1. IDEM Update & Air Quality Overview Air and Waste Management Association Winter Technical Meeting December 12, 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. How Does IDEM Protect the Environment? Measure the air, water and land to determine the existing state of the environment Compare the measured values to levels that protect human health and the environment Ambient Air Quality Standards Water Quality Standards Safe soil and ground water clean up levels Use modeling to determine how much of a substance can be added to the environment

8. How Does IDEM Protect the Environment? Develop regulations and issue permits to restrict discharges to the environment to safe levels Inspect and monitor permitted facilities to ensure compliance with the permits Enforce against people who exceed their permit levels or violate regulations Educate people on their environmental responsibilities

9. Performance Metrics Quality of Hoosiers' EnvironmentResultTargetComments % of Hoosiers that live in counties that meet air quality standards 81%100%80% 4 counties @ 1,178,770 of 6,271,973 failed % of CSO Communities with approved programs to prevent the release of untreated sewage 40%100%20%75% by 2007 is goal Permitting Efficiency Total calendar days accumulated in issuing environmental permits, as determined by state statute Land 103,33637,43086,864 233 permits 785 permits 125 permits Air 407,187207,731385,000 Water 162,15644,550200,000 * Places emphasis on back logged permits Compliance Total percentage of compliance observations from regulated customers within acceptable compliance standards Inspections 95.92%97%75% Self reporting 96.48%99%95% Continuous monitoring (COM) 99.47%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 $4,179,367$0$3,447,017 Will require increase in head count to accomplish

10. 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

11. Counties above AQ Standards January 1, 2006 Clark Dubois Hamilton Marion Vanderburgh October 1, 2006 Clark Dubois Marion Vanderburgh

12. Ozone Attainment Status

13. PM2.5 Attainment Status

14. PM 2.5 Status New 24 hour standard issued in September—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

21. 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

22. Total Permit Calendar Days

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

24. Percent of Activities Meeting Regulations

25. Office of Enforcement 2002-2006 20022003200420052006* Referrals 887607467547574 Violation Letters173347203225 Notice of Violations 561457318202400 Agreed Orders311349314258405 Commissioner's Orders 15 64137 Dismissals125121444846 * December 7, 2006

26. 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

27. Major Regulatory Initiatives Outdoor Wood Fueled Boilers—EQSC Report recommended waiting to proceed until EPA issues its model rule 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

28. 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

29. 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

30. 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.

31. 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.

32. FY 06 Available Cash by Month

33. Possible Issues for 2007 Legislation

34. 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

35. 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.

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

37. 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 Inactive legislative issue—Supplemental Environmental Project Banking.

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