ADEQ

ARK A N S A S

Department of Environmental Quality

October 1,2010

The Honorable Lisa P. Jackson

Administrator

u.s. Environmental Protection Age!1cy,

EPA West (Air Docket),

1200 Pennsylvania Avenue, NW,

Washington D.C., 20460

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

Dear Ms. Jackson:

The Arkansas Department of Environmental Quality ("ADEQ") is taking this opportunity

to confirm Arkansas's status as one of thirteen states that do not have Prevention of

Significant Deterioration ("PSD") permitting requirements that cover greenhouse gas

("GHG")- emitting sources. Accordingly, Arkansas will be found to have a state

implementation plan ("SIP") that is substantially inadequate. In the 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

("GHG SIP Call") proposed rule, the U.S. Environmental Protection Agency ("EPA")

proposes to issue a SIP Call to require a corrective SIP revision submittal that applies SIP

PSD programs to GHG-emitting sources. In light ofthe precarious position Arkansas PSD

permitted facilities would be in without the speedy issuance of a federal implementation

plan ("FIP"), Arkansas does not object to the shortest SIP deadline ofthree weeks after the

SIP Call for this corrective SIP submittal. Lastly, this comment letter provides Arkansas's

comments on matters raised in the proposed GHG SIP Call.

PSD

In the proposed GHG SIP Call, EPA requests information from states that will help EPA

reach its goal of obtaining a deeper understanding ofwhat provisions are in the relevant

PSD SIPs, how they are to be interpreted, and obtaining a comprehensive picture of all the

SIPs in this regard. Through the information provided herein by ADEQ, we hope EPA can

confirm that Arkansas has been given the proper status in the proposed GHG SIP Call.

In response to EPA's specific requests for information, Arkansas confirms that the SIP

PSD applicability provisions do not explicitly include GHG sources, and we are identifying

for EPA the provisions ofthe Arkansas State Constitution and other law, including the

SIP, that may be read to prohibit prospective rulemaking or otherwise limit the

ARKANSAS DEPARTMENT OF ENVIRONMENTAL QUALITY

5301 NORTHSHORE DRIVE / NORTH UTILE ROCK / ARKANSAS 72118·5317 /TELEPHONE 501·682·0744/ FAX 501·682·0880

www.adeq.state.ar.us
applicability of the PSD program to pollutants identified at a certain point in time, and

therefore not to GHGs. In addition, Arkansas identifies provisions that specifically

preclude PSD applicability for GHG sources. Copies of provisions ofthe SIP or state law

that may bear on the applicability ofthe PSD program to GHG-emitting sources are

provided as Attachments.

Rulemaking

Arkansas must go through rulemaking to amend its current regulations so that GHG

emissions can be regulated in accordance with the provisions of EPA's Tailoring Rule. The

reason for this statement lies in the general prohibition against prospective rulemaking in

Arkansas. The authority for prohibiting prospective rulemaking resides in the provisions

of the Arkansas Constitution and case law cited by the Arkansas Attorney General in

Opinion No. 95-008 and the Commission's administrative procedures.

Attorney General's Opinion 95-008 discusses the relevant state Constitutional provisions

and case law that give rise to the prohibition on prospective rulemaking in Arkansas.

Attorney General's Opinion 95-008 is included in Attachment B. The relevant provision of

the Arkansas State Constitution being interpreted by the Attorney General is included in

Attachment D. The Opinion can be summarized as follows:

The Arkansas State Constitution provides for the separation of powers, which limits

legislative authority to implement future rules and regulations. While the legislature

may confer discretion in the administration ofthe law, it may not delegate the

exercise ofits discretion as to what the law shall be. Accordingly, regulations

adopted by administrative agencies in the State ofArkansas through incorporation

by reference are lawful; however, adopting future editions by reference without

adhering to public notice and comment provisions (prospective rulemaking) is

constitutionally suspect. This limitation of authority ensures that future rules and

regulations must go through a standard rulemaking process in Arkansas. Allowing

shortcuts would strip away due process and violate the separation of powers

doctrine found at Article 4 §§ I and 2 ofthe Arkansas State Constitution.

The Attorney General's Opinion clearly articulates the basis for the prohibition against

prospective rulemaking. This prohibition precludes new pollutants, such as GHGs, from

being controlled under the existing state permitting programs without first undertaking

formal notice and rulemaking.

Further, the Arkansas Pollution Control and Ecology Commission Regulation No.8 sets

out the administrative procedures for rulemaking. Reg. 8.817 governs incorporation by

reference. This section authorizes the Commission to adopt regulations through

incorporation by reference. But this section also states that any subsequent changes in the

law adopted by reference do not affect the provisions ofthe regulations adopted by the

Commission; thereby ensuring due process is provided in the form of public notice and

public hearing for any amendments to the Commission's regulations as set out in Chapter

8 of Regulation No.8. The relevant sections ofRegulation No.8 are included in Attachment

E.
PSD Regulations

Arkansas's PSD program is specifically regulated under Arkansas Pollution Control and

Ecology Commission's ("Commission") Regulation No. 19, Chapter 9. Regulations

governing PSD permitting programs have incorporated federal regulations by reference.

Regulation No. 19, Chapter 9, has an incorporation by reference date ofNovember 29,

2005. No amendments to 40 CFR 52.21 or 40 CFR 51.166 beyond the November 29, 2005

date are incorporated by reference, including federal rules that regulate GHGs. This

November 2005 incorporation by reference date precludes EPA's recent changes from

becoming Arkansas law. The November 2005 incorporation by reference date is a bar to

Arkansas's regulation ofGHG emissions. See Attachment A for the specific sections

referenced in Regulation 19.

Chapter 9 of Regulation No. 19 incorporates definitions found in Chapter 2 of Regulation

Number 19, making these definitions applicable to PSD. Chapter 2 defines "federally

regulated air pollutant." Under part (C) of the definition, "federally regulated air

pollutant" is any pollutant that is subject to any standard promulgated under 42 U.S.C. §§

7401, et seq., as of the effective date of this regulation. The effective date in terms ofwhen

the regulation containing this definition was adopted is July 1, 1997, which excludes any

subsequently regulated air pollutants from this definition, including GHGs. The definition

contained in Regulation 19 is included in Attachment C.

PSD SIP'As a Whole'

EPA has requested information on whether Arkansas's SIP, read as a whole, contains a

clause that would provide general authority to Arkansas to issue PSD permits that meet

EPA requirements and are thereby considered to apply PSD to GHG sources. Arkansas

answers this question in the negative; there is no general authority clause in Arkansas's

SIP.

ADEQ has concluded that Arkansas's SIP, read as a whole, does not apply the PSD

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

While Arkansas plans to develop adequate authority to apply the PSD program to GHG

sources, Arkansas will not be submitting this authority in the form of a SIP revision by

December 1,2010.

Corrective SIP Revision Deadline

EPA proposes to issue a SIP Call to require submittal of a corrective SIP revision that

applies SIP PSD programs to GHG-emitting sources. Arkansas is electing to be placed on a

three week from SIP Call finalization deadline for submitting its corrective SIP revision.

In light ofthe fact that as of January 2, 2011, certain GHG-emitting sources will become

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

order to construct or modify- this is the only 'choice' available. Arkansas must decline the

twelve month deadline for SIP revision in order to ensure that PSD permitting authority

for newly constructed or modified sources remains in place. Since states are asked to 'not

object' to the three week deadline in order to keep PSD permits flowing smoothly,
Arkansas does 'not object,' but Arkansas emphasizes that we must take this position only

out of the necessity born from EPA's crafted situation. With respect to the reasonableness

of this deadline, Arkansas takes issue and provides the following comments.

Comments

EPA is soliciting comments on whether or not the 3-week-to-12-month expedited time

period for SIP revisions set by EPA meets the federal Clean Air Act ("CAA") section

IIO(k)(5) requirement for a "reasonable deadline." ADEQ believes that EPA's

interpretation of "reasonable deadline" is not realistic. In addition, ADEQ takes issue with

this 3-week-to-12-month deadline becoming the standard of reasonableness.

EPA's definition of "reasonable deadline" found in the proposed GHG SIP Call is

supposed to depend on the facts and circumstances. The facts and circumstances relied on

by EPA to determine a reasonable deadline are reported to be: (i) the state SIP

development and submission process; (ii) the imperative to minimize the period when

sources will be subject to PSD but not have a PSD permitting authority available to act on

permit applications, and therefore will be unable to construct or modify; and (iii) the

preference of the states.

Arkansas's standard rulemaking process is lengthy in comparison to the 3-week-to-12-

month deadline EPA proposes. The timing discrepancy between Arkansas's standard

rulemaking process and EPA's 3-week-to-12-month deadline weighs against calling this 3-

week-to-12-month deadline reasonable. With regard to the second factor, ADEQ agrees

that it is imperative to minimize the period when sources will be subject to PSD but not

have a PSD permitting authority available. Of course, the second factor, i.e., the need to

keep state PSD permitting authority intact in order to act on permit applications, would

not be an issue but for the conglomeration of rules and timelines put into place by EPA to

implement the regulation of GHG-emitting sources. This deadline is not a preference, but

is more aptly described as a necessity under the circumstances created by EPA.

While circumstances force ADEQ to not object to the deadline given by EPA, ADEQ

disputes the reasonableness of EPA's deadline. EPA's rationale behind using a state's

preference as the third factor for determining the reasonableness ofthe deadline is as

follows: if a state does not object to the earlier deadline, then the state's resulting increased

burden indicates the reasonableness of the deadline. Arkansas finds this argument

unrealistic. Arkansas does 'not object' to the earlier deadline, but only out of necessity, not

out of reasonableness. Rationalizing reasonableness on the basis of a state 'not objecting'

in this instance is hollow pretense. ADEQ disagrees with EPA's rationale of 'not objecting'

as conferring reasonableness on this deadline, and ADEQ strongly urges against viewing

stringent, shortened deadlines such as this as "reasonable" in the future.

Arkansas agrees with EPA's method ofstreamlining the SIP-revision process by having

simultaneous public participation processes for both the draft regulation and the proposed

SIP approval. When the SIP revision substantially consists of the regulation change, the

public participation process for the regulation should be able to proceed at the same time

as the proposed SIP approval and still allow adequate due process for both the regulation

and the SIP revision. Arkansas sees no reason to object to this method ofstreamlining as
long as adequate, reasonable public notice is assured. ADEQ also suggests that EPA

publish notice of the public hearing in the same manner as a solo EPA public notice

hearing, to ensure all necessary parties are notified.

Preferences

Arkansas prefers not to accept delegation of authority to implement the FIP with respect to

permitting for GHG emissions. However, please be advised that Arkansas plans to pursue

the parallel-processing ofits corrective SIP revision submittal in order to expedite SIP

review and approval.

Thank you again for the opportunity to provide comments on the proposed GHG SIP Call,

give notification ofthe 'chosen' deadline, and confirm Arkansas's status as a state that does

not have PSD permitting requirements that cover GHG-emitting sources. Please contact

Mike Bates at (501)682-0750 or bates@adeq.state.ar.us if you have any questions or

require additional information.

Sincerely,

C--~~('-- ~.L Teresa Marks

Director

cc: Mike Bates, Chief, Air Division
Attachment A

Regulation Number 19, Chapter 9: Prevention of Significant Deterioration

Reg. 19.903 Definitions

(B) All other terms used herein shall have the same meaning as set forth in Chapter 2 of

Regulation 19 or in 40 CFR 52.21(b) [PSD] and 40 CFR 51.301 [Protection of Visibility] as

ofNovember 29, 2005, all as in effect upon the latest date of amendment ofthis supplement,

unless manifestly inconsistent with the context in which they are used. Wherever there is a

difference between the definitions in Chapter 2 of Regulation 19 and those listed in 40 CFR

52.21(b) and 40 CFR 51.301, the federal definitions as listed in 40 CFR 52.21(b) and 40

CFR 51.301 as of November 29, 2005, shall apply.

Reg. 19.904 Adoption of Regulations

(A) Except where manifestly inconsistent with the provisions of the Clean Air Act, as

amended, or with federal regulations adopted pursuant thereto, and as amended

specifically herein by paragraphs (B), (C), (D), (E), and (F) ofReg. 19.904, the Arkansas

Department of Environmental Quality shall have those responsibilities and that authority,

with reference to the State ofArkansas, granted to the Administrator ofthe EPA under 40

CFR 52.21 (a)(2) through (bb), as in effect on November 29, 2005,which are hereby

incorporated herein by reference, with the exception of 40 CFR 52.21 (b)(55-58),40 CFR

52.21(i) (9), and 40 CFR 52.21(cc), which are not incorporated. In the absence of a specific

imposition of responsibility or grant of authority, the Department shall be deemed to have

that responsibility and authority necessary to attain the purposes of the Plan, these PSD

Regulations, and the applicable federal regulations, as incorporated herein by reference.

(B) Exclusions from the consumption ofincrements, as provided in 40 CFR 51. 166(f)(1)(iii)

as ofNovember 29, 2005, shall be effective immediately. Submission ofthis Plan under the

Governor's signature constitutes a request by the Governor for this exclusion.
Attachment B

Opinion No. 95-008

March 14, 1995

Colonel John R. Bailey

Director, Arkansas State Police

P. O. Box 5901

Little Rock, AR 72215

Dear Colonel Bailey:

This is in response to your request for an opinion regarding A.C.A. § 12-80-104 (Cum.

Supp. 1993), which addresses seismic design requirements for public structures. Your

question pertains to subsection (a) of § 12-80-104, which states:

(a)(1) Hereafter, neither the state, any county, city, township,

village or private entity shall construct, add to, alter, retrofit,

or remodel any public structure unless the structural elements

are designed to resist the anticipated forces of the designated

seismic zone in which the structure is located.

(2) Design loads and seismic design requirements shall be, as a

minimum, those listed in the chapter of Minimum Design

Loads and referenced chapters from the Standard Building

Code, 1988, or latest edition with revisions.

You have asked the following questions with reference to this Code section:

Is it legal for a standard to be adopted into State law by

utilizing the above referenced verbiage? Must a referenced

Standard adopted into law be a specific edition?

It is my opinion that the apparent effort under § 12-80-104 to adopt by reference future

editions of the Standard Building Code is of doubtful validity under the constitutional

separation of powers doctrine. Ark. Const. art. 4, §§ I and 2. It is generally stated,

pursuant to this doctrine, that the legislature may confer discretion in the administration of

the law. It may not, however, delegate the exercise of its discretion as to what the law shall

be. 16 C.J.S. Constitutional Law § 137 (1984). The latter form of delegation constitutes an

unlawful delegation of legislative authority, and has been held to preclude legislative

attempts to adopt by reference future legislation, rules, regulations or amendments to
existing regulations.\ See generally Cheney v. St. Louis Southwestern Railway Co., 239 Ark.

870, 394 S.W.2d 731 (1965) (rejecting as unconstitutional that part of the Income Tax Law

of 1929 under which certain corporate tax liability was to be based upon a formula subject

to prospective federal legislation or administrative rules); City of Warren v. State

Construction Code Commission, 66 Mich. App. 493, 239 N.W.2d 640 (1976) (stating that

while the legislature clearly may incorporate by reference existing statutes, it cannot adopt

by reference future legislation, rules, or regulations which are subsequently enacted or

promulgated by another sovereign authority).

The general prohibition against adopting future legislation or regulations by reference has

been applied in the context of rules or standards developed by private entities. See City of

Warren, supra. City of Warren involved the Michigan State Construction Code Act's

incorporation of building codes promulgated by private agencies. The act directed the

State Construction Code Commission to promulgate the state construction code, and in

connection therewith required that the code consist of nationally recognized model building

codes. The Commission, in preparing and promulgating the construction code,

incorporated by reference the 1970 edition of and a 1973 cumulative supplement to the

Basic Building Code, which was the product of a private association of building officials

and code enforcement officials from throughout Canada and the U.S. 239 N.W.2d at 642.

The Construction Code Act was challenged as unconstitutionally delegating to the

Construction Code Commission the power to promulgate a construction code; and the code

promulgated by the Commission was challenged as unconstitutionally incorporating a

building code promulgated by private entities. The first challenge was rejected because of

the sufficiency of the guidelines under the act for the Commission to follow in adopting the

State Construction Code. Id. at 643. The court also rejected the argument that the

Commission could not constitutionally adopt construction code provisions promulgated by

private entities, holding that this falls within the well-established rule authorizing the

incorporation of existing statutes by reference. Id. The court stated that it saw "no reason

why a nationally recognized model building code should be treated different from a statute

in this regard." Id. at 644. The court was careful, however, to note that there was no

attempt by the Commission to adopt any future building code. The following discussion in

this regard offers guidance in addressing your question regarding A.C.A. § 12-80-104(a)(2):

It is well established that the Legislature may, in enacting

legislation, incorporate by reference existing statutes.

[Citations omitted.] But an attempt by the Legislature to

adopt by reference future legislation, rules, regulations, or

amendments to existing legislation, which are subsequently

enacted, adopted or promulgated by another sovereign entity

does constitute an unlawful delegation of legislative power.

[Citations omitted.] In the case at bar, the State Construction

Code Act specifically refers to such codes as were adopted by

I The desire for uniformity of federal-state regulation has led to states' adoption in some instances of existing federal

legislative policies and prospective administrative determinations thereunder. See State v. Hotel Bar Foods, Inc., 18

N.J. 115, 112 A,2d 726, 732 (1955) (stating that "there are reasoned decisions which tend to support the view ... that

a state legislature, in dealing with [a matter that is] properly subject to extensive federal regulation, may

constitutionally provide that its administrator's regulations shall be brought into conformity with pertinent federal

regulations as they are duly promulgated and amended from time to time.")
reference by the Commission. None of the codes referred to or

adopted by the Commission were promulgated later than the

effective date ofthe act, and moreover such rules were

specifically approved by the joint legislative committee

pursuant to the Administrative Procedures Act of 1969....

[Citations omitted.]

Id.

It thus seems clear that there would have been a violation of separation of powers had the

Commission, in promulgating the state construction code, purported to incorporate future

building codes. The adoption by reference of existing codes was, however, deemed lawful.

See also generally Independent Electricians and Electrical Contractors' Association v. New

Jersey Board of Examiners of Electrical Contractors, 54 N.J. 466, 256 A.2d 33 (1969)

(upholding legislation requiring performance of electrical construction in accordance with

the standards of the National Electrical Code, the standard accepted safety code in the

electrical industry which is promulgated by a private organization); Meyer v. Ford, 37 Or.

App. 59, 586 P.2d 367 (1978) (stating that the legislature or an administrative agency may

adopt a particular edition of a set of standards or a codification so long as future

modifications or alterations by the agency or organization responsible for the standards are

not automatically included).

It is therefore my opinion, following the above guiding principles, that the apparent

attempt under § 12-80-104 to adopt subsequent editions of the 1988 Standard Building

Code is constitutionally suspect. The separation of powers doctrine has been construed to

authorize the adoption of existing standards such as this. The adoption by reference of

future editions is, however, in my opinion, subject to challenge as an unlawful delegation of

legislative power.

The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney

General Elisabeth A. Walker.

Sincerely,

WINSTON BRYANT

Attorney General

WB:EAW/cyh
Attachment C

Regulation Number 19, Chapter 2: Definitions

"Federally regulated air pollutant" means the following:

(A) Nitrogen oxides or any volatile organic compounds;

(B) Any pollutant for which a National Ambient Air Quality Standard has been

promulgated;

(C) Any pollutant that is subject to any standard promulgated under 42 U.S.C.

§§ 7401, et seq., as ofthe effective date of this regulation;

(D) Any Class lor II substance subject to a standard promulgated under or established

by Title VI ofthe Clean Air Act, 42 U.S.C. § 7401, et seq. as amended as of July

1, 1997.
Attachment D

Arkansas State Constitution

Article 4.

Departments.

Section:

1. Departments of government.

2. Separation of departments.

1. Departments of government.

The powers ofthe government of the State ofArkansas shall be divided into three distinct

departments, each ofthem to be confided to a separate body of magistracy, to-wit: Those

which are legislative, to one, those which are executive, to another, and those which are

judicial, to another.

2. Separation of departments.

No person or collection of persons, being of one of these departments, shall exercise any

power belonging to either ofthe others, except in the instances hereinafter expressly

directed or permitted.
Attachment E

Regulation Number 8, Chapter 8: Rulemaking

Reg.8.801 Public Notice

Prior to the adoption, amendment or repeal of any regulation, the Commission shall give at

least thirty (30) calendar days notice ofthe Commission's intended action on the proposed

rulemaking decision.

Reg.8.802 Publication of Notice

The notice shall be mailed to all persons requesting advance notice. In addition, notice

shall be published in appropriate industry, trade, professional or public interest

publications chosen by the Commission and at least twice in a newspaper ofstatewide

circulation.

Reg.8.804 Public Hearing Required

No regulation shall be adopted, amended or repealed by the Commission until after a

public hearing is held at least 20 days after the date of public notice, except for an

emergency rulemaking as set forth in Reg.8.807.

Reg.8.818 Amendment of Regulations

When amending portions of an existing regulation, the Commission's deliberations

shall be restricted to those proposed amendments described in the public notice.

Rulemaking proceedings concerning legally required periodic update of regulations shall

be restricted to Department staff proposals. Nothing in this section shall be construed as a

limit upon the right of third parties to petition for the amendment of a regulation in

separate rulemaking proceedings.

Reg. 8.817 Incorporation By Reference

(A) The Commission may, through incorporation by reference, adopt a regulation

that contains all or portions ofthe provisions of other laws (i.e., statutes or regulations).

(B) Unless a contrary intent is expressly stated, any adoption by specific or

=descriptive reference to another law shall be construed as though the referenced law were

set forth in the Commission regulation line for line, word for word.

(C) The effective date of any regulation that the Commission adopts by reference

shall be the effective date of the Commission regulation, not that of the referenced

regulation.

(D) Unless the Commission expressly states a contrary intent, the Commission

adopts a referenced law as it exists at the date of Commission regulation.

(E) Any subsequent changes in the referenced law do not affect the provisions of

those regulations adopted by the Commission.