by IDEM. This provides that desired level of 

assurance. While the public will have access to reviewing members' applications and annual reports, providing 

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the opportunity to understand members' projects, IDEM does not intend to accept public comment pertaining to 

the approval of members' projects at this time. 

Comment: After careful review of both the Second Notice of Rulemaking and the "Recognition and 

Regulatory Flexibility Incentive Guidance" (dated June 9, 2006), and for the reasons discussed in other 

comments, IKE has serious concerns about the eligibility and incentive aspects of the draft program. We are also 

concerned that adoption of this program, if and to the extent it does not comply with U.S. EPA's expectations for 

Indiana's delegated programs, will jeopardize that delegation. We presume that you have asked U.S. EPA Region 

V to review the draft rule for their comments. We will also be seeking U.S. EPA's reaction to the proposed 

program. (IKE) 

Response: In an effort to develop leadership programs with stewardship caliber membership and address 

such concerns shared with IDEM during the public meetings, ESP and CLEAN eligibility criteria exceed U.S. 

EPA's NEPT eligibility criteria in the regulatory compliance component, ability for program area staff to provide 

comment and public access to membership information and the public's ability to provide information to IDEM 

during membership determinations. Incentives were carefully developed with input from all applicable IDEM 

program areas and numerous stakeholders during the public meetings over the past year. IDEM is comfortable 

with the listed incentives, striking a fair balance between the agency, regulated community and interested 

stakeholders. None of the incentives are less stringent than the applicable federal regulations. Discussions with 

U.S. EPA Region V continue with the intent to develop the necessary agreements to provide a good working 

relationship between IDEM and U.S. EPA, promoting both IDEM'S leadership programs and NEPT. Previously 

developed agreements will need to be revised to reflect these programs. U.S. EPA headquarters has been 

working closely with the Office of Pollution Prevention and Technical Assistance (OPPTA) to develop ESP and 

CLEAN and is anxious for IDEM to implement these programs. U.S. EPA headquarters staff has offered and 

plans to assist IDEM in discussions with U.S. EPA Region V to develop these agreements. 

Comment: IKE is concerned about the agency resources that will be required to implement this program, 

especially if it attracts substantial interest. Making initial eligibility decisions, providing assistance to companies, 

and monitoring compliance with the terms of the designation will be time consuming. Does IDEM expect to divert 

human resource now focused on compliance and enforcement activities to this program? (IKE) 

Response: IDEM believes most Hoosiers are anxious to realize the benefits of a program that will produce 

positive results for the environment beyond those achieved through routine agency compliance and enforcement 

efforts. It is difficult to determine the amount of resources that will be needed to begin these programs as 

membership demand can only be estimated. However, IDEM anticipates needing compliance and enforcement 

resources during the early stages of these programs to assist OPPTA with membership determinations. As more 

entities are entered into the programs, IDEM anticipates a resource neutral period as the agency begins to spend 

less time with oversight of program members. In subsequent years, IDEM anticipates resource savings as a result 

of these programs, focusing agency resources on those sources that require increased oversight and lndiana 

sources the agency today knows little or nothing about. OPPTA anticipates having adequate resources to 

manage these programs. IDEM program area staff will always play a role in these programs as IDEM works to 

identify sources that are ideal candidates for membership, to maximize the value of the programs through existing 

and future benefits for members and to reallocate agency resources resulting from time savings realized by the 

agency through these programs. 

Comment: There appears to be no notice to the public of proposed or final acceptance of an entity into the 

program or revocation of ESP or CLEAN status. The opportunity for public input and notice to the public are 

important because members of the community may have information relevant to the agency's decision and are 

entitled to know whether a company in their town is participating. IDEM should include procedures for notifying 

the public of proposed and final acceptance as well as revocation and those notice mechanisms should be 

spelled out in the rule. These procedures should have regularly scheduled times (perhaps quarterly?) for 

proposed acceptance of applicants. It is fair to expect interested parties to check the IDEM website on a 

reasonable, regularly scheduled basis but not on a daily or unpredictable basis. (IKE) 

Response: Membership activity is planned to be posted on the IDEM website. Currently, there are two 

membership application periods per year scheduled. This will provide a regular schedule in which all interested 

parties may review entities applying to the program, existing members and memberships that have been revoked. 

IDEM agrees with IKE's comment that this should be clearly spelled out in the rule. Requirements in this rule 

pertaining to revocation have been revised to reflect web posting of membership revocation. 

Comment: The discussion in the Second Notice states that IDEM will start accepting entities into the program 

providing the incentives that are not dependent on rule revisions. When will the agency start considering 

applications? (IKE) 

Response: IDEM plans to begin accepting applications on September 1''. This application period is in line 

with U.S. EPA's next NEPT membership round. 

Comment: IKE suggests that the rules specify appeal rights by applicants and other parties, procedures and 

timing for appeal of both acceptance into the program and removal from it and any other decisions that may be ' made by the commissioner. (IKE) 

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Response: IDEM has carefully considered this issue and considering these programs are voluntary in nature, 

appeals will not be granted. This conclusion is based on IC 4-21.5-2-5(17). 

Comment: At its recent public meeting, IDEM mentioned that companies could use projects funded, or 

partially funded, through state assistance or incentive programs as their initiatives for this program. IKE 

appreciates that IDEM wants to boost interest in these types of programs, some of which are underused, but 

would like more detail from IDEM on how state-assisted initiatives would be evaluated. For example, with 

programs where state funding or other assistance is on a first-come, first-served basis, some companies may be 

at a disadvantage. In some cases, those incentive programs are administered by IDEM, which may then be in the 

positlon of deciding whether to grant funding assistance to a particular project which the applicant is counting on 

for approval in another IDEM discretionary program. This could get complicated. (IKE) 

Response: While IDEM agrees this could get complicated, it is a good problem to have. A time when 

voluntary programs doing good things for the environment are at full utilization where the agency has the ability to 

select only the best projects to get funding assistance means these programs are providing the highest possible 

value to Hoosiers. 

Comment: IKE hopes this program is successful and that companies and municipalities throughout the state 

come to view environmental regulations as a given, and a starting place for environmental stewardship and 

responsibility. To assure the public, U.S. EPA and the regulated community that this is in fact the case, IKE 

requests that IDEM commit to prepare an annual report on the ESP and CLEAN programs, including the following 

information (which IDEM would readily have) for the year: 

1. The entities approved into the program, renewals and revocations (including the reason for revocation). 

2. A list and summary of the continuous improvement initiatives that have been completed during the year 

and their environmental benefit. 

3. Any noncompliance identified for any entity participating in the program and what action was taken by 

IDEM. 

Response: IDEM agrees and believes an annual report or summary is necessary to keep members on track 

with their commitments and to communicate the environmental benefits realized through these programs. Items 1 

and 2 are planned for inclusion in this report. Item 3 will be reported in other existing agency compliance related 

public records. 

ESP and CLEAN Programs 

Comment: The definition of "entity" in 326 IAC 25-1-2(4), does not reflect the variety of business 

arrangements a company may have at a single geographical location, and thus may unintentionally exclude a site 

from participating in the ESP. The word entity is used to define the geographical and business characteristics of a 

company or facility that is eligible to participate in the ESP. As proposed, the term limits the scope of eligible 

entities to geographically connected sites operating under a single environmental management system ("EMS"). 

This approach would prohibit a complex manufacturing site that has many business units and environmental 

management systems from participating in the program. For example, Lilly's facilities in Indiana have more than 

one business unit at a geographical location. Each business unit may be responsible for manufacturing a different 

type of product or are involved in different stages of pharmaceutical production. These multi-business sites may 

share common utilities, waste treatment, and other non-production operations. Those business units, however, 

may have individually tailored EMS, and in some cases, the management hierarchy at the site does not pass 

through a single sitemanager. 

Lilly suggests that even if a single geographic site includes more than one business unit and more than one 

EMS, the entire site should still be considered an "entity" that is eligible for participation in the ESP. This approach 

is consistent with IDEM'S goals for the ESP program, and it is consistent with U.S. EPA's NEPT program. 

Accordingly, Lilly recommends that IDEM delete the proposed language in 326 IAC 25-1-2(4)(A) as shown below: 

(4) "Entity" means a company, corporation, firm, enterprise, authority, institution, partnership, or unit of local 

government, or part or combination thereof, whether incorporated or not, public or private, that has its own 

functions and administration. Except as described in section 4(c) of this rule, an entity is one (1) geographic 

location under5 

the direction of senior management. 

Alternatively, the definition of "entity" could be amended as follows: 

(4) "Entity" means a company, corporation, firm, enterprise, authority, institution, partnership, or unit of local 

government, or part or combination thereof, whether incorporated or not, public or private, that has its own 

functions and administration. Except as described in section 4(c) of this rule, an entity is one (1) geographic 

location under: 

(A) xwgk one or more EMS; and . (B) the direction of senior management. 

(ELC) Response: IDEM is aware of the complexity of business ownership scenarios that exist and did not intend to - - - -- 

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exclude entities or re1ationships.a~ described in this comment. The rule language has been revised to indicate an 

"entity" is a geographic location with "at least one EMS" to allow for the situation described. 

Comment: In 326 IAC 25-1-2, the definition of "Environmental Stewardship Program" applies to "entities" that 

meet the specified criteria. "Entities" include both companies and municipalities. Are municipalities eligible for the 

ESP program or just CLEAN? (IKE) 

Response: Municipalities are eligible for ESP and CLEAN, however, IDEM would encourage a municipality to 

join CLEAN in an effort to include other parts of local government and the community in the municipality's Quality 

of Life Plan (QLP) and provide benefits offered through CLEAN tothat community. 

Comment: The definition of "senior management," in 326 IAC 25-1-2(14), does not reflect the variety of 

business arrangements a company may have at a single geographical location, and thus may unintentionally 

exclude a site from participating in the ESP. The definition of "senior management" appears to be limited to sites 

under the responsibility of an individual senior manager with executive responsibility for the site or a group of 

managers acting together with executive responsibility for the site. Lilly believes that defining the term in this 

manner does not reflect the diversity of business organizations that may exist at a site. This definition should be 

amended to reflect the fact that there could be more than one senior manager at a site, each with executive 

responsibility over a particular area at the site, and none with responsibility for the overall site. Accordingly, Lilly 

offers the following amendment to the proposed definition of "Senior management" found at 326 IAC 25-1- 

2(14)(A). 

(14) "Senior management" means the following: 

(A) For entities, the person, persons, or group of persons with executive responsibility for the entity. 

In order to close the loop of issues affected by these definitions, Lilly also recommends amending the 

proposed language in 326 IAC 25-1-4(c) as follows: 

(c) A membership for an entity shall be limited to cover one (I) geographic location ,.... 

(ELC) Response: IDEM's intent is to ensure there is commitment by senior management at the entity to 

membership and the requirements of these programs and did not intend to exclude management relationships as 

described in this comment. The rule language has been revised to clarify that one or more individuals may have 

senior management responsibility. 

Comment: IDEM should define more specifically what "substantial environmental compliance" means and 

written criteria should guide the agency's decisions. "Substantial" implies that some amount of noncompliance 

would be acceptable, but provides a lot of room for discretion, although the specifics provided in 326 IAC 25-1- 

10(c) and (d) appear to give detail to the more general term. IKE suggests that IDEM include a definition of the 

Gm "substantial environmental compliance" and, also, that 326 IAC 25-1-10(d) include the following language: 

"(8) Any other information the commissioner deems relevant." 

Based on comments at the public meeting, it appears that IDEM is willing to consider on a case by case 

basis most compliance situations before deciding that an applicant is not eligible for the program. IKE agrees with 

the provisions in the current draft rules that certain past activities should eliminate an applicant from 

consideration, and would offer another for inclusion: ongoing noncompliance with a Consent Decree or Agreed 

Order. (IKE) 

Response: IDEM desires to promote and provide clear and consistent compliance determinations. Further 

defining substantial environmental compliance would not eliminate the need for case by case review. 326 IAC 25- 

- 1-4(d)(6)(B) does provide an opportunity for relevant information to be presented and reviewed by the 

commissioner during membership determination and in other applicable membership renewal sections. 

Comment: In 326 IAC 25-1-4, concerning membership application, subsection (b) states that the senior 

management signature on the application subjects him or her to liability under state laws forbidding false or 

misleading statements. It is not clear which laws are referred to here and whether it would be civil or criminal 

liability. Subsection (d) states that a representative of the agency must make a site visit, but is not specific about 

what that site visit entails. IKE urges IDEM to provide more guidance and make clear to prospective applicants 

and the public what to expect from the site visit. (IKE) 

Response: lndiana law provides for criminal liability for knowing and intentional violations. See, e.g., IC 13- 

30-6-2 and IC 13-30-6-3. Criminal prosecutorial authority rests with county prosecutors who may elect to accept 

or reject the referral of a case for criminal prosecution. In cases where the county prosecutor does not accept a 

referral for criminal prosecution, it is likely that an administrative or civil enforcement action may be taken by 

IDEM against the alleged violator. See, Section 4.1 (Actions Before the Violation) of IDEM's Civil Penalty Policy. 

Site visits will be further explained in relevant sections of the membership application materials. 

Comment: Will an entity's status with respect to any other statutory or regulatory program be considered for 

eligibility (for example, compliance with tax obligations, labor laws)? IKE hopes so, and suggests that reference 

be made in the rule to these other checks so that applicants will be aware of them. (IKE) 

Response: IDEM has carefully considered this issue. Considering these are environmental programs, IDEM 

will make compliance type requests with other relevant state agencies, however, IDEM does not intend to prohibit 

membership based on findings. IDEM does intend to advise potential members to reconcile issues with other 

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lndiana state aaencies if a~~licable. 

i comment:;~~ notes that municipalities appear to have to implement more improvement projects than 

industries (five compared to three over the same three year period). What is the reason for this discrepancy? If 

the expectation is that businesses will implement fewer, but more substantial, projects, this expectation should be 

spelled out in the rule. (IKE) 

Response: IKE is correct in that many anticipated projects in CLEAN will be less substantial than those 

approved in ESP. Project lists in both programs are not ideal for inclusion in the rule because they are categorical 

in nature, quite extensive, and anticipated to be revised periodically to account for technological advancements 

and to encourage members to voluntarily address Ind~ana's environmental challenges and agency priorities. 

Comment: In 326 IAC 25-1-8, concerning revocation, do the procedures in subsection (c) apply to both 

subsections (a) and (b)? Subsection (a) lays out situations where the commissioner "shall" revoke membership, 

but the procedures in subsection (c) appear to apply when the decision to revoke is discretionary. It is not 

suggested that the process is not appropriate under a mandatory revocation scenario, but that IDEM should look 

at the language carefully to make sure the process established here does not preclude or interfere with the 

commissioner's obligation to revoke membership under circumstances described in subsection (a). (IKE) 

Response: It is IDEM'S intent to provide notification to program members prior to membership revocation. 326 

IAC 25-1-8(c) has been revised to clarify this. 

Comment: In 326 IAC 25-1-9, concerning transfers, the draft rule properly states that membership cannot be 

transferred to another entity. What about if a company changes ownership? Will membership automatically be 

retained by the new owners? Will IDEM require notification of the change? (IKE) 

Response: After further consideration, transferring membership will be allowed provided the new ownership 

signs a new membership agreement, committing the entity to following through with the previous owner's 

commitments, maintaining the facility's membership in good standing. The rule language in 326 IAC 25-1-9 has 

been revised accordingly. 

Comment: In 326 IAC 25-1-10, concerning standards of environmental compliance, subsection (a) states that 

a member of senior management must certify "to the best of their knowledge" that the entity is currently in 

compliance with all applicable requirements. This is a very weak standard requiring minimal diligence on the 

signatory's part, and much weaker than is required in other regulatory programs. Senior management should be 

held to a higher standard, especially if they are applying for admission to an elite program. Submission of a Title V 

Air Operating Permit application and compliance certification documents under that permit, for example, must be 

accompanied by a certification by a responsible official stating that, "based on information and belief after 

reasonable inquiry, the statements and information in the document are true, accurate and complete." 326 IAC 2- 

- 7(4)(g). This would be a more appropriate expectation. (IKE) 

Comment: Lilly believes the proposed requirement in 326 IAC 25-1-10(a) that a member of senior 

management certify that the entity is currently in compliance with all local, state, and federal environmental laws 

and regulations could stifle participation in the ESP. Although Lilly agrees that members of the ESP should have 

superior environmental compliance performance records, we believe that it may be impossible for all prospective 

members to certify that at the time of application the entity is "in compliance with all local, state, and federal 

environmental laws and regulations." 

IDEM has recognized that the ESP should not be an exclusive club for entities that are able to achieve 100% 

compliance all the time. Consequently, the agency has proposed language in 326 IAC 25-1-10(d) that would 

enable an entity that is currently not 100% in compliance to participate in the ESP. The certification requirement 

proposed in 326 IAC 25-1-10, however, contradicts this position, and could limit participation in the ESP only to 

those who currently have minor, but unresolved compliance issues. Lilly recommends that IDEM consider 

changing the certification to reflect this potential conflict. 

In addition, although it appears the proposed rule language is based on similar language in the NEPT 

application, there is at least one significant difference. The NEPT certification includes the qualifying language 

"based on reasonable inquiry." These additional words provide the person signing the certification with an 

appropriate degree of certainty, without requiring 100% knowledge, about the current compliance status of the 

facility. This concept is used under the Title V and Federally Enforceable State Operating Permit (FESOP) 

permitting programs, so many industrial facilities will be familiar with the concept. Lilly recommends adding similar 

language to the proposed lndiana rules. 

Finally, the certification should include some wording that limits the scope of the certification from all 

environmental regulations to only the regulations that are applicable to the source. Again, the certification in the 

NEPT application provides this clarification. Accordingly, Lilly suggests the following amendments to the proposed 

language in 326 IAC 25-1-10: 

(a) To be accepted into ESP or CLEAN, a member of senior management of the entity shall submit a 

certification with the application to the department certifying that to the best of their knowledge and based on 

a reasonable inquiry, the entity is currently in compliance with a# applicable local, state, and federal 

environmental laws and regulations. 

(ELC) 

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Response: IDEM is in agreement with these comments and has revised the rule language accordingly. 

1 

comment: In 326 IAC 25-1-1 1, concerning environmental management systems, IKE believes that an entity 

applying for membership in ESP or CLEAN should have had an EMS in place for some length of time, at least six 

months, prior to applying to the program to demonstrate the company is in fact implementing it correctly. 

Commitment to and implementation of a viable EMS takes ongoing effort on behalf of a company; we agree with 

U.S. EPA's Performance Track Program that some demonstration of a successful track record is warranted. (IKE) 

Response: IDEM desires to encourage lndiana regulated entities to make the decision to take the next step 

to proactive environmental management, becoming eligible for these programs. U.S. EPA's Performance Track 

Program has been unsuccessful in appealing to small and medium-slzed companies. A reason for this IS the 

inc&ntive to develop and implement an EMS and commit to continuous environmental improvement and business 

value realized through these incentives in U.S. EPA's Performance Track Program cannot be factored into the 

business decision to make this commitment because it is too far into the future to factor into that decision. IDEM 

desires to appeal to those entities that today, do not have an EMS. There is much to gain by all Hoosiers if 

lndiana regulated entities are more proactive in managing their environmental responsibilities and committing to 

continuous environmental improvement. It is a significant accomplishment to develop and implement an EMS. 

Once an entity does this and commits to the remaining requirements of these programs, IDEM feels such entities 

are worthy of being called environmental stewards and receiving program member status. 

Comment: In 326 IAC 25-1-12, concerning continuous environmental improvement, the rule implies but does 

not specify that the improvement projects must be completed (or substantially implemented if the project is not 

one that can be completed within a three year period) within the three year term of the approval. IKE urges IDEM 

to make this clear in the rule. (IKE) 

Response: IDEM believes the current rule language in both the continuous environmental improvement 

section (326 IAC 25-1-12) and the annual summary for ESP members section (326 IAC 25-1-13) adequately 

address this. 

incentives 

Comment: IKE does not object to providing incentives, through recognition and more personal service, to 

companies who go beyond minimum requirements. IKE supports recognition of companies and municipalities that 

are true environmental leaders. Public recognition in a variety of ways, networking opportunities, and efforts to 

streamline and improve permit service and other agency functions are appropriate ways to acknowledge the extra 

effort that has been made by an environmental leader. It is equally important to the public and to other entities in 

the program, however, that recognition be withdrawn promptly if an entity drops out of the program (whether 

voluntarily or because it no longer meets the requirements for eligibility). IKE urges IDEM to make sure that 

procedures are in place to acknowledge such changes in status. (IKE) 

Response: IDEM agrees with this comment and has revised the rule accordingly. The agency has also begun 

the process of developing procedures for handling this situation. 

Comment: IKE is very concerned with the proposal's incentives regarding routine inspections. Within the 

parameters of each regulatory program and federal guidance where applicable, IDEM has discretion to direct 

more or less attention to individual sources. Even without an ESP or CLEAN program, IDEM inspectors and 

managers can and do make judgments about whether and when sources require inspections, based on 

considerations such as compliance history. A company that has demonstrated full compliance inspection after 

inspection just will not command the kind of attention that a company with a less stellar track record will-nor 

should it. IKE is concerned, however, with a program that promises lowered routine inspection frequency for any 

regulated source. For many sources in Indiana, inspections are an infrequent event already (every two or even 

five years for some types of sources). (IKE) 

Response: Reducing routine inspection frequency for members of such programs is consistent with NEPT 

and other state programs. Other comments indicate concern relative to limited agency resources. Reducing 

oversight of entities proven and committed to environmental stewardship allows the agency to focus these limited 

resources towards those sources in need of increased attention and resources to work on solutions to Indiana's 

environmental challenges. In an effort to be clear and consistent, IDEM has made every effort to include as much 

of this program in rule as feasible. Using agency discretion as the sole mechanism for inspection frequency in 

these programs will lead to inconsistent application of this incentive. Agency procedures are also being developed 

to provide clear and consistent application of this and other incentives. 

Comnlent: The plan to provide advance notice to ESP and CLEAN entities of an inspection is very disturbing. 

Unannounced inspections are a critical element of any compliance program. They allow inspectors to assess 

compliance when the regulated entity does not expect to have visitors. When inspections are preannounced, 

furthermore, it is not uncommon for particular operations to be undergoing maintenance and therefore not 

available for inspection. It is not that the agency is hoping to surprise companies and catch them in 

noncompliance. At the public meeting, IDEM suggested that the impetus for offering this incentive comes from 

occasions when IDEM inspectors have arrived for regular, unannounced, inspections, and found the company's 

environmental manager not present. Regulated entities must be in compliance at all times, whether or not the - . environmental manager is present and should be prepared for an inspection at any time, especially ones that 

Date Dec 28,2006 10 44 58AM EST DIN 20061 227-IR-326050232PRA Page 7 
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seek to be recognized as environmental leaders. An unannounced ins~ection is not a ~unishment. rather it is an 

opportunity to demonstrate to the agency and the community that it tr;ly is in full combliance. ~usinesses that 

employ an environmental manager understandably prefer to have that staff available when the IDEM inspector 

arrives. It makes for a more complete inspection and is less disruptive to regular business operations. IKE 

encourages the agency to consider other ways to address this concern, without institutionalizing the concept of 

announced inspections for entities in the ESP and CLEAN programs. (IKE) 

Response: IDEM has carefully considered this incentive. An alternative currently being discussed by U.S. 

EPA through its Performance Track Program is to allow members to schedule inspections at certain times of the 

year in lieu of inspection incentives like announcements. IDEM believes that approach could lead to even more 

instances where certain equipment or processes may not be in operation during the inspection. IDEM's 

preannouncement only provides a 24 hour notification, not enough time to correct any significant compliance 

issues, yet an opportunity to ensure appropriate staff or representation is present during the inspection and 

ensures efficient use of limited agency resources. 

Comment: IKE notes that the draft rule language states that FESOPs and minor state operating permits may 

be renewed for a period up to ten years, if approved by the commissioner. IKE does not believe that any permit 

should go for as long as ten years without review. Changes in regulatory requirements and operations are bound 

to occur over that long a period of time. A streamlined renewal process may be appropriate where there have 

been no or insignificant changes in an entity's operations or regulatory requirements, however. IDEM's guidance 

uses the word "will" instead of "may." This is a subtle but important difference. When does the agency mean? 

(IKE) 

Response: Currently, many of these existing permits have been extended several years beyond the 5-year 

permit term. In an effort to increase overall agency efficiency, IDEM desires to issue these permits as up to 

10-year permits for program members as appropriate and allowed by federal rule. Specific incentives may be 

refused by a member, such as the agency issuing a 10-year FESOP or Minor State Operating Permit (MSOP). 

Comment: At the recent public meeting, IDEM mentioned another possible incentive to companies 

participating in the ESP program-increased access to agency personnel to discuss rules under development. 

This is completely inappropriate and would be extremely detrimental to the integrity of the public rulemaking 

process. All parties should theoretically have equal access to put their views before the agency on rules under 

development. As a practical matter, businesses already have greater access to the agency than members of the 

public, because of their day to day regulatory relationship (through permitting, inspections, compliance assistance 

activities) and generally are better equipped in terms of resources (both time and expertise) than the public. 

Few things will erode the credibility of an incentive-based program to encourage environmental stewardship 

more than those that change the fundamental relationship between the agency and the regulated community (e.g. 

preannounced inspections) or that give the impression to the public, real or perceived, that companies will have 

even greater access and influence in agency decision making on issues of policy (e.g. rule development). (IKE) 

Response: IDEM desires to increase participation by all interested stakeholders in the rulemaking process. In 

the spirit of these programs being a partnership with IDEM, the agency hopes to utilize these relationships to 

promote discussion of rulemaking and other agency initiatives. 

Comment: Section 326 IAC 25-2-3 allows monthly compliance for volatile organic compounds (VOC) as an 

incentive under Indiana's draft Environmental Stewardship Program rulemaking. However, this incentive is 

inconsistent with U.S. EPA's prohibition against the use of greater than daily averaging, except in accordance with 

established U.S. EPA policy. It should be noted that monthly averaging provides more than just easier 

recordkeeping. The chief reason for this policy is that monthly averaging is a relaxation in that it allows coatings or 

inks to exceed their applicable VOC emission limlts if these increases are offset by coatings or inks that are below 

the applicable limits. (USEPA) 

Comment: IKE does not agree that monthly averages are appropriate to demonstrate compliance with VOC 

requ~rements. Ozone is a daily pollutant-monthly averages are irrelevant to a daily standard that is highly 

dependent upon specific weather conditions. How will a company with emission limits expressed as daily limits be 

able to demonstrate compliance using monthly averages? (IKE) 

Response: IDEM does not believe this incentive provides reasonable opportunity to violate VOC emission 

limits in normal operations. The same concern relative to the averaging of noncompliant coatings with compliant 

coatings applies on a daily basis as well. The U.S. EPA prohibition referenced is not in any applicable federal 

regulations, therefore, not enforceable. IDEM has had discussions with U.S. EPA on this particular incentive and 

based on these discussions, believes an agreement will be reached. 

SUMMARYIRESPONSE TO COMMENTS RECEIVED AT THE FIRST PUBLIC HEARING 

On October 19, 2006, the Air Pollution Control Board (board) conducted the first public hearinglboard 

meeting concerning the development of new rules at 326 IAC 25. Comments were made by the following parties: 

Improving Kid's Environment (IKE) 

Following is a summary of the comments received and IDEM'S responses thereto: 

Comment: These kinds of programs are really important. It's very important for companies to understand that 

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lndiana Register 

, .. there are good reasons to go beyond compliance, and it's important for agencies like IDEM to provide . . ! ' . . opportunities for companies to do that, so I'm supportive of the concept of this program very much. 

. . I also wanted to express my appreciation for how open IDEM has been in the rulemaking process to invite 

people in. They've been taking a lot of time to talk to people about the program and explain their reasoning for 

things, and that's very much appreciated, and I know that several of my own comments led to changes in the draft 

rule, and I appreciate that as well. (IKE) 

Response: IDEM appreciates the positive feedback on ESP and CLEAN and IDEM's involvement of 

interested stakeholders. IDEM also looks forward to this initiative being the starting point for developing 

partnerships to improve the environment and economic climate in lndiana and encourages those that have been 

involved to stay involved as IDEM looks to optimize these and other programs for the benefit of Hoosiers. 

Comment: The most important thing for a program like this is to maintain its credibility and for everyone to 

feel assured that the companies in this program truly are going beyond compliance and that environmental 

standards are not being relaxed in any way for those companies. (IKE) 

Response: IDEM agrees and believes the program has been developed in a manner that will establish and 

maintain the credibility of the program. The requirements of the program in this rule will provide the assurance 

that member companies are going beyond compliance and that environmental standards are not being relaxed. 

Comment: Resources are going to be really important. We won't know until the deadline how many 

companies are interested in this and how much resources it will take, but it's important for IDEM to devote the 

appropriate amount of resources to reviewing the applications and to keeping track of how the companies perform 

if they're given the privilege of being in this program. IDEM should be sure resources are available to manage the 

program properly. (IKE) 

Response: IDEM's Office of Pollution Prevention and Technical Assistance (OPPTA) has been preparing to 

support this program since the First Notice of Rulemaking, over a year ago, by providing EMS and program 

specific training to additional OPPTA staff, outside the P2 program, should the need arise to provide additional 

resources. OPPTA received a grant from U.S. EPA to implement ESP and provide contractor assistance if 

needed. ESP will provide efficiency improvements for both IDEM and members of the program. States with similar 

programs have increased overall agency efficiency as a result of these programs. IDEM's program has been 

designed to maximize agency efficiency and provide real business value to members. 

Comment: The rule includes an annual report that each company needs to submit. IDEM should also issue 

an annual report that summarizes the success of the program so that the information is available in one place for 

the public to view. This will make it easy for the public to see that this program is being successful and that these 

companies really are going beyond compliance and that there are not problems with it. (IKE) 

Response: IDEM's Office of Pollution Prevention and Technical Assistance is already required by statute (E 

13-27-6-1 ) to produce an annual report that includes all activities, including ESP. Based on this and similar 

comments, IDEM has agreed to provide a link to compliance information for regulated entities on the ESP 

website, directly linking each member to their most up to date compliance history. Concerned citizens have 

expressed a desire to keep all information updated and readily accessible. This website will provide much more 

recent data than an annual report that takes months to complete and publish. The report will also include the 

names of any member thatehas been removed from the program. 

Comment: Sections 13 and 14 of the rule list the items that the companies or the municipalities need to 

provide in their annual summary. I would suggest that they also provide a summary of their compliance history for 

the previous year. Hopefully, the summary would be, "We were in compliance for the entire year. We received no 

notices of violation, we've had no agreed orders." Otherwise they probably should not be in this program. But it 

would provide an extra level of assurance to the public if they could see that along with the companies' progress 

on their beyond compliance activities, they could also see that there were no rule or law violations in the last year. 

It would strengthen the credibility of the program from the perspective of the public. (IKE) 

Response: IDEM agrees and has provisions in the rule to address this. The ESP annual summary already 

requires more than a statement or history of compliance over the past year. Providing a history could be a simple 

acknowledgment that the source wasn't inspected that year or had nothing to report. As it stands now, the annual 

report requires each member to determine their compliance status at the time of submission and certify, that to 

their best of their knowledge and based on reasonable inquiry, it is in compliance with all applicable standards. 

Comment: In general, I don't disagree that incentives need to be provided for companies to feel that this is a 

good thing for them. I just want to express real concern about the incentives related to inspections, and 

particularly preannounced inspections. I think that it is a very, very bad idea to have a system where a regulated 

industry gets an advance announcement, even if it's 24 hours in advance, that the inspector is coming the next 

day. 

There are companies I've talked to that are very much beyond compliance that have said it is not an incentive 

they would ever accept, because they want people to know that an inspector can come any time, unannounced, 

and they are ready to be inspected. So, I would really urge IDEM to rethink that. (IKE) 

Response: This provision is not included in the rule, however, a response is being provided in an effort to 

explain the rationale behind this aspect of the program. As indicated, not all members will desire to request this 

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incentive. However, today, more and more facilities have one environmental manager overseeing numerous 

facilities. These member facilities and environmental managers have earned a mere 24-hour notice to ensure 

they are present or have arranged for proper representation at the facility. 

Currently, in an effort to ensure proper representation and inspection criteria, there are several inspection 

scenarios where advance announcement of the inspection is provided today, outside of ESP. It is IDEM's intent to 

ensure inspections of ESP facilities are credible and thorough. Proper representation is essential to such an 

inspection process. 

Comment: One of the reasons given for preannounced inspections is that sometimes an inspector comes 

and the environmental manager isn't there that day because he's at another plant site and that makes the 

inspection difficult and it's inefficient for IDEM to have to come back another day. Because there will be relatively 

few companies in this program (maybe more as it gets more successful), an alternative incentive that could be 

offered rather than announcing the inspection a day ahead, would be for IDEM offer to come back another day if 

the environmental manager isn't there. That wouldn't be much of a burden on IDEM because there will be 

relatively few companies involved. (IKE) 

Response: IDEM has limited inspection resources, therefore, it is not an efficient use of these resources to go 

out into the field and not conduct agency business, returning to the same facility at a later date. This proposed 

alternative also lends itself to "scheduling inspections" which the agency feels could jeopardize the integrity of the 

program. 

Comment: Section 10 of the rule talks about the kinds of criteria that either will preclude a company from 

being considered for this program or might preclude a company from being considered for this program. It can be 

debated which criteria ought to be in which category. There's one in the "might" category that I would urge you to 

consider putting in the "shall preclude" category. If the company is in noncompliance with either a federal or a 

state consent decree or agreed order, it is not appropriate for the company to be eligible for this program until the 

problems are resolved. (IKE) 

Response: This provision was recently discussed again in an effort to better understand the concern and 

consider this comment. It was determined that far too many insignificant conditions not related to environmental 

performance are included in Agreed Orders and Consent Decrees to remove IDEM's ability to assess these cases 

individually. However, this provision still provides IDEM with the ability to deny or revoke membership in these 

cases and will be used as intended to ensure and maintain a high standard of program credibility. 

Comment: In relation to the ten-year permit renewals, there are circumstances under which there's some 

value added to reviewing some permits more frequently than once every ten years. That is a long time for a 

permit to go without any attention, especially if this is also a company that may be getting inspected less 

frequently because it's in this program. So, I would suggest that IDEM consider some form of check-in. There may 

well be applicable rules that have been promulgated in that period of time, and having an every-five-year look 

gives you a little bit more regular time to check in on things like that. (IKE) 

Response: IDEM has already begun rulemaking to make this a change for all regulated entities. Currently, 

many of these existing permits have been extended several years beyond the 5-year permit term. In an effort to 

increase overall agency efficiency, IDEM desires to issue these permits as 10-year permits for program members 

as appropriate and allowed by federal rule. 

Comment: The comments on monthly VOC monitoring that have come in, both from my organization and 

from U.S. EPA, indicate there is concern with monthly averaging of VOC emissions. The health standard for 

ozone is a daily health standard. U.S. EPA has always insisted that companies keep daily records so that they 

know on a daily basis that they're meeting the standard. U.S. EPA has expressed concern with this based on their 

comment, and I want to register my concern about it as well. (IKE) 

Response: IDEM does not believe this incentive provides reasonable opportunity to violate VOC emission 

limits in normal operations. The same concern relative to the averaging of noncompliant coatings with compliant 

coatings applies on a daily basis as well. The U.S. EPA prohibition referenced is not in any applicable federal 

regulations, therefore, not enforceable. IDEM has had discussions with U.S. EPA on this particular incentive and 

based on these discussions, believes we will reach an agreement. 

326 IAC 25 

SECTION 1.326 IAC 25 IS ADDED TO READ AS FOLLOWS: 

ARTICLE 25. VOLUNTARY PERFORMANCE BASED LEADERSHIP PROGRAMS 

Rule 1. Environmental Stewardship Program and Comprehensive Local Environmental Action Network 

Community Challenge Program 

- - -- - - - 

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lndiana Register 

326 IAC 25-1-1 Applicability 

Authority: IC 13-14-8; IC 13-1 7-3-4; IC 13-17-3-12; IC 13-27-8-3 

Affected: IC 13-15; IC 13-17 

Sec. 1. (a) The lndiana Environmental Stewardship Program and Comprehensive Local Environmental 

Action Network Community Challenge Program are voluntary performance based leadership programs 

that offer recognition, regulatory flexibility, and an opportunity to work directly with the department on 

innovative pilot projects for entities that consistently demonstrate environmental stewardship and make 

measurable efforts towards continual environmental improvement. In accordance with IC 13-27-8-3, an 

entity is not required to comply with this rule and 326 IAC 25-2 except as a provision of participation in 

these programs. 

(b) This rule applies to any lndiana entity that: 

(1) voluntarily participates in either program; 

(2) meets the eligibility requirements of section 3 of this rule; and 

(3) maintains membership by complying with this rule and 326 IAC 25-2. 

(Air Pollution Control Board; 326 IAC 25-1-1) 

326 IAC 25-1 -2 Definitions 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-1 1-2-35; IC 13-1 1-2-51; IC 13-15; IC 13-47 

Sec. 2. In addition to the definitions in IC 13-11-2, the following definitions apply throughout this rule 

and 326 IAC 25-2: 

(1) "Commissioner", as defined in IC 13-11-2-35(a), means the commissioner of the department of 

environmental management. 

(2) "Comprehensive Local Environmental Action Network Community Challenge Program" or "CLEAN" 

means the voluntary state program for units of local government in lndiana that: 

(A) demonstrate environmental stewardship; and 

(B) strive for continual environmental improvement. 

(3) "Department", as defined in IC 13-11-2-51, means the lndiana department of environmental 

management. 

(4) "Entity" means a company, corporation, firm, enterprise, authority, institution, partnership, sole 

proprietorship, limited liability company, any person as defined in IC 13-11-2-158(a), or unit of local 

government, or part or combination thereof, whether incorporated or not, public or private, that has its 

own functions and administration. Except as described in section 4(c) of this rule, an entity has one (1) 

geographic location under: 

(A) at least one (1) EMS; and 

(B) the direction of senior management. 

(5) "Environmental aspect" means an element of the activities, products, or services of an entity that 

has the potential to interact with the environment. 

(6) "Environmental impact" means any change to the environment, whether adverse or beneficial, 

wholly or partially resulting from the environmental aspects of an entity. 

(7) "Environmental laws, rules, and regulations", for the purpose of this article, means the system of 

laws and standards administered by U.S. EPA, the department, or related local government bodies. 

(8) "Environmental management system" or "EMS" means a continuous cycle of planning, 

implementing, reviewing, and improving a set of documented processes and practices used to 

develop and implement the environmental policy and manage the environmental aspects of an entity 

to: 

(A) maintain compliance; 

(B) reduce adverse environmental impacts; and 

(C) increase operational efficiency. 

(9) "Environmental objective" means an environmental goal that is consistent with the environmental 

policy of an entity. 

(10) "Environmental policy" means the overall commitment and direction of an entity related to 

environmental performance as formally expressed by senior management. 

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Indiana Register 

(1 1) "Environmental Stewardship Program" or "ESP" means the voluntary state program for entities in 

Indiana that: 

(A) demonstrate environmental stewardship; and 

(B) strive for continual environmental improvement. 

(12) "Environmental target" means a detailed performance requirement that: 

(A) is quantified where practical; and 

(B) arises from the environmental objectives. 

(13) "Geographic location," for the purposes of this article, means an aggregation of one (1) or more 

operations that are: 

(A) located on: 

(i) one (1) piece of property; or 

(ii) contiguous or adjacent properties; and 

(B) owned, operated, or controlled by the same entity. 

(14) "Independent audit" means an audit conducted by a party that: 

(A) is not directly employed by the entity being audited; and 

(B) has not played a substantive role in implementing the EMS being audited. 

(15) "National Environmental Performance Track Program" or "NEPT" means the U.S. EPA's National 

Environmental Performance Track Program. 

(16) "Senior management" means the following: 

(A) For entities, the individual or individuals with executive responsibility for the entity. 

(B) For a partnership or sole proprietorship, a general partner or the proprietor, respectively. 

(C) For a unit of local government or other governmental unit, either a principal executive officer or 

ranking elected official. 

(17) "U.S. EPA" means the administrator of the United States Environmental Protection Agency or the 

administrator's designee. 

(Air Pollution Control Board; 326 IAC 25-1-2) 

326 IAC 25-1-3 Eligibility criteria 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 3. Participation in ESP or CLEAN is voluntary and is open to entities located and operating in 

lndiana that meet the following criteria: 

(1) The standard of environmental compliance as described in section 10 of this rule. 

(2) Implement and maintain an EMS as described in section 11 of this rule. 

(3) Conduct continuous environmental improvement initiatives as described in section 12 of this rule. 

(Air Pollution Control Board; 326 IAC 25-1-3) 

326 IAC 25-1-4 Membership application 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 4. (a) A member of senior management shall submit an application, preferably electronically, by 

one (1) of the following methods: 

(1) For applications for either ESP or CLEAN only, to the department on: 

(A) a form, whether electronically or hard copy, provided by the department; or 

(B) an equivalent form. 

(2) For applications for both ESP and NEPT, to U.S. EPA, electronically on the form provided by U.S. 

EPA. An application submitted to U.S. EPA satisfies the requirement for an application to the 

department for ESP. 

(b) The application shall be signed by a member of senior management. The signature shall: 

(1) constitute affirmation that the statements in the application are true and complete, as known at the 

time of completion of the application; and 

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(2) subject the member of senior management to liability under state laws forbidding false or 

misleading statements. 

(c) A membership for an entity shall be limited to cover one (1) geographic location, except that an 

entity may apply for membership as a group of locations if the following criteria are met: 

(1) Each location must meet the eligibility criteria individually and as a group, including the 

requirement to identify environmental improvement initiatives. 

(2) The environmental improvement initiatives may be similar or the same for all of the locations, but 

each location must: 

(A) play an active role in each initiative; and 

(B) demonstrate continuous environmental improvement. 

(3) The EMS must address staff and activities at each location. 

(4) Senior management must be common to all locations. 

(5) The standards of environmental compliance in section 10 of this rule shall apply to all lndiana 

locations under the control of the entity. 

(d) The commissioner shall make a determination on acceptance into ESP or CLEAN based on the 

following: 

(I) The EMS must meet the standards in section 11 of this rule. 

(2) A site visit by a representative of the department to provide an understanding of the environmental 

aspects of the entity and the EMS. 

(3) Identification of environmental improvement initiatives and associated objectives and targets as 

follows: 

(A) For ESP applicants, at least one (1) environmental improvement initiative and associated 

objectives and targets for the first year of membership. 

(8) For CLEAN applicants, at least five (5) environmental improvement initiatives and associated 

objectives and targets for the three (3) year term of membership. 

(4) For ESP applicants, information provided to U.S. EPA if the entity has also applied for membership 

in NEPT. 

(5) Compliance audits conducted by: 

(A) the department; 

(B) the U.S. EPA; 

(C) other state offices; and 

(D) other federal agencies; 

as appropriate. 

(6) Other information, including the following: 

(A) Compliance information obtained from department staff. 

(B) Verifiable, applicable information received from sources determined to be relevant by the 

commissioner. 

(Air Pollution Control Board; 326 IAC 25-1-4) 

326 IAC 25-1-5 Term of membership 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 . 

Sec. 5. (a) The term of membership is three (3) years from the date the entity is accepted into the 

program as long as the entity continues to meet the program criteria and submits the annual summary. 

(b) For ESP members, the department may extend the term for up to one (1) year to coincide with the: 

(1) membership date in NEPT, if applicable; or 

(2) annual summary submission by allowing a member whose expiration date occurs before April 1 of 

that year to extend its expiration date to April 1 of that year. 

(c) For CLEAN members, the department may extend the term for up to ninety (90) days to 

accommodate submission of the third annual summary, at which time CLEAN members may seek to 

renew membership in the program. 

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Indiana Register 

(Air Pollution Control Board; 326 IAC 25-1-5) 

326 IAC 25-1-6 Renewal of ESP membership 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-1.2 

Affected: IC 13-15; IC 13-17 

Sec. 6. (a) To renew ESP membership, a member of senior management shall submit a renewal 

application, preferably electronically, by April 1 of the third year of membership as follows: 

(I) For renewal applications for ESP only, to the department on: 

(A) a form, either electronically or hard copy, provided by the department; or 

(B) an equivalent form. 

(2) For renewal applications for both ESP and NEPT, electronically to U.S. EPA on the form provided 

by U.S. EPA. 

(b) The application shall be signed by a member of senior management. The signature shall: 

(1) constitute affirmation that the statements in the application are true and complete, as known at the 

time of completion of the application; and 

(2) subject the member of senior management to liability under state laws forbidding false or 

misleading statements. 

(c) The department shall review the renewal application and the annual summaries submitted during 

the most recent term of membership. The review of a renewal shall follow the same procedures as the 

review for the initial application regarding compliance checks and EMS evaluations, except a general site 

visit by a representative of the department shall not be required. 

(d) The commissioner shall make a determination on the ESP renewal application based on the 

following: 

(1) The EMS must continue to meet the standards in section 11 of this rule. 

(2) Review of the annual summaries submitted during the previous membership term. 

(3) Successful coordination with a member of senior management to set at least one (I) environmental 

improvement initiative and associated goals for the next year of membership. 

(4) Information provided by U.S. EPA if the entity has also applied for membership in NEPT. 

(5) Compliance audits conducted by: 

(A) the department; 

(B) the U.S. EPA; 

(C) other state offices; and 

(D) other federal agencies; 

as appropriate. 

(6) Other information, including the following: 

(A) Compliance information obtained from department staff. 

(B) Verifiable, applicable information received from sources determined to be relevant by the 

commissioner. 

(Air Pollution Control Board; 326 IAC 25-1-6) 

326 IAC 25-1-7 Renewal of CLEAN membership 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 7. (a) To renew CLEAN membership, a member of senior management shall submit the third 

annual summary of the previous membership term: 

(1) to the department within sixty (60) days after the third annual anniversary of the date the previous 

membership term began; 

(2) to clearly indicate the intention to renew membership; and 

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(3) including five (5) objectives, targets, and action plans for the next three (3) year term. 

(b) The application shall be signed by a member of senior management. The signature shall: 

(I) constitute affirmation that the statements in the application are true and complete, as known at the 

time of completion of the application; and 

(2) subject the member of senior management to liability under state laws forbidding false or 

misleading statements. 

(c) The department shall review the annual summaries and five (5) objectives, targets, and action plans 

submitted during the most recent term of membership. The review of this information shall follow the 

same procedures as the review for the initial application regarding compliance checks and EMS 

evaluations, except a general site visit by a representative of the department shall not be required. 

(d) The commissioner shall make a decision on the CLEAN.renewal application based on the 

following: 

(1) The EMS must continue to meet the standards in section 11 of this rule. 

(2) Review of the annual summaries submitted during the previous membership term. 

(3) Successful coordination with a member of senior management to identify at least five (5) 

environmental improvement initiatives and associated goals for the next three (3) year term of 

members hip. 

(4) Compliance audits conducted by: 

(A) the department; 

(B) the U.S. EPA; 

(C) other state offices; and 

(D) other federal agencies; 

as appropriate. 

(5) Other information, including the following: 

(A) Compliance information obtained from department staff. 

(B) Verifiable, applicable information received from sources determined to be relevant by the 

commissioner. 

(e) If the entity does not request a renewal with the third annual summary, then membership in CLEAN 

expires upon receipt by the department of the third annual summary. 

(Air Pollution Control Board; 326 IAC 25-1-7) 

326 IAC 25-1-8 Revocation 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 8. (a) The commissioner shall revoke membership in ESP or CLEAN if the entity has not 

substantially complied with any of the following: 

(1) The standards of environmental compliance described in section 10 of this rule. 

(2) The requirement to make sufficient progress towards attaining the environmental initiatives 

identified and agreed upon at the time of application and submittal of the annual summaries. 

(3) The requirement to maintain an approved EMS as required for membership. 

(4) The prohibition against knowingly submitting false information: 

(A) on the application; 

(B) in the annual summary; 

(C) during a site visit or evaluation by the department; or 

(D) during an independent audit. 

(b) The commissioner may revoke the membership in ESP or CLEAN if the entity has not substantially 

complied with any of the following: 

(1) The ESP or CLEAN program requirements in this article, as applicable. 

(2) Federal, state, or local environmental laws, rules, and regulations. 

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Indiana Register 

(c) A determination by the commissioner to revoke a membership under subsection (b) may be based 

I upon the following: 

(1) Compliance information obtained from department staff. 

(2) Verifiable, applicable information received from sources determined to be relevant by the 

commissioner. 

(d) If the commissioner determines that a situation shall or may warrant revocation of membership 

based on subsection (a) or (b), the following applies: 

(I) The commissioner shall notify the entity in writing: 

(A) of any potential deficiencies found; and 

(B) that the commissioner is considering removing the entity from the program. 

(2) The notice shall: 

(A) state that the commissioner may consider removing the entity from the program after the 

response time period provided to the member; 

(B) identify the potential deficiencies; and 

(C) provide the entity with thirty (30) days to respond. 

(3) Within thirty (30) days after the end of the time period provided to the member, the commissioner 

shall consider the response and determine if the situation warrants revocation of membership. 

(e) An entity whose membership has been revoked may reapply under section 4 of this rule at any time 

twelve (12) months after the revocation. 

(f) Revocation of memberships shall be posted on the department Web site for the duration of the 

current application period. 

(g) Except as described in subsection (h), immediately upon revocation, all member incentives and 

regulatory benefits afforded to the member of ESP or CLEAN under this article shall be revoked. 

(h) An entity whose membership has been revoked subsequent to renewal of the entities FESOP or 

MSOP permit under 326 IAC 25-2-2 shall apply for a renewal permit with a term of not more than five (5) 

years within six (6) months of the date of revocation. 

(Air Pollution Control Board; 326 IAC 25-1-8) 

326 IAC 25-1 -9 Transfers 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-1 2 

Affected: IC 13-15; IC 13-17 

Sec. 9. Membership in ESP or CLEAN may be transferred to another entity at the same geographic 

location provided: 

(1) the department is notified within ninety (90) days of the: 

(A) change in ownership or management; and 

(B) intent to maintain membership; and 

(2) senior management commits to: 

(A) fulfilling the previous member's commitments; and 

(B) the requirements of the program for the remainder of the membership term by signing an 

updated membership application. 

(Air Pollution Control Board; 326 IAC 25-1-9) 

326 IAC 25-1-10 Standards of environmental compliance 

Authority: IC 13-14-8; IC 13-47-34; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

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Indiana Register 

Sec. 10. (a) To be accepted into ESP or CLEAN, a member of senior management of the entity shall 

submit a certification with the application to the department certifying that, based on information and 

belief after reasonable inquiry, the entity is currently in compliance with all applicable local, state, and 

federal environmental laws, rules, and regulations. 

(b) The department shall: 

(1) review the administrative, civil, and criminal environmental compliance and enforcement history of 

the entity in order to determine if the entity satisfies the required standard of substantial 

environmental compliance; 

(2) consider all applicable environmental compliance and enforcement criteria, including the criteria in 

subsections (c) and (d) in determining whether or not an entity has achieved substantial 

environmental compliance; and 

(3) post the organizational name and location for all new and renewal applications on the department 

Web site within fourteen (14) days of the close of each application submission round. 

(c) The following criteria shall prevent acceptance of an entity into the ESP or CLEAN: 

(I) Corporate criminal conviction or guilty plea for environmentally-related violations of criminal laws 

involving the entity or an officer of the entity within the past five (5) years. 

(2) Criminal conviction or plea of employee at the entity for environmentally-related violations of 

criminal laws within the past five (5) years. 

(d) The existence of one (I) or more of the following criteria may prevent acceptance of an entity into 

ESP or CLEAN: 

(I). Ongoing criminal investigation or prosecution of the entity, or an officer or employee of the entity, 

for a violation of environmental law. 

(2) Three (3) or more significant violations at the entity in the past three (3) years. 

(3) Unresolved or unaddressed significant noncompliance or significant violations. 

(4) Planned, but not yet filed, judicial or administrative action, by U.S. EPA or the department, against 

the entity. 

(5) Ongoing U.S. EPA or department-initiated litigation against the entity. 

(6) A situation where an entity is not in compliance with the schedule and terms of an order or decree 

issued by: 

(A) U.S. EPA; or 

(6) the department. 

(7) A history of significant environmental problems or a pattern of noncompliance at the entity or at 

other affiliated entities under the same ownership or control. 

(Air Pollution Control Board; 326 IAC 25-1-10) 

326 IAC 25-1-11 Environmental management system 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 11. (a) An approved EMS must be implemented by the entity before acceptance of an entity into 

ESP or CLEAN. 

(b) An EMS that meets the criteria for ESP and CLEAN must, at a minimum, include the following: 

(1) Evidence of senior management support, commitment, and approval provided through 

management review of records, employee interviews, or signatory reference to the applicant's 

environmental policy. 

(2) A written environmental policy directed toward the following: 

(A) Compliance. 

(B) Pollution prevention. 

(C) Continuous improvement. 

(3) For CLEAN members, the environmental policy must also address sharing environmental decisions 

and performance information with the community. 

(4) Identification of the environmental aspects at the entity. 

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Indiana Register 

(5) Prioritization of the environmental aspects and a determination of those aspects deemed 

significant by the entity considering, at the minimum, environmental impacts and applicable laws, 

rules, and regulations. 

(6) Established priorities and environmental objectives and targets for the following: 

(A) Continuous improvement in environmental performance. 

(B) Ensuring compliance with applicable environmental laws, rules, regulations, and permit 

conditions. 

(7) An established community outreach mechanism that includes the following: 

(A) Identifying and responding to community concerns. 

(B) Informing the community of important matters that affect the community. 

(C) Reporting on the EMS, including, at a minimum, reporting to the public on the environmental 

policy and significant aspects. 

(D) Through the annual summary, reporting on the environmental improvement initiatives, including 

progress towards the most recent environmental improvement initiatives identified in the 

application or annual summary. 

(8) Incorporation of environmental and pollution prevention planning in the development of new 

products, processes, and services and modifications of existing processes. 

(9) Evidence of clear responsibility by the entity for the following: 

(A) Implementation, training, monitoring, EMS maintenance, and taking corrective action. 

(B) Ensuring compliance with applicable environmental laws, regulations, and permit conditions. 

(10) Documentation of the implementation procedures and the results of implementation. 

(11) Appropriately written EMS procedures to include documented plans, records, and procedures as 

needed for successful implementation of an EMS as defined in section 2(8) of this rule. 

(12) An annual evaluation of the EMS with written results provided to senior management and affected 

employees. 

(c) For CLEAN members, the environmental policy must be adopted through an executive order, 

resolution, or ordinance. 

(d) The department shall determine if the EMS meets the criteria in subsection (b). 

(e) A representative of the department shall perform an on-site review, evaluation, and verification of 

the EMS if, within twelve (12) months of the application submittal, the EMS has not been: 

(1) audited by an independent party; or 

(2) registered pursuant to a recognized certification standard. 

(Air Pollution Control Board; 326 IAC 25-1-1 1) 

326 IAC 25-1-12 Continuous environmental improvement 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-1 5; IC 13-17 

Sec. 12. (a) In coordination with the department, a member of senior management shall identify 

continuous environmental improvement initiatives for the appropriate program, as follows: 

(1) For ESP, a member of senior management shall identify three (3) continuous environmental 

improvement initiatives for each membership term. One (1) initiative shall be identified at the time of 

the initial or renewal application and the remaining initiatives shall be identified each year at the time 

the annual summary is submitted to the department. 

(2) For CLEAN, a member of senior management shall identify five (5) continuous environmental 

improvement initiatives for the three (3) year membership term. 

(b) Entities accepted into ESP or CLEAN shall: 

(1) maintain records that describe and track the actions taken toward achievement of the 

environmental improvement initiatives; and 

(2) submit an annual summary in accordance with section 13 or 14 of this rule, as applicable, 

documenting progress toward the environmental improvement initiatives for that year. 

- -- 

Date Dec 28,2006 10.44 58AM EST DIN 20061227-IR-326050232PRA Page I8 
Indiana Register 

(c) Entities accepted into ESP or CLEAN shall demonstrate continuous environmental improvement by 

the following: 

(1) Conducting periodic pollution prevention or environmental improvement assessments that identify 

opportunities for reducing pollution and eliminating waste at the entity. 

(2) Identifying, obtaining approval for, and implementing environmental improvement initiatives in 

coordination with the department that: 

(A) include objectives and targets beyond current legal requirements; and 

(B) as applicable, specify the: 

(ij environmental media; 

(ii) types of pollution to be prevented or reduced; 

(iii) implementation activities; and 

(iv) projected time frames. 

(3) Reporting on the activities undertaken toward implementation of the initiatives identified with the 

department. 

(Air Pollution Control Board; 326 IAC 25-1-72) 

326 IAC 25-1-13 Annual summary for ESP members 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15: IC 13-17 

Sec. 13. (a) Entities accepted into ESP shall submit an annual summary on a form provided by the 

department or an equivalent form documenting the following: 

(1) Progress toward the objectives and targets identified for the environmental improvement initiative 

for that year. 

(2) Results obtained from achieving the environmental improvement initiative objectives and targets, if 

applicable. 

(3) An annual review of the EMS by the entity. 

(b) If the entity has not attained the objectives and targets associated with an environmental 

improvement initiative, a member of senior management shall provide the following: 

(1) Verification of continued progress toward the objectives and targets. 

(2) A description of the reason the objectives and targets have not been attained. 

(c) Each annual summary must include identification of the environmental improvement initiative for 

the next year, unless the entity is terminating membership in ESP. 

(d) The annual summary shall: 

(1) cover the twelve (12) month calendar year; 

(2) be submitted to the department for each year by April 1 of the following year; and 

(3) be submitted for each calendar year in which the entity has been a member for at least three (3) full 

months. 

(e) An annual summary submitted to U.S. EPA as a requirement of being a member of NEPT shall 

satisfy the requirement for an annual summary for ESP members. 

(Air Pollution Control Board; 326 IAC 25-1-13) 

326 IAC 25-1-14 Annual summary for CLEAN members 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 14. (a) Entities accepted into CLEAN shall submit an annual summary on a form provided by the 

department or an equivalent form documenting the following: 

Date: Dec 28.2006 10:44:58AM EST DIN: 20061227-IR-326050232PR.A Page I9 
lndiana Register 

(1) Progress toward the objectives and targets identified for the five (5) environmental improvement 

initiatives. 

(2) Results obtained from achieving the environmental improvement initiative objectives and targets, if 

applicable. 

(3) An annual review of the EMS by the entity. 

(b) If the entity has not attained the objectives and targets associated with an environmental 

improvement initiative at the time the third annual summary is submitted, a member of senior 

management shall provide a description of the reason the objectives and targets have not been attained. 

(c) The annual summary shall be submitted to the department sixty (60) days after the annual 

anniversary of the date the previous membership term began. 

(Air Pollution Control Board; 326 IAC 25-1-14) 

Rule 2. Regulatory Flexibility for the Environmental Stewardship Program, Comprehensive Local 

Environmental Action Network Community Challenge Program, and lncorporation by Reference of NEPT 

Incentives 

326 IAC 25-2-1 lncorporation by reference of federal incentive for NEPT members 

Authority: IC 13-14-8; 1C 13-17-3-4; 1C 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 1. The air pollution control board incorporates by reference the Performance Track provisions at 

40 CFR 63.2*, 40 CFR 63.10*, and 40 CFR 63.16*. The incentives in these federal rules are only available to 

members of the NEPT program. 

*This body of documents is incorporated by reference. Copies may be obtained from the Government 

Printing Office, 732 North Capitol Street NW, Washington, D.C. 20401 or are available for review and 

copying at the lndiana Department of Environmental Management, Office of Air Quality, lndiana 

Government Center-North, Tenth Floor, 100 North Senate Avenue, Indianapolis, lndiana 46204. 

(Air Pollution Control Board; 326 IAC 25-2-1) 

326 IAC 25-2-2 Ten year permit renewals 

Authority: IC 13-14-8; IC 13-1 7-3-4; IC 13-17-3-12 

Affected: IC 13-1 5-3-2; IC 13-17 

Sec. 2. (a) Notwithstanding 326 IAC 2-1.1-9.5 and 326 IAC 2-8-4(2) and in accordance with IC 13-15-3-2, 

a federally enforceable state operating permit (FESOP) for a member in ESP or CLEAN may be renewed 

for a period of up ten (10) years, if approved by the commissioner. 

(b) Notwithstanding 326 IAC 2-1.1-9.5 and 326 IAC 2-6.1-7(a) and in accordance with IC 13-15-3-2, a 

minor state operating permit (MSOP) for a member in ESP or CLEAN may be renewed for a period of up 

ten (10) years, if approved by the commissioner. 

(Air Pollution Control Board; 326 IAC 25-2-2) 

326 IAC 25-2-3 Monthly compliance methods for volatile organic compound 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15-3-2; IC 13-17 

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Indiana Register 

Sec. 3. (a) Notwithstanding 326 IAC 8-I-2(a)(7), the emission limitations specified in 326 IAC 8 can be I achieved through monthly volume-weighted averaging of all coatings applied in a coating line or printing 

line subject to the requirements in 326 IAC 8-2 or 326 IAC 8-5-5. 

(b) Sufficient records must be maintained to demonstrate compliance with the applicable emission 

limitation on a monthly average basis. The records must be made available to the department upon 

request. 

(c) Records of monthly VOC emissions shall be maintained in: 

(1) pounds per month; or 

(2) tons per month. 

(d) If monthly records sufficient to determine an accurate monthly weighted average are not available, 

each coating, ink, and solvent shall meet the requirements of the applicable section. 

(Air Pollution Control Board; 326 IAC 25-2-3) 

326 IAC 25-2-4 Pollution prevention projects 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15-3-2; IC 13-17 

Sec. 4. Notwithstanding 326 IAC 2-6.1-6(i)(l)(J) and 326 IAC 2-8-ll.l(f)(l)(J), any pollution prevention 

project, as defined in 326 IAC 2-1.1-1(14), that would otherwise be subject to significant permit revision 

procedures, and that does not result in a net increase in potential emissions of more than the 

significance levels in 326 IAC 2-2-I(xx), may be processed as a minor permit revision as follows: 

(1) For minor state operating permits, under 326 IAC 2-6.1-6(h). 

(2) For federally enforceable operating permits, under 326 IAC 2-8-ll.l(e). 

(Air Pollution Control Board; 326 IAC 25-2-4) 

Notice of Public Hearing 

Posted: 12/27/2006 by Legislative Services Agency 

An html version of this document. 

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 21 
ATTACHMENT - G 
lndiana Register 

TITLE326 AIR POLLUTION CONTROL BOARD 

Notice of Public Hearing 

LSA Document #05-232 

Notice of Public Hearing 

Under IC 4-22-2-24, IC 13-14-8, and IC 13-14-9, nofice is hereby given that on February 7, 2007, af 1:00 

p.m., at the lndiana Governmenf Cenfer-South, 402 West Washington Street, Conference Center Room A, 

Indianapolis, lndiana the Air Pollution Control Board will hold a public hearing on amendments to 326 IAC 25 

concerning the Environmental Stewardship Program (ESP) and Comprehensive Local Environmental Action 

Network (CLEAN). 

The purpose of fhis hearing is to receive comments from the public prior to final adopfion of fhese rules by 

the board. All inferesfed persons are invifed and will be given reasonable opportunify to express fheir views 

concerning the proposed amendmenfs. Oral statements will be heard, but, for fhe accuracy of fhe record, all 

comments should be submitfed in writing. 

Addifional information regarding this action may be obtained from Christine Pedersen, Rules Development 

Secfion, Ofice of Air Qualify, (31 7) 233-6868 or (800) 451-6027 (in Indiana). 

Individuals requiring reasonable accommodafions for participation in this event should contact the lndiana 

Departmenf of Environmental Management, Americans with Disabilities Act coordinator at: 

Atfn: ADA Coordinator 

lndiana Departmenf of Environmental Managemenf 

I00 North Senate Avenue 

Indianapolis, lndiana 46204 

or call (317) 232-3077 (V) or (317) 232-6565 (TDD). Speech and hearing impaired callers may confact IDEM via 

the Indiana Relay Service (71 I) or 1-800-743-3333. Please provide a minimum of 72 hours notificafion. 

Copies of fhese rules are now on file af the Ofice of Air Quality, lndiana Departmenf of Environmenfal 

Management, lndiana Government Cenfer-North, 100 North Senate Avenue, Tenth Floor East and Legislafive 

Services Agency, One North Capifol, Suite 325, Indianapolis, lndiana and are open for public inspection. 

Kathryn A. Watson, Chief 

Air Programs Branch 

Office of Air Quality 

Posfed: 12/27/2006 by Legislative Services Agency 

An html version of this document. 

' I 

Date: Dec 28,2006 9:43:53AM EST DIN: 20061227-IR-326050232PHA Page I 
ATTACHMENT - H 
PUBLIC MEETING OF FEBRUARY 7, 2007 I 

ORIGINAL 1 

l2 11 Lindy L. Meyer, Jr., a Notary Public in and for 

9 

10 

11 

the State of Indiana, County of Shelby, at the 

Indiana Government Center South, conference 

PROCEEDINGS 

before the Indiana Air Pollution Control Board, 

Dr. James Miner, Chairman, taken before me, 

Center, Room A, 402 West Washington Street, 

Indianapolis, Indiana, on Wednesday, February 7, 

2007 at 12:58 o'clock p.m. 

William F. Daniels, RPR/CP CM d/b/a 

ACCURATE REPORTING OF INDIANA 

12922 Brighton Avenue 

Carmel, Indiana 46032 

(317) 848-0088 
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BOARD MEMBERS: 

Dr. James Miner, M.D., Chairman 

Thomas Anderson 

Mark A. Flint 

Randy Staley 

Chris Horn 

Kurt Anderson 

David Benshoof 

Dr. Phil Stevens 

Howard W. Cundiff, Proxy, State Board of 

Health 

John Bacone, Proxy, Department of 

Natural Resources 

Steve Boyce, Proxy, Lieutenant 

Governor 

Pamela Fisher, Proxy, Indiana Economic 

Development Corporation 

IDEM STAFF MEMBERS : 

Kathy Watson 

Daniel Murray 

John Nixon 

Karol Chuma 

PUBLIC SPEAKERS: 

APPEARANCES : 

None 
12:58 o'clock p.m. 

February 7, 2007 - - - 

CHAIRMAN MINER: Good afternoon. The 

February 7th, 2007 meeting of the Air Pollution 

Control Board of the State of Indiana will now 

come to order. A quorum of the Board is present. 

I will now introduce the members and their 

representations. We have Mr. Kurt Anderson, 

representing manufacturing; Mr. Tom Anderson, 

representing the environment; Mr. John Bacone, 

proxy for the Department of Natural Resources; 

Mr. David Benshoof, representing small business; 

Mr. Mark Flint, representing local government, a 

new member. Mark joins us in place of Marlow 1 

Harmon, who unfortunately passed away in 

December. I'm glad to have Mark here with us. 

Mark, I don't know if you want to just I 

introduce yourself briefly, where your from. 

MR. FLINT: Okay. 

CHAIRMAN MINER: That'd be great. 

MR. FLINT: I'm a Pike County 

Commissioner. I'm in my second term as a County i 

commissioner. I also work for Indianapolis 
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please stand? 

(Reporter sworn.) 

CHAIRMAN MINER: Thank you. 

The purpose of this hearing is to give all 

interested persons an opportunity to comment on 

the specific of topics of the hearing today. 

The first hearing will be a public hearing 

before the Air Pollution Control Board of the 

State of Indiana regarding final adoption of New 

Article 326 IAC 25, the Environmental Stewardship 

Program, No. 5-232. 

I will now introduce Exhibit No. 1, the 

proposed rule as preliminarily adopted, into the 

record of the hearing. 

Thank you, Kathy. 

Is there someone from the Department who 

wishes to speak to the this rule? 

MS. WATSON: Dan Murray. 

CHAIRMAN MINER: Dan? 

MR. MURRAY: Good afternoon. Thank 

you, Chairman Miner, members of the Board. 

I heard 18 months for a rulemaking 

process. We were close on this one. Twenty 
months is when I first came before you to talk 

about the concept of our Environmental 

Stewardship Program and why our state wanted to 

take our program not only through the legislative 

process and have statutory authority for such a 

program, but in our agency's rules as well. 

We're the only state to go through both of 

those processes for such an environmental 

leadership program, so it's been a little bit of 

a long and winding road, but I think the process 

has -- it has shaped the program, as a result of 

the public meetings that we held and public 

comments. 

We have added flexibility for how 

organizations would apply the program based on 

their structure, corporate or facility based, 

increased accountability on the part of the 

members and the agency, as well as increased 

reporting by the agency and members, allowing 

more information for public access. And we've 

also allowed public comment on applicants prior 

to membership determination, which was something 

the public wanted. 

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you've endeavored to do this, and the work that's 

been involved should be commented very much so -- 

for getting this established, and I think it goes 

a long way in making it more than just a 

situation where government polices the industry, 

that the industry begins to become proactive in 

the process of trying to make the environment 

better. It's a great process. 

I have no cards at this time. Is there 

anyone from the audience who wishes to make a 

comment? 

(No response. ) 

CHAIRMAN MINER: Seeing none, this 

hearing is now concluded. 

The Board will take action on final 

adoption of New Article 326 IAC 25. Are there 

any Board questions or comments at thls time? 

(No response.) 

CHAIRMAN MINER: Seeing none, I would 

entertain a motion for final adoption. 

MR. K. ANDERSON: I move. 

CHAIRMAN MINER: I have a motlon from 

Mr. Anderson. 
DR. STEVENS: Second. 

CHAIRMAN MINER: A second from 

Dr. Stevens. I will now do a roll-call vote and 

poll the Board. 

Mr. Anderson? 

MR. K. ANDERSON: Yes. 

CHAIRMAN MINER: Mr. Anderson votes 

yes. 

Mr. Tom Anderson? 

MR. T. ANDERSON: Aye. 

CHAIRMAN MINER: Mr. Anderson votes 

yes. 

Mr. Bacone? 

MR. BACONE: Aye. 

CHAIRMAN MINER: Mr. Bacone votes 

yes. 

Mr. Benshoof? 

MR. BENSHOOF: Yes. 

CHAIRMAN MINER: Mr. Benshoof votes 

yes. 

Mr. Boyce? 

MR. BOYCE: Yes. 

CHAIRMAN MINER: Mr. Boyce votes yes. 
Ms. Fisher? 

MS. FISHER: Yes. 

CHAIRMAN MINER: Ms. Fisher votes 
CERTIFICATE 

I, Lindy L. Meyer, Jr., the undersigned 

Court Reporter and Notary Public residing in the 

City of Shelbyville, Shelby County, Indiana, do 

hereby certify that the foregoing is a true and 

correct transcript of the proceedings taken by me 

on Wednesday, February 7, 2007 in this matter and 

transcribed by me. 

Notary Pub1i.c in and 

for the State of Indiana. 

My Commission expires October 27, 2008. 
EXHIBIT 1 

Rap #05-232 

ESPICLEAN 

February 7,2007 

TITLE 326 AIR POLLUTION CONTROL BOARD 

PROPOSED RULE AS PRELIMINARILY ADOPTED 

LSA Document #05-232 

DIGEST 

Adds 326 IAC 25. Effective 30 days after filing with the Publisher. 

HISTORY 

First Notice of Comment Period: September 1,2005, Indiana Register (28 IR 3665). 

Continuation of First Notice: April 1, 2006, Indiana Register (29 IR 2373). 

Second Notice: June 1,2006, Indiana Register (29 IR 3 109). 

Notice of First Hearing: June 1, 2006, Indiana Register (29 IR 3 121). 

Change of Hearing Notice: September 6,2006, Indiana Register (DIN: 20060906-R326050232CHA) 

Date of Flrst Hearmg: October 19, 2006. 

Proposed Rule: December 27, 2006, Indiana Register (DIN: 20061227-IR326050232PRA). 

Notice of Second Hearing: December 27, 2006, Indiana Register (DIN: 20061227-IR326050232PHA). 

Thxd Comment Period: December 27,2006, Indiana Register (DIN: 20061227-IR326050232PRA). 

Date of Second Hearing: February 7,2007. 

326 IAC 25 

SECTION I. 326 IAC 25 IS ADDED TO READ AS FOLLOWS: 

ARTICLE 25. VOLUNTARY PEWOF#'IANCE BASED LEADERSHIP PROGRAMS 

Rule 1. Environmental Stewardship Program and Comprehensive Local 

Environmental Action Network Community Challenge Program 

326 IAC 25-1-1 Applicability 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12; IC 13-27-8-3 

Affected: IC 13-15; IC 13-17 

Sec. 1. (a) The Indiana Environmental Stewardship Program and Comprehensive 

Local Environmental Action Network Community Challenge Program are voluntary 

Page 1 of 16 
Rap #05-232 

ESPICLEAN 

February 7,2007 

performance based leadership programs that offer recognition, regulatory flexibility, and 

an opportunity to work directly with the department on innovative pilot projects for 

entities that consistently demonstrate environmental stewardship and make measurable 

efforts towards continual environmental improvement. In accordance with 1C 13-27-8-3, 

an 

entity is not required to comply with this rule and 326 IAC 25-2 except as a provision of 

participation in these programs. 

(b) This rule applies.to any Indiana entity that: 

(1) voluntarily participates in either program; 

(2) meets the eligibility requirements of section 3 of this rule; and 

(3) maintains- membership by complying with this rule and 326 IAC 25-2. 

(Air Pollution Control Board; 326IAC 25-1- I) 

326 IAC 25-1-2 Definitions 

Authority: IC 13-14-8.; .IC 43-17-3-4; IC '13-1 7-3-12 

Affected: IC 13-11-2-35; IC 13-11-2-51; IC 13-15; IC 13-17 

Sec. 2. In addition to the definitions in IC 13-11-2, the following definitions apply 

throughout this rule and 326 IAC 25-2: 

(1) "Commissioner", as defined in IC 13-1 1-2-35(a), means the commissioner of the 

department of environmental management. 

(2) "Comprehensive Local Environmental Action Network Community Challenge 

Program" or "CLEAN" means the voluiltary state program for units of local 

government in Indiana that: 

(A) demonstrate environmental stewardship; and 

(B) strive for continual environmental improvement. 

(3) "Department", as defined in IC 13-11-2-51, means the Indiana department of 

environmental management. 

(4) "Entity" means a company, corporation, firm, enterprise, authority, institution, 

partnership, sole proprietorship, limited liability company, any person as defined in 

IC 13-11-2-158(a), or unit of local government, or part or combination thereof, 

whether incorporated or not, public or private, that has its own functions and 

administration. Except as described in section 4(c) of this rule, an entity has one (1) 

geographic location under: 

(A) at least one (I) EMS; and 

(B) the direction of senior management. 

(5) "Environmental aspect" means an element of the activities, products, or services 

of an entity that has the potential to interact with the environment. 

(6) "Environmental impact" means any change to the environment, whether 

adverse or beneficial, wholly or partially resulting from tbe environmental aspects 

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February 7, 2007 

of an entity. 

(7) "Environmental laws, rules, and regulations", for the purpose of this article, 

means the system of laws and standards administered by U.S. EPA, the department, 

or related local government bodies. 

(8) "Environmental management system" or "EMS" means a continuous cycle of 

planning, implementing, reviewing, and improving a set of documented processes 

and practices used to develop and implement the environmental policy and manage 

the environmental aspects of an entity to: 

(A) maintain compliance; 

(B) reduce adverse environmental impacts; and 

(C) increase operational egficiency. 

(9) "Environmental objective" means an environmental goal that is consistent with 

the environmental poli~y of an entity. 

(10) ."Environmental policy" means the overall) commitment and direction of an 

entity related to environmental performance as formally expressed by senior 

management. 

(11) "Environmental Stewardship Program" or "ESP" means the voluntary state 

program for entities in Indiana that: 

(A) demonstrate enviromental stewardship; and 

(B) strive for continual environmental improvement. 

(12) "Environmental target" means a detailed performance requirement that: 

(A) is quantified where practical; and 

(B) arises from the environmental objectives. 

(13) tCGeogr~phi~~locrltion,w far the purpasei of *h"ij: attfcie, rnerins"an~aggregation of 

one (1) or more'operations that are: 

(A) located on: 

(i) one (1) piece of property; or 

(ii) contiguous or adjacent properties; and 

(B) owned, operated, or controlled by the same entity. 

(14) "Independent audit" means an audit conducted by a party that: 

(A) is not directly employed by the entity being audited; and 

(B) has not played a substantive role in implementing the EMS being 

audited. 

(15) "National Environmental Performance Track Program" or "NEPT" means the 

U.S. EPA's National Environmental Performance Track Program. 

(16) "Senior management" means the following: 

(A) For entities, the individual or individuals with executive responsibility 

for the entity. 

(B) For a partnership or sole proprietorship, a general partner or the 

proprietor, respectively. 

(C) For a unit of local government or other governmental unit, either a 

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February 7,2007 

principal executive officer or ranking elected official. 

(17) "U.S. EPA" means the administrator of the United States Environmental 

Protection Agency or the admiaistrator's designee. 

(Air Pollution Control Board; 326IAC 25-1-2) 

326 IAC 25-1-3 Eligibility criteria 

Authority: IC 1.3-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 3. Participation in ESP or CLEAN is voluntary and is open to entities located and 

operating in Indiana that meet the following criteria: 

(1) The standard of environmental compliance as described in section 10 of this rule. 

(2) Implement and maintain an EMS as described in section 11 of this rule. 

(3) Conduct continuous environmental improvement initiatives as described in 

section 12 of this rule. , 

(Air Pollution Control Board; 3261AC 25-1-3) 

326 IAC 25-1-4 Membership application 

Authority: IC 13-14-8; IC 13-17-3-4; IC $3-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 4. (a) A member of senior management shall submit an application, preferably 

electronically, by one (1) of the following mekhods: 

(1) E'or,applications fg~eitber- ESP or .CLEA)N only, to the dcpartment on: 

(A) a form, whether electronically or hard copy, provided by the 

department; or 

(B) an equivalent form. 

(2) For applications for both ESP and NEPT, to U.S. EPA, electronically on the 

form provided by U.S. EPA. An application submitted to U.S. EPA satisfies the 

requirement for an application to the department for ESP. 

(b) The application shall be signed by a member of senior management. The 

signature shall: 

(1) constitute affirmation that the statements in the application are true and 

complete, as known at the time of completion of the application; and 

(2) subject the member of senior management to liability under state laws 

forbidding false or misleading statements. 

(c) A membership for an entity shall be limited to cover one (I) geographic location, 

except that an entity may apply for membership as a group of locations if the following 

criteria are met: 

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February 7, 2007 

(I) Each location must meet the eligibility criteria individually and as a group, 

including the requirement to identify environmental improvement initiatives. 

(2) The environmental improvement initiatives may be similar or the same for all of 

the locations, but each location must: 

(A) play an active role in each initiative; and 

(B) demonstrate continuous environmental improvement. 

(3) The EMS must address staff and activities at each location, 

(4) Senior management must be common to all locations. 

(5) The standards of environmental campliance in section 10 of this rule shall apply 

to all Indiana locations under the control of the entity. 

(d) The commissianer shall make a determination on acceptance into ESP or 

CLEAN based on the following: 

(1) The EMS must meet the standards in section 11 of this rule. 

(2) A site visit by a representative of the department to provide an understanding of 

the environmental aspects of the entity and the EMS. 

(3) Identification of environmental improvement initiatives and associated 

objectives and targets as follows: 

(A) For ESP applicants, at least one (1) environmental improvement 

initiative and associated objectives and targets for the first year of 

membership. 

(B) For CLEAN applicants, at least five (5) environmental improvement 

initiatives and associated objectives and targets for the three (3) year term of 

membership. 

(4) For ESP applicants, information provided to U.S. EPA if the entity has also 

applied for membership in NEPT. 

(5) Compliance audits conducted by: 

(A) the department; 

(B) the U.S. EPA; 

(C) other state offices; and 

(D) other federal agencies; 

as appropriate. 

(6) Other information, including the following: 

(A) Compliance information obtained from department staff. 

(B) Verifiable, applicable information received from sources determined to 

be relevant by the commissioner. 

(Alr Pollullon Control Board, 326 IAC 23-1-41 

326 IAC 25-1-5 Term of membership 

Authority: IC 13-14-8; IC 13-1 7-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

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Sec. 5. (a) The term of membership is three (3) years from the date the entity is 

accepted into the program as long as the entity continues to meet tlle program criteria and 

submits the annual summary. 

(b) For ESP members, the department may extend the term for up to one (1) year to 

coincide with the: 

(I) membership date in NEPT, if applicable; or 

(2) annual summary submission by allowing a member whose expiration date occurs 

before April 1 of that year to extend its expiration date to April 1 of that year. 

(c) For CLEAN members, the department may extend the term for up to ninety (90) 

days to accommodate submission of the third annual summary, at which time CLEAN 

members may seek to renew membership in the program. 

(Air Pollution Control Board; 326 IAC 25-1-5) 

326 IAC 25-1-6 Renewal of ESP membership 

Authority: IC 13-64-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 6. (a) To renew ESP membership, a member of senior management shall 

submit a renewal application, preferably electronically, by April 1 of the third year of 

membership as fallows: 

(1) For renewal applications for ESP only, to the department on: 

(A) a form, either electronically or hard copy, provided by the department; 

or 

(B) an equivalent form. 

(2) For renewal applications for both ESP and NEPT, electronically to U.S. EPA on 

the form provided by U.S. EPA. 

(b) The application shall be signed by a member of senior management. The 

signature shall: 

(1) constitute affirmation that the statements in the application are true and 

complete, as known at the time of completion of the application; and 

(2) subject the member of senior management to liability under state laws 

forbidding false or misleading statements. 

(c) The department shall review the renewal application and the annual summaries 

submitted during the most recent term of membership. The review of a renewal shall 

follow the same procedures as the review for the initial application regarding compliance 

checks and EMS evaluations, except a general site visit by a representative of the 

department shall not be required. 

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(d) The commissioner shall make a determination on the ESP renewal application 

based on the following: 

(1) The EMS must continue to meet the standards in section 11 of this rule. 

(2) Review of the annual summaries submitted during.the previous membership 

term. 

(3) Successful coordination with a member of senior management to set at least one 

(I) e~vironmental improvement initiative and associated goals for the next year of 

membership. 

(4) Information provided by U.S. EPA if the entity has also applied for membership 

in NEPT. 

(5) Compliance audits conducted by: 

(A) the department; 

(B) the U.S. EPA; 

(C) other state offices; and 

(D) other federal agencies; 

as appropriate. 

(6) Other information, including the following: 

(A) Compliance information obtained from department staff. 

(B) Verifiable, applicable information received from sources determined to 

be relevant by the commissioner. 

(Air Pollutzon Control Board, 326 IAC 25-1-6) 

326 IAC 25-1-7 Renewal of CLEAN membership 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-1'2 

Affected: IC 13-15; IC 13-17 

Sec. 7. (a) To renew CLEAN membership, a member of senior management shall 

submit the third annual summary of the previous membership term: 

(1) to the department within sixty (60) days after the third annual anniversary of the 

date the previous membership term began; 

(2) to clearly indicate the intention to renew membership; and 

(3) including five (5) objectives, targets, and action plans for the next three (3) year 

term. 

(b) The application shall be signed by a member of senior management. The 

signature shall: 

(I) constitute affirmation that the statements in the application are true and 

complete, as known at the time of completion of the application; and 

(2) subject the member of senior management to liability under state laws 

forbidding false or misleading statements. 
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ESPICLEAN 

February 7,2007 

(c) The department shall review the annual summaries and five (5) objectives, 

targets, and action plans submitted during the most recent term of membership. The 

review of this information shall follow the same procedures as the review for the initial 

application regarding colqpliance checks and EMS evaluations, except a general site visit 

by a representative of the department shall not be required. 

(d) The eommissianer shdl make a decision on the CLEAN renewal application 

based on the following: 

(1) The EMS must continue to meet the standards in section 11 of this rule. 

(2) Review of the annual summaries submitted during the previous membership 

term. 

(3) Successful coordination with a member of senior management to identify at least 

five (5) environmental improvement initiatives and associated goals for the next 

three (3) year term of membership. 

(4) Compliance audits conducted by: 

(A) the department; 

(B) the U.S. EPA; 

(C) other state offiees; and 

@) other federal agencies; 

as appropriate. 

(5) Other information, including the following: 

(A) Compliance information obtained from department staff. 

(B) Verifiable, applicable information received from sources determined to 

be relevant by the c6mml"ssioner.- 

(e) If the entity does not request a renewal with the third annual summary, then 

membership in CLEAN expires upon receipt by the department of the third annual 

summary. (Air Pollution Control Board; 326 IAC 25-1-7) 

326 IAC 25-1-8 Revocation 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 8. (a) The commissioner shall revoke membership in ESP or CLEAN if the 

entity has not substantially complied with any of the following: 

(I) The standards of environmental compliance described in section 10 of this rule. 

(2) The requirement to make sufficient progress towards attaining the 

environmental initiatives identified and agreed upon at the time of application and 

submittal of the annual summaries. 

(3) The requirement to maintain an approved EMS as required for membership. 

(4) The prohibition against knowingly submitting false information: 

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February 7,2007 

(A) on the application; 

(B) in the annual summary; 

(C) during a site visit or evaluation by the department; or 

(D) during an independent audit. 

(b) The commissioner may revoke the membership in ESP or CLEAN if the entity 

has not substantially complied with any of the following: 

(1) The ESP or CLEAN program requirements in this article, as applicable. 

(2) Federal, state, or local environmental laws, rules, and regulations. 

(c) A determination by the commissioner to revoke a membership under subsection 

(b) may be based upon the following: 

(1) Compliance information obtained from department staff. 

(2) Verifiable, applicable information received from sources determined to be 

relevant by the commissioner. 

(d-) If the commissioner determines that a situation shall or may warrant revocation 

of membership based on subsection (a) or (b), the following applies: 

(1) The commissioner shall notify the entity in writing: 

(A) of any potential deficiencies found; and 

(B) that the commissioner is considering removing the entity from the 

program. 

(2) The notice shall: 

(A) state that the commissioner may consider removing the entity from the 

program after the respoilse ti& pefibd prdvided to the meniber; 

(B) identify the potential deficiencies; and 

(C) provide the entity with thirty (30) days to respond. 

(3) Within thirty (30) days after the end of the time period provided to the member, 

the commissioner shall consider the response and determine if the situation 

warrants revocation of membership. 

(e) An entity whose membership has been revoked may reapply under section 4 of 

this rule at any time twelve (12) months after the revocation. 

(f) Revocation of memberships shall be posted on the department Web site for the 

duration of the current application period. 

(g) Except as described in subsection (h), immediately upon revocation, all member 

incentives and regulatory benefits afforded to the member of ESP or CLEAN under this 

article shall be revoked. 

(h) An entity whose membership has been revoked subsequent to renewal of the 

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February 7,2007 

entities FESOP or MSOP permit under 326 IAC 25-2-2 shall apply for a renewal permit 

with a tern] of not more than five (5) years within six (6) months of the date of revocation. 

(Air Pollution Control Board; 326IAC 25-1-8) 

326 IAC 25-1-9 Transfers 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 9. Membership in ESP or CLEAN may be transferred to another entity at the 

same geographic location provided: 

(1) the department is notified within ninety (90) days of the: 

(A) change in ownership or management; and 

(B) intent to maintajn membership; and 

(2) senior management commits to: 

(A) fulfilling the previous member's commitments; and 

(B) the requi~ements of the program for the remainder of the membership 

term by signing an updated membership application. 

(Air Pollution Control Board; 326 IAC 25-1-9) 

326 IAC 25-1-10 Standards of environmental compliaace 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 10. (a) To be accepted into l$SP or CLEAN, a member of senior rnanagei~iellt of 

the entity shall submit a certification with the application to the department certifying that, 

based on information and belief after reasonable inquiry, the entity is currently in 

compliance with all applicable local, state, and federal environmental laws, rules, and 

regulations. 

(b) The department shall: 

(1) review the administrative, civil, and criminal ellvironmental compliance and 

enforcement history of the entity in order to determine if the entity satisfies the 

required standard of substantial environmental compliance; 

(2) consider all applicable environmental compliance and enforcement criteria, 

including the criteria in subsections (c) and (d) in determining whether or not an 

entity has achieved substantial environmental compliance; and 

(3) post the organizational name and location for all new and renewal applications 

on the department Web site within fourteen (14) days of the close of each 

application submission round. 

(c) The following criteria shall prevent acceptance of an entity into the ESP or 

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February 7, 2007 

CLEAN: 

(I) Corporate criminal conviction or guilty plea for environmentally-related 

violations of criminal laws involving the entity or an officer of the entity within the 

past five (5) years. 

(2) Criminal conviction or plea of employee at the entity for environmentallyrelated violations of criminal laws within the past five (5) years. 

(d) The existence of one (1) or more of the following criteria may prevent acceptance 

of an entity into ESP or CLEAN: 

(1) Ongoing criminal investigation or prosecution of the entity, or an officer or 

employee of the entity, for a violation of environmental law. 

(2) Three (3) or more significant violations at the entity in the past three (3) years. 

(3) Unresolved or unaddressed significant ntrncompliance or significant violations. 

(4) Planned, but not yet filed, judicial or administrative action, by W.S. EPA or the 

department, against the entity. 

(5) Ongoing U.S. EPA or department-initiated litigation against the entity. 

(6) A situation where an entity is not in compliance with the schedule and terms of 

an order or decree issued by: 

(A) U.S. EPA; or 

(B) the department. 

(7) A history of significant environmental problems or a pattern of noncompliance 

at the entity or at other affiliated entities under the same ownership or control. 

(Air PolZutzon Control Board, 326 IAC 25-1-10) 

326 IAC 25-1-11 Environmental management system 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affeoted: IC 13-15; IC 13-17 

Sec. 11. (a) An approved EMS must be implemented by the entity before acceptance 

of an entity into ESP or CLEAN. 

(b) An EMS that meets the criteria for ESP and CLEAN must, at a minimum, 

include the following: 

(1) Evidence of senior management support, commitment, and approval provided 

through management review of records, employee interviews, or signatory reference 

to the applicant's environmental policy. 

(2) A written environmental policy directed toward the following: 

(A) Compliance. 

(B) Pollution prevention. 

(C) Continuous improvement. 

(3) For CLEAN members, the environmental policy must also address sharing 

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February 7, 2007 

environmental decisions and performance information with the community. 

(4) Identification of the environmental aspects at the entity. 

(5) Prioritization of the environmental aspects and a determination of those aspects 

deemed significant by the entity considering, at the minimum, environmental 

impacts and applicable laws, rules, and regulations. 

(6) Established priorities and environmental objectives and targets for the 

following: 

(A) Continuous improvement in environmental performance. 

(B) Ensuring compliance with applicable environmental laws, rules, 

regulations, and permit conditions. 

(7) An established community outreach mechanism that includes the following: 

(A) 1den;tifying and responding to community concerns. 

(B) Informing the oommuity of important matters that affect the 

community. 

(C) Reporting on the EMS, including, at a minimum, reporting to the public 

on the environmeatal policy and significant aspects. 

(I)) Through the annual summary, reporting on the environmental 

improvement initiatives, including progress towards the most recent 

environmental improvement initiatives identified in the application or 

annual summary. 

(8) Incorporation of environmental and pollution prevention planning in the 

development of new praduets, processes, and services and modifications of existing 

processes. 

(9) Evidence of clear responsibility by the ell tity for the following: 

(A) Implementation, training, monitoring, EMS maintenance, and taking 

corrective action. 

(B) Ensuring compliance with applicable environmental laws, regulations, 

and permit conditions. 

(10) Documentation of the implementation procedures and the results of 

implementation. 

(11) Appropriately written EMS procedures to include documented plans, records, 

and procedures as needed for successful implementation of an EMS as defined in 

section 2(8) of this rule. 

(12) An annual evaluation of the EMS with written results provided to senior 

management and affected employees. 

(c) For CLEAN members, the environmental policy must be adopted through an 

executive order, resolution, or ordinance. 

(d) The department shall determine if the EMS meets the criteria in subsection (b). 

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February 7, 2007 

(e) A representative of the department shall perform an on-site review, evaluation, 

and verification of the EMS if, within twelve (12) months of the application submittal, the 

EMS has not been: 

(1) audited by an independent party; or 

(2) registered pursuant to a recognized certification standard. 

(Air Pollution Control Board; 326 IAC 2.5-1-1 1) 

326 IAC 25-1-12 Continuous environmental improvement 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 12. (a) In coordination with the department, a member of senior management 

shall identify continuous environmental improvement initiatives for the appropriate 

program, as follows: 

(1) For ESP, a member of senior management shall identify three (3) continuous 

environmental improvement initiatives for each membership term. One (1) 

initiative shall be identified at the time of the initial or renewal application and the 

remaining initiatives shall be identified each year at the time the annual summary is 

submitted to the department. 

(2) For CLEAN, a member of senior management shall identify five (5) continuous 

environmental improvement initiatives for the three (3) year membership term. 

(b) Entities accepted into ESP or CLEAN shall: 

(1) maintain recbrds that d'ekribe and trh'ck the actioiis taken toward Achievement 

of the environmental improvement initiatives; and 

(2) submit an annual summary in accordance with section 13 or 14 of this rule, as 

applicable, documenting progress toward the environmental improvement 

initiatives for that year. 

(c) Entities accepted into ESP or CLEAN shall demonstrate continuous 

environmental improvement by the following: 

(1) Conducting periodic pollution prevention or environmental improvement 

assessments that identify opportunities for reducing pollution and eliminating waste 

at the entity. 

(2) Identifying, obtaining approval for, and implementing environmental 

improvement initiatives in coordination with the department that: 

(A) include objectives and targets beyond current legal requirements; and 

(B) as applicable, specify the: 

(i) environmental media; 

(ii) types of pollution to be prevented or reduced; 

(iii) implementation activities; and 

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ESPICLEAN 

February 7,2007 

(iv) projected time frames. 

(3) Reporting on the activities undertaken toward implementation of the initiatives 

identified with the department. 

(Air Pollution Control Board; 326 IAC 25-1-12) 

326 IAC 25-1-13 Annual summary for ESP members 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 13. (a) Entities accepted into ESP shall submit an annual summary on a form 

provided by the department or an equivalent form documenting the following: 

(1) Progress toward the objectives and targets identified for the envir~nmental 

improvement initiative for that year. 

(2) Results obtained from achieving the environmental improvement initiative 

objectives and targets, if applicable. 

(3) An annual rexiew of the EMS by the entity. 

(b) If the entity has not attained the objectives and targets associated with an 

environmental improvement initiative, a member of senior management shall provide the 

following: 

(1) Verification of continued progress toward the objectives and targets. 

(2) A description of the reason the objectives and targets have not been attained. 

(c) Each annual summary must include identification of the environmental 

improvement initiative for the next year, unless the entity is terminating membership in 

ESP. 

(d) The annual summary shall: 

(1) cover the twelve (12) month calendar year; 

(2) be submitted to the department for each year by April 1 of the following year; 

and 

(3) be submitted for each calendar year in whicb the entity has been a member for 

at least three (3) full months. 

(e) An annual summary submitted to U.S. EPA as a requirement of being a member 

of NEPT shall satisfy the requirement for an annual summary for ESP members. (Air 

Pollution Control Board; 326 IAC 25-1- 13) 

326 IAC 25-1-14 Annual summary for CLEAN members 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

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Sec. 14. (a) Entities accepted into CLEAN shall submit an annual summary on a 

form provided by the department or an equivalent form documenting the following: 

(1) Progress toward the objectives and targets identified for the five (5) 

environmental improvement initiatives. 

(2) Results obtained from achieving the environmental improvement initiative 

objectives and targets, if applicable. 

(3) An annual review of the EMS by the entity. 

(b) If the entity has not attained the objectives and targets associated with an 

environmental improvement initiative at the time the third annual summary is submitted, 

a member of senior management shall provide fi description of the reason the objectives 

and targets have not been attained. 

(c) The annual summary shall be submitted to the department sixty (60) days after 

the annuit1 .anniversary of the date the previous me'mbership term began, (Air Pollution 

Control Board; 326 IAC 25-1-14) 

Rule 2. Regulatory Flexibility for the Environmental Stewardship Program, 

Comprehensive Local Environmental Action Network Community Challenge Program, 

and Incorporation by Reference of NEPT Incentives 

326 IAC 25-2-1 Incorporation by reference of federal incentive for NEPT members 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15; IC 13-17 

Sec. 1. The air pollution control board incorporates by reference the Performance 

Track provisions at 40 CFR 63.2*, 40 CFR 63.10*, and 40 CFR 63.16". The incentives in 

these federal rules are only available to members of the NEPT program. 

"This body of documents is incorporated by reference. Copies may be obtained 

from the Government Printing Office, 732 North Capitol Street NW, Washington, D.C. 

20401 or are available for review and copying at the Indiana Department of Environmental 

Management, Office of Air Quality, Indiana Government Center-North, Tenth Floor, 100 

North Senate Avenue, Indianapolis, Indiana 46204. (Air Pollution Control Board; 326 IAC 

25-2- I) 

326 IAC 25-2-2 Ten year permit renewals 

Authority: IC 13-14-8; 1C 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15-3-2; IC 13-17 

Sec. 2. (a) Nottyithstanding 326 IAC 2-1.1-9.5 and 326 IAC 2-8-4(2) and in 

,. Page 15 of 16 
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February 7, 2007 

accordance with IC 13-15-3-2, a federally enforceable state operating permit (FESOP) for 

a member in ESP or CLEAN may be renewed for a period of up ten (10) years, if approved 

by the commissioner. 

(b) Notwithstanding 326 IAC 2-1.1-9.5 and 326 IAC 2-6.1-7(a) and in accordance 

with IC 13-15-3-2, a minor state operating permit (MSOP) for a member in ESP or 

CLEAN may be renewed for a period of up ten (10) years, if approved by the 

commissioner. (Air Pollution Control Board, 326 IAC 25-2-2) 

326 IAC 25-2-3 Monthly compliance methods for volatile organic compound 

Autho~ity: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15-3-2; IC 13-17 

Sec. 3. (a) Notwithstanding 326 IAC 8-1-2(a)(7), the emission limitations specified in 

326 IAC 8 can be achieved through monthly volume-weighted averaging of all coatings 

applied in a coating line or printing line subject to the requirements in 326 IAC 8-2 or 326 

IAC 8-5-5. 

(b) Sufficient records must be maintained to demonstrate compliance with the 

applicable emission limitation on a monthly average basis. The records must be made 

available to the department upon request. 

(c) Records of monthly VOC emissions shall be maintained in: 

(1) pounds per month; or 

(2) tons per month. 

(d) If monthly records sufficient to determine an accurate monthly weighted 

average are not available, each coating, ink, and solvent shall meet the requirements of the 

applicable section. (Air Pollution Control Board; 326 IAC 25-2-3) 

326 IAC 25-2-4 Pollution prevention projects 

Authority: IC 13-14-8; IC 13-17-3-4; IC 13-17-3-12 

Affected: IC 13-15-3-2; IC 13-17 

Sec. 4. Notwithstanding 326 IAC 2-6.1-6(i)(l)(J) and 326 IAC 2-8-lI.l(f)(l)(J), any 

pollution prevention project, as defined in 326 IAC 2-1.1-1(14), that would otherwise be 

subject to significant permit revision procedures, and that does not result in a net increase 

in potential emissions of more than the significance levels in 326 IAC 2-2-1(xx), may be 

processed as a minor permit revision as follows: 

(1) For minor state operating permits, under 326 IAC 2-6.1-6(h). 

(2) For federally enforceable operating permits, under 326 IAC 2-8-1 l.l(e). 

(Air Pollution Control Board; 326 IAC 25-2-4) 

Page 16 of 16 
ATTACHMENT - I 
ADMINISTRATIVE CHECKLIST (40 CFR 51, Appendix V) I 

1. The submittal is accompanied by a formal letter of submittal 

from the governor or his designee. 

2. Evidence that the State has adopted the plan in the State code 

or body of regulations; or issued the permit, order, consent 

agreement ("document"); in final form. 

a. Date of adoption or final issuance. 

b. The effective date of the plan, if different 

from the adoptionlissuance date. 

3. Evidence that the State has the necessary legal authority 

under state law to adopt and implement the plan. 

4. A copy of the actual regulation or document submitted for 

approval and incorporation by reference into the plan, 

including the following: 

a. Indication of the changes made to the existing 

approved plan, where applicable. 

b. The submittal shall be a copy of the official State regulation 

or document signed, stamped, dated by the appropriate state 

official indicating that it is hlly enforceable by the State. 

Effective date shall be stated in the document itself. 

5. Evidence that the State followed all of the procedural 

requirements of the State's laws and constitution in 

conducting and completing the adoption/issuance of the plan. 

Enclosed 

Attachment B 

May 16,2007 

June 16,2007 

Attachment A 

Attachment B 

6. Evidence, that public notice was given, including date of Attachments C and D 

proof of publication. 

- Notice of First Public Hearing and Publishers' Affidavits 

Notice of Second Public Hearing and Publishers' Affidavits 

7. Certification that public hearings were held in accordance 

with information provided in public hearing notice. 

Transcript from First Public Hearing 

- Transcript from Second Public Hearing 

8. Compilation of public comments and State's response. 

Second Notice - Proposed Ruled 

Third Comment Period 

Attachments E and H 

Attachments C and F