1. What’s New and Where is IDEM Heading? IMA, September 27, 2006 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 77%100%80% 5 counties @ 1,419,455 of 6,271,973 failed % of CSO Communities with approved programs to prevent the release of untreated sewage 27%100%20%75% by 2007 is goal Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute Land 122,46337,43086,864 238 permits 750 permits 125 permits Air 445,827207,731385,000 Water 188,72444,550200,000 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards Inspections 95.33%97%75% Self reporting 98.05%99%95% Continuous monitoring (COM) 99.38%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 $5,079,367$0$3,447,017 Will require increase in head count to accomplish

8. The following 35 CSO communities have either an approved LTCP or sewer separation Akron Albion Aurora Avilla Berne Bluffton Boonville Brazil Bremen Brownsburg Butler Chesterfield Columbia City Columbus Decatur Frankfort Goshen Greenfield Kendallville Knox LaGrange LaPorte Madison Michigan City Milford New Haven Ossian Remington Seymour Sullivan Veedersburg Warren Warsaw Waterloo Winamac

9. Water Infrastructure Funding Clean Water Costs Money The most efficient way to fund the projects is directly from the users Any State or National program requires additional overhead which raises the total cost of the project We need to work together to help people understand that they are going to pay for the projects one way or another, and that paying locally is the most economical

10. 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

11. Total Permit Calendar Days

12. Percent of Activities Meeting Regulations

13. Office of Enforcement 2002-2006 20022003200420052006* Referrals 887607467547324 Violation Letters173347203125 Notice of Violations 561457318202281 Agreed Orders311349314258237 Commissioner's Orders 15 64128 Dismissals125121444829 * August 1, 2006

14. The 120 Cases over Two Years Old March 2005, notified regulated community that IDEM wanted old cases resolved by June: 90 cases resolved (approximately) 20 settlements pending 10 commissioner orders issued Purpose: clear the process and get on fresh footing with the regulated community

15. Poor Data Systems Caused Confusion 120 cases over 2 years old 40 Resolved by 6/10/05 19 Additional resolved by 10/12/05 Industry asking why they were not included when they had old cases on the books 120 cases reported some of which were old Issued 8 old and 2 newer Commissioner’s Orders by 6/10/05 40 of these were older than 2 years

16. Status of the 120 Old Cases 112 have been moved through the process: 64 Agreed Orders 24 Commissioner’s Orders 12 Dismissals 1 Referred to EPA 5 Referred to the Attorney General 3 Deferred due to Criminal Prosecution 3 Violation Letters Issued

17. Status of the 120 Old Cases The Remaining 8 old cases involve 3 facilities 5 Air Cases with U.S. Steel 2 Air Cases with Grain Processing Corp. 1 Water Case with the City of Warsaw Each of these cases is in active negotiation and each of these parties is taking actions to improve the protection of the environment during the negotiations

18. Possible Issues for 2007 Legislation

19. Possible 2007 Legislative Issues Budget 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 (Considering adjusting 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

20. Possible 2007 Legislative Issues Streamline the OEA (Office of Environmental Adjudication) Process, especially for permit appeals. Issues include: Standing (i.e. who can appeal) Timeliness of Decisions The Standard of Review (i.e. Arbitrary and Capricious) Potential for the Collection of Damages Current Roles of Environmental Districts Regional Water and Sewer Districts Solid Waste Management Districts

21. Environmental Crimes Task Force Environmental Crimes Task Force Created by SEA 195 (2005) has been meeting since October, 2005. Chaired by Senator Kenley Developing more specific environmental criminal statutes. Plan to develop legislation for consideration in the 2007 session.

22. Possible 2007 Legislative Issues Streamlined Rulemaking when adopting Federal Requirements (including deadlines) without change Ask the 2007 EQSC to study Environmental Rulemaking Process Request legislative authority to encourage implementation of environmentally beneficial projects by providing credit through tax incentives and the ability to bank the value of Supplemental Environmental Projects

23. 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)—Will be accepting applications in September

24. Air Issues Paul Dubenetzky, Assistant Commissioner of the Office of Air Quality Retried unexpectedly —his last day was September 1, 2006 Currently open to suggestions on excellent replacement candidates In the interim, I have delegated most authority and responsibility to the Branch Chiefs Kathy Watson—Planning and Rules Nisha Sizemore—Permitting Phil Perry—Compliance Dick Zeiler--Monitoring

25. Counties above AQ Standards January 10, 2005 Allen Boone Clark Dubois Elkhart Hamilton Hancock Madison Marion Shelby St. Joseph October 1, 2005 Clark Dubois Hamilton Marion

26. Counties above AQ Standards January 1, 2006 Clark Dubois Hamilton Marion Vanderburgh October 1, 2006 (Projected) Clark Dubois Marion Vanderburgh

27. Ozone Attainment Status

28. Major Voluntary Air Emission Control Announcements Alcoa will add Scrubbers for SO 2 Emission Control to all units at its Warrick Power Plant near Newburgh. Indiana Kentucky Electric Corporation will add Scrubbers for SO 2 Emission Control to all six of its units in Madison.

29. Total Permit Calendar Days

30. Air Permits for New Facilities New Toyota Production at Lafayette Subaru Facility Louis Dreyfus Soy Biodiesel Plant— Largest in the US Ten new Ethanol Production Facilities Draft Honda Production facility permit now on public notice

31. Major Regulatory Initiatives Rulemaking to establish presumptive 8-1-6 VOC BACT controls to streamline permitting: Acid Scrubbers for foundry core making amines Compliance with certain NESHAPs 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 Adjustments to the Title V fees to fully fund the program

32. Major Regulatory Initiatives Outdoor Wood Fueled Boilers Utility NOx, SO2 and Mercury emission rules: CAIR, which regulates NOx and SO2, has been preliminarily adopted by the Air Pollution Control Board—general consensus. CAMR, regulating mercury, has not been second noticed 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.

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