## ATTACHMENT 

# - Flndiana 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: September6, 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 untilthe 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 makethe 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 suggestionsfor 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 confirmthe timely receipt of faxed comments by calling the Rule Development Section at (317) 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

Date Dec 28,2006 10 44 58AM EST DIN.20061227-IR-326050232PRA Page 1lndiana Register 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 companieswhere 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 questionsto be raised and were forthcoming in their responses.
Comment: We are pleased that IDEM has reachedout to the lndiana PerformanceTrack 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 possiblethrough 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 potentialto 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 commitmentto 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 positivefeedback 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 encouragesthose 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 demonstrateda strong commitment to environmental stewardship should be recognized and provided flexibility where appropriate by IDEM. However, IKE isworried 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 intothe program based upon a commitmentfor future action, not a demonstrated history of commitment to environmental stewardship. Requiringsome demonstrationof 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 implementedan EMS and must commit to implementa 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 commitmentto environmental proactivity prior to applying for acceptance into the program. (These are two instanceswhere the proposedstate program differs from the National Performance Track Program. In each case, the proposed state programwould 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 understandand provide input on the projects being proposed by applicants and considered by IDEM. IKE believes that adoption and demonstrated implementationof an Environmental Management System, a strong compliance history, and demonstrated commitmentto environmental proactivity are essential eligibility requirements. A program like this must be rigorous. The public relies on IDEMto ensure that regulated entities with pollution discharges either comply with all requirements or are compelledto do so through compliance and enforcement activities.A programthat 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 requirementsmust 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 positionthat 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 managingtheir environmental responsibilitiesfrom basic compliance with the regulations to proactive environmental managementand continuous improvement. For those willing to take this proactive step, joining such programs is a business decision.There must be value injoining such programs, available within a reasonable amount of time of makingthat decision. Boththe EMS and environmental improvement initiatives must be approved and will be subjectto annual evaluation by IDEM. This providesthat desired level of assurance. While the public will have access to reviewing members' applications and annual reports, providing

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 2lndiana Register 

### - the opportunity to understand members' projects, IDEM does not intendto 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, willjeopardize 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: Inan 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 inthe 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 RegionV continue with the intent to develop the necessary agreements to provide a good working relationship between IDEM and U.S. EPA, promoting both IDEM'Sleadership programs and NEPT. Previously developed agreements will need to be revisedto reflect these programs. U.S. EPA headquarters has been working closely with the Office of Pollution Prevention and TechnicalAssistance (OPPTA)to develop ESP and CLEAN and is anxious for IDEMto implement these programs. U.S. EPA headquarters staff has offered and plans to assist IDEM in discussions with U.S. EPA RegionV to develop these agreements. Comment: IKE is concerned about the agency resourcesthat will be required to implementthis program, especially if it attracts substantial interest. Making initial eligibility decisions, providing assistance to companies, and monitoring compliance with the terms ofthe designation will be time consuming. Does IDEM expect to divert human resource nowfocused 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 onthose 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 programsthrough 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 noticeto 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 inthe 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 plannedto be posted on the IDEMwebsite. 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 membershipsthat 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 IDEMwill 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 removalfrom it and any other decisions that may be
' made by the commissioner. (IKE)

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 3lndiana Register Response: IDEM has carefully considered this issue and consideringthese programs are voluntary innature, appeals will not be granted. This conclusion is based on IC4-21.5-2-5(17). Comment: At its recent public meeting, IDEM mentionedthat companies could use projectsfunded, or partially funded, through state assistance or incentive programs as their initiatives for this program. IKE appreciates that IDEMwants to boost interest inthese 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 inthe positlon of deciding whether to grant funding assistanceto 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 projectsto get funding assistance means these programs are providingthe highest possible value to Hoosiers. Comment: IKE hopes this program is successful and that companies and municipalities throughoutthe 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 committo 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 intothe 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 actionwas 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 inthis 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 inthe ESP. The word entity is used to definethe 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 manufacturingsite 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 manufacturinga different type of product or are involved in different stages of pharmaceutical production. These multi-businesssites 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 morethan one EMS, the entire site should still be considered an "entity" that is eligible for participation inthe ESP.This approach is consistent with IDEM'Sgoals 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 incorporatedor 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)

### xwgkone 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

- - - -- Date Dec 28,2006 10 44 58AM EST DIN 20061227-IR-326050232PRA Page 4Indiana Register exclude entities or re1ationships.a~ described inthis comment. The rule language has been revised to indicatean "entity" is a geographic location with "at least one EMS" to allow for the situation described. Comment: In326 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 eligiblefor the ESP program orjust CLEAN? (IKE) Response: Municipalities are eligible for ESP and CLEAN, however, IDEM would encourage a municipalityto join CLEAN in an effortto include other parts of local government and the community in the municipality's Quality of Life Plan (QLP) and provide benefits offered through CLEANtothat community. Comment: The definitionof "senior management," in326 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 responsibilityfor 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 responsibilityfor the overall site. Accordingly, Lilly offers the following amendmentto 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 membershipfor 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 intendto exclude management relationshipsas 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, althoughthe specifics provided in 326 IAC25-1- 10(c)and (d) appearto 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 willingto 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 anotherfor inclusion: ongoing noncompliancewith a Consent Decree or Agreed Order. (IKE) Response: IDEM desires to promote and provide clear and consistentcompliance determinations. Further defining substantial environmental compliance would not eliminate the needfor case by case review. 326 IAC 25- 1-4(d)(6)(B)does provide an opportunityfor 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 providesfor 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 Beforethe Violation)of IDEM's Civil Penalty Policy. Site visits will be further explained in relevant sections of the membershipapplication materials. Comment: Will an entity's status with respect to any other statutory or regulatory program be consideredfor 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. Consideringthese 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. IDEMdoes intend to advise potential members to reconcile issues with other

Date: Dec 28.2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 5lndiana Register lndiana state aaencies if a~~licable. i comment:;~~ notesthat municipalities appear to have to implement more improvement projects than industries (five comparedto 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 expectationshould be spelled out inthe rule. (IKE) Response: IKE is correct inthat many anticipated projects in CLEAN will be less substantial than those approved in ESP. Project lists in both programs are not idealfor 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 membersto voluntarily address Ind~ana's environmental challenges and agency priorities. Comment: In326 IAC 25-1-8, concerning revocation, do the procedures in subsection (c) apply to both subsections (a) and (b)? Subsection (a) lays out situationswhere 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, butthat IDEM should look at the language carefully to make sure the process establishedhere does not preclude or interfere with the commissioner's obligation to revoke membership under circumstances described in subsection (a). (IKE) Response: It is IDEM'Sintent to provide notificationto 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 notificationof 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, maintainingthe facility's membership in good standing. The rule language in 326 IAC 25-1-9 has been revised accordingly. Comment: In326 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 heldto a higher standard, especially if they are applyingfor admission to an elite program. Submission of a Title V Air Operating Permit application and compliance certificationdocuments underthat 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 believesthe proposed requirement in 326 IAC 25-1-10(a)that a member of senior management certify that the entity is currently in compliancewith 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 recognizedthat the ESP should not be an exclusive club for entitiesthat 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 complianceto participateinthe 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 inthe 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 underthe 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 applicationto the department certifying that to the best of their knowledge and based on a reasonable inquiry, the entity is currently in compliancewith 

### a# applicable local, state, and federal environmental laws and regulations. (ELC)

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 6lndiana Register 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 membershipin ESP or CLEAN should have had an EMS in place for some length of time, at least six months, prior to applying to the programto demonstrate the company is infact 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 decisionto 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 committo continuous environmental improvementand business value realized through these incentives in U.S. EPA's PerformanceTrack 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 managingtheir environmental responsibilitiesand committingto continuous environmental improvement. It is a significant accomplishmentto develop and implementan 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 IAC25-1-12) 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 municipalitiesthat 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 appropriateways 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 requirementsfor 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 handlingthis 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 discretionto direct more or less attentionto 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 recordwill-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, inspectionsare an infrequent event already (everytwo or even five years for some types of sources). (IKE) Response: Reducing routine inspection frequency for members of such programs is consistentwith NEPT and other state programs. Other comments indicate concern relativeto limited agency resources. Reducing oversight of entities proven and committedto environmental stewardship allows the agency to focus these limited resources towards those sources in need of increased attention and resourcesto 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 mechanismfor 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 inspectorsto assess compliance when the regulated entity does not expect to have visitors. When inspections are preannounced, furthermore, it is not uncommonfor particular operationsto 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 suggestedthat the impetusfor 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 preparedfor an inspection at any time, especially ones that

Date Dec 28,2006 1044 58AM EST DIN 20061 227-IR-326050232PRA Page 7Indiana Register 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 infull combliance. ~usinesses that employ an environmental manager understandably preferto have that staff available when the IDEM inspector arrives. It makes for a more complete inspection and is less disruptiveto regular business operations. IKE encourages the agencyto consider other ways to address this concern, without institutionalizingthe 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 PerformanceTrack Program is to allow membersto schedule inspections at certain times of the year in lieu of inspection incentives like announcements. IDEM believesthat 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 duringthe inspection and ensures efficient use of limited agency resources. Comment: IKE notes that the draft rule language states that FESOPsand 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 appropriatewhere 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 beyondthe 5-year permit term. Inan effort to increase overall agency efficiency, IDEM desires to issue these permits as upto 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 inthe ESP program-increased access to agency personnelto 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 interms of resources (both time and expertise) than the public. Fewthings will erode the credibility of an incentive-based programto 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 impressionto 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 compliancefor 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 notedthat 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 agreethat monthly averages are appropriateto demonstrate compliancewith VOC requ~rements. Ozone is a daily pollutant-monthly averages are irrelevantto 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 opportunityto violate VOC emission limits in normal operations. The same concern relativeto 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 RECEIVEDAT THE FIRST PUBLIC HEARING On October 19,2006, the Air Pollution Control Board (board) conductedthe 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'Sresponses thereto: Comment: These kinds of programs are really important. It'svery important for companiesto understand that

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 8lndiana Register

, .. there are good reasons to go beyond compliance, and it's important for agencies like IDEMto provide

. . ! ' . . opportunities for companies to do that, so I'm supportive of the concept of this programvery much.

. . Ialso wanted to express my appreciation for how open IDEM has been inthe 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 improvethe environment and economic climate in lndiana and encouragesthose that have been involved to stay involved as IDEM looks to optimizethese 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 everyoneto feel assured that the companies inthis 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 mannerthat will establish and maintain the credibility of the program. The requirementsof the program inthis 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 inthis and how much resources it will take, but it's important for IDEMto devotethe appropriate amount of resourcesto reviewing the applications and to keeping track of how the companies perform ifthey're given the privilege of being inthis 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. EPAto implement ESP and provide contractor assistance if needed. ESP will provide efficiency improvementsfor 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 placefor the public to view. This will make it easy for the publicto 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 Preventionand Technical Assistance is already requiredby 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 monthsto 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 listthe items that the companies or the municipalities need to provide in their annual summary. Iwould suggest that they also provide a summary of their compliance historyfor 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." Otherwisethey 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 complianceover 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 companiesto feel that this is a good thing for them. Ijust want to express real concern about the incentives related to inspections,and particularly preannounced inspections. Ithink 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, Iwould really urge IDEMto 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

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 91ndian.aRegister 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 IDEMto haveto come back another day. Becausethere 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 inspectiona 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 therewill 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 intothe field and not conduct agency business, returningto the same facility at a later date. This proposed alternative also lends itself to "scheduling inspections" which the agency feels couldjeopardize 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 consideredfor this program. It can be debated which criteria ought to be in which category. There's one in the "might" category that Iwould urge you to consider putting in the "shall preclude" category. If the company is in noncompliancewith either a federal or a state consent decree or agreed order, it is not appropriatefor the companyto be eligiblefor this program until the problems are resolved. (IKE) Response: This provision was recently discussed again in an effort to better understandthe 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 Decreesto 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 inthis program. So, Iwould suggestthat 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 rulemakingto make this a changefor all regulated entities. Currently, many of these existing permits have been extended several years beyondthe 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 monthlyVOC monitoringthat 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 insistedthat 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 Iwant to register my concern about it as well. (IKE) Response: IDEM does not believethis incentive provides reasonable opportunityto 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, believeswe 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

- - -- - - - Date Dec 28,2006 10 44 58AM EST DIN 20061227-IR-326050232PRA Page 10lndiana 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. Inaccordance with IC 13-27-8-3, an entity is not requiredto 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 complyingwith 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 13-11-2-51; IC 13-15; IC 13-47

Sec. 2. Inaddition 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 ofthe department of environmental management. (2) "Comprehensive Local EnvironmentalAction 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 ownfunctions and administration. Except as described insection4(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 ofthe 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.

Date. Dec 28,2006 10 44:58AM EST DIN 20061 227-IR-326050232PRA Page IIIndiana Register (11) "Environmental Stewardship Program" or "ESP" means the voluntary state program for entities 

### in Indianathat:

(A) demonstrate environmental stewardship; and (B) strive for continual environmental improvement. (12) "Environmental target" means a detailed performance requirementthat:

(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) locatedon:

(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 anaudit conducted by a partythat:

(A) is not directly employed bythe entity being audited; and (B) has not played a substantive role in implementingthe EMS being audited. (15) "National Environmental PerformanceTrack 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 orthe 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 ofthe 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 insection 10 ofthis rule. (2) Implement and maintain an EMS as described insection 11 of this rule. (3) Conduct continuous environmental improvement initiatives as described insection 12of 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) ofthe 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 submittedto U.S. EPA satisfies the requirement for an application tothe department for ESP.
(b) The application shall be signed by a member of senior management. The signature shall: (1) constitute affirmation that the statements inthe application are true and complete, as known at the time of completion ofthe application; and

Dale: Dec 28,2006 10:44:58AM EST DIN:20061227-lR-326050232PRA Page I2lndiana Register (2) subject the member ofsenior management to liability under state laws forbiddingfalse or misleadingstatements.
(c) A membership for an entity shall be limitedto cover one (1) geographic location, except that an entity may apply for membership as a group of locations ifthe 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 ineach initiative; and (B) demonstrate continuous environmental improvement. (3) The EMS must address staff and activities at each location. (4) Senior management must becommon to all locations. (5) The standards of environmental compliance 

### in section 10ofthis rule shall apply to all lndiana locations under the control ofthe entity.
(d) The commissioner shall make a determination on acceptance into ESP or CLEAN based onthe following: (I)The EMS must meet the standards insection 

### 11 ofthis rule. (2) A site visit by a representativeofthe department to provide an understandingof the environmental aspects ofthe entity andthe 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 andtargets 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 providedto U.S. EPA ifthe 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 receivedfrom sources determinedto be relevant bythe 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 isthree (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 upto 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 toApril 1 ofthat year.
(c) For CLEAN members, the department may extend the term for upto ninety (90) days to accommodate submission of the third annual summary, at which time CLEAN members may seek to renew membership inthe program.

Date: Dec 28.2006 10:44:58AMEST DIN: 20061227-IR-326050232PRA Page I3Indiana Register (AirPollution 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, byApril 1ofthe third year of membership as follows: (I) For renewal applications for ESP only, tothe department on:

(A) a form, either electronically or hard copy, provided bythe department; or (B) an equivalent form. (2) For renewal applications for both ESP and NEPT, electronically to U.S. EPA onthe 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 inthe application are true and complete, as knownat the time of completion ofthe application; and (2) subject the member of senior managementto 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 recentterm 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 bya representative of the department shall not be required.
(d) The commissioner shall make a determination onthe ESP renewal application based onthe following: (1) The EMS must continue to meet the standards insection 11of this rule. (2) Review ofthe annual summaries submitted during the previous membershipterm. (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 ifthe 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 receivedfrom sources determinedto be relevant bythe 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 ofthe previous membership term: (1) tothe department within sixty (60) days after the third annual anniversary of the date the previous membershipterm began; (2) to clearly indicatethe intentionto renew membership; and

Date: Dec28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA - Page I4Indiana Register (3) including five (5) objectives, targets, and action plansfor 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 inthe application are true and complete, as known at the time of completion ofthe 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 duringthe 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 onthe CLEAN.renewal application based onthe following: (1) The EMS must continue to meet the standards insection 11 of this rule. (2) Review ofthe annual summaries submitted during the previous membershipterm. (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 offices; and (D) other federal agencies; as appropriate. (5) Other information, includingthe following:

(A) Compliance information obtained from department staff. (B) Verifiable, applicable information receivedfrom sources determined to be relevant bythe commissioner.
(e) Ifthe entity does not request a renewalwith the third annual summary, then membership in CLEAN expires upon receipt by the department ofthe 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 ifthe entity has not substantially complied with any ofthe 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 ofthe annual summaries. (3) The requirement to maintain an approved EMS as required for membership. (4) The prohibitionagainst knowingly submitting false information:

(A) onthe application; (B) inthe 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 ifthe entity has not substantially complied with any of the following: (1) The ESP or CLEAN program requirements inthis article, as applicable. (2) Federal, state, or local environmental laws, rules, and regulations.

Date: Dec 28.2006 10:44.58AM EST DIN: 20061227-IR-326050232PRA Page I5Indiana Register (c) A determination bythe commissioner to revoke a membership under subsection (b) may be based

I uponthe following: (1) Compliance information obtainedfrom department staff. (2) Verifiable, applicable information received from sources determinedto be relevant bythe commissioner.
(d) Ifthe commissioner determines that a situation shall or may warrant revocation of membership based onsubsection (a) or (b), the following applies: (I)The commissioner shall notify the entity inwriting:

(A) of any potential deficiencies found; and (B) that the commissioner is considering removingthe entity from the program. (2) The notice shall:

(A) state that the commissioner may consider removing the entity from the program after the responsetime period providedto the member; (B) identifythe potential deficiencies; and (C) provide the entity with thirty (30) days to respond. (3) Within thirty (30) days after the end ofthe time period providedtothe member, the commissioner shall consider the response and determine ifthe situation warrants revocation of membership.
(e) An entity whose membership has been revoked may reapply under section 4 ofthis 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 ofthe current application period.
(g) Except as described insubsection (h), immediately upon revocation, all member incentives and regulatory benefits affordedto the member of ESP or CLEAN under this article shall be revoked.
(h) An entity whose membership has been revoked subsequent to renewal ofthe entities FESOP or MSOP permit under 326 IAC 25-2-2 shall apply for a renewal permit with a term of not morethan five (5) years within six (6) months ofthe 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 betransferred to another entity at the same geographic location provided: (1) the department is notified within ninety (90) days ofthe:

(A) change in ownership or management; and (B) intentto maintain membership; and (2) senior management commits to:

(A)fulfillingthe 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

Date: Dec 28.2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 16Indiana 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 tothe department certifying that, based on information and belief after reasonable inquiry, the entity is currently incompliance 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 inorder 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) indetermining whether or not an entity has achieved substantial environmental compliance; and (3) postthe organizational name and location for all new and renewal applications onthe department Web site within fourteen (14) days ofthe 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 involvingthe 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 ofthe following criteria may prevent acceptance of an entity into ESP or CLEAN: (I).Ongoing criminal investigationor prosecution ofthe 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 inthe past three (3) years. (3) Unresolvedor unaddressed significant noncompliance or significant violations. (4) Planned, but notyet filed, judicial or administrative action, by U.S. EPA orthe department, against the entity. (5) Ongoing U.S. EPA or department-initiated litigation against the entity. (6) A situation where an entity is not incompliancewith the schedule andterms 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. 

### (AirPollution 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 bythe 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 informationwith the community. 

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

Date: Dec 28,2006 10:44:58AM

### EST DIN: 20061227-IR-326050232PRA Page 17Indiana Register (5) Prioritizationofthe environmental aspects and a determination ofthose aspects deemed significant bythe entity considering, at the minimum, environmental impacts and applicable laws, rules, and regulations. 

### (6) Establishedpriorities and environmental objectives and targets for the following:

(A) Continuous improvement inenvironmental 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 respondingto community concerns. (B) Informing the community of important matters that affect the community. (C) Reporting onthe EMS, including, at a minimum, reporting tothe public onthe environmental policy and significant aspects. (D) Through the annual summary, reporting onthe environmental improvement initiatives, including progress towards the most recent environmental improvement initiatives identified inthe application or annual summary. (8) Incorporation of environmental and pollution prevention planning inthe development of new products, processes, and services and modifications of existing processes. (9) Evidence of clear responsibility bythe entity for the following:

(A) Implementation, training, monitoring, EMS maintenance, andtaking corrective action. (B) Ensuring compliance with applicable environmental laws, regulations, and permit conditions. (10) Documentation ofthe implementation procedures andthe results of implementation. (11) Appropriately written EMS procedures to include documented plans, records, and procedures as neededfor successful implementation of an EMS as defined insection 2(8) ofthis rule. (12) An annual evaluation ofthe EMS with written results providedto 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 ifthe EMS meets the criteria insubsection (b).
(e) A representative ofthe department shall perform an on-site review, evaluation, and verification of the EMS if, within twelve (12) months ofthe application submittal, the EMS has not been: (1) audited by an independent party; or (2) registered pursuantto a recognized certification standard. (Air Pollution ControlBoard; 326 IAC 25-1-1 1)

326 IAC25-1-12 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) Incoordinationwith 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 issubmittedto the department. (2) For CLEAN, a member of senior management shall identify five (5) continuous environmental improvement initiatives for the three (3) year membershipterm.
(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 inaccordance with section 13 or 14 ofthis 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 I8Indiana Register (c) Entities accepted into ESP or CLEAN shall demonstrate continuous environmental improvement by thefollowing: (1) Conducting periodic pollution prevention or environmental improvement assessments that identify opportunitiesfor reducing pollution and eliminating waste at the entity. (2) Identifying, obtaining approval for, and implementing environmental improvement initiatives in coordinationwiththe department that:

(A) include objectives andtargets beyond current legal requirements; and (B) as applicable, specify the:

(ijenvironmental media; (ii) types of pollutionto be prevented or reduced; (iii) implementation activities; and (iv) projected time frames. (3) Reporting onthe activities undertakentoward implementation ofthe initiatives identifiedwith 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 ona form provided bythe department or an equivalent form documenting the following: (1) Progress toward the objectives and targets identifiedfor 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 bythe entity.
(b) Ifthe entity has not attained the objectives and targets associated with an environmental improvement initiative, a member of senior management shall providethe following: (1) Verification of continued progress towardthe 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 nextyear, unless the entity isterminating membership in ESP.
(d) The annual summary shall: (1) cover the twelve (12) month calendar year; (2) be submittedtothe department for each year by April 1 of the following year; and (3) be submitted for each calendar year inwhich 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 documentingthe following:

Date: Dec 28.2006 10:44:58AM EST DIN: 20061227-IR-326050232PR.A Page I9lndiana Register (1) Progress towardthe objectives andtargets identified for the five (5) environmental improvement initiatives. (2) Results obtainedfrom achieving the environmental improvement initiative objectives andtargets, if applicable. (3) An annual review ofthe EMS bythe entity.



### (b)Ifthe 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 ofthe reason the objectives andtargets have not been attained.
(c) The annual summary shall be submittedtothe department sixty (60) days after the annual anniversary ofthe date the previous membership term began. (Air Pollution Control Board; 326 IAC 25-1-14)

Rule2. Regulatory Flexibility for the Environmental Stewardship Program, Comprehensive Local Environmental Action Network Community Challenge Program, and lncorporation by Reference of NEPT Incentives

326 IAC25-2-1 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 inthese federal rules are only available to members ofthe NEPT program.

*This body of documents is incorporated by reference. Copies may be obtainedfrom 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 upten (10) years, if approved by the commissioner.
(b) Notwithstanding326 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 bythe 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

Date: Dec 28,2006 10:44:58AM EST DIN: 20061227-IR-326050232PRA Page 20Indiana Register Sec. 3. (a) Notwithstanding 326 IAC 8-I-2(a)(7), the emission limitations specified in326 IAC 8 can be

I achieved through monthly volume-weighted averaging of all coatings applied ina coating line or printing linesubject to the requirements in326 IAC 8-2 or 326 IAC 8-5-5.
(b) Sufficient records must be maintained to demonstrate compliancewith the applicable emission limitationon a monthly average basis. The records must be made available tothe 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 ofthe 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 IAC2-8-ll.l(f)(l)(J), any pollution prevention project, as defined in326 IAC 2-1.1-1(14), that would otherwise be subject to significant permit revision procedures, and that does not result ina net increase in potential emissions of morethan the significance levels in326 IAC 2-2-I(xx), may be processed as a minor permit revision as follows: (1) For minor state operating permits, under 326 IAC2-6.1-6(h). (2) Forfederally 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

# - Glndiana Register 

### TITLE326 

### AIR POLLUTION CONTROL 

### BOARD


### Notice of 

### Public Hearing 

### LSA Document

### #05-232


### Notice ofPublic Hearing
Under IC 4-22-2-24, IC 13-14-8,and IC 13-14-9,nofice is hereby given thaton February 7, 2007, af 1:00 p.m., at the lndiana Governmenf Cenfer-South,402 West Washington Street, Conference Center Room A, Indianapolis, lndiana theAir Pollution Control Board willholda public hearingon amendments to 326 IAC 25 concerning the Environmental Stewardship Program (ESP) and Comprehensive Local Environmental Action Network (CLEAN). Thepurpose offhis hearing is to receive comments from thepublicprior to final adopfion of fhese rules by the board. All inferesfed persons are invifed and willbe given reasonable opportunify to express fheir views concerning theproposed amendmenfs. Oralstatements willbe heard, but, for fhe accuracy of fhe record, all comments should be submitfedin writing. Addifional information regarding this action may be obtainedfrom Christine Pedersen, Rules Development Secfion, Ofice of Air Qualify, (317) 233-6868 or (800) 451-6027 (in Indiana). Individuals requiring reasonable accommodafionsforparticipation in this event should contact the lndiana Departmenf ofEnvironmental Management,Americans with DisabilitiesAct coordinatorat: Atfn: ADA Coordinator lndiana Departmenf of EnvironmentalManagemenf I00 North SenateAvenue Indianapolis, lndiana 46204 or call (317) 232-3077 (V) or (317) 232-6565 (TDD). Speech and hearingimpaired callers may confact IDEM via the Indiana Relay Service (71I)or 1-800-743-3333. Please provide a minimum of 72 hours notificafion. Copies offhese rules are now on file afthe Ofice ofAir Quality, lndiana Departmenf ofEnvironmenfal Management, lndiana GovernmentCenfer-North, 100North 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 ofAir Quality
Posfed: 12/27/2006by Legislative ServicesAgency An

## html version of this document.

' I Date: Dec28,2006 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

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## 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 

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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 (28IR 3665). Continuation ofFirst Notice: April 1,2006, Indiana Register (29 IR 2373). Second Notice: June 1,2006,Indiana Register (29 IR 3109). Notice ofFirst Hearing: June 1, 2006, Indiana Register (29 IR 3121). Change ofHearing Notice: September 6,2006,Indiana Register 

### (DIN: 20060906-R326050232CHA) Date ofFlrst 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 ChallengeProgram

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)TheIndiana Environmental Stewardship Program and Comprehensive Local Environmental Action Network Community Challenge Program arevoluntary
Page 1of 16Rap #05-232 ESPICLEAN February 7,2007 

### performance based leadership programs that offer recognition, regulatory flexibility, and
an opportunityto work directly with thedepartment on innovative pilot projects for entitiesthat consistently demonstrateenvironmental stewardship and makemeasurable efforts towards continual environmental improvement. In accordance with 1C 13-27-8-3,
an entityis notrequired to comply with this rule and 326 IAC 25-2 except asa provision of participation in these programs. (b)Thisrule applies.to any Indiana entity that: (1) voluntarily participates in eitherprogram; (2) meets theeligibilityrequirements of section 3 of this rule; and (3)

### maintains-membership by complying with this rule and 326 IAC 25-2. 

## (AirPollution Control Board; 326IAC 25-1-

### I)

326 IAC 25-1-2 Definitions Authority: IC 13-14-8.; .IC 43-17-3-4; IC'13-17-3-12 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, thefollowing definitions apply throughout this rule and 326 IAC25-2: (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" meansthevoluiltary state program for units of local government in Indiana that: 

### (A) demonstrate environmental stewardship; and 

### (B) strivefor 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), orunit of local government, or part or combination thereof, whether incorporated ornot, 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) atleast 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 adverseorbeneficial, wholly orpartially resulting from tbe environmental aspects 

### Page 

## 2of 16Rap #05-232



### , ESPICLEAN February 7,2007


### of an entity. 

### (7) "Environmental laws, rules, and regulations", for the purposeof this article,
means the system of laws and standards administered by 

### U.S. EPA, the department,
orrelated local governmentbodies. 

### (8) "Environmental management system" or "EMS" means a continuous cycle of planning, implementing, reviewing, andimproving a set of documentedprocesses andpractices used to develop andimplement 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 environmentalpoli~y of an entity. (10) ."Environmental policy" meanstheoverall) commitment and direction of an entity related to environmental performance asformally expressed by senior management. (11) 

### "Environmental StewardshipProgram" or "ESP" means the voluntary state program for entities in Indiana that: (A) demonstrate enviromental stewardship; and (B) strivefor continual environmental improvement. (12) "Environmental target" means a 

### detailed performance requirement that: (A) 

### is quantified wherepractical; and (B) arises from the environmental objectives. (13) 

### tCGeogr~phi~~locrltion,w farthe

## purpasei of *h"ij: attfcie, rnerins"an~aggregation of
one (1) ormore'operations that are: (A) located on: (i) one (1) piece of property; or (ii) contiguous oradjacent properties; and (B) owned, operated, orcontrolled by 

### the sameentity. (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 theEMS being audited. (15) "National EnvironmentalPerformance Track Program" or "NEPT" means the U.S. EPA's National Environmental PerformanceTrackProgram. (16) "Senior management" means thefollowing: (A) 

### For entities, the individual or individuals with executive responsibility for the entity. (B) For a partnership or soleproprietorship, a general partner or the proprietor, respectively. (C) For a unit of local government or other governmental unit, either a
Page 3 

### of 16Rap #05-232 ESPICLEAN 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. 

### (AirPollution ControlBoard; 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 ESPor CLEAN is voluntary and is open to entities located and operating in Indiana that meet thefollowing criteria: 

### (1) Thestandard 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.

, 

### (AirPollution ControlBoard; 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 thefollowing mekhods: 

### (1)E'or,applicationsfg~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 satisfiesthe 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 thetime of completion of the application; and (2) 

### subject the member of senior management to liability under state laws forbiddingfalse 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 aremet:


### Page4 of 16Rap #05-232 ESPICLEAN 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 samefor all of thelocations, but each location must: (A) play an activerole in each initiative; and 

## (B) demonstrate continuous environmental improvement. (3) TheEMSmust address staff and activities at each location, (4) Senior management must be common to all locations. (5) Thestandards of environmental campliance in section 10of this rule shall apply to all Indiana locationsunder thecontrol of the entity.
(d) Thecommissianer shallmakea determination on acceptanceintoESP or CLEANbased on thefollowing: (1) TheEMSmust meet the standardsin section 11 

### of this rule. (2) 

### A sitevisit by a representative of the departmenttoprovide an understanding of the environmental aspects of theentity and theEMS. (3)Identification of environmental improvement initiatives and associated objectives andtargets asfollows: (A) ForESPapplicants, atleast one (1)

### environmental improvement initiative and associated objectives and targets forthefirst year of membership. (B) For CLEAN applicants, at least five (5) 

### environmentalimprovement initiatives and associated objectives and targets forthethree (3) year term of membership. (4) ForESP applicants, information provided to U.S. EPA if the entity has also applied for membership 

### in NEPT. (5) Compliance audits conducted by: (A) thedepartment; 

### (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. 

### (AlrPollullon 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


### Page 5 of 16Rap #05-232 ESPICLEAN February 7, 2007


### Sec. 

### 5. (a) Theterm of membership is three (3) years from the datethe entity is accepted into theprogram aslong as the entity continues to meet tlle program criteria and submitsthe annual summary.
(b) ForESPmembers, the department may extend the term for upto one (1) year to coincide with the: (I)membership datein NEPT, if applicable; or (2) annual summarysubmission by allowing a member whose expiration date occurs before April 

### 1of thatyear to extend its expiration dateto April 

### 1of that year. (c) For CLEANmembers, the departmentmay extend the term for up to ninety 

### (90) days to accommodate submission of thethird annual summary, atwhich time CLEAN members may seek to renew membership in the program. 

### (AirPollution ControlBoard; 326IAC 25-1-5)

326 IAC25-1-6 Renewal ofESPmembership Authority: IC

### 13-64-8; IC 13-17-3-4; 

### IC 13-17-3-12 Affected: IC13-15; IC 13-17

Sec. 6. (a) Torenew

### ESP membership, a member of senior management shall submit a renewal application, preferably electronically, by April 1

### of thethird year of membership asfallows: (1)

### Forrenewal applications forESP only, to the departmenton: 

### (A) a form, either electronicallyorhard copy, provided bythe department;
or 

### (B) an equivalent form. (2) 

### Forrenewal applications for both ESP and NEPT, electronically to U.S. 

### EPA on theformprovided byU.S. EPA.
(b)Theapplication shall be signed by a member of senior management. The signature shall: (1) constitute affirmation that the statements in the application aretrue and complete, as known at the time of completion of the application; and (2) 

### subject themember of senior management to liability under statelaws 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. Thereview of a renewal shall follow the sameprocedures 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 berequired.
Page 6 

### of 16Rap #05-232 ESPICLEAN February 7,2007 

### (d)Thecommissioner shall make a determination on theESPrenewal application based on the following: (1) TheEMS must continue to meet the standardsin 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 atleast one (I) e~vironmental improvement initiative and associated goals forthenext 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) Otherinformation, including thefollowing: (A) 

### Compliance information obtained from department staff. 

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

## (AirPollutzon ControlBoard, 326

### IAC 25-1-6)



### 326IAC 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 thethird annual summary of the previous membership term: (1) to the department within sixty (60) days after thethird 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 aretrue and complete, as known at the time of completion of the application; and (2) 

### subject the member of senior management to liability under statelaws forbidding false or misleading statements.Rap #05-232 ESPICLEAN February 7,2007 

### (c) Thedepartment 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 sameprocedures as the review for theinitial application regarding colqpliance checks and 

## EMS evaluations, except a general site visit by a representative of the department shall not be required. (d)Theeommissianer shdlmake 

## a decision on the CLEAN renewal application based on thefollowing: (1) TheEMS must continueto meet the standards in section 11of this rule. (2) Review oftheannual summaries submitted during the previous membership term. (3)

### Successful coordination with a member of senior management to identify atleast five (5) 

### environmentalimprovement initiatives and associated goals for thenext three (3) 

### year term of membership. (4) Compliance audits conducted by: (A) the department; (B) 

### the

### U.S. EPA; (C) other stateoffiees; and @) 

### other federal agencies;
as appropriate. (5) 

### Other information, includingthefollowing: (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 expiresupon receipt by the department of thethird annual summary. (AirPollution 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)Thecommissioner shall revoke membership in ESP or CLEAN if the entity has not substantially complied with any of thefollowing: 

### (I)Thestandards of environmental compliance described in section 10of this rule. (2) 

### Therequirement 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)

### Therequirement to maintain an approved 

## EMS as required for membership. (4)Theprohibition against knowingly submitting false information:
Page 8 

### of 16Rap#05-232 ESPICLEAN February 7,2007 

### (A) on the application; 

## (B)in the annual summary; (C)during a site visit orevaluation by the department; or 

## (D) during an independent audit.
(b)Thecommissioner may revoke themembership 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, orlocal environmental laws, rules, and regulations.
(c) A determination by the commissionerto revoke a membership under subsection (b)

### maybebased upon thefollowing: (1) Compliance information obtained from department staff. (2) 

### Verifiable, applicable information received from sources determined to be relevant by the commissioner. 

### (d-)

### Ifthe commissionerdeterminesthat a situation shall ormay warrantrevocation of membership based on subsection (a) or(b), thefollowing applies: (1) Thecommissioner shall notify the entity in writing: (A) 

### of anypotential deficiencies found; and 

### (B) that the commissioner is consideringremoving theentityfrom the program. (2) Thenotice shall: (A) state that the commissionermay consider removing the entity from the program after therespoilse 

### ti& pefibd prdvided to themeniber; 

### (B) identify thepotential deficiencies; and (C) provide the entity with thirty (30) days to respond. (3) Within thirty (30) days aftertheend of the time period provided to the member, the commissioner shall consider theresponse and determineif the situation warrants revocation of membership.
(e) An entity whose membership has been revoked may reapply under section 4 

### of this rule at anytime twelve (12) months after therevocation. (f)

### Revocation of memberships shall beposted on the department Web site for the duration of the current application period. (g) Except as described in subsection (h), immediatelyupon 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


### Page 

### 9 

## of 16Rap #05-232 ESPICLEAN February 7,2007


### entitiesFESOP orMSOPpermit under 326 IAC 25-2-2 shall applyfor 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)

326IAC25-1-9 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. Membershipin ESP or CLEAN may be transferred to another entity atthe
samegeographiclocation provided: (1) thedepartmentisnotified within ninety 

### (90) days of the: (A) changein ownership ormanagement; and (B) intent to maintajn membership; and 

## (2) senior management commitsto: 

### (A) fulfilling theprevious member's commitments; and (B) therequi~ements of theprogram for the remainder of themembership term by signinganupdated membership application. 

### (AirPollution Control Board; 326

### IAC 25-1-9)



### 326IAC25-1-10 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 seniorrnanagei~iellt of the entity shall submit a certification with the application to the department certifyingthat, based on information and belief after reasonable inquiry, the entity is currentlyin compliancewith all applicablelocal, state, and federal environmental laws, rules, and regulations.
(b) Thedepartment 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 ornot 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) Thefollowing criteria shall prevent acceptance of 

### an entity into the

## ESP or 

### Page 

### 10

## of 16Rap #05-232 ESPICLEAN February 7, 2007


### CLEAN: (I) Corporate criminal conviction or guilty plea for environmentally-related violations of criminal laws involvingthe entity or an officer of the entity within the past five (5) years. (2) 

### Criminal conviction or plea of employeeatthe entityfor environmentallyrelated violations of criminal lawswithin thepast five 

### (5) years. (d) 

### The existence of one 

### (1)or more of thefollowing criteria may prevent acceptance of an entity into ESP or CLEAN: (1) Ongoing criminal investigation orprosecution of theentity, or an officer or employee of the entity,for a violation of environmentallaw. (2) Three (3) ormore significant violations

## at the entityin thepast three (3) years. (3) Unresolved or unaddressed significant ntrncompliance orsignificant violations. 

### (4) Planned, but not yet filed, judicial oradministrativeaction, by 

### W.S. EPA orthe department, against the entity. (5) OngoingU.S. EPA ordepartment-initiated litigation against the entity. (6) A 

### situation where anentity is notin compliance with thescheduleand terms of
an order or decreeissued by: (A) 

### U.S. EPA; or 

### (B) the department. (7) A 

### history of significant environmental problems ora pattern of noncompliance atthe entityor at other affiliated entities under thesameownership or control. (AirPolZutzon Control Board, 326IAC 25-1-10)



### 326 IAC25-1-11 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 beimplemented 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, orsignatory 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
Page 11

### of 16Rap #05-232 ESPICLEAN 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 applicablelaws, rules, and regulations. 

### (6) Established priorities and environmental objectives and targets forthe following: (A) Continuousimprovementin environmental performance. 

## (B) Ensuring compliancewith 

### applicable environmental laws, rules, regulations, and permit conditions. (7) 

## An established community outreach mechanism that includes thefollowing: (A) 

### 1den;tifyingand responding to community concerns. 

## (B) Informingthe oommuityof important matters that affect the community. (C) 

### Reporting on theEMS, including, at a minimum, reporting to thepublic
ontheenvironmeatalpolicy and significant aspects. 

## (I)) Through the annual summary,reporting on the environmental improvement initiatives, including progress towards themost recent environmentalimprovementinitiatives identified in the application or annual summary. (8) 

### Incorporation of environmental andpollution prevention planning in the development ofnewpraduets, processes, and services and modifications of existing processes. (9)

### Evidence of clear responsibility 

### by the elltity for the following: (A) Implementation, training, monitoring, EMS maintenance, and taking corrective action. 

### (B)Ensuring compliancewith applicable environmental laws, regulations, and permit conditions. (10) 

### Documentation of theimplementation procedures and theresults of implementation. (11)

### Appropriately written EMSprocedures to include documented plans, records, and procedures asneeded for successful implementation of an 

### EMS as defined in section 2(8) of this rule. (12)An annual evaluation of theEMSwith 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).



### Page 120f 

### 16Rap #05-232 ESPICLEAN February 7, 2007 

### (e) 

### A representative of the department shall perform an on-site review, evaluation, andverification of theEMSif, 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. 

## (AirPollution ControlBoard; 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 forthe appropriate program, asfollows: (1) ForESP, a member of senior management shall identifythree (3) 

### continuous environmental improvement initiatives for each membershipterm. One (1) initiative shall be identified atthe timeof theinitial orrenewal application andthe remaining initiatives shall be identified each year atthetime the annual summaryis submitted tothe department. (2) For 

### CLEAN, a member of senior management shall identify five (5) continuous environmental improvement initiatives for thethree (3) year membership term. (b) Entities accepted into ESP or CLEAN shall: (1)

### maintain 

## recbrds thatd'ekribe andtrh'cktheactioiis taken toward Achievement of theenvironmental improvementinitiatives; and (2) submit an annual summaryin accordancewith section 13or 14of this rule, as applicable, documenting progress toward the environmental improvement initiativesfor that year. (c) Entities accepted into ESP or CLEAN shall demonstrate continuous environmental improvement by thefollowing: (1) Conductingperiodic pollution prevention or environmental improvement assessments that identify opportunities for reducingpollution 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 orreduced; (iii) implementation activities; and


### Page I3

### of 16Rap #05-232 ESPICLEAN February 7,2007 

### (iv)projected timeframes. (3) Reporting on the activitiesundertaken toward 

### implementation of theinitiatives identified with the department. 

### (AirPollution ControlBoard; 326IAC 25-1-12)

326 IAC25-1-13 Annual summaryforESPmembers 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 summaryona form provided by the departmentoranequivalentform documenting thefollowing: (1) Progresstoward the objectives and targets identified for the envir~nmental improvement initiative for that year. (2) Results obtained from achieving the environmental improvement initiative objectivesandtargets, if applicable. 

### (3) An annual rexiew of the

### EMS by the entity. (b) 

## Ifthe entity has not attainedtheobjectives and targets associated with an environmental improvementinitiative, a member of senior management shall providethe following: (1) Verification of continued progress toward the objectives and targets. (2)A 

### description of thereason the objectives and targets have not been attained.
(c) Each annual summarymust includeidentification of the environmental improvement initiativeforthenext year, unless theentity is terminating membershipin ESP. (d)Theannual summary shall: (1) cover thetwelve (12) month calendar year; (2)

### be submitted to thedepartmentfor each year by April 1 of the following year; and (3)

### besubmitted for each calendar year in whicb the entity has been a 

### member for atleast three (3) full months.
(e)An annual summary submitted to 

### U.S. EPA as a requirement of being a member of NEPT shall satisfy therequirement 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


### Page 14

### of 16Rap#05-232 ESPICLEAN February 7, 2007

. 

### Sec. 14. (a) Entities accepted into CLEAN shall submit an annual summary on a form provided by the department or an equivalentform documenting thefollowing: 

## (1)Progress toward the objectives and targets identified for thefive 

### (5) environmental improvement initiatives. 

### (2) Results obtained from achieving the environmentalimprovement initiative objectives and targets, if applicable. (3) An annualreview of theEMS

### by the entity.
(b) 

### If the entity has not attained theobjectives and targets associated with an environmental improvementinitiative 

### at thetime thethird annualsummaryis submitted,
a member of senior management shall provide 

### fi description of thereason theobjectives andtargets have not been attained.
(c) The annual summary shall be submitted to thedepartment sixty (60) days after theannuit1.anniversaryof thedatethe previous me'mbershipterm began, 

## (AirPollution ControlBoard; 326IAC 

### 25-1-14)



### Rule2. 

### Regulatory Flexibility for the Environmental StewardshipProgram, ComprehensiveLocal Environmental Action Network Community ChallengeProgram, andIncorporation by Reference of NEPTIncentives

326IAC 25-2-1 Incorporation by reference of federalincentive 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 incorporatesby reference the Performance Trackprovisions at 40 CFR 63.2*, 40 CFR 63.10*, and 40 CFR 63.16". Theincentives in these federal rules areonly availableto members oftheNEPT program.
"This body of documents is incorporated by reference. Copies may be obtained from the Government Printing Office, 732 North Capitol StreetNW, 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 SenateAvenue, Indianapolis, Indiana 46204. 

## (AirPollution ControlBoard; 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 IAC2-8-4(2) and in

,. 

### Page 15 

### of 16Rap #05-232 ESPICLEAN February 7, 2007


### accordancewith 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 operatingpermit (MSOP) for a member in ESP or CLEAN may be renewed for a period of up ten (10)years, if approved 

### by the commissioner. 

### (AirPollution ControlBoard, 326IAC 25-2-2)

326 IAC25-2-3 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 

### 8can be achieved through monthly volume-weighted averaging of all coatings applied in a coating line orprinting line subject to the requirements in 326 IAC 8-2 or 326 IAC8-5-5. 

### (b) Sufficientrecords must be maintained to demonstrate compliance with the applicable emission limitation on a monthly average basis. Therecords must be made available to the department upon request. (c) Records of monthlyVOC 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 arenot available, each coating, ink, and solvent shall meet the requirements of the applicable section. 

### (Air Pollution ControlBoard; 326IAC 

### 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 2-8-1l.l(e). 

## (AirPollution 

### ControlBoard; 326

### IAC 25-2-4)

Page 

### 16 of 

### 16

## ATTACHMENT

# - I

### ADMINISTRATIVECHECKLIST 

### (40 CFR 

### 51,Appendix V) I 

### 1.The submittal is accompaniedby a formal letter of submittal from the governor or his designee.

2. 

### Evidence that the Statehas adoptedtheplan in the State code
orbody ofregulations; or issuedthe permit, order, consent agreement ("document"); in final form. a. Date of adoptionor finalissuance.

b. The effective date oftheplan, if different fromthe adoptionlissuancedate.

3. 

### Evidence that the Statehas the necessary legal authority under statelaw to adopt and implementtheplan.

4. A copy of the actualregulation or document submitted for approval and incorporationby reference into the plan, including the following:

a. Indicationofthe changes made to the existing approvedplan, where applicable.

b. 

### The submittal shallbe a copy of the official State regulation
or document signed, stamped,datedby the appropriate state official indicating that it is hllyenforceable by the State. Effective date shallbe statedin the documentitself.

5.Evidencethat the Statefollowed all ofthe procedural requirementsofthe State's laws and constitution in conductingand completing the adoption/issuance of the plan. Enclosed

Attachment 

### B

May 16,2007

June 16,2007

Attachment A



### Attachment

### B

6. Evidence,that public noticewas given, including date of AttachmentsC and

### D proof ofpublication.



### - Notice ofFirst PublicHearing andPublishers' Affidavits Notice of SecondPublicHearing and Publishers' Affidavits



## 7. Certification thatpublic hearingswere held in accordance with informationprovided inpublic hearing notice. Transcript from First PublicHearing



### - Transcript from SecondPublicHearing



### 8. Compilationofpublic comments and State's response. SecondNotice 

# -Proposed Ruled Third Comment Period AttachmentsE and 

### H

Attachments 

### C and 

## F