1. IDEM Update & Air Quality Overview Indiana Cast Metals Association March 6, 2007 Thomas W. Easterly, P.E., DEE, QEP Commissioner IN Department of Environmental Management

2. New State Laws impacting IDEM from the 2006 Legislative Session HB1110—Removal of Mercury Convenience Switches from End of Life Motor Vehicles. SB 234—Improving the rulemaking process for wet weather discharges and authorizing the Environmental Stewardship Program. HB1117—Simplifying the solid waste statutes and eliminating the groundwater task force. SB 146—Removing the Property Transfer Disclosure Form from Statute.

3. IDEM’s Environmental Goal Increase the personal income of all Hoosiers from the current $0.88/$1.00 of the national average to at least $1.00/$1.00 of the national average while maintaining and improving Indiana’s Environmental Quality.

4. Pilot 2006 Environmental Performance Index Yale Center for Environmental Law & Policy Yale University Center for International Earth Science Information Network (CIESIN) Columbia University http://www.yale.edu/epi/

6. How Will IDEM Help Increase Personal Income? Clear, consistent and speedy decisions Clear regulations Assistance first, enforcement second Timely resolution of enforcement actions Every regulated entity will have current valid permits without unnecessary requirements Written Standard Operating Procedures Improved staff training and development

7. Performance Metrics Quality of Hoosiers' EnvironmentResultTargetComments % of Hoosiers that live in counties that meet air quality standards 85%100%80% 2 counties @ 964,725 of 6,271,973 failed % of CSO Communities with approved programs to prevent the release of untreated sewage 50%100%20%75% by 2007 is goal Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute Land 93,91637,43086,864 208 permits 699 permits 82 permits Air 337,792207,731385,000 Water 109,01644,550200,000 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards Inspections 93.20%97%75% Self reporting 95.55%99%95% Continuous monitoring (COM) 99.91%99.90%98.95% * Tracks observations and not just inspections Organizational Transformation Budgetary agency dollars spent on key outside contracts for core agency functions. Dollars spent on outside services per year $3,179,367$0$3,447,017 Will require increase in head count to accomplish

8. Counties above AQ Standards January 10, 2005 Allen--Ozone Boone--Ozone Clark—PM & Ozone Dubois--PM Elkhart--Ozone Hamilton--Ozone Hancock--Ozone Madison--Ozone Marion—PM & Ozone Shelby--Ozone St. Joseph--Ozone January 1, 2007 Clark--PM Marion--PM

9. Ozone Attainment Status

10. PM2.5 Attainment Status

11. PM 2.5 Status New 24 hour standard issued in September, 2006—Annual standard retained Designations will initially be based upon 2004-2006 air quality, but the process will allow the use of data up to 2009 New nonattainment designations April 2010, SIPS due 2013 SIPS for current nonattainment areas due April, 2008—we may try redesignations

12. PM 2.5 Status Based upon monitored 2004-2006 Air Quality, the following locations exceed the new 35 microgram per cubic meter short term PM 2.5 Standard: Jeffersonville (Clark County) 37 SW Purdue Ag Center (Knox County) 36 Gary IITRI (Lake County) 38 Gary Burr St. (Lake County) 38 Indianapolis S. West St. (Marion County) 38 Indianapolis English Ave (Marion County) 37 Indianapolis W 18 th St. (Marion County) 37

14. Permitting IDEM is still meeting the statutory deadlines for permit issuance, as reported in past years IDEM now tracks the total calendar days a permit is in house and is applying a deadline to permits that traditionally do not have a statutory deadline; as a new interpretation to the intent of statutes

15. Total Permit Calendar Days

16. Air Permits for New Facilities New Toyota Production at Lafayette Subaru Facility Louis Dreyfus Soy Biodiesel Plant— Largest in the US A dozen new Ethanol Production Facilities with ten pending Honda Greensburg NSR permit issued in 94 days

17. Percent of Activities Meeting Regulations

18. Office of Enforcement 2002-2006 20022003200420052006 Referrals 887607467547591 Violation Letters173347203231 Notice of Violations 561457318202427 Agreed Orders311349314258417 Commissioner's Orders 15 64138 Dismissals125121444846

19. Foundry Air Issues IDEM started rulemaking to accept acid scrubbers as presumptive 8-1-6 VOC BACT for core making amines—withdrawn at the request of INCMA. BACT still applies. Applicability of New Source Performance Standards (NSPS) Subpart UUU to sand reclamation operations and cooling towers at foundries. EPA’s October 16, 2006 letter.

20. Foundry Air Issues CO Permitting Issue—IDEM’s Office of Enforcement worked with INCMA to develop “CO Emissions Guidelines” as a pathway for facilities that may not have considered all of their CO emissions to obtain the proper permit. So far, very few foundry operations have submitted information under this program. At the end of this program, normal enforcement procedures will apply to any improperly permitted CO emissions.

21. Major Regulatory Initiatives Regulations to facilitate the proper management of e-Scrap Rulemaking to require the removal of mercury convenience switches from automobiles prior to crushing or shredding Rulemaking to allow Performance Track (Indiana Environmental Stewardship Program)—Charter Members Announced in February 2007

22. Major Regulatory Initiatives Outdoor Wood Fueled Boilers—EQSC Report recommended waiting to proceed until EPA issues its model rule in January 2007 Utility NOx, SO2 and Mercury emission rules: CAIR, which regulates NOx and SO2, was adopted by the Air Pollution Control Board in November. CAMR, regulating mercury, was due to EPA on November 17, but Indiana does not have a Final Rule because there has been no resolution of issues between Utilities which favor the federal program and the Hoosier Environmental Council which favors a 90% reduction—Second Notice

23. Major Regulatory Initiatives Rulemaking to establish presumptive 8-1-6 VOC BACT controls to streamline permitting: Acid Scrubbers for foundry core making amines— Withdrawn at Request of INCMA Compliance with certain NESHAPs--Continuing Ethanol Plant BACT—Final Adoption 12/6/2006 Possible statewide regulations on the formulation of consumer products (i.e. air fresheners, deodorants, etc.) and paint products to ensure continued compliance with the Ozone standard and reduce our impact on neighboring States—First Notice Soon Adjustments to the Title V fees to fully fund the program—Air Board Adoption 12/6/2006

24. IDEM Fees & Fund Balances Title V Example Significant Communication Challenge: Auditor reports the “check book balance” for each fund on June 30 IDEM collects almost all of its Title V fees in the 2 nd Quarter of each year. IDEM’s June 30 fee balance is similar to a person’s check book balance right after depositing their paycheck IDEM must pay all of its bills until the next pay day (next June 30) without overdrawing

25. IDEM Fees & Fund Balances Title V Example For the last five years (FY 02-FY 06), Title V fund expenditures have exceed revenues by $5,771,277, yet the June 30, 2006 check book balance was $10,039,779 which many people believe is a healthy fund balance. This fund balance is insufficient to cover the estimated $10,587,184 in expenditures up to the date of receipt of new funds in the 2 nd Quarter of 2007.

26. IDEM Fees & Fund Balances Title V Example The “payday checkbook balance” minus the expenditures before the next pay day gives the “minimum cash in the check book” which is projected to be negative by $547,405 during FY 06. The actuarial fund balance (assets less contracted liabilities) is much worse because the fund has $6,131,187 in contractual obligations and its projected lowest net worth is actually a debt of $6,678,592.

27. 05-06 Available Cash by Month

28. 2007 Legislative Issues Budget—SB432 Federal Funds continuing to decrease State General Funds fluctuate Dedicated Funds: Except for Title V, fees collected for do not relate to program costs— some programs like Methamphetamine Clean-up and Mercury Switch Management completely unfunded (Recently adjusted Title V fees) Consider Prohibiting the Commissioner from renewing a permit for a facility that was not constructed or has not operated for the past 5 years—SB205

29. Environmental Crimes Task Force SB286 Environmental Crimes Task Force Created by SEA 195 (2005) has been meeting since October, 2005. Chaired by Senator Kenley then Rep Walorski Developing more specific environmental criminal statutes.

30. 2007 Legislative Issues Streamlined Rulemaking when adopting Federal Requirements (including deadlines) without change SB154 Ask the 2007 EQSC to study Environmental Rulemaking Process SB154 Current Roles of Environmental Districts Regional Water and Sewer Districts Solid Waste Management Districts SB154

31. Questions? Tom Easterly 100 N. Senate Ave. IGCN 1301 Indianapolis, IN 46204 (317) 232-8611 Fax (317) 233-6647 teasterly@idem.in.gov