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6560-50-P 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Parts 51, 52, 70, and 71 

[EPA-HQ-OAR-2010-0107; FRL-xxxx-x] 

RIN-2060-AQ08 

Action to Ensure Authority to Issue Permits under the Prevention 

of Significant Deterioration Program to Sources of Greenhouse 

Gas Emissions: Finding of Substantial Inadequacy and SIP Call 

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The EPA is proposing to find that 20 states with EPAapproved state implementation plan (SIP) New Source Review 

Prevention of Significant Deterioration (PSD) programs are 

substantially inadequate to meet Clean Air Act (CAA) 

requirements because they do not appear to apply PSD 

requirements to GHG-emitting sources. For each of these states, 

EPA proposes to require the state (through a "SIP Call") to 

revise its SIP as necessary to correct such inadequacies. EPA 

proposes an expedited schedule for states to submit their 

corrective SIP revision, in light of the fact that PSD permits 

will be required for construction or modification of for certain 

GHG-emitting sources as of January 2, 2011. As for the rest of 

the states with approved SIP PSD programs, EPA solicits comment 

on whether their PSD programs do or do not apply to GHG-emitting 

Deleted: , certain GHGemitting sources will become 

subject to the PSD 

requirements and will not be 

able to construct or modify 

unless they have a PSD 

permit
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sources. If, on the basis of information EPA receives, EPA 

concludes that the SIP for such a state does not apply the PSD 

program to GHG-emitting sources, then EPA will proceed to issue 

a finding of substantial inadequacy and a SIP Call. In a 

companion notice, EPA proposes a federal implementation plan 

(FIP), which EPA would finalize if a state fails to make the 

required SIP submission and which would authorize EPA to issue 

the PSD permits to the GHG sources. 

DATES: Comments. Comments must be received on or before 

[INSERT DATE 30 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL 

REGISTER]. 

ADDRESSES: Submit your comments, identified by Docket ID No. 

EPA-HQ-OAR-2010-0107 by one of the following methods: 

• www.regulations.gov: Follow the online instructions for 

submitting comments. 

• E-mail: a-and-r-docket@epa.gov. 

• Fax: (202) 566-9744 

• Mail: Attention Docket ID No. EPA-HQ-OAR-2010-0107, U.S. 

Environmental Protection Agency, EPA West (Air Docket), 

1200 Pennsylvania Avenue, NW, Mail code: 6102T, Washington, 

DC 20460. Please include a total of 2 copies. In 

addition, please mail a copy of your comments on the 

information collection provisions to the Office of 
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Information and Regulatory Affairs, Office of Management 

and Budget (OMB), Attn: Desk Officer for EPA, 725 17th 

Street, NW, Washington, DC 20503. 

• Hand Delivery: U.S. Environmental Protection Agency, EPA 

West (Air Docket), 1301 Constitution Avenue, Northwest, 

Room 3334, Washington, DC 20004, Attention Docket ID No. 

EPA-HQ-OAR-2010-0107. Such deliveries are only accepted 

during the Docket's normal hours of operation, and special 

arrangements should be made for deliveries of boxed 

information. 

Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR2010-0107. EPA's policy is that all comments received will be 

included in the public docket without change and may be made 

available online at www.regulations.gov, including any personal 

information provided, unless the comment includes information 

claimed to be Confidential Business Information (CBI) or other 

information whose disclosure is restricted by statute. Do not 

submit information that you consider to be CBI or otherwise 

protected through www.regulations.gov or e-mail. The 

www.regulations.gov Web Site is an "anonymous access" system, 

which means EPA will not know your identity or contact 

information unless you provide it in the body of your comment. 

If you send an e-mail comment directly to EPA without going 
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through www.regulations.gov, your e-mail address will be 

automatically captured and included as part of the comment that 

is placed in the public docket and made available on the 

Internet. If you submit an electronic comment, EPA recommends 

that you include your name and other contact information in the 

body of your comment and with any disk or CD-ROM you submit. If 

EPA cannot read your comment due to technical difficulties and 

cannot contact you for clarification, EPA may not be able to 

consider your comment. Electronic files should avoid the use of 

special characters, avoid any form of encryption, and be free of 

any defects or viruses. For additional information about EPA's 

public docket visit the EPA Docket Center homepage at 

www.epa.gov/epahome/dockets.htm. For additional instructions on 

submitting comments, go to section I.C of the SUPPLEMENTARY 

INFORMATION section of this document. 

Docket. All documents in the docket are listed in the 

www.regulations.gov index. Although listed in the index, some 

information is not publicly available, e.g., CBI or other 

information whose disclosure is restricted by statute. Certain 

other material, such as copyrighted material, will be publicly 

available only in hard copy. Publicly available docket 

materials are available either electronically in 

www.regulations.gov or in hard copy at the U.S. Environmental 
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Protection Agency, Air Docket, EPA/DC, EPA West Building, Room 

3334, 1301 Constitution Ave., NW, Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through 

Friday, excluding legal holidays. The telephone number for the 

Public Reading Room is (202) 566-1744, and the telephone number 

for the Air Docket is (202) 566-1742. 

FOR FURTHER INFORMATION CONTACT: Ms. Lisa Sutton, Air Quality 

Policy Division, Office of Air Quality Planning and Standards 

(C504-03), Environmental Protection Agency, Research Triangle 

Park, NC 27711; telephone number: (919) 541-3450; fax number: 

(919) 541-5509; e-mail address: sutton.lisa@epa.gov. 

SUPPLEMENTARY INFORMATION: 

For questions related to a specific state, local, or tribal 

permitting authority, or to submit information requested in this 

action, please contact the appropriate EPA regional office: 

EPA 

Regional 

office 

Contact for regional office 

(person, mailing address, 

telephone number) Permitting authority 

I Dave Conroy, Chief, Air 

Programs Branch, 

EPA Region 1, 5 Post Office 

Square, Suite 100, Boston, MA 

02109-3912, (617) 918-1661. 

Connecticut, 

Massachusetts, Maine, 

New Hampshire, Rhode 

Island, and Vermont. 

II Raymond Werner, Chief, Air 

Programs Branch, EPA Region 2, 

290 Broadway, 25th Floor, New 

York, NY 10007-1866, (212) 

637-3706. 

New Jersey, New York, 

Puerto Rico, and Virgin 

Islands. 
Page 6 of 71 

III Kathleen Anderson, Chief, 

Permits and Technical 

Assessment Branch, EPA Region 

3, 1650 Arch Street, 

Philadelphia, PA 19103-2029, 

(215) 814-2173. 

District of Columbia, 

Delaware, Maryland, 

Pennsylvania, Virginia, 

and West Virginia. 

IV Dick Schutt, Chief, Air 

Planning Branch, EPA Region 4, 

Atlanta Federal Center, 61 

Forsyth Street, SW, Atlanta, 

GA 30303-3104, (404) 562-

9033. 

Alabama, Florida, 

Georgia, Kentucky, 

Mississippi, North 

Carolina, South 

Carolina, and 

Tennessee. 

V J. Elmer Bortzer, Chief, Air 

Programs Branch (AR-18J), EPA 

Region 5, 77 West Jackson 

Boulevard, Chicago, IL 60604-

3507, (312) 886-1430. 

Illinois, Indiana, 

Michigan, Minnesota, 

Ohio, and Wisconsin. 

VI Jeff Robinson, Chief, Air 

Permits Section, EPA Region 6, 

Fountain Place 12th Floor, 

Suite 1200, 1445 Ross Avenue, 

Dallas, TX 75202-2733, (214) 

665-6435. 

Arkansas, Louisiana, 

New Mexico, Oklahoma, 

and Texas. 

VII Mark Smith, Chief, Air 

Permitting and Compliance 

Branch, EPA Region 7, 901 

North 5th Street, Kansas City, 

KS 66101, (913) 551-7876. 

Iowa, Kansas, Missouri, 

and Nebraska. 

VIII Carl Daly, Unit Leader, Air 

Permitting, Monitoring & 

Modeling Unit, EPA Region 8, 

1595 Wynkoop Street, Denver, 

CO 80202-1129, (303) 312-

6416. 

Colorado, Montana, 

North Dakota, South 

Dakota, Utah, and 

Wyoming. 

IX Gerardo Rios, Chief, Permits 

Office, EPA Region 9, 75 

Hawthorne Street, San 

Francisco, CA 94105, (415) 

972-3974. 

Arizona; California; 

Hawaii and the Pacific 

Islands; Indian Country 

within Region 9 and 

Navajo Nation; and 

Nevada. 

X Nancy Helm, Manager, Federal 

and Delegated Air Programs 

Unit, EPA Region 10, 1200 

Sixth Avenue, Suite 900, 

Seattle, WA 98101, (206) 553-

6908. 

Alaska, Idaho, Oregon, 

and Washington. 
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I. General Information 

A. Does this action apply to me?

Entities potentially affected by this rule include states, 

local permitting authorities, and tribal authorities.1

 Any SIPapproved PSD air permitting regulation that is not structured 

such that it includes GHGs among pollutants subject to the PSD 

program will potentially be found to be substantially inadequate 

to meet CAA requirements, under CAA §110(k)(5), and the state 

will potentially be affected by this rule. For example, if a 

state's PSD regulation identifies its regulated NSR pollutants 

by specifically listing each individual pollutant and the list 

omits GHGs, then the regulation is substantially inadequate. 

Entities potentially affected by this rule also include 

sources in all industry groups, which have a direct obligation 

under the CAA to obtain a PSD permit for GHGs for projects that 

meet the applicability thresholds set forth in the Tailoring 

Rule.2

 This independent obligation on sources is specific to PSD 

 

1

 EPA respects the unique relationship between the U.S. 

government and tribal authorities and acknowledges that tribal 

concerns are not interchangeable with state concerns. However, 

for convenience, we refer to "states" in this rulemaking to 

collectively mean states, local permitting authorities, and 

tribal authorities. 

2

 Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule; Final Rule. 75 FR 31514. The Tailoring Rule 

is described in more detail later in this preamble. 
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and derives from CAA §165(a). Any source that is subject to a 

state PSD air permitting regulation not structured to apply to 

GHG-emitting sources will potentially rely on this rule to 

obtain a permit that contains emission limitations that conform 

to requirements under CAA §165(a). The majority of entities 

potentially affected by this action are expected to be in the 

following groups: 

Industry Group NAICSa

Utilities (electric, natural 

gas, other systems) 

2211, 2212, 2213 

Manufacturing (food, beverages, 

tobacco, textiles, leather) 

311, 312, 313, 314, 315, 316 

Wood product, paper 

manufacturing 

321, 322 

Petroleum and coal products 

manufacturing 

32411, 32412, 32419 

Chemical manufacturing 3251, 3252, 3253, 3254, 3255, 

3256, 3259 

Rubber product manufacturing 3261, 3262 

Miscellaneous chemical products 32552, 32592, 32591, 325182, 

32551 

Nonmetallic mineral product 

manufacturing 

3271, 3272, 3273, 3274, 3279 

Primary and fabricated metal 

manufacturing 

3311, 3312, 3313, 3314, 3315, 

3321, 3322, 3323, 3324, 3325, 

3326, 3327, 3328, 3329 

Machinery manufacturing 3331, 3332, 3333, 3334, 3335, 

3336, 3339 

Computer and electronic 

products manufacturing 

3341, 3342, 3343, 3344, 3345, 

4446 

Electrical equipment, 

appliance, and component 

manufacturing 

3351, 3352, 3353, 3359 

Transportation equipment 

manufacturing 

3361, 3362, 3363, 3364, 3365, 

3366, 3366, 3369 
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Furniture and related product 

manufacturing 

3371, 3372, 3379 

Miscellaneous manufacturing 3391, 3399 

Waste management and 

remediation 

5622, 5629 

Hospitals/nursing and 

residential care facilities 

6221, 6231, 6232, 6233, 6239 

Personal and laundry services 8122, 8123 

Residential/private households 8141 

Non-residential (commercial) Not available. Codes only 

exist for private households, 

construction and leasing/sales 

industries. a

 North American Industry Classification System. 

B. Where can I get a copy of this document and other related 

information?

In addition to being available in the docket, an electronic 

copy of this proposal will also be available on the World Wide 

Web. Following signature by the EPA Administrator, a copy of 

this notice will be posted on the EPA's NSR Web Site, under 

Regulations & Standards, at www.epa.gov/nsr. 

C. What should I consider as I prepare my comments for EPA?

1. Submitting CBI. Do not submit this information to EPA 

through www.regulations.gov or e-mail. Clearly mark the part or 

all of the information that you claim to be CBI. For CBI 

information in a disk or CD ROM that you mail to EPA, mark the 

outside of the disk or CD ROM as CBI and then identify 

electronically within the disk or CD ROM the specific 

information that is claimed as CBI. In addition to one complete 
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version of the comment that includes information claimed as CBI, 

a copy of the comment that does not contain the information 

claimed as CBI must be submitted for inclusion in the public 

docket. Information so marked will not be disclosed except in 

accordance with procedures set forth in 40 CFR part 2. Send or 

deliver information identified as CBI only to the following 

address: Roberto Morales, OAQPS Document Control Officer (C404-

02), U.S. EPA, Research Triangle Park, NC 27711, Attention 

Docket ID No. EPA-HQ-OAR-2010-0107. 

2. Tips for preparing your comments. When submitting 

comments, remember to: 

• Identify the rulemaking by docket number and other 

identifying information (subject heading, Federal Register

date and page number). 

• Follow directions - The agency may ask you to respond to 

specific questions or organize comments by referencing a 

Code of Federal Regulations (CFR) part or section number. 

• Explain why you agree or disagree; suggest alternatives and 

substitute language for your requested changes. 

• Describe any assumptions and provide any technical 

information and/or data that you used. 

• If you estimate potential costs or burdens, explain how you 

arrived at your estimate in sufficient detail to allow for 
Page 11 of 71 

it to be reproduced. 

• Provide specific examples to illustrate your concerns, and 

suggest alternatives. 

• Explain your views as clearly as possible, avoiding the use 

of profanity or personal threats. 

• Make sure to submit your comments by the comment period 

deadline identified. 

D. How is the preamble organized?

The information presented in this preamble is organized as 

follows: 

I. General Information 

A. Does this action apply to me? 

B. Where can I get a copy of this document and other 

related information? 

C. What should I consider as I prepare my comments for 

EPA? 

D. How is the preamble organized? 

II. Overview of Proposed Rule 

III. Background 

A. CAA and Regulatory Context 

B. State PSD SIPs 

IV. Proposed Action: Finding of Substantial Inadequacy and SIP 

Call 

A. Introduction 

B. States with SIP PSD Applicability Provisions that Do 

Not Appear to Apply to GHG-emitting Sources 

C. States with SIP PSD Applicability Provisions that Do

Appear to Apply to GHG-emitting Sources 

D. Proposed Finding of SIP Substantial Inadequacy and SIP 

Call; Solicitation of Comment 

E. Comment Period 

F. State Actions 

G. EPA Actions on SIP Submittals; Findings of Failure to 

Submit and Promulgation of FIPs 

H. Streamlining the State Process for SIP Development and 

Submittal 
Page 12 of 71 

I. Sanctions 

J. Title V 

V. Statutory and Executive Order Reviews 

A. Executive Order 12866 – Regulatory Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform 

E. Executive Order 13132 – Federalism 

F. Executive Order 13175 – Consultation and Coordination 

with Indian Tribal Governments 

G. Executive Order 13045 – Protection of Children from 

Environmental Health Risks and Safety Risks 

H. Executive Order 13211 – Actions Concerning Regulations 

that Significantly Affect Energy Supply, Distribution, 

or Use 

I. National Technology Transfer and Advancement Act 

J. Executive Order 12898 – Federal Actions to Address 

Environmental Justice in Minority Populations and LowIncome Populations 

VI. Statutory Authority 

II. Overview of Proposed Rule 

In this rulemaking, along with the companion rulemaking 

described elsewhere in this preamble, EPA is taking another in a 

series of actions concerning the PSD program for GHG-emitting 

sources that will begin on January 2, 2011. These two 

rulemakings take steps to assure that in 14 states that do not 

appear to have authority to issue PSD permits to GHG-emitting 

sources at present, either the state or EPA will have the 

authority to issue PSD permits by January 2, 2011. Although for 

most states, either the state or EPA is already authorized to 

issue PSD permits for GHG-emitting sources as of that date, our 

preliminary information shows that these 14 states have EPAapproved PSD programs that do not appear to include GHG-emitting 

Deleted: 20 

Deleted: 20 
Page 13 of 71 

sources and therefore do not appear to authorize these states to 

issue PSD permits to such sources. In this rulemaking, EPA 

proposes to find that these 14 states' SIPs are substantially 

inadequate to comply with Clean Air Act (CAA) requirements and, 

accordingly, proposes to issue a SIP Call to require a 

corrective SIP revision that applies their SIP PSD programs to 

GHG-emitting sources. In a companion rulemaking, EPA proposes a 

FIP that would give EPA authority to apply EPA's PSD program to 

GHG-emitting sources in case a state is unable to submit a 

corrective SIP revision by its deadline. 

Under the CAA PSD program, stationary sources must obtain a 

permit prior to undertaking construction or modification 

projects that would result in specified amounts of new or 

increased emissions of air pollutants that are subject to 

regulation under other provisions of the CAA. CAA §§165(a), 

169(1). The permit must, among other things, impose emission 

limitations associated with the best available control 

technology (BACT). CAA §165(a)(4). 

In recent months, EPA has taken four related actions that, 

taken together, trigger PSD applicability for GHG sources on and 

after January 2, 2011, but limit the scope of PSD. These 

actions included, as they are commonly called, the "Endangerment 

Finding" and "Cause or Contribute Finding," which were issued in 

Deleted: 20 
Page 14 of 71 

a single final action,3 the "Johnson Memo Reconsideration,"4 the 

"Light-Duty Vehicle Rule,"5 and the "Tailoring Rule."6 Taken 

together, these actions established regulatory requirements for 

GHGs emitted from new motor vehicles and new motor vehicle 

engines, determined that such regulations, when they take effect 

on January 2, 2011, will subject GHGs emitted from stationary 

sources to PSD requirements, and will limit the applicability of 

PSD requirements to GHG sources on a phased-in basis. 

We are taking this action due to preliminary research 

indicating that the EPA-approved SIPs for 14 states appear to 

not apply the PSD program to GHG sources. In many of these 

states, the SIP applicability provisions apply the PSD program 

to sources of specifically listed air pollutants and do not 

include GHGs. In one state, Connecticut, the SIP explicitly 

 

3

 "Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act." 74 FR 66496 

(December 15, 2009). 

4

 "Interpretation of Regulations that Determine Pollutants 

Covered by Clean Air Act Permitting Programs." 75 FR 17004 

(April 2, 2010). This action finalizes EPA's response to a 

petition for reconsideration of "EPA's Interpretation of 

Regulations that Determine Pollutants Covered by Federal 

Prevention of Significant Deterioration (PSD) Permit Program" 

(commonly referred to as the "Johnson Memo"), December 18, 2008. 

5

 "Light-Duty Vehicle Greenhouse Gas Emission Standards and 

Corporate Average Fuel Economy Standards; Final Rule." 75 FR 

25324 (May 7, 2010). 

6

 "Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule; Final Rule." 75 FR 31514 (June 3, 2010). 

Deleted: ed

Comment [A1]: A brief discussion of 

EPA’s “early warning” efforts regarding 

the SIP revision timeframe as established 

in these collective rulemakings would be 

helpful context in supporting EPA’s 

interpretation of the reasonableness of the 

expedited process; e.g., if EPA publicized 

the need for SIP revisions to conform to 

the Tailoring rule as described on p. 25 of 

this draft in the rulemakings or other 

public statements. Alternatively, has 

EPA’s research mirrored much of what is 

being requested of states pp. 42-44? 

Comment [A2]: Here and also on p. 

33: To allow stakeholders and the public 

to better understand the basis for EPA’s 

proposed SIP determinations (Tables IV1 and IV-2), the rule should further 

describe the nature of this research and 

the docket should include documentation 

of it. Noting the self-identification by 

states could be a worthwhile 

consideration in this regard. 

Deleted: 20 
Page 15 of 71 

precludes the application of PSD to GHG-emitting sources. In 

other states, the SIP applicability provisions apply the PSD 

program generally to regulated pollutants, and these provisions, 

by their terms, cover GHGs; however, these states have other 

constitutional, state law, or SIP provisions that may limit 

their state laws or SIP requirements to applying only when 

specifically approved by the appropriate state authority. These 

constitutional or statutory provisions may limit the scope of 

the state PSD applicability provisions to pollutants expressly 

identified at a certain point in time as subject to PSD. In 

these instances, if the state has not yet expressly identified 

GHGs as subject to its PSD program, permitting authority for 

GHG-emitting sources may not exist. . As a result, absent 

further action, GHG sources that will be required to obtain a 

PSD permit for construction or modification on and after January 

2, 2011 will be unable to do so in those states. 

In this rulemaking, we are proposing to find that under CAA 

§110(k)(5), the SIP for each of these 14 states is substantially 

inadequate to meet the CAA PSD requirements, and we are 

proposing a SIP Call to require that each affected state submit 

a corrective SIP revision that applies the PSD program to GHG 

sources. These states [##list to be refined] are listed in 

table IV-1, "States with SIPs that Do Not Appear to Apply PSD to 

Deleted: As a result, 

Deleted: t

Deleted: ,

Deleted: and thereby preclude 

the 

Deleted: s from applying to 

GHG-emitting sources because 

the state has not yet 

identified GHGs as subject 

to PSD

Deleted: in those states 

Deleted: obtain that permit 

and therefore unable to 

proceed with planned 

construction or modification

Deleted: 20 
Page 16 of 71 

GHG Sources (Presumptive SIP Call List)." 

As for the remaining states with EPA-approved SIP PSD 

programs, our preliminary research indicates that their SIP PSD 

applicability provisions apply the PSD programs more broadly—for 

example, many apply to sources of "regulated NSR pollutants"—and 

therefore appear to include GHG-emitting sources. Moreover, we 

have not to this point received information about other 

provisions in the state constitutional or other state or SIP law 

that would have the effect of limiting the applicability of the 

PSD provisions to exclude GHG-emitting sources. Those remaining 

states, which include all the states with EPA-approved PSD 

programs not listed in table IV-1, are listed in table IV-2, 

"States with SIPs that Appear to Apply PSD to GHG Sources 

(Presumptive Adequacy List)." 

Even so, we are aware of the possibility that some of those 

states may also have other state law provisions that may have 

the effect of limiting their PSD SIP requirements to applying 

only to pollutants specifically approved by the appropriate 

state authority, which would not include GHGs. In light of this 

possibility, we are soliciting comment on whether each of those 

remaining states' SIPs (see table IV-2) apply PSD to GHGemitting sources. If, for any such state, we receive 

information that leads us to conclude that its SIP does not 
Page 17 of 71 

apply PSD to GHG-emitting sources, we will take final action to 

issue a finding of substantial inadequacy and a SIP Call for 

that state, on the same schedule as any final action we take 

concerning the 20 states for which we propose to issue a finding 

and SIP Call. 

In a companion action to this rulemaking, we are proposing 

to promulgate, in any state that is not in a position to make a 

timely submittal of the corrective SIP revision, a FIP that will 

assure that sources will be able to obtain the necessary 

permits, with EPA as the permitting authority for GHG emissions. 

In view of the need for prompt action to eliminate or 

significantly limit any time when certain GHG sources are 

precluded from constructing or modifying because no entity has 

the authority to issue them permits, we intend to finalize this 

rulemaking action by December 1, 2010, and we propose in this 

rulemaking to give states a deadline of 12 months from the date 

we finalize to submit their corrective SIP revision. However, 

we are also proposing to authorize states to accept a shorter 

deadline, as short as three weeks from the date we finalize. If 

any state is not able to submit a corrective SIP revision by its 

deadline, then EPA, by virtue of the authority of the FIP 

provisions under CAA §110(c), will immediately make a finding 

that the state has failed to submit the required SIP revision 
Page 18 of 71 

and will immediately promulgate the FIP. 

Some states may already be in the process of developing the 

legal authority needed and may be able to submit a SIP revision 

sooner than December 2010. EPA encourages states to take action 

as expeditiously as possible and will assist states as much as 

possible. Therefore, for each state for which EPA is proposing 

a SIP Call, it is possible that by January 2, 2011, when certain 

GHG sources in the state may be required to obtain PSD permits, 

a permitting authority will be in place to act on the sources' 

permit applications. The availability of this permitting 

authority would depend on whether the state submits a SIP 

revision before EPA finalizes this action or alternatively, on 

which deadline the state receives for the corrective SIP 

submittal.

We ask that, within the comment period for this action, 

each of the states listed in table IV-1 confirm to EPA that its 

SIP does not apply the PSD program to GHG-emitting sources. We 

also ask that within this comment period, every other state in 

the nation with an approved SIP (see table IV-2) review its SIP 

and inform EPA if its SIP does not apply the PSD program to GHGemitting sources. Further, we ask that the states (see table 

IV-1) for which we are proposing a SIP Call identify the 

deadline—between 3 weeks and 12 months from the date of 

Deleted: depending on whether 

the state submits a SIP 

revision before EPA 

finalizes this action or, if 

not, depending on which 

deadline the state receives 

for the corrective SIP 

submittal, 

Deleted: the time 

Deleted: arrives and 

Deleted: .
Page 19 of 71 

signature of the final SIP Call—that they would accept for 

submitting their corrective SIP revision. For example, assuming 

that, as we anticipate, this rulemaking is signed in final form 

by December 1, 2010, a state may specify that it would accept a 

SIP submittal deadline that falls between December 22, 2010, and 

December 1, 2011, inclusive. 

III. Background 

A. CAA and Regulatory Context

EPA described the relevant background information in the 

Tailoring Rule. Knowledge of this background information is 

presumed and will be only briefly summarized here. 

1. SIP PSD Requirements 

Under the CAA PSD requirements, a new or existing source 

that emits or has the potential to emit "any air pollutant" in 

the amounts of either 100 or 250 tons per year (tpy), depending 

on the source category, cannot construct or modify unless it 

first obtains a PSD permit that, among other things, imposes 

emission limitations that qualify as BACT. CAA §§165(a)(1), 

165(a)(4), 169(1). Longstanding EPA regulations have 

interpreted the term "any air pollutant" narrowly so that only 

emissions of any "regulated NSR pollutant" trigger PSD. 40 CFR 

51.166(j)(1), 52.21(j)(2). The term "regulated NSR pollutant" 

is defined to include the following four classes of air 
Page 20 of 71 

pollutants: 

(i) any pollutant for which a NAAQS has been promulgated; 

(ii) any pollutant subject to an NSPS promulgated under 

CAA §111; 

(iii) any pollutant subject to a standard promulgated 

under CAA title VI; and 

(iv) "any pollutant that otherwise is subject to 

regulation under the Act" (excluding HAPs listed under CAA 

§112). 40 CFR 51.166(b)(49), 52.21(b)(50). 

The CAA contemplates that the PSD program be implemented in 

the first instance by the states and requires that states 

include PSD requirements in their SIPs. CAA §110(a)(2)(C) 

requires that – 

Each implementation plan * * * shall * * * include a 

program to provide for * * * regulation of the 

modification and construction of any stationary source 

within the areas covered by the plan as necessary to 

assure that national ambient air quality standards are 

achieved, including a permit program as required in 

part[] C * * * of this subchapter. 

CAA §110(a)(2)(J) requires that – 

Each implementation plan * * * shall * * * meet the 

applicable requirements of * * * part C of this 

subchapter (relating to significant deterioration of 

air quality and visibility protection). 

CAA §161 provides that – 

Each applicable implementation plan shall contain 

emission limitations and such other measures as may be 

necessary, as determined under regulations promulgated 
Page 21 of 71 

under this part [C], to prevent significant 

deterioration of air quality for such region * * * 

designated * * * as attainment or unclassifiable. 

These provisions, read in conjunction with the PSD 

applicability provision—which, as noted above, applies, by its 

terms, to "any air pollutant," and which EPA has, through 

regulation, interpreted more narrowly as any "NSR regulated 

pollutant"—and read in conjunction with other provisions, such 

as the BACT provision under CAA §165(a)(4), mandate that SIPs 

include PSD programs that are applicable to, among other things, 

any air pollutant that is subject to regulation, including, as 

discussed below, GHGs on and after January 2, 2011.7

A number of states do not have PSD programs approved into 

their SIPs. In those states, EPA's regulations at 40 CFR 52.21 

govern, and either EPA or the state as EPA's delegatee acts as 

the permitting authority. On the other hand, most states have 

PSD programs that have been approved into their SIPs, and these 

states implement their PSD programs and act as the permitting 

authority. These approved SIPs are discussed in more detail 

 

7

 In the Tailoring Rule, we noted that commenters argued, with 

some variations, that the PSD provisions applied only to NAAQS 

pollutants, and not GHGs, and we responded that the PSD 

provisions apply to all pollutants subject to regulation, 

including GHGs. See 75 FR 31560-62, "Prevention of Significant 

Deterioration and Title V GHG Tailoring Rule: EPA's Response to 

Public Comments," May 2010, pp.38-41. We maintain our position 

that the PSD provisions apply to all pollutants subject to 

regulation, and we incorporate by reference our discussion of 

this issue in the Tailoring Rule. 
Page 22 of 71 

below. 

2. Recent EPA Regulatory Action Concerning PSD Requirements 

for GHG-emitting Sources 

By notice dated December 15, 2009, pursuant to CAA §202(a), 

EPA issued, in a single final action, two findings regarding 

GHGs that are commonly referred to as the "Endangerment Finding" 

and the "Cause or Contribute Finding." "Endangerment and Cause 

or Contribute Findings for Greenhouse Gases Under Section 202(a) 

of the Clean Air Act," 74 FR 66496. In the Endangerment 

Finding, the Administrator found that six long-lived and 

directly emitted greenhouse gases—carbon dioxide (CO2), methane 

(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)—may 

reasonably be anticipated to endanger public health and welfare. 

In the Cause or Contribute Finding, the Administrator "define[d] 

the air pollutant as the aggregate group of the same six * * * 

greenhouse gases," 74 FR 66536, and found that the combined 

emissions of this air pollutant from new motor vehicles and new 

motor vehicle engines contribute to the GHG air pollution that 

endangers public health and welfare. 

By notice dated May 7, 2010, EPA published what is commonly 

referred to as the "Light-Duty Vehicle Rule" (LDVR), which for 

the first time established federal controls on GHGs emitted from 
Page 23 of 71 

light-duty vehicles. "Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy Standards; 

Final Rule." 75 FR 25324. In its applicability provisions, the 

LDVR specifies that it "contains standards and other regulations 

applicable to the emissions of six greenhouse gases," including 

CO2, CH4, N2O, HFCs, PFCs, and SF6. 75 FR 25686 (40 CFR 86.1818-

12(a)). 

Shortly before finalizing the LDVR, by notice dated April 

2, 2010, EPA published a notice commonly referred to as the 

Johnson Memo Reconsideration, which interpreted the term 

"subject to regulation," a term that is one of the regulatory 

triggers for PSD applicability.8

 The Johnson Memo 

Reconsideration concluded that for GHGs, promulgation of the 

LDVR would trigger PSD applicability for GHG-emitting sources on 

or after January 2, 2011, which according to EPA is the date 

upon which the LDVR takes effect. 

By notice dated June 3, 2010, EPA published what is 

commonly referred to as the "Tailoring Rule,"9

 which limits the 

 

8

 "Interpretation of Regulations that Determine Pollutants 

Covered by Clean Air Act Permitting Programs," 75 FR 17004 

(finalizing EPA's response to a petition for reconsideration of 

"EPA's Interpretation of Regulations that Determine Pollutants 

Covered by Federal Prevention of Significant Deterioration (PSD) 

Permit Program" (commonly referred to as the "Johnson Memo"), 

December 18, 2008). 

9

 Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule; Final Rule. 75 FR 31514. 
Page 24 of 71 

applicability of PSD through a multi-step phase-in approach to 

only the highest-emitting GHG-emitting sources for a specified 

period of time, and not all GHG-emitting sources at the 100/250-

tpy statutory thresholds. The Tailoring Rule established the 

first two steps of the approach, which take effect on January 2, 

2011, and July 1, 2011, respectively. In the Tailoring Rule, 

EPA codified the Johnson Memo Reconsideration interpretation of 

the term "subject to regulation" and added a further 

interpretation of that term designed to expedite the adoption of 

the phase-in approach for PSD permitting for GHGs by the states 

into their SIPs. In addition, in the Tailoring Rule, EPA 

identified the air pollutant that, if emitted or potentially 

emitted by the source in excess of specified thresholds, would 

subject the source to PSD requirements, as the aggregate of the 

six GHGs, again, CO2, CH4, N2O, HFCs, PFCs, and SF6. The 

Tailoring Rule further provided that for purposes of determining 

whether the GHGs emitted or potentially emitted exceeded the 

specified thresholds, the amount of the GHGs must be calculated 

first on a mass emissions basis and then on a carbon dioxide 

equivalent (CO2e) basis. With respect to the latter, according 

to the rule, "PSD * * * applicability is based on the quantity 

that results when the mass emissions of each of these [six] 

gases is multiplied by the Global Warming Potential (GWP) of 
Page 25 of 71 

that gas, and then summed for all six gases." 75 FR 31518. In 

the Tailoring Rule, we asked states to submit to us letters 

within 60 days of publication describing how they intended to 

incorporate into their SIPs the limitations on PSD applicability 

included in the rule's phase-in approach. 

Further information on the Endangerment and Cause or 

Contribute Findings, the LDRV, the Johnson Memo Reconsideration, 

and the Tailoring Rule is contained in the Tailoring Rule. 

3. SIP Inadequacy and Corrective Action 

The CAA provides a mechanism for the correction of flawed 

SIPs, under CAA §110(k)(5), which provides: 

(5) Calls for plan revisions 

 Whenever the Administrator finds that the 

applicable implementation plan for any area is 

substantially inadequate to * * * comply with any 

requirement of this Act, the Administrator shall 

require the State to revise the plan as necessary to 

correct such inadequacies. The Administrator shall 

notify the State of the inadequacies and may establish 

reasonable deadlines (not to exceed 18 months after 

the date of such notice) for the submission of such 

plan revisions. 

This provision by its terms authorizes the Administrator to 

"find[] that [a SIP] * * * is substantially inadequate to * * * 

comply with any requirement of this Act," and, based on that 

finding, to "require the State to revise the [SIP] * * * to 

correct such inadequacies." This latter action is commonly 

referred to as a "SIP Call." In addition, this provision 

Comment [A3]: See earlier comment 

re: SIP revision timing. 
Page 26 of 71 

provides that EPA must notify the state of the substantial 

inadequacy and authorizes EPA to establish a "reasonable 

deadline[] (not to exceed 18 months after the date of such 

notice)" for the submission of the corrective SIP revision. 

If the state fails to submit the corrective SIP revision by 

the deadline, CAA §110(c) authorizes EPA to "find[] that [the] 

State has failed to make a required submission." CAA 

§110(c)(1)(A). Once EPA makes that finding, CAA §110(c)(1) 

requires EPA to "promulgate a Federal implementation plan at any 

time with 2 years after the [finding] * * * unless the State 

corrects the deficiency, and [EPA] approves the plan or plan 

revision, before [EPA] promulgates such [FIP]." 

B. State PSD SIPs

1. SIP PSD Applicability Provisions 

As noted earlier in this preamble, most states have 

approved PSD SIPs. Most of those SIPs identify the pollutants 

addressed under their PSD program as any "regulated NSR 

pollutant." This definition covers any "pollutant subject to 

regulation" and therefore, by its terms, in effect is 

automatically updating and needs no revision in order to cover 

pollutants that become subject to regulation under the CAA. As 

a result, these provisions cover GHG emissions when they become 

subject to regulation under other provisions of the CAA. See 40 
Page 27 of 71 

CFR 52.21(b)(50). 

However, EPA has become aware that a minority of approved 

SIPs fail to include this broad approach to identifying 

pollutants subject to PSD and instead simply list the individual 

pollutants by name. These SIPs do not identify GHGs as among 

the pollutants addressed under their PSD program. As a result, 

these applicability provisions, by their terms, do not appear to 

apply the PSD requirements to sources of GHGs when GHGs become 

"subject to regulation" under the CAA on January 2, 2011. 

In addition, the PSD SIP applicability provisions of one 

state that we are aware of, Connecticut, explicitly excludes CO2

as an "air pollutant," so that CO2 is not subject to PSD 

requirements. 

2. Other Relevant State Law Provisions 

Some states may have other state law, including other SIP, 

provisions that bear upon the applicability of their PSD 

programs to GHG-emitting sources. 

First, some states may have in their SIPs some sort of 

"general authority clause" that affirms the state's legal 

authority to issue, and enforce compliance with, permits that 

are consistent with federal requirements. If one of the states 

listed in table IV-1 of this preamble as having a SIP that does 

not explicitly apply PSD to GHG emitters nevertheless has such a 
Page 28 of 71 

"general authority clause," then the SIP, read as a whole, may 

be considered to apply PSD to GHG sources. 

For an example of the type of "general authority clause" 

that may have this effect, we refer to correspondence between 

the California Bay Area Air Quality Management District (BAAQMD) 

and EPA Region IX that is included in the docket for this 

rulemaking. In a letter dated October 28, 2009, the BAAQMD 

proposed to exercise general authority in order to issue air 

permits to sources of PM2.5 even though its air permit 

regulations did not contain specific provisions for PM2.5 

emissions. Under the proposed approach, with which EPA 

concurred, BAAQMD exercised general authority under the 

administrative requirements within its air permit regulations, 

which provide that the Air Pollution Control Officer "may impose 

any permit condition that he deems reasonably necessary to 

insure compliance with federal or California law or District 

regulations...." See Regulation 2-1-403 [##cite] included in 

the docket for this rulemaking. 

Second, some states may have, in their SIPs, statutes, or 

constitutions, a provision that precludes "forward adoption," 

that is, that prevents the state law from incorporating by 

reference or otherwise adopting any requirements not 

specifically adopted by the state legislature or other state 
Page 29 of 71 

authority. In particular, some states may include a SIP PSD 

applicability provision that incorporates by reference (IBR) our 

federal PSD rule at 40 CFR 52.21—including the definition of 

"regulated NSR pollutant"—but that further provides that this 

IBR is not "rolling" and therefore is limited to only pollutants 

identified as regulated NSR pollutants as of the date the state 

adopted the PSD provision. Any of these provisions could limit 

the SIP PSD applicability rule to only the pollutants that were 

regulated as of the time the state adopted the PSD applicability 

rule, which means the SIP PSD program would not cover GHGemitting sources until the state took specific action to that 

effect. 

IV. Proposed Action: Finding of Substantial Inadequacy and SIP 

Call 

A. Introduction

Beginning on January 2, 2011, certain stationary sources 

that construct or undertake modifications will become subject to 

the CAA requirement to obtain a PSD permit for their GHG 

emissions. This is because of the following CAA statutory and 

EPA regulatory requirements: Under CAA §§165(a) and 169(1), as 

interpreted through longstanding EPA regulations, PSD applies to 

sources that emit specified amounts of "regulated NSR 

pollutants," which include specified air pollutants as well any 
Page 30 of 71 

other "[air] pollutant" that is "subject to regulation." 40 CFR 

51.166(j)(1), (b)(49)(iv). By notice dated May 7, 2010, EPA 

promulgated the Light-Duty Vehicle Rule (LDVR), which 

establishes requirements for GHGs. 75 FR 25324. By the terms 

of the LDVR, these emission limits take effect on January 2, 

2011. The LDVR identified the GHGs to which it applies as a 

single air pollutant that consists of CO2, CH4, N2O, HFCs, PFCs, 

and SF6. The LDVR followed EPA's Endangerment and Cause or 

Contribute Findings, issued by notice dated December 15, 2009, 

by which EPA found that GHGs—defined to include the same six 

constitutents—may reasonably be anticipated to endanger public 

health and welfare. By notice dated April 2, 2010, EPA 

promulgated the Johnson Memo Reconsideration. 75 FR 17004. In 

this action, EPA made clear that the regulation of GHGs by the 

LDVR will trigger the applicability of PSD requirements to GHGemitting stationary sources as of January 2, 2011, because GHGs 

will become "subject to regulation" through the LDVR. By notice 

dated June 3, 2010, EPA promulgated the Tailoring Rule, which 

narrows PSD applicability to specified GHG-emitting sources on a 

specified phase-in schedule and makes clear that GHGs—defined as 

the same single pollutant, with six constituent gases, as 

described in the LDVR—are the "[air] pollutant" to which PSD 

requirements apply. 75 FR 31514. As a result, PSD permitting 
Page 31 of 71 

requirements for construction or modification will apply to 

certain GHG-emitting stationary sources beginning on January 2, 

2011 for the first step of the Tailoring Rule, and beginning on 

July 1, 2011 for the second step of the Tailoring Rule. . 

A number of states do not have an approved PSD SIP; as a 

result, in these states10 the applicable regulatory authority is 

EPA's regulations, found in 40 CFR 52.21, which constitute a 

FIP. For sources in these states, either the EPA Regional 

Office or the state acting as EPA's delegatee is the permitting 

authority. Because EPA's regulations apply directly, sources in 

these states that emit GHGs will become subject to PSD for their 

GHG emissions, to the extent provided under the Tailoring Rule, 

on January 2, 2011. These sources will be able, on and after 

January 2, 2011, to apply for and receive in due course their 

PSD permits either from EPA directly or from those state 

permitting authorities acting on EPA's behalf. 

All of the other states administer their PSD program 

 

10 In the following listed state or local jurisdictions, as well 

as in all Indian country, EPA is the PSD permitting authority, 

implementing the federal PSD regulation at 40 CFR 52.21: 

American Samoa; Arizona (some areas); California (most areas); 

District of Columbia; Guam; Massachusetts; New York; Northern 

Mariana Islands; Puerto Rico; Trust Territories; and the Virgin 

Islands. In a smaller number of areas, listed as follows, the 

state or local permitting authority is delegated at least 

partial authority by EPA to implement the federal PSD 

regulation: Arizona (some areas); California (some areas); 

Hawaii; Illinois; Nevada (most areas); Pennsylvania (some 

areas); and Washington. 

Deleted: under the PSD 

provisions, the GHG-emitting 

stationary sources that 

become subject to PSD—which 

are those sources identified 

in the first step of the 

Tailoring Rule, followed on 

July 1, 2011, by the sources 

identified in the second 

step of the Tailoring Rule—

will not be able to 

construct or undertake 

modifications until they 

receive a PSD permit from 

the permitting authority
Page 32 of 71 

through an approved SIP and, as a result, they or their local 

entities are the PSD permitting authority. This rulemaking 

concerns whether those approved SIP PSD programs include GHGemitting sources and, for those that do not, the steps that EPA 

will take to assure that a PSD permit program that includes GHGs 

is in place. 

B. States with SIP PSD Applicability Provisions that Do Not

Appear to Apply to GHG-emitting Sources

Our research indicates that for 14 of the states with 

approved PSD SIPs, the PSD programs of their SIPs do not appear 

to apply to GHG-emitting sources. These states are listed in 

table IV-1, "States with SIPs that Do Not Appear to Apply PSD to 

GHG Sources (Presumptive SIP Call List)." In a number of these 

SIPs, the PSD applicability provisions do not mirror EPA's 

regulatory provisions by applying PSD requirements to sources of 

any air pollutant "subject to regulation"; instead, the PSD 

applicability provisions specifically list the air pollutants to 

which the PSD program applies and do not include GHGs on that 

list. As a result, the PSD applicability provisions do not, by 

their terms, cover GHG-emitting sources. 

In addition, Connecticut's SIP appears by its terms to 

preclude the application of PSD to GHG-emitting sources. 

Further, some of these states have SIP PSD provisions that 

Comment [A4]: Here and also on p. 

14: To allow stakeholders and the public 

to better understand the basis for EPA’s 

proposed SIP determinations (Tables IV1 and IV-2), the rule should further 

describe the nature of this research and 

the docket should include documentation 

of it. Noting the self-identification by 

states could be a worthwhile 

consideration in this regard. 

Deleted: 20 
Page 33 of 71 

by their terms apply PSD to regulated NSR pollutants, or have a 

substantially similarly phrased requirement, but also have state 

constitutional or other statutory or SIP provisions that appear 

to have the effect of limiting PSD applicability to air 

pollutants identified on a certain date. Therefore, state law, 

read as whole, would not appear to apply PSD requirements to 

GHGs until the appropriate state authority takes action to 

specifically subject PSD to GHGs, and the state has not yet done 

so. 

We conclude, based on our preliminary research, that the 

states with SIPs or state law with these provisions do not 

appear to apply the PSD program to GHG-emitting sources, and we 

are including them in table IV-1. We recognize that 

stakeholders may have other interpretations of these provisions, 

and we solicit comments from stakeholders on their 

interpretations. In addition, some of these SIPs may include 

what we will refer to as a "general authority provision," which 

is a provision for the state to issue PSD permits that comply 

with EPA requirements, as described earlier in this preamble. 

If so, it is possible that these provisions could be interpreted 

to authorize the state in some cases to issue to GHG sources PSD 

permits that incorporate EPA's regulatory requirements, as found 

in 40 CFR 51.166. As a result, we consider table IV-1 to be a 

Comment [A5]: See earlier comment 

on this. 
Page 34 of 71 

presumptive SIP Call list.
Page 35 of 71 

Table IV-1. States with SIPs that Do Not Appear to Apply PSD to 

GHG Sources (Presumptive SIP Call List) 

 

State (or Area) EPA Region 

Alaska X 

Arizona: Pinal County IX 

Arkansas VI 

California: Sacramento Metropolitan AQMD IX 

Connecticut I 

Florida IV 

Idaho X 

Indiana V 

Louisiana VI 

Maine I 

Montana VIII 

Nevada: Clark County IX 

New Hampshire I 

Ohio V 

Oklahoma VI 

Oregon X 

Rhode Island I 

Texas VI 

Utah VIII 

Vermont I 

Comment [A6]: Update with current 

list of 14 states. 
Page 36 of 71 

 

C. States with SIP PSD Applicability Provisions that Do Appear 

to Apply to GHG-emitting Sources

On the other hand, as noted above, for most of the states 

with approved SIPs, those SIPs generally apply PSD to sources of 

any "regulated NSR pollutant," and we have not received 

information indicating that the state law includes other 

provisions that may have the effect of precluding PSD from 

applying to GHG-emitting sources. As a result, EPA is including 

a list of states with presumptively adequate SIPs in table IV-2, 

"States with SIPs that Appear to Apply PSD to GHG Sources 

(Presumptive Adequacy List)."
Page 37 of 71 

Table IV-2. States with SIPs that Appear to Apply PSD to GHG 

Sources (Presumptive Adequacy List) 

 

State (or Area) EPA Region 

Alabama: Jefferson County; Huntsville; Rest 

of State 

IV 

Arizona: Rest of State (Excludes Pinal County 

and Indian Country) 

VIII 

California: Monterey Bay Unified APCD; North 

Coast Unified AQMD; Northern Sonoma 

County APCD 

IX 

Colorado VIII 

Delaware III 

Georgia IV 

Iowa VII 

Kansas VII 

Kentucky: Jefferson County; Rest of State IV 

Maryland III 

Michigan V 

Mississippi IV 

Missouri VII 

Nebraska: Lincoln Lancaster; Omaha; Rest of 

State 

VII 

New Mexico: Albuquerque; Rest of State VI 

North Carolina: Forsythe County; Mecklenburg; 

Western NC; Rest of State 

IV 

North Dakota VIII 

Pennsylvania: All except Allegheny County III 

South Carolina IV 

South Dakota VIII 

Tennessee: Chattanooga; Nashville; Knoxville; 

Memphis; Rest of State 

IV 

Virginia III 

West Virginia III 

Wisconsin V 

Wyoming VIII 
Page 38 of 71 

 

We have developed these two lists of states—one listing 

states whose PSD program appears to not apply to GHG-emitting 

sources and one listing states whose program appears to cover 

such sources—based on our own preliminary research, consultation 

with states, and review of the 60-day letters, described earlier 

in this preamble, submitted thus far by states in response to 

the Tailoring Rule. As explained elsewhere in this preamble, we 

ask that each state with an approved SIP submit information 

during the comment period for this rulemaking pertinent to 

whether its SIP—including the PSD applicability provisions and 

any other relevant provisions—covers GHG-emitting sources. 

D. Proposed Finding of SIP Substantial Inadequacy and SIP 

Call; Solicitation of Comment

For each of the states listed in table IV-1 of this 

preamble, we propose to issue a finding that the SIP is 

"substantially inadequate ... to ... comply with [the PSD] 

requirement[s]" and to "require the State to revise the plan as 

necessary to correct such inadequacies," i.e., to issue a SIP 

Call. CAA §110(k)(5). For each of these states, the SIP 

appears to not apply the PSD program to GHG-emitting sources. 

As discussed elsewhere in this preamble, we invite comment 

on this proposal. For any state listed in table IV-1, if we do 

Comment [A7]: Again, a bit more 

explanation on this process would be 

helpful as noted in the earlier comment. 
Page 39 of 71 

not receive any further information from the state or other 

commenters, we expect to finalize our proposed finding and SIP 

Call. Also for any state listed in table IV-1, if we do receive 

additional information that our interpretation of these 

provisions is incorrect or that the SIP includes a general 

authority provision so that, read as a whole, the SIP applies 

the PSD program to GHG sources, we will not finalize our 

proposed finding and SIP Call. 

 Our basis for the proposed finding—and the proposed SIP 

Call that is based on this finding—is that CAA §110(k)(5) 

provides that EPA may make the finding when the SIP is 

"substantially inadequate ... to ... comply with any requirement of 

[the CAA]," and this includes the PSD requirements. As 

discussed earlier in this preamble, SIPs are required to include 

PSD programs that apply to sources that emit pollutants subject 

to regulation; as a result, the SIPs at issue merit a finding of 

substantial inadequacy because they fail to apply the PSD 

program to GHG-emitting sources on and after January 2, 2011. 

For all other states with approved PSD SIPs—which are the 

ones listed in table IV-2—we solicit comment on whether their 

SIPs, read as a whole, apply the PSD program to GHG-emitting 

sources. If, on the basis of additional information, we 

conclude that their PSD programs do not apply to GHG-emitting 
Page 40 of 71 

sources, we will issue a final finding of substantial inadequacy 

and SIP Call on the same schedule as that for any of the states 

for which we are issuing a proposed finding and SIP Call. 

We recognize that PSD requirements will not apply to GHGemitting sources until January 2, 2011, but that for any state 

for which we finalize a finding of substantial inadequacy and a 

SIP Call, our plan is to do so approximately one month in 

advance of that date. Even so, given the prior rulemaking 

record as noted, EPA believes this timing is justified. SIPs 

must include, at least a month prior to January 2, 2011, a 

provision applying PSD requirements to GHG-emitting sources as 

of January 2, 2011, in order to give sources notice that the 

requirement applies and that the state will act as the 

permitting authority. We recognize that as a practical matter, 

some states may wish that we impose a FIP effective as of 

January 2, 2011, in order to avoid any period of time when the 

GHG-emitting sources identified in the Tailoring Rule as subject 

to PSD are unable to obtain a permit due to lack of a permitting 

authority. We cannot impose a FIP until we have first finalized 

the SIP Call and given the state a reasonable period of time to 

make the corrective SIP submission. EPA proposes that this 

necessarily entails, for those states, finalizing the SIP Call 

prior to January 2, 2011 and requests comment on the proposed 

Formatted: Font: Courier New, Not

Highlight

Formatted: Font: Courier New, Not

Highlight

Deleted: our 

Deleted: All this 
Page 41 of 71 

finalization date for the SIP Call. 

After the close of the comment period for this proposed 

action, we will review all comments. If we determine that the 

PSD SIP for any state either by its terms does not apply to 

sources of GHGs or has conflicting provisions that create 

ambiguity as to whether it applies to sources of GHGs (such as 

an applicability provision that explicitly excludes GHG sources, 

coupled with a general-authority provision that could be read to 

authorize permitting of GHG sources), then, for that state, we 

will finalize the finding that the SIP is "substantially 

inadequate ... to ... comply with [the PSD] requirement[s]." At the 

same time, we will finalize a SIP Call for that state. We will 

make the finding of substantial inadequacy, notify the state 

that we have made the finding, and issue the SIP Call in a final 

action that we intend to sign by December 1, 2010, and submit 

for publication in the Federal Register as soon as possible 

thereafter. We will notify the state of the finding of 

substantial inadequacy by letter and by posting the signed 

action on our Web Site. In view of the urgency of the task, 

which is to ensure that a PSD permitting authority for affected 

GHG sources is in place by January 2, 2011, we propose to give 

the final SIP Call an effective date of its publication date. 

EPA requests comment on above proposed process and effective 
Page 42 of 71 

date.

E. Comment Period 

In order to deepen our understanding of what provisions are 

in the relevant PSD SIPs, and how they are to be interpreted, as 

well as to ensure that we have a comprehensive picture of all 

the SIPs in this regard, we ask each state to give us the 

following information by the close of the comment period on this 

rule: 

1. States with SIP PSD Applicability Provisions that Do Not 

Appear to Include GHGs 

We ask that each of the states listed in table IV-1 of this 

preamble—for which we have information that their SIP PSD 

applicability provisions do not include GHGs, and for which we 

propose a finding of substantial inadequacy and a SIP Call—

provide the following information by the end of the comment 

period for this action: 

(a) Confirm, with citations and a copy of the relevant 

language, that the SIP PSD applicability provisions do not 

explicitly include GHG sources; 

(b) Identify and provide a copy of any provision that 

specifically precludes PSD applicability for GHG sources; 

(c) Identify and provide a copy of any provision of state 

constitution or other law, including the SIP, that may be read 
Page 43 of 71 

to limit the applicability of the PSD program to pollutants 

identified at a certain point in time, and therefore not to 

GHGs. 

(d) Indicate, with citations and a copy of the relevant 

language, if any, whether the SIP includes general authority for 

the state to issue PSD permits that meet EPA requirements; 

(e) Indicate, with citations and a copy of the relevant 

language, any other provisions of the SIP or state law that may 

bear on the applicability of the PSD program to GHG-emitting 

sources. 

(f) Indicate the state's interpretation as to whether the 

SIP, read as a whole, does or does not apply the PSD program to 

GHG sources or authorize the state to issue PSD permits for GHG 

sources that meet EPA requirements. This statement should be 

made by the commissioner or general counsel of the state 

environmental agency, or by the counterpart at the local or 

tribal level, or by the state Attorney General. 

(g) If the SIP, read as a whole, does not apply the PSD 

program to GHG sources or authorize the issuance of permits to 

GHG sources, indicate whether the state plans to develop 

adequate authority to apply the PSD program to GHG sources and 

to submit it to EPA as a SIP revision by December 1, 2010, which 

is shortly before the date on which, as discussed below, EPA 
Page 44 of 71 

intends to finalize its finding of inadequacy and finalize the 

SIP Call. 

As discussed later in this preamble, we also ask these 

states to inform us, by the end of the comment period, of the 

period of time (as bounded in this preamble) that they would 

accept as the deadline for submittal of their SIP revisions in 

response to a SIP Call. 

2. All Other States with Approved SIPs 

We request that each state with an approved PSD SIP (see 

table IV-2) that is also not one of the14 states for which we 

propose a SIP Call—review its PSD provisions to confirm that it 

applies the PSD program to GHG sources. We request that each of 

these states inform us if it has a SIP PSD applicability 

provision that does not by its terms apply to pollutants 

"subject to regulation" or similar language, or otherwise apply 

to GHG sources. In addition, we request that each of these 

states inform us if it has another state law provision that may 

have the effect of limiting PSD applicability to air pollutants 

covered by EPA's PSD program as of a certain date, and therefore 

does not include GHGs. For any state whose PSD program, for any 

of these reasons, may not apply to GHG-emitting sources, we 

request the same information described in section IV.E.1 of this 

preamble as soon as possible during the comment period. Once we 

Deleted: other 

Deleted: —besides

Deleted: the 20 

Deleted: with an approved PSD 

SIP (see table IV-2) 

Deleted: they 

Deleted: y
Page 45 of 71 

receive this information, if we believe it shows that the 

state's SIP PSD program does not apply to GHG sources, we will 

finalize a finding of substantial inadequacy and a SIP Call on 

the same schedule as any of the states for which we are 

proposing a finding and SIP Call. 

F. State Actions

1. State Submission of SIP Revision Prior to Final SIP Call 

If a state for whose SIP we propose a finding of 

substantial inadequacy submits a SIP revision by December 1, 

2010 that purports to correct that inadequacy, we will not 

finalize the finding or SIP Call for that state. Rather, we 

will take action on their SIP submission promptly, as discussed 

below. 

2. State Response to SIP Call 

a. Timing of State Submittal 

Under CAA §110(k)(5), in notifying the state of the finding 

of substantial inadequacy and issuing the SIP Call, we "may 

establish reasonable deadlines (not to exceed 18 months after 

the date of such notice) for the submission of such plan 

revisions." We propose to allow the state 12 months from the 

date of the notice, which will be the date on which we sign the 

final action, to submit the SIP revision, unless, during the 

comment period, the state expressly advises that it would not 
Page 46 of 71 

object to a shorter period—as short as 3 weeks from the date of 

signature of the final rule—in which case we will establish the 

shorter period as the deadline. As mentioned earlier, EPA 

intends to finalize the SIP Call on December 1, 2010.If the 

Administrator signs on this date,the earliest possible deadline 

according to the proposed schedule would be December 22, 2010. 

The purpose of establishing the shorter period as the deadline—

assuming that state advises us that it does not object to that 

shorter period—is to accommodate states that wish to ensure that 

a FIP is available as, in effect, a backstop to ensure that 

there is no gap in PSD permitting. If the state does not advise 

us that it does not object to a shorter deadline, then the 12-

month deadline will apply.

It must be emphasized that any state that receives a 

deadline after January 2, 2011 will not have federally approved 

authority to issue permits for construction or modification 

oflarger GHG-emitting stationary sources (as identified in the 

Tailoring Rule)in that state—until EPA either approves the SIP 

submittal or promulgates a FIP. 

EPA proposes that this 3-week-to-12-month time period, 

although expedited, meets the CAA §110(k)(5) requirement as a 

"reasonable deadline[]." The term "reasonable deadline[]," as 

it appears in that provision, is not defined. We interpret it 

Deleted: Assuming that the

Deleted: Administrator signs 

Deleted: final 

Deleted: ,

Deleted: 

Deleted: for 

Deleted: , the affected GHGemitting sources

Deleted: 

Deleted: —which are those 

larger GHG-emitters 

identified in the Tailoring 

Rule as subject to PSD 

through the phase-in 

approach

Deleted: will be unable to 

receive a federally approved 

permit authorizing 

construction or 

modification, and therefore 

will not lawfully be able to 

construct or modify—from 

January 2, 2011, 

Deleted: the date that 

Deleted: T
Page 47 of 71 

to mean a time period that is sensible or logical, based on all 

the facts and circumstances. Those facts and circumstances 

include (i) the state SIP development and submission process, 

(ii) the imperative to minimize the period when sources will be 

subject to PSD but not have available a PSD permitting authority 

to act on their permit application, and therefore will be unable 

to construct or modify; and (iii) the preferences of the state. 

The following elaborates on those three facts and circumstances. 

First, although the 12-month period is consistent with the 

time period required for SIP revisions in at least one previous 

SIP call that EPA issued, the NOx SIP Call,11 we recognize that a 

period shorter than 12 months is expedited in light of the time 

involved in most state SIP development and submission processes. 

In particular, we recognize that some states may need to 

undertake full-blown rulemaking actions, which may typically be 

time-consuming, and we acknowledge that some states may need to 

change their statutory provisions, which may typically be even 

more time-consuming. Even so, we understand that at least some 

states have emergency processes that may be used to 

significantly expedite action. Although this is a matter of 

state process, we are prepared, as described elsewhere in this 

 

11 "Finding of Significant Contribution and Rulemaking for 

Certain States in the Ozone Transport Assessment Group Region 

for Purposes of Reducing Regional Transport of Ozone; Rule." 63 

FR 57356 (October 27, 1998). 
Page 48 of 71 

preamble, to work with the states to develop expedited methods 

for developing, processing, and submitting SIP revisions. 

Second, the need to minimize the period when states will 

lack permitting authority to act on permit applications for 

construction or modification is an essential consideration. A 

shorter period for SIP submittal means that either the state, 

through the SIP revision that it submits on an expedited basis 

in light of this tight schedule, or EPA, through a FIP, will 

become the permitting authority and will then be able to act on 

permit applications and issue permits that allow new 

construction and modification of existing plants. The purposes 

of the PSD provisions include both the protection of the 

environment and the promotion of economic development, see, 

e.g., CAA §160(3)-(4), and the D.C. Circuit has held that the 

terms of the PSD provisions should be interpreted with these 

goals in mind. New York v. EPA, 413 F.3d 3, 23(D.C. Cir.), 

rehearing en banc den., 431 F.3d 801 (2005). Accordingly, 

determining a "reasonable deadline[]" for the submittal of a PSD 

SIP revision should account for the need to promote economic 

development by assuring the availability of a permitting 

authority to process permit applications. 

Finally, the preference of the state is important because 

the deadline for submittal of the corrective SIP revision in 

Deleted: sources will be 

unable to construct or 

modify due to 

Deleted: the 

Deleted: of a 

Deleted: their 

Deleted: shortly 
Page 49 of 71 

response to a SIP Call acts as a burden on the state. If the 

state does not object to an earlier deadline under which it must 

operate—which, in a sense, is contrary to the state's selfinterest because an earlier deadline typically increases 

burdens—then that is an indication of the reasonableness of the 

deadline. 

We suggest the following model language that a state 

wishing to indicate that it does not object to a deadline 

shorter than 12 months could consider using in its response to 

our request for comments. Of course, the state is not obligated 

to use this specific language, and we present it solely for the 

convenience of the states: 

 U.S. EPA has proposed a finding of substantial 

inadequacy and SIP Call under Clean Air Act section 

110(k)(5) concerning the state's SIP PSD applicability 

provisions. Further, U.S. EPA has proposed a deadline 

for the state's submittal of a corrective SIP 

revision. U.S. EPA has requested the state's comments 

on the proposed deadline. In light of EPA's 

perception of the importance of having in place as 

soon as possible a PSD permitting authority for any 

GHG-emitting sources that may be subject to PSD 

requirements, the state does not object to U.S. EPA's 

establishment of a deadline of [identify the 

deadline].

EPA requests comments on its proposed interpretation of 

"reasonable deadline[]" under the CAA as well as on the 

proposed model language. 

Formatted: Indent: Left: 0"

Formatted: Normal
Page 50 of 71 

b. Substance of State Submittal 

(i) Addition of GHGs to List of Pollutants Subject to PSD

We propose to make a finding of substantial inadequacy and 

issue a SIP Call for each state whose SIP fails to apply the PSD 

program to GHG-emitting sources. Accordingly, for the state to 

correct its SIP, the state must submit a SIP revision that 

applies PSD to GHG sources. For those states whose SIP applies 

PSD to listed air pollutants, the state may accomplish this 

correction by including GHGs on the list of pollutants to which 

PSD applies. 

(ii) Definition and Calculation of Amount of GHGs

In adding GHGs to the list of pollutants subject to PSD 

applicability, the state must define GHGs as a single pollutant 

that is the aggregate of the group of six gases: CO2, CH4, N2O, 

HFCs, PFCs, and SF6. As EPA stated in the Tailoring Rule, "[t]he 

final LDVR for GHGs specifies, in the rule's applicability 

provisions, the air pollutant subject to control as the 

aggregate group of the six GHGs * * * . Because it is this 

pollutant that is regulated under the LDVR, it is this pollutant 

to which PSD * * * appli[es]." 75 FR 31528. 

(iii) Thresholds

Once a state applies the PSD program to GHG-emitting 

sources, the state must determine the threshold for emissions 

Comment [A8]: The Tailoring Rule 

lists two separate SIP actions: 1) re: 

source threshold applicability and 

significance levels in SIPs; 2) coverage of 

GHG gases as a pollutant. This language 

appears to create ambiguity as to the 

distinctly separate scopes of action as 

described in the Tailoring Rule. If the 

separate treatment remains the intention, 

it would be helpful to clarify with a brief 

recap of the 2-track SIP revision process 

as described in the Tailoring rule and to 

expressly state that this is the second of 

those actions. Alternatively, if this is 

intended as a combination of the two, that 

should also be made clear and EPA 

should spell out what, if anything then 

remains to be addressed in future 

rulemakings. See also comment below. 
Page 51 of 71 

from those sources that will trigger PSD. In the Tailoring 

Rule, EPA promulgated a determination that the CAA thresholds of 

100 or 250 tpy (depending on the source category) would not 

apply as of January 2, 2011, or for a period of years 

thereafter, in light of, in part, administrative concerns. 

Instead, EPA promulgated a phase-in approach that limits PSD 

applicability to only the largest GHG emitting sources for a 

period of time. 

The state may adopt the Tailoring Rule phase-in approach 

into its SIP or it may adopt lower thresholds—as low as (or, if 

the state chooses, even lower than) the 100/250 tpy statutory 

thresholds—but if it adopts lower thresholds, it must show that 

it has "adequate personnel [and] funding * * * to carry out," 

that is, administer and implement, the PSD program with those 

lower thresholds, in accordance with CAA §110(a)(2)(E)(i). 

In the Tailoring Rule, EPA adopted a CO2e metric and use of 

short tons (as opposed to metric tons) for calculating GHG 

emissions in order to implement the higher thresholds. 75 FR 

31530, 31532. As noted above, a state retains the authority to 

adopt lower thresholds than in the Tailoring Rule. As a result, 

the states are not obligated to adopt the CO2e metric or use of 

short tons; however, the state must assure that its approach is 

at least as stringent as the thresholds in the Tailoring Rule. 

Formatted: Font: Bold, Font color:

Auto

Formatted: Font: Bold, Font color:

Auto

Comment [A9]: In line with the above 

comment, if this rulemaking is limited to 

coverage of GHGs as a PSD pollutant in 

SIPs, this language should be dropped. If 

EPA wishes to retain the language, 

suggest dropping or revising the bolded 

text in for consistency with Sec. 116 of 

CAA and other text herein. See 

suggested additional parenthetical in 

text. 
Page 52 of 71 

(v) State Adoption of "Regulated NSR Pollutants"

Beyond this, we encourage—but do not propose to require—the 

states for which we propose a SIP Call to submit a SIP revision 

to adopt the PSD applicability provision found in EPA 

regulations—which is that PSD applies to "regulated NSR 

pollutant[s]," including any air pollutant "subject to 

regulation"—instead of simply adding GHGs to the SIP's list of 

pollutants subject to PSD. 

There are many advantages for a state to revise its SIP PSD 

applicability provisions in the manner that we encourage. 

First, doing so would more readily incorporate, for state law 

purposes, the phase-in approach for PSD applicability to GHG 

sources that EPA has developed in the Tailoring Rule and expects 

to develop further through additional rulemaking. As explained 

in the Tailoring Rule, incorporating this phase-in approach for 

state law purposes—including Steps 1 and 2 of the phase-in as 

promulgated in the Tailoring Rule and additional steps of the 

phase-in that EPA may promulgate in the future—can be most 

readily accomplished through state interpretation of the 

"subject to regulation" prong of the definition of "regulated 

NSR pollutant." If, instead of adopting into its SIP the 

"regulated NSR pollutant" trigger for PSD applicability, the 

state simply adds GHGs to its list of pollutants subject to PSD, 

Deleted: (iv) Model SIP 

Language ¶

[##PLACEHOLDER: Include 

model SIP language?]¶
Page 53 of 71 

then the SIP will not include the term "subject to regulation" 

and therefore may not include any vehicle or "hook" for the 

state to adopt by interpretation the current and any future 

steps of the phase-in approach. As a result, the state may have 

to adopt and submit for EPA approval additional SIP revisions to 

incorporate the current and future steps of the phase-in 

approach. 

There are other advantages to a state that adopts EPA's 

definition of "regulated NSR pollutant." The SIP would apply 

PSD to sources emitting PM2.5, thereby resolving as well the 

problem that some SIPs have of failing to cover PM2.5 for PSD 

purposes. That is, many of the states for which we propose a 

SIP Call due to their SIPs' failure to apply PSD to sources that 

emit GHGs also fail to apply PSD to sources that emit PM2.5.12 To 

this point in time, this failure has not been a problem because 

we have allowed the state to issue PSD permits for sources of 

PM2.5 emissions through what is commonly called EPA's "PM10

surrogate policy." Under the PM10 surrogate policy, sources and 

permitting authorities satisfy the CAA requirements for PM2.5 in 

 

12 Following a 1997 review of our national ambient air quality 

standards ("NAAQS") for particulate matter, we promulgated NAAQS 

for fine particles (PM2.5). We then designated all areas of the 

country as "attainment," "nonattainment," or unclassifiable for 

the PM2.5 standards, which became effective in April 2005. 

Pursuant to the CAA, states are obliged to revise their PSD 

regulations to include the new PM2.5 standards. 
Page 54 of 71 

PSD permits by applying the PM2.5 requirements to PM10 as a 

surrogate for PM2.5. Each permit that relies on our PM10

surrogate policy is subject to review as to the adequacy of the 

presumption that the PM2.5 requirements are satisfied. However, 

we note that EPA is planning to end the prospective use of the 

PM10 surrogate policy by the end of 2010. We are not at this 

time taking action with respect to these SIPs on account of 

PM2.5, but we encourage states to submit SIP revisions that apply 

PSD to sources of PM2.5. 

In addition, the SIP would, in effect, automatically update 

the state PSD program to apply PSD to any newly regulated 

pollutants and thereby avoid recurrence of the present problem 

of a gap in the PSD program coverage for newly regulated 

pollutants. Finally, state adoption of EPA's definition of 

"regulated NSR pollutant" would allow the SIP to mirror EPA 

regulations and the SIPs of most states, which may promote 

consistency and ease administration. 

Notwithstanding the advantages to a state of revising its 

SIP to apply PSD to "regulated NSR pollutants," we do not, at 

this time, propose a finding that the SIP is substantially 

inadequate to comply with a CAA requirement or propose to issue 

a SIP call that would require a SIP revision that applies PSD to 

"regulated NSR pollutants." Instead, as noted above, our 
Page 55 of 71 

proposed finding and SIP call are limited to the failure to 

apply PSD to GHG-emitting sources, and the SIP revision may 

simply include GHGs on the state's list of pollutants subject to 

PSD. We do not propose to require the "regulated NSR pollutant" 

approach because that approach is not necessary to correct the 

substantial inadequacy—which is the failure of the PSD SIP to 

cover GHG sources—for which we propose to issue a SIP Call. 

Rather, that substantial inadequacy may be corrected more 

narrowly by listing GHGs. 

[##PLACEHOLDER: Address state requirement to submit SIPs 

that incorporate NSR Reform requirements, which include 

"regulated NSR pollutant?"] 

3. General Authority Provision 

As noted earlier in this preamble, some SIPs that apply PSD 

to sources of specified pollutants, not including GHGs, may also 

include a general authority provision that provides general 

authority to issue PSD permits that meet EPA requirements. For 

states that include such general authority, it may be possible 

to read their SIPs as a whole to authorize the issuance of PSD 

permits to GHG sources. In that case, EPA would not finalize a 

finding of substantial inadequacy or a SIP Call for that state. 

Even so, EPA encourages states with these SIP provisions to 

submit a SIP revision that applies PSD to GHG-emitting sources. 
Page 56 of 71 

Such a SIP revision would add clarity to the SIP and, in 

general, carry the benefits described earlier in this preamble. 

G. EPA Actions on SIP Submittals; Findings of Failure to 

Submit and Promulgation of FIPs

1. Actions on SIP Submittals 

As noted above, for any state for which EPA proposes a 

finding of substantial inadequacy and SIP Call but that submits 

a SIP revision before December 1, 2010, EPA will not issue a 

final finding of substantial inadequacy or a SIP Call. Instead, 

EPA will take action on the SIP submittal as quickly as 

possible. 

By the same token, for any state for which EPA has issued a 

final finding of substantial inadequacy and a SIP Call, if the 

state submits the SIP revision within the submittal deadline, 

then EPA will not issue a finding of failure to submit or 

promulgate a FIP. Instead, EPA will take action on the SIP 

submittal as quickly as possible. 

We reiterate and encourage states to keep in mind that PSD 

applicability for certain GHG sources begins January 2, 2011., 

As such, states with proposed SIP revisions will not be able to 

issue federally approved PSD permits for construction or 

modification to affected sources until those revisions are 

Deleted: fully recognize—

Deleted: we 

Deleted: the 

Deleted: firmly 

Deleted: —that once the 

January 2, 2011, date for 

Deleted: arrives

Deleted: until we approve the 
Page 57 of 71 

approved.13 In light of this potential for burden on the 

affected sources, we intend to act on any SIP submittals that we 

receive as promptly as possible. 

In light of the need to act promptly on these SIP 

submittals, EPA solicits public comment on ways in which it 

might, consistent with the CAA and APA, expedite its action to 

consider and approve these SIP revisions. One possible 

technique is parallel-processing the SIP submittal, on request 

of the state. Under this approach, the state sends us the draft 

of the SIP revision on which it plans to seek public comment at 

the state level, in accordance with CAA §110(a)(2), and we will 

publish a proposed approval of that draft SIP revision. In 

addition, at the same time the state solicits such public 

comment at the state level, we will solicit public comment on 

the proposed approval at the federal level. If, subsequently, 

the SIP revision that the state adopts and submits to EPA is 

substantially similar to the draft on which EPA solicited 

comment, then EPA will proceed to take final action on the SIP 

submittal and will not re-notice it for public comment. This 

process could significantly shorten the time EPA needs to act on 

the SIP revision. We would appreciate receiving comment on 

 

13 The source would be able to receive a state-issued permit, but 

the lack of a federally approved permit means that the source 

would not be in accordance with federal requirements if it 

constructed or modified. 

Comment [A10]: Suggest moving 

footnote to above line following this 

sentence. 

Deleted: , the affected 

sources will not be able to 

receive a federally approved 

PSD permit authorizing 

construction or modification

Comment [A11]: Please see 

suggested language edits within 

paragraph. In addition, given potential 

issues with the statutorily required notice 

and comment process, suggest inserting a 

paragraph prior to this one as follows: 

Insert a new paragraph describing the 

existing notice-and-comment process for 

federal approval of SIP revisions under 

CAA section 110(a) and (k). The 

discussion could indicate that (1) while 

the CAA specifies public notice and 

hearing procedures at the State level prior 

to adoption of a SIP or SIP revision under 

CAA 110(a) and (l), it does not specify 

any procedures for public participation 

that EPA must follow in approving or 

disapproving a SIP revision; (2) EPA has 

previously treated such actions as subject 

to the public participation requirements 

for informal rulemaking under the 

Administrative Procedure Act, 5 U.S. C. 

553 (b)-(c) (see 40 C.F.R. 51.102), as 

have some reviewing courts; and (3) 

those procedures require an agency to 

publish a notice of proposed rulemaking, 

give interested persons an opportunity to 

comment, etc. 

Deleted: we are prepared to 

expedite our action by

Deleted: 

Deleted: upon 

Deleted: that it expects to 

issue for public comment 

Deleted: will 
Page 58 of 71 

whether the CAA and APA allow EPA to conduct parallel-processing 

in these circumstances; whether “substantially similar” (rather 

than “substantively identical” or “materially the same” or some 

other standard) is the appropriate standard on which to base a 

decision whether to re-notice a SIP submittal for public comment 

in these circumstances; and what are appropriate criteria on 

which EPA might determine whether a SIP submittal is 

“substantially similar.” Finally, to the extent EPA ultimately 

decides to employ any particular streamlining technique, the 

Agency expects to limit its use to this action only, due to the 

need to act promptly on these SIP submittals to avoid a gap in 

PSD permitting. 

2. Findings of Failure to Submit and Promulgation of FIPs 

If the state does not meet its SIP submittal deadline, we 

will immediately issue a finding of failure to submit a required 

SIP submission under CAA §110(c)(1)(A) and immediately 

thereafter issue a FIP. This timing for FIP promulgation is 

authorized under CAA §110(c)(1), which authorizes us to 

promulgate a FIP "at any time within 2 years after" finding a 

failure to submit a required SIP submission. We discuss our 

approach to the FIP in the companion notice to this rulemaking 

concerning FIPs for failure to submit the required PSD SIP 

revision. 
Page 59 of 71 

3. Rescission of the FIP 

After we have promulgated a FIP, it must remain in place 

until the state submits a SIP revision and we approve that SIP 

revision. CAA §110(c)(1). Under the present circumstances, we 

will act on a SIP revision to apply the PSD program to GHG 

sources as quickly as possible and, upon request of the state, 

will parallel-process the SIP submittal in the manner described 

earlier in this preamble. If we approve such a SIP revision, we 

will, at the same time, rescind the FIP. We discuss this 

approach in the companion notice to this rulemaking concerning 

FIPs for failure to submit the required PSD SIP revision. 

H. Streamlining the State Process for SIP Development and 

Submittal

As stated earlier in this preamble, we recognize that the 

deadline we are giving states to submit their SIP revisions is 

expeditious. Through this rulemaking, we are prepared to 

develop methods to streamline requirements for state SIP 

submissions consistent with the requirements of the CAA and APA, 

although we recognize that the states remain fully in charge of 

their own state processes and, again, emphasize that we intend 

to limit use of any streamlining technique to this action only, 

due to the need to act promptly on these SIP submittals to avoid 

a gap in PSD permitting. We solicit recommendations during the 

Deleted: We are prepared to 

work with the states to 

develop methods to 

streamline the state 

administrative process, 
Page 60 of 71 

comment period for ways to streamline the state process for 

adopting and submitting these SIPs, and to streamline or 

simplify what is required for the SIP submittal. 

For example, we may streamline the process as it concerns 

public hearing requirements. Many states require that the 

underlying state regulation that the state intends to develop 

into the SIP submittal undergo a public hearing. In addition, 

the CAA requires that the state provide a public hearing on the 

proposed SIP submittal, under CAA §110(a)(2) and (l). EPA 

solicits public comment on whether it may, consistent with the 

CAA and APA, accept the public hearing that the state holds on 

the underlying regulation as meeting the requirement for the 

hearing on the SIP submittal, as long as the state provides 

reasonable public notice of the hearing, and the state hearing 

process conforms to federal hearing requirements. 

I. Sanctions

1. Mandatory Sanctions 

Under CAA §179(a)(3)(A), if EPA finds that a state failed 

to submit a PSD SIP revision as required under a SIP Call, then 

a mandatory sanctions clock begins to run, so that if the state 

does not submit the required SIP revision within 18 months, EPA 

must impose one of two sanctions identified under CAA §179; if 

the state does not submit the required SIP revision within 

Deleted: will accept the 

hearing 

Deleted: adequate 

Deleted: EPA will not require 

a separate SIP hearing

Comment [A12]: There may be 

significant difference in the substantive 

notice afforded to the public at a hearing 

on the underlying Sate regulation versus 

on the SIP submittal At the time of a 

public hearing on the SIP submittal, it is 

probable that the State process for 

adopting the underlying State 

requirement will have been concluded 

and the underlying State requirement 

finally adopted; and thus the public will 

know what the substantive impact of 

approving the SIP submittal as a matter of 

federal law will be. 

Another alternative in addition to or in 

lieu of the proposed edits might be for the 

proposed rule to solicit comment on 

whether a process which provides for 

simultaneous reasonable notice and 

hearing on the underlying State regulation 

and the draft SIP submittal, if permitted 

under State law, would satisfy the 

requirements of the CAA and the APA 

and expedite the processing of these SIP 

revisions. 
Page 61 of 71 

another 6 months, EPA must impose the second of the sanctions. 

However, because each sanction applies only to nonattainment 

areas, it has been a longstanding EPA position that a finding 

that a state has failed to submit a required SIP revision for a 

PSD area will not trigger mandatory sanctions. 

The two sanctions are described in CAA §179(b) and include: 

(i) "highway sanctions," which are "a prohibition, applicable to 

a nonattainment area, on the approval" of certain highway 

construction projects or certain federal grants for highway 

construction, CAA §179(b)(1); and (ii) "[i]n applying the 

emission offset requirements of [CAA §173] to new or modified 

sources or emissions units for which a permit is required under 

this part, the ratio of emissions reductions to increased 

emissions shall be at least 2 to 1." CAA §179(b)(2). 

Each of these sanctions applies, by its terms, to 

nonattainment areas. That is, as just quoted, CAA §179(b)(1) 

limits the application of the highway sanctions "to a 

nonattainment area," and the offsets sanctions under CAA §173(c) 

apply only to nonattainment areas. See, e.g., CAA §173(c)(1) 

(referring to "any offset requirement under this part [D]," 

which is entitled, "Plan Requirements for Nonattainment Areas"); 

§182(b)(5) (offset requirement for ozone moderate areas); 

§182(c)(10) (offset requirement for ozone serious areas); 
Page 62 of 71 

§182(d)(2) (offset requirement for ozone severe areas); 

§182(e)(1) (offset requirement for ozone extreme areas). 

Neither of the mandatory sanctions provided under CAA §179(b) 

applies to attainment/unclassifiable areas. 

As a result, a finding that a state has failed to submit a 

required SIP revision will not trigger mandatory sanctions. 

J. Title V 

We note that a number of states may have a similar problem 

with their approved title V operating permit programs, (i.e., 

that their title V programs do not apply to GHG-emitting 

sources). We intend to address this issue through separate 

rulemaking. 

V. Statutory and Executive Order Reviews 

A. Executive Order 12866 - Regulatory Planning and Review

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 

1993), this action is a "significant regulatory action" because 

it raises novel legal or policy issues. Accordingly, EPA 

submitted this action to the Office of Management and Budget 

(OMB) for review under EO 12866 and any changes made in response 

to OMB recommendations have been documented in the docket for 

this action. 

B. Paperwork Reduction Act

This action does not impose any new information collection 

Deleted: 2. Voluntary 

Sanctions¶

[##Placeholder]¶
Page 63 of 71 

burden. Instead, this proposed action would significantly 

reduce costs incurred by sources and permitting authorities 

relative to the costs that would be incurred if EPA did not 

revise the rule. Based on our GHG threshold data analysis, we 

estimated that over 40,000 new and modified facilities per year 

would be subject to PSD review based on applying a GHG emissions 

threshold of 250 tpy using a CO2e metric. This is compared to 

280 PSD permits currently issued per year, which is an increase 

of more than 140-fold. By increasing the volume of permits, the 

administrative burden would be unmanageable without this rule. 

Despite this reduction of burden, the OMB has previously 

approved the information collection requirements contained in 

the existing regulations for PSD (see, e.g., 40 CFR 52.21) and 

title V (see 40 CFR parts 70 and 71) under the provisions of the 

Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has assigned 

OMB control number 2060-0003 and OMB control number 2060-0336 

respectively. The OMB control numbers for EPA's regulations in 

40 CFR are listed in 40 CFR part 9. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an 

agency to prepare a regulatory flexibility analysis of any rule 

subject to notice and comment rulemaking requirements under the 

Administrative Procedure Act or any other statute unless the 

Comment [A13]: The Tailoring Rule 

also cites to these two ICRs (OMB 

Control numbers 2060-0003 and 2060-

0336). According to a preliminary check 

of our records, no changes specific to the 

Tailoring Rule have been submitted for 

these ICRs yet. The collections will need 

to contemplate the increase in burden 

from new GHG source permits and 

existing permits that will need to add 

GHG. Even if this burden is much 

smaller relative to a world without the 

Tailoring Rule, it is still an increase 

because of the new GHG requirements. 

Please adjust the language here 

accordingly. 
Page 64 of 71 

agency certifies that the rule will not have a significant 

economic impact on a substantial number of small entities. 

Small entities include small businesses, small organizations, 

and small governmental jurisdictions. 

For purposes of assessing the impacts of this notice on 

small entities, small entity is defined as: (1) a small business 

that is a small industrial entity as defined in the U.S. Small 

Business Administration (SBA) size standards (see 13 CFR 

121.201); (2) a small governmental jurisdiction that is a 

government of a city, county, town, school district, or special 

district with a population of less than 50,000; or (3) a small 

organization that is any not-for-profit enterprise that is 

independently owned and operated and is not dominant in its 

field. 

After considering the economic impacts of this proposed 

rule on small entities, I certify that this action will not have 

a significant economic impact on a substantial number of small 

entities. In determining whether a rule has a significant 

economic impact on a substantial number of small entities, the 

impact of concern is any significant adverse economic impact on 

small entities, since the primary purpose of the regulatory 

flexibility analysis is to identify and address regulatory 

alternatives "which minimize any significant economic impact of 
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the rule on small entities." 5 U.S.C. 603 and 604. Thus, an 

agency may certify that a rule will not have a significant 

economic impact on a substantial number of small entities if the 

rule relieves regulatory burden, or otherwise has a positive 

economic effect, on all of the small entities subject to the 

rule. 

We believe that this proposed rule changes will relieve the 

regulatory burden associated with the major PSD program for new 

or modified major sources that emit GHGs having to submit title 

V operating permits for GHG emissions sources, including small 

businesses. This is because the proposed rule would simplify 

applicability determinations, and would reduce the PSD 

administrative burden that would be associated with requiring 

sources that emit GHG in de minimis amounts in absence of this 

rulemaking. As a result, the program changes provided in the 

proposed rule are not expected to result in any increases in 

expenditure by any small entity. 

We have therefore concluded that this proposed rule would 

relieve regulatory burden for all small entities. We continue 

to be interested in the potential impacts of the proposed rule 

on small entities and welcome comments on issues related to such 

impacts. 

D. Unfunded Mandates Reform Act
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This action contains no federal mandates under the 

provisions of Title II of the Unfunded Mandates Reform Act of 

1995 (UMRA, 2 U.S.C. 1531-1538) for state, local or tribal 

governments or the private section. The action imposes no 

enforceable duty on any state, local or tribal goverments or the 

private sector. This action merely prescribes EPA's action for 

states that do not meet their existing obligation for PSD SIP 

submittal. Thus, this proposed rule is not subject to the 

requirements of sections 202 or 205 of UMRA. 

This action is also not subject to the requirements of 

section 203 of UMRA because it contains not regulatory 

requirements that might significantly or uniquely affect small 

governments. This action merely prescribes EPA's action for 

states that do not meet their existing obligation for PSD SIP 

submittal. 

E. Executive Order 13132 - Federalism

This action does not have federalism implications. It will 

not have substantial direct effects on the states, on the 

relationship between the national government and the States, or 

on the distribution of power and responsibilities among the 

various levels of government, as specified in Executive Order 

13132. This action merely prescribes EPA's action for states 

that do not meet their existing obligation for PSD SIP 
Page 67 of 71 

submittal. 

In the spirit of Executive Order 13132, and consistent with 

EPA policy to promote communications between EPA and state and 

local governments, EPA specifically solicits comment on this 

proposed rule from state and local officials. 

F. Executive Order 13175 - Consultation and Coordination with 

Indian Tribal Governments

This action does not have tribal implications, as specified 

in Executive Order 13175 (65 FR 67249, November 9, 2000). This 

action merely prescribes EPA's action for states that do not 

meet their existing obligation for PSD SIP submittal. Thus, 

Executive Order 13175 does not apply to this action. 

Although Executive Order 13175 does not apply to this 

proposed rule, EPA specifically solicits additional comment on 

this proposed action from tribal officials. 

G. Executive Order 13045 - Protection of Children from 

Environmental Health Risks and Safety Risks

 EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as 

applying only to those regulatory actions that concern health or 

safety risks, such that the analysis required under section 5-

501 of the EO has the potential to influence the regulation. 

This action is not subject to EO 13045 because it merely 

prescribes EPA's action for states that do not meet their 
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existing obligation for PSD SIP submittal. 

H. Executive Order 13211 - Actions Concerning Regulations That 

Significantly Affect Energy Supply, Distribution, or Use

 This action is not a "significant energy action" as defined 

in Executive Order 13211 (66 FR 28355(May 22, 2001)), because it 

is not likely to have a significant adverse effect on the 

supply, distribution, or use of energy. This action merely 

prescribes EPA's action for states that do not meet their 

existing obligation for PSD SIP submittal. 

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and 

Advancement Act of 1995 ("NTTAA"), Public Law No. 104-113, 12(d) 

(15 U.S.C. 272 note) directs EPA to use voluntary consensus 

standards in its regulatory activities unless to do so would be 

inconsistent with applicable law or otherwise impractical. 

Voluntary consensus standards are technical standards (e.g., 

materials specifications, test methods, sampling procedures, and 

business practices) that are developed or adopted by voluntary 

consensus standards bodies. NTTAA directs EPA to provide 

Congress, through OMB, explanations when the Agency decides not 

to use available and applicable voluntary consensus standards. 

This proposed rulemaking does not involve technical 

standards. Therefore, EPA is not considering the use of any 
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voluntary consensus standards. 

J. Executive Order 12898 - Federal Actions to Address 

Environmental Justice in Minority Populations and Low-Income 

Populations

Executive Order 12898 (59 FR 7629, February 16, 1994) 

establishes federal executive policy on environmental justice. 

Its main provision directs federal agencies, to the greatest 

extent practicable and permitted by law, to make environmental 

justice part of their mission by identifying and addressing, as 

appropriate, disproportionately high and adverse human health or 

environmental effects of their programs, policies, and 

activities on minority populations and low-income populations in 

the U.S. 

 EPA has determined that this proposed rule will not have 

disproportionately high and adverse human health or 

environmental effects on minority or low-income populations 

because it does not affect the level of protection provided to 

human health or the environment. This proposed rule merely 

prescribes EPA's action for states that do not meet their 

existing obligation for PSD SIP submittal. 

VI. Statutory Authority 

The statutory authority for this action is provided by 

sections 101, 111, 114, 116, and 301 of the CAA as amended (42 
Page 70 of 71 

U.S.C. 7401, 7411, 7414, 7416, and 7601). 

List of Subjects 

40 CFR Part 51 

Administrative practice and procedure, Air pollution 

control, Carbon dioxide, Carbon dioxide equivalents, Carbon 

monoxide, Environmental protection, Greenhouse gases, 

Hydrofluorocarbons, Intergovernmental relations, Lead, Methane, 

Nitrogen dioxide, Nitrous oxide, Ozone, Particulate matter, 

Perfluorocarbons, Reporting and recordkeeping requirements, 

Sulfur hexafluoride, Sulfur oxides, Transportation, Volatile 

organic compounds.
Page 71 of 71 – Action to Ensure Authority to Issue Permits under 

the Prevention of Significant Deterioration Program to Sources 

of Greenhouse Gas Emissions: Finding of Substantial Inadequacy 

and SIP Call 

Page 71 of 71 

40 CFR Part 52 

Air pollution control, Carbon dioxide, Carbon dioxide 

equivalents, Carbon monoxide, Environmental protection, 

Greenhouse gases, Hydrofluorocarbons, Intergovernmental 

relations, Lead, Methane, Nitrogen dioxide, Nitrous oxide, 

Ozone, Particulate matter, Perfluorocarbons, Reporting and 

recordkeeping requirements, Sulfur hexafluoride, Sulfur oxides, 

Volatile organic compounds. 

________________________ 

Dated: 

_________________________ 

Lisa P. Jackson, 

Administrator.