# ADEQ

ARK A N S A S Departmentof Environmental Quality


### October 1,2010

The Honorable Lisa P. Jackson Administrator 

## u.s. Environmental Protection Age!1cy, EPA West (Air Docket), 1200PennsylvaniaAvenue, NW, Washington D.C., 20460

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

Dear Ms. Jackson:

The Arkansas Department ofEnvironmental Quality ("ADEQ") is taking this opportunity to confirm Arkansas's status as one ofthirteen states that do nothave Preventionof SignificantDeterioration ("PSD") permitting requirements that cover greenhouse gas ("GHG")- emitting sources. Accordingly, Arkansas will befound to have a state implementationplan ("SIP") that is substantiallyinadequate. In theAction to Ensure Authority to Issue Permits under the Prevention ofSignificantDeterioration Program to Sources ofGreenhouse Gas Emissions: Finding ofSubstantial Inadequacy and SIP Call ("GHG SIP Call") proposed rule, the U.S. Environmental Protection Agency ("EPA") proposes to issue aSIP Call to require acorrective 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 speedyissuance ofafederal 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 letterprovides 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 ofobtaining a deeper understanding ofwhatprovisions are in the relevant PSD SIPs, how they are to beinterpreted, and obtaining acomprehensivepicture ofall the SIPs in this regard. Through the informationprovided hereinbyADEQ, wehope 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 explicitlyinclude GHG sources, and we are identifying for EPA the provisions ofthe Arkansas State Constitution and otherlaw, including the SIP, that maybe read to prohibitprospective rulemaking or otherwiselimitthe

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.usapplicabilityofthe PSD program to pollutants identified at a certain pointin time, and therefore not to GHGs. In addition, Arkansas identifies provisions that specifically preclude PSD applicability for GHG sources. Copies ofprovisions ofthe SIP or state law that may bear on the applicabilityofthe 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 ofEPA'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 ofthe Arkansas Constitution and case law cited bythe Arkansas Attorney General in OpinionNo. 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 rulemakingin Arkansas. Attorney General's Opinion 95-008 is included in Attachment B. The relevant provision of the Arkansas State Constitutionbeinginterpretedbythe Attorney General is included in Attachment D. The Opinion can be summarized as follows:

The Arkansas State Constitution provides for the separation ofpowers, 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 ofauthority 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 ofpowers doctrine found at Article4 §§ 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 administrativeprocedures 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 affectthe provisions ofthe regulations adopted bythe Commission; thereby ensuring due process is provided in the form ofpublic notice and public hearing for any amendments to the Commission's regulations as set out in Chapter 8 ofRegulation No.8. The relevant sections ofRegulation No.8 are included in Attachment 

### E.PSD Regulations

Arkansas's PSD program is specificallyregulated under Arkansas Pollution Control and Ecology Commission's ("Commission") RegulationNo. 19, Chapter 9. Regulations governing PSD permitting programs haveincorporated federal regulations by reference. RegulationNo. 19, Chapter 9, has an incorporationby reference date ofNovember 29, 2005. No amendments to 40 CFR 52.21 or40 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 abar to Arkansas's regulation ofGHG emissions. SeeAttachment A for the specific sections referenced in Regulation 19. Chapter 9 ofRegulation No. 19incorporates definitions found in Chapter 2ofRegulation Number 19, making these definitions applicable to PSD. Chapter 2 defines "federally regulated air pollutant." Under part (C) ofthe definition, "federallyregulated air pollutant" is any pollutant that is subjectto any standard promulgated under 42 U.S.C. §§ 7401, et seq., as ofthe effective date ofthis 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 aWhole'

EPAhas requested information on whether Arkansas's SIP, read as awhole, 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 clausein Arkansas's SIP.
ADEQ has concluded that Arkansas's SIP, read as awhole, does not applythe PSD program to GHG sources or authorize the state to issue PSD permits for GHG sources. While Arkansas plans to develop adequate authorityto applythe PSD program to GHG sources, Arkansas will not be submitting this authorityin the form ofa SIP revision by December 1,2010.

Corrective SIPRevision Deadline

EPA proposes to issue a SIP Call to require submittal ofacorrective 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 ofJanuary 2, 2011, certain GHG-emitting sources will become subjectto the PSD requirements and may not otherwisebe able to obtain a PSD permitin 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 newlyconstructed 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,' butArkansas emphasizes that we must take this position only out ofthe necessityborn from EPA's crafted situation. With respect to the reasonableness ofthis deadline, Arkansas takes issue and provides the following comments.

Comments



### EPAis soliciting comments on whether or not the 3-week-to-12-month expedited time period for SIP revisions setby EPA meets the federal Clean AirAct ("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 deadlinebecoming the standard ofreasonableness.

EPA's definition of"reasonable deadline" found in the proposed GHG SIP Call is supposed to depend onthe facts and circumstances. The facts and circumstances relied on by EPA to determine areasonable deadline are reported to be: (i) the state SIP development and submission process; (ii) the imperativeto minimize the periodwhen
sources will be subject to PSD but not have aPSD permitting authority available to act on permit applications, and therefore will beunable to construct ormodify; and (iii) the preference ofthe states.
Arkansas's standard rulemaking process is lengthyin comparison to the 3-week-to-12- month deadline EPA proposes. The timing discrepancybetweenArkansas's standard rulemakingprocess 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 itis imperativeto minimize the period when sources will be subjectto PSD but not have aPSD permitting authority available. Ofcourse, the second factor, i.e., the need to keep state PSD permitting authorityintactin order to act on permit applications, would notbe an issuebut for the conglomeration ofrules and timelines putinto placebyEPAto implement the regulation ofGHG-emitting sources. This deadline is not apreference, but is more aptly described as anecessityunder the circumstances createdby EPA.

While circumstances force ADEQ to notobject to the deadline givenby EPA, ADEQ disputes the reasonableness ofEPA's deadline. EPA's rationalebehind using astate's preference as the third factor for determining the reasonableness ofthe deadline is as follows: ifa state does not object to the earlier deadline, then the state's resulting increased burden indicates the reasonableness ofthe deadline. Arkansas finds this argument unrealistic. Arkansas does 'not object' to the earlier deadline, but onlyoutofnecessity, not out ofreasonableness. Rationalizing reasonableness on the basis ofa state 'not objecting' in this instanceis hollow pretense. ADEQ disagrees with EPA's rationale of'not objecting'
as conferring reasonableness on this deadline, and ADEQ strongly urges againstviewing stringent, shortened deadlines such as this as "reasonable" in the future.

Arkansas agrees with EPA's method ofstreamlining the SIP-revision processbyhaving simultaneous publicparticipation processes for both the draft regulation and the proposed SIP approval. When the SIP revision substantially consists ofthe regulation change, the public participation process for the regulation shouldbe 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 objectto this method ofstreamlining as

### long as adequate, reasonable public notice is assured. ADEQ also suggests that EPA publish notice ofthe public hearing in the same manner as a solo EPApublic notice hearing, to ensure all necessary parties are notified.

Preferences



### Arkansas prefers not to accept delegation ofauthority to implement the FIP with respect to permitting for GHG emissions. However, pleasebe advised that Arkansas plans to pursue the parallel-processing ofits corrective SIP revision submittal in order to expedite SIP review and approval.

Thankyou again for theopportunity 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 orbates@adeq.state.ar.us ifyou have any questions or require additional information. Sincerely,

# C--~~('--**~.L** TeresaMarks Director

cc: Mike Bates, Chief, Air Division

### AttachmentA Regulation Number 19, Chapter9: Prevention ofSignificantDeterioration
Reg. 19.903 Definitions
(B) All other terms used herein shall have the same meaning as setforth in Chapter 2of Regulation 19 orin40 CFR 52.21(b) [PSD] and 40 CFR 51.301 [Protection ofVisibility] as ofNovember 29, 2005, all as in effectupon the latest date ofamendment ofthis supplement, unless manifestlyinconsistentwith the contextin which they are used. Wherever there is a difference between the definitions in Chapter 2ofRegulation 19 and thoselisted 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 ofNovember 29, 2005, shall apply.
Reg. 19.904 Adoption ofRegulations (A) Exceptwhere manifestlyinconsistentwith the provisions ofthe Clean AirAct, as amended, orwith federal regulations adoptedpursuant thereto, and as amended specificallyhereinbyparagraphs (B), (C), (D), (E), and (F) ofReg. 19.904, the Arkansas Department ofEnvironmental Quality shall have those responsibilities and that authority, with reference to the State ofArkansas, granted to the Administrator ofthe EPA under40 CFR 52.21 (a)(2) through (bb), as in effectonNovember 29, 2005,which are hereby incorporated hereinbyreference, with the exception of40 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 ofa specific imposition ofresponsibility or grant ofauthority, the Department shall be deemed to have that responsibility and authority necessary to attain the purposes ofthe 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 effectiveimmediately. Submission ofthis Plan under the Governor's signature constitutes a requestby the Governor for this exclusion.

### AttachmentB

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 ofthe 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, orlatest 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 ofits discretion as to what the law shall be. 16 C.J.S. Constitutional Law § 137 (1984). The latter form ofdelegation 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 toexisting regulations.\ See generally Cheney v. St. Louis Southwestern Railway Co., 239 Ark. 870, 394 S.W.2d 731 (1965) (rejecting as unconstitutional that part ofthe 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 promulgatedby another sovereign authority).

The general prohibition against adopting future legislation or regulations by reference has been applied in the context ofrules or standards developed by private entities. See City of Warren, supra. City of Warren involved the Michigan State Construction Code Act's incorporation ofbuilding 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 ofnationally 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 ofa private association ofbuilding 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 ofthe 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 ofexisting 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 foruniformity offederal-state regulationhas ledto states' adoptionin some instances ofexisting federal legislative policies andprospective administrative determinations thereunder. SeeState v. HotelBarFoods, Inc., 18 N.J. 115, 112 A,2d 726, 732 (1955) (stating that "there are reasoned decisions which tendto supportthe 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 theyare dulypromulgated and amendedfrom time to time.")reference by the Commission. None ofthe 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 ofseparation ofpowers had the Commission, in promulgating the state construction code, purported to incorporate future building codes. The adoption by reference ofexisting codes was, however, deemed lawful. See also generally Independent Electricians and Electrical Contractors' Association v. New Jersey Board ofExaminers ofElectrical Contractors, 54 N.J. 466, 256 A.2d 33 (1969) (upholding legislation requiring performance ofelectrical 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 bythe agency or organization responsible for the standards are not automaticallyincluded). 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 ofpowers doctrine has been construed to authorize the adoption ofexisting 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, Chapter2: Definitions
"Federallyregulated air pollutant" means the following:
(A) Nitrogen oxides or anyvolatile organic compounds;
(B) Anypollutant for which aNational Ambient Air Quality Standard has been promulgated;
(C) Any pollutant that is subject to any standard promulgated under42 U.S.C. §§ 7401, et seq., as ofthe effective date ofthis regulation;
(D) Any Class lor II substance subject to a standard promulgated under or established by TitleVI ofthe Clean Air Act, 42 U.S.C. § 7401, et seq. as amended as ofJuly 1, 1997.

### AttachmentD Arkansas State Constitution Article 4. Departments.

Section: 

### 1. Departments ofgovernment. 2. Separation ofdepartments.

1. Departments ofgovernment. 

### Thepowers ofthe government ofthe StateofArkansas shall be dividedinto three distinct departments, each ofthem to be confided to aseparate bodyofmagistracy, to-wit: Those which are legislative, to one, thosewhich are executive, to another, and thosewhich are judicial, to another.

2. Separation ofdepartments. 

### No person orcollection ofpersons, being ofone ofthese departments, shall exercise any powerbelonging to either ofthe others, exceptin the instances hereinafterexpressly directed or permitted.

### AttachmentE Regulation Number 8, Chapter 8: Rulemaking
Reg.8.801 PublicNotice Prior to the adoption, amendmentor repeal ofany regulation, the Commission shall give at least thirty (30) calendar days noticeofthe Commission's intended action on the proposed rulemaking decision.
Reg.8.802 Publication ofNotice The notice shall be mailed to all persons requesting advance notice. In addition, notice shall bepublished in appropriate industry, trade, professional orpublicinterest publications chosen bythe Commission and at least twice in anewspaper ofstatewide circulation. Reg.8.804 Public HearingRequired No regulation shall be adopted, amended or repealed by the Commission until after a public hearingis held at least 20 days after the date ofpublic notice, except for an emergency rulemaking as set forth in Reg.8.807.
Reg.8.818 AmendmentofRegulations When amending portions ofan existing regulation, the Commission's deliberations shallbe restricted to those proposed amendments describedin the public notice. Rulemaking proceedings concerning legally required periodic update ofregulations shall be restricted to Department staffproposals. Nothing in this section shall be construed as a limit upon the right ofthird parties to petition for the amendmentofaregulation in separate rulemaking proceedings. Reg. 8.817 Incorporation By Reference
(A) The Commission may, through incorporation by reference, adopt a regulation that contains all orportions ofthe provisions ofother laws (i.e., statutes or regulations).
(B) Unless acontrary intentis expressly stated, any adoption by specificor =descriptive reference to another law shall be construed as though the referenced law were setforth in the Commission regulation line for line, word for word. (C) The effective date ofany regulation that the Commission adopts by reference shall be the effective date ofthe Commission regulation, not that ofthe referenced regulation. (D) Unless the Commission expressly states acontrary intent, the Commission adopts a referenced law as it exists at the date ofCommission regulation.
(E) Any subsequent changes in the referenced law do not affect the provisions of those regulations adopted by the Commission.