Page 1 of 52 6560-50-P
ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52 [EPA-HQ-OAR-2010-0107; FRL-xxxx-x]

RIN-2060-AQ45 Action to Ensure Authority to Issue Permits under t he Prevention of Significant Deterioration Program to Sources of Greenhouse

Gas Emissions: Federal Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

SUMMARY: In this rulemaking, EPA is proposing a federal implementation plan (FIP) to apply in any state tha t is unable to submit, by its deadline, a corrective state impl ementation plan (SIP) revision to ensure that the state has au thority to issue permits under the Clean Air Act's (CAA or Act ) New Source Review Prevention of Significant Deterioration (PSD ) program for sources of greenhouse gases (GHGs). This proposal is a companion rulemaking to "Action to Ensure Authority to Issue Permits Under the Prevention of Significant Deterio ration Program to Sources of Greenhouse Gas Emissions: Fi nding of Substantial Inadequacy and SIP Call," which is bein g signed and published on the same schedule. In that action, EP A is proposing to make a finding of substantial inadequa cy and proposing to issue a SIP call for 13 states on grou nds thatPage 2 of 52

their SIPs do not appear to apply the PSD program t o GHGemitting sources. These tw o companion actions will provide, to the maximum extent possible, a permitting authority

— preferably the state, but if necessary the EPA

— to process permit applications for certain large GHG

- emitting sources that b ecome subject to PSD on January 2, 2011, and thereby allow the sources to proceed with construction or modification activi ties. EPA intends to work closely with states to minimize the need for

FIPs.
DATES: Comments . Comments must be received on or before [INSERT DATE 30 DAYS AFTER DATE OF PUBLICATION IN T HE FEDERAL REGISTER]

. Public Hearing : One public hearing concerning the proposed regulation will be held before the end of the comme nt period. The date, time and location will be announced separ ately. Please refer to SUPPLEMENTARY INFORMATION for addit ional information on the comment period and the public he aring.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2010-0107 by one of the following method s:

• www.regulations.gov : Follow the online instructions for submitting comments.

• E-mail : a-and-r-docket@epa.gov

.

• Fax : (202) 566-9744Page 3 of 52

• Mail : Attention Docket ID No. EPA-HQ-OAR-2010-0107, U. S. Environmental Protection Agency, EPA West (Air Dock et), 1200 Pennsylvania Avenue, NW, Mail code: 6102T, Was hington, DC 20460. Please include a total of 2 copies.

• Hand Delivery : U.S. Environmental Protection Agency, EPA West (Air Docket), 1301 Constitution Avenue, Northw est, Room 3334, Washington, DC 20004, Attention Docket I D No. EPA-HQ-OAR-2010-0107. Such deliveries are only acc epted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information. Instructions . Direct your comments to Docket ID No. EPA-HQ-OAR

2010-0107. EPA's policy is that all comments recei ved will be included in the public docket without change and ma y be made available online at www.regulations.gov , including any personal information provided, unless the comment includes i nformation claimed to be Confidential Business Information (CB I) or other information whose disclosure is restricted by statu te. Do not submit information that you consider to be CBI or o therwise protected through www.regulations.gov or e-mail. The www.regulations.gov Web Site is an "anonymous access" system, which means EPA will not know your identity or cont act information unless you provide it in the body of yo ur comment.Page 4 of 52

If you send an e-mail comment directly to EPA witho ut going through www.regulations.gov , your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available o n the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact inform ation in the body of your comment and with any disk or CD-ROM yo u submit. If EPA cannot read your comment due to technical diffi culties and cannot contact you for clarification, EPA may not b e able to consider your comment. Electronic files should avo id the use of special characters, avoid any form of encryption, a nd be free of any defects or viruses. For additional information about EPA's public docket, visit the EPA Docket Center homepage at www.epa.gov/epahome/dockets.htm . For additional instructions on submitting comments, go to section I.C of the SUPPLEMENTARY
INFORMATION section of this document. Docket . All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g. , CBI or other information whose disclosure is restricted by statu te. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available do cket materials are available either electronically inPage 5 of 52

www.regulations.gov or in hard copy at the U.S. Environmental Protection Agency, Air Docket, EPA/DC, EPA West Bui lding, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., M onday through Friday, excluding legal holidays. The telephone nu mber for the Public Reading Room is (202) 566-1744, and the tele phone number for the Air Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Ms. Lisa Sutton, Air Quality Policy Division, Office of Air Quality Planning and Standards (C504-03), Environmental Protection Agency, Researc h Triangle Park, NC 27711; telephone number: (919) 541-3450; f ax number: (919) 541-5509; e-mail address: sutton.lisa@epa.go v . SUPPLEMENTARY INFORMATION: For questions related to a specific state, local, o r tribal permitting authority, or to submit information requ ested in this action, please contact the appropriate EPA regional office:

EPA r egional office Contact for regional office

(person, mailing address, telephone number) Permitting authority I Dave Conroy, Chief, Air Programs Branch, EPA Region 1, 5 Post Office Square, Suite 100, Boston, MA 02109-3912, (617) 918-1661. Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont. II Raymond Werner, Chief, Air Programs Branch, EPA Region 2, 290 Broadway, 25th Floor, New York, NY 10007-1866, (212) 637

- 3706

. New Jersey, New York, Puerto Rico, and Virgin Islands.Page 6 of 52

III Kathleen Anderson, Chief,

Permits and Technical Assessment Branch, EPA Region 3, 1650 Arch Street, Philadelphia, PA 19103-2029, (215) 814

- 2173

. District of Columbia, Delaware, Maryland, Pennsylvania, Virginia, and West Virginia.

IV Dick Schutt, Chief, Air Planning Branch, EPA Region 4, Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, GA 30303-3104, (404) 562- 9033. Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. V J. Elmer Bortzer, Chief, Air Programs Branch (AR-18J), EPA Region 5, 77 West Jackson Boulevard, Chicago, IL 60604- 3507, (312) 886

- 1430

. Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.

VI Jeff Robinson, Chief, Air Permits Section, EPA Region 6, Fountain Place 12th Floor, Suite 1200, 1445 Ross Avenue, Dallas, TX 75202-2733, (214) 665

- 6435

. Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.

VII Mark Smith, Chief, Air

Permitting and Compliance Branch, EPA Region 7, 901 North 5th Street, Kansas City, KS 66101, (913) 551-7876. Iowa, Kansas, Missouri, and Nebraska.

VIII Carl Daly, Unit Leader, Air

Permitting, Monitoring & Modeling Unit, EPA Region 8, 1595 Wynkoop Street, Denver, CO 80202-1129, (303) 312- 6416. Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming.

IX Gerardo Rios, Chief, Permits Office, EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105, (415) 972-3974. Arizona; California; Hawaii and the Pacific Islands; Indian Country within Region 9 and Navajo Nation; and Nevada

. X Nancy Helm, Manager, Federal and Delegated Air Programs Unit, EPA Region 10, 1200 Sixth Avenue, Suite 900, Seattle, WA 98101, (206) 553- 6908

. Alaska, Idaho, Oregon, and Washington.Page 7 of 52

I. General Information A. Does this action apply to me? Entities potentially affected by this rule include states, local permitting authorities, and tribal authoritie s. 1 Any SIPapproved PSD air permitting regulation that is not structured such that it includes GHGs among pollutants subject to regulation under the Act will potentially be found substantially inadequate to meet CAA requirements, under CAA 110( k)(5), and the state will potentially be affected by this rule . For example, if a state's PSD regulation identifies its regulated NSR pollutants by specifically listing each individ ual pollutant and the list omits GHGs, then the regulation is ina dequate. Entities potentially affected by this rule also inc lude sources in all industry groups, which have a direct obligation under the CAA to obtain a PSD permit for GHGs for p rojects that meet the applicability thresholds set forth in the Tailoring

1 EPA respects the unique relationship between the U .S. government and tribal authorities and acknowledges that tribal concerns are not interchangeable with state concern s. However, for convenience, we refer to "states" in this rulem aking to collectively mean states, local permitting authorit ies, and tribal authorities.Page 8 of 52

Rule. 2 This independent obligation on sources is specifi c to PSD and derives from CAA 165(a). Any source that is su bject to a state PSD air permitting regulation not structured to apply to GHG-emitting sources will potentially rely on this rule to obtain a permit that contains emission limitations that conform to requirements under CAA 165(a). The majority of entities potentially affected by this action are expected to be in the following groups: Industry Group NAICS a Utilities (electric, natural gas, other systems) 2211, 2212, 2213 Manufacturing (food, beverages, tobacco, textiles, leather) 311, 312, 313, 314, 315, 316 Wood product, paper manufacturing 321, 322 Petroleum and coal products manufacturing 32411, 32412, 32419 Chemical manufacturing 3251, 3252, 3253, 3254, 3255 , 3256, 3259 Rubber product manufacturing 3261, 3262 Miscellaneous chemical products 32552, 32592, 32591 , 325182, 32551 Nonmetallic mineral product manu facturing 3271, 3272, 3273, 3274, 3279 Primary and fabricated metal manufacturing 3311, 3312, 3313, 3314, 3315, 3321, 3322, 3323, 3324, 3325, 3326, 3327, 3328, 3329 Machinery manufacturing 3331, 3332, 3333, 3334, 333 5, 3336, 3339

2 Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule. 75 FR 31514 (June 3, 2010). The Tailoring Rule is described in more detail late r in this preamble.Page 9 of 52

Computer and electronic products manufacturing 3341, 3342, 3343, 3344, 3345, 4446 Electrical equipment, appliance, and component manufacturing 3351, 3352, 3353, 3359

Transportation equipment manufacturing 3361, 3362, 3363, 3364, 3365, 3366, 3366, 3369 Furniture and related product manufacturing 3371, 3372, 3379 Miscellaneous manufacturing 3391, 3399 Waste management and remediation 5622, 5629 Hospitals/nursing and residential care facilities 6221, 6231, 6232, 6233, 6239 Personal and laundry services 8122, 8123 Residential/private households 8141 Non-residential (commercial) Not available. Codes only exist for private households, construction and leasing/sales industries.

a North American Industry Classification System.

B. Where can I get a copy of this document and othe r related information? In addition to being available in the docket, an el ectronic copy of this proposal will also be available on the World Wide Web. Following signature by the EPA Administrator, a copy of this notice will be posted on the EPA's NSR Web Sit e, under Regulations & Standards, at www.epa.gov/nsr

. C. What should I consider as I prepare my comments for EPA? 1. Submitting CBI . Do not submit this information to EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. F or CBIPage 10 of 52

information in a disk or CD ROM that you mail to EP A, mark the outside of the disk or CD ROM as CBI and then ident ify electronically within the disk or CD ROM the specif ic information that is claimed as CBI. In addition to one complete version of the comment that includes information cl aimed as CBI, a copy of the comment that does not contain the inf ormation claimed as CBI must be submitted for inclusion in t he public docket. Information so marked will not be disclose d except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI only to the f ollowing address: Roberto Morales, OAQPS Document Control Of ficer (C404- 02), U.S. EPA, Research Triangle Park, NC 27711, At tention Docket ID No. EPA-HQ-OAR-2010-0107. 2. Tips for preparing your comments . When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information (subject heading, Federal R egister date and page number).

• Follow directions - The agency may ask you to respo nd to specific questions or organize comments by referenc ing a Code of Federal Regulations (CFR) part or section n umber.

• Explain why you agree or disagree; suggest alternat ives and substitute language for your requested changes.Page 11 of 52

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to al low for it to be reproduced.

• Provide specific examples to illustrate your concer ns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the comment pe riod deadline identified. D. How can I find information about the public hear ing? The EPA will hold one public hearing on this propos al. The date, time, and location of the public hearing will be announced separately. The EPA encourages commenters to provi de written versions of their oral testimonies either electroni cally or in paper copy. If you would like to present oral test imony at the public hearing, please notify Ms. Pamela S. Long, N ew Source Review Group, Air Quality Policy Division (C504-03) , U.S. EPA, Research Triangle Park, NC 27711, telephone number (919) 541- 0641, or email: long.pam@epa.gov . Persons interested in presenting oral testimony should notify Ms. Long at least 2 days in advance of the public hearing. Persons interest ed inPage 12 of 52

attending the public hearing should also contact Ms . Long to verify the time, date, and location of the hearing. The public hearing will provide interested parties the opportu nity to present data, views, or arguments concerning the pr oposed rule. E. How is the preamble organized? The information presented in this preamble is organ ized as follows: I. General Information A. Does this action apply to me? B. Where can I get a copy of this document and othe r related information? C. What should I consider as I prepare my comments for EPA? D. How can I find information about the public hear ing? E. How is the preamble organized? II. Background and Context of Proposed Rule A. Introduction B. CAA and Regulatory Context C. SIP Inadequacy and Corrective Action; Federal Implementation Plans D. States that Do Not Apply the PSD Program to GHG Sources; PSD GHG SIP Call III. Proposed Federal Implementation Plan A. Timing for FIP B. Substance of FIP C. Primacy of the SIP Process IV. Statutory and Executive Order Reviews A. Executive Order 12866 – Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform E. Executive Order 13132 – Federalism F. Executive Order 13175 – Consultation and Coordin ation with Indian Tribal Governments G. Executive Order 13045 – Protection of Children f rom Environmental Health Risks and Safety Risks H. Executive Order 13211 – Actions Concerning Regul ations that Significantly Affect Energy Supply, Distributi on, or UsePage 13 of 52

I. National Technology Transfer and Advancement Act J. Executive Order 12898 – Federal Actions to Addre ss Environmental Justice in Minority Populations and L owIncome Populations K. Determination under Section 307(d) V. Statutory Authority II. Background and Context of Proposed Rule A. Introduction In this rulemaking under the CAA, EPA is proposing a FIP for 13 states for which, in a companion action, EPA is proposing a finding of SIP substantial inadequacy and is prop osing to issue a SIP Call because the states' PSD SIP progra ms do not appear to apply to sources of GHGs. "Action to Ens ure Authority to Issue Permits Under the Prevention of Significan t Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call" (th e "PSD GHG SIP Call" or "SIP Call"). These two rulemakings ad dress states whose permitting regulations and SIPs appear to fai l to apply the PSD program to sources of GHGs in those states. As discussed further in this preamble, certain larger GHG-emitting sources will be subject to PSD permitting requireme nts on and after January 2, 2011. Thus, in states whose PSD p rograms do not apply to sources of GHGs, sources will be unabl e to obtain a PSD permit that covers GHG emissions and therefore potentially unable to undertake construction or modification pr ojects on and after January 2, 2011.Page 14 of 52

The states for which we are proposing a FIP are lis ted in table II-1, "States with SIPs that Do Not Appear to Apply PSD to GHG Sources (Presumptive SIP Call List)." If any o f these states are not in a position to submit to EPA a cor rective SIP revision by its deadline, EPA will promulgate a FIP that will provide authority to issue PSD permits for construc tion or modification of appropriate GHG sources in the stat e.Page 15 of 52

Table II-1. States with SIPs that Do Not Appear to Apply PSD to

GHG Sources (Presumptive SIP Call List)

State (or Area) EPA Region Alaska X Arizona: Pinal County; Rest of State (Excludes Maricopa County, Pima County, and Indian Country) IX

Arkansas VI California: Sacramento Metropolitan AQMD IX Connecticut I Florida IV Idaho X Kansas VII Kentucky: Jefferson County; Rest of State IV Nebraska: Lincoln Lancaster; Omaha; Rest of State VII Nevada: Clark County IX Oregon X Texas VIPage 16 of 52

The rest of the states with approved SIP PSD progra ms (meaning each of those not listed in table II-1) ar e listed in table II-2, "States with SIPs that Appear to Apply PSD to GHG Sources (Presumptive Adequacy List)." For each of the states listed in table II-2 (as well as for any states wit h approved SIP PSD programs that we may have inadvertently omi tted from table II-2), EPA is soliciting comment in the SIP C all companion notice on whether their SIPs do or do not apply the PSD program to GHG-emitting sources. We are not at this time p roposing a FIP for the states listed in table II-2. However, if EPA concludes, on the basis of information EPA receives , that such a state's SIP does not apply the PSD program to GHG-e mitting sources, then EPA will proceed to issue for that st ate a finding of substantial inadequacy and a SIP Call on the sam e schedule as for the states listed in table II-1 (the presumptiv e SIP Call list). If a SIP-called state is not able to submit to EPA a SIP revision that applies the PSD program to GHG source s by the deadline required in the SIP Call, then EPA propose s to promulgate a FIP without further notice and comment . The promulgated FIP will apply the PSD program to GHG s ources in the state and provide PSD permitting authority for cons truction and modification of affected sources. Accordingly, int erested parties in a state for which we, in the companion S IP CallPage 17 of 52

rulemaking, solicit comment on the adequacy of its SIP to apply PSD to GHG-emitting sources should consider the com ment period for the present notice to be their opportunity to c omment on the FIP that EPA would implement in their state (should EPA ultimately determine to issue a SIP Call for their state in EPA's final action on the companion SIP Call rulema king).Page 18 of 52

Table II-2. States with SIPs that Appear to Apply PSD to GHG

Sources (Presumptive Adequacy List)

State (or Area) EPA Region Alabama: Jefferson County; Huntsville; Rest of State IV California: Mendocino County AQMD; Monterey Bay Unified APCD; North Coast Unified AQMD; Northern Sonoma County APCD IX

Colorado VIII Delaware III G eorgia IV Indiana V Iowa VII Louisiana VI Maine I Maryland III Michigan V Mississippi IV Missouri VII Montana VIII New Hampshire I New Mexico: Albuquerque; Rest of State VI North Carolina: Forsythe County; Mecklenburg; Western NC; Rest of State IV North Dakota VIII Ohio V Oklahoma VI Pennsylvania: All except Allegheny County III Rhode Island I South Carolina IV South Dakota VIII Tennessee: Chattanooga; Nashville; Knoxville; Memphis; Rest of State IV
Vermont I Virginia III West Virgini a III Wisconsin V Wyoming VIII Utah VIIIPage 19 of 52

The background and context for this proposed rule i s the same as for the proposed PSD GHG SIP Call and other actions cross-referenced in that action. Familiarity with the proposed PSD GHG SIP Call is presumed. As a result, the bac kground and context for this rule will be only briefly summariz ed here. B. CAA and Regulatory Context 1. SIP PSD Requirements Under the CAA PSD requirements, a new or existing s ource that emits or has the potential to emit "any air po llutant" in specified quantities cannot construct or modify unl ess it first obtains a PSD permit that, among other things, impo ses emission limitations that qualify as best available control technology (BACT). CAA 165(a)(1), 165(a)(4), 169(1). Longsta nding EPA regulations have interpreted the term "any air poll utant" narrowly so that only emissions of any "regulated N SR pollutant" trigger PSD. 40 CFR 52.21(j)(2), (b)(50)(iv). The term "regulated NSR pollutant" is defined to include the following four classes of air pollutants: (i) any pollutant for which a NAAQS has been promu lgated; (ii) any pollutant subject to an NSPS promulgated under CAA 111; (iii) any pollutant subject to a standard promulga ted under CAA title VI; andPage 20 of 52

(iv) "any pollutant that otherwise is subject to regulation under the Act" (excluding HAPs listed un der CAA 112). The CAA contemplates that the PSD program be implem ented in the first instance by the states. States are requi red to include PSD requirements in their SIPs. CAA 110(a) (2)(C). Most states have PSD programs that have been approved in to their SIPs, and these states implement their PSD program and act as the permitting authority. For the most part, these approved SIPs mirror EPA regulatory requirements, as found i n 40 CFR 51.166 (except for the recently added revisions fro m the Tailoring Rule). As a result, most SIPs include th e applicability requirement that PSD apply to sources that construct or modify and thereby increase their emis sions of any "regulated NSR pollutant." A number of states do n ot have PSD programs approved into their SIPs; in those states, EPA's regulations at 40 CFR 52.21 govern, and either EPA or the state as EPA's delegatee acts as the permitting authority

. 2. Recent EPA Regulatory Actions Concerning PSD Req uirements for GHG-emitting Sources Beginning on January 2, 2011, certain stationary so urces that construct or undertake modifications will beco me subject to the CAA requirement to obtain a PSD permit for thei r GHG emissions. This is because of the following EPA re gulatoryPage 21 of 52

actions. By notice dated December 15, 2009, pursuant to CAA 202(a), EPA issued, in a single final action, two findings 3 regarding GHGs that are commonly referred to as the "Endanger ment Finding" and the "Cause or Contribute Finding." In the Enda ngerment Finding, EPA found that six long-lived and directly emitted GHGs—carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF 6 )—may reasonably be anticipated to endanger public health and welfare. In the Cause or Contrib ute Finding, the Administrator "define[d] the air pollutant as t he aggregate group of the same six * * * greenhouse gases," 74 F R 66536, and found that the combined emissions of this air pollu tant from new motor vehicles and new motor vehicle engines contri bute to the GHG air pollution that endangers public health and welfare. By notice dated May 7, 2010, EPA published what is commonly known as the "Light-Duty Vehicle Rule" (LDVR), 4 which for the first time established federal controls on GHGs, th ose emitted from light-duty vehicles. This rule specifies, in its applicability provisions, the air pollutant subject to control

3 "Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act." 74 FR 66496. 4 "Light-Duty Vehicle Greenhouse Gas Emission Standa rds and Corporate Average Fuel Economy Standards; Final Rul e," 75 FR 25324 (May 7, 2010).Page 22 of 52

as the aggregate group of the six GHGs, including C O 2 , CH 4 , N 2 O, HFCs, PFCs, and SF 6 . 75 FR 25686 (40 CFR 86.1818-12(a)). By notice dated April 2, 2010, EPA promulgated what is commonly known as the Johnson Memo Reconsideration. 5 The Johnson Memo Reconsideration interpreted one of the regulat ory triggers for PSD applicability—the term "subject to regulati on"—and concluded that promulgation of the LDVR would rende r GHGs "subject to regulation" and thereby trigger PSD app licability for GHG-emitting sources on January 2, 2011, which according to EPA is the date upon which the LDVR takes effect. By notice dated June 3, 2010, EPA published what is commonly known as the "Tailoring Rule," 6 which limits the applicability of PSD to certain GHG-emitting source s through a multi-step phase-in approach. In the Tailoring Rul e, EPA established the first two steps of the phase-in app roach as follows: For the first step of this Tailoring Rule, which will begin on January 2, 2011, PSD * * * requiremen ts will apply to sources' GHG emission only if the

5 "Interpretation of Regulations that Determine Poll utants Covered by Clean Air Act Permitting Programs" (75 F R 17004; April 2, 2010) (finalizing EPA response to petition for reconsideration of "EPA's Interpretation of Regulat ions that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program" (co mmonly known as the "Johnson Memo"), December 18, 2008). 6 "Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule," 75 FR 31514.Page 23 of 52

sources are subject to PSD * * * anyway due to thei r non-GHG pollutants. [We call these sources "anyway sources."] Therefore, EPA will not require sources or modifications to evaluate whether they are subject to PSD * * * requirements solely on account of their G HG emissions. Specifically, for PSD, Step 1 requires that as of January 2, 2011, the applicable requirements of PSD, most notably, the best availab le control technology (BACT) requirement, will apply t o projects that increase net GHG emissions by at leas t 75,000 tpy carbon dioxide equivalent (CO 2 e) but only if the project also significantly increase emissions o f at least one non-GHG pollutant. The second step * * * beginning on July 1, 2011, will phase in additional large sources of GHG emissions. New sources * * * that emit, or have th e potential to emit, at least 100,000 tpy CO 2 e will become subject to the PSD * * * requirements. In addition, sources that emit or have the potential t o emit at least 100,000 tpy CO 2 e and that undertake a modification that increases net emissions of GHGs b y at least 75,000 tpy CO 2 e will also be subject to PSD requirements. [We call this the 100,000/75,000 threshold.] For both steps, we note that if source s or modifications exceed these CO 2 e-adjusted GHG triggers, they are not covered by permitting requirements unless their GHG emissions also exceed the corresponding mass-based triggers (i.e. , unadjusted for CO 2 e.) 75 FR 31516. In the Tailoring Rule, EPA codified t he Johnson Memo Reconsideration interpretation of the term "su bject to regulation" and added a further interpretation of t hat term designed to expedite the adoption of the phase-in a pproach by the states into their SIPs. In addition, in the Ta iloring Rule, EPA identified the air pollutant as the aggregate o f the six GHGs, again, CO 2 , CH 4 , N 2 O, HFCs, PFCs, and SF 6 . The Tailoring Rule further provided that for purposes of determin ing whetherPage 24 of 52

the amount of GHG emissions exceeds specified thres holds and therefore triggers the application of PSD, the amou nt of emissions must be calculated on both a mass basis a nd, as alluded to above, a carbon dioxide equivalent (CO 2 e) basis. With respect to the latter, according to the rule, "PSD * * * applicability is based on the quantity that results when the mass emissions of each of these gases is multiplied by the Global Warming Potential (GWP) of that gas, and the n summed for all six gases." 75 FR 31518. Further information on the applicable CAA provision s, the Endangerment and Cause or Contribute Findings, the LDRV, the Johnson Memo Reconsideration, and the Tailoring Rul e is contained in the Tailoring Rule and the proposed PS D GHG SIP Call. We note that in this rulemaking, we are not address ing the issue of accounting for emissions of GHGs from bioe nergy and other biogenic sources (which are generated during the combustion or decomposition of biologically based m aterial such as forest or agriculture products). When we finali zed the Tailoring Rule, we noted that EPA planned to seek c omment on how to address emissions of biogenic CO 2 under the PSD and title V programs through future action, such as a separate Advance Notice of Proposed Rulemaking (ANPR) (75 FR at 3159 1). As aPage 25 of 52

first step, we recently issued a Call for Informati on (CFI) to solicit public comment and data on technical issues that might be used to consider biomass fuels and the emissions resulting from their combustion differently with regard to ap plicability under PSD and with regard to the BACT review proces s under PSD. See "Call for Information: Information on Greenhou se Gas Emissions Associated with Bioenergy and Other Bioge nic Sources," 75 FR 41173 (July 15, 2010). Additional information on this CFI is available at http://www.epa.gov/climatechange/emissions/biogenic _emissions.ht ml . In the CFI we stated: "In response to this Call for Information, interested parties are invited to assi st EPA in the following: (1) Surveying and assessing the science by submitting research studies or other relevant information, and (2) evaluating different accounting approaches and opti ons by providing policy analyses, proposed or published me thodologies, or other relevant information. Interested parties are also invited to submit data or other relevant informatio n about the current and projected scope of GHG emissions from b ioenergy and other biogenic sources." 75 FR at 41174. Without prejudging the outcome of the CFI process, EPA anticipates that the comments we receive in respons e to the CFI, with regard to applicability under PSD and with reg ard to thePage 26 of 52

BACT review process under PSD, will inform any subs equent actions to address applicability of emissions of GH Gs from bioenergy and other biogenic sources under the PSD program. C. SIP Inadequacy and Corrective Action; Federal Implementation Plans The CAA provides a mechanism for the correction of SIPs that are inadequate, under CAA 110(k)(5), which pro vides: (5) Calls for plan revisions Whenever the Administrator finds that the applicable implementation plan for any area is substantially inadequate to * * * comply with any requirement of this Act, the Administrator shall require the State to revise the plan as necessary t o correct such inadequacies. The Administrator shall notify the State of the inadequacies and may establ ish reasonable deadlines (not to exceed 18 months after the date of such notice) for the submission of such plan revisions. This provision by its terms authorizes the Administ rator to "find[] that [a SIP] * * * is substantially inadequ ate to * * * comply with any requirement of this Act," and, base d on that finding, "require the State to revise the [SIP] * * * to correct such inadequacies." This latter action is commonly known as a "SIP call." In addition, this provision provides t hat EPA must notify the state of the inadequacies and authorizes EPA to establish a "reasonable deadline[] (not to exceed 1 8 months after the date of such notice)" for the submission of the corrective SIP revision.Page 27 of 52

If the state fails to submit the corrective SIP rev ision by the deadline, CAA 110(c) authorizes EPA to "find[] that [the] State has failed to make a required submission." C AA 110(c)(1)(A). Once EPA makes that finding, CAA 110 (c)(1) requires EPA to "promulgate a Federal implementatio n plan at any time with 2 years after the [finding] * * * unless the State corrects the deficiency, and [EPA] approves the pla n or plan revision, before [EPA] promulgates such [FIP]." D. States that Do Not Appear to Apply the PSD Progr am to GHG Sources; PSD GHG SIP Call A number of states do not have an approved PSD SIP; as a result, in these states 7 the applicable regulatory authority is EPA's regulations, found in 40 CFR 52.21, which con stitute a FIP. For sources in these states, either the EPA R egional Office or the state acting as EPA's delegatee is th e permitting authority. In these states, EPA's regulations appl y directly. As a result, the regulations apply the PSD program to any

7 In the following listed state or local jurisdictio ns, as well as in all Indian country, EPA is the PSD permitting authority, implementing the federal PSD regulation at 40 CFR 5 2.21: American Samoa; Arizona (some areas); California (m ost areas); District of Columbia; Guam; Massachusetts; New Jers ey; New York; Northern Mariana Islands; Puerto Rico; Trust Territ ories; and the Virgin Islands. In a smaller number of areas, listed as follows, the state or local permitting authority is delegated at least partial authority by EPA to implement the fed eral PSD regulation: Arizona (some areas); California (some areas); Hawaii; Illinois; Minnesota; Nevada (most areas); P ennsylvania (some areas); and Washington.Page 28 of 52

constructing or modifying source that emits the req uisite quantity of any "regulated NSR pollutant," 40 CFR 5 2.21(b)(50), which includes any "pollutant subject to regulation ," which, in turn, as discussed earlier in this preamble, will c over GHG emissions on January 2, 2011. All of the other states administer their PSD progra ms through an approved SIP and, as a result, they or t heir local entities are the PSD permitting authority. Of thes e states, most appear to have SIP PSD applicability provision s that parallel EPA's regulatory PSD applicability provisi ons and therefore apply PSD to any stationary source that e mits the requisite amount of any air pollutant "subject to r egulation." As a result, and absent any other provision under s tate law that limits the applicability of these provisions, these PSD SIPs will cover GHG sources, just as the current FIPs do , in these states, on and after January 2, 2011. Therefore, t hese states or local authorities will be able to act as the per mitting authority for GHG sources in their states. As discussed in the PSD GHG SIP Call, it appears, o n the basis of preliminary research and information recei ved that for 13 of the states with approved PSD SIPs, the PSD pr ograms do not apply to GHG-emitting sources. In many of these SI Ps, the PSD applicability provisions do not mirror EPA's regula toryPage 29 of 52

provisions by applying PSD requirements to sources of any air pollutant "subject to regulation." Instead, the ap plicability provisions specifically list the air pollutants to which the PSD program applies and do not include GHGs on that lis t. Although, as discussed in the proposed PSD GHG SIP Call, thes e SIPs may have other provisions that provide the state with g eneral authority to issue permits that meet CAA requiremen ts, until EPA receives more information, we will proceed on the b asis that these SIPs do not apply their PSD programs to GHG s ources. Also as discussed in the proposed SIP Call, the state of Connecticut explicitly excludes GHGs from the state PSD program . In addition, as discussed in the proposed SIP Call, so me states with SIP PSD applicability provisions that do mirro r EPA's regulatory provisions by applying PSD requirements to sources of any air pollutant "subject to regulation" neverthel ess do not appear to apply PSD to GHG-emitting sources because these states have other state law constraints against applying s tate law or SIP requirements without specific state action auth orizing such application of law. In the SIP Call, EPA proposed to find the SIPs for these 13 states to be substantially inadequate, and EPA prop osed a SIP Call under CAA 110(k)(5). EPA stated that it inten ds to finalize the finding of substantial inadequacy and the SIP CallPage 30 of 52

by December 1, 2010. EPA further stated that it wo uld allow states 12 months from the date of signing the findi ng and the SIP Call for states to submit their corrective SIP revisions, but that states could indicate to EPA that they do not object to a shorter deadline, and in that event EPA would imp ose that shorter deadline. In the proposed SIP Call, EPA also solicited commen t on whether the approved SIPs for those other states (l isted in table II-2 of this preamble, for which EPA was not proposing a SIP Call) do or do not apply their PSD programs to GHG-emitting sources. EPA asked the other states to review thei r SIPs and, if their SIPs fail to apply PSD to GHG-emitting sou rces, advise EPA by the end of the comment period of the state's inadequacy and also inform EPA if they do not object to a shor ter deadline for submittal of the required corrective SIP revisi on. In the proposed SIP Call, we stated that the requir ed corrective SIP revision could constitute a simple a ddition of GHGs to the list of pollutants subject to PSD appli cability, with GHGs defined as the aggregate of six pollutant s—CO 2 , CH 4 , N 2 O, HFCs, PFCs, and SF 6 . III. Proposed Federal Implementation Plan In this rulemaking, we propose a FIP, under CAA 110(c)(1)(A), for any state—if ultimately there is any—for whichPage 31 of 52

we issue a finding of failure to submit a SIP submi ssion required under the PSD GHG SIP Call. A. Timing for FIP If any of the states for which we issue the SIP Cal l does not meet its SIP submittal deadline, we will immedi ately issue a finding of failure to submit a required SIP submiss ion, under CAA 110(c)(1)(A), and immediately thereafter promul gate a FIP for the state. This timing for FIP promulgation is authorized under CAA 110(c)(1), which authorizes us to promulg ate a FIP "at any time within 2 years after" finding a failure to submit a required SIP submission. We intend to take these a ctions immediately in order to minimize any period of time during which larger-emitting sources may be under an obligation to obtain PSD permits for their GHGs when they construct or modif y, but no permitting authority is authorized to issue those p ermits. After we have promulgated a FIP, it must remain in place until the state submits a SIP revision and we appro ve that SIP revision. CAA 110(c)(1). Under the present circum stances, we will act on a SIP revision to apply the PSD program to GHG sources as quickly as possible. Upon request of th e state, we will parallel-process the SIP submittal. That is, if the state submits to us the draft SIP submittal for which the state intends to hold a hearing, we will propose the draf t SIPPage 32 of 52

submittal for approval and open a comment period du ring the same time as the state hearing. If the SIP submittal th at the state ultimately submits to us is substantially similar t o the draft SIP submittal, we will proceed to take final action without a further proposal or comment period. If we approve such a SIP revision, we will at the same time rescind the FIP. B. Substance of FIP The proposed FIP constitutes the EPA regulations fo und in 40 CFR 52.21, including the PSD applicability provi sions, with a limitation to assure that, strictly for purposes of this rulemaking, the FIP applies only to GHGs. Under th e PSD applicability provisions in 40 CFR 52.21(b)(50), th e PSD program applies to sources that emit the requisite amounts of any "regulated NSR pollutant[s]," including any air pol lutant "subject to regulation." However, in states for wh ich EPA would promulgate a FIP to apply PSD to GHG-emitting pollu tants, the approved SIP already applies PSD to other air pollu tants. To appropriately limit the scope of the FIP, EPA propo ses in this action to amend 40 CFR 52.21(b)(50) to limit the ap plicability provision to GHGs. We propose this FIP because it would, to the greate st extent possible, mirror EPA regulations (as well as those of most of the states). In addition, this FIP would r eadilyPage 33 of 52

incorporate the phase-in approach for PSD applicabi lity to GHG sources that EPA has developed in the Tailoring Rul e and expects to develop further through additional rulemaking. As explained in the Tailoring Rule, incorporating this phase-in approach— including Steps 1 and 2 of the phase-in as promulga ted in the Tailoring Rule—can be most readily accomplished thr ough interpretation of the terms in the definition "regu lated NSR pollutant," including the term "subject to regulati on." In accordance with the Tailoring Rule, as described earlier in this preamble, the FIP would apply in Step 1 of the phase-in approach only to "anyway sources" (that is, sources undertaking construction or modification projects that are requ ired to apply for PSD permits anyway due to their non-GHG emissio ns and that emit GHGs in the amount of at least 75,000 tpy on a CO 2 e basis) and would apply in Step 2 of the phase-in approach to both "anyway sources" and sources that meet the 100,000/ 75,000-tpy threshold (that is, (i) sources that newly construc t and would not be subject to PSD on account of their non-GHG e missions, but that emit GHGs in the amount of at least 100,000 tp y CO 2 e, and (ii) existing sources that emit GHGs in the amount of at least 100,000 tpy CO 2 e, that undertake modifications that would not trigger PSD on the basis of their non-GHG emissions , but that increase GHGs by at least 75,000 tpy CO 2 e).Page 34 of 52

Under the FIP, with respect to permits for "anyway sources," EPA will be responsible for acting on per mit applications for only the GHG portion of the permit , and the state will retain responsibility for the rest of th e permit. Likewise, with respect to permits for sources that meet the 100,000/75,000-tpy threshold, our preferred approac h—for reasons of consistency—is that EPA will be responsible for acting on permit applications for only the GHG portion of the permit, that the state permitting authorities will be responsibl e for the non-GHG portion of the permit, and EPA will coordin ate with the state permitting authority as needed in order to fu lly cover any non-GHG emissions that, for example, are subject to BACT because they exceed the significance levels. We recognize that questions may arise as to whether the state permitt ing authorities have authority to permit non-GHG emissi ons; as a result, we solicit comment on whether EPA should al so be the permitting authority for the non-GHG portion of the permit for these latter sources. We propose that the FIP consist of the regulatory provisions included in 40 CFR 52.21, except that th e applicability provision would include a limitation so that it applies for purposes of this rulemaking only to GHG s. C. Primacy of the SIP ProcessPage 35 of 52

Today's proposal is secondary to our overarching go al, which is to assure that in every instance, it will be the state that will be that permitting authority. EPA contin ues to recognize that the states are best suited to the ta sk of permitting because they and their sources have expe rience working together in the state PSD program to proces s permit applications. EPA seeks to remain solely in its pr imary role of providing guidance and acting as a resource for the states as they make the various required permitting decisions for GHG emissions. Accordingly, beginning immediately we intend to wor k closely with the states—as we have already begun to do since earlier in the year—to help them promptly develop a nd submit to us their corrective SIP revisions that extend their PSD program to GHG-emitting sources. Moreover, we intend to pr omptly act on their SIP submittals. Again, EPA's goal is to have each and every affected state have in place the necessary pe rmitting authorities by the time businesses seeking construc tion permits need to have their applications processed and the p ermits issued—and to achieve that outcome by means of enga ging with the states directly through a concerted process of cons ultation and support. EPA is taking up the additional task of proposing t his SIPPage 36 of 52

Call and the companion FIP action only because the Agency believes it is compelled to do so by the need to as sure businesses, to the maximum extent possible and as p romptly as possible, that a permitting authority is available to process PSD permit applications for GHG-emitting sources on ce they become subject to PSD requirements on January 2, 20 11. In order to provide that assurance, we are obligate d to recognize, as both states and the regulated communi ty already do, that there may be circumstances in which states are simply unable to develop and submit those SIP revisions by January 2, 2011, or for some period of time beyond that date. As a result, absent further action by EPA, those states' affecte d sources confront the risk that they may have to put on hold their plans to construct or modify, a risk that may have advers e consequences for the economy.. Given these exigent circumstances, EPA proposes thi s plan, within the limits of our power, with the intent to make a backup permitting authority available—and to send a sig nal of assurance expeditiously in order to reduce uncertai nty and thus facilitate businesses' planning. Within the design of the CAA, it is EPA that must fill that role of back-up permi tting authority. This SIP Call action and the companion FIP action fulfill the CAA requirements to establish EPA in th at role.Page 37 of 52

At the same time, we propose these actions with the intent that states retain as much discretion as possible i n the hand of the states. In this rulemaking, EPA proposes state s may choose the deadline they consider reasonable for submissio n of their corrective SIP revision. If, under CAA requirement s, we are compelled to promulgate a FIP, we invite the affect ed state to accept a delegation of authority to implement that FIP, so that it will still be the state that processes the permi t applications, albeit operating under federal law. In addition, if we are compelled to issue a FIP, we intend to co ntinue to work closely with the state to assist it in develop ing and submitting for approval its corrective SIP revision , so as to minimize the amount of time that the FIP must remai n in place. Finally, we can report that in informal conversatio ns, officials of various states have acknowledged the n eed for our SIP call and FIP actions. That is, they have ackno wledged that a short-term FIP may be necessary in their states t o establish permitting authority to construct and modify in acc ordance with environmental safeguards for these sources. In add ition, some states have indicated that they will closely consid er their opportunities to accept delegation of the permittin g responsibilities.Page 38 of 52

Today's proposal is secondar y to our overarching goal, which is to assure that in every instance, it will be the state that will be that permitting authority. EPA contin ues to recognize that the states are best suited to the ta sk of permitting because they and their sources have exp erience working together in the state PSD program to proces s permit applications. EPA seeks to remain solely in its pr imary role of providing guidance and acting as a resource for the states as they make the various required permitting decisions for GHG

e missions. Accordingly, beginning immediately we intend to wor k closely with the states

— as we have already begun to do since earlier in the year

— to help them promptly develop and submit to us their corrective SIP revisions that extend their PSD program
to G HG

- emitting sources. Moreover, we intend to promptly act on their SIP submittals. Again, EPA's goal is to have each and every affected state have in place the necessary pe rmitting authorities by the time businesses seeking construc tion permits need to ha ve their applications processed and the permits issued

— and to achieve that outcome by means of engaging wi th the states directly through a concerted process of cons ultation and support. EPA is taking up the additional task of proposing t his FIPPage 39 of 52

and the com panion SIP Call action only because the Agency is compelled to do so by the need to assure businesses , to the maximum extent possible and as promptly as possible , that a permitting authority is available to process PSD pe rmit applications for GHG

- emitting sources once they become subject to PSD requirements on January 2, 2011. Again, wit hout a permitting authority, those sources will be unable to construct or modify. In order to provide that assurance, we are obligate d to recognize, as both states and the regulated community already do, that there may be circumstances in which states are simply unable to develop and submit those SIP revisions by January 2, 2011, or for some period of time beyond that date. As a result, absent further action by EPA, those s tates' affected sources confront the risk that they will have to put on hol d their plans to construct or modify, a risk that may have advers e consequences for the economy

— and a risk that can be minimized only by EPA's taking the specific step of issuing t h is proposal. To be sure, these circumstances are exigent. They demand that we develop a plan to assure, within the limits of our power, that a back

- up permitting authority is available

— and to send that signal of assurance expeditiously in orde r to elimina te uncertainty and thus facilitate businesses' plan ning.Page 40 of 52

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

- up permitting authority. This FIP and the companion SIP Call action fulfill the CAA requirements to establish EP A in that ro le. At the same time, we have designed these actions to retain as much discretion as possible in the hand of the s tates. The states may choose the deadline they consider reason able for submission of their corrective SIP revision. If we are compelled to p romulgate a FIP, we invite the affected state to accept a delegation of authority to implement that FIP, so that it will still be the state that processes the permi t applications, albeit operating under federal law. In addition, if we are compelled to iss ue a FIP, we intend to continue to work closely with the state to assist it in develop ing and submitting for approval its corrective SIP revision , so as to minimize the amount of time that the FIP must remai n in place. Finally, we can report that in inform al conversations, officials of various states have acknowledged the n eed for our SIP call and FIP actions. That is, they have ackno wledged that a short

- term FIP may be necessary in their states to protec t their sources' abilities to construct and modify i n accordance with environmental safeguards. In addition, some h ave indicated that they will closely consider their opportunities to acceptPage 41 of 52

delegation of the permitting responsibilities. IV. Statutory and Executive Order Reviews A. Executive Order 12866 - Regulatory Planning and Review Under Executive Order (EO) 12866 (58 FR 51735, Octo ber 4, 1993), this action is a "significant regulatory act ion" because it raises novel legal or policy issues. Accordingl y, EPA submitted this action to the Office of Management a nd Budget (OMB) for review under EO 12866 and any changes mad e in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act This action does not impose s any new information collection burden. The action is based on information concern ing whether the states have authority to regulate GHGs under th eir SIP PSD provisions, which information is already requested of the states in the Tailoring Rule. The OMB has previously appr oved the information collection requirements contained in th e existing regulations for PSD (see, e.g. , 40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) under the provisions of the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . and has assigned OMB control number 2060-0003 and OMB control number 206 0-0336 respectively. The OMB control numbers for EPA's re gulations in 40 CFR are listed in 40 CFR part 9.Page 42 of 52

The tailoring rule does not establish any new requi rements (either control or reporting) for any sources. It merely establishes the thresholds that trigger NSR and tit le V for GHG sources. The trigger for GHG and title V is not du e to the tailoring rule, it is the result of the endangermen t finding and the LDVR and how the Act works as explained in mult iple rulemakings by now. We agree that the NSR and Titl e V ICRs will need to be modified to include the new sources that will be triggering because of GHG requirements (which won't be until July 2011) and will do so during the next ICR renew als, which I think are coming up in the next year or so. Again, the ICR renewals is the correct place to account for the ne wly subject sources that will be coming into the programs becau se of the requirements of the Act, not because of the tailori ng rule. Without the tailoring rule we would still be needin g to revise our ICRs but the numbers would be much higher (say 6 million sources!). So we should be doing the ICR revisions at renewal and independent of the tailoring rule. C. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) generally requ ires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requiremen ts under the Administrative Procedure Act or any other statute u nless the Formatted: Font: (Default) Courier New, 12 ptPage 43 of 52

agency certifies that the rule will not have a sign ificant economic impact on a substantial number of small en tities. Small entities include small businesses, small orga nizations, and small governmental jurisdictions. For purposes of assessing the impacts of this notic e on small entities, small entity is defined as: (1) a s mall business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards (see 13 CFR 121.201); (2) a small governmental jurisdiction tha t is a government of a city, county, town, school district , or special district with a population of less than 50,000; or (3) a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominan t in its field. After considering the economic impacts of this prop osed rule on small entities, I certify that this action will not have a significant economic impact on a substantial numb er of small entities. Although this rule would lead to federal permitting requirements for certain sources, those sources are large emitters of GHGs and tend to be large sources. We continue to be interested in the potential impacts of the propo sed rule on small entities and welcome comments on issues relat ed to such impacts.Page 44 of 52

D. Unfunded Mandates Reform Act This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Ref orm Act of 1995 (UMRA, 2 U.S.C. 1531-1538) for state, local or tribal governments or the private section. The action imp oses no enforceable duty on any state, local or tribal gove rnments or the private sector. This action merely prescribes EPA's action for states that do not meet their existing obligati on for PSD SIP submittal. Thus, this proposed rule is not sub ject to the requirements of sections 202 or 205 of UMRA. This action is also not subject to the requirements of section 203 of UMRA because it contains no regulato ry requirements that might significantly or uniquely a ffect small governments. This action merely prescribes EPA's a ction for states that do not meet their existing obligation f or PSD SIP submittal. E. Executive Order 13132 - Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and th e states, or on the distribution of power and responsibilities a mong the various levels of government, as specified in Execu tive Order 13132

. This action merely prescribes EPA's action for stat esPage 45 of 52

that do not meet their existing obligation for PSD SIP submittal. In the spirit of Executive Order 13132, and consist ent with EPA policy to promote communications between EPA an d state and local governments, EPA specifically solicits commen t on this proposed rule from state and local officials. F. Executive Order 13175 - Consultation and Coordin ation with Indian Tribal Governments This action does not have tribal implications, as s pecified in Executive Order 13175 (65 FR 67249, November 9, 2000)

. This action does not impose a FIP in any tribal area. T hus, Executive Order 13175 does not apply to this action

. Although Executive Order 13175 does not apply to th is proposed rule, EPA specifically solicits additional comment on this proposed action from tribal officials. G. Executive Order 13045 - Protection of Children f rom Environmental Health Risks and Safety Risks EPA interprets EO 13045 (62 FR 19885, April 23, 19 97) as applying only to those regulatory actions that conc ern health or safety risks, such that the analysis required under section 5- 501 of the EO has the potential to influence the re gulation. This action is not subject to EO 13045 because it merely prescribes EPA's action for states that do not meet theirPage 46 of 52

existing obligation for PSD SIP submittal. H. Executive Order 13211 - Actions Concerning Regul ations That Significantly Affect Energy Supply, Distribution, o r Use This action is not a "significant energy action" a s defined in Executive Order 13211 (66 FR 28355(May 22, 2001) ), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This actio n merely prescribes EPA's action for states that do not meet their existing obligation for PSD SIP submittal. I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer a nd Advancement Act of 1995 ("NTTAA"), Public Law No. 1 04-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary c onsensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impra ctical. Voluntary consensus standards are technical standar ds (e.g. , materials specifications, test methods, sampling pr ocedures, and business practices) that are developed or adopted b y voluntary consensus standards bodies. NTTAA directs EPA to p rovide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the u se of anyPage 47 of 52

voluntary consensus standards. J. Executive Order 12898 - Federal Actions to Addre ss Environmental Justice in Minority Populations and L ow-Income Populations Executive Order 12898 (59 FR 7629, February 16, 199 4) establishes federal executive policy on environment al justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make en vironmental justice part of their mission by identifying and ad dressing, as appropriate, disproportionately high and adverse hu man health or environmental effects of their programs, policies, and activities on minority populations and low-income p opulations in the U.S. EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income pop ulations because it does not affect the level of protection provided to human health or the environment. This proposed rul e merely prescribes EPA's action for states that do not meet their existing obligation for PSD SIP submittal. K. Determination under Section 307(d) Pursuant to sections 307(d)(1)(B) of the CAA, this action is subject to the provisions of section 307(d). Se ctionPage 48 of 52

307(d)(1)(B) provides that the provisions of sectio n 307(d) apply to "the promulgation or revision of an implem entation plan by the Administrator under section 110(c) of this A ct." V. Statutory Authority The statutory authority for this action is provided by sections 307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42 U.S.C. 7401, 7411, 7414, 7416, and 7601 ). This action is also subject to section 307(d) of the CAA (42 U.S.C. 7407(d)).Page 49 of 52 – Action to Ensure Authority to Issue Perm its under

the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Federal Implementatio n Plan

Page 49 of 52 List of Subjects in 40 CFR Part 52 Air pollution control, Carbon dioxide, Carbon dioxi de equivalents, Carbon monoxide, Environmental protect ion, Greenhouse gases, Hydrofluorocarbons, Intergovernme ntal relations, Lead, Methane, Nitrogen dioxide, Nitrous oxide, Ozone, Particulate matter, Perfluorocarbons, Report ing and recordkeeping requirements, Sulfur hexafluoride, Su lfur oxides, Volatile organic compounds.

________________________ Dated:

_________________________ Lisa P. Jackson, Administrator.Page 50 of 52

For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is proposed to be a mended as follows: PART 52 - [Amended] §52.37. What are the requirements of the Federal Implementation Plans (FIPs) to issue permits under the Prevention of Significant Deterioration requirement s to sources that emit greenhouse gases? (a) The requirements of sections 160 through 165 of the Clean Air Act are not met to the extent the plans, as app roved, of the states listed in subsection (b) does not apply with respect to GHG emissions from certain stationary sources. The refore, the provisions of §52.21 except paragraph (a)(1) are he reby incorporated by reference and made a part of the [n ame of state] plan for: (1) beginning January 2, 2011, the pollutant GHGs f rom stationary sources described in §52.21(b)(49)(iv), and (2) beginning July 1, 2011, in addition to the poll utant described under subsection (a), [Alternative 1] the pollutant GHGs from stationary sources described in §52.21(b)(49)(v) [Alternative 2] beginning July 1, 2011, stationary sources described in §52.21(b)(49)(iv). Field Code ChangedPage 51 of 52

(b) Subsection (a) applies to – (1) Alaska, (2) Arizona, Pinal County; Rest of State (Excludes Maricopa County, Pima County, and Indian Country) (3) Arkansas (4) California, Sacramento Metroplitan AQMD (5) Connecticut (6) Florida (7) Isaho (8) Kansas (9) Kentucky, Jefferson County and Rest of State (10) Nebraska, Lincoln Lancaster; Omaha; and Rest o f State (11) Nevada, Clark County (12) Oregon (13) TexasPART 52

- [Amended] Each of the appropriate s ubparts of p art 52, which are the

s ubparts for the states for which EPA proposes the FIP, will include the following provision in the appropriate place among the subpart’s PSD requirements : §52. [ XXX ] The requirements of sections 160 through 165 of the Clean Air Act are not met to the extent the [na me of state] plan, as approved, doe s not apply with respect to GHG emissions from certain stationary sources. Therefore, the pr ovisions ofPage 52 of 52

§52.21 except paragraph (a)(1) are hereby incorpora ted by reference and made a part of the [name of state] plan for: (a ) beginning January 2, 2011, the pollutant GHG s from stationary sources described in §52.21(b)(49)(iv), and (b ) beginning July 1, 2011, in addition to the pollutan t described under subsection (a), [Alternative 1] the pollutant GHG s from stationary sources described in §52.21(b)(49)(v) [Alternative 2] beginning July 1, 2011, stationary sources described in §52.21(b)(49)(iv).