Page 1 of 75 

6560-50-P 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Part 52 

[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 13 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 as of January 

2, 2011, certain GHG-emitting sources will become subject to the 

PSD requirements and may not be able to obtain a PSD permit in 

order to construct or modify. As for the rest of the states 

with approved SIP PSD programs, EPA solicits comment on whether 
Page 2 of 75 

their PSD programs do or do not apply to GHG-emitting 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 GHGemitting sources, then EPA will proceed to also issue a finding 

of substantial inadequacy and a SIP Call for that state. 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 
Page 3 of 75 

information collection provisions to the Office of 

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. 
Page 4 of 75 

If you send an e-mail comment directly to EPA without going 

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 
Page 5 of 75 

www.regulations.gov or in hard copy at the U.S. Environmental 

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 75 

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. 
Page 7 of 75 

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. 
Page 8 of 75 

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 
Page 9 of 75 

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 
Page 10 of 75 

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 75 

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 75 

I. Primacy of the SIP Process 

J. Sanctions 

K. 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 13 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 13 states have EPA-
Page 13 of 75 

approved PSD programs that do not appear to include GHG-emitting 

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 13 states' SIPs are substantially 

inadequate to comply with 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 GHGemitting sources in case such 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 
Page 14 of 75 

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

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 limited the applicability of 

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

We are taking this action on the basis of: our analysis of 

the affected states' SIP provisions and other relevant state 

law; the states' analyses of their SIP provisions and state law, 

as indicated in letters sent to us as required under the 

 

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). 
Page 15 of 75 

Tailoring Rule;7 and direct consultation with the individual 

states and with the National Association of Clean Air Agencies 

(NACAA). As further described in section IV.D of this preamble, 

EPA compiled relevant provisions of the affected states' SIPs 

and other state law into a Technical Support Document for this 

rulemaking, which can be found in the docket for this 

rulemaking. Our analysis, along with information received from 

consulting with the states, indicates that the EPA-approved SIPs 

for 13 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 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 

 

7 In the Tailoring Rule, EPA asked states to advise EPA by 

letter, within 60 days of publication of the Tailoring Rule, how 

the states intended to implement the requirements of the 

Tailoring Rule, including whether the states had authority to 

apply their PSD program to GHG-emitting sources. 
Page 16 of 75 

provisions may limit the scope of the state PSD applicability 

provisions expressly to pollutants identified at a certain point 

in time as subject to PSD. For example, if the state has not 

yet expressly identified GHGs as subject to its PSD program, the 

authority to regulate 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 obtain that permit and 

therefore may be unable to proceed with planned construction or 

modification in those states.

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

110(k)(5), the SIP for each of these 13 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 are listed in table IV-1, "States with 

SIPs that Do Not Appear to Apply PSD to 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 
Page 17 of 75 

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 

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 that for the 13 states. 

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 
Page 18 of 75 

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 period during which 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 on or about 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 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 
Page 19 of 75 

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

the state would have the authority in place to act on the 

sources' permit applications. The availability of this 

authority to regulate GHGs 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 

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 
Page 20 of 75 

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 

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 
Page 21 of 75 

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 

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 
Page 22 of 75 

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, 2011.8

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 

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 

 

8 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 23 of 75 

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 

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)). 
Page 24 of 75 

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.9 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,"10 which limits the 

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 

 

9 "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). 

10 Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule; Final Rule. 75 FR 31514. 
Page 25 of 75 

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 

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, 
Page 26 of 75 

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 

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 
Page 27 of 75 

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 

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 
Page 28 of 75 

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 laws, 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 

"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 
Page 29 of 75 

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 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 

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 
Page 30 of 75 

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 

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, 
Page 31 of 75 

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 

constituents—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. Pursuant to the Tailoring 

Rule, PSD permitting 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 
Page 32 of 75 

result, in these states11 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 

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 

 

11 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 Jersey; 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; Minnesota; Nevada (most areas); Pennsylvania 

(some areas); and Washington. 
Page 33 of 75 

is in place. 

B. States with SIP PSD Applicability Provisions that Do Not

Appear to Apply to GHG-emitting Sources

Our review of the SIPs and other authorities, as well as 

consultation with states, as described further in section IV.D 

of this preamble and the Technical Support Document included in 

the docket for this rulemaking, indicates that for 13 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 

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

substantially similarly phrased requirement, but also have state 
Page 34 of 75 

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 that the states with SIPs or state law with 

these provisions do not appear to apply the PSD program to GHGemitting 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 presumptive SIP Call 

list.
Page 35 of 75 

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; Rest of State 

(Excludes Maricopa County, Pima County, 

and Indian Country) 

IX 

Arkansas VI 

California: Sacramento Metropolitan AQMD IX 

Connecticut I 

Florida IV 

Idaho X 

Kansas VII 

Kentucky: Jefferson County; Rest of State IV 

Nebraska: Lincoln Lancaster; Omaha; Rest of 

State 

VII 

Nevada: Clark County IX 

Oregon X 

Texas VI 
Page 36 of 75 

 

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 75 

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 

California: Mendocino County AQMD; Monterey 

Bay Unified APCD; North Coast Unified 

AQMD; Northern Sonoma County APCD 

IX 

Colorado VIII 

Delaware III 

Georgia IV 

Indiana V 

Iowa VII 

Louisiana VI 

Maine I 

Maryland III 

Michigan V 

Mississippi IV 

Missouri VII 

Montana VIII 

New Hampshire I 

New Mexico: Albuquerque; Rest of State VI 

North Carolina: Forsythe County; Mecklenburg; 

Western NC; Rest of State 

IV 

North Dakota VIII 

Ohio V 

Oklahoma VI 

Pennsylvania: All except Allegheny County III 

Rhode Island I 

South Carolina IV 

South Dakota VIII 

Tennessee: Chattanooga; Nashville; Knoxville; 

Memphis; Rest of State 

IV 

Vermont I 

Virginia III 

West Virginia III 

Wisconsin V 

Wyoming VIII 

Utah VIII 
Page 38 of 75 

 

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. 

In consultation with the affected states, EPA compiled 

relevant provisions of the affected states' SIPs and other state 
Page 39 of 75 

law into a Technical Support Document for this rulemaking. The 

Technical Support Document, which can be found in the docket for 

this rulemaking, presents the basis for EPA's proposed finding 

of substantial inadequacy for the states listed in table IV-1. 

As discussed elsewhere in this preamble, we invite comment 

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

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 
Page 40 of 75 

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 

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, 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 
Page 41 of 75 

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 strongly believes that 

this necessarily entails, for those states, finalizing the SIP 

Call prior to January 2, 2011. 

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 on or about 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, 
Page 42 of 75 

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. 

We recognize that this process is highly expedited, but we 

believe that this is essential to maximize our and the states' 

opportunity to put in place a permitting authority to process 

PSD permit applications beginning on January 2, 2011, without 

which sources may be unable to proceed with plans to construct 

or modify. Commenters should feel free to advise us if they 

believe a different approach can achieve this goal. 

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—
Page 43 of 75 

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 

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 
Page 44 of 75 

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 

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 not also one of the 13 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 
Page 45 of 75 

"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 or legal 

interpretation 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 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 
Page 46 of 75 

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 

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 stated earlier in this 

preamble, EPA intends to finalize the SIP Call on or about 

December 1, 2010. If the Administrator signs the notice on that 

date, the earliest possible deadline 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 for any state that receives a 
Page 47 of 75 

deadline after January 2, 2011, the affected GHG-emitting 

sources in that state—which are those larger GHG-emitters 

identified in the Tailoring Rule—will be unable to receive a 

federally approved permit authorizing construction or 

modification. Therefore, after January 2, 2011, these sources 

may not lawfully be able to construct or modify until the date 

that 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[]" and we welcome comment on this 

interpretation. The term "reasonable deadline[]," as it appears 

in that provision, is not defined. We interpret it 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 
Page 48 of 75 

SIP call that EPA issued, the NOx SIP Call,12 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 

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 sources may be 

unable to construct or modify due to the lack of regulatory 

authority to act on their permit applications 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 sooner and will then 

be able to act on permit applications and issue permits that 

 

12 "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 49 of 75 

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 

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 
Page 50 of 75 

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]. 

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 in at least two different ways. First, the state may 

revise its SIP so that instead of applying PSD to sources of 

individually listed pollutants, the SIP applies PSD to sources 

that emit any "regulated NSR pollutant." We recommend that 

states follow this approach. It is consistent with our 2002 

"NSR Reform" rule. "Prevention of Significant Deterioration 
Page 51 of 75 

(PSD) and Nonattainment New Source Review (NSR); Final Rule and 

Proposed Rule," 67 FR 80186, 80240 (December 31, 2001). In 

addition, it would resolve any issues about whether the state 

has authority to issue permits for sources of PM2.5 emissions, as 

well as permits for sources of pollutants that EPA may subject 

to regulation for the first time in the future. Secondly, and 

as an alternative, the state may retain its approach of applying 

PSD to sources of individually listed pollutants but submit a 

SIP revision that includes GHGs on that list of pollutants. If 

a state chooses this second approach, we will approve the SIP 

revision as SIP strengthening. 

(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. 

Although we propose to require that the state define GHGs 

as described immediately above, we solicit comment on whether 
Page 52 of 75 

the state may adopt a different definition that is at least as 

stringent, and, if so, what such a definition might be. We 

caution that a definition that includes more gases than the six 

identified above could prove to be less stringent in certain 

ways because it could allow greater opportunities for a source 

of different gases to net out of PSD. 

We note that in this rulemaking, we are not addressing the 

issue of accounting for emissions of GHGs from bioenergy and 

other biogenic sources (which are generated during the 

combustion or decomposition of biologically based material such 

as forest or agriculture products). When we finalized the 

Tailoring Rule, we noted that EPA planned to seek comment on how 

to address emissions of biogenic CO2 under the PSD and title V 

programs through future action, such as a separate Advance 

Notice of Proposed Rulemaking (ANPR) (75 FR at 31591). As a 

first step, we recently issued a Call for Information (CFI) to 

solicit public comment and data on technical issues that might 

be used to consider biomass fuels and the emissions resulting 

from their combustion differently with regard to applicability 

under PSD and with regard to the BACT review process under PSD. 

See "Call for Information: Information on Greenhouse Gas 

Emissions Associated with Bioenergy and Other Biogenic Sources," 

75 FR 41173 (July 15, 2010). 
Page 53 of 75 

Additional information on this CFI is available at 

http://www.epa.gov/climatechange/emissions/biogenic_emissions.ht

ml. In the CFI we stated: "In response to this Call for 

Information, interested parties are invited to assist EPA in the 

following: (1) Surveying and assessing the science by submitting 

research studies or other relevant information, and (2) 

evaluating different accounting approaches and options by 

providing policy analyses, proposed or published methodologies, 

or other relevant information. Interested parties are also 

invited to submit data or other relevant information about the 

current and projected scope of GHG emissions from bioenergy and 

other biogenic sources." 75 FR at 41174. 

Without prejudging the outcome of the CFI process, EPA 

anticipates that the comments we receive in response to the CFI, 

with regard to applicability under PSD and with regard to the 

BACT review process under PSD, will inform any subsequent 

actions to address applicability of emissions of GHGs from 

bioenergy and other biogenic sources under the PSD program. 

(iii) Thresholds

For a state to correct its SIP, the state must submit a SIP 

revision that applies PSD to GHG sources. Once a state applies 

the PSD program to GHG-emitting sources, the state must 

determine the threshold for emissions from those sources that 
Page 54 of 75 

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. 

A state, in revising its SIP to apply PSD to GHG sources, 

may adopt the Tailoring Rule phase-in approach into its SIP or 

it may adopt lower thresholds—as low as 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).13

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 

 

13 We indicated in the Tailoring Rule (75 FR at 31525-26) that a 

state may undertake a SIP action to either: (1) revise its PSD 

program, which already applies to GHG-emitting sources, in order 

to implement the tailoring approach; or (2) revise its PSD 

program so that it applies to GHG-emitting sources, in which 

case the state must also establish its PSD applicability 

thresholds for PSD. This rulemaking relates to the latter 

described SIP action. 
Page 55 of 75 

adopt lower thresholds than in the Tailoring Rule in order to 

meet statutory requirements. 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. 

(iv) 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 
Page 56 of 75 

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, 

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 may fail to apply PSD to sources that emit PM2.5.

14 

 

14 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 57 of 75 

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 

"1997 PM10 surrogate policy." Under the 1997 PM10 surrogate 

policy, sources and permitting authorities satisfy the CAA 

requirements for PM2.5 in PSD permits by applying the PM10

requirements 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 has issued a notice of 

proposed rulemaking to end the prospective use of the 1997 PM10

surrogate policy by the end of 2010 (75 FR 6827, February 11, 

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. 
Page 58 of 75 

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 

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. 

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 
Page 59 of 75 

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. 

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, even states with proposed SIP revisions will not be 
Page 60 of 75 

able to issue federally approved PSD permits for construction or 

modification to affected sources until those revisions are 

approved. The affected source would be able to receive a stateissued 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. 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. 

For example, upon request of the state, we will parallelprocess the SIP submittal. 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 of its SIP revision at the state level, we 

will initiate a separate public proceeding on our proposed 

approval of the SIP revision 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. 

EPA has successfully employed the parallel-processing approach 

in past rulemakings, and we believe that to employ it in this 
Page 61 of 75 

process could significantly shorten the time EPA needs to act on 

the SIP revision. 

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. 

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. 
Page 62 of 75 

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. EPA understands that each state must determine 

whether its own regulatory development process allows for 

streamlining, and we defer to the states on the extent to which 

they may choose to streamline the process. Given the 

exigencies, we believe a streamlining approach could be 

beneficial to a state in meeting its deadline. We are prepared 

to work with the states to develop methods to streamline the 

state administrative process, although we recognize that the 

states remain fully in charge of their own state processes. We 

solicit recommendations during the 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). EPA will accept 
Page 63 of 75 

the 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 adequate public notice of the 

hearing, and EPA will not require a separate SIP hearing. 

I. Primacy of the SIP Process

Today's proposal is secondary to our overarching goal, 

which is to assure that in every instance, it will be the state 

that will be that permitting authority. EPA continues to 

recognize that the states are best suited to the task of 

permitting because they and their sources have experience 

working together in the state PSD program to process permit 

applications. EPA seeks to remain solely in its primary role of 

providing guidance and acting as a resource for the states as 

they make the various required permitting decisions for GHG 

emissions. 

Accordingly, beginning immediately we intend to work 

closely with the states—as we have already begun to do since 

earlier in the year—to help them promptly develop and submit to 

us their corrective SIP revisions that extend their PSD program 

to GHG-emitting sources. Moreover, we intend to promptly act on 

their SIP submittals. Again, EPA's goal is to have each and 

every affected state have in place the necessary permitting 

authorities by the time businesses seeking construction permits 
Page 64 of 75 

need to have their applications processed and the permits 

issued—and to achieve that outcome by means of engaging with the 

states directly through a concerted process of consultation and 

support. 

EPA is taking up the additional task of proposing this SIP 

Call and the companion FIP action only because the Agency is 

compelled to do so by the need to assure businesses, to the 

maximum extent possible and as promptly as possible, that a 

permitting authority is available to process PSD permit 

applications for GHG-emitting sources once they become subject 

to PSD requirements on January 2, 2011. Again, without a 

permitting authority, those sources will be unable to construct 

or modify. 

In order to provide that assurance, we are obligated to 

recognize, as both states and the regulated community already 

do, that there may be circumstances in which states are simply 

unable to develop and submit those SIP revisions by January 2, 

2011, or for some period of time beyond that date. As a result, 

absent further action by EPA, those states' affected sources 

confront the risk that they will have to put on hold their plans 

to construct or modify, a risk that may have adverse 

consequences for the economy—and a risk that can be minimized 

only by EPA's taking the specific step of issuing this proposal. 
Page 65 of 75 

To be sure, these circumstances are exigent. They demand 

that we develop a plan to assure, within the limits of our 

power, that a back-up permitting authority is available—and to 

send that signal of assurance expeditiously in order to 

eliminate uncertainty and thus facilitate businesses' planning. 

Within the design of the CAA, it is EPA that must fill that role 

of back-up permitting authority. This SIP Call action and the 

companion FIP action fulfill the CAA requirements to establish 

EPA in that role. 

At the same time, we have designed these actions to retain 

as much discretion as possible in the hand of the states. The 

states may choose the deadline they consider reasonable for 

submission of their corrective SIP revision. If we are 

compelled to promulgate a FIP, we invite the affected state to 

accept a delegation of authority to implement that FIP, so that 

it will still be the state that processes the permit 

applications, albeit operating under federal law. In addition, 

if we are compelled to issue a FIP, we intend to continue to 

work closely with the state to assist it in developing and 

submitting for approval its corrective SIP revision, so as to 

minimize the amount of time that the FIP must remain in place. 

Finally, we can report that in informal conversations, 

officials of various states have acknowledged the need for our 
Page 66 of 75 

SIP call and FIP actions. That is, they have acknowledged that 

a short-term FIP may be necessary in their states to protect 

their sources' abilities to construct and modify in accordance 

with environmental safeguards. In addition, some have indicated 

that they will closely consider their opportunities to accept 

delegation of the permitting responsibilities. 

J. 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 

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 
Page 67 of 75 

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); 

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. 

K. 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 
Page 68 of 75 

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 

burden. Although this action asks states to provide information 

during the comment period, the information requested, which 

concerns whether the states have authority to regulate GHGs 

under their SIP PSD provisions, is substantially similar to the 

information already requested of the states in the Tailoring 

Rule. 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-
Page 69 of 75 

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 

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. 

This proposed rule will affect states and will not, in and 
Page 70 of 75 

of itself, directly affect sources. In addition, although this 

rule could lead to federal permitting requirements for certain 

sources, those sources are large emitters of GHGs and tend to be 

large sources. 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. 

D. Unfunded Mandates Reform Act

This rule does not contain a federal mandate that may 

result in expenditures of $100 million or more for state, local, 

and tribal governments, in the aggregate, or the private sector 

in any one year. The action may impose a duty on certain state, 

local or tribal governments to meet their existing obligation 

for PSD SIP submittal, but with lesser expenditures. Thus, this 

rule is not subject to the requirements of sections 202 or 205 

of UMRA. 

This rule is also not subject to the requirements of 

section 203 of UMRA because it contains no regulatory 

requirements that might significantly or uniquely affect small 

governments.

E. Executive Order 13132 - Federalism

This action does not have federalism implications. It will 

not have substantial direct effects on the states, on the 
Page 71 of 75 

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 

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). In 

this action, EPA is not addressing any tribal implementation 

plans. This action is limited to 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
Page 72 of 75 

 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 

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 
Page 73 of 75 

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 

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 
Page 74 of 75 

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 

U.S.C. 7401, 7411, 7414, 7416, and 7601). 
Page 75 of 75 – 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 75 of 75 

List of Subjects in 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.