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6560-50-P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2010-1033; FRL-____]

RIN 2060-AQ68

Determinations Concerning Need for Error Correction, Partial 

Approval and Partial Disapproval, and Federal Implementation 

Plan Regarding Texas’s Prevention of Significant Deterioration 

Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

SUMMARY: EPA is finalizing a correction to its previous full 

approval of Texas’s Clean Air Act (CAA) Prevention of 

Significant Deterioration (PSD) program to be a partial approval 

and partial disapproval and is also promulgating a Federal 

Implementation Plan (FIP) for Texas. These actions are based on 

EPA’s determination that at the time EPA approved Texas’s PSD 

program, the program was flawed because the state did not 

address how the program would apply to all pollutants that would 

become newly subject to regulation in the future, including nonNational Ambient Air Quality Standard (NAAQS) pollutants, among 

them greenhouse gases (GHGs). The partial disapproval requires 

EPA to promulgate a FIP and EPA is doing so to assure that GHGemitting sources in Texas are able to proceed with plans to 

construct or expand. 
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DATES: This action is effective on May 1, 2011.

ADDRESSES: EPA has established a docket for this rulemaking 

under Docket ID No. EPA-HQ-OAR-2010-1033. 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., confidential business information or other information 

whose disclosure is restricted by statute. Certain other 

material, such as copyrighted material, will be publicly 

available only in hard copy. Publicly available docket 

materials are available either electronically in 

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

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: For information on this rule, 

contact Ms. Cheryl Vetter, Air Quality Policy Division, Office 

of Air Quality Planning and Standards (C504-03), Environmental 

Protection Agency, Research Triangle Park, NC 27711; telephone 

number: (919) 541-4391; fax number: (919) 541-5509; e-mail 

address: vetter.cheryl@epa.gov.

SUPPLEMENTARY INFORMATION:
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I. General Information

A. Does this action apply to me?

The only governmental entity potentially affected by this 

rule is the State of Texas. Other entities potentially affected 

by this rule include sources in all industry groups within the 

State of Texas, 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.1

 This 

independent obligation on sources is specific to PSD and derives 

from CAA section 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

 1 Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule; Final Rule. 75 FR 31,514 (June 3, 2010). 

The Tailoring Rule is described in more detail later in this 

preamble.
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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

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. How is the preamble organized?

The information presented in this preamble is organized as 

follows:
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I. General Information

A. Does this action apply to me?

B. How is the preamble organized?

II. Overview of Rulemaking

III. Background

A. Requirements for SIP Submittals and EPA Action

B. General Requirements for the PSD Program

C. Regulatory Background: Texas SIP and PSD Program

D. Regulatory Background: GHG Rules

IV. Final Action and Response to Comments

A. Response to General Comments on the Operation of the 

PSD Program

B. Determination that EPA’s Previous Approval of Texas’s 

PSD Program was in Error

C. Error Correction: Conversion of Previous Approval to 

Partial Approval and Partial Disapproval

D. Reconsideration Under CAA Section 301, Other CAA 

Provisions, and Case Law

E. Relationship of this Action to GHG PSD SIP Call

F. Relationship of this Rulemaking to Other States

G. Federal Implementation Plan

V. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and Review

and Executive Order 13563: Improving Regulation and 

Regulatory 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

K. Congressional Review Act

VI. Judicial Review

II. Overview of Rulemaking
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This notice-and-comment final rulemaking is intended to 

assure that large GHG-emitting sources in Texas, which became 

subject to PSD on January 2, 2011, will continue to be able to 

obtain preconstruction permits under the CAA New Source Review 

(NSR) PSD program beyond the April 2030, 2011, expiration date 

of the FIP that EPA put in place for this purpose via an interim 

final rule.Interim Final Rule. “Determinations Concerning Need 

for Error Correction, Partial Approval and Partial Disapproval, 

and Federal Implementation Plan Regarding Texas Prevention of 

Significant Deterioration Program; Interim Final Rule.” 75 FR 

82,430 (Dec. 30, 2010). In this manner, this rulemaking will 

allow those sources to avoid delays in construction or 

modification. 

As in the interim final rulemaking, EPA is determining in 

this rulemaking that it erred in fully approving Texas’s PSD 

program in 1992 because at that time, the program had a gap, 

which recent statements by Texas have made particularly evident. 

The program did not address its application to, or provide 

assurances that it has adequate legal authority to apply to, all 

pollutants newly subject to regulation, including non-NAAQS 

pollutants, among them GHGs. As a result, EPA is correcting its 

previous full approval to be a partial approval and partial 

disapproval. EPA is taking this action through the errorcorrection mechanism provided under CAA section 110(k)(6). The 
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partial disapproval requires EPA, under CAA section 

110(c)(1)(B), to promulgate a FIP within 2 years, and, as part 

of this rulemaking, EPA is exercising its discretion to 

promulgate the FIP immediately. Under the FIP, EPA will become 

the permitting authority for, and apply federal PSD requirements 

to, large GHG-emitting sources in accordance with the thresholds 

established under what we call the Tailoring Rule, which EPA 

published by notice dated June 3, 2010, 75 FR 31,514.2

 

By becoming the permitting authority, EPA will be able to 

process preconstruction PSD permit applications for GHG-emitting 

sources and thereby allow the affected sources to avoid delays 

in construction and modification. According to Texas, 167 GHGemitting sources will require PSD permits during 2011. These 

sources have a real need to have a permitting authority in place 

in Texas. Although the CAA allows states to implement PSD, and 

Texas has been implementing an EPA-approved PSD program since 

1992, Texas has recently informed EPA that it does not have the 

intention or the authority to apply PSD to GHG-emitting sources, 

and that it could very well maintain this position even if the 

 2 Texas will continue to be the permitting authority for non-GHG 

pollutants for sources that triggered PSD requirements due to 

such other pollutants. EPA will be the permitting authority for 

all pollutants for sources that trigger PSD solely because of 

their GHGs, which may occur after July 1, 2011, under the 

Tailoring Rule. This permitting process will also take place in 

the seven other states for which EPA is implementing a GHG PSD 

FIP. 
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U.S. Court of Appeals for the D.C. Circuit (the D.C. Circuit) 

upholds the GHG rules against legal challenges that Texas and 

other parties have recently brought. Texas’s unwillingness to 

implement this aspect of the federal PSD program leaves EPA no 

choice but to resume its role as the permitting authority for 

this portion, in order to assure that businesses in Texas are 

not subject to delays or potential legal challenges and are able 

to move forward with planned construction and expansion projects 

that will create jobs and otherwise benefit the state’s and the 

nation’s economy. EPA has determined that this action is 

necessary at this time so that there is no period of time when 

sources are unable to obtain necessary PSD permits.

In order to assure no gap in permitting, EPA is 

establishing May 1, 2011, as the effective date for the FIP, 

which immediately follows the expiration of the interim-final 

FIP EPA published by notice dated December 30, 2010. EPA stated 

in the interim final rule that the FIP would remain in place 

until April 30, 2011. 

III. Background

A. Requirements for SIP Submittals and EPA Action

This section reviews background information concerning the 

CAA requirements for what SIPs must include, the process for 

state submittals of SIPs, requirements for EPA action on SIPs 

and SIP revisions, and FIPs.
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1. Requirements for What SIPs Must Include

Congress enacted the NAAQS and SIP requirements in the 1970 

CAA Amendments. CAA section 110(a)(1) requires that states 

adopt and submit to EPA for approval SIPs that implement the 

NAAQS. CAA section 110(a)(2) contains a detailed list of 

requirements that all SIPs must include to be approvable by EPA. 

Of particular relevance for this action, subparagraph 

(E)(i) of CAA section 110(a)(2) provides that SIPs must "provide

...... necessary assurances that the state ... will have adequate 

personnel, funding, and authority under State ... law to carry 

out such implementation plan...." As applicable to PSD 

programs, this provision means that EPA may approve the SIP PSD 

provisions only if EPA is satisfied that the state will have 

adequate legal authority under state law. 

2. EPA Action on SIP Submittals

After a SIP or SIP revision has been submitted, EPA is 

authorized to act on it under CAA section 110(k)(3)-(4). Those 

provisions authorize a full approval or, if the SIP or SIP 

revision meets some but not all of the applicable requirements, 

a conditional approval, a partial approval and disapproval, or a 

full disapproval. If EPA disapproves a required SIP or SIP 

revision, then EPA must promulgate a FIP at any time within 2

years after the disapproval, unless the state corrects the 

deficiency within that period of time by submitting a SIP 
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revision that EPA approves. CAA section 110(c)(1).3

3. SIP Call

The CAA provides a mechanism for the correction of SIPs 

with certain types of inadequacies, under CAA section 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 

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. 

 3 States are subject to sanctions for failure to submit, or for 

EPA disapproval of, SIPs for nonattainment areas, under CAA 

section 179. These sanctions provisions are not relevant for 

this rule because they do not apply to PSD SIPs.
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If EPA does not receive the corrective SIP revision by the 

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

[the] State has failed to make a required submission." CAA

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

110(c)(1) requires EPA to "promulgate a Federal implementation 

plan at any time within 2 years after the [finding] . . . unless 

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

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

CAA section 110(k)(5), by its terms - specifically, the use 

of the term "[w]henever" - authorizes, but does not require, EPA 

to make the specified finding and does not impose any time 

constraints for EPA to do so. As a result, EPA has discretion 

in determining whether and when to make the specified finding. 

See New York Public Interest Research Group v. Whitman, 321 F.3d 

316, 330-31 (2d Cir. 2003) (opening phrase "Whenever the 

Administrator makes a determination" in CAA section 502(i)(1) 

grants EPA "discretion whether to make a determination"); Her 

Majesty the Queen in Right of Ontario v. EPA, 912 F.2d 1525, 

1533 (D.C. Cir. 1990) ("whenever" in CAA section 115(a) 

"impl[ied] a degree of discretion" in whether EPA had to make a 

finding). 

4. Authority for EPA to Revise Previous Action on SIPs 

EPA has authority to revise its previous actions concerning 

SIP submittals. Two mechanisms are available to EPA: the error 
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correction mechanism provided under CAA section 110(k)(6), and

EPA’s general administrative authority to reconsider its own 

actions under CAA sections 110 and 301(a), in light of case law.

(a) Error Correction Under CAA Section 110(k)(6)

CAA section 110(k)(6) provides as follows:

Whenever the Administrator determines that the 

Administrator’s action approving, disapproving, or 

promulgating any plan or plan revision (or part 

thereof), area designation, redesignation, 

classification, or reclassification was in error, the 

Administrator may in the same manner as the approval, 

disapproval, or promulgation revise such action as 

appropriate without requiring any further submission 

from the State. Such determination and the basis 

thereof shall be provided to the State and public.

The key provisions for present purposes are that the 

Administrator has the authority to “determine[]” when a SIP 

approval was “in error,” and when she does so, she may then 

revise the SIP approval “as appropriate,” in the same manner as 

the approval, and without requiring any further submission from 

the state. 

As quoted previously, CAA section 110(k)(6) provides EPA 

with the authority to correct its own “error,” but nowhere does 

this provision or any other provision in the CAA define what 

qualifies as “error.” Thus, the term should be given its plain 

language, everyday meaning, which includes all unintentional, 

incorrect or wrong actions or mistakes. 
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The legislative history of CAA section 110(k)(6) is silent 

regarding the definition of error, but the timing of the 

enactment of the provision suggests a broad interpretation. The 

provision was enacted shortly after the Third Circuit decision 

in Concerned Citizens of Bridesburg v. U.S. EPA, 836 F.2d 777 

(1987). In Bridesburg, the court adopted a narrow 

interpretation of EPA’s authority to unilaterally correct 

errors. The court stated that such authority was limited to 

typographical and other similar errors, and stated that any 

other change to a SIP must be accomplished through a SIP 

revision. Id. at 786. In Bridesburg, EPA determined that it 

lacked authority to include odor regulations as part of a SIP 

unless the odor regulations had a significant relationship to 

achieving a NAAQS, and so directly acted to remove 13-year-old 

odor provisions from the Pennsylvania SIP. Id. at 779-80. EPA 

found the previous approval of the provisions to have been an 

inadvertent error, and so used its “inherent authority to 

correct an inadvertent mistake” to withdraw its prior approval 

of the odor regulations without seeking approval of the change 

from Pennsylvania. Id. at 779-80, 785. After noting that 

Congress had not contemplated the need for revision on the 

grounds cited by EPA, Id. at 780, the court found that EPA’s 

“inherent authority to correct an inadvertent mistake” was 

limited to corrections such as “typographical errors,” and that 
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instead EPA was required to use the SIP revision process to 

remove the odor provision from the SIP. Id. at 785-86. 

When the court made its determination in Bridesburg in 

1987, there was no provision explicitly addressing EPA’s error 

correction authority under the CAA. In 1990, Congress passed 

CAA section 110(k)(6), apparently for the purpose of overturning 

the Bridesburg opinion.In 1990, Congress passed CAA section

110(k)(6). The legislative history says little about the 

provision, and does not mention Bridesburg. Even so, the terms 

of the provision make it evident that Congress authorized EPA to 

undertake a broader set of revisions under the guise of error 

correction than the Bridesburg court read the pre-existing Clean 

Air Act to authorize, and that Congress did not intend to codify 

the holding of Bridesburg. This is apparent because CAA section

110(k)(6) both (i) authorizes EPA to correct SIP approvals and 

other actions that were “in error,” which, as noted previously, 

broadly covers any mistake, and thereby contrasts with the 

holding in Bridesburg that EPA’s pre-section 110(k)(6) authority 

was limited to correction of typographical or similar mistakes; 

and (ii) provides that the error correction need not be 

accomplished via the SIP revision or SIP call process, which 

contrasts with the holding of Bridesburg requiring a SIP 

revision. Because Congress apparently intended CAA section

110(k)(6) to overturn Bridesburg, the definition of “error” in 
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that provision should be sufficiently broad to encompass the 

error that EPA asserted it made in its approval action at issue 

in Bridesburg, which goes well beyond typographical or other 

similar mistakes.By the same token, because the Bridesburg 

decision stood for the proposition that EPA could not correct 

anything more than a narrow range of errors, had Congress 

intended to codify the decision in Bridesburg, it is logical 

that Congress would have described the type of error that EPA 

was authorized to correct in the same limited way that the 

decision did. In this manner, the fact that Congress adopted 

CAA section 110(k)(6) against the backdrop of the Bridesburg

case confirms that the provision cover a broad range of errors.

EPA has used CAA section 110(k)(6) in the past to correct 

errors of a non-technical nature. Most recently, EPA withdrew 

its approval of SIP PSD programs in 24 states to the extent they 

apply PSD to GHG-emitting sources below the thresholds in the 

final Tailoring Rule. “Limitation of Approval of Prevention of 

Significant Deterioration Provisions Concerning Greenhouse Gas 

Emitting Sources in State Implementation Plans; Final Rule,” 75 

FR 82,536 (Dec. 30, 2010)(Narrowing Rule). In addition, EPA has 

used CAA section 110(k)(6) as authority to make substantive 

corrections to remove a variety of provisions from federally 

approved SIPs that are not related to the attainment or 

maintenance of NAAQS or any other CAA requirement. See, e.g.,
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“Approval and Promulgation of Implementation Plans; Kentucky: 

Approval of Revisions to the State Implementation Plan,” 75 FR 

2,440 (Jan. 15, 2010) (correcting the SIP by removing a 

provision, approved in 1982, used to address hazardous or toxic 

air pollutants); “Approval and Promulgation of Implementation 

Plans; New York,” 73 FR 21,546 (April 22, 2008) (issuing a 

direct final rule to correct a prior SIP correction from 1998 

that removed general duties from the SIP but neglected to remove 

a reference to “odor” in the definition of “air contaminant or 

air pollutant”); “Approval and Promulgation of Implementation 

Plans; New York,” 63 FR 65,557 (Nov. 27, 1998) (issuing direct 

final rule to correct SIP by removing a general duty “nuisance 

provision” that had been approved in 1984); "Correction of 

Implementation Plans; American Samoa, Arizona, California, 

Hawaii, and Nevada State Implementation Plans," 63 FR 34,641 

(June 27, 1997) (correcting five SIPs by deleting a variety of 

administrative provisions concerning variances, hearing board 

procedures, and fees that had been approved during the 1970s).

CAA section 110(k)(6), by its terms - specifically, the use 

of the terms "[w]henever" and “may” and the lack of any time 

constraints - authorizes, but does not require, EPA to make the 

specified finding. As a result, EPA has discretion in 

determining whether and when to make the specified finding. See

New York Public Interest Research Group v. Whitman, 321 F.3d 
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316, 330-31 (2d Cir. 2003) (opening phrase "Whenever the 

Administrator makes a determination" in CAA section 502(i)(1) 

grants EPA "discretion whether to make a determination"); Her 

Majesty the Queen in Right of Ontario v. EPA, 912 F.2d 1525, 

1533 (D.C. Cir. 1990) ("whenever" in CAA section 115(a) 

"impl[ied] a degree of discretion" in whether EPA had to make a 

finding). 

(b) Inherent Authority to Reconsider

The provisions in CAA section 110 that authorize EPA to 

take action on a SIP revision inherently authorize EPA to, on 

its own initiative, reconsider and revise that action as 

appropriate. The courts have found that an administrative 

agency has the inherent authority to reconsider its decisions, 

unless Congress specifically proscribes the agency's discretion 

to do so. See, e.g., Gun South, Inc. v. Brady, 877 F.2d 858, 

862 (11th Cir. 1989) (holding that agencies have implied 

authority to reconsider and rectify errors even though the 

applicable statute and regulations do not provide expressly for 

such reconsideration); Trujillo v. General Electric Co., 621 

F.2d 1084, 1086 (10th Cir. 1980) (“Administrative agencies have 

an inherent authority to reconsider their own decisions, since 

the power to decide in the first instance carries with it the 

power to reconsider”); see also New Jersey v. EPA, 517 F.3d 574 

(D.C. Cir. 2008) (holding that an agency normally can change its 
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position and reverse a prior decision but that Congress limited 

EPA’s ability to remove sources from the list of hazardous air 

pollutant source categories, once listed, by requiring EPA to 

follow the specific delisting process at CAA section 112(c)(9)).4

 

Section 301(a) of the CAA, read in conjunction with CAA

section 110 and the case law just described, provides further 

statutory authority for EPA to reconsider its actions under CAA 

section 110. CAA section 301(a) authorizes EPA "to prescribe 

such regulations as are necessary to carry out [EPA's] 

functions" under the CAA. Reconsidering prior rulemakings, when 

necessary, is part of “[EPA’s] functions” under the CAA - in 

light of EPA’s inherent authority as recognized under the case 

law to do so – and, as a result, CAA section 301(a) confers such 

authority upon EPA. 

EPA finds further support for its authority to narrow its 

approvals in the Administrative Procedures Act (APA) section

553(e), which requires EPA to give interested persons "the right 

to petition for the issuance, amendment, or repeal of a rule," 

and CAA section 307(b)(1), which expressly contemplates that 

persons may file a petition for reconsideration under certain 

 4 For additional case law, see Belville Mining Co. V. United 

States, 999 F.2d 989, 997 (6th Cir. 1993); Dun & Bradstreet Corp. 

v. United States Postal Service, 946 F.2d 189, 193 (2d Cir. 

1991); Iowa Power & Light Co. v. United States, 712 F.2d 1292 

(8th Cir. 1983).
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circumstances (at the same time that a rule is under judicial 

review). These authorizations for other persons to petition EPA 

to amend or repeal a rule suggest that EPA has inherent 

authority, on its own, to issue such amendment or repeal. This 

is because EPA may grant a petition from another person for an 

amendment to or repeal of a rule only if justified under the 

CAA, and if such an amendment or repeal is justified under the 

CAA, then EPA should be considered as having inherent authority 

to initiate the process on its own, even without a petition from 

another person. 

EPA recently used its authority to reconsider prior actions 

and limit its prior approval of a SIP in connection with 

California conformity SIPs. See, e.g., 68 FR 15,720, 15,723 

(discussing prior action taken to limit approvals); 67 FR 69,139 

(taking final action to amend prior approvals to limit their 

duration); and 67 FR 46,618 (proposing to amend prior approvals 

to limit their duration, based on CAA sections 110(k) and 

301(a)). EPA had previously approved SIPs with emissions 

budgets based on a mobile source model that was current at the 

time of EPA's approval. Later, EPA updated the mobile source 

model. But, even though the model had been updated, emissions 

budgets would continue to be based on the older, previously 

approved model in the SIPs, rather than the updated model. To 

rectify this problem, EPA conducted a rulemaking that revised 
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the previous SIP approvals so that the approvals of the 

emissions budgets would expire early, when the new ones were 

submitted by states and found adequate, rather than when a SIP 

revision was approved. This helped California more quickly 

adjust its regulations to incorporate the newer model. EPA is 

using its authority to reconsider and limit its prior approval 

of SIPs generally in the same manner as it did in connection 

with California conformity SIPs. 

5. FIPs

As noted previously, if the state fails to submit a 

required SIP revision, or does so but EPA then disapproves that 

SIP revision, then the CAA requires EPA to promulgate a FIP and 

thereby, in effect, federalize the part of the air pollution 

control requirements for which the state, through the required 

SIP revision, would otherwise have been responsible. 

Specifically, under CAA section 110(c)(1), EPA is required to:

promulgate a [FIP] at any time within 2 years after 

the Administrator (A) finds that a State has failed to 

make a required submission..., or (B) disapproves a 

[SIP] submission in whole or in part, unless the State 

corrects the deficiency, and the Administrator 

approves the plan or plan revision, before the 

Administrator promulgates such [FIP].

Although this provision, by its terms, mandates that EPA 

promulgate a FIP under the specified circumstances, and mandates 

that EPA do so within 2 years of when those circumstances occur, 
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the provision gives EPA discretion to promulgate the FIP “at any 

time within [that] 2 year[]” period. Thus, EPA is authorized to 

promulgate a FIP immediately after either the specified state 

failure to submit or EPA disapproval.

However, CAA section 110(c)(1), as quoted earlier, further 

provides that if EPA delays promulgating a FIP until later in 

the 2-year period, and, in the meantime, the state corrects the 

deficiency by submitting an approvable SIP revision that EPA 

approves, then EPA is precluded from promulgating the FIP. 

Similarly, once EPA promulgates a FIP, it stays on the books 

until the state submits an approvable SIP that EPA then 

approves.

B. General Requirements for the PSD Program

The PSD program is a preconstruction review and permitting 

program applicable, under EPA rules, to large new stationary 

sources and, in general, expansions of existing sources. The 

PSD program applies in areas that are designated “attainment” or 

“unclassifiable” for a NAAQS, and is contained in part C of 
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title I of the CAA.5 Specifically, under EPA’s regulations, PSD 

applies to a “major stationary source” that newly constructs or 

that undertakes a “major modification.” 40 CFR 52.166(a)(7), 

(b)(1)(i), (b)(2)(i). A “major stationary source” is any source 

that emits or has the potential to emit 100 or 250 tpy or more, 

depending on the source category, of any “regulated NSR 

pollutant.” 40 CFR 51.166(b)(1)(i)(a). The regulations define 

that term to include four classes of air pollutants, including, 

as a catch-all, "any pollutant that otherwise is subject to 

regulation under the Act." 40 CFR 51.166(b)(49)(iv). As 

discussed later in this preamble, the phrase “subject to 

regulation” began to include GHGs on January 2, 2011, under our 

interpretation of that phrase as described in the Tailoring 

Rule, 75 FR at 31,580/3, and what we call the "Johnson Memo 

 5 In contrast, the "nonattainment new source review (NSR)" 

program applies in areas not in attainment of a NAAQS and in the 

Ozone Transport Region and is implemented under the requirements 

of part D of title I of the CAA. We commonly refer to the PSD 

program and the nonattainment NSR program together as the major 

NSR program. The EPA rules governing both programs are 

contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, 

Appendices S and W. There is no NAAQS for CO2 or any of the 

other well-mixed GHGs, nor has EPA proposed any such NAAQS; 

therefore, unless and until we take further such action, the 

nonattainment NSR program does not apply to GHGs.
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Reconsideration” (or the “Timing Decision”).6

The CAA contemplates that the PSD program be implemented by 

the states through their SIPs. CAA section 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 section 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 section 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 provisions, CAA sectionsections 165(a)(1),) and

169(1), mandate that SIPs include PSD programs that are 

 6 "Interpretation of Regulations that Determine Pollutants 

Covered by Clean Air Act Permitting Programs." 75 FR 17,004 

(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.
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applicable to any air pollutant that is subject to regulation 

under the CAA, including, as discussed later in this preamble, 

GHGs as of January 2, 2011.7

Most states have EPA-approved SIP PSD programs, and as a 

result, in those states, PSD permits are issued by state or 

local air pollution control agencies. In states that do not 

have EPA-approved SIP PSD programs, EPA issues PSD permits under 

its own authority, although in some cases, EPA has delegated 

such authority to the state or local agency. 

1. Applicability of PSD to non-NAAQS pollutants

EPA has long- held the view that PSD applies to “any 

pollutant subject to regulation under the CAA,” and that 

includes non-NAAQS pollutants. EPA’s long-standing 

regulations have interpreted CAA section 165(a) broadly 

enough to capture non-NAAQS pollutants. A detailed 

discussion of these positions was provided in the Tailoring 

Rule at 75 FR 31,560/3, and in the Interim Final Rule at 75 

FR 82,443. 

2. Automatic Application of PSD to Newly Regulated Pollutants

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

some variations, that the PSD provisions applied only to NAAQS 

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

provisions apply to all pollutants subject to regulation, 

including GHGs. See 75 FR 31,560-62; "Prevention of Significant 

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

Public Comments," May 2010, pp.38-41. We did not reopen that 

issue in this rulemaking.
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Under the PSD applicability requirements, PSD applies to 

sources automatically, that is, by operation of law, as soon as 

their emissions of pollutants become subject to regulation under 

the CAA. This is because CAA section 165(a)(1) prohibits "major 

emitting facilit[ies]" from constructing or modifying without 

obtaining a permit that meets the PSD requirements, and CAA 

section 169(1) defines a "major emitting facility" as a source 

that emits a specified quantity of "any air pollutant," which, 

as noted earlier, EPA has long interpreted as any pollutant 

subject to regulation. Whenever EPA promulgates control 

requirements for a pollutant for the first time, that pollutant 

becomes subject to regulation, and any stationary source that 

emits that pollutant in sufficient quantities becomes a “major 

emitting facility” that, when it constructs or modifies, becomes 

subject to PSD without any further action from EPA or a state or 

local government. 

EPA regulations have long codified automatic PSD 

applicability. See 43 FR 26,380, 26403/3, 26406 (June 19, 1978) 

(promulgating 40 CFR 51.21(b)(1)(i)) and 42 FR 57,479, 57,480, 

57,483 (November 3, 1977) (proposing 40 CFR 51.21(b)(1)(i)) 

(applying PSD requirements to a "major stationary source" and 

defining that term to include sources that emit specified 

quantities of "any air pollutant regulated under the Clean Air 

Act"). Most recently, in the 2002 NSR Reform Rule, EPA 
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reiterated these requirements, although changing the terminology

to "any regulated NSR pollutant." 67 FR 80,186. EPA stated in 

the preamble: “The PSD program applies automatically to newly 

regulated NSR pollutants, which would include final promulgation 

of an NSPS applicable to a previously unregulated pollutant.” 

67 FR at 80,240/1. 

In most states with approved PSD programs, PSD does apply 

automatically. However, in a minority of states with approved 

PSD programs, it does not.8 Instead, each time EPA subjects a 

previously unregulated air pollutant to regulation, these states 

must submit a SIP revision incorporating that pollutant into 

their programs. Despite the time needed for the state to submit 

a SIP revision and EPA to approve it, the pollutant-emitting 

sources in the state become subject to PSD under the CAA as soon 

as EPA first subjects that pollutant to control. Because under 

CAA section 165(a)(1) and 169(1), as interpreted by EPA, a 

source that emits specified quantities of any air pollutant 

subject to regulation cannot construct or modify unless it first 

receives a PSD permit, as a practical matter, in a state with an 

approved PSD program that does not automatically update and that 

has not been revised to include the newly regulated pollutant, 

the sources may find themselves subject to the CAA requirement 

 8 75 FR at 53,897/3 (proposed GHG PSD SIP call).
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to obtain a permit, but without a permitting authority to issue 

that permit. As discussed later, this action is needed because 

GHG-emitting sources in Texas would otherwise confront that 

situation.

In a recent decision, the U.S. Court of Appeals for the 7th 

Circuit (7th Circuit), mistakenly citing to PSD provisions when 

the issue before the court involved the separate and different 

non-attainment provisions of CAA sections 171-193, concluded 

that sources could continue to abide by permitting requirements 

in an existing SIP until amended, even if that SIP does not 

comport with the law. United States v. Cinergy Corp., No. 09-

3344, 2010 WL 4009180 (7th Cir. Oct. 12, 2010). In stark 

contrast to the nonattainment provisions actually at issue in 

Cinergy — which are not self-executing and must therefore be 

implemented through a SIP — PSD is self-executing; it is the 

statute (CAA section 165), not just the SIP, that prohibits a 

source from constructing a project without a permit issued in 

accordance with the Act.

C. Regulatory Background: Texas SIP and PSD program

1. Texas’s Initial Attainment SIP Revision

In 1972, shortly after the enactment of the 1970 CAA 

Amendments, Texas submitted to EPA its SIP to attain and 

maintain the NAAQS that EPA had promulgated by that time. As 

part of that SIP revision, Texas provided assurances that it had 
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legal authority to carry out the SIP, in accordance with the 

predecessor to CAA section 110(a)(2)(E)(i). EPA approved 

Texas’s SIP, including the assurances of legal authority, by 

notice dated May 31, 1972. 37 FR 10,842.

2. Texas Initial PSD SIP Revision

In the 1977 CAA Amendments, Congress enacted the PSD 

program. In the immediate aftermath, EPA acted as the PSD 

permitting authority in the states, but EPA began to delegate to 

various state authorities all or part of EPA’s authority to 

issue PSD permits. In addition, at this time, EPA revised its 

pre-existing regulations, which had established a 

preconstruction permitting program, to conform to the 1977 CAA 

requirements. Each state was required to adopt a PSD program 

and submit it for approval as a SIP revision, and., if the PSD 

program met CAA requirements, EPA approved the program, and the 

state then became the PSD permitting authority. This process 

occurred for most of the states in the nation, including Texas. 

A brief history of Texas’s initial PSD SIP approval follows.9 

a. Texas’s Receipt of Delegation Authority for the PSD Program

 9 This history is described in “Approval and Promulgation of 

Implementation Plan, State of Texas; Prevention of Significant 

Deterioration – Final rulemaking, 57 FR 28,093, 28,094 (June 24, 

1992); “Approval and Promulgation of Implementation Plan, State 

of Texas; Prevention of Significant Deterioration – Proposed 

rulemaking, 54 FR 52,823, 52,824 (December 22, 1989).
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Beginning in 1980, when EPA was still the permitting 

authority for federally required PSD permits in Texas, the 

stateState requested delegation of certain aspects of the 

Federal PSD program, and in a series of actions, EPA granted 

that authority.10 During this time, Texas also revised its state 

– i.e., Texas Air Control Board (TACB) - PSD regulations. EPA 

commented on an early set of proposed revisions to TACB 

regulations by letter dated December 23, 1980 and made clear 

 10 See, e.g., 48 FR 60236,023 (February 9, 1983).

Formatted: Underline
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that PSD applies to non-NAAQS pollutants.11 EPA reiterated these 

statements to Texas in 1983.12

b. Texas’s SIP PSD program

During 1985-1988, Texas submitted a series of SIP revisions 

comprising its PSD program to EPA for approval. In these SIP 

revisions, Texas established key components of its PSD rules by 

incorporating by reference EPA’s PSD rules found in 40 CFR 

52.21. Of most importance for present purposes, Texas 

incorporated by reference (IBR’d) EPA’s PSD applicability 

 11 Letter from Jack S. Divita, U.S EPA, Region 6, to Roger 

Wallis, Texas Air Control Board (December 23, 1980), p. 2. In 

that letter, EPA objected to Texas’s proposed definitions of the 

terms “major facility/stationary source” and “major 

modification” on grounds they are not equivalent to the 

definition of those terms in EPA’s PSD and nonattainment NSR 

regulations because Texas’s proposed definitions –

include only those stationary sources and 

modifications with emissions of air contaminants for 

which a [NAAQS] has been issued. Under the PSD and 

[nonattainment] NSR requirements, [Texas’s] 

definitions must include sources with emissions of 

“any air pollutant subject to regulation under the 

Act.” ... Since the proposed definitions would exclude 

PSD and [nonattainment] NSR coverage for those sources 

emitting pollutants subject to regulations under the 

Act, but for which a NAAQS has not been issued, they 

are not equivalent to the federal definitions of 

“major stationary source” and “major modification.”

 

Id. (emphasis in original).

12 Environmental Protection Agency – Region 6, “EPA Review of 

Texas Revisions to the General Rules and Regulations VI,” p. 4 

(August 1983), cited in 48 FR 55,483/1 & n.1 (December 13, 

1983).
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regulations in 52.21.13 Under EPA’s regulations, as then 

written, PSD applied to “any pollutant subject to regulation 

under the [Clean Air] Act.” 40 CFR 52.21(b)(1)(i)) (1985-1988). 

It bears emphasis that this provision, by its terms, applied PSD 

to each and every air pollutant subject to regulation under the 

CAA, which, as discussed elsewhere, has been EPA’s consistent 

interpretation of the CAA requirements for PSD applicability. 

CAA section 165(a)(1), 169(1).14

(1) Incorporation by Reference

In adopting a particular SIP revision that IBR’edIBR’d

EPA’s regulations, however, Texas intended that IBR to apply to 

only the EPA regulations as they read as of the date that Texas 

adopted the SIP revision. Texas did not intend that IBR in that 

SIP revision to apply to subsequent revisions to those 

regulations. This became readily apparent during the course of 

EPA’s review of Texas’s SIP revisions. The TACB adopted the 

first SIP revision on July 26, 1985.15 This SIP revision 

consisted, in relevant part, of a revision to TACB Regulation VI 

 13 For convenience, we will use the acronym “IBR” for the various 

grammatical usages of incorporate by reference, including the 

noun form, i.e., IBR, for incorporation by reference; as well as 

the verb form, e.g., IBR’d, for incorporated by reference.

14 As also discussed elsewhere, this is a narrowing 

interpretation of the PSD applicability requirements in CAA 

section 169(1), which, read literally, apply PSD to “any air 

pollutant.”

15 TACB Board Order No. 85-7 (July 26, 1985).
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- §116.3.(a) to add subparagraph (13), which read, in relevant 

part, 

(13) The proposed facility shall comply with the 

Prevention of Significant Deterioration of Air Quality 

regulations promulgated by the [EPA] in the Code of 

Federal Regulations at 40 CFR 52.21 as amended..., 

hereby incorporated by reference, except for [certain 

identified] paragraphs [not here relevant].16

The TACB submitted this SIP revision to EPA on December 11, 

1985.17 EPA responded with a letter to Texas, dated July 3, 

1986, commenting on several aspects of the SIP revision, 

including inquiring whether the state had authority to IBR 

Federal rules prospectively, asking for “legal clarification” on 

the subject, and recommending that if the TACB did not have such 

authority, then the TACB should clarify the IBR by “referencing 

 16 Id.

17 Letter from Mark White, Governor of Texas, to Lee M. Thomas, 

Administrator of U.S. EPA, December 11, 1985.
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the appropriate date.”18

Texas responded with a letter dated October 24, 1986,19 in 

which it stated:

An issue of concern ... is whether the [TACB] 

intended to incorporate by reference federal rules 

prospectively in the PSD rule §116.3(a)(13) and in the 

stack height rule §116.3(a)(14). [A]lthough our 

intention was not prospective rulemaking and we do not 

believe the rule language implies such, we have no 

specific objection to including the date of federal 

adoption of any federal material adopted by reference 

by the TACB in future SIP revisions (including the 

proposed PSD and stack height revisions). By 

initiating the public hearing process for PSD rules 

again (to incorporate requested revisions), federal 

PSD regulations amended on July 12, 1985 will be 

subject to the state public participation process. 

 18 Letter from William B. Hathaway, Director, Air, Pesticides and 

Toxics Division, EPA Region 6, to Allen Eli Bell, Executive 

Director, TACB (July 3, 1986). Specifically, EPA stated -

State’s authority to IBR Federal rules prospectively – The Board 

approved and signed the incorporation of the PSD regulations on 

July 26, 1985, An amendment to the Federal PSD regulations [40 

CFR 52.21(o)(3), p(1) and p(3)] occurred on July 12, 1985. 

However, the TACB proposed to adopt the Federal regulations and 

carried out the public participation process before the July 12, 

1985, promulgation date of the amendments. We need a legal 

analysis from the state concerning the TACB’s legal authority to 

incorporate by reference the federal rules prospectively. We 

recognize that the proposed federal rules were unchanged on the 

final promulgation; however, the Texas Water Commission believes 

that the state cannot adopt prospective Federal rules under the 

State laws. We would appreciate a legal clarification on this 

subject. If the State did not intend prospective adoption, the 

rules should be clarified by referencing the appropriate date.

Id. p. 2 and Enclosure p. 5.

19 Letter from Steve Spaw, Deputy Executive Director, TACB, to 

William B. Hathaway, Director, Air, Pesticides and Toxics 

Division, EPA Region 6 (October 24, 1986).
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This should eliminate the concern expressed in your 

July 3, 1986 letter.20

Accordingly, on July 17, 1987, the TACB adopted a revision 

to its PSD rule, §116.3(a)(13), so that the rule continued to 

IBR EPA’s PSD regulatory requirements at 40 CFR 52.21, but 

referenced the date of November 7, 1986.21 Texas submitted that 

as a SIP revision to EPA on October 26, 1987.22 

However, some 8 months later, by notice published on July 

1, 1987, EPA adopted the PM10 NAAQS,23 and thereby subjected to 

PSD sources emitting PM10. Recognizing this, the TACB, on July 

15, 1988, adopted still another revision to its PSD rule to 

change the referenced date to August 1, 1987, and thereby 

incorporated EPA’s application of PSD to PM10-emitting sources 

into Texas’s PSD program.24 Texas submitted that revised rule to 

EPA as a SIP revision on September 29, 1988.25 As so revised, 

the Texas PSD rule (again, §116.3(a)(13)) read, in relevant 

part, as follows:

 20 Id. 1-2.

21 TACB Board Order No. 87-09 (July 17, 1987). See 12 Tex. Reg. 

2575/2 (August 7, 1987) (discussing revision to section 

116.3(a)(13) in response to request from U.S. EPA).

22 Letter from William P. Clements, Jr., Governor of Texas, to 

Lee M. Thomas, Administrator of U.S. EPA (October 26, 1987). 

23 52 FR 24,634 (July 1, 1987).

24 TACB Board Order No. 88-08 (July 15, 1988).

25 Letter from William P. Clements, Jr., Governor of Texas, to 

Lee M. Thomas, Administrator of U.S. EPA (September 29, 1988). 
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(13) The proposed facility shall comply with the 

Prevention of Significant Deterioration (PSD) of Air 

Quality regulations promulgated by the Environmental 

Protection Agency (EPA) in the Code of Federal 

Regulations at 40 CFR 52.21 as amended August 1, 

1987..., except for [certain identified] paragraphs 

[not here relevant].26

EPA proposed to approve this SIP revision, with this 

iteration of the Texas PSD rule, by notice dated December 22, 

1989,27 and EPA issued a final approval by notice dated June 24, 

1992.28 In the preambles to the proposed and final rules, and in 

supporting documents, EPA recounted part of this history of 

Texas revising its regulations to IBR the current EPA regulatory 

requirements.29

This history shows that both EPA and Texas were well aware 

that Texas’s method of IBR’ingincorporating by reference EPA’s 

regulatory requirements into Texas’s PSD rule was not 

 26 TACB Board Order No. 88-08 (July 15, 1988).

27 54 FR 52,823.

28 57 FR 28,093.

29 57 FR 28,093, 28,094/2 (June 24, 1992) (final rule); 54 FR 

52,823, 52,824/1 (December 22, 1989) (proposed rule); Technical 

Support Document: Texas State Implementation Plan for Prevention 

of Significant Deterioration, U.S. Environmental Protection 

Agency, 4 (November 28, 1988). Moreover, Texas submitted 

another SIP revision on February 18, 1991, to change the date in 

section 116.3(a)(13) from “August 1, 1987” to “October 17, 1988” 

to reflect the amendments to 40 CFR 52.21 as promulgated in the 

Federal Register on October 17, 1988 (53 FR 40,656) (Nitrogen 

Oxides PSD increments). EPA did not act on this SIP revision 

when it approved the Texas PSD program on June 24, 1992, but did 

approve this SIP revision later, on September 9, 1994 (59 FR 

46,556). See 62 FR 44,084/2.
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prospective and therefore did not automatically update to 

incorporate a pollutant newly subject to regulation.30 In fact, 

during the time that EPA was reviewing Texas’s PSD SIP, Texas 

revised its SIP to apply PSD to PM10, which EPA subjected to 

regulation for the first time during that time. However, after 

stating simply that it does not intend prospective IBR, Texas 

did not explicitly address this issue. That is, Texas did not 

acknowledge that following approval of Texas’s PSD program, EPA 

could well subject to regulation additional pollutants – whether 

through a revised NAAQS or regulation under another CAA 

provision – and Texas did not discuss how it would respond.31 

Simply put, Texas failed to look down the road and address a 

problem with its PSD SIP – the mechanism for applying PSD to 

pollutants newly subject to regulation - that was bound to 

recur. 

(2) Legal authority

The record of Texas’s PSD program includes limited 

references to, or discussion of, legal authority that may be 

 30 It should be noted that although Texas subsequently made 

certain commitments, discussed below, none of those commitments, 

on its face, suggested that Texas’s PSD SIP should be 

interpreted to automatically update to incorporate a pollutant 

newly subject to regulation.

31 Following EPA approval of Texas’s PSD program, Texas has 

occasionally submitted SIP revisions to update its PSD program 

to accommodate further EPA regulatory revisions. See, e.g., 69 

FR 43,752, 43,753 (July 22, 2004).
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relevant to whether Texas provided assurances that it had

adequate legal authority to apply PSD to pollutants newly 

subject to regulation. The following merit review:

First, in adopting and submitting the PSD SIP revisions, 

the TACB – the agency charged with taking that action - relied 

on its general legal authority to adopt and submit the SIP 

revisions. The TACB adopted regulatory amendments through 

“Board Orders,” and then submitted those Board Orders to EPA as 

SIP revisions. The Board Orders typically cited general 

authority under the Texas CAA. One example is TACB Board Order 

No. 88-08 (July 15, 1988), which revised the Texas PSD rule to 

provide a later date for IBR’ing EPA’s PSD program, and which 

comprised one of the SIP revisions that formed the basis for the 

Texas PSD program that EPA approved by notice dated June 24, 

1992 (57 FR 28,093). This Board Order provides, in relevant 

part, “Section 3.09(a) of the Texas CAA gives the Board 

authority to make rules and regulations consistent with the 

general intent and purposes of the Act and to amend any rule or 

regulation it makes” and “the Board hereby certifies that the 

amendments as adopted have been reviewed by legal counsel and 

found to be a valid exercise of the Board’s legal authority.” 

Board Order No. 88-08, page 2.

Second, the 1990 CAA Amendments amended CAA section 169(1) 

to add another type of source that was subject to PSD: large 
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municipal combustors. Shortly after the 1990 amendments, and 

before issuing final approval for the Texas PSD program, EPA 

asked Texas for assurances that its PSD program would apply to 

large municipal waste combustors. In a March 30, 1992, letter, 

EPA stated the following:

Since we proposed approval of this SIP before 

enactment of the 1990 Clean Air Act Amendments (CAAA), 

it is necessary that we address several issues in the 

final approval notice in order to be in conformance 

with the CAAA.

* * * *

Municipal Waste Combustion – Section 169(1) is 

amended by expanding the list of major emitting 

facilities that are subject to PSD requirements if 

they emit or have the potential to emit 100 tons per 

year or more of any regulated pollutant. This list 

now includes municipal incinerators capable of 

charging more than fifty tons of refuse per day. This 

requirement has been effective since November 15, 

1990, for all applicable PSD sources. In the 

conference call [with EPA Region 6], the ...... TACB 

...... legal representative said that the TACB has the 

existing legal authority, and can and will be 

reviewing such sources for PSD applicability and 

permitting.32

Thus, according to this letter, Texas provided oral statements 

in a conference call with EPA Region 6 that Texas has legal 

authority to apply its state PSD rules to large municipal waste 

combustors.

Texas responded in a letter dated April 17, 1992:

 32 Letter from A. Stanley Meiburg, Director, Air, Pesticides & 

Toxics Division, EPA Region 6, to Steve Spaw, Executive 

Director, TACB ( March 30, 1992).
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We understand that you need confirmation in 

several areas to conform with the requirements of the 

1990 Federal Clean Air Act Amendment ...... before the 

final delegation will be made.

* * * *

We will address as a major source subject to PSD 

review, municipal waste combustors capable of 

cha[n]ging more than 50 tons of refuse per day as one 

of the sources subject to PSD review if they emit or 

have the potential to emit 100 tons per year or more 

of any regulated pollutant.33

Although the TACB Board Order referred to the TACB’s 

general legal authority, the record reveals no discussion or 

assurances that this legal authority was adequate to apply PSD 

to pollutants newly subject to regulation. Similarly, the oral 

assurance that the TACB apparently provided that it had legal 

authority to apply PSD to large municipal combustors, as 

required under the then-newly enacted 1990 CAA Amendments, does 

not address whether Texas had adequate authority to apply PSD to 

each pollutant that EPA newly subjects to regulation.

(3) Texas’s Commitments

The rulemaking record of EPA’s approval of Texas’s PSD SIP 

shows that Texas provided two commitments that are relevant for 

present purposes: 

(a) 1987 Texas PSD Commitments Statement

 33 Letter from Steve Spaw, Executive Director, TACB, to A. 

Stanley Meiburg, Director, Air, Pesticides and Toxics Division, 

EPA Region 6 (April 17, 1992).
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The TACB adopted revisions to TACB Regulation VI on July 

17, 1987, which the Governor submitted on October 27, 1987. 

Those revisions included the following statement, which we call 

the 1987 Texas PSD Commitments Statement:

Revision To The Texas State Implementation Plan For 

Prevention Of Significant Deterioration Of Air Quality

The Texas Air Control Board (TACB) will implement and 

enforce the federal requirements for Prevention of 

Significant Deterioration of Air Quality (PSD) as 

specified in 40 CFR 51.166(a) by requiring all new 

major stationary sources and major modifications to 

obtain air quality permits as provided in TACB 

regulation VI, Control of Air Pollution by Permits for 

New Construction and Modification. In addition, the 

TACB will adhere to the following conditions in the 

implementation of the PSD program: 

* * * *

4. Plan assessment

The TACB will review the adequacy of the Texas PSD 

plan on an annual basis and within 60 days of the time 

information becomes available that an applicable 

increment may be violated. If the TACB determines 

that an increment is being exceeded due to the 

violation of a permit condition, appropriate 

enforcement action will be taken to stop the 

violation. If an increment is being exceeded due to a 

deficiency in the state PSD plan, the plan will be 

revised and the revisions will be subject to public 

hearing.

This 1987 Texas PSD Commitments Statement does not 

specifically address the application of PSD to pollutants newly 

subject to regulation. The first paragraph, as quoted 

previously in this preamble, commits TACB to require “all new 
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major stationary sources and major modifications to obtain air 

quality permits as provided in TACB regulation VI...,” but this 

does not commit TACB to address pollutants newly subject to 

regulation. Instead, this limits the TACB requirement to 

application of PSD to sources “as provided in TACB regulation 

VI,” and that regulation VI does not automatically update. As 

for “4, Plan assessment,” although the first sentence calls for 

the TACB to review the adequacy of the Texas PSD plan on an 

annual basis, and although the rest of the provision requires a 

plan revision if an increment violation is determined to result 

from a deficiency in the plan, this does not address what 

happens when a new pollutant becomes subject to regulation and 

does not require a plan revision to apply to the new pollutant. 

The fact that Texas agreed to revise the plan if the plan is 

found to be deficient and that deficiency results in an 

increment being exceeded serves to highlight the lack of any 

comparable focus on how the plan would deal with pollutants 

newly subject to regulation.

EPA’s technical support document supporting its proposed 

approval stated, with respect to this 1987 Texas PSD Commitments 

Statement:

The “Revision to Texas State Implementation Plan 

for Prevention of Significant Deterioration of Air 

Quality” specifies how the TACB will fulfill the 

requirements of 40 CFR 51.166(a), plan revisions, and 

plan assessment. The EPA has reviewed the State’s 
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commitment and has determined that the TACB has 

addressed the continuous plan revisions and 

assessments adequately.34

This general discussion by EPA does not indicate that EPA 

considered the Texas statement to apply to pollutants newly 

subject to regulation.

(b) 1989 Texas Commitment Letter

In 1989, as EPA considered Texas’s SIP revision submittal, 

EPA became concerned that a Texas official had made statements 

that led EPA to question whether Texas would adhere to EPA’s 

interpretation that Best Available Control Technology (BACT)

must be implemented through the Top-Down process.35 

Accordingly, EPA advised Texas that EPA would not approve 

Texas’s PSD program unless Texas provided a letter assuring EPA 

that Texas would follow EPA requirements in general, and 

particularly with respect to the interpretation of BACT. Texas 

provided this letter, which we call the Texas PSD Commitments 

Letter, on September 5, 1989.36 In this letter, Texas 

acknowledged EPA’s concern that a Texas official had -

 34 Technical Support Document: Texas State Implementation Plan 

for Prevention of Significant Deterioration, U.S. Environmental 

Protection Agency, 6 (November 28, 1988).

35 Letter from Allen Eli Bell, Executive Director, Texas Air 

Control Board to Robert Layton Jr., Regional Administrator, U.S. 

EPA (September 5, 1989) 1 (Texas’s Commitments Letter).

36 Texas’s 1989 Commitments Letter, p. 1.
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indicated a lack of intent to follow federal 

interpretations of the Clean Air Act and Environmental 

Protection Agency (EPA) operating policies, most 

specifically, the “Top-Down” approach for Best 

Available Control Technology (BACT) analysis in 

reviewing PSD permit applications.

Texas went on to state:

[Y]ou may be assured that the position of the [Texas 

Air Control Board (TACB)] is, and will continue to be, 

to implement EPA requirements relative to programs for 

which we have received State Implementation Plan 

approval, and to do so as effectively as possible.... 

Again, the TACB is committed to the implementation of 

EPA decisions regarding PSD program requirements. We 

look forward37 approval of the PSD revisions and 

believe EPA will find the management of that program 

in Texas to be capable and effective.38

By notice dated December 22, 1989, EPA proposed to fully 

approve Texas’s PSD program.39 In this proposal, EPA focused on 

the issue of how EPA’s current and future interpretations of PSD 

statutory requirements would be reflected in the stateimplemented program. EPA stated:

In adopting the Clean Air Act, Congress 

designated EPA as the agency primarily responsible for 

interpreting the statutory provisions and overseeing 

their implementation by the states. The EPA must 

approve state programs that meet the requirements of 

40 CFR 51.166. Conversely, EPA cannot approve 

programs that do not meet those requirements. 

However, PSD is by nature a very complex and dynamic 

program. It would be administratively impracticable 

to include all statutory interpretations in the EPA 

 37 Sic: the word “to” should be between “forward” and 

“approval”

38 Texas’s 1989 Commitments Letter, p. 1.

39 54 FR 52,823.
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regulations and the SIPs of the various states, or to 

amend the regulations and SIPs every time EPA 

interprets the statute or regulations or issues 

guidance regarding the proper implementation of the 

PSD program, and the Act does not require EPA to do 

so. Rather, action by the EPA to approve this PSD 

program as part of the SIP will have the effect of 

requiring the state to follow EPA’s current and future 

interpretations of the Act’s PSD provisions and EPA 

regulations, as well as EPA’s operating policies and 

guidance (but only to the extent that such policies 

are intended to guide the implementation of approved 

state PSD programs). Similarly, EPA approval also 

will have the effect of negating any interpretations 

or policies that the state might otherwise follow to 

the extent they are at variance with EPA’s 

interpretation and applicable policies. Of course, 

any fundamental changes in the administration of PSD 

would have to be accomplished through amendments to 

the regulations in 40 CFR 52.21 and 51.166, and 

subsequent SIP revisions.

54 FR 52,824/2-3.

EPA went on to state that it was basing its proposed 

approval of Texas’s PSD program on Texas’s agreement, as 

contained in the September 5, 1989, letter, that Texas would 

“implement that PSD SIP approved program in compliance with all 

of the EPA’s statutory interpretations and operating policies.” 

54 FR 82,825/2. EPA stated –

... EPA’s approval of the Texas PSD SIP requires 

the state to follow EPA’s statutory interpretations 

and applicable policies[], including those concerning 

[BACT]....

In support of the discussion above, the Executive 

Director of the TACB has submitted a letter, dated 

September 5, 1989, which commits the TACB to implement 

the PSD SIP approved program in compliance with all of 

the EPA’s statutory interpretations and operating

policies. Specifically, the TACB’s letter states that 
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(1) “... you may be assured that the position of the 

agency is, and will continue to be, to implement EPA 

requirements relative to programs for which we have 

received [SIP] approval, and to do so as effectively 

as possible...”, and (2) “... the TACB is committed to 

the implementation of the EPA decisions regarding PSD 

program requirements...”. The EPA has evaluated the 

content of this letter and has determined that the 

letter sufficiently commits the TACB to carry out the 

PSD program in accordance with the Federal 

requirements as set forth in the [CAA] applicable 

regulations, and as further clarified in the EPA’s 

statutory and regulatory interpretations, including 

the proper conduct of BACT analyses. The EPA also 

interprets this letter as committing the TACB to 

follow applicable EPA policies such as the “Top-Down” 

approach. This letter will be incorporated into the 

SIP upon the final approval action. 

54 FR 52,825/1-2.

EPA issued a final rule to give full approval to the 

program by notice dated June 24, 1992, 57 FR 28,093. In the 

final rule, EPA indicated that it had received adverse comments 

concerning its statements in the proposal that Texas was 

required to adopt all of EPA’s interpretations of the PSD 

requirements. Accordingly, EPA refined its views. EPA stated:

Comment 1: The commenters expressed concern with the 

preamble language in the proposal notice, suggesting 

that final approval would require that the State 

follow EPA's current and future interpretations of the 

Act's PSD provisions and EPA regulations as well as 

EPA's operating policies and guidance. The commenter 

contended that such a condition would be unlawful ... 

and would improperly limit the State's flexibility.... 

Response 1: The EPA did not intend to suggest that 

Texas is required to follow EPA's interpretations and 

guidance issued under the Act in the sense that those 

pronouncements have independent status as enforceable 

provisions of the Texas PSD SIP, such that mere 
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failure to follow such pronouncements, standing alone, 

would constitute a violation of the Act. As clarified 

herein, EPA's intent is merely to place the State and 

the public on notice of EPA's longstanding views that 

the Agency must continue to oversee the State's

implementation of the PSD SIP.... 

... Texas and other states [have] considerable 

discretion to implement the PSD program as they see 

fit.

... PSD-SIP approved states remain free to follow 

their own course, provided that state action is 

consistent with the letter and spirit of the SIP, when 

read in conjunction with the applicable statutory and 

regulatory provisions. 

...

Comment 4: One commenter noted that the TACB's letter, 

dated September 5, 1989, cannot reasonably be 

interpreted as a legal requirement that the State 

follow the EPA's present and future new source review 

interpretations, policies and guidance, including the 

BACT "Top-Down" approach, because it only commits

Texas to implement properly established EPA 

requirements and legally-binding EPA decisions. The 

commenter said that the Clean Air Act specifically 

requires that, if at all, any such change in EPA 

policy for BACT determinations be accomplished through 

notice and comment rulemaking, and that the EPA first 

prepare an economic impact assessment.

Response 4: In certain circumstances, EPA's approval 

of a SIP revision through notice-and-comment 

rulemaking procedures can serve to adopt specific 

interpretations or decisions of the Agency. For 

example, a state may commit in writing to follow 

particular EPA interpretations or decisions in 

administering the PSD program. As part of the SIP 

revision process, EPA may incorporate that State's 

commitment into the SIP by reference. This process 

has been followed in today's action. Of course, EPA 

agrees with the commenter that the Agency must act 

reasonably in construing the terms of a commitment 

letter, so as to avoid approving it in a manner that 

would contravene the state's intent in issuing the 
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letter in the first place. Moreover, the State 

commitment must be consistent with the plain language 

of the applicable statutory or regulatory provisions 

at issue. Similarly, EPA cannot unilaterally change 

the clear meaning of any approved SIP provision by 

later guidance or policy. Rather, as stated in the

proposed approval notice, such fundamental change must 

be accomplished through the SIP revision process.

Consistent with the terms of the TACB letter dated 

September 5, 1989, EPA views that letter as a 

commitment on the part of the TACB to "implement EPA

program requirements . . . as effectively as 

possible," and as a commitment "to the implementation 

of the EPA decisions regarding PSD program 

requirements." EPA agrees, however, that the TACB 

letter need not be interpreted as a specific 

commitment by the State to follow a "Top-Down" 

approach to BACT determinations.

57 FR 28,095/1-2; 28,096/1.

As for the fact that Texas’s PSD program was limited to 

pollutants that were regulated as of the date Texas adopted the 

program as a SIP revision, but did not automatically apply to 

newly regulated pollutants, the preamble to the final rule 

alluded to this limitation:

The State’s regulation VI requires review and 

control of air pollution from new facility 

construction and modification and allows the TACB to 

issue permits for stationary sources subject to this 

regulation. Section 116.3(a)(13) of the TACB 

Regulation VI incorporates by reference the Federal 

PSD regulations (40 CFR 52.21) as they existed on 

August 1, 1987, which include revisions associated 

with the July 1, 1987, promulgation of revised 

National Ambient Air Quality Standards for particulate 

matter (52 FR 24872) and the visibility NSR 

requirements noted above.

57 FR 28,094. 
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However, there is no indication in the preamble for the 

final rule that (i) Texas specifically addressed the requirement 

that its PSD program apply to pollutants newly subject to PSD, 

including non-NAAQS pollutants, or (ii) Texas provided 

assurances that it had adequate authority under State law to 

carry out the PSD program, including applying PSD to pollutants 

newly subject to regulation, among them non-NAAQS pollutants. 

Nor is there any indication that EPA asked Texas to do so.40

As discussed previously, in 1996 EPA proposed, and in 2002 

finalized, what we call the NSR Reform Rule,41 which included a 

set of amendments to the PSD provisions that included revisions 

to conform to the 1990 CAA Amendments. See 61 FR 38,250 (July 

23, 1996), 67 FR 80,186 (December 31, 2002). The NSR Reform 

Rule revised the terminology for PSD applicability. In 2006, 

Texas submitted a SIP revision to incorporate the NSR Reform 

Rule into its PSD program, including revising its applicability 

provisions. EPA disapproved this SIP revision by notice dated 

 40 See “Technical Support Document (TSD): State of Texas State 

Implementation Plan for Prevention of Significant Deterioration” 

(November 28, 1988). 

41 "Prevention of Significant Deterioration (PSD) and 

Nonattainment New Source Review (NNSR): Baseline Emissions 

Determination, Actual-to-Future-Actual Methodology, Plantwide 

Applicability Limitations, Clean Units, Pollution Control 

Projects – Final Rule," 67 FR 80,186 (December 31, 2002) (NSR 

Reform rule).
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September 15, 2010.42 Accordingly, the applicable Texas PSD 

applicability provisions remain the ones in the state’s 

currently approved SIP.

D. Regulatory Background: GHG Rules

1. GHGs and Their Sources 

As discussed in detail in the rule EPA calls the 

“Endangerment Finding,”43 greenhouse gases trap the Earth’s heat 

that would otherwise escape from the atmosphere into space, and 

form the greenhouse effect that helps keep the Earth warm enough 

for life. Greenhouse gases are naturally present in the 

atmosphere and are also emitted by human activities. Human 

activities are intensifying the naturally occurring greenhouse 

effect by increasing the amount of GHGs in the atmosphere, which 

is changing the climate in a way that endangers human health, 

society, and the natural environment.

Some GHGs, such as carbon dioxide (CO2), are emitted to the 

atmosphere through natural processes as well as human 

activities. Other gases, such as fluorinated gases, are created 

and emitted solely through human activities. The well-mixed 

GHGs of concern directly emitted by human activities include CO2, 

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

 42 75 FR 56,424 (September 15, 2010).

43 "Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act." 74 FR 66,496 

(December 15, 2009).
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perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). These 

six GHGs will, for the purposes of this final rule, be referred 

to collectively as "the six well-mixed GHGs,” or, simply, GHGs, 

and together constitute the “air pollutant” upon which the GHG 

thresholds in the Tailoring Rule are based. These six gases 

remain in the atmosphere for decades to centuries where they 

become well-mixed globally in the atmosphere. When they are 

emitted more quickly than natural processes can remove them from 

the atmosphere, their concentrations increase, thus increasing 

the greenhouse effect. The heating effect caused by the humaninduced buildup of GHGs in the atmosphere is very likely the 

cause of most of the observed global warming over the last 50 

years. A detailed explanation of greenhouse gases, climate 

change, and its impact on health, society, and the environment 

is included in EPA’s technical support document (TSD) for the 

Endangerment Finding Final Rule (Docket ID No. EPA-HQ-OAR-2009-

0472-11292). 

In the United States, the combustion of fossil fuels (e.g., 

coal, oil, gas) is the largest source of CO2 emissions and 

accounts for 80 percent of the total GHG emissions. 

Anthropogenic CO2 emissions released from a variety of sources, 

including fossil fuel combustion and industrial manufacturing 

processes that rely on geologically stored carbon (e.g., coal, 

oil, and natural gas) that is hundreds of millions of years old, 
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as well as anthropogenic CO2 emissions from land-use changes such 

as deforestation, all perturb the atmospheric concentration of 

CO2 and cause readjustments in the distribution of carbon within 

different reservoirs. More than half of the energy-related 

emissions come from large stationary sources such as power 

plants, while about a third comes from transportation. Of the 

six well-mixed GHGs, four (CO2, CH4, N2O, and HFCs) are emitted 

by motor vehicles. In the United States industrial processes 

(such as the production of cement, steel, and aluminum), 

agriculture, forestry, other land use, and waste management are 

also important sources of GHGs. 

Different GHGs have different heat-trapping capacities. 

The concept of Global WarningWarming Potential (GWP) was 

developed to compare the heat-trapping capacity and atmospheric 

lifetime of one GHG to another. The definition of a GWP for a 

particular GHG is the ratio of heat trapped by one unit mass of 

the GHG to that of one unit mass of CO2 over a specified time 

period. When quantities of the different GHGs are multiplied by 

their GWPs, the different GHGs can be summed and compared on a 

CO2-equivalent (CO2e) basis. For example, CH4 has a GWP of 21, 

meaning each ton of CH4 emissions would have 21 times as much 

impact on global warming over a 100-year time horizon as 1 ton 

of CO2 emissions. Thus, on the basis of heat-trapping 

capability, 1 ton of CH4 would equal 21 tons of CO2e. The GWPs 
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of the non-CO2 GHGs range from 21 (for CH4) up to 23,900 (for 

SF6). Aggregating all GHGs on a CO2e basis at the source level 

allows a facility to evaluate its total GHG emissions 

contribution based on a single metric.

2. GHG Regulatory Actions

Over the past year, EPA has completed four distinct actions 

related to greenhouse gases under the CAA. The result of these 

rules, in conjunction with the operation of the CAA, has been to

trigger PSD applicability for GHG sources on and after January 

2, 2011, but to limit the scope of PSD for those sources covered 

by PSD. These actions include, as they are commonly called, the 

"Endangerment Finding" and "Cause or Contribute Finding," which 

we issued in a single final action;44 the Johnson Memo 

Reconsideration, noted previously; the "Light-Duty Vehicle Rule”

(LDVR or Vehicle Rule);45 and the "Tailoring Rule," also noted 

previously.

a. Endangerment Finding, Vehicle Rule, Johnson Memo 

Reconsideration

In the Endangerment and Cause or Contribute Finding, which 

is governed by CAA section 202(a), the Administrator exercised 

 44 "Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act." 74 FR 66,496 

(December 15, 2009).

45 "Light-Duty Vehicle Greenhouse Gas Emission Standards and 

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

25,324 (May 7, 2010).
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her judgment, based on an exhaustive review and analysis of the 

science, to conclude that “six greenhouse gases taken in 

combination endanger both the public health and the public 

welfare of current and future generations.” 74 FR at 66,496. 

The Administrator also found “that the combined emissions of 

these greenhouse gases from new motor vehicles and new motor 

vehicle engines contribute to the greenhouse gas air pollution 

that endangers public health and welfare under CAA section 

202(a).” Id. 

The Endangerment Finding led directly to promulgation of 

the Vehicle Rule, also governed by CAA section 202(a), in which 

EPA set standards for the emission of greenhouse gases for new 

motor vehicles built for model years 2012-2016. 75 FR 25,324. 

The Vehicle Rule established the first controls for GHGs under 

the CAA.

The Johnson Memo Reconsideration – as well as the Tailoring 

Rule, which we discuss later - is governed by the PSD and Title 

V provisions in the CAA. It was issued to address the automatic 

statutory triggering of the PSD and Title V programs for GHGs 

due to the Vehicle Rule establishing controls for GHGs. The 

Johnson Memo Reconsideration provided EPA’s interpretation of a 

pre-existing definition in its PSD regulations delineating the 

“pollutants” that are taken into account in determining whether 

a source must obtain a PSD permit and the pollutants each permit 
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must control. The Johnson Memo Reconsideration stated that when 

the Vehicle Rule takes effect on January 2, 2011, it will, in 

conjunction with the applicable CAA requirements, trigger the 

application of PSD to GHG-emitting sources. 75 FR 17,004.

b. Tailoring Rule

In the Tailoring Rule, EPA limited PSD applicability, at 

the outset, to only the largest GHG-emitting sources, and to 

phase-in PSD applicability, as appropriate, to smaller sources 

over time. 75 FR 31,514. 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 six GHGs: CO2, 

CH4, N2O, HFCs, PFCs, and SF6. EPA based this identification on 

the Vehicle Rule, which included applicability provisions 

specifying that the rule "contains standards and other 

regulations applicable to the emissions of those six greenhouse 

gases." 75 FR at 25,686 (promulgating 40 CFR 86.1818-12(a)). 

The Tailoring Rule noted that it was because the Vehicle Rule 

subjected to regulation the pollutant that is comprised of the 

six GHGs, that PSD was triggered for that pollutant and that, as 

a result, the pollutant must be defined for PSD purposes in the 

same way as it is identified in the Vehicle Rule. 75 FR 31,527. 

The Vehicle Rule identified the pollutant as the aggregate of 

the six gases because in the Endangerment Finding, the 
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Administrator found that those six gases – which she described 

as long-lived and directly emitted GHGs — may reasonably be 

anticipated to endanger public health and welfare.

3. Implementation of GHG PSD Requirements

Because PSD is implemented through the SIP system, EPA has

taken a series of actions to address the obligations of states 

(including localities and other jurisdictions, as appropriate) 

to implement PSD requirements for GHG-emitting sources. EPA has 

taken these actions through the Tailoring Rule discussed 

elsewhere in this preamble and a series of subsequent actions.46

a. Tailoring Rule 

In the Tailoring Rule, EPA incorporated the PSD thresholds 

for GHGs in the definition of the term “subject to regulation.” 

As noted previously, under EPA’s PSD regulations, PSD applies to 

a “major stationary source;” a “major stationary source” is 

defined as a source that emits 100/250 tons per year (tpy) on a 

mass basis of a “regulated NSR pollutant;” and a “regulated NSR 

pollutant,” in turn, is defined as, among other things, a

pollutant that is “subject to regulation” under the CAA.47 In 

 46 A detailed description of EPA’s implementation efforts, and 

the status of state compliance with those efforts, is included 

in Declaration of Regina McCarthy, Coalition for Responsible 

Regulation v. EPA, D.C. Cir. No. 09-1322 (and consolidated 

cases) (McCarthy Declaration), including Attachment 1 (Tables 1, 

2, and 3), which can be found in the docket for this rulemaking.

47 40 CFR 51.166(a)(7)(i), (b)(1)(i)(a), (b)(49).
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the Tailoring Rule, EPA added a limitation to the term “subject 

to regulation” so that the only GHG emissions that would be 

treated as “subject to regulation” (and therefore subject to 

PSD) are those emitted at or above specified thresholds of, 

depending on the circumstances, 75,000 and/or 100,000 tpy on a 

CO2e basis.48 EPA explained in the Tailoring Rule that it 

intends these levels to be the first steps in a phase-in 

approach for PSD applicability, and EPA committed in that rule 

to conduct additional rulemaking by 2012 and 2016 that would 

consider taking additional steps.

Some states advised EPA that it is likely they would be 

able to implement the Tailoring Rule thresholds by interpreting 

the term “subject to regulation” in their SIPs, and without 

having to take further action. A state’s ability to take this 

approach would have implications for how EPA needed to implement 

the Tailoring Rule.49 Accordingly, in the Tailoring Rule, EPA 

 48 Specifically, under the revised definition of “subject to 

regulation,” sources that emit at least the 75,000 and/or 

100,000 tpy CO2e threshold amount of GHGs are subject to PSD as 

long as the amount of GHG emissions also exceeds, in general,

100/250 tpy on a mass basis for new sources and zero tpy on a 

mass basis for modifications of existing sources. 40 CFR 

51.166(b)(48), 75 FR at 31,606; see EPA Office of Air Quality 

Planning and Standards, “PSD and Title V Permitting Guidance for 

Greenhouse Gases.” (March 2011 update).

49 Specifically, a state’s implementation of the Tailoring Rule in 

this manner prior to January 2, 2011 would obviate the need for 

EPA to narrow its approval of that state’s SIP, as EPA had 

proposed in the proposed Tailoring Rule. Thus, in the Final 
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began a process to gather more information about how states 

would implement permitting for GHG-emitting sources. 

b. 60-Day Letters

To gather this information, EPA, in the Tailoring Rule, 

asked states to submit letters within 60 days of publication of 

the Tailoring Rule, which we refer to as the 60-day letters, 

concerning the status of their PSD program and their legal 

authority for applying PSD program to GHG-emitting sources. 

This information would help clarify, for each state, the two 

central issues for PSD applicability to GHG-emitting sources: 

(i) whether the state has an approved PSD program that applies 

to GHG-emitting sources; and (ii) if so, what action the state 

would take to limit the applicability of its PSD program to GHGemitting sources at or above the Tailoring Rule thresholds.50

This information would assist EPA to determine what, if any, 

action it needed to take with respect to the states. 

Almost all states submitted 60-day letters, generally by 

August 4, 2010. The letters, along with other information EPA 

received through review of state requirements and further 

 

Tailoring Rule, EPA delayed final action on its narrowing 

proposal so that EPA could gather information about the process 

and time-line for states to implement the Tailoring Rule.

50 Alternatively, a state could choose to apply its PSD program 

to sources below the Tailoring Rule thresholds and acquire 

sufficient resources to implement the program as expanded, but 

no state had indicated an intention to proceed in this manner.
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communications with state officials, indicate that the states, 

localities, and other jurisdictions may be divided into three 

categories, described later in this preamble, for purposes of 

EPA’s implementation of the PSD program to GHG-emitting sources.

c. The Three Categories of States and EPA’s Implementation 

Process

The first category, which includes 7 states, 35 subsections 

of states, the District of Columbia, American Samoa, Guam, 

Puerto Rico, the U.S. Virgin Islands, and Indian Territory, does 

not have an approved SIP PSD permitting program. Instead, 

federal requirements apply. Thus, implementation of PSD for 

GHG-emitting sources in these jurisdictions is the simplest of 

all the states: GHG-emitting sources became subject to PSD and 

the thresholds in the Tailoring Rule as of January 2, 2011,

without further action.51 

The second category includes 13 states and a number of 

districts within states that have approved PSD SIPs, but those 

SIPs do not apply the PSD program to GHG-emitting sources. This 

group includes Texas, which is the focus of this action. The 

implementation process for this category is discussed later.52 

 51 McCarthy Declaration, paragraphs 28-33, page 8, and Attachment 

1, Table 1.

52 Id., paragraphs 34-55, pages 8-12, and Attachment 1, Table 2.
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The third category includes the remaining states, which 

have an approved SIP PSD program that applies to GHG-emitting 

sources. As for the implementation process for this category, 

some of these states have indicated that they are able to 

interpret their SIPs to apply PSD only to GHG emissions at or 

above the Tailoring Rule thresholds, and that they do not need 

to revise their SIPs to do so. However, most indicated that 

they would need to submit SIP revisions to EPA in order to 

incorporate the Tailoring Rule thresholds. This means that in 

these states, until they do submit their SIP revisions and EPA 

approves them, sources emitting GHGs at or above the 100/250 tpy 

levels are subject to PSD requirements as of January 2, 2011, if 

they construct or modify. EPA has encouraged these states to 

submit SIP revisions adopting the Tailoring Rule thresholds as 

soon as possible and some of these states have already done so. 

Moreover, almost all of these states are proceeding to revise 

their state law to reflect the Tailoring Rule thresholds and 

either did so by January 2, 2011, or very soon thereafter, or 

are currently in the process of revising their SIPs. In the 

meantime, EPA has finalized what we call the Narrowing Rule so 

that as of January 2, 2011, at least for federal purposes, PSD 

will apply to GHG-emitting sources only at the Tailoring Rule 

thresholds or 
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higher.53 As a result of these state actions and EPA’s Narrowing 

Rule, as of January 2, 2011, or shortly thereafter, in all or 

almost all of these states, only GHG-emitting sources at or 

above the Tailoring Rule thresholds are subject to PSD 

requirements . 54

d. SIP Call States, Including Texas

As just noted, the second category, which includes Texas, 

includes 13 states and some districts within states whose SIPs 

have an approved PSD program but do not have the authority to 

apply that program to GHG-emitting sources. For most of these 

states, including Texas, the reason is that their PSD 

applicability provision applies to any "pollutant subject to 

regulation" under the CAA (or a similar term), but other 

provisions of state law preclude automatic updating. As a 

 53 Specifically, for these states, EPA has stated that it intends 

to finalize its proposal in the Tailoring Rule to narrow its 

approval of their53 “Limitation of Approval of Prevention of 

Significant Deterioration Provisions Concerning Greenhouse Gas 

Emitting Sources in State Implementation Plans; Final Rule, 75 

FR 82535 (December 30, 2010). Specifically, in the Narrowing 

Rule, EPA narrowed its approval of the affected states’ SIP PSD 

applicability provisions to only the extent they apply PSD to 

GHG-emitting sources at or above the Tailoring Rule thresholds, 

which we call the Narrowing Rule. Id. paragraph 90, page 19.. 

In addition, recognizing that GHG-emitting sources also have 

permitting obligations under state law, EPA has strongly 

encouraged states to revise their state law as promptly as 

possible to eliminate the state PSD obligations of sources below 

the Tailoring Rule thresholds. Id.McCarthy Declaration

paragraph 92, page 19.

54 Id. paragraphs 62-94, pages 13-20, and Attachment 1, Table 3.
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result, this applicability provision covers only pollutants -

not including GHGs — that were subject to regulation at the time 

the state adopted the applicability provision. 

After proposing action by notice dated September 2, 2010,55 

EPA promulgated the final SIP call for 13 states, including 

Texas, by notice signed on December 1, 2010, and published on 

December 13, 2010, 75 FR 77,698, which we call the GHG PSD SIP 

Call or, simply, the SIP call.56 In this action, consistent with 

the requirements of CAA section 110(k)(5), EPA (i) issued a 

finding that the SIPs for 13 states (comprising 15 state and 

local programs) are "substantially inadequate to . . . comply 

with any requirement of this Act" because their PSD programs do 

not apply to GHG-emitting sources as of January 2, 2011; (ii) 

issued a SIP call requiring submission of a corrective SIP 

revision; and (iii) established a "reasonable deadline[] (not to 

exceed 18 months after the date of such notice)" for the 

submission of the corrective SIP revision. This deadline 

 55 "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—Proposed Rule," 75 FR 53,892 (September 2, 2010); 

"Action to Ensure Authority to Issue Permits under the 

Prevention of Significant Deterioration Program to Sources of 

Greenhouse Gas Emissions: Federal Implementation Plan –

Proposed Rule," 75 FR 53,883 (September 2, 2010). 

56 "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—Final Rule," 75 FR 77,698 (December 13, 2010). 
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ranges, for different states, from 3 weeks to 12 months after 

the date of the final SIP call, as discussed later in this 

preamble. 

EPA justified its finding that the affected SIPs are 

“substantially inadequate” to comply with CAA requirements on 

grounds that (i) the CAA requires that PSD requirements apply to 

any stationary source that emits specified quantities of any air 

pollutant subject to regulation under the CAA, and those PSD 

requirements must be included in the approved SIPs; (ii) as of 

January 2, 2011, GHG-emitting sources will become subject to 

PSD; (iii) as a result, the CAA requires PSD programs to apply 

to GHG-emitting sources; and (iv) accordingly, the failure of 

any SIP PSD applicability provisions to apply to GHG-emitting 

sources means that the SIP fails to comply with these CAA 

requirements. 

In the SIP call proposal, EPA discussed in some detail the 

SIP submittal deadline under CAA section 110(k)(5). Under this 

provision, in issuing a SIP call, EPA "may establish reasonable 

deadlines (not to exceed 18 months after the date of such 

notice) for the submission of such plan revisions." EPA 

proposed to allow each of the affected states up to 12 months 

from the date of signature of the final finding of substantial 

inadequacy and SIP call within which to submit the SIP revision, 

unless, during the comment period, the state expressly advised 
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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 EPA would establish the shorter period as the deadline. 

EPA stated that, assuming that EPA were to finalize the SIP call 

on or about December 1, 2010, as EPA said it intended to do in 

the proposal, then the earliest possible SIP submittal deadline 

would be December 22, 2010.

EPA made clear that the purpose of establishing the shorter 

period as the deadline for any interested state is to 

accommodate states that wish to ensure that a FIP is in effect 

as a backstop to avoid any gap in PSD permitting. EPA also made 

clear that if a state did not advise EPA that it does not object 

to a shorter deadline, then the 12-month deadline would apply. 

EPA emphasized that for any state that receives a deadline after 

January 2, 2011, the affected GHG-emitting sources in that state 

may be delayed in their ability to receive a federally approved 

permit authorizing construction or modification. This is 

because after January 2, 2011, these sources may not have 

available a permitting authority to review their permit 

applications until the date that EPA either approves the SIP 

submittal or promulgates a FIP.

EPA asked that each of the affected states write EPA a 

letter during the comment period to identify the deadline for 

SIP submission to which the state would not object if EPA 
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established. We call these the 30-day letters. Each affected 

state wrote a 30-day letter to EPA, as requested. Except for 

Texas, each state identified a SIP submittal deadline, which 

differed among the states, and which ranged from three weeks to 

12 months. In the final SIP call, EPA established SIP submittal 

deadlines identified by the states, except that EPA established 

a deadline of 12 months for Texas, in accordance with EPA’s 

proposal. Except for Texas, each state explained in its 30-day 

letter and in subsequent communications with EPA, that it was 

planning on either receiving a FIP or adopting a SIP and that it 

chose a deadline that would result in having either the FIP or 

an approved SIP, as appropriate, in place by January 2, 2011 or 

soon enough thereafter so as to avoid any hardship to its 

sources. In the final SIP call, EPA justified approving this 3-

week-to-12-month time period, although expeditious, as meeting 

the CAA section 110(k)(5) requirement to be a "reasonable" 

deadline in light of: (i) the SIP development and submission 

process; (ii) the preference of the state; and (iii) the 

imperative to minimize the period when sources will be subject 

to PSD but will not have available a PSD permitting authority to 

act on their permit application and therefore may face delays in 

constructing or modifying.

In the final SIP call, based on the states’ 30-day letters 

and other communications, EPA established a SIP submittal 
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deadline of December 22, 2010, for seven states. Each of the 

states indicated that it did not expect to submit a SIP revision 

by that date and instead expected to receive a FIP. On December 

23, 2010, for each of the seven states, EPA issued a finding of 

failure to submit its corrective SIP revision by that deadline, 

and EPA promulgated a FIP. 

Except for Texas, EPA expectsexpected each of the other 

states subject to the SIP call to adopt a SIP revision and 

receive EPA approval of it, or receive a FIP, within the first 

half of 2011, and, in most cases, substantially sooner. 

Although none of these states will havehad a permitting 

authority in place as of January 2, 2011, none of these states 

expectsexpected that gap to pose meaningful difficulties for 

sources because, depending on the state, the gap iswould be

brief, and the state doesdid not expect any sources to seek a 

permit during the gap, or even if the state werehad been the 

permitting authority during the gap, it could not completehave 

completed processing the permits during that time.57 

As discussed later, Texas has responded to the SIP call 

differently than the other states. As a result, its GHGemitting sources do face the prospect of permitting delays. 

This rulemaking action addresses that situation.

 57 McCarthy Declaration, p. 12, paragraph 55.
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4. Summary of the Effect of EPA’s Implementation Actions in 

States Other Than Texas

EPA recently summarized the status of its implementation 

efforts, for all three categories of sources, as follows:

Overall, EPA has received information about the 

status of 99 jurisdictions (49 states58, 4 territories, 

45 localities, and the District of Columbia), and 

included that information in Attachment 1. Of these 

jurisdictions, 94 will have, for Federal law purposes, 

a PSD permitting program for GHG emissions at the 

Tailoring Rule thresholds on Jan. 2, 2011. Of these 

94 entities, 84 will have made any necessary 

amendments to state or local law to ensure that state 

or local permits are not required for GHG emissions 

below Tailoring Rule thresholds. By the end of the 

first quarter of 2011, only one jurisdiction will not 

have authority to permit GHG sources, and that 

jurisdiction will obtain authority by July 1, 2011 and 

in the meantime, does not expect large sources seeking 

permits for their GHGs. In addition, by the end of 

the first quarter of 2011, all but one more state will 

have made any necessary amendments to state or local 

law to ensure that permits are not required for GHG 

emissions below Tailoring Rule levels. 1 program with 

GHG permitting authority at the lower statutory levels 

has not yet determined how, and on which timeline, it 

 58 California’s PSD program is administered in its entirety by 

local jurisdictions.
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will incorporate the Tailoring Rule thresholds into 

its state law.59

Thus, under EPA’s implementation program, (i) in every 

state, (a) only sources at or above the Tailoring Rule 

thresholds will be subject under federal law to obtain a PSD 

permit when they construct or modify as of January 2, 2011, and 

(b) only those same sources will be subject under state law to 

obtain a PSD permit when they construct or modify as of January 

2, 2011 or very soon thereafter; and (ii) in every state, except 

for Texas, as of January 2, 2011 or very soon thereafter, GHG 

sources that construct or modify will be able to receive permits 

when they need them, so that the sources will not face obstacles 

to constructing and modifying. Again, Texas has responded to 

EPA’s implementation program in a manner that has resulted in 

its sources facing obstacles to constructing and modifying, as 

discussed next, which this rulemaking addresses. 

5. EPA’s Implementation Approach for Texas and Texas’s Response

 59 McCarthy Declaration, p. 20, paragraph 98. There have been a 

few changes in the status of individual states since this time, 

but the overall picture remains the same. EPA has been in close 

communication with almost every state and many other 

jurisdictions, along with multi-state organizations such as the 

National Association of Clean Air Agencies (NACAA) In addition 

to the letters that states have sent responding to the Tailoring 

Rule (the 60-day letters) and proposed SIP Call (the 30-day 

letters), EPA officials, primarily through the Regional Offices, 

have had numerous communications with their state counterparts. 

It is as a result of the prompt action taken by the states that 

implementation efforts have been so successful to date. 
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The following describes the progress to date of 

implementing PSD for GHG emissions in Texas, based on extensive 

communications between EPA and TCEQ. It should be borne in mind, 

as noted earlier, that Texas is in the second of the three 

categories of states: that is, it has an approved PSD program 

that does not apply to GHGs-emitting sources.

a. Texas’s 60-Day Letter

Texas’s 60-day letter provides the state’sState’s clearest 

articulation of its response to EPA’s efforts to implement PSD 

for GHG-emitting sources at the Tailoring Rule thresholds 

beginning January 2, 2011. As noted previously, in the preamble 

to the final Tailoring Rule, EPA asked each state to send EPA a 

letter within 60 days to identify which category the state was in 

and what action the state intended to take. Specifically, with 

regard to sources in Category 2, EPA stated:

In our proposed rule, we also noted that a 

handful of EPA-approved SIPs fail to include 

provisions that would apply PSD to GHG sources at the 

appropriate time. This is generally because these 

SIPs specifically list the pollutants subject to the 

SIP PSD program requirements, and do not include GHGs 

in that list, rather than include a definition of NSR 

regulated pollutant that mirrors the federal rule, or 

because the state otherwise interprets its regulations 

to limit which pollutants the state may regulate. At 

proposal, we indicated that we intended to take 

separate action to identify these SIPs, and to take 

regulatory action to correct this SIP deficiency. 

We ask any state or local permitting agency that 

does not believe its existing SIP provides authority 

to issue PSD permits to GHG sources to notify the EPA 
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Regional Administrator by letter, and to do so no 

later than August 2, 2010. This letter should 

indicate whether the state intends to undertake 

rulemaking to revise its rules to apply PSD to the GHG 

sources that will be covered under the applicability 

thresholds in this rulemaking, or alternatively, 

whether the state believes it has adequate authority 

through other means to issue federally-enforceable PSD 

permits to GHG sources consistent with this final 

rule. For any state that lacks the ability to issue 

PSD permits for GHG sources consistent with this final 

rule, we intend to undertake a separate action to 

issue a SIP call, under CAA section 110(k)(5). As 

appropriate, we may also impose a FIP through 40 CFR 

52.21 to ensure that GHG sources will be permitted 

consistent with this final rule.

75 FR 31,582/3.

With regard to states in category 3, EPA requested that in 

the states’ 60-day letter, 

the state should explain whether it will apply EPA’s 

meaning of the term “subject to regulation” and if so, 

whether the state intends to incorporate that meaning 

of the term through interpretation, and without 

undertaking a regulatory or legislative process. If a 

state must undertake a regulatory or legislative 

process, then the letter should provide an estimate of 

the time needed to adopt the final rules. If a state 

chooses not to adopt EPA’s meaning by interpretation, 

the letter should address whether the state has 

alternative authority to implement either our 

tailoring approach or some other approach that is at 

least as stringent, whether the state intends to use 

that authority. If the state does not intend to 

interpret or revise its SIP to adopt the tailoring 

approach or such other approach, then the letter 

should address the expected shortfalls in personnel 

and funding that will arise if the state attempts to 

carry out PSD permitting for GHG sources under the 

existing SIP and interpretation. 

For any state that is unable or unwilling to 

adopt the tailoring approach by January 2, 2011, and 

that otherwise is unable to demonstrate adequate 
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personnel and funding, we will move forward with 

finalizing our proposal to limit our approval of the 

existing SIP. 

75 FR 31,582/3. 

On August 2, 2010, Texas submitted its 60-day letter, 

signed by the Texas Attorney General and the Chairman of the 

Texas Commission on Environmental Quality.60 In that letter, 

Texas responded specifically to EPA’s request that “any state . . 

.... that does not believe its existing SIP provides authority to 

issue PSD permits to GHG sources to notify [EPA and] . . ....

indicate whether the state intends to . . . revise its rules to 

apply PSD to . . . GHG sources” by stating: “Texas has neither 

the authority nor the intention of interpreting, ignoring, or 

amending its laws in order to compel the permitting of greenhouse 

gas emission.” Id. p. 1. Texas offered several explanations for 

this position. First, Texas noted: 

Texas’ stationary source permitting program 

encompasses all “federally regulated new source review 

pollutants,” including, “any pollutant that otherwise 

is subject to regulation under the [federal Clean Air 

Act].” 30 Tex. Admin. Code §116.12(14)(D). The rules 

of the Texas Commission on Environmental Quality 

(TCEQ), like the EPA’s rules, do not define the phrase 

“subject to regulation.” 

 60 Letter from Bryan W. Shaw, Chairman, Texas Commission on 

Environmental Quality, and Greg Abbott, Attorney General of 

Texas, to Hon. Lisa Jackson, Administrator, U.S. Environmental 

Protection Agency, and Dr. Alfredo “Al” Armendariz, Regional 

Administrator, U.S. Environmental Protection Agency, Region 6 

(August 2, 2010) (Texas’s 60-day letter), included in the docket 

for this rulemaking.
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Id. p. 2. Texas then explained that it had several objections to 

interpreting the phrase “subject to regulation” to allow 

regulation of GHGs. For one thing, according to Texas, longstanding state case law precluded the term – and the PSD 

applicability provisions generally - from automatically 

incorporating newly regulated pollutants. Specifically, Texas 

said:61

...Texas’ stationary source permitting program 

encompasses all “federally regulated new source review 

pollutants,” including “any pollutant that otherwise 

is subject to regulation under the [federal Clean air 

Act].” 30 Tex. Admin. Code §116.12(14)(D). This 

delegation of legislative authority to the EPA is 

limited solely to those pollutants regulated when 

Texas Rule 116.12 was adopted (1993) and last amended 

(2006). As the Texas Supreme Court has explained, 

“The general rule is that when a statute is adopted by 

a specific descriptive reference, the adoption takes 

the statute as it exists at that time, and the 

subsequent amendment thereof would not be within the 

terms of the adopting act.” Trimmer v. Carlton, 296 

S.W. 1070 (1927). Thus, in order for Texas Rule 

116.12 to pass constitutional muster, it must be 

limited to adopting by reference the definition of 

“subject to regulation” in existence when Rule 116.12 

was last amended in 2006. In other words, Texas Rule 

116.12 cannot delegate authority to the EPA to define 

“subject to regulation” in 2010 to include pollutants 

that were not “subject to regulation” in 2006.

Id. at 4.

 61 In this explanation, Texas was referring to the PSD 

applicability provision that Texas adopted under State law in 

2006, which differed slightly from the applicability provision 

approved into the SIP in 1993.
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Secondly, Texas took the position that PSD applies only to 

NAAQS pollutants, and not non-NAAQS pollutants. Texas stated: 

The only sensible interpretation of the Clean Air Act 

is one that requires the EPA to promulgate a National 

Ambient Air Quality Standard (NAAQS) for greenhouse 

gases before the EPA can require PSD permitting of 

greenhouse gases.... EPA, however, has not developed a 

NAAQS for greenhouse gases....

Id. at 4-5.

Texas provided a more detailed exposition of its view that 

PSD applies only to NAAQS pollutants in its challenges before the 

D.C. Circuit to EPA’s GHG actions, where Texas moved to stay the 

Endangerment Finding, the Vehicle Rule, and the Johnson Memo 

Reconsideration (Texas’s Motion to Stay Three GHG Actions).62 

(In a separate motion, Texas also moved to stay the Tailoring 

Rule.63) There, Texas reiterated arguments based on the text of 

some of the CAA PSD provisions that, in Texas’s view, lead to the 

conclusion that the CAA precludes applying PSD to non-NAAQS. As 

noted previously, these arguments were raised by commenters to 

 62 “State of Texas’s Motion For A Stay Of EPA’s Endangerment 

Finding, Timing Rule, and Tailpipe Rule,” Coalition for 

Responsible Regulation v. EPA, No. 09-1322 (and consolidated 

cases) (September 15, 2010). On December 10, 2010, the D.C. 

Circuit denied Texas’s, and other parties’, motions to stay. 

Order, Coalition for Responsible Regulation v. EPA, No. 09-1322 

(and consolidated cases) (December 10, 2010).

63 “State of Texas’s Motion For A Stay Of EPA’s Greenhouse Gas 

Tailoring Rule,” Coalition for Responsible Regulation v. EPA, 

No. 09-1322 (and consolidated cases) (September 15, 2010) 

(Texas’s Motion to Stay the Tailoring Rule).
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the Tailoring Rule. Texas concluded that EPA’s efforts to apply 

PSD to GHGs –

thus violates the CAA. Moreover, [EPA’s] 

interpretation of the CAA is not entitled to deference 

because the text of the statute is unambiguous. 

Chevron, U.S.A. v. NRDC, 467 U.S. 837, 842 (1984) (the 

Agency must give effect to the unambiguously expressed 

intent of Congress). Accordingly, EPA’s attempt to 

short cut the CAA’s NAAQS process in order to regulate 

GHG emissions from stationary sources through PSD and 

Title V must fail.64

At the close of its 60-day letter, Texas added, “In the 

event a court concludes EPA’s actions comport with the law, Texas 

specifically reserves and does not waive any rights under the 

federal Clean Air Act or other law with respect to the issues 

raised herein.”65

b. Texas’s 30-Day Letter

As noted previously, in the GHG PSD SIP call proposal, EPA 

proposed to establish, for each affected state, a deadline of 12 

months from the date of signature of the final SIP call for 

submitting the corrective SIP revision, unless the state 

expressly advised EPA in its 30-day letter that it would not 

object to a shorter period. Texas submitted a 30-day letter on 

 64 Texas’s Motion to Stay Three GHG Actions, at 27. 65 Id. at 5. 
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October 4, 2010,66 and in that letter, voiced various objections 

to the proposed SIP call. Texas reiterated its view that PSD is 

limited to NAAQS pollutants, and therefore cannot apply to GHGs, 

and added that the SIP call is “based on an impermissible 

interpretation of the [Clean Air Act]. EPA cannot ... impose 

permitting through [the PSD] program without first setting a 

NAAQS....” Texas 30-day letter p. 2, 4. EPA responded to those 

objections in the final SIP call.67

In its 30-day letter, Texas went on to discuss the SIP 

submission schedule and FIP that EPA proposed, but Texas 

declined EPA’s invitation to identify a specific deadline for 

the state’s SIP submission. As a result, in the final SIP call, 

EPA was obliged to establish the default SIP submission deadline 

for Texas of December 1, 2011, in accordance with EPA’s 

proposal. Because Texas has clearly stated that it does not 

intend, and, in its view, does not have the authority, to adopt 

a SIP revision to respond to the SIP Call, including to apply 

PSD to GHG-emitting sources, EPA expects to promulgate a FIP to

continue to apply PSD to these sources in December, 2011. But, 

 66 “Texas Commission on Environmental Quality Comments on Actions 

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, 

Docket ID No. EPA-HQ-OAR-2010-0107, FRL-9190-7 Federal 

Implementation Plan (FIP), Docket ID No EPA-HQ-OAR-2010-0107, 

FRL-9190-8 (October 4, 2010) (Texas 30-day letter).

67 Final SIP Call, 75 FR at 77,706/2-3 and n. 18.
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again, because Texas did not identify an earlier deadline for 

its SIP submittal, the earliest that EPA could promulgate such a 

FIP would be December 2, 2011. Under this approach, due to the 

position Texas has taken, absent further action, sources in 

Texas could not expect to have a permitting authority with 

authority to issue preconstruction permits for their GHG 

emissions until that December 2, 2011, date. As a result, 

absent further action, sources in Texas would face obstacles in 

constructing or modifying before that date. 

Texas’s 30-day letter indicates that Texas was well aware 

of the consequences of its decision not to identify a specific 

deadline for its SIP submission, but had several reasons for 

making that decision. These included its view, again, that PSD 

applies only to NAAQS pollutants, and also that EPA was required 

to employ a different process for requiring a SIP revision, one 

that would have provided the state with 3 years to adopt a SIP 

revision. Texas 30-day letter at 4-5. In addition, Texas

asserted that there is no reason to allow EPA to promulgate an 

early FIP for the benefit of Texas’s sources because, in Texas’s 

view, for practical reasons, EPA could not issue those permits 

for the “foreseeable future” anyway. Specifically, Texas 

explained that EPA had not issued guidance for determining BACT, 

the key element of a PSD permit for a GHG source. Texas added 

that even after EPA issued that guidance, BACT will, in Texas’s 
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view, remain uncertain and contentious, and the guidance will be 

of limited usefulness until the control technology is proven. 

Id. at 5. Texas added that “[i]ndustry should be particularly 

concerned about EPA’s lack of resources and experience to issue 

these permits....” Id. at 6. Texas concluded, “The result of 

all this is that, even under a FIP, it is unlikely that 

construction of new major GHG sources or major modifications 

will commence in the foreseeable future.” Id. at 6.

In order to reduce uncertainty for sources and permitting 

authorities, EPA has issued guidance for use in determining 

BACT, provided training for permitting authorities and sources, 

and is continuing to maintain and update resources for use in 

making these determinations. These resources include question 

and answer documents and white papers on proven and emerging 

technologies for reducing greenhouse gas emissions in different 

industries as well as continued close interaction between 

sources, permitting authorities, and EPA. 

It should be noted that Texas stated in filings before the 

D.C. Circuit in which it challenged the Tailoring Rule that it 

believed 167 projects in Texas would be affected by the lack of 

a permitting authority during 2011.68

IV. Final Action and Response to Comments

 68 Texas’s Motion to Stay the Tailoring Rule, pp. 2, 16.
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In this action, EPA is taking the following actions to 

ensure that there is a mechanism for large, GHG-emitting sources 

in Texas to obtain PSD permits under a program that complies 

with the CAA. First, EPA is determining that the 

Administrator’s action approving the Texas SIP PSD program was 

in error under CAA section 110(k)(6). 

Second, EPA, in the same manner as its past action to 

approve the Texas SIP PSD program, is revising such action as 

appropriate without requiring any further submission from Texas. 

Id. The appropriate revision is to convert the previous 

approval to a partial approval and partial disapproval. The 

partial approval applies to the extent that Texas’s PSD program 

actually covers pollutants that are required to be included in 

PSD. The partial disapproval applies to the extent that Texas 

failed to address or to include assurances of adequate legal 

authority (required under CAA section 110(a)(2)(E)(i)) for the 

application of PSD to each newly regulated pollutant, including 

non-NAAQS pollutants, under the CAA. Note that as an 

alternative basis to CAA section 110(k)(6) for taking these 

first two steps, EPA relies on its inherent administrative 

authority to reconsider its previous action. 

Third, in this rulemaking, EPA is promulgating a FIP to 

apply appropriate measures to assure that EPA’s PSD regulatory 

requirements will apply to non-NAAQS pollutants that are newly 
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subject to regulation under the CAA that the Texas PSD program 

does not already cover. At present, the only such pollutant is 

GHGs. Therefore, EPA’s FIP will at present apply the EPA 

regulatory PSD program for the GHG portion of PSD permits for 

GHG-emitting sources in Texas, and EPA commits to take whatever 

steps are appropriate if, in the future, Texas fails to apply 

PSD to another newly regulated non-NAAQS pollutant. In light of 

the immediate need of Texas’s GHG-emitting sources for a 

permitting authority to process their permit applications for 

GHGs, this rule will be effective on May 1, 2011. 

A. Response to General Comments on the Operation of the PSD 

Program

1. Comments on the Self-Executing Nature of the PSD Program

Several commenters disagreed with EPA’s position regarding 

section 165(a) of the CAA and argue that EPA’s decision to 

regulate GHGs had no self-executing effect on the permitting 

requirements applicable to sources in Texas. These commenters 

state that the only CAA requirements that are self-executing are 

found in CAA section 168, a section of the statute that 

incorporated PSD changes made in the 1977 amendments to the Act. 

Instead, according to these commenters, GHG-emitting sources 

became subject to PSD requirements through EPA’s revisions to 

the PSD regulations in 40 CFR 51.166, and those regulations

provide states 3 years to revise their SIPS to incorporate 
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changes in the PSD program. Accordingly, one commenter asserted 

that rather than imposing a “construction permitting moratorium”

upon EPA’s adoption of a new minimum PSD requirement, the PSD 

rules provide states a reasonable period of time for 

incorporating a new minimum PSD requirement, with prospective 

effect, into SIPs, during which time the EPA-approved SIP 

continues in force and the state may continue to issue permits 

under that SIP without addressing the new minimum requirement 

promulgated by EPA.

2. EPA Response

EPA indicated in the proposal for this rulemaking, 75 FR at 

82,388/2, that in earlier rulemakings, EPA took comment on and 

resolved the issue of whether the CAA PSD requirements apply by 

their terms, so that EPA was not soliciting comment on that 

issue in this rulemaking. In those earlier rulemakings, EPA 

concluded that the CAA PSD requirements do apply by their terms, 

so that sources in a state are subject to PSD for their 

emissions of pollutants newly subject to regulation even if the 

state has an approved SIP that does not apply PSD to those 

pollutants. See 75 FR 31,514 (June 3, 2010) and 75 FR 77,698 

(December 13, 2010). As noted earlier in this preamble, 

notwithstanding the proposal, EPA did receive comments on this 

issue in this rulemaking. Because EPA resolved this issue in 

those earlier rulemakings, and those dissatisfied with that 

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resolution may challenge it in court – and in fact are so doing 

– and because the present rulemaking is based on those 

rulemakings, EPA is not obliged to respond to those comments in 

this rulemaking. 

Even so, for the sake of completeness, and without 

reopening this issue in this rulemaking, EPA does provide the 

following response. EPA disagrees with these commenters and EPA 

continues to take the view that the CAA PSD requirements apply 

by their terms to pollutants newly subject to regulation, 

regardless of whether a state with an approved SIP applies PSD 

to such pollutants. As discussed at length in the preamble to 

the final PSD GHG SIP call (75 FR 77,707-77,709, Dec 13. 2010), 

the CAA requirements (i) prohibit a "major emitting facility" 

from constructing or modifying without obtaining a permit that 

meets the PSD requirements, CAA section 165(a)(1); and (ii) 

define a "major emitting facility" as a source that emits a 

specified quantity of "any air pollutant," CAA section 169(1), 

which EPA has long interpreted as any pollutant subject to 

regulation. 40 CFR 52.166(b)(49)(iv). In this manner, the CAA 

requirements for PSD applicability are what we call 

automatically updating, that is, at the very time EPA regulates 

a previously unregulated pollutant, any source emitting that 

pollutant in sufficient quantities becomes a “major emitting 

facility,” and that source cannot construct or modify without 
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receiving a PSD permit. That is, PSD applies to that pollutant 

at the time it becomes subject to regulation, without further 

regulatory action by EPA. 

EPA regulations have codified this automatically updating 

aspect of the CAA PSD requirements. See 43 FR 26,380, 26,403/3, 

26,406 (June 19, 1978) (promulgating 40 CFR 51.21(b)(1)(i)) and 

42 FR 57,479, 57,480, 57,483 (November 3, 1977) (proposing 40 

CFR 51.21(b)(1)(i)) (applying PSD requirements to a "major 

stationary source" and defining that term to include sources 

that emit specified quantities of "any air pollutant regulated 

under the Clean Air Act"). Most recently, in our 2002 NSR 

Reform rule, EPA reiterated these requirements, although 

changing the terminology. 67 FR 80,186 (December 31, 2002). 

Specifically, EPA required that emissions of "any regulated NSR 

pollutant" be subject to PSD requirements when emitted in 

specified quantities by sources and defined that term to include 

pollutants regulated under certain CAA requirements, as well as 

"any pollutant that otherwise is subject to regulation under the 

[CAA]." 40 CFR 52.166(b)(49)(iv). EPA made clear in the 

preamble to the NSR Reform rule that PSD applicability was 

automatically updating. 67 FR 80,240. 

GHG-emitting sources became subject to PSD due to the 

operation of these CAA and regulatory provisions, in conjunction 

with the Light-Duty Vehicle Rule. The latter rule subjected 
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GHGs to regulation for the first time, as of January 2, 2011, so 

that, by operation of the CAA PSD provisions and the associated 

regulatory provisions, PSD automatically applied to GHG-emitting 

stationary sources as of that date. The Tailoring Rule codified 

in 40 CFR 51.166 an interpretation that, read in conjunction 

with the Light-Duty Vehicle Rule regulations, had the effect of 

establishing the January 2, 2011 date by which GHGs became 

subject to regulation, see 40 CFR 51.166(b)(48) along with a 

phase-in schedule, see id at 51.166(b)(48)(iv)-(v). However, 

contrary to commenters arguments, the Tailoring Rule did not 

itself require that PSD apply to GHG-emitting sources, and the 

provisions that the Tailoring Rule incorporated into 40 CFR 

51.166(b)(48), as just described, did not impose that 

requirement.

Accordingly, commenters are incorrect in arguing that the 

authorization for states to submit PSD SIP revisions within a 

three-year period, under 40 CFR 51.166(a)(6), means that PSD 

does not apply to GHG-emitting sources until states submit such 

a SIP revision. Section 51.166(a)(6) provides, in relevant 

part: “Any State required to revise its implementation plan by 

reason of an amendment to this section ... shall adopt and

submit such plan revision to the Administrator for approval no 

later than three years after such amendment is published in the 

Federal Register”; and “[a]ny [such] revision ... shall take 

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effect no later than the date of its approval and may operate 

prospectively. 40 CFR 51.166(a)(6)(i), (iii) (emphasis added). 

There are several reasons why this provision does not mean that 

PSD does not apply to GHG-emitting sources until after a state 

revises its SIP in accordance with the Tailoring Rule. For one 

thing, because this provision is a regulation, it cannot, no 

matter how it is interpreted, override the CAA requirements that 

apply PSD requirements to GHG-emitting sources so that those CAA 

requirements do not take effect as of January 2, 2011. 

For another, this provision does not apply to the 

requirement that GHG-emitting sources became subject to PSD as 

of January 2, 2011. GHG-emitting sources became subject to PSD 

by operation of the CAA and existing regulations, in conjunction 

with the Light-Duty Vehicle Rule, not because of any amendment 

to 40 CFR 51.166. The Tailoring Rule did amend section 51.166, 

but, again, those amendments did not impose PSD applicability on 

GHG-emitting sources; rather, they clarified the date of PSD 

applicability for GHG-emitting sources and provided a timetable 

for phasing-in PSD applicability. Therefore, no Statestate is 

required “by reason of an amendment to ... section [51.166]” to 

revise its SIP to apply PSD to GHG-emitting sources, and as a 

result, any three-year delay in section 51.166 does not apply to 

PSD applicability for GHG-emitting sources.
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3. Comments on Stationary Sources’ Ability to Rely on 

Approved State SIP

Several industry commenters stated that in light of their 

contention that the PSD program is not self-executing, as 

discussed earlier in this preamble, then it follows that 

stationary sources do not violate the CAA if they get permits in 

accordance with the requirements of an approved state SIP, and 

they may lawfully construct or modify in accordance with the 

terms of those permits, even though those permits do not cover 

their GHG emissions. According to these commenters, sources in 

Texas need only look to the content of Texas’s existing SIP in 

determining the permitting requirements with which they must 

comply and sources in Texas can obtain permits now, without 

addressing GHGs, and lawfully construct or modify in accordance 

with those permits. One commenter states that CAA Section 

113(a)(1) “provides a shield to these sources so long as they 

comply with the applicable SIP.” Commenters cited the recent 

decision of the 7th Circuit, United States v. Cinergy 

Corporation, 623 F.3d 455 (7th Cir. 2010) to support the opinion 

that actions taken in compliance with an approved SIP are valid. 

4. EPA Response 

Here, too, EPA stated in the proposal for this rulemaking 

that because EPA addressed this comment in earlier rulemakings 

on which this rulemaking is based – including the Tailoring Rule 
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and the GHG PSD SIP Call – EPA was not soliciting comment on 

this issue and was not required to respond to such comments. 75 

FR at 82,388/2, see 75 FR 31,514 (June 3, 2010) and 75 FR 77,698 

(December 13, 2010). Even so, for the sake of completeness, and 

without re-opening this issue in this rulemaking, EPA provides 

the following response: EPA disagrees with the comment. As we 

stated earlier in this preamble, EPA has long interpreted the 

PSD applicability provisions in the CAA to be self-executing,69

that is, they apply by their terms so that a source that emits 

any air pollutant subject to regulation becomes subject to PSD -

and, therefore, cannot lawfully construct or modify without 

obtaining a PSD permit — and these provisions apply by their 

terms in this manner regardless of whether the state has an 

approved SIP PSD program. What is more, until an applicable 

implementation plan is in place — either an approved SIP or a 

FIP — no permitting authority is authorized to issue a permit to 

the source. 

In the recent Cinergy decision, the 7th Circuit confronted a 

case that, at the district court level, involved both 

nonattainment NSR and PSD claims, with the appeal involving a 

substantive nonattainment NSR issue and an evidentiary PSD 

issue. However, in its opinion, the 7th Circuit described the 

 69 EPA likewise did not reopen this issue in this rulemaking.
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substantive nonattainment NSR issue as if it applied to both 

nonattainment NSR and PSD. On that issue, the Court held that 

sources could continue to abide by permitting requirements in an 

existing SIP until amended, even if that SIP does not comport 

with the law. Again, notwithstanding the Court’s broader 

description of the case, that holding applied only to the 

nonattainment NSR claims because, again, only those claims were 

before the Court on that issue. United States v. Cinergy Corp., 

623 F.3d 455 (7th Cir. 2010). In stark contrast to the 

nonattainment provisions actually at issue in Cinergy—which are 

not self-executing and must therefore be enforced through a SIP

— PSD is self-executing; it is the statute (CAA section 165), 

not just the SIP, that prohibits a source from constructing a 

project without a permit issued in accordance with the Clean Air 

Act. 

B. Determination that EPA’s Previous Approval of Texas’s PSD 

Program was in Error

In this action, EPA is determining that EPA’s previous 

approval of Texas’s PSD program was in error under CAA section 

110(k)(6). In applying CAA section 110(k)(6), EPA must first 

“determine[] that the Administrator’s action approving ... [the 

Texas PSD program] was in error....” EPA has determined that 

the Texas PSD program had flaws at the time Texas submitted it 

and EPA approved it, so that EPA’s approval was in error.

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1. Gaps in Texas’s PSD Program Concerning Application of PSD to 

Pollutants Newly Subject to Regulation and Concerning Assurances

of Legal Adequacy

Texas’s PSD program, although approved by EPA, contained 

important gaps concerning the application of PSD to pollutants 

newly subject to regulation, including non-NAAQS pollutants, and 

Texas’s legal authority for doing so.

a. Gaps in Texas’s PSD Program at the Time of EPA Approval

The application of the PSD program to pollutants newly 

subject to regulation, including non-NAAQS pollutants, is a key 

component of the program. As noted earlier in this preamble, it 

is EPA’s long-standing position that PSD applies to all such 

pollutants, and most of the states’ PSD programs do apply to 

such pollutants automatically, as soon as those pollutants 

become subject to regulation.

In particular, as noted previously, EPA made clear to Texas 

during 1980 and again during 1983 that PSD applies to non-NAAQS 

pollutants. Because Texas’s PSD program, unlike that of most 

states, did not automatically apply to such pollutants, it was 

important that during the time when Texas submitted SIP 

revisions and EPA acted on them, 1985-1992, that Texas address 

the application of PSD to pollutants newly subject to 

regulation, including non-NAAQS pollutants. 
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It is clear from the record that both Texas and EPA were 

well aware that the Texas PSD rules’ IBR of EPA PSD regulatory 

requirements did not automatically update. Indeed, when EPA 

promulgated the NAAQS for PM10, a previously unregulated 

pollutant, and thereby subjected that pollutant to PSD for the 

first time, Texas revised its PSD rules to update the IBR and 

thereby assure that the state PSD program applied to PM10.

Had Texas recognized that following approval of its PSD 

program, EPA would in all likelihood continue to subject 

previously unregulated pollutants to regulation, and therefore 

to PSD for the first time, Texas could have addressed how it 

would handle that situation. For example, Texas could have 

provided assurances that the state would apply PSD to such 

pollutants, and could have included those assurances in the form 

of a SIP revision or as a separate letter. Texas could also 

have provided information as to the method and timing for 

applying PSD to such pollutants. The most likely method would 

be through a separate SIP revision, which would apply PSD 

specifically with respect to that pollutant. By comparison, as 

noted earlier in this preamble, Texas committed to submit a SIP 

revision if a SIP inadequacy led to an increments violation. 

Alternatively, another method would be to adopt the approach of 

most other states and adopt a SIP revision to update the program 
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to apply automatically to any pollutant newly subject to 

regulation. 

In addition, depending on how it addressed the need to 

update its PSD program to apply to pollutants newly subject to 

regulation, Texas could have addressed the timing of that 

action. The timing would most likely relate to the time 

necessary to adopt and submit a SIP revision. This timing issue 

is important because the sources emitting pollutants are subject 

to PSD under the CAA as soon as the pollutants become subject to 

regulation, but if the SIP PSD program does not automatically 

apply to the sources, then the state does not have authority to 

issue permits to the sources as soon as the sources become 

required to obtain the permits.

However, there is no indication in the record of Texas’s 

SIP submissions that Texas specifically addressed this issue of 

the treatment of pollutants that would newly become subject to 

PSD after Texas’s PSD SIP was approved, or that Texas provided 

any such information as to method or timing. Nor is there any 

indication in the record that during this 1985-92 period, EPA 

identified this issue and sought such information from Texas. 

As noted elsewhere in this preamble, although both Texas and EPA 

were well aware that the Texas SIP did not automatically update 

to include pollutants newly subject to regulation, both failed 

to look down the road and anticipate that EPA would in all 
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likelihood newly subject more pollutants to regulation. As 

noted elsewhere in this rulemaking, because the SIP did not 

address PSD applicability to pollutants newly subject to 

regulation, the SIP did not meet CAA requirements.

Texas did provide the 1987 Texas PSD Commitments Statement, 

in which Texas agreed to “implement and enforce the federal 

requirements for [PSD] as specified in [EPA regulations] by 

requiring all new major stationary sources and major 

modifications to obtain air quality permits as provided in TACB 

regulation VI, Control of Air Pollution by Permits for New 

Construction and Modification.” However, this 1987 statement 

does not specifically address the application of PSD to 

pollutants newly subject to regulation. As just quoted, it 

commits TACB to require “all new major stationary sources and 

major modifications to obtain air quality permits as provided in 

TACB regulation VI...”, but that regulation VI does not 

automatically update, and therefore does not apply to pollutants 

newly subject to regulation, and does not further address such 

pollutants. 

Texas also provided the 1989 Texas PSD Commitments Letter, 

in which Texas generally committed “to implement EPA 

requirements relative to [PSD].” However, as quoted previously, 

this phrasing is general and therefore cannot be read to commit 

to apply PSD to pollutants newly subject to regulation, 
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including non-NAAQS pollutants. Nor did the letter identify the 

method and timing for doing so. Accordingly, we do not read 

this letter as a commitment by Texas to apply PSD to each newly 

regulated pollutant, including non-NAAQS pollutants, whether 

through a SIP revision or some other method, or on any 

particular time-table. Moreover, although EPA approved the 

Texas PSD program in reliance on the letter, EPA indicated, in 

the final approval preamble, that the scope and binding impact 

of the letter were limited and that Texas retained discretion in 

implementing the PSD program.

In approving Texas’s rule, EPA did not recognize that 

Texas’s SIP did not address pollutants newly subject to 

regulation. In its 1992 approval rulemaking, EPA noted that “any 

fundamental changes in the administration of PSD would have to 

be accomplished through amendments to the regulations in 40 CFR 

§§52.21 and 51.166, and subsequent SIP revisions,” and added:

The EPA did not intend to suggest that Texas is 

required to follow EPA’s interpretations and guidance 

issued under the Act in the sense that those 

pronouncements have independent status as enforceable 

provisions of the Texas PSD SIP, such that mere 

failure to follow such pronouncements, standing alone, 

would constitute a violation of the Act.... 

...PSD-SIP approved states remain free to follow 

their own course, provided that state action is 

consistent with the letter and spirit of the SIP, when 

read in conjunction with the applicable statutory and 

regulatory provisions.
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57 FR 28,094-28,095 (June 24, 1992). EPA made these statements 

in response to comments that EPA should not require that (i) the 

Texas PSD program must automatically incorporate any revision to 

the PSD program that EPA might adopt, such as a revision to how 

the central technological requirement – best available control 

technology (BACT) – is determined; or (ii) that the Texas PSD 

program incorporate any new interpretation or guidance that EPA 

may issue with respect to PSD. Rather, according to these 

statements, EPA would revise the PSD program through regulatory 

changes and Texas would adopt them through SIP revisions, and 

Texas retained discretion as to whether to follow revisions to 

EPA interpretation or guidance. However, these statements do 

not concern EPA’s newly subjecting pollutants to regulation, and 

thereby triggering PSD requirements for those pollutants,

because that action does not constitute a “fundamental change[] 

in the administration of PSD ... accomplished through amendments 

to the regulations in 40 CFR §§52.21 and 51.166....” Nor is 

that action any type of new interpretation or guidance for the 

PSD program itself. Rather, that action is a regulatory action 

outside the PSD program that has the effect of newly subjecting 

a pollutant to regulation; does not alter the underlying 

requirements of the PSD program; and instead, simply makes an 

incremental addition (however large the increment may be) to the 

types of pollutants subject to the existing PSD program.
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In addition, the rulemaking record for Texas’s PSD program 

does not indicate that Texas provided, as required under CAA 

section 110(a)(2)(E)(i), assurances that Texas had adequate 

legal authority to carry out the PSD program, including, insofar 

as relevant for this rulemaking, applying PSD to pollutants 

newly subject to regulation, among them non-NAAQS pollutants. 

Some 15 years previously, in Texas’s 1972 submission of its 

original SIP, the state had provided assurances of legal 

authority to carry out the SIP, and EPA had approved those 

assurances. But the record for the PSD SIP submission does not 

indicate whether, or how, that legal authority applied to PSD 

applicability to such pollutants. In submitting the PSD SIP 

program, the TACB provided general references to legal 

authority, but the TACB did not indicate whether PSD applies to 

such pollutants either. Nor did the 1989 Texas PSD Commitments 

Letter specifically identify legal authority to apply PSD to 

such pollutants. Nor did the assurance of legal authority to 

apply the Texas PSD program to large municipal waste combustors, 

as required by the 1990 CAA Amendments, which assurances which

Texas apparently made in a 1992 conference call with EPA Region 

6 officials, and which were referenced in a letter from the 

Region to TACB, address legal authority to apply PSD to 

pollutants that newly become subject 
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to PSD as a result of EPA regulation.70

Therefore, the Texas PSD SIP submittal contained gaps: it 

did not address the application of PSD to pollutants newly 

subject to regulation, including non-NAAQS pollutants; and it 

did not include any information concerning Texas’s methods or 

timing for doing so. Nor did the program provide assurances 

that the state had adequate legal authority to apply PSD to such 

pollutants.

b. Recent Statements by Texas that Confirm the Gaps in Texas’s 

PSD Program

Texas has recently made several statements that confirm 

that at the time EPA approved the state’s PSD program, that 

program had the gaps described immediately above.previously. 

(1). Gap Concerning Application of PSD to All Pollutants Newly 

Subject to Regulation, Including Non-NAAQS Pollutants

First, Texas has made clear its view that it is not 

required to apply PSD to non-NAAQS pollutants that are newly 

subject to regulation, including GHGs. Specifically, in its 

August 2, 2010, 60-day letter, Texas stated that it interprets 

the CAA PSD applicability provisions to apply only to NAAQS 

 70 Letter to Steve Spaw, Executive Director, Texas Air Control 

Board, from A. Stanley Meiburg, Director, Air Pesticides, and 

Toxics Division, Region 6, USEPA, Request for Commitments for 

Prevention of Significant Deterioration (PSD) Program. March 30, 

1992.
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pollutants, and therefore to not include non-NAAQS pollutants, 

among them GHGs. Texas asserted that “the only sensible 

interpretation of the CAA” is that PSD applies to only NAAQS 

pollutants. Texas 60-day letter, p. 4. Indeed, in its court 

challenge to EPA’s four GHG rules, Texas stated that its 

interpretation is mandated under Chevron step 1. There, Texas 

stated that EPA’s “interpretation of the CAA [that PSD applies 

to non-NAAQS pollutants] is not entitled to deference because 

the text of the statute is unambiguous. Chevron, U.S.A. v. 

NRDC, 467 U.S. 837, 842 (1984) (the Agency must give effect to 

the unambiguously expressed intent of Congress).”71 As noted 

previously, EPA responded at length to this argument in the 

Tailoring Rule and in EPA’s response in the court challenge to 

EPA’s GHG rules. EPA asserts that the CAA mandates that PSD 

apply to non-NAAQS pollutants, including GHGs, once they become 

subject to regulation; and EPA is not reopening this issue on 

the merits in this rulemaking.

For present purposes, however, what is important is that 

Texas takes the position that under a Chevron step 1 reading of 

the CAA, the PSD program does not apply to non-NAAQS pollutants. 

This position has important ramifications for how Texas must 

 71 See Texas “Motion to Stay Three GHG Actions” 27, Coalition for 

Responsible Regulation v. EPA, No. 09-1322 (and consolidated 

cases).
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interpret EPA’s PSD applicability regulations and for the 

meaning of Texas’s SIP PSD applicability provisions. As noted 

previously, under EPA’s current regulations, PSD applies to “any 

pollutant that otherwise is subject to regulation under the

[CAA]." 40 CFR 52.166(b)(49)(iv). These regulations have read 

this way since they were revised in EPA’s 2002 NSR Reform Rule, 

and the regulations that predated them were phrased in much the 

same way: They applied PSD to "any air pollutant regulated 

under the Clean Air Act."72 These regulations are based on the 

CAA PSD applicability requirements, and as a result, cannot 

apply PSD to any pollutants that the CAA does not itself subject 

to PSD. Accordingly, although Texas did not specifically 

address the meaning of EPA’s regulations in its 60-day letter or 

court filings, it must be that in Texas’s view, these EPA 

regulations may lawfully apply PSD to only NAAQS pollutants.

Texas’s EPA-approved SIP PSD applicability provisions apply 

PSD to "any air pollutant subject to regulation under the [Clean 

Air] Act." Although these Texas provisions mirror EPA’s 

provisions – which, again, Texas appears to interpret as limited 

 72 See 43 FR 26,380, 26,403/3, 26,406 (June 19, 1978) 

(promulgating 40 CFR 51.21(b)(1)(i)) and 42 FR 57,479, 57,480, 

57,483 (November 3, 1977) (proposing 40 CFR 51.21(b)(1)(i)) 

(applying PSD requirements to a "major stationary source" and 

defining that term to include sources that emit specified 

quantities of "any air pollutant regulated under the Clean Air 

Act").
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to applying PSD only to NAAQS pollutants - Texas is authorized 

to apply its provisions more expansively than the EPA 

regulations. This is because a state must comply with CAA 

requirements as a minimum, but retains authority to impose 

additional or more stringent requirements. CAA section 116. 

Therefore, it is in accordance with Texas’s view that the CAA 

and EPA regulatory requirements for PSD applicability be limited 

to NAAQS pollutants, that Texas would nevertheless consider 

itself authorized – but not required - to apply its PSD program 

to particular non-NAAQS pollutants. This position would allow 

Texas, in effect, to choose which non-NAAQS pollutants to 

subject to PSD, and which not. 

In fact, Texas has clearly stated that it does not consider 

itself required to apply its PSD program to one non-NAAQS 

pollutant in particular: GHGs. In its 60-day letter, Texas 

stated: “Texas has neither the authority nor the intention of 

interpreting, ignoring, or amending its laws in order to compel 

the permitting of greenhouse gas emissions.” Texas 60-day 

letter, at 1. Texas’s letter went on to provide numerous 

reasons for why it did not believe EPA lawfully subjected GHGs 

to PSD; why, in any event, EPA was required to allow states more 

time before PSD would apply to GHG-emitting sources; and, as 

noted previously, why, in any event, Texas’s SIP does not 
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automatically update to apply PSD to newly regulated pollutants. 

Id. at 5. 

With this statement - that “Texas has neither the authority 

nor the intention of interpreting, ignoring, or amending its 

laws in order to compel the permitting of greenhouse gas 

emissions”– Texas has made clear that it does not view itself as 

obligated to apply PSD to GHGs under the CAA. Thus, this

statement is fully consistent with, and highlights, Texas’s view 

that it is not obligated to apply PSD to each newly regulated 

non-NAAQS, including, of course, GHGs.73

These statements from Texas are significant because they

confirm that Texas’s PSD program, as approved by EPA, had an 

important gap: Texas did not address the applicability of its 

PSD program to pollutants newly subject to regulation, including 

non-NAAQS pollutants, such as by providing assurances that Texas 

would take action to apply PSD to such pollutants or describing 

the methods (such as SIP revision) and timing for doing so. 

Moreover, Texas’s recent statements are consistent with the view 

 73 It should be noted that Texas has applied its PSD program to 

non-NAAQS pollutants because Texas has IBR’d EPA’s PSD 

regulatory requirements and those requirements apply to nonNAAQS pollutants. However, as noted earlier, Texas has made 

clear that it has no intention of submitting a SIP revision to 

apply PSD to GHGs. All this is consistent with the view 

described previously that Texas interprets its PSD applicability 

provision to authorize it to apply PSD to non-NAAQS pollutants 

at Texas’s discretion, but that Texas does not view itself as 

required to apply PSD to non-NAAQS pollutants. 
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that Texas’s silence on the subject at the time of the PSD SIP 

action means that Texas did not, at that time, view itself as 

obligated to apply PSD to each pollutant.74 

In particular, Texas’s recent statement that the CAA PSD 

provisions are clear by their terms, as a matter of Chevron step 

1, that they do not apply to non-NAAQS pollutants, suggests that 

Texas would have viewed the CAA PSD provisions the same way at 

the time Texas submitted its PSD program. As noted earlier, the 

Texas Attorney General and the Chairman of the Texas Commission 

on Environmental Quality, who are the joint signatories of 

Texas’s 60-day letter, are of the view that “[t]he only sensible 

interpretation of the Clean Act” is that PSD applies only to 

NAAQS pollutants, and not non-NAAQS pollutants. Texas 60-day 

letter, p. 4. Texas has confirmed its reading – and clarified 

that it is based on a Chevron step 1 interpretation - in filings 

before the D.C. Circuit. The fact that these high state 

officials view this reading of the CAA as, again, “[t]he only 

sensible reading,” indicates that in the past, Texas is less 

likely to have adopted the opposite reading, which would be that 

the CAA mandates that PSD applies to non-NAAQS pollutants. 

Statutory provisions whose meaning is clear on their face, at 

 74 By the same token, we see nothing in these recent statements 

to indicate that Texas views itself as rescinding any preexisting understanding that it would apply PSD to each such 

pollutant. 
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least to a particular reader, would not be expected to have had 

a different or uncertain meaning to that same reader at an 

earlier point in time. By the same token, Texas’s insistence, 

noted previously, that it does not have the intention or 

authority to apply PSD to one non-NAAQS in particular, GHGs, 

suggests that Texas could well have expressed the same view, had 

the issue arisen, at the time EPA approved Texas’s PSD program.

We further note that Texas itself appears to take the 

position that an agency’s present interpretation of its 

regulations should be presumed to have been the agency’s past 

interpretation of those regulations, so that Texas’s current 

interpretation that its PSD program does not apply to at least 

one non-NAAQS, GHGs, should be presumed to be Texas’s 

interpretation of its PSD program in the past, including at the 

time Texas submitted its program as a SIP revision to EPA and 

EPA approved it. Specifically, in its 60-day letter, Texas 

noted that in the Tailoring Rule, EPA asked states to consider 

whether their SIPs that include the term “subject to regulation” 

can be interpreted to incorporate the Tailoring Rule thresholds

on grounds that the state interprets that term as being 

sufficiently open-ended. 75 FR 51,581/2. Texas stated,

In the Tailoring Rule you have asked TCEQ to 

report to you by August 2, 2010, whether it would 

“interpret” the undefined phrase “subject to 

regulation” in TCEQ Rule 116.12 consistent with the 

newly promulgated definition in EPA Rule 51.166, in 
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all its specifics and particulars. That is, you have 

effectively requested that Texas agree to regulate 

greenhouse gases in the exact manner and method 

proscribed by the EPA.

In other words, you have asked Texas to agree 

that when it promulgated its air quality permitting 

program rules for pollutants “subject to regulation” 

in 1993, that Texas really meant to define the term 

“subject to regulation” as set forth in the dozens of 

paragraphs and subparagraphs of EPA Rule 51.166, first 

promulgated in 2010.

Texas 60-day letter, p. 3. In these statements, Texas appears 

to reveal Texas’s own understanding of the circumstances under 

which Texas can be said to give the term “subject to regulation” 

a particular interpretation, and that is if Texas interpreted 

that term that same way at the time that Texas first promulgated 

the term in 1993. By that same logic, Texas’s position, as 

stated in its 60-day letter, that it “has neither the authority 

nor the intention of interpreting, ignoring, or amending its 

laws in order to compel the permitting of greenhouse gas 

emissions” would have applied to “its laws” – including the SIP 

PSD requirements – at the time that Texas adopted those rules. 

Therefore, it seems reasonable to conclude that just as Texas 

does not currently view its PSD program as applying to all newly 

regulated non-NAAQS pollutants, Texas did not, at the time it 

submitted and EPA approved its PSD program, view its PSD program 

as applying to all newly regulated non-NAAQS pollutants. 
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By the same token, Texas’s recent statements also confirm 

that the assurances Texas provided in its 1989 Texas PSD 

Commitments Letter cannot be interpreted as having committed 

Texas to apply PSD to all pollutants newly subject to 

regulation, including non-NAAQS pollutants. The assurances, by 

their terms, were phrased generally and did not address the 

application of PSD to such pollutants; and EPA, in the preamble 

for the final approval of Texas’s PSD SIP, indicated that the 

scope and binding impact of the assurances were limited.75 

Texas’s recent direct statements that PSD does not cover nonNAAQS pollutants indicates that the generally phrased assurances 

in the letter, whatever they meant, did not mean that Texas 

would apply PSD to each newly regulated pollutant, including 

non-NAAQS pollutants.

As a result, it stands to reason that at the time Texas 

submitted its PSD program, Texas did not view the CAA as 

mandating the application of PSD to at least certain pollutants 

newly subject to regulation, non-NAAQS pollutants. But at a 

minimum, it can be said that Texas’s PSD program contained a 

gap: EPA required that PSD apply to each pollutant newly 

subject to regulation, including non-NAAQS pollutants; Texas’s 

program applied only to pollutants already subject to regulation 

 75 57 FR at 28,095/2, 28,096/1.
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at the time Texas adopted its program, not to subsequently 

regulated pollutants, including non-NAAQS; and Texas did not 

address its program’s applicability to such pollutants, 

including how or when its program would so apply. This gap is 

significant because it facilitates Texas’s current position, 

with which EPA disagrees, that PSD does not apply to non-NAAQS 

pollutants.

(2). Gap Concerning Assurances of Adequate Legal Authority

Texas’s statement in its 60-day letter that it “has neither 

the authority nor the intention of interpreting, ignoring, or 

amending its laws in order to” apply PSD to GHG-emitting sources 

also highlights that Texas’s PSD program had a gap in its 

failure to provide “necessary assurances” of adequate legal 

authority to carry out the PSD program. Although Texas’s letter 

described obstacles to applying PSD to GHG-emitting sources 

without first adopting a SIP revision, and did not describe 

obstacles that precluded Texas from adopting a SIP revision if 

it chose to do so, Texas’s direct statement that it does not 

have authority to apply PSD to GHGs at least casts doubt on 

whether Texas has such authority under any circumstances. 

Moreover, Texas has never indicated that there has been a recent 

change that places new limits on its legal authority to carry 

out the CAA. 
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Accordingly, itIt is possible that at the time that Texas 

submitted its PSD program, Texas considered itself under the 

same limits in its legal authority to apply PSD to each nonNAAQS pollutant.. At a minimum, in light of Texas’sthese recent 

statementstatements that it does not have authority to apply PSD 

to at least one newly regulated, non-NAAQS, GHGs, it is apparent 

that at the time that Texas submitted its PSD program, Texas did 

not provide the “necessary assurances” that it “will have 

adequate ... authority under State ... law to carry out such 

implementation plan (and is not prohibited by any provision of 

... State law from carrying out such implementation plan or 

portion thereof).” CAA section 110(a)(2)(E)(i) (emphasis 

added). “[C]arrying out such implementation plan” includes

meeting all CAA requirements applicable to the plan and, in the 

case of athe Texas PSD SIP program, fully implementing the SIP 

in a manner consistent with the CAA, and that includes 

applyingthe applicability of PSD to each pollutant newly subject 

to regulation, including non-NAAQS pollutants.

2. Flaws in PSD Program

The Texas PSD program’s gaps – which are, again, that Texas 

did not address the applicability of PSD to all pollutants newly 

subject to regulation, including non-NAAQS pollutants; and Texas 

did not provide assurances of adequate legal authority to do so 

– mean that the state’s PSD program has flaws. These flaws were 
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present at the time that EPA approved Texas’s PSD program. 

Moreover, these flaws are significant. They have figured 

prominently into the present situation in which EPA takes the 

position that Texas is obligated under the CAA and EPA 

regulations to apply its PSD program to a newly regulated 

pollutant - GHGs - but Texas takes the opposite position.

a. Comments on the Flaws in PSD Program

Several commenters, including both the Texas Commission on 

Environmental Quality (TCEQ) and the Texas Attorney General, 

object to EPA’s determination that the Texas SIP is flawed. 

TCEQ comments that nothing in “...the CAA or federal PSD rules 

require that state PSD programs apply to pollutants newly 

subject to regulation.” The Texas Attorney General states that

40 CFR § 51.166 does not require automatic updating of SIPs to 

incorporate pollutants that subsequently become subject to 

regulation. The Texas Attorney General adds that the state is 

not required to provide legal assurances about matters not 

included in the SIP; rather, that the state need show only that 

it has legal authority to carry out the SIP. 

b. Response to Comments

EPA disagrees with these comments. Contrary to the TCEQ’s 

comments, as discussed elsewhere in this rulemaking preamble, 

the PSD requirements in the CAA and regulations do require that 

PSD SIPs address the applicability of PSD to pollutants newly 
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subject to regulation. As discussed previously, the CAA PSD 

provisions and EPA’s PSD regulations are clear that PSD applies 

to each newly regulated pollutant, whether a NAAQS pollutant or 

a non-NAAQS pollutant. Moreover, the CAA is clear that SIPs 

must include provisions to assure that CAA requirements are met. 

See CAA section 110(a)(2)(J) (each SIP must “meet the applicable 

requirements of ... part C ... (relating to prevention of 

significant deterioration of air quality...)”; CAA section 161 

(“each applicable implementation plan shall contain emission 

limitations and such other measures as may be necessary, as 

determined under regulations promulgated under this part, to 

prevent significant deterioration of air quality in each region 

[to which PSD applies]”). Accordingly, each PSD SIP must 

include provisions that address how PSD will apply to pollutants 

newly subject to regulation. As noted aboveearlier in this 

preamble, there are several different ways for SIP to address 

PSD applicability to such pollutants, but SIPs must adopt one of 

those ways.

With respect to the Texas Attorney General, the comment 

that EPA’s regulations do not require automatic updating of SIPs 

to incorporate such pollutants misses the point. In the Interim 

Final Rule and the proposal, EPA did not identify the gap in 

Texas’s SIP PSD provisions as based on the lack of automatic 

updating to apply PSD to each pollutant newly subject to 
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regulation. Rather, EPA identified the gap as the failure of 

the State, at the time it submitted and EPA approved the PSD 

program, to address such pollutants. The State could have 

specifically acknowledged the issue of the applicability of PSD 

to newly regulated pollutants and addressed that issue in 

several different ways. Providing an automatic updating 

mechanism is one way, which is what most of the other states do. 

Second, the stateState could have committed, in either the SIP 

itself or in a letter accompanying the SIP submittal, that the 

State would adopt and submit for approval SIP revisions to apply 

PSD to newly regulated pollutants, and the stateState could have 

indicated a schedule for it to do so. Third, it is possible 

that more general assurances by the stateState to address the 

issue could have passed muster. In addition, there may be other 

ways to address this issue. The record does not indicate that 

Texas specifically identified the issue or identified any ways 

that Texas would address the issue. Moreover, as discussed 

earlier in this preamble, Texas failed to demonstrate that it 

had adequate legal authority to regulate these pollutants. 

EPA also disagrees with the Texas Attorney General’s 

argument that the state is not required to provide legal 

assurances about matters not included in the SIP; and rather, 

that the state need show only that it has legal authority to 

carry out the SIP. The requirement under CAA section 
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110(a)(2)(E)(i) that each SIP provide “necessary assurances that 

the State ... will have adequate ... authority under State ... law to 

carry out such implementation plan...” must be read in the context 

of the CAA mandate that SIPs meet all CAA requirements. That 

is, just as the SIP must meet all CAA requirements, the state 

must also provide assurances that the state has the legal 

authority to carry out a SIP that meets all CAA requirements. 

For the reasons noted above, Texas’s SIP was required to address 

the applicability of PSD to each pollutant newly subject to 

regulation, and as a result, Texas was required to provide 

assurances that it had the legal authority to apply PSD to each 

pollutant newly subject to regulation. As a result, if the SIP 

did address such an application of PSD, then the State would 

have legal authority to carry out that SIP. 

3. EPA’s Error in Approving Texas’s PSD Program

In this rulemaking, EPA is “determin[ing]” that EPA’s 

action fully approving Texas’s PSD program was “in error” within 

the meaning of CAA section 110(k)(6). This section contains 

EPA’s basis for that determination.

a. CAA Section 110(k)(6) Error Correction 

Under the familiar Chevron two-step framework for 

interpreting administrative statutes, an agency must, under 

Chevron step 1, determine whether “Congress has directly spoken 

to the precise question at issue.” If so, “the court, as well 
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as the agency, must give effect to the unambiguously expressed 

intent of Congress.” However, under Chevron step 2, if “the 

statute is silent or ambiguous with respect to the specific 

issue, the question for the court is whether the agency’s answer 

is based on a permissible construction of the statute.” Chevron 

U.S.A. Inc. v. NRDC, 467 U.S. 837, 842–43 (1984).

As noted previously, the term “error” in CAA section 

110(k)(6) is not defined and, as a result, should be given its 

ordinary, everyday meaning. The dictionary definition of 

“error” is “a mistake” or “the state or condition of being wrong 

in conduct or judgment,” Oxford American College Dictionary 467 

(2d ed. 2007); or “1) an act, assertion, or belief that 

unintentionally deviates from what is correct, right or true 2) 

the state of having false knowledge . . . 4) a mistake . . . .” 

Webster’s II New Riverside University Dictionary 442 (Houghton 

Mifflin Co. 1988). These definitions are broad, and include all 

unintentional, incorrect or wrong actions or mistakes.

Moreover, CAA section 110(k)(6) authorizes EPA to 

“determine[]” that its action was in error, and does not direct 

or constrain that determination in any manner. That is, the 

provision does not identify any factors that EPA must, or may 

not, consider in making the determination. This further 

indicates that this provision confers broad discretion upon EPA. 

b. Gaps in Texas PSD Program.
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As previously discussed, the Texas SIP PSD program was 

flawed because it contained gaps: Texas did not address the 

applicability of PSD to all pollutants newly subject to 

regulation, including non-NAAQS pollutants; and Texas did not 

provide assurances of adequate legal authority to do so. EPA 

did not address these gaps in its action on Texas SIP PSD 

program and instead, EPA fully approved the PSD program.

Therefore, EPA’s action in fully approving Texas’s SIP PSD 

program in the face of these flaws was “in error” under CAA

section 110(k)(6), in accordance with Chevron step 1. “[E]rror” 

should be defined broadly to include any mistake, and approval 

of a flawed SIP is a mistake. Moreover, this flaw is 

significant because it affects the applicability of the PSD 

program to a pollutant and, as a result, to an entire set of 

sources.

Even if the term “error” is not considered unambiguously to 

encompass, under Chevron step 1, the mistake that EPA made in 

approving the Texas PSD SIP, and instead is considered ambiguous 

on this question, then under Chevron step 2 EPA has sufficient 

discretion to determine that its approval action meets the 

definition of “error.” That is, under CAA section 110(k)(6), 

the breadth of the term “error” and of the authorization for EPA 

to “determine[]” when it made an error, mean that EPA has

sufficient discretion to identify the gaps in Texas’s PSD 
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program as flawed and to identify EPA’s action in approving 

Texas’s PSD SIP in the face of those flaws as an error.

c. Comments and responses on the use of CAA §110(k)(6)

Comment: One commenter supported EPA’s use of CAA section 

§110(k)(6) to correct its previous approval of the Texas PSD 

program. This commenter asserted that the use of this mechanism 

is appropriate in this case, where serious flaws in Texas’s SIP 

have become glaringly apparent, and, if left uncorrected, would 

cause immediate harm... EPA agrees with this commenter’s 

assessment that this action is necessary to correct this error 

in the Texas program.

Several other commenters, however, challenged the use of 

section 110(k)(6) in this instance. Commenters stated that 

section 110(k)(6) of the Act has been understood and was 

intended by Congress to be used as authority to make corrections 

of a “technical” or ministerial nature, such as “typographical 

errors.” This section was not, according to commenters intended 

as a means to make unilateral, substantive changes in SIPs or 

major policy changes. These commenters view EPA’s action here 

as directly contrary to the Act’s cooperative federalism scheme.

Response: For the reasons noted earlier in this preamble, the 

natural meaning of the term “error” in the error correction 

provision is broad and as a result, the provision applies by its 

terms to any mistake. The explicit legislative history of the 
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provision – what Congress said in the various reports and 

statements accompanying its passages - is sparse and does not 

illuminate its meaning. Because there is nothing in the statute 

or legislative history that suggests that Congress intended a 

meaning narrower than the natural meaning of the term, the 

natural meaning of the term controls. Commenters’ assertions 

that this provision is limited to “technical” errors or 

“typographical errors” are conclusory and wholly unsupported. 

For the reasons discussed elsewhere in this preamble, 

Texas’s SIP was flawed and as a result, EPA’s action in 

approving that flawed SIP was in error. 

As a result, this rulemaking action is simply the 

correction of an error, as authorized under CAA §110(k)(6). 

Contrary to some comments, this action is not based on a policy 

shift in EPA’s administration of the PSD program. Nor does this 

action upset federalism concerns or constitute a claim of 

authority to unilaterally revise any action on any SIP 

submittal. EPA does not read section 110(k)(6) to provide 

unlimited discretion to act on SIP submissions, only to provide 

authority to make error corrections.

Comment: Commenters went on to assert that other historical 

uses of CAA section 110(k)(6) were uncontroversial edits to 

remove federal enforceability of regulatory requirements that 

had been included or retained inadvertently and were made at 
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the state’s request. In contrast, according to these 

commenters, this rule imposes new requirements contrary to the 

state’s wishes. 

Response: EPA’s previous use of the error correction provision 

makes clear that EPA has corrected errors many years after they 

occurred, and that EPA has corrected errors that are broader 

than merely technical or typographical errors. MoreoverIn 

addition, EPA’s most recent use of the error correction 

provision was in the PSD Narrowing Rule, in which EPA again 

corrected errors in SIP approvals that occurred many years ago, 

and which relied on as broad an application of section 110(k)(6) 

as in the present rulemaking. Moreover, in the GHG PSD 

Narrowing Rule, EPA relied on the error correction mechanism 

without having first been asked to do so by some of the affected 

states, and, in fact, in the face of negative comments by some 

of the affected states. Even so, the PSD Narrowing Rule was not 

challenged in Court by any party. 

In any event, for the reasons noted aboveearlier in this 

preamble, EPA’s action in this rulemaking qualifies as an error 

correction within the meaning of CAA section 110(k)(6). Whether 

the affected state – or any other party - agrees or disagrees

that the SIP that is the subject of the error correction is 

flawed is not a criteria under CAA section 110(k)(6).
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Comment: A commenter raised several concerns about EPA’s 

interpretation of other provisions of CAA section 110(k)(6). 

For convenience, the relevant provisions state: “Whenever the 

Administrator determines that the Administrator’s action 

approving, disapproving, or promulgating any plan or plan 

revision (or part thereof), area designation, redesignation, 

classification, or reclassification was in error, the 

Administrator may in the same manner as the approval, 

disapproval, or promulgation revise such action as appropriate 

without requiring any further submission from the State.”

A commenter focused on the requirement that EPA’s action 

must be “in the same manner” as the action that EPA is 

correcting, and argued that this requirement limits EPA to, as a 

substantive matter, applying the same standard to Texas’s SIP 

today as it did to the SIP when it was approved in 1992 and 

using the same record; and as a procedural matter, taking the 

same action, which, in this case, prevents EPA from converting 

an approval to a disapproval. 

Response: EPA disagrees with this reading of the phrase “in the 

same manner.” This phrase is not defined in section 110(k)(6). 

As a matter of Chevron step 1, or, in the alternative, Chevron

step 2, the phrase refers to Administrative Procedure Act or, if 

applicable, CAA section 307(d) procedures. Thus, if the 
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original action were a notice-and-comment rulemaking under the 

Administrative Procedure Act, then the error correction must 

follow the same procedure.76 We see no basis for reading the 

phrase “in the same manner” more narrowly to limit an error 

correction of an approval to be only another approval, and not a 

disapproval. That strained reading is inconsistent with the 

purpose of the section, which is to allow for the correction of 

errors, a process that may well require reversing the initial 

action if found to be in error. Although EPA sees no basis for 

the substantive requirements that the commenter reads into the 

phrase, the record for the present action – which includes the 

relevant documents in the record for the 1992 approval – makes 

clear that EPA’s 1992 action was in error, and nothing in CAA 

section 110(k)(6) limits the record for an error correction more 

narrowly.

Comment: A commenter argued that EPA ignored the phrase “revise 

such action.” The commenter believes that section 110(k)(6) 

affords EPA no discretion to “revise” an approval action into a 

disapproval but instead limits the Agency to revising the 

contents of “such action” that it previously undertook. The 

commenter asserted that EPA does not “revise” an action by 

 76 By comparison, if the original action were not a notice-andcomment action (such as a classification under CAA section 

172(a)(1)(B), then the correction must follow whatever process 

applied to the original action.
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substituting another action for it; rather, EPA must take the 

same type of action, a reading reinforced by the requirement 

that the Agency act “in the same manner as the [original 

action].” The EPA may not “reconsider” or “replace” a SIPrelated action. The commenter indicated that in this way, 

section 110(k)(6) is not a mechanism for revisiting a decision 

but for correcting mistakes in an action – using this section to 

reverse an approval offends both the participation requirements 

and the principles of the Act’s SIP provisions.

Response: Section 110(k)(6) authorizes EPA to “revise” the 

action it determines to be in error “as appropriate.” The term 

“revise” is not defined in section 110(k)(6). Its natural 

meaning is to “change” or “modify.” Webster’s II New Riverside 

University Dictionary (1988) at 1005. As a matter of Chevron 

step 1, or, in the alternative, Chevron step 2, the term is

broad enough to encompass changing or modifying an approval to a 

disapproval. This is particularly so in light of the 

authorization under section 110(k)(6) to revise the action in 

error “as appropriate.” Used in this context, the term 

“appropriate” indicates EPA is under a constraint of 

reasonableness in revising the action, but is not under the 

other constraints that commenter suggests. Thus, if EPA has a 

basis for revising an approval to a disapproval, then EPA may do 

so on grounds that this type of revision is “appropriate.” 
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Comment: A commenter stated that EPA ignored the phrase “as 

appropriate.” The commenter stated that this language serves to 

“keep EPA within bounds” and explained that EPA may revise an 

earlier action only “as appropriate” to correct its error in 

undertaking the earlier action, and not to effect a change in 

policy. The commenter added the following reasons (which are 

discussed further in other sections of this document) that EPA’s 

actions are not appropriate: (i) It is not “appropriate” to 

single out Texas’s SIP submission for disapproval based on a 

purported deficiency that is present in other states’ SIPs. 

(ii) It is not “appropriate” to exercise section 110(k)(6)’s 

error correction provisions where EPA is simultaneously 

exercising its powers under section 110(k)(5), which affords 

states procedural protections EPA has refused to afford under 

section 110(k)(6). 

Response: The term “as appropriate” should be viewed as 

highlighting the significant discretion that EPA has under the 

error correction provision to “revise” the action it found to be 

in error, as discussed earlier in this preamble. EPA responds 

elsewhere in this rulemaking preamble to the specific reasons 

the commenter gives as to why the commenter believes EPA’s 

action was not appropriate.77 It should be noted here that the 

 77 The commenter added that it is not “appropriate” to exercise 

section 110(k)(6)’s error correction provisions to change a SIP 
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various considerations the commenter cites would suggest the 

commenter’s agreement that the term “appropriate” allows EPA to 

consider a wide range of factors, that is, to exercise broad 

discretion. 

Comment: One commenter questioned whether EPA had made a 

mistake because the action taken to approve the SIP was what EPA

intended to do and was not done unintentionally. 

Response: EPA acted purposefully in fully approving the Texas 

SIP, but that does not mean that the full approval did not carry 

any element of an inadvertent error. As noted elsewhere in this

rulemaking preamble, EPA and Texas both failed to look down the 

road and recognize that in all likelihood, EPA would newly 

subject additional pollutants to regulation, and thereby trigger 

the application of PSD to those additional pollutants, so that 

Texas’s SIP needed to – but did not – address that situation.

c. Alternative Basis for Error Correction

As explained previously, we view Texas’s recent statements 

that the CAA does not apply to non-NAAQS pollutants and that 

 

approval into a disapproval where the Agency has made no finding 

that the purported SIP submission deficiency will directly harm 

public health or welfare. Commenter appears to suggest that 

section 110(k)(6) should be read to include the constraint that 

the provision is available only if EPA finds that error it seeks 

to correct. EPA sees no basis in the terms, legislative 

history, or logic of section 110(k)(6), or in EPA’s previous 

error-correction actions, for reading this constraint into 

section 110(k)(6).
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Texas has neither the authority nor the intention to apply PSD 

to GHGs as an indication that at the time Texas submitted its 

PSD program, Texas did not address the applicability of its 

program to pollutants newly subject to regulation or provide 

assurances that it had legal authority to apply its program to 

such pollutants. Absent specific evidence to the contrary, we 

are not inclined to conclude that at the time EPA approved the 

Texas PSD program in 1992, Texas in fact had filled those gaps –

by, for example, providing assurances that it would apply PSD to 

each newly regulated non-NAAQS pollutants and had the legal 

authority to do so - but that more recently, Texas has failed to

comply with those assurances. The CAA is based on a partnership 

between the states and the federal government, and we think it 

more consonant with the principles of that partnership to 

interpret the evidence as indicating that Texas never addressed 

the gap or provided the requisite assurances.

However, in the alternative, if one were to conclude that 

during the course of Texas’s submittal of, and EPA’s action on, 

the state’sState’s PSD program, Texas did in fact, address the 

applicability of its program to newly regulated pollutants and 

did in fact provide the requisite assurances, so that no gaps in 

Texas’s PSD program existed at that time, then Texas’s recent 

statements would amount to failing to comply with, or even 

rescinding, those assurances. Under these circumstances, EPA 
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would still consider its previous approval of Texas’s PSD SIP to 

have been in error. This is because if Texas should be 

considered to have addressed the issue and to have provided the 

appropriate assurances, then EPA should be considered to have 

based its approval on those assurances. For example, EPA stated 

in approving the Texas PSD program that EPA was relying on the 

1989 Texas PSD Commitments Letter. Rescinding or failing to 

comply with those assurances – if that is what Texas is 

considered to have done - would eliminate the basis for EPA’s 

approval. Compare CAA section 110(k)(4) (authorizing EPA to 

approve a SIP revision based on a commitment by the state to 

adopt certain measures by a date certain, but if the state does 

not do so, then the conditional approval is treated as a 

disapproval). 

C. Error Correction: Conversion of Previous Approval to 

Partial Approval and Partial Disapproval

Under CAA section 110(k)(6), once EPA determines that its 

previous action approving a SIP revision was in error, EPA “may 

... revise such action as appropriate without requiring any 

further submission from the State. . . .” Under this provision, 

EPA may revise its previous full approval of Texas’s PSD program 

as appropriate, without requiring any submission from Texas.

This provision offers EPA a great deal of discretion in 

revising its previous action. For one thing, the use of the 
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term “may” means that this provision simply authorizes, and does 

not require, EPA to revise its previous action even after EPA 

has determined the error, and that, in turn, implies that EPA 

has discretion in determining how to revise its previous action. 

Moreover, if EPA does decide to revise its previous action, EPA 

may do so in any way that is “appropriate.” The term 

“appropriate” offers EPA significant latitude in deciding what 

type of revision to do.

Here, EPA is revising its previous full approval of Texas’s

PSD program to be a partial approval and partial disapproval. 

Specifically, EPA is retaining the approval of Texas’s PSD 

program to the extent of the pollutants that the PSD program 

already does cover. This amounts to a partial approval. In 

addition, EPA is disapproving the Texas PSD program to the 

extent it has not addressed the applicability of its PSD program 

to each pollutant newly subject to regulation, including nonNAAQS pollutants, and because it has not provided assurances of 

adequate legal authority to apply its PSD program to such 

sources. 

D. Reconsideration Under CAA Section 301, Other CAA Provisions, 

and Case Law

As an alternative to the error correction provision of CAA 

section 110(k)(6), EPA is using its inherent administrative 

authority to reconsider its prior approval actions as a basis 
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for revising its previous full approval of the Texas PSD program 

to a partial approval and partial disapproval. This authority 

lies in CAA section 301(a), read in conjunction with CAA section

110 and case law holding that an agency has inherent authority 

to reconsider its prior actions.

As noted earlier, EPA approved the Texas PSD program by 

notice dated June 24, 1992, 57 FR 28,093, under the authority of 

CAA section 110(k)(3)-(4). These provisions authorize EPA to 

approve a SIP submittal “as a whole,” “approve [the SIP 

submittal] in part and disapprove [it] in part,” or issue a 

“conditional approval” of a SIP submittal. EPA issued a full 

approval under CAA section 110(k)(3).

In its approval action under that provision, EPA retained 

inherent authority to revise that action. The courts have found 

that an administrative agency has the inherent authority to 

reconsider its decisions, unless Congress specifically 

proscribes the agency's discretion to do so. See, e.g., Gun 

South, Inc. v. Brady, 877 F.2d 858, 862 (11th Cir. 1989) 

(holding that agencies have implied authority to reconsider and 

rectify errors even though the applicable statute and 

regulations do not provide expressly for such reconsideration); 

Trujillo v. General Electric Co., 621 F.2d 1084, 1086 (10th Cir. 

1980) (“Administrative agencies have an inherent authority to 
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reconsider their own decisions, since the power to decide in the 

first instance carries with it the power to reconsider”). 

Section 301(a) of the CAA, read in conjunction with CAA

section 110(k)(3) and the case law just described, provides 

statutory authority for EPA’s reconsideration action in this

rulemaking. Section 301(a) authorizes EPA "to prescribe such 

regulations as are necessary to carry out [EPA's] functions" 

under the CAA. Reconsidering prior rulemakings, when necessary, 

is part of “[EPA’s] functions” under the CAA – in light of EPA’s 

inherent authority as recognized under the case law to do so -

and as a result, CAA section 301(a) confers authority upon EPA 

to undertake this rulemaking. 

EPA finds further support for its authority to narrow its 

approval in APA section 553(e), which requires EPA to give 

interested persons "the right to petition for the issuance, 

amendment, or repeal of a rule;" and CAA section 307(b)(1), 

which expressly contemplates that persons may file a petition 

for reconsideration under certain circumstances (at the same 

time that a rule is under judicial review). These 

authorizations for other persons to petition EPA to amend or 

repeal a rule suggest that EPA has inherent authority, on its 

own, to issue such amendment or repeal. This is because EPA may 

grant a petition from another person for an amendment to or 

repeal of a rule only if justified under the CAA, and if such an 
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amendment or repeal is justified under the CAA, then EPA should 

be considered as having inherent authority to initiate the 

process on its own, even without a petition from another person. 

EPA recently used its authority to reconsider prior actions 

and limit its prior approval of a SIP in connection with 

California conformity SIPs. See, e.g., 68 FR 15,720, 15723 

(discussing prior action taken to limit approvals); 67 FR 69,139 

(taking final action to amend prior approvals to limit their 

duration); 67 FR 46,618 (proposing to amend prior approvals to 

limit their duration, based on CAA sections 110(k) and 301(a)). 

EPA had previously approved SIPs with emissions budgets based on 

a mobile source model that was current at the time of EPA's 

approval. Later, EPA updated the mobile source model. But, 

even though the model had been updated, emissions budgets would 

continue to be based on the older, previously approved model in 

the SIPs, rather than the updated model. To rectify this 

problem, EPA conducted a rulemaking that revised the previous 

SIP approvals so that the approvals of the emissions budgets 

would expire early, when the new ones were submitted by states 

and found adequate, rather than when a SIP revision was 

approved. This helped California more quickly adjust its 

regulations to incorporate the newer model. In this rule, EPA 

is using its authority to reconsider and limit its prior 
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approval of SIPs generally in the same manner as it did in 

connection with California conformity SIPs. 

EPA is relying, in the alternative, on this inherent 

authority to convert its previous approval of Texas’s PSD 

program to a partial approval and partial disapproval for the 

same reasons discussed previously in connection with the “error” 

correction provision of CAA section 110(k)(6). That is, EPA 

approved Texas’s PSD program even though that program had 

significant flaws because Texas did not address the 

applicability of its PSD program to all pollutants newly subject 

to regulation, including non-NAAQS, and that Texas had adequate 

legal authority to do so. 

EPA’s inherent authority to reconsider its previous action 

also supports revising its previous action in the same manner, 

and for the same reasons, as under CAA section 110(k)(6), as 

described earlier. That is, in light of the flaws in the Texas 

PSD program, EPA is revising EPA’s previous full approval to be 

a partial approval (to the extent of the pollutants regulated 

under the CAA that are subject to Texas’s PSD program) and a 

partial disapproval (to the extent Texas’s program does not 

address pollutants newly subject to regulation, including nonNAAQS pollutants).

1. Comments received on Reconsideration under Section 301(a)
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Several commenters questioned EPA’s ability to use section 

301(a) given that EPA already has the authority to take this 

action through the SIP revision process. There is no gap for 

the Agency to fill with its general rulemaking authority, so, 

according to these commenters, EPA cannot use this section of 

the CAA to authorize this SIP revision without going through the 

notice and comment process required for a SIP revision. One 

commenter goes on to question whether the enactment of section 

110(k)(6) would have been necessary if EPA had authority under 

section 301(a). 

2. Response to comments

EPA’s inherent authority to reconsider its actions, in 

conjunction with CAA section 301(a) is not limited by the 

availability of the SIP revision process. That process entails 

the state submitting a revised SIP submission and EPA acting on 

it, which is fundamentally different than EPA reconsidering its 

action on the initial SIP submission without the state needing 

to submit a SIP revision. In addition, the reconsideration 

authority is broader than the section 110(k)(6) authority 

because the former is not necessarily limited to the correction 

of errors. And if, as commenters argue, the section 110(k)(6) 

authority is limited to only technical or typographical errors, 

then the reconsideration authority is substantially broader. 

For these reasons, the reconsideration authority should not be 
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considered to have been pre-empted or otherwise eliminated by 

the availability of either the SIP revision process or the error 

correction process. 

As for reasons why Congress would have added section 

110(k)(6) if the reconsideration authority already existed, 

several reasons present themselves. Congress may have intended 

to codify into the CAA the reconsideration authority, which 

otherwise would have remained in the case law. In doing so, 

Congress established the criteria and process for error 

corrections. In addition, three years prior to the enactment of 

the 1990 CAA Amendments, the U.S. Court of Appeals for the Third 

Circuit (3rd Circuit) handed down a decision in Concerned 

Citizens of Bridesburg v. U.S. EPA, 836 F.2d 777 (1987), which 

imposed severe limits on EPA’s authority to reconsider its 

actions. As discussed elsewhere in this preamble, although the 

legislative history is not explicit, section 110(k)(6) suggests 

by its terms that Congress intended the provision to in effect 

overturn that decision. 

E. Relationship of This Action to GHG PSD SIP Call

As noted previously, EPA has recently taken another action 

concerning Texas’s PSD program as that program relates to GHGs: 

the GHG PSD SIP call, which we published by notice dated 

December 13, 2010, 75 FR 77,698. This section describes the 

relationship of this error-correction/partial-disapproval/FIP 
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action to the SIP call. For convenience, the background for the 

SIP call, although described in detail earlier in this preamble, 

is reiterated here.

EPA promulgated the SIP call under CAA section 110(k)(5), 

which provides:

Whenever the Administrator finds that the 

applicable implementation plan for any area is 

substantially inadequate to ... comply with any 

requirement of [the CAA], the Administrator shall 

require the State to revise the plan as necessary to 

correct such inadequacies. The Administrator ... may 

establish reasonable deadlines (not to exceed 18 

months) after [notifying the state of the 

inadequacies] for the submission of such plan 

revisions.

In the SIP call, EPA made a finding that the PSD SIPs of each of 

13 states, including Texas, do not apply to GHG-emitting sources 

and therefore are “substantially inadequate to ... comply with 

[the PSD applicability] requirement[s]” of the CAA. 

Accordingly, EPA required each state, including Texas, to 

submit a corrective SIP revision. EPA established a deadline 

for the SIP submittal for each state as 12 months from the date 

of the SIP call, or December 1, 2011, unless the state indicated 

in its 30-day letter that it did not object to an earlier 

deadline. Each state for which EPA would finalize the SIP call 

submitted a 30-day letter, and each, except for Texas, indicated 

a date sooner than December 1, 2011. Texas did not indicate any 

particular date and, as a result, EPA established December 1, 
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2011 as Texas’s deadline. In addition, EPA stated that if Texas 

or any of the other states failed to submit its corrective SIP 

revision by its deadline, EPA intended to promulgate a FIP 

immediately thereafter. 

The timing of the SIP call – both the time that EPA 

promulgated the SIP call and the deadlines it established for 

SIP submittals - was driven by the fact that the affected states 

did not have authority to issue PSD permits to GHG-emitting 

sources and as a result, those sources could face delays in 

construction and modification when they became subject to PSD as 

early as January 2, 2011. EPA designed the SIP call to maximize 

the opportunity of each affected state to assure that its 

sources would have a permitting authority available as of that 

date or a later date, if the state concluded that a later date 

would not leave its sources facing delays. EPA did so by 

allowing each state flexibility for its SIP submittal deadline. 

Each of the affected states except Texas responded with a 

plan that would assure that its sources would not confront 

permitting delays. Most states – 7 of the 13 states – indicated 

they would not object to EPA’s establishing a SIP submittal date 

of December 22, 2010, recognizing that as a practical matter, 

that meant that EPA would promulgate a FIP on December 23, 2010. 

An eighth state (Kentucky) took the same approach for one of its 

counties (Jefferson County), except that it selected the
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slightly later date of January 1, 2011.78 Five states (including 

Kentucky for the rest of its state) indicated a later date, and 

again, one indicated a date as late as July 1, 2011. This means 

that purely as a legal matter, there would be no permitting 

authority in place in those five states to issue GHG permits on 

January 2, 2011, when GHG-emitting sources became subject to 

PSD. Even so, the later dates were acceptable to each of the 

five states because (i) they intended to submit a SIP revision 

by their date, and (ii) they did not expect the lack of a 

permitting authority during the period before their deadline to 

place their sources at risk for delays in construction or 

expansion.

Texas responded differently than the other states. In its 

30-day letter, Texas did not indicate a particular date for its 

SIP submittal, and as a result, EPA, as we had proposed, 

established Texas’s deadline at December 1, 2011. But shortly 

before submitting its 30-day letter, Texas stated, in its 60-day 

letter, that “Texas has neither the authority nor the intention 

of interpreting, ignoring, or amending its laws in order to 

compel the permitting of greenhouse gas emission.”79 Texas has 

 78 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 75 FR 77,698 (December 13, 2010).

79 Texas’s 60-day letter, p. 1.
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never qualified this statement, and as a result, EPA reads this 

statement to indicate that Texas does not intend to submit a SIP 

revision as required under the SIP call. 

This means that a permitting authority for GHG-emitting 

sources would not be in place until EPA promulgated a FIP, no 

earlier than December 2, 2011. Importantly, Texas has indicated 

that this one-year delay in the availability of a permitting 

authority would, in fact, mean that under EPA’s interpretation 

of the CAA, Texas’s sources would face delays in constructing 

and modifying.80 Moreover, Texas indicated that during 2011, 

some 167 construction or modification projects would be 

affected,81 which are significantly more sources than any other 

state.

Moreover, Texas’s indication that it does not intend to 

submit a SIP revision, and that it does not consider its PSD 

program as being required to apply to non-NAAQS pollutants, 

including GHGs, has cast a spotlight on underlying flaws in 

Texas’s fully approved PSD SIP, and that, in turn, has brought 

into play the error-correction provision in CAA section 

110(k)(6). All this is discussed in detail earlier in this 

 80 Texas 30-day letter, at 5, 6; Texas “Motion to Stay Three GHG 

Actions” 40-41, Coalition for Responsible Regulation v. EPA, No. 

09-1322 (and consolidated cases).

81 See Texas “Motion to Stay Three GHG Actions” 41, Coalition for 

Responsible Regulation v. EPA, No. 09-1322 (and consolidated 

cases).
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preamble, but to reiterate for convenience: CAA section 

110(k)(6) provides, “Whenever the Administrator determines that 

the Administrator’s action approving ... any [SIP] ... was in 

error, the Administrator may ... revise such action as 

appropriate....” Here, the Texas SIP was flawed at the time EPA 

approved it because it did not address, or assure adequate legal 

authority for, application of the PSD program to pollutants 

newly subject to regulation, including non-NAAQS pollutants. As 

a result, EPA has the authority to determine that its full 

approval of the SIP was “in error” and to convert that action to 

a partial approval and partial disapproval; and as a result of 

that, EPA is authorized to promulgate a FIP immediately. 

This is an important reason why EPA is proceeding with this 

error-correction/partial approval and partial disapproval 

rulemaking at this time. This approach allowed EPA to implement

a FIP immediately as an interim rule, instead of waiting until 

December, 2011, and as a result, EPA has been able to act as the 

permitting authority in Texas and in that capacity, allow Texas 

sources to avoid delays in construction or modification. This 

same approach allows EPA to continue to keep the FIP in pace and 

continues to act as the permitting authority so that there are 

no gaps in coverage for sources to obtain permits. 

With the interim final rule and the present rulemaking, EPA 

has both (i) promulgated a SIP call and established a SIP 
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deadline of December 1, 2011 for Texas, under CAA section 

110(k)(5); and (ii) corrected its error in previous fully 

approving Texas’s PSD program by converting that action to a 

partial approval and partial disapproval, under CAA section 

110(k)(6), and then promulgating a FIP immediately, under CAA 

section 110(c)(1)(B). For the reasons just discussed, each of 

these actions is fully justified under the applicable CAA 

provisions.

Moreover, there is no preclusion against taking both of 

these actions with respect to Texas at this time, for the 

following reasons: First, the two actions are based on CAA 

provisions – CAA section 110(k)(5) (SIP call), and section 

110(k)(6) (error correction) - that overlap, so that it is to be 

expected that circumstances may arise in which both apply. If 

EPA approves a flawed SIP, then circumstances could well arise 

under which EPA has a basis for concluding both that (i) the SIP 

is “substantially inadequate” to meet a CAA requirement, under 

CAA section 110(k)(5); and (ii) EPA’s action in approving the 

SIP was “in error,” under CAA section 110(k)(6). The same flaw 

in the SIP would be the basis for each of those actions.82

 82 In contrast, situations could also arise in which EPA has a 

basis for imposing a SIP call but not issuing an error 

correction because the SIP currently has a substantial 

inadequacy but was not flawed at the time of its submittal and 

approval.
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This is the case with EPA’s two actions concerning Texas. 

As EPA stated in the SIP call, the basis for the finding of 

“substantial inadequacy” was the failure of Texas’s approved SIP 

PSD program to apply to GHGs, which was rooted in the program’s 

failure to apply pollutants newly subject to regulation. As EPA 

stated earlier in this preamble, the basis for the determination 

that EPA’s previous full approval of Texas’s SIP was “in error” 

was the gap in the SIP due to the SIP’s failure to address, or 

assure that it has adequate legal authority for, the application 

to pollutants newly subject to regulation.83

Second, each provision, by its terms, is discretionary to 

EPA, and neither provision precludes the application of the 

other. CAA section 110(k)(5) applies “[w]henever the 

Administrator finds” that the SIP is substantially inadequate. 

CAA section 110(k)(6) applies “[w]henever the Administrator 

determines” that her previous action was in error. Neither 

provision references the other. Neither provision includes any 

 83 In this case, the substantial inadequacy for which EPA issued 

the SIP call, which was the PSD program’s failure to apply to 

GHGs, is narrower than the flaw in the SIP for which EPA is 

issuing the error correction, which is the PSD program’s failure 

to address, or assure legal authority for, application of PSD to 

all pollutants newly subject to regulation. In another case, it 

is conceivable that the opposite would be true, that the 

substantial inadequacy would be broader than the flaw in the SIP 

for which EPA issues the error correction. In that case, if EPA 

imposed a FIP after the deadline for SIP submittal related to 

the SIP call, the FIP would be broader than the FIP imposed 

after the disapproval related to the error correction.
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requirement or limitation that constrains the application of the 

other at any time.

Third, each provision serves a different purpose and when 

applied to this case – including in conjunction with the FIP 

provision in CAA section 110(c)(1) - leads to a different 

outcome, but each outcome is neither dependent on, or 

compromised by, the other outcome. CAA section 110(k)(5), as 

applied in the current case, is focused on a present problem 

with the SIP, that is, a “substantial[] inadequacy” that 

currently exists. This provision mandates that EPA require a 

corrective SIP revision to address that inadequacy, but further 

provides that EPA must allow a reasonable deadline for the state 

to submit the SIP revision. In the GHG PSD SIP call, EPA 

allowed states to, in effect, choose within a range of 

deadlines. But if the state fails to submit the required SIP 

revision by its deadline, then EPA is required to promulgate a 

FIP under CAA section 110(c)(1)(A). CAA section 110(k)(6), as 

it applies in the current case, is focused on a past problem 

with SIP, that is, a flaw that existed at the time EPA approved 

the SIP, so that EPA’s approval was “in error.” This provision 

authorizes EPA to convert the approval to a disapproval, but 

does not mandate that the Statestate submit a new SIP revision. 

This is because the state has already submitted a SIP revision, 

the one that is flawed, and EPA has acted on it. Instead, EPA 
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is required to promulgate a FIP under CAA section 110(c)(1)(B), 

and EPA may do so immediately. The FIP will remain in place 

until the state submits, and EPA approves, a SIP revision. 

Viewing the two provisions as applied here together: (i) 

CAA section 110(k)(5) allows EPA to exercise its discretion to 

make a finding that Texas’s SIP is “substantially inadequate,” 

and then to establish a SIP submittal schedule for Texas, one 

that is consistent with whatever choice as to deadline Texas had 

available to it; and (ii) CAA section 110(k)(6) allows EPA to 

exercise its discretion to convert its previous approval of 

Texas’s SIP, which EPA made “in error,” to a disapproval, and 

then to promulgate a FIP immediately. The requirement that 

Texas submit a corrective SIP revision and do so by a date 

certain - a date that Texas exercised some control over - serves 

the useful function of establishing a mechanism and a timeframe 

for Texas to address the substantial inadequacy in its PSD SIP.84 

The immediate promulgation of a FIP serves the useful purpose of 

assuring the availability of a permitting authority as of 

January 2, 2011, so that Texas sources will not face delays in 

their plans to construct or modify. Importantly, the immediate 

promulgation of a FIP through this rulemaking does not 

 84 We recognize that Texas has indicated that it does not intend 

to submit a SIP revision, but this does not eliminate the 

utility of establishing a SIP submittal schedule.
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compromise in any manner the SIP submittal deadline established 

for Texas through the SIP call. After EPA’s promulgation of the 

FIP, Texas remains obligated to submit the corrective SIP 

revision by December 1, 2011. As soon as Texas does submit that 

SIP revision and EPA approves it, EPA will rescind the part of 

the FIP that concerns GHGs. It is always the case that when EPA 

has promulgated a FIP of any type in a particular state, the 

state remains obligated to adopt a SIP revision. Nothing about 

a FIP impedes the state from doing so; and when the state does 

so and EPA approves the SIP revision, then EPA rescinds the FIP.

It is true that one of the purposes of the SIP call, as 

applied here, was to allow states to in effect select an early 

FIP – by selecting an early SIP submittal date and then not 

submitting a SIP by that date – so as to assure the availability 

of a permitting authority for their sources by that early date. 

And it is further true that Texas, in its 30-day letter, chose 

not to select such an early date and, on the contrary, stated 

its opposition to a FIP; yet, in this present rulemaking, EPA is 

promulgating an immediate FIP for Texas. But this does not mean 

that the present rulemaking has compromised the SIP call or any 

choices made available to Texas in the SIP call. The focus of 

the SIP call, as it related to Texas, was the finding of a 

substantial inadequacy in Texas’s PSD program, the imposition of 

a requirement for Texas to submit a corrective SIP revision, and 
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– based on Texas’s choice - the establishment of a deadline of 

December 1, 2011 for Texas to do so. The promulgation of an 

immediate FIP through the present rulemaking does not disturb 

that. Texas remains subject to the December 1, 2011, SIP 

submittal schedule that EPA established for it, based on Texas’s

decision not to respond directly to EPA’s request that Texas 

itself identify a deadline.85 Texas’s expressed opposition to a 

FIP does not preclude EPA from imposing one as justified through 

the present rulemaking.

It is also true that, as EPA stated in the SIP call, 

“federalism principles ... underlie the SIP call process and the 

SIP system as a whole,” and that means that “in the first 

instance, it is to the state to whom falls the responsibility of 

developing pollution controls through an implementation plan.” 

75 FR 77,710/2. And it is further true that the immediate 

promulgation of a FIP through the present error-correction 

action means that a FIP will be in place in Texas before the 

December 1, 2011 deadline established under the SIP call for 

 85 In any event, to conclude that the promulgation of a FIP under 

this error-correction rulemaking compromised the SIP call 

rulemaking would be tantamount to concluding that the SIP call 

should somehow take priority over this error correction. There 

would be no basis for taking that position. Each action is 

fully justifiable in its own right. The process of completing 

one before the other does not give the first one a priority 

simply because it is first any more than that process would give 

the second a priority because the latter is more recent.
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Texas to adopt its SIP. However, imposition of the FIP is fully 

justified under this error-correction action, as discussed 

previously, and is essential to assure that Texas sources will 

not face delays in construction or modification, a risk that 

Texas acknowledges will occur under EPA’s interpretation of the 

applicable CAA requirements. In any event, Texas’s statement 

that “Texas has neither the authority nor the intention of 

interpreting, ignoring, or amending its laws in order to compel 

the permitting of greenhouse gas emission,”86 as we read it, is 

tantamount to a direct statement that it does not intend to 

submit a GHG PSD SIP revision, and is a direct statement that it 

does not intend to require its sources to obtain permits for 

their GHG emissions. Accordingly, it is difficult to see how it 

could meaningfully be claimed that an early FIP, promulgated 

through this rulemaking, could displace any prerogatives Texas 

may have under the SIP call to develop its own SIP revision 

before the imposition of a FIP or to exercise control over the 

permitting of GHG emissions of its sources. Similarly, Texas 

has stated that it does not believe that EPA’s FIP will be 

effective because, according to Texas, EPA will be unable to 

issue permits for a lengthy period due to uncertainty over how 

 86 Texas 60-day letter, p. 1.
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to apply PSD requirements to GHG-emitting sources.87 

Accordingly, it is difficult to see how it could meaningfully be 

claimed that a FIP, which Texas considers ineffective, could 

adversely affect Texas’s interests.

It is also true that under the principles of federalism 

that underlie the SIP system, states exercise some discretion 

over controls for their industry, so that a state may impose 

more stringent controls than minimum CAA requirements. CAA 

section 116. But this discretion does not mean that Texas is 

authorized to create the circumstances under which its sources 

face delays in constructing or modifying and EPA is precluded 

from promulgating a FIP – when justified under this rulemaking –

for the purpose of protecting those sources against such delays. 

Absent this action, Texas sources would face delays in 

construction and modification resulting from Texas’s decision 

during the course of the SIP call to neither adopt a SIP 

promptly nor facilitate an early FIP. Those delays do not 

result from Texas’s decision to impose more stringent controls 

than the CAA requires. On the contrary, Texas’s action is 

inconsistent with one of the purposes of the PSD provisions, 

which is “to insure that economic growth will occur in a manner 

consistent with the preservation of clean air resources.” CAA 

 87 Texas 30-day letter.
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section 160(3). EPA is justified in interpreting and applying 

CAA section 110(k)(6) to correct errors related to Texas’s SIP 

PSD program in order to effectuate this purpose of PSD. The 

D.C. Circuit has held that the terms of the PSD provisions 

should be interpreted with the PSD purposes in mind, New York v. 

EPA, 413 F.3d 3, 23(D.C. Cir.), rehearing en banc den., 431 F.3d 

801 (2005), and the same should be true of CAA section 110(k)(5) 

as applied to PSD requirements.

F. Relationship of This Rulemaking to Other States

EPA is not, at this time, undertaking a similar errorcorrection rulemaking for any of the other states that are 

subject to the SIP call. EPA has discretion as to whether and 

when to undertake such a rulemaking, and each of the other 

states has chosen a course of action that at present appears to 

assure that its large GHG-emitting sources will have a 

permitting authority available when the sources need one, and 

therefore will not face delays in constructing or modifying. As 

a result, EPA has not inquired into whether any of these other 

states have flaws in their SIP PSD programs as Texas does.

1. Comments on the Relationship of this Rulemaking to Other 

States

Industry commenters, in addition to the State of Texas, 

raised concerns about this rule treating Texas differently than 

other states. Other states, such as Arizona, Arkansas,
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Connecticut, Florida, Idaho, and Kansas, do not have SIPs that 

automatically update to incorporate new requirements, and so 

regulate new pollutants in a “stepwise” fashion, according to 

these commenters. Moreover, these commenters argue that EPA’s 

approval of Texas’s SIP cannot be considered to have been in 

error because, they say, EPA approved other SIPs that, like 

Texas’s, did not automatically apply PSD to each pollutant newly 

subject to regulation.

Several industry commenters also stated that they believe 

that EPA’s rationale for this rule, read in conjunction with 

EPA’s PSD Narrowing Rule 75 FR 8253682,536 (December 30, 2010) 

makes it impossible for a state to ever have an approvable SIP. 

This is because, according to these commenters, states can only 

have an approvable SIP if they automatically incorporate federal 

requirements when EPA adopts them. However, the PSD Narrowing 

Rule was required because those states that do “impose PSD 

applicability on new pollutants in an unconstrained manner” in 

their SIPs do not ensure that states have adequate funding and 

personnel to implement the new SIP requirements, according to 

commenters. 

2. Response to comments

EPA disagrees with the comments that we are singling out 

Texas for unfair treatment for its failure to automatically 

update its SIP to incorporate new requirements. Texas is, in 
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fact, unlike each of these other states. Texas, uniquely among 

all the states, has stated that it will not implement PSD 

requirements for GHGs either by revising or committing to revise 

its SIP. It is this refusal that has shined a spotlight on 

EPA’s error in previously approving Texas’s SIP, for the reasons 

discussed earlier in this preamble. Moreover, each of the other 

states identified by commenters has taken measures to ensure 

that permitting for GHG-sources in its state will be available. 

Arizona, Arkansas, Florida, and Idaho each have a FIP in place 

to allow EPA to issue permits to GHG-emitting sources. 

Connecticut has submitted a SIP revision to enable the state to 

assume responsibility for PSD permitting of these sources. 

Kansas already has an approved SIP that applies PSD to GHGs.

Accordingly, it has never been necessary for EPA to inquire, and 

EPA has not inquired, into whether these states have flaws in 

their PSD SIPs. In addition, the error correction provision is 

discretionary: it provides that EPA “may” undertake an error 

correction when it finds that its previous action was in error. 

Accordingly, even if EPA did inquire into the SIP PSD program 

approvals in these other states, EPA would not be required to 

issue an error correction for them. In light of the fact that 

these states are addressing their GHG-emitting sources as 

described previously, EPA sees no need at present to consider an 

error-correction action with respect to those states. Finally, 
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EPA disagrees with the commenters’ argument that EPA’s approval 

of these several other PSD SIPs – despite their lack of an 

automatic updating mechanism – means that EPA’s approval of 

Texas’s PSD SIP was not in error. As discussed elsewhere in 

this rulemaking preamble, the Texas SIP was flawed because it 

did not address the applicability of PSD to pollutants newly 

subject to regulation, not because it did not automatically 

apply PSD to such pollutants. Commenters have not shown that 

the several other SIPs they discuss did not address the 

applicability of PSD to pollutants newly subject to PSD in some 

way other than automatic updating. And if any other of the 

SIPs, or even all of them, did not do so, then it is possible 

that those SIPs were flawed in the same manner as Texas’s, and 

that in approving them, EPA repeated the same error that it made 

in approving Texas’s SIP. But to reiterate, section 110(k)(6) 

is discretionary with EPA and EPA has no reason to review those 

SIPs.

EPA also disagrees with the commenters that contend that no 

SIP could possibly be approvable given the rationales presented 

for this rule and the SIP Narrowing Rule. In this action, EPA 

identifies as the flaw in the SIPs the failure to address the 

applicability of PSD to newly regulated pollutants (along with 

the failure to provide adequate assurances of legal authority to 

apply PSD to such pollutants). As noted earlier in this 
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preamble, there are several ways that Statesstates could address 

this flaw, and although providing for automatic updating is one 

way – and the one that most states have adopted – it is not the 

only way. A Statestate could, for example, commit to adopt a 

SIP revision to apply PSD to a newly regulated pollutant. In 

the course of addressing the applicability of PSD to a newly 

regulated pollutant, the state could address any associated 

resource issues. Moreover, as EPA explained in the SIP 

Narrowing rule, the flaw that needed correcting by that rule was 

the “combination of that unconstrained applicability and the 

failure of the SIP to plan for adequate resources for that 

applicability, and to do so on the appropriate time-table.” 

(emphasis added) 75 FR 82,542 (December 30, 2010). There are, 

in fact, some states that were able to revise their SIPs before 

January 2, 2011. Six other states and four districts within 

states were able to interpret their SIPs to regulate GHG 

emissions only above the Tailoring Rule thresholds, and needed 

no further action by EPA. There is, then, no “conundrum” for a 

state that does not adopt EPA regulations by reference. 

G. Federal Implementation Plan

1. Authority to Promulgate a FIP

In this rulemaking, EPA is promulgating a FIP to apply 

EPA’s PSD regulatory program to GHG-emitting sources in Texas 

and to commit to take action as appropriate with respect to 
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pollutants that become newly subject to regulation. 

The CAA authority for EPA to promulgate a FIP is found in 

CAA section 110(c)(1), which provides –

The Administrator shall promulgate a Federal 

implementation plan at any time within 2 years after 

the Administrator ... (B) disapproves a State 

implementation plan submission in whole or in part, 

unless the State corrects the deficiency, and the 

Administrator approves the plan or plan revision, 

before the Administrator promulgates such [FIP].

As indicated earlier in this notice, EPA is partially 

disapproving Texas’s PSD program by correcting EPA’s previous 

full approval to be a partial approval and partial disapproval. 

Accordingly, under CAA section 110(c)(1)(B), EPA is required to 

promulgate a PSD FIP for Texas.

The FIP must be designed to address the flaws in Texas’s

PSD program. As discussed earlier in this preamble, the Texas 

PSD program contains significant gaps: It does not address, or 

provide assurances of adequate legal authority for, application 

to pollutants newly subject to regulation, including non-NAAQS 

pollutants. As a practical matter, at present, the only 

pollutant the program does not address is GHGs. Accordingly, 

the FIP applies the EPA regulatory PSD program to GHGs. In 

addition, the FIP commits to address pollutants that become 

newly subject to regulation, as appropriate.

2. Timing of FIP

EPA is promulgating the FIP in this rulemaking, so 
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that it takes effect immediately upon the partial 

disapproval. This timing for FIP promulgation is 

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

to promulgate a FIP "at any time within 2 years after" EPA 

disapproves a SIP submission in whole or in part. The 

quoted phrase, by its terms, establishes a two-year period 

within which EPA must promulgate the FIP, and provides no 

further constraints on timing. Accordingly, this provision 

gives EPA discretion to promulgate the FIP at any point in 

time within that two-year period, and in this rulemaking, 

EPA is promulgating the FIP immediately. 

The reason why we are exercising our discretion to 

promulgate the FIP immediately is to minimize any period of time 

during which larger-emitting sources in Texas may be under an 

obligation to obtain PSD permits for their GHGs when they 

construct or modify, but no permitting authority is authorized 

to issue those permits. We believe that acting immediately is 

in the best interests of the regulated community. Note that for 

similar reasons, in EPA’s recently promulgated SIP call, EPA 

stated that if a state failed to submit its required SIP 

revision by its deadline, EPA would immediately make a finding 

of failure to submit and immediately thereafter promulgate a 

FIP. 75 FR 53,889/2. 

The lack of constraints in CAA section 110(c)(1)(B) stands 
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in contrast to other CAA provisions that do impose requirements 

for the timing of proposals. See CAA sections 109(a)(1)(A), 

111(b)(1)(B). In light of the lack of constraints, EPA was free 

to promulgate the FIP concurrently with the disapproval action. 

3. Substance of GHG PSD FIP

a. Components of FIP

The FIP consists of two components. The first mirrors the 

GHG PSD FIP that EPA promulgated for seven states for which EPA 

issued the PSD GHG SIP call and, subsequently, issued a finding 

of failure to submit a required SIP submittal. Thus, this 

component of the FIP consists of the EPA regulations found in 40 

CFR 52.21, including the PSD applicability provisions, with a 

limitation to assure that, strictly for purposes of this 

rulemaking, the FIP applies only to GHGs. Under the PSD 

applicability provisions in 40 CFR 52.21(b)(50), the PSD program 

applies to sources that emit the requisite amounts of any 

"regulated NSR pollutant[s]," including any air pollutant 

"subject to regulation." However, Texas’s partially approved 

SIP already applies PSD to other air pollutants. To 

appropriately limit the scope of the FIP, EPA amends 40 CFR 

52.21(b)(50), as incorporated into the Texas FIP, to limit the 

applicability provision to GHGs. 

We adopt this FIP because, as we stated in the

proposed GHG PSD FIP –
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it would, to the greatest extent possible, mirror EPA 

regulations (as well as those of most of the states). 

In addition, this FIP would readily incorporate 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—including Steps 1 

and 2 of the phase-in as promulgated in the Tailoring 

Rule—can be most readily accomplished through 

interpretation of the terms in the definition 

"regulated NSR pollutant," including the term "subject 

to regulation." 

In accordance with the Tailoring Rule, ... the 

FIP would apply in Step 1 of the phase-in approach 

only to "anyway sources" (that is, sources undertaking 

construction or modification projects that are 

required to apply for PSD permits anyway due to their 

non-GHG emissions and that emit GHGs in the amount of 

at least 75,000 tpy on a CO2e basis) and would apply in 

Step 2 of the phase-in approach to both "anyway 

sources" and sources that meet the 100,000/75,000-tpy 

threshold (that is, (i) sources that newly construct 

and would not be subject to PSD on account of their 

non-GHG emissions, but that emit GHGs in the amount of 

at least 100,000 tpy CO2e, and (ii) existing sources 

that emit GHGs in the amount of at least 100,000 tpy 

CO2e, that undertake modifications that would not 

trigger PSD on the basis of their non-GHG emissions, 

but that increase GHGs by at least 75,000 tpy CO2e). 

Under the FIP, with respect to permits for 

"anyway sources," EPA will be responsible for acting 

on permit applications for only the GHG portion of the 

permit, and the state will retain responsibility for 

the rest of the permit. Likewise, with respect to 

permits for sources that meet the 100,000/75,000-tpy 

threshold, our preferred approach—for reasons of 

consistency—is that EPA will be responsible for acting 

on permit applications for only the GHG portion of the 

permit, that the state permitting authorities will be 

responsible for the non-GHG portion of the permit, and 

EPA will coordinate with the state permitting 

authority as needed in order to fully cover any nonGHG emissions that, for example, are subject to BACT 

because they exceed the significance levels.

75 FR 53,889/3 to 53,890/1.
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This formulation of the FIP is authorized because it is part of 

the “appropriate” action EPA is authorized to take as part of 

EPA’s correction of its previous, erroneous full approval, under 

CAA section 110(k)(6).

The second component of the FIP consists of a commitment 

that EPA will take such action as is appropriate to ensure that 

pollutants that become newly subject to regulation are subject 

to the FIP. If a pollutant becomes newly subject to regulation 

in the future, and if Texas does not take steps to subject it to 

its PSD program, then EPA will take the appropriate action. 

b. Dual permitting authorities

In the GHG PSD FIP proposal, commenters raised concerns 

about how having EPA issue the GHG portions of a permit while 

allowing states under a FIP to continue to be responsible for 

issuing the non-GHG portions of a PSD permit will work in 

practice. Commenters specifically identified the potential for 

a source to be faced with conflicting requirements and the need 

to mediate among permit engineers making BACT decisions. 

We well recognize that dividing permitting responsibilities 

between two authorities – EPA for GHGs and the state, Texas, in 

this case, for all other pollutants – will require coordination 

between the two authorities to avoid duplication, conflicting 

determinations, and delays. We note that this situation is not 

without precedent. In many instances, EPA has been the PSD 
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permitting authority but the state has accepted a delegation for 

parts of the PSD program, so that a source has had to go to both 

the state and EPA for its permit. In addition, all 

nonattainment areas in the nation are in attainment or are 

unclassifiable for at least one pollutant, so that every 

nonattainment area is also a PSD area. In some of these areas, 

the state is the permitting authority for nonattainment NSR and 

EPA is the permitting authority for PSD. As a result, there are 

instances in which a new or modifying source in such an area has 

needed a nonattainment NSR permit from the state and a PSD 

permit from EPA. 

EPA is working expeditiously to develop recommended 

approaches for EPA regions and affected states to use in 

addressing the shared responsibility of issuing PSD permits for 

GHG-emitting sources. EPA delegated the authority to issue PSD 

permits to GHG-emitting sources to one state, and is working 

toward similar delegations in other states. In addition, EPA 

has provided training and guidance for permitting authorities in 

determining GHG BACT for these sources. 

In addition, we note that the concern over dual permitting 

authorities would become moot if Texas were either to submit and 

EPA approve a SIP revision that applies PSD to GHGs or request a 

delegation of permitting responsibility. If it did request and 

receive a delegation, it would be responsible for issuing both 
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the GHG part and the non-GHG part of the permit, and that would 

moot concerns about split-permitting.

4. Period for GHG PSD FIP to Remain in Place

In the FIP proposal, we stated our intention to leave any 

promulgated FIP in place for as short a period as possible, and 

to process any corrective SIP revision submitted by the state to 

fulfill the requirements of the SIP call as expeditiously as 

possible. Specifically, we stated:

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 section 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. Upon request of the state, we 

will parallel-process the SIP submittal. That is, if 

the state submits to us the draft SIP submittal for 

which the state intends to hold a hearing, we will 

propose the draft SIP submittal for approval and open 

a comment period during the same time as the state 

hearing. If the SIP submittal that the state 

ultimately submits to us is substantially similar to 

the draft SIP submittal, we will proceed to take final 

action without a further proposal or comment period. 

If we approve such a SIP revision, we will at the same 

time rescind the FIP. 

75 FR 53,889/2-3. 

We continue to have these same intentions. Thus, we 

reaffirm our intention to leave the GHG PSD FIP in place only as 

long as is necessary for the state to submit and for EPA to 

approve a SIP revision that includes PSD permitting for GHGemitting sources. As discussed in more detail later in this 
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preamble, EPA continues to believe that the states, including 

Texas, should remain the primary permitting authority. 

Specifically, EPA will rescind the FIP, in full or in part, 

if (i) Texas submits, and EPA approves, a SIP revision to apply 

Texas’s PSD program to GHG-emitting sources, (ii) Texas provides 

assurances that in the future, it will apply its PSD program to 

all pollutants newly subject to regulation, including non-NAAQS 

pollutants, and (iii) Texas provides “necessary assurances” 

under CAA section 110(a)(2)(E)(ii) that it “will have adequate 

... authority under State law” to apply its PSD program to such 

pollutants.

In addition, if Texas does not submit a SIP revision by 

December 1, 2011, in response to the SIP Call, EPA intends to 

promulgate, on or about December 2, 2011, the FIP associated 

with the SIP call. The GHG provisions of the FIP promulgated 

with this error correction rulemaking will terminate at that 

time, and, in effect, be replaced bybe fully consistent with the

identical provisions in the FIP associated with the SIP call. 

The remaining components of the FIP promulgated with this error 

correction rulemaking, which concern other non-criteria 

pollutants other than GHGs, will also remain in place.

5. Primacy of Texas’s SIP process

This action to partially approve and partially disapprove 

Texas’s SIP PSD program and to promulgate a FIP is secondary to 
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our overarching goal, which is to assure that it will be Texas 

that will be the permitting authority. EPA continues to 

recognize that Texas is best suited to the task of permitting 

because the state and its 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 Texas as it 

makes the various required permitting decisions for GHG 

emissions.

Accordingly, we are prepared to work closely with Texas to 

help it promptly develop and submit to us a SIP revision that 

extends its PSD program to GHG-emitting sources and that assures 

that the program will apply to each pollutant newly subject to 

regulation in the future. If Texas submits such a SIP revision, 

we intend to promptly act on it, and if we approve it, then we 

intend to rescind the FIP immediately. Again, EPA's goal is to 

have in place in Texas the necessary permitting authority by the 

time businesses seeking construction permits need to have their 

applications processed and the permits issued —- and to achieve 

that outcome by means of engaging with Texas directly through a 

concerted process of consultation and support.

EPA is taking up the additional task of partially 

disapproving Texas’s PSD program and promulgating the FIP at 

this time only because the Agency believes it is compelled to do 
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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. At the same time, we invite Texas to accept a 

delegation of authority to implement the FIP, so that it will 

still be the state that processes the permit applications, 

albeit operating under federal law. 

V. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and 

Executive 13563: Improving Regulations and Regulatory Review

Under Executive Orders (EO) 12866 (58 FR 51,735, October 4,

1993) and 13563 (76 FR 3,821, January 21, 2011), 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 EOs 12866 

and 13563 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. 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 
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70 and 71) under the provisions of the Paperwork Reduction Act,

44 U.S.C. 3501 et seq. and has assigned OMB control number 2060-

0003 and OMB control number 2060-0336 respectively. The OMB 

control numbers for EPA's regulations in 40 CFR are listed in 40 

CFR part 9.

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an 

agency to prepare a regulatory flexibility analysis of any rule 

subject to notice and comments 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 noticerule 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 AdministrationAdministration’s (SBA) size standards 

(seeregulations at 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-forprofit enterprise that is independently owned and operated and 

is not dominant in its field. 
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Although this rule would 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 rule on small entities, 

I certify that this action will not have a significant economic 

impact on a substantial number of small entities. This final 

rule will not impose any requirements on small entities. 

D. Unfunded Mandates Reform Act

This action contains no federal mandates under the 

provisions of Title II of the Unfunded Mandates Reform Act of 

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

governments or the private section. The action imposes no 

enforceable duty on any state, local or tribal governments or 

the private sector. With this action, EPA is only revising its 

previous approval of the Texas PSD SIP to be a partial approval 

and partial disapproval and promulgating a FIP to address the 

deficiencies as authorized by the CAA. Thus, this rule is not 

subject to the requirements of sections 202 or 205 of UMRA.

This action is also not subject to the requirements of 

section 203 of UMRA because it contains 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 
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not have substantial direct effects on Texas, on the 

relationship between the national government and Texas, or on 

the distribution of power and responsibilities among the various 

levels of government, as specified in Executive Order 13132. 

The CAA specifies conditions under which states may request, and 

EPA may approve state implementation of CAA requirements. The 

CAA also specifies the action EPA is to take, including issuing 

a FIP, when states have not met their requirements under the 

CAA. This rulemaking does not change that distribution of power 

between the states and EPA. With this action, EPA is only 

revising its previous approval of the Texas PSD SIP to be a 

partial approval and partial disapproval and promulgating a FIP 

to address the deficiencies identified in the Texas SIP as 

authorized by the CAA. Thus, Executive Order 13132 does not 

apply to this action.

In the spirit of Executive Order 13132, and consistent with 

EPA policy to promote communications between EPA and state and 

local governments, EPA solicited comment on the proposal for 

this action. Comments from state government organizations are 

addressed within this preamble and supporting materials 

available in the docket for this rulemaking. 

F. Executive Order 13175 - Consultation and Coordination with 

Indian Tribal Governments

This action does not have tribal implications, as specified 
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in Executive Order 13175 (65 FR 67,249, November 9, 2000). In 

this action, EPA is not addressing any tribal implementation 

plans. This action is limited to Texas’s PSD SIP. Thus,

Executive Order 13175 does not apply to this action.

G. Executive Order 13045 - Protection of Children from 

Environmental Health Risks and Safety Risks

EPA interprets EO 13045 (62 FR 19,885, 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 EPA is only 

revising its previous approval of the Texas PSD SIP to be a 

partial approval and partial disapproval and promulgating a FIP 

to address the deficiencies as authorized by the CAA.

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 28,355(May 22, 2001)), because 

it is not likely to have a significant adverse effect on the 

supply, distribution, or use of energy. With this action, EPA 

is only revising its previous approval of the Texas PSD SIP to 

be a partial approval and partial disapproval and promulgating a 

FIP to address the deficiencies as authorized by the CAA. This 

action will provide energy facilities in Texas that are large 
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emitters of GHG a mechanism to get necessary PSD permits to 

construct or modify. 

I. National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and 

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

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

standards in its regulatory activities unless to do so would be 

inconsistent with applicable law or otherwise impractical. 

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

materials specifications, test methods, sampling procedures, and 

business practices) that are developed or adopted by voluntary 

consensus standards bodies. NTTAA directs EPA to provide 

Congress, through OMB, explanations when the Agency decides not 

to use available and applicable voluntary consensus standards. 

This 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 7,629, 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 
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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 final rule will not have 

disproportionately high and adverse human health or 

environmental effects on minority or low-income populations 

because it does not affect the level of protection provided to

human health or the environment. With this action, EPA is only 

revising its previous approval of the Texas PSD SIP to be a 

partial approval and partial disapproval and promulgating a FIP 

to address the deficiencies as authorized by the CAA. 

K. Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801, et seq., as 

added by the Small Business Regulatory Enforcement Fairness Act 

of 1996, generally provides that before a rule may take effect, 

the agency promulgating the rule must submit a rule report, 

which includes a copy of the rule, to each House of the Congress 

and to the Comptroller General of the United States. Section 

808 allows the issuing agency to make a rule effective sooner 

than otherwise provided by the CRA if the agency makes a good 

cause finding that notice and public procedure is impracticable, 

unnecessary, or contrary to the public interest. This 
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determination must be supported by a brief statement, 5 U.S.C. 

808(2). As stated previously, EPA has made such a good cause 

finding, including the reasons therefore, and established an 

effective date of May 1, 2011. EPA will submit a report 

containing this rule and other required information to the 

United States Senate, the United States House of 

Representatives, and the Comptroller General of the United 

States prior to publication of the rule in the Federal Register. 

This action is not a “major rule” as defined by 5 U.S.C. 804(2).

VI. Judicial Review

Section 307(b)(1) of the CAA specifies which Federal Courts 

of Appeal have jurisdiction to hear petitions for review of 

which final actions by EPA. This section provides, in part, 

that petitions for review must be filed in the Court of Appeals 

for the District of Columbia Circuit: (i) when the agency 

action consists of “nationally applicable regulations 

promulgated, or final actions taken, by the Administrator,” or 

(ii) when such action is locally or regionally applicable, if 

“such action is based on a determination of nationwide scope or 

effect and if in taking such action the Administrator finds and 

publishes that such action is based on such a determination.”

This rule is based on a determination of nationwide scope 

or effect. Texas’s response to the SIP call – including Texas’s

statements that it does not intend to submit a SIP revision and 
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its decision not to identify a SIP submittal deadline, which 

have placed its sources at risk for delays in construction or 

modification – led us to determine that we should examine 

whether there may be a flaw in Texas’s SIP that was present at 

the time of our approval. We then conducted a closer inquiry 

and on the basis of that, we are concluding that in fact a flaw 

was present. As a result, we are authorized to undertake an 

error correction, as we are doing in this rulemaking. For all 

other states subject to the SIP call, their response to the SIP 

call – which did not raise the concerns Texas’s did and which 

assured that their sources would not be at risk for delays in 

construction or modification – led us to determine that it was 

not necessary to examine further whether their SIPs were flawed 

at the time we approved them. That determination – whether to 

examine the SIPs further – is a determination of nationwide 

scope or effect because it affected Texas and the 12 other 

states subject to the SIP call. Further indication that this is 

a determination is of nationwide scope or effect is that EPA is 

making it as part of the complex of rules EPA has promulgated to 

implement the GHG PSD program for each of the states in the 

nation. Those rules include (i) the Tailoring Rule and the 

Johnson Memo Reconsideration, which revise EPA regulations to 

incorporate the Tailoring Rule thresholds, and which apply in 

each state that does not have an approved SIP PSD program, and 
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therefore operates under EPA’s regulations; (ii) the SIP Call, 

which applies in each state that has an EPA-approved SIP PSD 

program but does not apply that program to GHG-emitting sources; 

and (iii) the PSD Narrowing rule, which applies in each state 

that has an EPA-approved SIP PSD program that does apply to GHGemitting sources. 

Thus, under section 307(b)(1) of the Act, judicial review 

of this final action is available by filing of a petition for 

review in the U.S. Court of Appeals for the District of Columbia 

Circuit by [INSERT DATE 60 DAYS AFTER PUBLICATION IN THE FEDERAL 

REGISTER]. 

Pursuant to CAA section 307(d)(1)(B), this action is 

subject to the requirements of CAA section 307(d) to the extent 

it promulgates a FIP under CAA sectopm110section 110(c). In 

addition, pursuant to CAA section 307(d)(1)(V), which authorizes 

the Administrator to determines that actions other than those 

specifically listed in CAA section 307(d)(1) are subject to the 

provisions of CAA section 307(d), EPA is making that 

determination for this action to the extent it constitutes an 

error correction under CAA section 110(k)(6); a rescission of 

EPA’s previous approval and a limited approval and disapproval

of Texas’s PSD SIP, under CAA section 110(k)(3); or any other 

action.

IX. Statutory Authority
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The statutory authority for this action is provided by 

sections 101, 110, 114, 116, 301, and 307(d) of the CAA as 

amended (42 U.S.C. 7401, 7410, 7414, 7416, 7601, and 7607(d)).
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Page 162164 of 164166 – Determinations Concerning Need for Error 

Correction, Partial Approval and Partial Disapproval, and 

Federal Implementation Plan Regarding Texas’s Prevention of 

Significant Deterioration Program

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.
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For the reasons set out in the preamble, title 40, chapter I of 

the Code of Federal Regulations is amended as follows:

PART 52 - [Amended]

1. The authority citation for part 52 continues to read as 

follows:

 Authority: 42 U.S.C. 7401 et seq.

2. Section 52.2305 is added to read as follows:

Section 52.2305 What are the requirements of the Federal 

Implementation Plan (FIP) to issue permits under the Prevention 

of Significant Deterioration requirements to sources that emit 

greenhouse gases? 

(a) The requirements of sections 160 through 165 of the Clean 

Air Act are not met to the extent the plan, as approved, for 

Texas does not apply with respect to emissions of the pollutant 

GHGs from certain stationary sources. Therefore, the provisions 

of §52.21 except paragraph (a)(1) are hereby made a part of the 

plan for Texas for:

(1) Beginning on [##][THE EFFECTIVE DATE OF THIS RULE],May 1, 

2011, the pollutant GHGs from stationary sources described in 

§52.21(b)(49)(iv), and 

(2) Beginning July 1, 2011, in addition to the pollutant GHGs 

from sources described under paragraph (a)(1) of this section, 

stationary sources described in §52.21(b)(49)(v).
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(b) For purposes of this section, the "pollutant GHGs" refers to 

the pollutant GHGs, as described in §52.21(b)(49)(i).

(c) In addition, the United States Environmental Protection 

Agency shall take such action as is appropriate to assure the 

application of PSD requirements to sources in Texas for any 

other pollutants that become subject to regulation under the 

federal Clean Air Act for the first time after January 2, 2011.