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Amendments to Department of Environment and Conservation Rules 1200-03-09-.O1 

## and 1200-03-09-.02, 

## filed November 10,2010, 

## effective February 8,2011.



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# 01 Jan~am 2012Department of State For Department of State Use Only ~lvision of Publications
312 Rosa L Parks Avenue. 8th Floor SnodgrasflN Towar Nashv~lla. TN 37243 Phone' 815-741-2650 Fax 615-7416133 Ernaii resuster.mnfomtation@tn.aav Sequence Number: 

# 1 

# (-lo 46

Rule ID(s):

File Date:
Effective Date:



# Rulemaking Hearing Rule@) Filing Form

Revlsion Type (cheek 

### all that apply):

x Amendment 

## -

- New



# - Repeal

Rule@) Revised (ALL chapters and rules contained in filing must 

### be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please enter only ONE Rule NurnberlRule Tile per 

### mw)

~ction Permits
ng Permits 

# 1

SS-7039 (July 

### 201 0) 

### RDA 1693(Place substance of rules and other info here. Statutory authority must be given for each rule change. For information on formatting rules go to hK~:Nstate.tn.uslsosl~lesll360/1360.htm)

Chapter 1200-03-09 Construction and Operating Permits

Amendments

Part 3 of subparagraph (a) of paragraph (4) of ruie 1200-03-09-.O1 Construction Permlts is amended by deleting the "I" in "1981" and replacing it with a "1" so that, as amended, the part shall read:

3. Any owner or operator who constructs or operates a source or modifcation not in accordance with the application submitted pursuant to this paragraphor with the terms of any approval to construct, or any
owner or operator of a source or modification subject to this paragraph who commences construction after June 3, 1981 without applying for and receiving approval hereunder, shali be subject to appropriate enforcement action.

Part 46 of subparagraph (b) of paragraph (4) of ruie 1200-03-09-.O1 Construction Permits is amended by deleting the word "Reserved and replacing it as follows:

46. "Subject to regulation" means, for any air pollutant, that the pollutant is subject 

### to either a provision in the Clean Air Act, or a nationally-applicable regulation codified by the Administrator in subchapter C of Chapter I of Title 40 of the Code of Federal Regulations, that requires actual control of the quantity of emissions of that pollutant, and that such 

### a control requirement has taken effect and is operative to control, lime or restrict the quantity of emissions of that pollutant released from the regulated activity. Except that:

(i) Greenhouse gases (GHGs), the air pollutant defined .in part 86.1818-12(a) of Chapter I of Title 40 of the Code of Federal Regulations as the aggregate group of six gkenhouse gases: Carbon dioxide, nitrous oxide, methane. hydrofluorocarbons. perfluorocarbons, and sulfur hexafiuoride, shall not be subject to regulation except as provided in subparts (iv) through (v) of this part.

(ii) For purposes of subparts (iii) through (v) of this part, the term tpy CO, equivalent emtssions (C0,e) shall represent an amount of GHGs emitted, and shall be computed as follows:

(I) Multiplying the mass amount of emissions (tpy), for each of the six greenhouse gases in the pollutant GHGs, by the gas's associated global warming potential published at Table A1 

### to subpart A of part 98 of Chapter I of Title 40 of the Code of Federal Regulations 

# - Global Warming Potentials.

(11) Sum the resultant value from item (ii)(l) of this part for each gas 

### to compute a tpy C0,e.

(iii) The ten emissions increase as used in subparts (iv) through (v) of this part shall

mean that both a -significant emissions increase (as calculated using the procedures in part (c)4 of this paragraph) and a significant net emissions increase (as defined in parts (b)4 and (b)24 of thisparagraph) occur. For the pollutant GHGs, an emissions increase shall be based on tpy Cop, and shall 

### be calculated assuming the poilutant GHGs is a regulated NSR pollutant, and "significant" is defined as 75,000 tpy 

### GO* instead of applying the value in subpart (b)24(ii) of this paragraph.

(iv) Beginning January 

### 2. 201 1, the pollutant GHGs is subject to regulation if:

SS-7039 (July 2010) 

### 2 RDA 1693(I) The stationary source is a new major stationary source for a regulated NSR pollutant that is not GHGs, and also will emit or will have the potential to emit 75,000 tpy C.02e or more; or

(11) The stationary source is an existing major stationary source for a regulated NSR pollutant that is not GHGs, and also will have an emissions increase of

a regulated NSR pollutant, and an emissions increase of 75,000 tpy Cole or more; and,

(v) Beginning July 1, 2011, in addition to the provisions in subpart (iv) of this part, the pollutant GHGs shall also be subject to regulation:

(I) At a new stationary source that will emit or have the potential to emit 100,000 tpy C02e; or
(11)

. At an existing stationary source that emits or has the potential to emit 100,000 tpy Cole, when such stationary source undertakes a physical change or change in the method of operation that will result in an emissions increase of 75.000 tpy C02e or more.

Subpart (N) of part 47 of.subparagraph (b)' of paragraph (4) of rule 120043-09-.bl Construction Permits is amended by adding the words 'as defined in part (b)460f this paragraph" after the first occurrence of the words "Federal Clean Air Act" and deleting the remainder of the subpart so that, as amended, the subpart shall read:
(iv) Any pollutant that othewise is subject to regulation under the ~ederal Clean Air Act as defined in part (b)46 of this paragraph.

Part 47 of subparagraph (b)of pa'ragraph (4) of rule 1200-0349-.01 Construction Permits is amended by adding a
new subpart "(v)" as follows:
(v) Notwithstanding subparts (b)47(i) through (iv) of this pafagraph, the term "regulated NSR pollutant" shall not include any or all hazardous air pollutants either listed in section 112 of the Federal Clean Air Act or added to the list pursuant to section 112(b)(2) of .the Federal Clean Air Act, and which havenot been delisted pursuant to section 112(b)(3) of the Federal Clean Air Act, unless the listed hazardous air pollutant is also regulated as a constituent or precursor of a general pollutant listed under section 108 of the Federal Clean Air Act.

Subpart (ii) of part 14 of subparagraph (b) of paragraph (11) of rule 12004509-.02 Operating Permits is amended by adding the words "subject to regulation" behen the words "air pollutanr and "(including any major

source of fugitive emissions of any such pollutant, as determined by rule by the Adm~nistrator)" so that, as amended, the subpart shall read:
(ii) A major stationary source of air pollutants, as defined in section 302 of the Federal Act, that directly emits or has the potential to emit. 100 tpy or more of any air pollutant subject to regulation (including any major source of fugitive emissions of any such pollutant, as determined by rule by the Administrator). The fugitive emissions of a stationary source shall not be considered in determinina whether it is a maior stationaw source for the purposes of section 3025) of the Federal A& unless thk source belongs to one of the following categories of stationary sources:

Subparagraph (b) of paragraph (11) of rule 1200-03-09-.02 Operating Permits is amended by adding a new part "32" as follows:

RDA 1693

### 32. "Subject to regulation" means, for any air pollutant, that the pollutant is subject to either a provision in the Clean Air Act, or a nationally-applicable regulation codified by the Administrator in subchapter C of Chapter 

### I of Title 40 of the Code of Federal Regulations,

, . that requires actual control of the quantity of emissions of that pollutant, and that such a control requirement has taken effect and is operative to control, limit or restrict the quantity of emissions of that pollutant released from the regulated activity. Except that:

(i) Greenhouse gases (GHGs), the air pollutant defined in 40 CFR 86.1818-12(a) as the aggregate group of six greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur hewfluoride, shall not be subject 

### to regulation unless, as of July 1, 2011, the GHG emissions are at a stationary source emitting or having the potential to ernit 100,000 tpy C02equivalent emissions.

(ii) The term tpy COzequivalent emissions (Cole) shall represent an amount of GHGs emitted, and shall be computed by multiplying the mass amount ofemissions (tpy), for each of. the six greenhouse gases in the pollutant GHGs, by the gas's associated global warming potential published at Table Prl to subpart A of 40 CFR 98 

# - Global Warming Potentials, and summing the resultant value for each to compute a tpy C02e.

Authority: T.C.A. 5568-201-101 et seq. and 4-5-201 et seq.

RDA 1693 SS-7039 (July 2010)

### 'If a 

### mllcall vote was 

### necessary, the vote by the Agency on these rulemaking hearing rules was 

### as follows.

Michael Atchison 

# u

Dr. 

### J. Ronald Bailey

Dr. Brian Christman 

# I Dr. Wayne T.

Davis

Dr. Mary English 

# I4 I

Stephen 

## R. 

# Im

Honorable Mayor Tommy Green, 

### Jr.


# - Dr. Shawn A.

Hawkins 

# J

Helen 

### S. Hennon 

# 1 

# /

Richard 

### M. Holland 

### I/



## gm R. Roberts, 

# 1 ; 

# 1 1

Alicia M. Wilson

Honorable Mayor \, 

### Law Waters ibstain Absent 

# 'I Sianature (If 

### required) 

# U%

I cert~fy 

### that this 

### is an accurate and complete copy of rulemaking hearing rules, lawfully promulgated and adopted by 

### the Air Pollution Control (boardlcommissionl other authority) on 1011312010 (rnmlddlyyyy), and is in compliance with the provisions of TCA 4-5-222.



### 55-7039 (July 2010) RDA 1693

### I further certify the following:

Notice of Rulemaking Hearing filed with the Department of State on. 07/f 

### 6/10

Rulemaking Hearing(s) Conducted on: (add more dates). 

### 09/09/f 0

Date:

Signature:

Name of Officer:

Title of Officer Technical Secretary

Subscribed and sworn to before me on:
Notary Public Signature:



### My commission expires on:

All rulemaking hear~ng rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as 

### to legality pursuant to the piovlsions of the Administrative Procedures Act, Tennessee Code Annotated, Title 4, Chapter 5.

Date
Department 

### of State 

### Use 

### Only

Filed with the Department of State on: 

# //o
-

SS-7039 (July 2010) --

Secretary oFState



### . RDA 1693Public Hearing Comments

One copy of a document containing responses to comments made at the public hearing must,accompany the filing pursuant to T.C.A. 94-5-222. Agencies shall include only their responses to public hearing comments, which can be summarized. No letters of inquiry horn parties questioning the rule will be accepted. When no comments are received at the public hearing, the agency need only draft 

### a memorandum stating such and include it with the Rulemaking Hearing Rule filing. Minutes of the meeting will not be accepted. Transcripts are not acceptable.

Comments: "The commenter request that a provision be incorporated in the rules which will state that these rules to regulate GHGs are not to be applicable or enforceable if the federal proposal to regulate such is withdrawn, limited, rejected, or stayed because of legal challenges or a court decision."

Response: An attorney in the Department's Office of General Counsel discussed this issue with the Tennessee Attorney General's Office, and was told that they would not approve' the rule with this type of restriction. It is imperative that this rule become effective as soon as possible to avoid tremendous casts to the Department and the regulated community. Should' any of these situations occur, the Department will take action to remove the proposed rule from the rulemaking process, or delete it from the regulations if the rule has been made final, if such action is approved by the Tennessee Air Pollution Control Board.

Comments "The commenter would further request that 

### a statement be added that the intent of these rules 

### will not impose the current Title 5 or non-Title 5 fees on these emissions. Any fee schedule to be proposed and adopted by the Air Pollution Control Board under the provision of Administrative Fees will be based on the new level of work required to regulate these new emissions."

Response, As currently written, Chapter 1200-03-26 of the Tennessee Air Pollution Control Regulations does not allow the Division to charge construction permit or annual emissions fees for greenhouse gas emissions. Any revisions to Chapter 1200-03-26 to charge fees for these emissions will 

### be rewewed by the Tennessee Air Pollution Control Board.

Comments: Rule 1200-03-09-.01(4)(b)24(ii) 

## - "Significant definition: Adding "and part (b)46" to this definition has the effect of eliminating the 0 tpy (i.e. any emissions rate) mass basis threshold for GHGs. The definition of "significant" in 40 CFR 51.166 does not include this exemption for GHGs. The preamble to the Tailoring rule clearly explains that the current significance threshold for GHGs on
a mass basis remains as "any emissions increase".

Response: In agreement with this comment. the proposed amendment to Rule 120003-09-.01(4)(b)24(1i) has been withdrawn.

Comments: 1200-0309-.01(4)(b)46(v) -Typographical error: Please revise the provision listed above to read: (v) Beginning July 1, 201 1, in addition to the provisions In subpart (iv) of this part, the pollutant GHGs shall also be subject to regulation.

Response: This has been revised.

SS-7039 (July 2010) RDA 1693Regulatory Flexibility Addendum Pursuant 

### to T.C.A. 

### g 4-5-401 through 4-5-404, prior to initiating the rule making process as described in T.C.A. 

## 9 4-5-202(a)(3) and T.C.A. 

## 3 4-5-202(a). all agencies shall conduct a review of whether a proposed rule or rule affects small businesses.

The type or types of small business and an identification and estimate of the number of small businesses subject to the proposed rule that would bear the cost of, or directly benefit from the proposed rule:

This amendment is required by the United States Environmental Protection Agency (USEPA). With this rule, it is expected that about fifteen small businesses will be required to obtain major source permits that do not already have these permits. Without promulgation of this rule, tens of thousands of small businesses in Tennessee could potentially be subject to costly and time-consuming permitting requirements.

The projected reporting, recordkeeping, and other administrative costs required for compliance with the proposed rule, including the type of professional skills necessary for preparation of the report or record:

The Department cannot accurately estimate projected administrative costs as a result of this amendment at this time. Worst case costs should not exceed $10,000 in most circumstances.

A statement of the probable effect on impacted small businesses and consumers:

This rule will increase industry permitting costs in some sectors This increase may ultimately result in higher costs for consumer goods.

A description of any less burdensome, less intrusive or less costly alternative methods of achieving the purpose and objectiies of the proposed rule that may exist, and to what extent the alternative means might be less burdensome to small business:

None.

A comparison of the proposed rule with any federal or state counterparts:

The proposed rule revision is required by the USEPA (Pages 31514-31608 of the Federal Register published June 3, 2010). All states and local pmgrams must adopt these requirements or the 

### USEPA will enforce them directly.

Analysls of the effect of the poss~ble exemption of small businesses from all or any part of the requirements contained in the proposed rule

Exempbon of small businesses from these requirements at the state level will result in direct regulation of these busmesses by the USEPA, whrch 1s typically more costly than regulation by the State of Tennessee

SS-7039 (July 2010) RDA 1693Impact on Local Governments

Pursuant to T.C.A. 

### 4-5-220 and 

### 4-5-228 "any rule proposed to be promulgated shall state in a simple declarative sentence, without additional comments on the merits of the ~olicv of the rules or maulation, whether the rule or regulation may have a projected impact on local governma&." isee Public chapter Number 

### 1070 (http:Nstate.tn.udsos/acWlOG/pub/pc1070.pdf) of the 

### 2010 Session of the General Assembly)

This amendment will impact local governments 

### if they operate certain types of sources. These sources may have 

### to receive major source permits.



### SS-7039 (July 

### 2010) RDA 1693Additional Information Required by Joint Government Operations Committee

All agencies, upon filing a rule, must also submit the foilowing pursuant to TCA 4-5-226(i)(I).



### (A) A brief summary of the rule and a description of all relevant changes in previous regulations effectuated by such, rule;



## - This proposed rule is required by the USEPA. It contains provisions requiring large sources of greenhouse gas emissions to be permitted by the Division of'Air Pollution Control. Under this rule, sources with the potential to emit 100,000 tons per year of greenhouse gases (measured as carbon dioxide equivalents) will be subject to permitting as Title V sources. Existing sources in this category must determine the applicability of the Prevention of Significant Deterioration (PSD) permitting requirements if they seek to modify a source of greenhouse gas emissions, and new sources in this category will be required to obtain PSD permits.

(8) A citation to and brief description of any federal law or regulation or any state law or regulation mandating promulgation of such rule or establishing guidelines relevant thereto;

40 CFR 51 contains the requirements for states that operate their own air pollution control programs. Specifically, 40 CFR 51.166 and 40 CFR 70 contain the requirements for Title 

### V permits and Prevention of Significant Deterioration permits for maior sources of air pollution.

(C) Identif~ation of persons, organizations, corporations or governmental entities most directly affected by this rule, and whether those persons, organizations, corporations or governmental entities urge adoption or rejection of this rule;

Commercial, Industrial and institutional sources of air polfution (greenhouse gases) are most affected by this rule. These entities urge adoption of this rule if it is upheld at the federal level. Without this rule, they 

### will be required to obtain Title 

### V and PSD permits at very low levels of emissions of greenhouse gases (100 or 250 tons of greenhouse gases per year):



### (D) identification of any opinions of the attorney general and reporter or any judicial ruling that directly relates to the rule; 

## [ The Department is not aware of any. 

# 1

(E) An estimate of the probable increase or decrease in state and local government revenues and expenditures, if any, resulting from the promulgation of this rule, and assumptions and reasoning upon which the estimate is based An agency shall not state that the fiscal impact is minimal if the fiscal impact is more than 

### two percent (2%) of the agency's annual budget or five hundred thousand dollars ($500,000), whichever is less;



# I The Department anticipates an increase in expenditures. The amount cannot 

### be esbmated at this time. 

# 1

(F) Identification of the appropriate agency representative or representabves, possessing substantial knowledge and understanding of the rule;

Lacey J. I-lardin Division of Air Pollution Control 9th Floor. L & C Annex 

# 1

401 church Street Nashville, Tennessee 37243-1531

SS-7039 (July 2010) 10 RDA 1693

### (G) Identification of the appropriate agency representative or representatives who will explain the rule at a scheduled meeting of the committees;



# -- -- Alan 

### b4. Le~serson Legal 

### Sewices Director Department 

### of Environment and conservation 

# 1

(H) Office address, telephone number, and ematl address of the agency representative or representatives who will explain the rule at a scheduled meeting 

### of the committees; and

Off~ce of General Counsel Deoarhnent of Environment and conservation' 

# ___?

20' Floor L 

### 8, 

### C Tower Nashville, Tennessee 37243-1548 (615) 532-0131


### -aov

(I) Any additional information relevant 

### to the rule proposed for continuation that the committee requests. 

# I The Departments not aware of any. 

# 1

RDA 1693SS

- 7039 ( Ju ly 2010 ) RDA 1693 1 Department of State Division of Publications 312 Rosa L. Parks Avenue, 8th Floor Snodgrass/TN Tower Nashville, TN 37243 Phone: 615

- 741

- 2650 Fax: 615

- 741

- 5133 Email: register.information@tn.gov For Department of State Use Only

Sequence Number: Rule ID(s) : File Date:
Effective Date:



# Rulemaking Hearing Rule(s) Filing Form

Rulemaking Hearing Rules are rules filed after and as a result of a rulemaking hearing. TCA Section 4

- 5

- 205

Agency/Board/Commission: Environment and Conservation

Division: Air Pollution Control Contact Person: Lacey J. Hardin Address: 9 th Floor L & C Annex

401 Church Street Nashville, Tennessee Zip: 37243

- 1531 Phone: 615

- 532

- 0600 Email: Malcolm.Butler@tn.gov

Revision Type (check all that apply):

x Amendment New Repe al

Rule(s) Revised ( A LL chapters and rules contained in filing must be listed here . If needed, copy and paste additional tables to accommodate multiple chapters . Please enter only ONE Rule Number/Rule Title per row)

Chapter Number Chapter Title 1200

- 0 3

- 09 Construction and Operating Permits Rule Number Rule Title 1200

- 03

- 09

- .01 Construction Permits 1200

- 03

- 09

- .02 Operating PermitsSS

- 7039 ( Ju ly 2010 ) RDA 1693 2 (Place substance of rules and other info here. Statutory authority must be given for each rule change. For informat ion on formatting rules go to http://state.tn.us/sos/rules/1360/1360.htm )

Chapter 1200

- 03

- 09 Construction and Operating Permits

Amendments

Part 3 of subparagraph (a) of paragraph (4) of rul e 1200

- 03

- 09

- .01 Construction Permits is amended by deleting the “I” in “I981” and replacing it with a “1” so that, as amended, the part shall read:

3. Any owner or operator who constructs or operates a source or modification not in accordance with the ap plication submitted pursuant to this paragraph or with the terms of any approval to construct, or any owner or operator of a source or modification subject to this paragraph who commences construction after June 3, 1 981 without applying for and receiving a pproval hereunder, shall be subject to appropriate enforcement action.

Part 46 of subparagraph (b) of paragraph (4) of rule 1200

- 03

- 09

- .01 Construction Permits is amended by deleting the word “Reserved” and replacing it as follows:

46. “ Subject to regula tion” means, for any air pollutant, that the pollutant is subject to either a provision in the Clean Air Act, or a nationally

- applicable regulation codified by the Administrator in subchapter C of Chapter I of Title 40 of the Code of Federal Regulations,
t hat requires actual control of the quantity of emissions of that pollutant, and that such a control requirement has taken effect and is operative to control, limit or restrict the quantity of emissions of that pollutant released from the regulated activity . Except that:

(i) Greenhouse gases (GHGs), the air pollutant defined in part 86.1818

– 12(a) of Chapter I of Title 40 of the Code of Federal Regulations as the aggregate group of six greenhouse gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbo ns, perfluorocarbons, and sulfur hexafluoride, shall not be subject to regulation except as provided in subparts (iv) through (v) of this part.

(ii) For purposes of subparts (iii) through (v) of this part, the term tpy CO 2 equivalent emissions (CO 2 e) shall represent an amount of GHGs emitted, and shall be computed as follows:

(I) Multiplying the mass amount of emissions (tpy), for each of the six greenhouse gases in the pollutant GHGs, by the gas's associated global warming potential published at Table A

– 1 to subpart A of part 98 of Chapter I of Title 40 of the Code of Federal Regulations

- Global Warming Potentials.

(II) Sum the resultant value from item (ii)(I) of this part for each gas to compute a tpy CO 2 e.

(iii) The term emissions increase as used in su bparts (iv) through (v) of this part shall mean that both a significant emissions increase (as calculated using the procedures in part (c)4 of this paragraph) and a significant net emissions increase (as defined in parts (b)4 and (b)24 of this paragraph ) o ccur. For the pollutant GHGs, an emissions increase shall be based on tpy CO 2 e, and shall be calculatedSS

- 7039 ( Ju ly 2010 ) RDA 1693 3 assuming the pollutant GHGs is a regulated NSR pollutant, and “significant” is defined as 75,000 tpy CO 2 e instead of applying the value in subpart (b)24 (ii) of this paragraph.

(iv) Beginning January 2, 2011, the pollutant GHGs is subject to regulation if:

(I) The stationary source is a new major stationary source for a regulated NSR pollutant that is not GHGs, and also will emit or will have the potential to emit 75,000 tpy CO 2 e or more; or

(II) The stationary source is an existing major stationary source for a regulated NSR pollutant that is not GHGs, and also will have an emissions increase of a regulated NSR pollutant, and an emissions increase of 75,00 0 tpy CO 2 e or more; and,

(v) Beginning July 1, 2011, in addition to the provisions in subpart (iv ) of this part , the pollutant GHGs shall also be subject to regulation:

(I) At a new stationary source that will emit or have the potential to emit 100,000 tpy CO 2 e; or

(II) At an existing stationary source that emits or has the potential to emit 100,000 tpy CO 2 e, when such stationary source undertakes a physical change or change in the method of operation that will result in an emissions increase of 75,000 tpy CO 2 e or more.

Subpart (iv) of part 47 of subparagraph (b) of paragraph (4) of rule 1200

- 03

- 09

- .01 Construction Permits is amended by adding the words “ as defined in part (b)46 of this paragraph ” after the first occurrence of the words “Federal Clean Air A ct” and deleting the remainder of the subpart so that, as amended, the subpart shall read:

(iv) Any pollutant that otherwise is subject to regulation under the Federal Clean Air Act as defined in part (b)46 of this paragraph.

Part 47 of subparagraph (b) of paragraph (4) of rule 1200

- 03

- 09

- .01 Construction Permits is amended by adding a new subpart “(v)” as follows:

(v) Notwithstanding subparts (b)47(i) through (iv) of this paragraph, the term “regulated NSR pollutant” shall not include any or all hazardo us air pollutants either listed in section 112 of the Federal Clean Air Act or added to the list pursuant to section 112(b)(2) of the Federal Clean Air Act, and which have not been delisted pursuant to section 112(b)(3) of the Federal Clean Air Act, unless the listed hazardous air pollutant is also regulated as a constituent or precursor of a general pollutant listed under section 108 of the Federal Clean Air Act.

Subpart (ii) of part 14 of subparagraph (b) of paragraph (11) of rule 1200

- 03

- 09

- .02 Operat ing Permits is amended by adding the words “subject to regulation” between the words “air pollutant” and “ (including any major source of fugitive emissions of any such pollutant, as determined by rule by the Administrator) ” so that, as amended, the subpart shall read:SS

- 7039 ( Ju ly 2010 ) RDA 1693 4 (ii) A major stationary source of air pollutants, as defined in section 302 of the Federal Act, that directly emits or has the potential to emit, 100 tpy or more of any air pollutant subject to regulation (including any major source of fugiti ve emissions of any such pollutant, as determined by rule by the Administrator). The fugitive emissions of a stationary source shall not be considered in determining whether it is a major stationary source for the purposes of section 302(j) of the Federal Act, unless the source belongs to one of the following categories of stationary sources:

Subparagraph (b) of paragraph (11) of rule 1200

- 03

- 09

- .02 Operating Permits is amended by adding a new part “32” as follows:

32. “ Subject to regulation” means, for a ny air pollutant, that the pollutant is subject to either a provision in the Clean Air Act, or a nationally

- applicable regulation codified by the Administrator in subchapter C of Chapter I of Title 40 of the Code of Federal Regulations

, that requires actua l control of the quantity of emissions of that pollutant, and that such a control requirement has taken effect and is operative to control, limit or restrict the quantity of emissions of that pollutant released from the regulated activity. Except that:

(i) Greenhouse gases (GHGs), the air pollutant defined in 40 CFR 86.1818

– 12(a) as the aggregate group of six greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, shall not be subject to regul ation unless, as of July 1, 2011, the GHG emissions are at a stationary source emitting or having the potential to emit 100,000 tpy CO 2 equivalent emissions.

(ii) The term tpy CO 2 equivalent emissions (CO 2 e) shall represent an amount of GHGs emitted, and sha ll be computed by multiplying the mass amount of emissions (tpy), for each of the six greenhouse gases in the pollutant GHGs, by the gas's associated global warming potential published at Table A

– 1 to subpart A of 40 CFR 98

- Global Warming Potentials, and summing the resultant value for each to compute a tpy CO 2 e.

Authority: T.C.A. §§68

- 201

- 105SS

- 7039 ( Ju ly 2010 ) RDA 1693 5 * If a roll

- call vote was necessary, the vote by the Agency on these rulemaking hearing rules was as follows:



### Board Member Aye No Abstain Absent Signa ture (if required)



### Michael Atchison

Dr. J. Ronald Bailey

Tracy R. Carter

Dr. Brian Christman

Dr. Wayne T. Davis

Dr. Mary English

Stephen R. Gossett

Honorable Mayor Tommy Green , Jr.

Dr. Shawn A. Hawkins

Helen S. Hennon

Richard M. Holland

John R. Roberts, Sr.

Alicia M. Wilson

Honorable Mayor Larry Waters

I certify that this is an accurate and complete copy of rulemaking hearing rules, lawfully promulgated and adopted by the __Air Pollution Control_ (board/commission/ other authority) on

_ 10/13/2010 (mm/dd/yyyy), and is in compliance with the provisions of TCA 4

- 5

- 222.SS

- 7039 ( Ju ly 2010 ) RDA 1693 6 I further certify the following:

Notice of Rulemaking Hearing filed with the Department of State on: 07/ 16/10

Rulemaking Hearing(s) Conducted on: (add more dates). 09/09/10

Date:

Signature:

Name of Officer: Barry R. Stephens, P.E.

Title of Officer: Technical Secretary

Subscribed and sworn to before me on :

Notary Public Signature:

My commission expires on:

All rulemaking hearing rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as to legality pursuant to the provisions of the Administrative Procedures Act, Tennessee C ode Annotated, Title 4, Chapter 5.

______________________________ Robert E. Cooper, Jr. Attorney General and Reporter

______________________________ Date

Department of State Use Only

Filed with the Department of State on:

Effective on:

______________________________ Tre Hargett Secretary of State

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- 7039 ( Ju ly 2010 ) RDA 1693 7 Public Hearing Comments

One copy of a document containing responses to comments made at the public hearing must accompany the filing pursuant to T.C.A. §4

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- 222. Agencies shall include only their responses to public hearing comments, which can be summarized. No letters of inquiry from parties questioning the rule will be accepted. When no comments are received at the public hearing, the agency need onl y draft a memorandum stating such and include it with the Rulemaking Hearing Rule filing. Minutes of the meeting will not be accepted. Transcripts are not acceptable.

Comments: “The commentor request that a provision be incorporated in the rules which w ill state that these

rules to regulate GHGs are not to be applicable or enforceable if the federal proposal to regulate such is withdrawn, limited, rejected, or stayed because of legal challenges or a court decision.”

Response: An attorney in the Departme nt’s Office of General Counsel discussed this issue with the

Tennessee Attorney General’s Office, and was told that they would not approve the rule with this type of restriction. It is imperative that this rule become effective as soon as possible to avoid tremendous costs to the Department and the regulated community. Should any of these situations occur, the Department will take action to remove the proposed rule from the rulemaking process, or delete it from the regulations if the rule has been made fina l, if such action is approved by the Tennessee Air Pollution Control Board.

Comments: “The commentor would further request that a statement be added that the intent of these rules will

not impose the current Title 5 or non

- Title 5 fees on these emission s. Any fee schedule to be proposed and adopted by the Air Pollution Control Board under the provision of Administrative Fees will be based on the new level of work required to regulate these new emissions.”

Response: As currently written, Chapter 1200

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- 26 of the Tennessee Air Pollution Control Regulations does

not allow the Division to charge construction permit or annual emissions fees for greenhouse gas emissions. Any revisions to Chapter 1200

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- 26 to charge fees for these emissions will be reviewed b y the Tennessee Air Pollution Control Board.

Comments: 1200

- 03

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- .01(4)(b)24(ii)

- "Significant definition: Adding "and part (b)46" to this definition has

the effect of eliminating the 0 tpy (i.e. any emissions rate) mass basis threshold for GHGs. The definition of "significant" in 40 CFR 51.166 does not include this exemption for GHGs. The preamble to the Tailoring rule clearly explains that the current significance threshold for GHGs on a mass basis remains as "any emissions increase".

Response: " and part (b)46" has been removed

.

Comments: 1200

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- .01(4)(b)46(v)

- Typographical error: Please revise the provision listed above to read:

(v) Beginning July 1, 2011, in addition to the provisions in subpart (iv) of this part, the pollutant GHGs sha ll also be subject to regulation.

Response: This has been revised

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- 7039 ( Ju ly 2010 ) RDA 1693 8 Regulatory Flexibility Addendum Pursuant to T.C.A. § 4

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- 401 through 4

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- 404, prior to initiating the rule making process as described in T.C.A. § 4

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- 202(a)(3) and T.C.A. § 4

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- 202(a), all agencies shall conduct a review of whether a proposed rule or rule affects small businesses.

(1) The type or types of small business and an identification and estimate of the number of small businesses subject to the proposed rule that wo uld bear the cost of, or directly benefit from the proposed rule:

This amendment is required by the United States Environmental Protection Agency (USEPA). With this rule, it is expected that about fifteen small businesses will be required to obtain majo r source permits that do not already have these permits. Without promulgation of this rule, tens of thousands of small businesses in Tennessee could potentially be subject to costly and time

- consuming permitting requirements.

(2) The projected reporting, recordkeeping, and other administrative costs required for compliance with the proposed rule, including the type of professional skills necessary for preparation of the report or record:

The Department cannot accurately estimate projected administrativ e costs as a result of this amendment at this time. Worst case costs should not exceed $10,000 in most circumstances.

(3) A statement of the probable effect on impacted small businesses and consumers:

This rule will increase industry permitting costs i n some sectors. This increase may ultimately result in higher costs for consumer goods.

(4) A description of any less burdensome, less intrusive or less costly alternative methods of achieving the purpose and objectives of the proposed rule that may exist , and to what extent the alternative means might be less burdensome to small business:

None.

(5) A comparison of the proposed rule with any federal or state counterparts:

The proposed rule revision is required by the USEPA (Pages 31514

- 31608 of the Federal Register published June 3, 2010). All states and local programs must adopt these requirements or the USEPA will enforce them directly.

(6) Analysis of the effect of the possible exemption of small businesses from all or any part of the requiremen ts contained in the proposed rule.

Exemption of small businesses from these requirements at the state level will result in direct regulation of these businesses by the USEPA, which is typically more costly than regulation by the State of Tennessee.SS

- 7039 ( Ju ly 2010 ) RDA 1693 9 Impact on Local Governments

Pursuant to T.C.A. 4

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- 220 and 4

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- 228 “any rule proposed to be promulgated shall state in a simple declarative sentence, without additional comments on the merits of the policy of the rules or regulation, whether the rule or regulation may have a projected impact on local governments.” (See Public Chapter Number 1070 (http://state.tn.us/sos/acts/106/pub/pc1070.pdf) of the 2010 Session of the General Assembly)

This amendment will impact local governments if they op erate certain types of sources. These sources may have to receive major source permits.SS

- 7039 ( Ju ly 2010 ) RDA 1693 10 Additional Information Required by Joint Government Operations Committee

All agencies, upon filing a rule, must also submit the following pursuant to TCA 4

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- 226(i) (1).

(A) A brief summary of the rule and a description of all relevant changes in previous regulations effectuated by such rule;

This proposed rule is required by the USEPA. It contains provisions requiring large sources of greenhouse gas emissions to be pe rmitted by the Division of Air Pollution Control. Under this rule, sources with the potential to emit 100,000 tons per year of greenhouse gases (measured as carbon dioxide equivalents) will be subject to permitting as Title V sources. Existing sources in t his category must determine the applicability of the Prevention of Significant Deterioration (PSD) permitting requirements if they seek to modify a source of greenhouse gas emissions, and new sources in this category will be required to obtain PSD permits.

(B) A citation to and brief description of any federal law or regulation or any state law or regulation mandating promulgation of such rule or establishing guidelines relevant thereto;

40 CFR 51 contains the requirements for states that operate their own air pollution control programs. Specifically, 40 CFR 51.166 and 40 CFR 70 contain the requirements for Title V permits and Prevention of Significant Deterioration permits for major sources of air pollution.

(C) Identification of persons, organizations, corp orations or governmental entities most directly affected by this rule, and whether those persons, organizations, corporations or governmental entities urge adoption or rejection of this rule;

Commercial, Industrial and institutional sources of air polluti on (greenhouse gases) are most affected by this rule. These entities urge adoption of this rule if it is upheld at the federal level. Without this rule, they will be required to obtain Title V and PSD permits at very low levels of emissions of greenhouse g ases (100 or 250 tons of greenhouse gases per year).

(D) Identification of any opinions of the attorney general and reporter or any judicial ruling that directly relates to the rule;

The Department is not aware of any.

(E) An estimate of the probable incre ase or decrease in state and local government revenues and expenditures, if any, resulting from the promulgation of this rule, and assumptions and reasoning upon which the estimate is based. An agency shall not state that the fiscal impact is minimal if th e fiscal impact is more than two percent (2%) of the agency's annual budget or five hundred thousand dollars ($500,000), whichever is less;

The Department anticipates an increase in expenditures. The amount cannot be estimated at this time.

(F) Identific ation of the appropriate agency representative or representatives, possessing substantial knowledge and understanding of the rule;

Lacey J. Hardin Division of Air Pollution Control 9th Floor, L & C Annex 401 Church Street Nashville, Tennessee 37243

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- 7039 ( Ju ly 2010 ) RDA 1693 11 (G) Identification of the appropriate agency representative or representatives who will explain the rule at a scheduled meeting of the committees;

Alan M. Leiserson Legal Services Director Department of Environment and conservation

(H) Office address, te lephone number, and email address of the agency representative or representatives who will explain the rule at a scheduled meeting of the committees; and

Office of General Counsel Department of Environment and conservation 20 th Floor L & C Tower Nashvil le, Tennessee 37243

- 1548 (615) 532

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(I) Any additional information relevant to the rule proposed for continuation that the committee requests.

The Department is not aware of any.

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