Document ID: EPA-R05-OAR-2017-0147-0002
Agency: epa
Document Type: Proposed Rule
Title: Proposed Approval of the Indiana Reasonable Further Progress Plan and other Moderate Nonattainment Plan Elements for the Chicago Nonattainment Area for the 2008 Ozone Standard
Posted Date: 2018-08-28T04:00Z

[Federal Register Volume 83, Number 167 (Tuesday, August 28, 2018)]
[Proposed Rules]
[Pages 43825-43836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18640]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2017-0147; FRL-9982-90--Region 5]

Air Plan Approval; Indiana; Reasonable Further Progress Plan and 
Other Plan Elements for the Chicago Nonattainment Area for the 2008 
Ozone Standard

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a revision to the Indiana State Implementation Plan (SIP) to 
meet the base year emissions inventory, reasonable further progress 
(RFP), RFP contingency measure, nonattainment new source review 
(nonattainment NSR), volatile organic compound (VOC) reasonably 
available control technology (RACT), and motor vehicle inspection and 
maintenance (I/M) requirements of the Clean Air Act (CAA) for the 
Indiana portion of the Chicago-Naperville, Illinois-Indiana-Wisconsin 
area (Chicago area) for the 2008 ozone national ambient air quality 
standard (NAAQS or standard). EPA is also proposing to approve the 2017 
transportation conformity motor vehicle emissions budgets (MVEBs) for 
the Indiana portion of the Chicago area for the 2008 ozone NAAQS. EPA 
is proposing to approve the state's submission as a SIP revision 
pursuant to section 110 and part D of the CAA and EPA's regulations 
because it satisfies the emission inventory, RFP, RFP contingency 
measure, nonattainment NSR, VOC RACT, I/M, and transportation 
conformity requirements for areas classified as moderate

[[Page 43826]]

nonattainment for the 2008 ozone NAAQS. Final approval of Indiana's SIP 
as meeting the nonattainment NSR requirements of the CAA for the 2008 
ozone NAAQS will permanently stop the sanctions and Federal 
Implementation Plan (FIP) clocks triggered by EPA's February 3, 2017 
finding that Indiana failed to submit a marginal ozone nonattainment 
NSR plan.

DATES: Comments must be received on or before September 27, 2018.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2017-0147, at http://www.regulations.gov, or via email to 
[email protected]. For comments submitted at Regulations.gov, 
follow the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, EPA may publish any comment received to its 
public docket. Do not submit electronically any information you 
consider to be Confidential Business Information (CBI) or other 
information whose disclosure is restricted by statute. Multimedia 
submissions (audio, video, etc.) must be accompanied by a written 
comment. The written comment is considered the official comment and 
should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e. on the web, cloud, or other file sharing 
system). For additional submission methods, please contact the person 
identified in the FOR FURTHER INFORMATION CONTACT section. For the full 
EPA public comment policy, information about CBI or multimedia 
submissions, and general guidance on making effective comments, please 
visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Kathleen D'Agostino, Environmental 
Engineer, Attainment Planning and Maintenance Section, Air Programs 
Branch (AR-18J), U.S. Environmental Protection Agency, Region 5, 77 
West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-1767, 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This supplementary information 
section is arranged as follows:

I. What is the background for this action?
II. What is EPA's evaluation of Indiana's submittal?
III. What action is EPA proposing?
IV. Statutory and Executive Order Reviews

I. What is the background for this action?

A. Background on the 2008 Ozone Standard

    On March 12, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 
0.075 parts per million (ppm).\1\ Promulgation of a revised NAAQS 
triggers a requirement for EPA to designate all areas of the country as 
nonattainment, attainment, or unclassifiable for the NAAQS. For the 
ozone NAAQS, this also involves classifying any nonattainment areas at 
the time of designation.\2\ Ozone nonattainment areas are classified 
based on the severity of their ozone levels (as determined based on the 
area's ``design value,'' which represents air quality in the area for 
the most recent 3 years). The classifications for ozone nonattainment 
areas are marginal, moderate, serious, severe, and extreme.\3\
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    \1\ 73 FR 16436 (March 27, 2008), codified at 40 CFR 50.15.
    \2\ CAA sections 107(d)(1) and 181(a)(1).
    \3\ CAA section 181(a)(1).
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    Areas that EPA designates nonattainment for the ozone NAAQS are 
subject to the general nonattainment area planning requirements of CAA 
section 172 and also to the ozone-specific planning requirements of CAA 
section 182. Ozone nonattainment areas in the lower classification 
levels have fewer and/or less stringent mandatory air quality planning 
and control requirements than those in higher classifications. For 
marginal areas, a state is required to submit a baseline emissions 
inventory, adopt provisions into the SIP requiring emissions statements 
from stationary sources, and implement a nonattainment NSR program for 
the relevant ozone NAAQS.\4\ For moderate areas, a state needs to 
comply with the marginal area requirements, plus additional moderate 
area requirements, including the requirement to submit a modeled 
demonstration that the area will attain the NAAQS as expeditiously as 
practicable but no later than 6 years after designation, the 
requirement to submit an RFP plan, the requirement to adopt and 
implement certain emissions controls, such as RACT and I/M, and the 
requirement for greater emissions offsets for new or modified major 
stationary sources under the state's nonattainment NSR program.\5\
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    \4\ CAA section 182(a).
    \5\ CAA section 182(b).
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B. Background on the Chicago 2008 Ozone Nonattainment Area

    On June 11, 2012,\6\ EPA designated the Chicago area as a marginal 
nonattainment area for the 2008 ozone NAAQS. The Chicago area includes 
Cook, DuPage, Kane, Lake, McHenry, and Will Counties and part of Grundy 
and Kendall Counties in Illinois; Lake and Porter Counties in Indiana; 
and part of Kenosha County in Wisconsin. On May 4, 2016,\7\ pursuant to 
section 181(b)(2) of the CAA, EPA determined that the Chicago area 
failed to attain the 2008 ozone NAAQS by the July 20, 2015, marginal 
area attainment deadline and thus reclassified the area from marginal 
to moderate nonattainment. In that action, EPA established January 1, 
2017, as the due date for the state to submit all moderate area 
nonattainment plan SIP requirements applicable to newly reclassified 
areas.
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    \6\ 77 FR 34221, effective July 20, 2012.
    \7\ 81 FR 26697.
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    In addition, effective March 6, 2017, EPA found that 15 states and 
the District of Columbia failed to submit SIP revisions in a timely 
manner to satisfy certain nonattainment plan requirements for the 2008 
ozone NAAQS.\8\ This finding established certain deadlines for the 
imposition of sanctions if a state does not submit a timely SIP 
revision addressing the requirements for which EPA made the finding and 
for EPA to promulgate a FIP to address any outstanding SIP 
requirements. As part of that action, EPA made a finding that Indiana 
failed to submit a SIP submission to meet the marginal nonattainment 
NSR requirements for the Indiana portion of the Chicago area.
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    \8\ 82 FR 9158 (February 3, 2017).
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II. What is EPA's evaluation of Indiana's submittal?

    Indiana submitted a SIP revision request on February 28, 2017, and 
submitted supplemental information on January 9, 2018, to address the 
moderate area requirements for the Indiana portion of the Chicago area 
for the 2008 ozone NAAQS. The submission contained a number of 
nonattainment plan elements, including a revised 2011 base year 
emissions inventory for VOC and oxides of nitrogen (NOX), a 
15% RFP plan, a 3% RFP contingency measure plan, 2017 VOC and 
NOX motor vehicle emissions budgets, a nonattainment NSR 
certification, a VOC RACT certification, and an enhanced I/M 
certification. The nonattainment NSR certification included in the SIP 
submission addresses the deficiency that was the basis for the March 6, 
2017,

[[Page 43827]]

finding; therefore, approval of this SIP revision would permanently 
stop the sanctions and FIP clocks triggered by EPA's February 3, 2017 
finding that Indiana failed to submit a marginal ozone nonattainment 
NSR plan. The submission also included an attainment demonstration, 
which will be addressed in a separate action.

A. Revised 2011 Base Year Emissions Inventory

    CAA sections 172(c)(3) and 182(a)(1), 42 U.S.C. 7502(c)(3) and 
7511a(a)(1), require states to develop and submit, as SIP revisions, 
comprehensive, accurate, and complete emissions inventories for all 
areas designated as nonattainment for the ozone NAAQS. An emissions 
inventory for ozone is an estimation of actual emissions of VOC and 
NOX from all sources located in the relevant designated 
nonattainment area. For the 2008 ozone NAAQS, EPA has recommended that 
states use 2011 as a base year for the emissions estimates.\9\ On April 
7, 2017,\10\ EPA approved the 2011 base year emissions inventory 
submitted by the Indiana Department of Environmental Management (IDEM) 
on June 15, 2016, for the Indiana portion of the Chicago area. IDEM 
included a revised 2011 base year emissions inventory in its February 
27, 2017, submission. The revised 2011 base year emissions inventory 
only modifies the emissions estimates for the on-road mobile sector, 
with emissions estimates for point, area, and non-road mobile sectors 
remaining unchanged from the inventory approved by EPA.
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    \9\ 78 FR 34178, 34190, (June 6, 2013).
    \10\ 82 FR 16934.
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    In the original 2011 base year emissions inventory approved by EPA, 
Indiana derived 2011 onroad mobile emissions by back-casting emissions 
estimates generated by the MOVES2014 model for 2015 and 2020. The 
revised onroad emissions estimates were generated by running the 
MOVES2014 model for 2011. This is a more accurate method for estimating 
2011 onroad emissions. Thus, EPA is proposing to approve the 2011 base 
year emissions inventory the state submitted with the RFP plan as a 
revision to the Indiana SIP.

                                       Table 1--Revised 2011 Base Year Emissions Inventory in Tons per Summer Day
                                                                         [tpsd]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                VOC                                             NOX
                      Source sector                      -----------------------------------------------------------------------------------------------
                                                            Lake County    Porter County       Total        Lake County    Porter County       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
EGU Point...............................................            0.44            0.19            0.63           24.62            5.53           30.15
Point...................................................           15.39            1.68           17.07           43.10           23.36           66.46
Area....................................................           12.54            5.53           18.07            5.80            3.89            9.69
Non-road................................................            7.55            6.64           14.19            8.07            4.62           12.69
On-road.................................................            6.92            2.66            9.58           17.85            6.85           24.70
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................           42.84           16.70           59.54           99.44           44.25          143.69
--------------------------------------------------------------------------------------------------------------------------------------------------------

B. 15% RFP Plan and 3% Contingency Plan

1. Background
    The CAA requires that states with areas designated as nonattainment 
for ozone achieve RFP toward attainment of the ozone NAAQS. CAA section 
172(c)(2) contains a general requirement that nonattainment plans must 
provide for emissions reductions that meet RFP. For areas classified 
moderate and above, section 182(b)(1) imposes a more specific RFP 
requirement that a state had to meet through a 15% reduction in VOC 
emissions from the baseline anthropogenic emissions within 6 years 
after November 15, 1990. The state must meet the 15% requirement by the 
end of the 6-year period, regardless of when the nonattainment area 
attains the NAAQS. As with other nonattainment plan requirements for 
more recent iterations of the ozone NAAQS, EPA has promulgated 
regulations and guidance to interpret the statutory requirements of the 
CAA.
    EPA's final rule to implement the 2008 ozone NAAQS (SIP 
Requirements Rule),\11\ addressed, among other things, the RFP 
requirements as they apply to areas designated nonattainment and 
classified as moderate for the 2008 ozone NAAQS.\12\ EPA interprets the 
15% VOC emission reduction requirement in CAA section 182(b)(1) such 
that a state that has already met the 15% requirement for VOC for an 
area under either the 1-hour ozone NAAQS or the 1997 8-hour ozone NAAQS 
would not have to fulfill that requirement through reductions of VOC 
again. Instead, EPA is interpreting CAA section 172(c)(2) to require 
states with such areas to obtain 15% ozone precursor emission 
reductions (VOC and/or NOX) over the first 6 years after the 
baseline year for the 2008 ozone NAAQS. The state previously met the 
15% VOC reduction requirement of CAA section 182(b)(1) for the Indiana 
portion of the Chicago area under the 1-hour ozone NAAQS. Therefore, 
the state may rely upon both VOC and NOX emissions 
reductions to meet the RFP requirement for the 2008 ozone NAAQS.
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    \11\ 80 FR 12264. (March 6, 2015).
    \12\ Ibid, at 12271 and 40 CFR 51.1110.
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    EPA's SIP Requirements Rule indicates the base year for the 2008 
ozone NAAQS, for which areas were designated nonattainment effective 
July 20, 2012, can be 2011 or a different year of the states choosing. 
However, states selecting a pre-2011 alternate baseline year must 
achieve 3% emission reductions each year after the initial 6-year 
period has concluded up to the beginning of the attainment year. For a 
multi-state area, states must agree on the same base year. Wisconsin, 
Illinois, and Indiana have selected the EPA-recommended base year of 
2011.\13\
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    \13\ On February 16, 2018, the D.C. Circuit Court issued a 
decision in South Coast Air Quality Management District v. EPA, 882 
F.3d 1138 (D.C. Cir. 2018), in which several parties challenged 
different aspects of EPA's SIP Requirements Rule for the 2008 Ozone 
NAAQS. In this decision, the Court upheld 2011 as a reasonable 
baseline year for the 2008 ozone NAAQS but vacated the provision 
allowing for an alternate year. Because Wisconsin, Illinois, and 
Indiana have selected 2011 as the baseline year, the decision does 
not impact Indiana's ROP plan.
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    States may not take credit for VOC or NOX reductions 
occurring from sources outside the nonattainment area for purposes of 
meeting the 15% ROP and 3% RFP requirements of CAA sections 172(c)(2), 
182(b)(1) and 182(c)(2)(B). Indiana's 15% RFP represents emissions 
reductions which occurred in Indiana's portion of the nonattainment 
area from

[[Page 43828]]

2011 to 2017, thereby satisfying this requirement.
    Except as specifically provided in section 182(b)(1)(D) of the CAA, 
all state control measures approved into the SIP or Federal measures 
that provide emissions reductions that occur after the baseline 
emissions inventory year are creditable for purposes of the RFP 
requirements, provided that the reductions meet the standard 
requirements for creditability which include being enforceable, 
quantifiable, permanent, and surplus in terms of not having previously 
been counted toward RFP.
    States must also include contingency measures in their 
nonattainment plans. The contingency measures required for areas 
classified as moderate and above under CAA sections 172(c)(9) and 
182(c)(9) must provide for the implementation of specific measures if 
the area fails to attain or to meet any applicable RFP milestone. The 
state must submit these measures for approval by EPA into the SIP as 
adopted measures that would take effect without further rulemaking 
action by the state or the EPA upon a determination that an area failed 
to attain or to meet the applicable milestone. Per EPA guidance for 
purposes of the ozone NAAQS, contingency measures should represent one 
year's worth of RFP progress, amounting to reductions of at least 3% of 
the baseline emissions inventory for the nonattainment area.\14\ The 
purpose of the contingency measures is to provide additional emission 
reductions in the event of a failure to attain or meet any applicable 
milestone, which would occur while the state is revising its SIP for 
the area to rectify the failure to attain or to meet RFP 
requirements.\15\
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    \14\ See the March 6, 2015 SIP Requirements Rule (80 FR 12264 at 
12285) and April 16, 1992 General Preamble section III.A.3.c (57 FR 
13498 at 13511).
    \15\ 80 FR 12264 at 12285.
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    Regarding the contingency measures, EPA's prior guidance for 
purposes of the ozone NAAQS specifies that some portion of the 
contingency measures must include VOC reductions. This previous 
limitation is no longer necessary in all areas. In particular, EPA has 
concluded that states with nonattainment areas classified as moderate 
and above that have already completed the initial 15% VOC reduction 
required by CAA section 182(b)(1)(A)(i), can meet the contingency 
measures requirement based entirely on NOX controls if that 
is what the state's analyses have demonstrated would be most effective 
in bringing the area into attainment. There is no minimum VOC 
requirement. Also, EPA is continuing its long-standing policy that 
allows states to use promulgated Federal measures as contingency 
measures as long as they provide emission reductions in the relevant 
years in excess of those needed for attainment or RFP.\16\
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    \16\ 80 FR 12264 at 12285.
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2. Indiana's 15% RFP and 3% RFP Contingency Measures Plan
    To demonstrate that the Indiana portion of the Chicago area has 
achieved 15% RFP over the 6-year attainment planning period, Indiana is 
using a 2011 base year inventory and a 2017 RFP inventory. To develop 
the 2017 inventory, Indiana calculated on-road emissions using EPA's 
MOVES2014 model and non-road emissions using EPA's National Mobile 
Inventory Model (NMIM). The MOVES model for the on-road sector and NMIM 
for the non-road sector incorporate a number of Federal emissions 
control programs into its projections. These emissions reduction 
measures are permanent and enforceable and are implemented in the 
nonattainment area. The MOVES and NMIM models assumed increases in 
vehicle or equipment population and usage while projecting decreases in 
ozone precursor emissions from 2011 to 2017. The estimated emissions 
reductions are therefore not due to reductions in source activity, but 
to the implementation of control measures. Tables 2 and 3 list the 
Federal permanent and enforceable control programs modeled by the MOVES 
model for the on-road sector and NMIM for the non-road sector, 
respectively.

                       Table 2--Federal On-Road Emission Control Programs Modeled by MOVES
----------------------------------------------------------------------------------------------------------------
        On-road control program                Pollutants              Model year *             Regulation
----------------------------------------------------------------------------------------------------------------
Passenger vehicles, SUVs, and light     VOC & NOX..............  2004-09+ (Tier 2) 2017+  40 CFR parts 85 & 86.
 duty trucks--emissions and fuel                                  (Tier 3).
 standards.
Light-duty trucks and medium duty       VOC....................  2004-10................  40 CFR part 86.
 passenger vehicle--evaporative
 standards.
Heavy-duty highway compression engines  VOC & NOX..............  2007+..................  40 CFR part 86.
Heavy-duty spark ignition engines.....  VOC & NOX..............  2005-08+...............  40 CFR part 86.
Motorcycles...........................  VOC & NOX..............  2006-10 (Tier 1 & 2)...  40 CFR part 86.
Mobile Source Air Toxics--fuel          Organic Toxics & VOC...  2009-15 **.............  40 CFR parts 59, 80,
 formulation, passenger vehicle                                                            85, & 86.
 emissions, and portable container
 emissions.
Light duty vehicle corporate average    Fuel efficiency (VOC &   2012-16 & 2017-25......  40 CFR part 600.
 fuel economy standards.                 NOX).
----------------------------------------------------------------------------------------------------------------
* The range in model years affected can reflect phasing of requirements based on engine size or initial years
  for replacing earlier tier requirements.
** The range in model years reflects phased implementation of fuel, passenger vehicle, and portable container
  emission requirements as well as the phasing by vehicle size and type.

                       Table 3--Federal Non-Road Emission Control Programs Modeled by NMIM
----------------------------------------------------------------------------------------------------------------
       Nonroad control program *               Pollutants             Model year **             Regulation
----------------------------------------------------------------------------------------------------------------
Compression Ignition..................  VOC & NOX..............  2000-2015+ (Tier 4)....  40 CFR parts 89 &
                                                                                           1039.
Large Spark Ignition..................  VOC & NOX..............  2007+..................  40 CFR part 1048.
Marine Spark Ignition.................  VOC & NOX..............  2010+..................  40 CFR part 1045.
Recreational Vehicle..................  VOC & NOX..............  2006-2012 (Tiers 1-3)..  40 CFR part 1051.
Small Spark Ignition Engine <19 Kw--    VOC & NOX..............  2005-2012 (Tiers 2 & 3)  40 CFR parts 90 &
 emission standards.                                                                       1054.

[[Page 43829]]

 
Small Spark Ignition Engine <19 Kw--    VOC....................  2008-2016..............  40 CFR parts 1045, 54,
 evaporative standards.                                                                    & 60.
----------------------------------------------------------------------------------------------------------------
* Compression ignition applies to diesel non-road compression engines including engines operated in
  construction, agricultural, and mining equipment. Recreational vehicles include snowmobiles, off-road
  motorcycles, and all-terrain vehicles. Small spark ignition engines include engines operated in lawn and hand-
  held equipment.
** The range in model years affected can reflect phasing of requirements based on engine size or initial years
  for replacing earlier tier requirements.

    Indiana used the 2017 EPA-projected National Emissions Inventory 
(NEI) to obtain estimated point and area source emissions. While EPA 
projected point and area source emissions to decrease between 2011 and 
2017, Indiana did not document the control programs and associated 
reductions in emissions for these sectors or determine to what extent 
any reduction may be attributed to reductions in source activity. 
Therefore, Indiana took no credit for emissions reductions from these 
source sectors in its RFP or RFP contingency measures calculations. 
Table 4 shows Indiana's 2017 projected emissions inventory. Table 5 
shows Indiana's 2017 RFP and RFP contingency emissions inventory, which 
assumes no reduction in emissions between 2011 and 2017 from the point 
and area source sectors.

                                                       Table 4--Projected 2017 Emissions Inventory
                                                                         [tpsd]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                VOC                                             NOX
                      Source sector                      -----------------------------------------------------------------------------------------------
                                                            Lake County    Porter County       Total        Lake County    Porter County       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
EGU Point...............................................            0.09            0.07            0.16            4.07            1.36            5.43
Non-EGU Point...........................................           15.34            1.67           17.01           42.44           23.10           65.54
Area....................................................           11.73            5.08           16.81            5.10            3.25            8.35
Non-road................................................            5.03            4.44            9.47            5.59            3.48            9.07
On-road.................................................            4.33            1.63            5.96           10.15            4.35           14.50
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................           36.52           12.89           49.41           67.35           35.54          102.90
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                                           Table 5--2017 RFP AND RFP Contingency Measures Emissions Inventory
                                                                         [tpsd]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                VOC                                             NOX
                      Source sector                      -----------------------------------------------------------------------------------------------
                                                            Lake County    Porter County       Total        Lake County    Porter County       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
EGU Point...............................................            0.44            0.19            0.63           24.62            5.53           30.15
Non-EGU Point...........................................           15.39            1.68           17.07           43.10           23.36           66.46
Area....................................................           12.54            5.53           18.07            5.80            3.89            9.69
Non-road................................................            5.03            4.44            9.47            5.59            3.48            9.07
On-road.................................................            4.33            1.63            5.96           10.15            4.35           14.50
                                                         -----------------------------------------------------------------------------------------------
    Total...............................................           37.73           13.47           51.20           89.26           40.61          129.87
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Indiana submitted documentation showing that emission reductions in 
the Indiana portion of the Chicago area met the 15% RFP and 3% RFP 
contingency measures requirements entirely through Federal permanent 
and enforceable control measures within the mobile source sectors. 
Table 6 shows the calculations Indiana used to determine that the 
mobile source emissions reductions meet the RFP and RFP contingency 
measures requirements.

                           Table 6--2017 RFP and Contingency Target Level Calculations
                                               [emissions in tpsd]
----------------------------------------------------------------------------------------------------------------
                         Description                               Formula            VOC              NOX
----------------------------------------------------------------------------------------------------------------
A. 2011 RFP Base Year Inventory..............................  ...............           59.54           143.69
B. RFP Reductions totaling 15%...............................  ...............              9%               6%
C. RFP Emissions Reductions Required Between 2011 & 2017.....           A * B             5.36             8.62
D. RFP Target Level for 2017.................................              A-C           54.18           135.07
E. Contingency Percentage....................................  ...............              2%               1%
F. Contingency Emission Reduction Requirements...............           A * E              1.2             1.44
G. RFP + Contingency Target Level............................              A-C-F         52.99           133.63
H. 2017 Projected Emissions (2017 RFP & Contingency            ...............           51.20           129.87
 Inventory)..................................................
I. Compare RFP & Contingency Target with 2017 Projected                  HX for ozone) to address pollution from on-road 
transportation sources. The MVEBs are the portion of the total 
allowable emissions that are allocated to highway and transit vehicle 
use that, together with emissions from other sources in the area, will 
meet an RFP milestone or provide for attainment or maintenance of the 
NAAQS.\18\ The MVEB serves as a ceiling on emissions from an area's 
planned transportation system.\19\
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    \17\ See the SIP requirements for the 2008 ozone standard in 
EPA's March 6, 2015 implementation rule (80 FR 12264).
    \18\ 40 CFR 93.101.
    \19\ The MVEB concept is further explained in the preamble to 
the November 24, 1993, Transportation Conformity Rule (58 FR 62188). 
The preamble also describes how to establish the MVEB in the SIP and 
how to revise the MVEB, if needed, subsequent to initially 
establishing a MVEB in the SIP.
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    When reviewing control strategy or maintenance plan submissions, 
EPA must affirmatively find that the MVEBs contained therein are 
adequate for use in determining transportation conformity. Once EPA 
affirmatively finds that the submitted MVEBs are adequate for 
transportation purposes, the MVEBs must be used by state and Federal 
agencies in determining whether proposed transportation projects 
conform to the SIP as required by section 176(c) of the CAA.
    EPA's substantive criteria for determining adequacy of a MVEB are 
set out in 40 CFR 93.118(e)(4). The process

[[Page 43831]]

for determining adequacy consists of three basic steps: Public 
notification of a SIP submission; provision for a public comment 
period; and EPA's adequacy determination. This process for determining 
the adequacy of submitted MVEBs for transportation conformity purposes 
was initially outlined in EPA's May 14, 1999 guidance, ``Conformity 
Guidance on Implementation of March 2, 1999, Conformity Court 
Decision.'' EPA adopted regulations to codify the adequacy process in 
the Transportation Conformity Rule Amendments for the ``New 8-Hour 
Ozone and PM2.5 National Ambient Air Quality Standards and 
Miscellaneous Revisions for Existing Areas; Transportation Conformity 
Rule Amendments--Response to Court Decision and Additional Rule 
Change,'' on July 1, 2004.\20\ Additional information on the adequacy 
process for transportation conformity purposes is available in a June 
30, 2003, proposed rule titled, ``Transportation Conformity Rule 
Amendments: Response to Court Decision and Additional Rule Changes.'' 
\21\
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    \20\ 69 FR 40004.
    \21\ 68 FR 38974, 38984.
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    Indiana's RFP and contingency measure plan includes VOC and 
NOX MVEBs for the Indiana portion of the Chicago area for 
2017. EPA reviewed the VOC and NOX MVEBs through the 
adequacy process. Indiana's February 28, 2017, RFP and contingency 
measure SIP submission (as supplemented on January 9, 2018), including 
the VOC and NOX MVEBs for the Indiana portion of the Chicago 
area, was available for public comment on EPA's adequacy website on 
February 2, 2018, found at: http://www.epa.gov/otaq/stateresources/transconf/currsips.htm. The EPA public comment period on adequacy of 
the 2017 MVEBs for the Indiana portion of the Chicago area closed on 
March 5, 2018. No comments on the submittal were received during the 
adequacy comment period. The submitted RFP and contingency measure 
plan, which included the MVEBs, was endorsed by the Governor's designee 
and was subject to a state public hearing. The MVEBs were developed as 
part of an interagency consultation process which includes Federal, 
state, and local agencies. The MVEBs were clearly identified and 
precisely quantified. These MVEBs, when considered together with all 
other emissions sources, are consistent with the 15% RFP and 3% RFP 
contingency measures requirements of the 2008 8-hour ozone standard.

                                       Table 7--2017 VOC and NOX MVEBs for the Indiana Portion of the Chicago Area
                                                                         [tpsd]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Allocation of surplus
                                                       2017 On-road emissions   RFP + Contingency plan   reductions to on-road          2017 MVEBs
                                                                                  surplus reductions         mobile sector
--------------------------------------------------------------------------------------------------------------------------------------------------------
VOC.................................................                     5.96                     1.79                     0.89                     6.85
NOX.................................................                    14.50                     3.65                     2.18                    16.68
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in Table 7, the 2017 MVEBs exceed the estimated 2017 on-
road sector emissions. In an effort to accommodate future variations in 
travel demand models and vehicle miles traveled forecast, Indiana 
allocated a portion of the surplus RFP and contingency plan reductions 
to the mobile sector. Indiana has demonstrated that the Indiana portion 
of the Chicago area can meet the 15% RFP and 3% RFP contingency measure 
requirements of the 2008 ozone NAAQS with mobile source emissions of 
6.85 tpsd of VOC and 16.68 tpsd of NOX in 2017, because 
despite partial allocation of the RFP and RFP contingency measures plan 
surplus reductions, emissions will remain under 2017 RFP plus 
contingency measure target levels. EPA has found adequate and is thus 
proposing to approve the 2017 VOC and NOX MVEBs for use to 
determine transportation conformity in the Indiana portion of the 
Chicago area under the 2008 ozone NAAQS because EPA has determined that 
the area can meet the 15% RFP and 3% RFP contingency measure 
requirements of the 2008 ozone NAAQS with mobile source emissions at 
the levels of the MVEBs.

D. VOC RACT Certification

    Sections 172(c)(1) and 182(b)(2) of the CAA require states to 
implement RACT in ozone nonattainment areas classified as moderate (and 
higher). Specifically, these areas are required to implement RACT for 
all major VOC and NOX emissions sources and for all sources 
covered by a Control Techniques Guideline (CTG). A CTG is a document 
issued by EPA which establishes a ``presumptive norm'' for RACT for a 
specific VOC source category. States must submit rules, or negative 
declarations when no such sources exist for CTG source categories.
    EPA's SIP Requirements Rule for the 2008 ozone NAAQS indicates that 
states may meet RACT through the establishment of new or more stringent 
requirements that meet RACT control levels, through a certification 
that previously adopted RACT controls in their SIPs approved by EPA for 
a prior ozone NAAQS also represent adequate RACT control levels for 
attainment of the 2008 ozone NAAQS, or with a combination of these two 
approaches. In addition, a state must submit a negative declaration in 
instances where there are no CTG sources.
    In its February 28, 2017 submission, Indiana certified that the 
existing VOC rules contained in 326 Indiana Administrative Code (IAC) 8 
satisfy the VOC RACT requirements of Section 182(b)(2) of the CAA and 
have been approved into the SIP by EPA. Indiana also certified that the 
negative declaration approved into the SIP by EPA for the fiberglass 
boat manufacturing materials CTG is still current.\22\ Table 8 lists 
these state regulations and identifies the associated SIP approvals by 
EPA.
---------------------------------------------------------------------------

    \22\ The NEI, the Harris Manufacturing Directory and the Manta 
small business directory were reviewed to spot check the validity of 
the previously approved negative declaration for this category. No 
fiberglass boat manufacturing facilities subject to the CTG were 
identified.

[[Page 43832]]

       Table 8--VOC RACT Regulations Approved into the Indiana SIP
------------------------------------------------------------------------
                                  Applicable Indiana   EPA approval into
        CTGs and ACTs \1\             regulation            the SIP
------------------------------------------------------------------------
EPA 453/R-08-004 2008/09--        Negative            75 FR 8246 (02/24/
 Control Techniques Guidelines     Declaration         2010).
 for Fiberglass Boat               Letter--06/05/
 Manufacturing Materials.          2009.
EPA 453/R-08-006, 2008/09--       326 IAC 8-2-2--
 Control Techniques Guidelines     Automobile and
 for Automobile and Light-Duty     Light Duty Truck
 Truck Assembly Coatings and EPA   Coating
 453/R-08-002, 2008/09--Protocol   Operations.
 for Determining the Daily
 Volatile Organic Compound
 Emission Rate of Automobile and
 Light-Duty Truck Primer-
 Surfacer and Topcoat Operations.
EPA 453/R-07-003, 2007/09--       326 IAC 8-2-5--
 Control Techniques Guidelines     Paper Coating
 for Paper, Film, and Foil         Operations.
 Coatings.
EPA 453/R-07-005, 2007/09--       326 IAC 8-2-6--
 Control Techniques Guidelines     Metal Furniture
 for Metal Furniture Coatings.     Coating
                                   Operations.
EPA 453/R-07-004, 2007/09--       326 IAC 8-2-7--
 Control Techniques Guidelines     Large Appliance
 for Large Appliance Coatings.     Coating
                                   Operations.
EPA 453/R-08-003, 2008/09--       326 IAC 8-2-9--     75 FR 8246 (02/24/
 Control Techniques Guidelines     Miscellaneous       2010) Revision:
 for Miscellaneous Metal and       Metal and Plastic   76 FR 63549 (10/
 Plastic Parts Coatings.           Parts Coating       13/2011).
                                   Operations.
EPA-453/R-06-004 2006/09--        326 IAC 8-2-10--    75 FR 8246 (02/24/
 Control Techniques Guidelines     Flat Wood Panels;   2010).
 for Flat Wood Paneling Coatings.  Manufacturing
                                   Operations.
EPA-453/R-06-003 2006/09--        326 IAC 8-5-5--     63 FR 35141 (06/29/
 Control Techniques Guidelines     Graphic Arts and    1998) and 75 FR
 for Flexible Package Printing.    Graphic Arts        8246 (02/24/
                                   Operations.         2010).
Non-CTG.........................  IAC 326 8-7--       60 FR 34856 (07/05/
                                   Specific VOC        1995).
                                   Reduction
                                   Requirements for
                                   Lake, Porter,
                                   Clark, and Floyd
                                   Counties.
EPA-453/R-06-002 2006/09--        326 IAC 8-16--      75 FR 8246 (02/24/
 Control Techniques Guidelines     Offset              2010).
 for Offset Lithographic           Lithographic
 Printing and Letterpress          Printing and
 Printing.                         Letterpress
                                   Printing.
EPA-453/R-06-001, 2006/09--       326 IAC 8-17--
 Control Techniques Guidelines     Industrial
 for Industrial Cleaning           Solvent Cleaning
 Solvents.                         Operations.
EPA-450/3-84-015 1984/12--        326 IAC 8-18--
 Control of Volatile Organic       Synthetic Organic
 Compound Emissions from Air       Chemical
 Oxidation Processes in            Manufacturing
 Synthetic Organic Chemical        Industry Air
 Manufacturing Industry and EPA-   Oxidation,
 450/4-91-031 1993/08--Control     Distillation, and
 of Volatile Organic Compound      Reactor
 Emissions from Reactor            Processes.
 Processes and Distillation
 Operations in Synthetic Organic
 Chemical Manufacturing Industry.
EPA-453/R-93-020, 1994/02--       326 IAC 8-19--
 Control of Volatile Organic       Control of
 Compound Emissions from Batch     Volatile Organic
 Processes ACT (Note--also         Compound
 released as EPA-453/R-93-017).    Emissions from
                                   Process Vents in
                                   Batch Operations.
EPA-453/D-93-056, 1992/09--       326 IAC 8-20--
 Control of Volatile Organic       Industrial
 Compound Emissions from           Wastewater.
 Industrial Wastewater CTG
 (draft).
Note--CTG not finalized but
 issued as ACT in 1994..
(No Report ID) 1994/04
 Industrial Wastewater
 Alternative Control Technology..
Note--ACT consists of cover memo
 with option tables + CTG
 (draft) EPA-453/D-93-056..
59 FR-29216, 6/06/94--1994/06     326 IAC 8-21--
 Aerospace MACT and EPA-453/R-97-  Aerospace
 004, 1997/12 Aerospace (CTG &     Manufacturing and
 MACT).                            Rework
                                   Operations.
EPA 453/R-08-005, 2008/09--       326 IAC 8-22--
 Control Techniques Guidelines     Miscellaneous
 for Miscellaneous Industrial      Industrial
 Adhesives.                        Adhesives.
------------------------------------------------------------------------
\1\ ACTs describe available control technologies and their respective
  cost effectiveness but do not establish presumptive RACT.

    EPA has reviewed Indiana's certification that it has adopted VOC 
control regulations for stationary sources that constitute RACT, and 
determined that the set of regulations cited by the state and negative 
declaration for fiberglass boat manufacturing constitute RACT for 
purposes of the 2008 ozone NAAQS in this nonattainment area. Therefore, 
EPA is proposing to approve the state's submission as meeting the VOC 
RACT requirements for the Indiana portion of the Chicago area for the 
2008 ozone NAAQS.

E. Motor Vehicle I/M Program Certification

    The requirement to adopt a motor vehicle I/M program for moderate 
ozone nonattainment areas is described in CAA section 182(b)(4), and 
the regulations for basic and enhanced I/M programs are found at 40 CFR 
part 51, subpart S. Under these cumulative requirements, states with 
areas classified as moderate nonattainment for ozone with 1990 Census-
defined urbanized populations of 200,000 or more are required to adopt 
basic I/M programs, while serious and higher classified ozone 
nonattainment areas outside of the northeast ozone transport region 
with 1980 Census-defined urbanized populations of 200,000 or more are 
required to adopt enhanced I/M programs. The Chicago area meets the 
criteria for mandatory I/M under the 2008 ozone NAAQS.
    The Indiana portion of the Chicago area was required to adopt an 
enhanced I/M program under the 1-hour ozone NAAQS. EPA approved 
Indiana's enhanced I/M program on March 19, 1996 (61 FR 11142). 
Indiana's I/M program is authorized by state statute

[[Page 43833]]

Indiana Code (IC) 13-17-5, paid through the general funds, and 
implemented through rules promulgated by the Indiana Environmental 
Rules Board at 326 IAC 13. These requirements remain in place in 
Indiana's ozone SIP. In its February 28, 2017, submission, Indiana 
certified that the existing enhanced I/M program continues to satisfy 
the I/M requirements of the CAA for the Indiana portion of the Chicago 
area. Therefore, EPA is proposing to find that Indiana has met the I/M 
requirement for its portion of the Chicago area for the 2008 ozone 
NAAQS.

F. Nonattainment New Source Review

1. Background
    CAA sections 110(a)(2) and 172(c)(5) require permits for the 
construction of new or modified major stationary sources anywhere in a 
nonattainment area in accordance with CAA section 173. CAA section 182 
contains additional requirements applicable to ozone nonattainment 
areas. Nonattainment NSR requirements are codified at 40 CFR 51.165.
    On March 6, 2017, EPA found that Indiana failed to submit marginal 
ozone nonattainment NSR rules for the Indiana portions of the Chicago 
area and Cincinnati \23\ 2008 ozone nonattainment areas.\24\ On 
February 28, 2017, Indiana submitted its nonattainment NSR 
certification to address nonattainment NSR requirements for marginal 
and moderate ozone nonattainment areas.\25\
---------------------------------------------------------------------------

    \23\ The Cincinnati, Ohio-Kentucky-Indiana 8-hour ozone 
nonattainment area has since been redesignated to attainment 
effective April 7, 2017. See 82 FR 16940.
    \24\ See 82 FR 9158.
    \25\ The Chicago-Naperville 2008 8-hour ozone nonattainment area 
was reclassified to moderate nonattainment effective June 3, 2017. 
See 81 FR 26697.
---------------------------------------------------------------------------

    Indiana has certified that specific sections of its nonattainment 
NSR rules at 326 IAC 2-3 continue to meet the nonattainment NSR program 
requirements for ozone nonattainment areas under the 2008 ozone NAAQS. 
Table 9 provides the sections of Indiana's nonattainment NSR rule 
corresponding to the relevant requirements at 40 CFR 51.165. 326 IAC 2-
3 was originally approved into the SIP effective December 6, 1994,\26\ 
with revisions subsequently approved into the SIP effective September 
6, 2011.\27\ Each requirement identified in Indiana's certification has 
been unchanged since EPA last approved it.
---------------------------------------------------------------------------

    \26\ See 59 FR 51108. In its submittal, Indiana cites 94 FR 
24838 as the initial approval for each requirement. The Federal 
Register Document Number of the initial approval is 94-24838 and 
corresponds to the proposed Approval and Promulgation of a New 
Source Review Implementation Plan; Indiana. Federal Register 
Document Number 94-24837 is the direct final Approval and 
Promulgation of a New Source Review Implementation Plan; Indiana. 
The direct final rule can be found at 59 FR 51108. Throughout 
today's proposed rule, the direct final approval of Indiana's NSR 
program will be cited as 59 FR 51108.
    \27\ See 76 FR 40242.

                   Table 9--Nonattainment NSR Rules Indiana Certified as Meeting Federal Rules
----------------------------------------------------------------------------------------------------------------
              Federal rule                                             Indiana rule
----------------------------------------------------------------------------------------------------------------
40 CFR 51.165(a)(1)(iv)(A)(1)(i)-(iii).  326 IAC 2-3-1(z)(1) and (2).
40 CFR 51.165(a)(1)(iv)(A)(2)..........  326 IAC 2-3-1(z)(1) and (2).
40 CFR 51.165(a)(1)(iv)(A)(3)..........  326 IAC 2-3-1(z)(5).
40 CFR 51.165(a)(1)(v)(E)..............  326 IAC 2-3-1(y)(1).
40 CFR 51.165(a)(1)(x)(A)-(C)..........  326 IAC 2-3-1(pp).
40 CFR 51.165(a)(3)(ii)(C)(1)-(2)......  326 IAC 2-3-3(b)(5).
40 CFR 51.165(a)(8)....................  326 IAC 2-3-1(y); 326 IAC 2-3-2(a) and (b).
40 CFR 51.165(a)(9)(ii)-(iv)...........  326 IAC 2-3-3(a)(5)(B).
----------------------------------------------------------------------------------------------------------------

    For the following reasons, we are proposing to approve Indiana's 
certification that 326 IAC 2-3 is consistent with 40 CFR 51.165 and 
meets the requirements of CAA sections 172(c)(5), 173, 110(a)(2), 
182(a)(4), and 182(b)(5) under the 2008 ozone standard for the Indiana 
portion of the Chicago area ozone nonattainment area. Approval of 
Indiana's nonattainment NSR certification would address the deficiency 
that was the basis for the March 6, 2017 finding. Therefore, final 
approval of this SIP revision will permanently stop the sanctions and 
FIP clocks triggered by EPA's February 3, 2017 finding that Indiana 
failed to submit a marginal ozone nonattainment NSR plan.
2. Extreme Ozone Nonattainment Area and Ozone Transport Region 
Nonattainment NSR Requirements
    In its February 28, 2017 submission, Indiana states that its 
nonattainment NSR rules do not include extreme ozone nonattainment 
requirements because Indiana has never had an extreme ozone 
nonattainment area. We concur with the statement that Indiana has never 
had an extreme ozone nonattainment area. Further, the finding of 
failure to submit applies to marginal ozone nonattainment NSR 
requirements, not extreme. Finally, the Chicago area ozone 
nonattainment area was reclassified to a moderate ozone nonattainment 
area which requires moderate, not extreme, ozone nonattainment NSR 
requirements. For these reasons, Indiana's nonattainment NSR program 
does not require extreme ozone nonattainment requirements at this time. 
The following extreme ozone nonattainment NSR requirements are not 
included as part of Indiana's nonattainment NSR rules: 40 CFR 
51.165(a)(1)(iv)(A)(1)(iv), 40 CFR 51.165(a)(1)(iv)(A)(2)(vi), 40 CFR 
51.165(a)(1)(v)(F), 40 CFR 51.165(a)(1)(x)(E), and 40 CFR 
51.165(a)(9)(ii)(E).
    Indiana's submission does not address ozone transport region 
requirements. However, no portion of Indiana is currently part of an 
ozone transport region; therefore, ozone transport region nonattainment 
NSR requirements do not apply in Indiana. The following ozone transport 
region nonattainment NSR requirements are not included as part of 
Indiana's nonattainment NSR rules: 40 CFR 51.165(a)(1)(iv)(A)(1)(ii), 
40 CFR 51.165(a)(1)(iv)(A)(2)(ii), 40 CFR 51.165(a)(1)(iv)(A)(2)(ii), 
40 CFR 51.165(a)(1)(v)(E), 40 CFR 51.165(a)(1)(x)(C), 40 CFR 
51.165(a)(8), and 40 CFR 51.165(a)(9)(iii).
    Extreme ozone nonattainment area and ozone transport region 
nonattainment NSR requirements will not be addressed further in this 
analysis of Indiana's ozone nonattainment NSR program certification 
because they do not apply to Indiana at this time. If, in the future, 
Indiana has an extreme ozone nonattainment area or becomes part of an 
ozone transport region, then

[[Page 43834]]

Indiana's SIP would need to be revised to establish the appropriate 
nonattainment NSR requirements.
3. 40 CFR 51.165(a)(1)(iv)(A)(1)(i)-(iv) and (2)--Major Source 
Thresholds for Ozone
    40 CFR 51.165(a)(1)(iv)(A)(1)(i)-(iv) and (2) defines the major 
source thresholds for the ozone precursors VOC and NOX. The 
major source threshold for both VOC and NOX vary depending 
on the classification of the ozone nonattainment area. For marginal and 
moderate ozone nonattainment areas, a major stationary source of ozone 
is a source that emits, or has the potential to emit, 100 tons per year 
or more of VOC or NOX. Different emissions thresholds apply 
for serious, severe, and extreme ozone nonattainment areas and areas in 
an ozone transport region.
    326 IAC 2-3-1(z)(1) generally defines a major stationary source as 
a stationary source that emits, or has the potential to emit, 100 tons 
per year or more of any regulated NSR pollutant, with an exception for 
ozone provided in 326 IAC 2-3-1(z)(2). 326 IAC 2-3-1(z)(2) defines a 
major stationary source for ozone nonattainment areas, specifying that 
the major source threshold is 100 tons per year or more of VOC or 
NOX in marginal and moderate ozone nonattainment areas. 326 
IAC 2-3-1(z)(1) and (2) remain consistent with 40 CFR 
51.165(a)(1)(iv)(A)(1)(i)-(iv) and (2) for marginal and moderate ozone 
nonattainment areas.
4. 40 CFR 51.165(a)(1)(iv)(A)(3)--Change Constitutes Major Source by 
Itself
    40 CFR 51.165(a)(1)(iv)(A)(3) requires any physical change that 
would constitute a major stationary source by itself to be treated as a 
major stationary source if the stationary source does not qualify as a 
major stationary source. 326 IAC 2-3-1(z)(5) requires the same and 
remains consistent with 40 CFR 51.165(a)(1)(iv)(A)(3).
5. 40 CFR 51.165(a)(1)(v)(E)--Significant Net Emissions Increase of 
NOX is Significant for Ozone
    40 CFR 51.165(a)(1)(v)(E) requires significant net emissions 
increases of NOX to be considered significant for ozone. For 
major modifications, 326 IAC 2-3-1(y)(1) requires significant net 
emissions increases of NOX to be considered significant for 
ozone in ozone nonattainment areas. 326 IAC 2-3-1(y)(1) exempts 
NOX when the Administrator has granted a NOX 
waiver pursuant to CAA section 182(f) and 40 CFR 51.165(a)(8). As a 
result, 326 IAC 2-3-1(y)(1) remains consistent with 40 CFR 
51.165(a)(1)(v)(E).
6. 40 CFR 51.165(a)(1)(x)(A)-(C)--Significant Emission Rates for VOC 
and NOX as Ozone Precursors
    40 CFR 51.165(a)(1)(x)(A) defines the significant emission rate for 
ozone as 40 tons per year of VOC or NOX. 326 IAC 2-3-1(pp) 
defines the significant emission rate for ozone in marginal and 
moderate nonattainment areas as 40 tons per year of VOC or 
NOX (unless a NOX waiver is in effect). 326 IAC 
2-3-1(pp) remains consistent with 40 CFR 51.165(a)(1)(x)(A) for 
marginal and moderate ozone nonattainment areas.
    40 CFR 51.165(a)(1)(x)(B) and (C) define the significant emission 
rate for ozone in serious or severe nonattainment areas as 25 tons per 
year of VOC or NOX. For the purpose of implementing 
nonattainment NSR in marginal and moderate ozone nonattainment areas, 
serious and severe ozone significant emission rates are not required.
7. 40 CFR 51.165(a)(3)(ii)(C)(1)-(2)--Provisions for Emissions 
Reduction Credits
    40 CFR 51.165(a)(3)(ii)(C)(1) and (2) are the requirements that 
make emission reductions achieved by shutting down an existing emission 
unit or curtailing production or operating hours creditable. Such 
reductions must be surplus, permanent, quantifiable, and federally 
enforceable. Shutdowns or curtailments must have occurred after the 
last day of the base year for the SIP planning process. Reviewing 
authorities may choose to consider a prior shutdown or curtailment to 
have occurred after the last day of the base year if the projected 
emissions inventory used to develop the attainment demonstration 
explicitly includes emissions from the previously shutdown or curtailed 
emissions units, but in no event may credit be granted for shutdowns 
that occurred prior to August 7, 1977. Shutdown or curtailment 
reductions occurring before the last day of the base year for the SIP 
planning process may also be generally credited if the shutdown or 
curtailment occurred on or after the date the construction permit 
application is filed or if the applicant can establish that the 
proposed new emissions unit is a replacement for the shutdown or 
curtailed emission unit and the emission reductions that result are 
surplus, permanent, quantifiable, and federally enforceable. 326 IAC 2-
3-3(b)(5) remains consistent with 40 CFR 51.165(a)(3)(ii)(C)(1)(i) and 
40 CFR 51.165(a)(3)(ii)(C)(2)(ii).
    326 IAC 2-3-3(b)(5)(A) credits emission reductions from emission 
unit shutdowns and curtailments if they occurred on or after the date 
of the most recent emissions inventory or attainment demonstration. 
Prior shutdown or curtailment emission reductions may be considered to 
have occurred after the date of the most recent emissions inventory if 
the inventory explicitly includes the emissions from the previously 
shutdown or curtailed emissions units. 326 IAC 2-3-3(b)(5)(A) remains 
consistent with 40 CFR 51.165(a)(3)(ii)(C)(1)(ii).
    326 IAC 2-3-3(b)(5)(B) allows reductions to be credited absent an 
approved attainment demonstration if the shutdown or curtailment 
occurred on or after the date the new source permit application is 
filed or if the applicant can establish that the proposed new source is 
a replacement for the shutdown or curtailed emissions unit, with the 
exception of shutdowns occurring prior to August 7, 1977. 326 IAC 2-3-
3(b)(5)(B) remains consistent with 40 CFR 51.165(a)(3)(ii)(C)(2)(ii).
8. 40 CFR 51.165(a)(8)--Requirements for VOC Apply to NOX as 
Ozone Precursors
    40 CFR 51.165(a)(8) requires that all requirements applicable to 
major stationary sources and major modifications of VOCs shall apply to 
NOX except where the Administrator has granted a 
NOX waiver applying the standards set forth under CAA 
section 182(f) and the waiver continues to apply. In its submittal, 
Indiana certifies that 326 IAC 2-3-1(y) and 326 IAC 2-3-2(a) and (b) 
meet this requirement.
    326 IAC 2-3-1(y) defines major modification. As discussed above, 
326 IAC 2-3-1(y)(1) is consistent with 40 CFR 51.165(a)(8) since it 
considers increases in both VOC and NOX unless a 
NOX waiver is in effect. 326 IAC 2-3-1(y) considers, in 
serious and severe ozone nonattainment areas, increases in VOC or 
NOX unless a NOX waiver is in effect and is 
consistent with 40 CFR 51.165(a)(8). 326 IAC 2-3-1(y) remains 
consistent with the definition of major modification at 40 CFR 
51.165(a)(1)(v)(A) through (E) for marginal and moderate ozone 
nonattainment areas.
    326 IAC 2-3-2(a) states that ozone nonattainment NSR applies to new 
major stationary sources or major modifications in an area designated 
as nonattainment for which the stationary source or modification is 
major. As previously discussed, 326 IAC 2-3-1(z)(1), (2), and (5) and 
326 IAC 2-3-1(y) define major source and major

[[Page 43835]]

modification, respectively, as they relate to ozone nonattainment areas 
and remain consistent with 40 CFR 51.165(a)(8).
    326 IAC 2-3-2(b) applies to modifications of VOC and NOX 
major stationary sources in serious and severe ozone nonattainment 
areas. 326 IAC 2-3-2(b)(1) through (3) remain consistent with CAA 
sections 182(c)(6) through (8) and 182(d).
9. 40 CFR 51.165(a)(9)(ii)-(iv)--Offset Ratios for VOC and 
NOX for Ozone Nonattainment Areas
    40 CFR 51.165(a)(9)(ii)(A)-(D) requires the VOC offset ratio to be 
1.1:1 in marginal ozone nonattainment areas, 1.15:1 in moderate ozone 
nonattainment areas, 1.2:1 in serious ozone nonattainment areas, and 
1.3:1 in severe ozone nonattainment areas. 326 IAC 2-3-3(a)(5)(B) 
requires offset ratios for both VOC and NOX that are 
consistent with 40 CFR 51.165(a)(9)(ii)(A)-(D).
    40 CFR 51.165(a)(9)(iv) requires, for ozone nonattainment areas 
subject to CAA Title I, Part D, Subpart 1 but not Subpart 2, an offset 
ratio of at least 1:1. All of the current ozone nonattainment areas in 
Indiana were designated pursuant to CAA Title I, Part D, Subpart 2, so 
this requirement does not apply to Indiana at this time.
10. 40 CFR 51.165(a)(12)--Anti-backsliding Provisions
    40 CFR 51.165(a)(12) requires anti-Backsliding requirements at 40 
CFR 51.1105 to apply in any area designated nonattainment for the 2008 
ozone NAAQS and designated nonattainment for the 1997 ozone NAAQS on 
April 6, 2015. Indiana certified that there were no areas designated as 
nonattainment for the 1997 8-hour ozone NAAQS on April 6, 2015.
    40 CFR 81.315 provides the attainment status designations for 
Indiana. For the 1997 8-hour ozone NAAQS, 40 CFR 81.315 codifies the 
fact that all areas in Indiana attained the 1997 8-hour ozone NAAQS 
prior to April 6, 2015. Table 10 includes relevant information about 
the 1997 8-hour ozone NAAQS, including the date that areas previously 
designated as nonattainment under the 1997 8-hour ozone NAAQS were 
redesignated to attainment. All other areas in Indiana that are not 
listed in the table were designated unclassifiable/attainment for the 
1997 8-hour ozone standard on June 15, 2004.\28\
---------------------------------------------------------------------------

    \28\ See 69 FR 23857.

              Table 10--1997 8-Hour Ozone NAAQS Redesignation Dates and Federal Register Citations
----------------------------------------------------------------------------------------------------------------
                                                                   Redesignation
           Designated areas                    Counties                 date          Federal Register citation
----------------------------------------------------------------------------------------------------------------
Chicago-Gary-Lake County, IL-IN......  Lake, Porter............          5/11/2010  75 FR 26113
Cincinnati-Hamilton OH-KY-IN.........  Dearborn (part).........          5/11/2010  75 FR 26118
Evansville, IN.......................  Vanderburgh, Warrick....          1/30/2006  70 FR 77026
Fort Wayne, IN.......................  Allen...................          2/12/2007  72 FR 1292
Greene Co., IN.......................  Greene..................         12/29/2005  70 FR 69085
Indianapolis, IN.....................  Boone, Hamilton,                 10/19/2007  72 FR 59210
                                        Hancock, Hendricks,
                                        Johnson, Madison,
                                        Marion, Morgan, Shelby.
Jackson Co., IN......................  Jackson.................         12/29/2005  70 FR 69085
LaPorte Co., IN......................  LaPorte.................          7/19/2007  72 FR 39574
Louisville, KY-IN....................  Clark, Floyd............          7/19/2007  72 FR 39571
Muncie, IN...........................  Delaware................           1/3/2006  70 FR 69443
South Bend-Elkhart, IN...............  Elkhart, St. Joseph.....          7/19/2007  72 FR 39577
Terre Haute, IN......................  Vigo....................           2/6/2006  71 FR 541
----------------------------------------------------------------------------------------------------------------

    Since all areas in Indiana were designated as attainment or 
unclassifiable/attainment on April 6, 2015 for the 1997 8-hour ozone 
NAAQS, the anti-backsliding requirements of 40 CFR 51.165(a)(12) do not 
apply for the 2008 8-hour ozone NAAQS.
11. Conclusion
    Indiana's nonattainment NSR rules, codified at 326 IAC 2-3, remain 
consistent with Federal marginal and moderate ozone nonattainment NSR 
rules codified at 40 CFR 51.165. Therefore, EPA is proposing to approve 
Indiana's certification that its nonattainment NSR rules at 326 IAC 2-3 
meet the requirements of 40 CFR 51.165 and CAA sections 172(c)(5), 173, 
110(a)(2), 182(a)(4), and 182(b)(5) for the Indiana portion of the 
Chicago area ozone nonattainment area. EPA's final approval of 
Indiana's nonattainment NSR certification will permanently stop the 
sanctions and FIP clocks triggered by EPA's February 3, 2017 finding 
that Indiana failed to submit a marginal ozone nonattainment NSR plan.

III. What action is EPA proposing?

    EPA is proposing to approve revisions to Indiana's SIP pursuant to 
section 110 and part D of the CAA and EPA's regulations because 
Indiana's February 28, 2017, nonattainment plan submission and January 
1, 2018, supplement satisfy the emissions inventory, RFP, RFP 
contingency measures, transportation conformity, VOC RACT, I/M, and 
nonattainment NSR requirements of the CAA for the Indiana portion of 
the Chicago area for the 2008 ozone NAAQS. Final approval of Indiana's 
SIP as meeting the nonattainment NSR requirements of the CAA for the 
2008 ozone NAAQS will permanently stop the sanctions and FIP clocks 
triggered by EPA's February 3, 2017 finding that Indiana failed to 
submit a marginal ozone nonattainment NSR plan.

IV. Statutory and Executive Order Reviews

    Under the CAA the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
action merely approves state law as meeting Federal requirements and 
does not impose additional requirements beyond those imposed by state 
law. For that reason, this action:
     Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

[[Page 43836]]

     Is not an Executive Order 13771 (82 FR 9339, February 2, 
2017) regulatory action because SIP approvals are exempted under 
Executive Order 12866;
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, the SIP is not approved to apply on any Indian 
reservation land or in any other area where EPA or an Indian tribe has 
demonstrated that a tribe has jurisdiction. In those areas of Indian 
country, the rule does not have tribal implications and will not impose 
substantial direct costs on tribal governments or preempt tribal law as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Ozone, Reporting and 
recordkeeping requirements, Volatile organic compounds.

    Dated: August 16, 2018.
Cathy Stepp,
Regional Administrator, Region 5.
[FR Doc. 2018-18640 Filed 8-27-18; 8:45 am]
 BILLING CODE 6560-50-P