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Federal Highway Funding Assistance Limitations and Emissions Offset Requirements; Indiana

American Government

Federal Highway Funding Assistance Limitations and Emissions Offset Requirements; Indiana

Carol M. Browner (Federal Register)
January 24, 1994

[Federal Register Volume 59, Number 15 (Monday, January 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 94-1131]

[[Page Unknown]]

[Federal Register: January 24, 1994]


40 CFR Part 52

[IN33-1-6049; FRL-4826-5]


Federal Highway Funding Assistance Limitations and Emissions 
Offset Requirements; Indiana

AGENCY: United States Environmental Protection Agency.

ACTION: Notice of proposed rulemaking.


SUMMARY: The U.S. Environmental Protection Agency (USEPA) is proposing 
this action to impose sanctions on Indiana under the discretionary 
sanction authority provided under the Clean Air Act, as amended in 
1990, (CAA or Act) for failure by the State to submit a complete SIP 
revision for an enhanced motor vehicle inspection and maintenance (I/M) 
program as required by the Act for certain ozone nonattainment areas. 
On December 2, 1992, the Indiana Department of Environmental Management 
(IDEM), acting as the governor's designee, submitted a commitment 
(Committal SIP) to adopt an I/M program to meet the requirement of the 
Act and the I/M rule by November 15, 1993. The committal SIP provides 
for the adoption and implementation of an enhanced I/M program meeting 
all requirements of USEPA's I/M regulations and includes an 
implementation schedule. On September 9, 1993, USEPA proposed to 
disapprove this SIP revision and on November 29, 1993, USEPA 
disapproved this SIP revision based on the failure by the State to meet 
milestones contained in the committal SIP's implementation schedule 
pertaining to the enactment of necessary legislative authority. A full 
SIP revision including State legislative authority to implement the 
program was required by November 15, 1993. The Indiana legislature 
adjourned on June 30, 1993, without taking necessary action to provide 
for implementation of an enhanced I/M program. On December 30, 1993, 
USEPA Region 5 issued a letter finding that the State had failed to 
submit the SIP revision required under sections 110 and 182 of the Act. 
Due to the failure of the State to submit a complete SIP revision 
fulfilling either the requirements of the Act or its commitment to 
adopt and implement an enhanced I/M program as promised in its 
committal SIP, USEPA proposes to exercise its discretionary authority 
under the Act to apply a statewide highway funding limitation sanction 
and a 2 for 1 growth offset sanction in all areas required to have a 
permit program under the new source review provisions of the Act.

DATES: Comments on this proposed action are to be submitted by March 
15, 1994. The USEPA will hold three public hearings on February 16, 18, 
and 22.

ADDRESSES: Comments on this proposed rule should be addressed to: J. 
Elmer Bortzer, Chief, Regulation Development Section, Regulation 
Development Branch (5AR-18J), United States Environmental Protection 
Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.
    The public hearings will be held in Indiana as follows: February 
16, 1994 in Valparaiso, (Porter County) at the Porter County 
Administration Center on 155 Indiana Avenue in Suite 205 at 11 a.m. to 
4 p.m.; February 18, 1994 in New Albany (Floyd County) at the New 
Albany Courthouse on West First and Spring Streets in the third floor 
assembly room at 11 a.m. to 4 p.m.; and February 22, 1994 in 
Indianapolis (Marion County) at the Indiana Government Center South on 
402 West Washington Street in the auditorium at 11 a.m. to 4 p.m.
    Copies of Indiana's I/M Committal SIP submittal, USEPA's proposals 
and rulemakings, and other documents pertinent to this proposed rule 
are available at the following address: U.S. Environmental Protection 
Agency, Region 5, Air and Radiation Division, Regulation Development 
Branch, 77 West Jackson Boulevard, Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Francisco J. Acevedo, Environmental 
Engineer, Regulation Development Section, Regulation Development Branch 
(5AR-18J), United States Environmental Protection Agency, Region 5, 77 
West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-6061. Anyone 
wishing to come to Region 5 offices should first contact Francisco J. 


I. I/M Program Requirements

    Pursuant to the 1977 amendments to the Act, vehicle I/M programs 
were mandated for certain areas with long standing air quality 
problems. The 1990 amendments to the Act expanded the role of I/M 
programs as an attainment strategy and required USEPA to develop 
different performance standards for ``basic'' and ``enhanced'' I/M 
programs. The performance standard is the minimum amount of emission 
reductions a program must achieve, based on a model or benchmark 
program design. In addition, the amended Act directed USEPA to address 
requirements for specific design elements and program implementation 
issues for both basic and enhanced I/M programs. The amended Act 
requires states containing nonattainment areas to make changes to 
improve existing I/M programs or implement new ones. Section 
182(a)(2)(B) of the Act directed USEPA to publish updated guidance for 
state I/M programs, taking into consideration findings of the 
Administrator's audits and investigations of these programs. The Act 
further requires each area required by the Act to have an I/M program 
to incorporate this guidance into the SIP. Based on these requirements, 
USEPA promulgated an I/M regulation on November 5, 1992. (57 FR 52950)
    Under section 182(c)(3) of the Act, areas designated as serious or 
worse ozone nonattainment areas with populations of 200,000 or more, in 
addition to metropolitan statistical areas with populations of 100,000 
or more in the northeast ozone transport region, are required to meet 
USEPA requirements for ``enhanced'' I/M programs. These areas were 
required to submit a SIP revision to incorporate an enhanced I/M 
program by November 15, 1992. In Indiana, the State must implement a 
basic I/M program in the urbanized areas of Clark and Floyd counties; 
it must implement an enhanced I/M program in the urbanized areas of 
Lake and Porter counties.
    The I/M regulation establishes minimum performance standards for 
basic and enhanced I/M programs as well as requirements for the 
following: Network type and program evaluation; adequate tools and 
resources; test frequency and convenience; vehicle coverage; test 
procedures and standards; test equipment; quality control; waivers and 
compliance via diagnostic inspection; motorist compliance enforcement; 
motorist compliance enforcement program oversight; quality assurance; 
enforcement against contractors, stations and inspectors; data 
collection; data analysis and reporting; inspector training and 
licensing or certification; public information and consumer protection; 
improving repair effectiveness; compliance with recall notices; on-road 
testing; SIP revisions; and implementation deadlines.
    For enhanced I/M programs, all requirements must be implemented by 
January 1, 1995 except that areas switching from an existing test-and-
repair network to a test-only network may phase in that change between 
January 1995 and January 1996.
    Each state required to implement an I/M program was required to 
submit by November 15, 1992, a SIP revision (here and after referred to 
as ``I/M committal SIP'') including two elements: (1) A commitment from 
the Governor or his/her designee to the timely adoption and 
implementation of an I/M program meeting all the requirements of the I/
M regulation; and, (2) a schedule for adoption of the program, with 
interim milestones including passage of enabling statutory or other 
legal authority and adoption of final regulations. Acceptance of I/M 
committal SIPs in lieu of full SIPs was justified by the fact that 
states could not have been expected to begin development of an I/M 
program meeting the requirements of the Act and the I/M regulation 
until the I/M regulation was adopted as a final rule, which did not 
occur until November 5, 1992. A complete SIP revision which contained 
all of the elements identified in the adoption schedule, including the 
authorizing legislation and implementing regulations, was to be 
submitted no later than November 15, 1993.
    On December 2, 1992, the State of Indiana submitted a committal SIP 
to USEPA. A public hearing on this submittal was held by the State on 
October 22, 1992, in Gary, Indiana. The submittal included a schedule 
of implementation and a commitment to the timely adoption and 
implementation of an I/M program in the Lake, Porter, Clark, and Floyd 
County ozone nonattainment areas meeting all the requirements of the I/
M regulation and the amended Act by November 15, 1993.
    On June 30, 1993, the Indiana legislature adjourned without taking 
the necessary action to enable Indiana to adopt and implement the I/M 
provisions mandated by the amended Act and the final I/M rule in Lake 
and Porter Counties. Failure to provide such authority prevented the 
State from submitting a complete SIP revision containing all the 
required elements of the program by November 15, 1993. On August 17, 
1993, USEPA sent a letter to Governor Bayh of Indiana and to the 
Regional Administrator of the Federal Highway Administration advising 
them that USEPA had decided to exercise its discretionary authority 
under section 110(m) of the Act to impose sanctions at any time once a 
finding of SIP deficiency is made. After review of the committal SIP, 
USEPA proposed to disapprove the commitment on September 9, 1993 (58 FR 
47415), and on November 29, 1993 USEPA disapproved this SIP revision 
based on the failure by the State to meet interim and final milestones 
in the schedule contained in the SIP submittal pertaining to the 
enactment of necessary authority to implement I/M requirements during 
the 1993 Indiana General Legislative session. On November 15, 1993, the 
State of Indiana failed to meet its commitment to USEPA by failing to 
submit a full SIP revision for I/M program implementation.
    Beyond being a specific mandate of the Act, enhanced I/M programs 
play an important role in the ability of Lake and Porter Counties to 
comply with the CAA requirements for achieving the National Ambient Air 
Quality Standards (NAAQS) for ozone, as well as the Act's requirements 
for reasonable further progress (RFP) reductions for ozone. The Act 
provides that each state in which all or part of certain 
classifications for ozone and/or CO nonattainment areas are located is 
required to provide an attainment demonstration showing that its SIP, 
as revised, will provide for attainment of the NAAQS by the applicable 
attainment date(s). The Act further requires that each state in which 
all or part of a serious, severe, or extreme ozone nonattainment area 
is located shall submit SIP revisions that will reduce VOC emissions by 
November 15, 1996 by at least 15% of 1990 baseline emissions. If the 
reductions identified in the SIP revisions are less than 15% of 
baseline emissions, the state may obtain a waiver under section 
182(b)(1)(A)(ii); this requires the State to make several 
demonstrations, including one that the plan reflecting the lesser 
amount includes all measures that can feasibly be implemented in the 
area in light of technological achievability. The Lake and Porter areas 
in Indiana will have difficulty meeting the RFP requirements because 
credit for certain pre-1990 CAA programs, such as the federal motor 
vehicle control program and basic I/M is not allowed. The additional 
benefits of enhanced I/M, however, are fully creditable towards meeting 
the RFP requirement. Enhanced I/M is one of the most powerful tools 
available to areas in terms of providing expeditious reductions in both 
VOC and NOx, both of which are precursors of ozone.
    Finally, a federally approvable enhanced I/M program represents one 
of the most cost-effective air quality control strategies available. 
Without an effective I/M program, attainment of the ozone air quality 
standard is virtually impossible, and without appropriate enabling 
legislation, an enhanced I/M program cannot be implemented.

II. Sanctions Under the Clean Air Act

    This sanction action is being proposed under USEPA's discretionary 
authority contained in section 110(m) of the Act. The predicate 
findings and types of sanctions are in section 179. The two sanctions 
available to USEPA for application under section 110(m), as provided in 
section 179(b), are: (1) A prohibition on the funding of certain 
highway projects; and (2) an increase in the emission offset 
requirement for new and modified major stationary sources. The highway 
funding sanction prohibits the approval by the Secretary of 
Transportation of any projects or the awarding by the Secretary of any 
grants, under Title 23 of the U.S. Code, other than projects or grants 
for safety and certain other categories of projects listed in section 
179(b)(1). The offset sanction requires that, when states apply the 
emission offset requirement of section 173 to new or modified sources, 
the ratio of emission reductions to increased emissions must be at 
least 2 to 1.
    Section 179(a) of the Act sets forth the findings\1\ which provide 
USEPA with discretion under section 110(m) to impose one or both of the 
sanctions specified under section 179(b). The four findings are: (1) A 
state has failed, for a nonattainment area, to submit a SIP or an 
element of the SIP, or that the SIP or SIP element submitted fails to 
meet the completeness criteria of section 110(k); (2) USEPA disapproves 
a SIP submission for a nonattainment area based on the submission's 
failure to meet one or more plan elements required by the Act; (3) a 
state has not made any other submission required by the Act or has made 
a submission that does not meet the completeness criteria or has made a 
required submission that is disapproved by USEPA for not meeting the 
Act's requirements; or (4) a requirement of an approved plan is not 
being implemented.

    \1\Section 179(a) refers to Agency findings, disapprovals, and 
determinations. These will all be referred to by the one term 

    Under section 179(a), unless the state corrects the deficiency, one 
of the two sanctions listed in section 179(b) must be imposed 18 months 
after a finding is made, and the second must be imposed 6 months after 
the first sanction is imposed, if the deficiency remains 
uncorrected.\2\ In addition, USEPA may apply both sanctions after 18 
months if the Administrator finds a lack of good faith on the part of 
the state.

    \2\On October 1, 1993, U.S. EPA proposed a rule governing the 
order in which the sanctions shall apply under section 179 of the 
Act. 58 FR 51270. The rule proposes that the offset sanction apply 
first and the highway funding sanction apply second. According to 
the proposed rule, U.S. EPA may change this sequence of sanctions 
through individual notice-and-comment rulemaking. This proposed 
sequencing applies only to mandatory sanctions that apply under 
section 179(a) and does not govern sanctions imposed under section 

    Although section 179(a) establishes mandatory deadlines for the 
application of sanctions at certain points after a finding of 
deficiency, section 110(m) provides USEPA with the discretion to impose 
section 179(b) sanctions at any time (or at any time after) a section 
179(a) finding. Likewise, although mandatory sanctions under section 
179 are limited to the area with the deficiency, section 110(m) 
authorizes USEPA to apply discretionary sanctions to any portion of the 
state that USEPA deems reasonable and appropriate to ensure that the 
requirements of the Act are met. See 57 FR 44534, 44536-44537. However, 
the Act requires USEPA to establish by rule criteria to ensure that 
such sanctions are not applied on a statewide basis where one or more 
political subdivisions covered by the applicable implementation plan 
are principally responsible for the deficiency.
    On September 28, 1992, USEPA proposed criteria under section 110(m) 
that it would use when proposing statewide sanctions to determine if 
one or more political subdivisions is principally responsible for a SIP 
deficiency. 57 FR 44534. These proposed criteria are discussed later in 
this notice.
    With regard to Indiana, EPA is using its discretionary authority 
under section 110(m) to propose early sanctions\3\ based on Indiana's 
failure to submit a complete SIP to improve its I/M program. EPA is 
taking this action for two reasons: (1) Congress required timely 
submittal of enhanced I/M programs as a measure the State's 
metropolitan areas to meet CAA deadlines, and any legislative delay 
threatens the State's ability to meet those deadlines, and (2) enhanced 
I/M is the single most effective air pollution control measure 
available. Delayed legislative approval of an acceptable I/M program 
places a disproportionate burden for cleaning the air on the State's 
major industrial sources.

    \3\U.S. EPA issued a letter on December 30, 1993, finding that 
the State's proposed SIP revision was a failure to submit a SIP 
revision as required by the Act. Mandatory sanctions under section 
179(a) were triggered by issuance of the letter notifying the State 
of the finding of the deficiency.

III. Proposed Sanctions

A. Finding Under Section 179(a)

    As stated previously on December 30, 1993, USEPA Region 5 issued a 
letter notifying the State of its failure to submit a complete SIP 
revision on November 15, 1993, as required by the Act. USEPA's letter 
constitutes a finding under section 179(a) that triggers USEPA's 
discretionary authority to impose the sanctions proposed in this notice 
under section 110(m). Further, on November 29, 1993, USEPA disapproved 
Indiana's committal SIP revision because the State had failed to meet 
its commitment.
    If sufficient progress has not been made by Indiana toward the 
implementation of an approvable I/M program to be operational on or 
before January 1, 1995, EPA hereby announces its intention to impose 
sanctions on May 15, 1994.

B. Rationale and Approach for Section 110(m) Sanctions

    Section 110(m) of the Act allows USEPA to apply the Federal highway 
funding assistance limitations and 2:1 emission offset sanction at any 
time (or at any time after) it makes a finding under section 179(a). 
Based on its finding dated December 30, 1993, USEPA is proposing to 
impose both the Federal highway funding assistance limitations and 2:1 
emission offset sanctions. USEPA believes that the imposition of both 
sanctions is appropriate because of Indiana's failure to adopt 
legislation to enhance its existing vehicle inspection and maintenance 
program. In the absence of an improved vehicle inspection and 
maintenance program, the ability of the State's metropolitan areas to 
meet the Clean Air Act deadlines for attaining healthy air quality is 
severely compromised. As previously noted, enhanced vehicle inspection 
and maintenance is the single most effective air pollution control 
measure available and delayed legislative approval of an acceptable 
program further burdens major industrial sources of air pollution with 
responsibility for cleaning the air.
    Under section 110(m), USEPA may apply sanctions to any portion of 
the state it determines is reasonable and appropriate. During the 24 
months following the finding, USEPA may not impose the sanctions 
statewide if one or more political subdivisions within the state is 
principally responsible for the deficiency that is the basis for 
sanctions. USEPA has proposed criteria for determining when a political 
subdivision is principally responsible (57 FR 44534, September 28, 
1992). The criteria provide that a political subdivision is principally 
responsible if: (1) It has the legal authority to perform the required 
activity; (2) it has traditionally performed, or has been delegated the 
responsibility to perform, the required activity; (3) it has received, 
where appropriate, adequate funding, or authority to obtain funding, 
from the state to perform the required activity; (4) it has agreed to 
perform (and has not revoked the agreement), or is required by state 
law to accept responsibility for performing, the required activity; and 
(5) it has failed to perform the required activity. A ``political 
subdivision'' is defined as the representative body that is responsible 
for adopting and/or implementing air pollution controls for any 
combination of political subdivisions created by, or pursuant to, 
Federal or State law. If no political subdivision meets all 5 criteria, 
USEPA may use its discretion to determine whether it is reasonable and 
appropriate to apply sanctions on a statewide basis.
    In this notice, USEPA is proposing to use the above proposed 
criteria to determine if it may impose highway sanction statewide for 
Indiana because of the failure to submit a complete enhanced I/M 
    USEPA believes that the first criterion has not been met by any 
political subdivision. Only the Indiana legislature, composed of 
representatives from all portions of the State of Indiana, has the 
authority to revise the state statute to provide for an enhanced I/M 
program meeting the CAA and EPA requirements. Once the legislature has 
acted, only state government agencies can adopt any implementing 
regulations. While individual air pollution control districts or air 
quality management districts may request implementation of the state I/
M program within their districts once that program is adopted, this 
authority is meaningless unless the State has first established an 
appropriate program through legislation and regulations. Since the 
State legislature has not enacted the legislation required to provide 
the legal authority for an enhanced I/M program meeting the CAA and 
USEPA requirements, the program is not available to areas within the 
State that require the program.
    Since no political subdivision within the State has met the first 
criterion, EPA believes that no political subdivision is principally 
responsible for the failure to have an enhanced I/M program. Therefore, 
EPA is not prohibited from imposing sanctions statewide. As noted 
above, the State legislature bears the ultimate responsibility to adopt 
the requisite legislative authority and IDEM, not the individual air 
quality districts, must subsequently adopt adequate regulations. Since 
the State does bear the ultimate responsibility, USEPA believes that it 
is reasonable and appropriate for USEPA to impose the highway sanction 
on the entire State.
    The 2:1 offset sanction requirements apply only to new or modified 
major stationary sources located or to be located in areas that are 
required to have a permit program pursuant to section 173. Thus, USEPA 
is proposing to impose the 2:1 emission offset sanction in the 
following ozone nonattainment counties: Lake, Porter, Clark, Floyd, 
Marion, St. Joseph, Elkhart, and Vanderburgh. The 2:1 emission offset 
would apply to all new or modified major stationary sources for 
volatile organic compounds and oxides of nitrogen that are locating to 
or located in each of these areas. USEPA proposes to impose the offset 
sanction in the manner described in the proposed action on the 
sequencing of sanctions (58 FR 51270, 51275-51277 (Oct. 1, 1993)).

C. Removal of Discretionary Sanctions

    USEPA is proposing to temporarily lift (i.e., toll)4 the 
highway and offset sanctions imposed under section 110(m) upon the 
passage by the Indiana legislature and signature by the Governor of 
legislation which USEPA preliminary determines provides legal authority 
for an enhanced I/M program meeting the requirements of the CAA and the 
I/M regulations. USEPA proposes to notify the State of this tolling by 
a letter to the Governor and the public by a notice published in the 
notice section of the Federal Register. The section 110(m) sanctions 
would not be completely lifted until the State of Indiana submits a 
complete enhanced I/M program to USEPA. USEPA will take action to 
completely lift section 110(m) sanctions upon its determination that 
the State has submitted a complete enhanced I/M program.

    \4\ As a general rule, an Agency must go through rulemaking to 
remove or alter a requirement imposed through rulemaking. While U.S. 
EPA intends to issue a notice tolling the 110(m) sanctions upon the 
occurrence of the events described, U.S. EPA will use the good cause 
exception to the otherwise applicable requirement for proposed 
rulemaking. EPA believes there is good cause to toll the sanctions 
once the state takes the action which cures the deficiency that 
resulted in the imposition of sanctions. See 5 U.S.C. 
Sec. 553(b)(B). Therefore, no proposed action for removal will be 
issued. Consistent with U.S. EPA's intent to impose discretionary 
sanctions only on those areas that lack legislative authority U.S. 
EPA believes that it is in the public interest to remove, at least 
temporarily, these discretionary sanctions as expeditiously as 
possible once the State of Indiana has enacted legislative 

    As an alternative, EPA proposes that the basis for the 
discretionary sanctions is EPA's disapproval of Indiana's committal 
SIP. If the EPA's disapproval of the committal SIP is the basis for the 
discretionary sanctions, such sanctions would be tolled in the same 
manner as if the finding of failure to submit were the basis; however, 
if the disapproval is the basis for imposing the sanctions such 
sanctions would not be completely lifted until EPA formally approves an 
enhanced I/M program for the State of Indiana. In such a case, EPA 
would take action to lift the sanctions at the same time as EPA took 
final action approving the State's I/M program.
    USEPA's action imposing or tolling the section 110(m) sanctions 
will in no manner affect EPA's obligation to impose mandatory sanctions 
under section 179(a). The mandatory sanctions clock for Indiana was 
triggered on November 29, 1993 by EPA's disapproval of Indiana's 
committal SIP. Therefore, one mandatory sanction shall apply 18 months 
after USEPA's final disapproval of the committal SIP and the second 
mandatory sanction shall apply 6 months later. Sanctions under section 
179(a) apply to the areas for which the deficiency exists and until 
such deficiency has been corrected. Moreover, if the State does not 
adopt and USEPA does not approve regulations providing for an I/M 
program within the 18-month and additional 6-month periods following 
the effective date of EPA's disapproval, the sanctions will 
automatically apply on those areas of the State that were required to 
have but do not have such a USEPA-approved I/M program under the 
amended Act. See 58 FR 51270 (October 1, 1993).

IV. Regulatory Requirements

A. Executive Order 12866

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. The Order defines 
``significant regulatory action'' as one that is likely to result in a 
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely effect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action.'' 
Nevertheless, this action has been informally submitted to OMB for 

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, USEPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000. For reasons cited below, USEPA has not completed a regulatory 
flexibility analysis for this rule.
    The USEPA cannot reliably predict the impact of these restrictions 
because of the exemptions authorized for certain highway projects 
related to mass transit, public safety, and those that have beneficial 
air quality impacts. Careful review and evaluation of each project is 
necessary to determine whether or not a project is exempt.
    Major stationary sources of VOC and NOX with emissions are 
generally not small entities. Also, the 2:1 emission offset requirement 
does not prevent growth and modification but sets a higher offset 
standard than the current offset required. It is not expected that a 
large number of small entities will be affected by the emission offset 
requirement. In the past, when USEPA has made efforts to quantify the 
impact of the Act's rules on the construction and modification of 
sources, USEPA has been unable to do so due, in part, to the need to 
obtain information on future plans for business growth. This 
information is difficult to obtain, as businesses are understandably 
reluctant to make their plans public.
    The USEPA is also proposing to impose Federal highway funding 
assistance limitations statewide. This limitation could affect a number 
of government entities with jurisdiction over populations of less than 
50,000 since government entities often apply for and receive federal 
funding under Title 23, United States Code, for road improvement 
projects. Although a great many projects are exempted under section 
179(b)(1)(B), a number of projects are expected to be affected if the 
USEPA takes final action.
    For the reasons stated above, EPA cannot further analyze the 
economic impacts of this action on small entities. The statements in 
this package constitute EPA's full regulatory flexibility analysis.

C. Reporting and Recordkeeping Requirements

    This rule does not contain any information collection requirements 
which require OMB approval under the Paperwork Reduction Act (44 U.S.C. 
3501 et seq.). Should the highway sanctions become effective, the 
Secretary of the U.S. Department of Transportation (USDOT) is required 
to determine which projects or grants should not be affected by the 
sanction and which, therefore, are exempt. This determination will be 
based on information readily available in existing documentation 
gathered for the purpose of evaluating the environmental, social, and 
economic impacts of different alternatives for transportation projects. 
These analyses are already required for the preparation of 
environmental assessments and impact statements under the National 
Environmental Policy Act (NEPA). Historically, exemption determinations 
by USDOT for sanctions have been based on such NEPA documentation and 
have not necessitated additional information gathering and analysis by 
the states. In addition, since under NEPA, final environmental 
documents must be approved by USDOT, in most cases the NEPA 
documentation will already be in USDOT's possession. Therefore, USEPA 
does not believe that the highway sanctions, when applied, will impose 
an additional information collection burden on the states.
    When the offset sanction applies, sources subject to it will not 
incur an additional information collection burden because sources are 
already required under section 173 offset requirements to obtain an 
emission offset from between 1 to 1 and 1.5 to 1 (depending on the 
classification of the nonattainment area in which they are located). 
Should the offset sanction apply, if would not impose an additional 
information collection burden because sources will not have to provide 
additional information in the application beyond that which they would 
already have to provide in the absence of the sanction. (For the 
information collection burden of new requirements of the amended Act 
for nonattainment new source review (NSR) and prevention of significant 
deterioration, an information collection request is being prepared to 
support rulemaking changes to parts 51 and 52.)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Motor vehicle pollution, Nitrogen oxide, Volatile organic compounds.

    Dated: January 7, 1994.
Carol M. Browner,

    40 CFR part 52 is proposed to be amended as follows:


    1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart A--[Amended]

    2. Section 52.32, as proposed to be added in a document published 
elsewhere in this Federal Register, is amended by adding entries for 
the State of Indiana in the tables in paragraphs (c)(1)(i) and (c)(2) 
to read as follows:

Sec. 52.32  Discretionary sanction under section 110(m) of the Clean 
Air Act.

* * * * *
    (c) * * *
    (1) * * *
    (i) * * * 

                Affected area                    sanction   Pollutant(s)
                                                 applies      affected  
State of Indiana:                                                       
  Clark.......................................  .........  VOC, NOx     
  Elkhart.....................................  .........  VOC, NOx     
  Floyd.......................................  .........  VOC, NOx     
  Lake........................................  .........  VOC, NOx     
  Marion......................................  .........  VOC, NOx     
  Porter......................................  .........  VOC, NOx     
  St. Joseph..................................  .........  VOC, NOx     
  Vanderburgh.................................  .........  VOC, NOx     

* * * * *
    (2) * * * 

                       Affected area                           sanction 
State of Indiana:                                                       

[FR Doc. 94-1131 Filed 1-21-94; 10:00 am]

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