October 23, 2015 Shaun McGrath Regional Administrator U.S. Environmental Protection Agency, Region VIII 1595 Wynkoop Street Denver, CO 80202-1129 Dear Mr. McGrath: 

### DEPARTMENT of ENVIRONMENT and NATURAL RESOURCES JOE FOSS BUILDING 523 EAST CAPITOL PIERRE, SOUTH DAKOTA 57501-3182 denr.sd.gov

The Secretary ofthe Department ofEnvironment and Natural Resources (DENR) has been delegated by the Governor ofSouth Dakota as his designee for the Air Quality Program in South Dakota. In that capacity, I am amending South Dakota's Air Quality Program. The Board ofMinerals and Environment approved changes to South Dakota's Air Quality Program during a public hearing onAugust 20, 2015. The changes were approved bythe Interim Rules Committee on September 21, 2015, and became effective on October 13, 2015. Ihave enclosed a copy ofthe changes which you should attach to EPA's current version ofthe Administrative Rules ofSouth Dakota (ARSD) 74:36 and supporting documentation to demonstrate the rules were revised in accordance with SouthDakota'sprocedures for adopting rules. A copy ofthese finalized rules will be readily available on South Dakota's webpage at: http://legis.sd.gov/Rules/RulesList.aspx. DENRhas and will continue to have adequate resources to implement and enforce South Dakota's Air Quality Program. I want to thank you in advance for your favorable consideration ofthese requests. Please contact Kyrik Rombough at (605) 773-3151, ifyou have any questions. Sincerely,

# ~-· Steven M. Pirner Secretary Enclosures

# DESCRIPTION OFAPPROVED RULE CHANGES Chapter74:36:01 - Definitions Chapter 74:36:01 defines the terms used throughout Article 74:36 -AirPollution Control Program. EPA approved sections 74:36:01 :01 through 74:36:01 :21 ofthis chapterinto South Dakota's State Implementation Plan (SIP). The definitions in Chapter 74:36:01 are reviewed periodicallyto ensure they are up-to-date and consistent withthe other Air Quality Program chapters. There are six definitions in Chapter 74:36:01 thatreference federal regulations. The federal regulations are periodicallyupdated to ensure these definitions are consistent with the federal regulations. For example, the definition ofa volatile organic compound is revised periodically by EPA by adding compounds to the list oforganic compounds that have negligible photochemical reactivity, and therefore, are not considered a volatile organic compound. The sections in Chapter 74:36:01 that require updating the reference date to the most current version ofthe federal reference as ofJuly 1, 2014, involve the following: 1. 74:36:01:01(8); 2. 74:36:01 :01(29); 3

.. 74:36:01 :01(67); 4. 74:36:01 :01(73); 5. 74:36:01 :05; and 6. 74:36:01 :20. Based on DENR's experience, certain modifications to existing operations atpermitted facilities result in an insignificant increase in air pollution. As such, South Dakotaregulations identified these sources as insignificant activities. Insignificant activities were not required to be included in an operating or constructionpermit. However, South Dakota's regulations contained a "catch all" clause that stated an emission unit that was applicable to a federal or state standard could not be considered insignificant regardless ofits insignificant increase in airpollution. In the past few years, EPA has promulgated several federal regulations covering these small sources ofair pollution (e.g. generators, boilers, gas dispensing facilities, etc.). As such, SouthDakota's "catch all" clause is requiring these small sources ofairpollutants to nowbe included inthe air quality permits and to undergo the same permittingprocess as projects with significant increases in emissions ofair pollutants. SouthDakota's regulations as initial written were not intended to require these small sources to have to go through the same permittingprocess as projects with significant increases ofair pollutants. In July 2011, EPApromulgated a federal minor source reviewprogram in Indian country, which does not require a constructionpermit for new sources or modifications to existing sources if emissions are belowthe minorNew Source Reviewthreshold in Table 1 of40 CFR §49.153. The federal program allows existing sources with permits to administratively amend its existing permitto include these small sources ofair pollutants. 1To be consistent with EPA and to streamline the process for insignificant increases in air pollution, the approved rules added "insignificant increase in allowable emissions" to the definition of"permitrevision" in section 74:36:01(50) and an exception to the definition of "modification" in section 74:36:01: 10, which will allow construction projects to move forward if the airpollution increase meets the definition ofan "insignificant increase in allowable emissions." DENRis proposingto add a definition for, "insignificant increase in allowable emissions," derived from Table 1in 40 CPR§ 49.153. This process would still require a small source ofairpollution to be covered by an air qualitypermit but would use a process similar to EPA's administrative amendment process. These sources have been and are expected to continue to be inconsequential to attainment or maintenance ofthe National Ambient Air Quality Standards. 

### Chapter 74:36:02-AmbientAir Quality Chapter 74:36:02 establishes the air quality goals and ambient air quality standards for South Dakota. EPA approved sections 74:36:02:01 through 74:36:02:05 ofthis chapter into South Dakota's SIP: The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. The following sections in Chapter 74:36:02 involve this type ofchange: 1. 74:36:02:02; 2. 74:36:02:03; 3. 74:36:02:04; and 4. 74:36:02:05. 

### Chapter74:36:03 -Air Quality Episodes Chapter 74:36:03 identifies the contingency plan DENRwill follow during an airpollution emergency episode. EPA approved sections 74:36:03:01 and 74:36:03:02 ofthis chapter into South Dakota's SIP. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve 74:36:03:01 and 74:36:03:02. 

### Chapter74:36:04 - Operating Permits for Minor Sources Chapter 74:36:04 is South Dakota's minor air quality operating permitprogram. EPA approved sections 74:36:04:01 through 74:36:04:33 ofthis chapter into South Dakota's SIP. 2The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. This type ofchange involves section 74:36:04:04. Section 74:36:04:03 lists emission units that are exempt from inclusion in a minor air quality operatingpermit. Emissionunits maynot be exempted iffederally enforceable limits have been included in the permitto avoid otherpermits. The approved revisions clarify that any unit that is applicable to a federal rule in Chapter 74:36:07

- New Source Performance Standards and Chapter 74:36:08

- National Emission Standards for Hazardous AirPollutants maynotbe exempted from inclusion in the minor air quality operatingpermit. This will ensure that the business understands and complies with all ofthe federal requirements. A definition for "insignificant increase in allowable emissions" was included to account for all of the newfederal standards covering small sources ofair pollutants, to stream line the permitting actions for these small sources, and to be consistent with the federal permittingrequirements. As such, the revisions add section 74:36:04:21.01 which will identify procedures for processing an application for activities that are considered an "insignificant increase in allowable emissions." This process will allow constructionprojects to move forward ifthe air pollution increase meets the definition ofan "insignificant increase in allowable emissions." 

### Chapter74:36:05 - Operating Permits for Part 70 Sources Chapter 74:36:05 is South Dakota's Title Vair quality operatingpermitprogram, which is also referred to as an Operating Permit for Part 70 Sources program. Title V air quality operating permitprograms are not part ofSouth Dakota's SIP; however, EPAhas approved South Dakota'spermitprogram. This program is located in section 74:35:05:01 through 74:35:05:52. The reference date for the federal regulation was updated to the most current version ofthe, federal reference ofJuly 1, 2014. This revision updates any minorinconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. Thesetypes ofchanges are in the following sections: I. 74:36:05:04; 2. 74:36:05:06; and 3. 74:36:05:16.01. Section 74:36:05:04.01 lists insignificant activities that are exempt from inclusion in a Title Vair quality operatingpermit. Emission units maynot be exempted iffederally enforceable limits have been included in the permitto avoid otherpermits. The approved rules clarify that any insignificant activity that is applicable to a federal rule in Chapter 74:36:07

- New Source Performance Standards and Chapter 74:36:08 -National Emission Standards for Hazardous Air Pollutants, be included in the Title V air quality operatingpermit. The approved rules ensure that businesses understand and comply with all ofthe federal requirements.

3A definition for "insignificant increase in allowable emissions" was included to account for all of the new federal standards covering small sources ofairpollutants, to stream line the permitting actions for these small sources, and to be consistent with the federal permitting requirements. As such, the approved rules add section 74:36:05:39.01 which will identify procedures for processing an application for activities that are considered an "insignificant increase in allowable emissions." This process will allow constructionprojects to move forward ifthe airpollution increase meets the definition ofan "insignificant increase in allowable emissions." 

### Chapter74:36:07 - New Source Performance Standards Chapter 74:36:07 includes all ofthe federal new source performance standards DENRhas adopted byreference to maintain delegation ofthis program However, the following three sections are not delegated but are included in South Dakota's SIP: 

### I. 74:36:07:08 -Ashdisposal requirements; 2. 74:36:07:29- Operating requirements for wire reclamation furnaces; and 3. 74:36:07:30

- Monitoring requirements for wire reclamation furnaces. The ash disposal requirements are for municipal waste combustors and reference Article 74:27, which are DENR's solid waste requirements. The sections onwire reclamation furnaces were developed to ensure existing wire reclamation furnaces were minimizing air emissions and conducting monitoring to ensure compliance. None ofthese sections are beingrevised at this time. This chapter was last updated in June 2013, when the federal regulations promulgated as ofJuly 1, 2012, were adopted by reference. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota'srules and EPA's federal regulations as ofJuly 1, 2014. There are 98 sections in this chapter. All but five are impacted bythis revision. EPAhas promulgated new standards since the last update to this chapter. The following section was included in Chapter 74:36:07: · 1. 74:36:07:94 - Standards ofperformance for crude oil and natural gas production, transmission and distribution This federal regulation establishes standards ofperformance for crude oil and natural gas production, transmission and distribution that commence construction, modification, or reconstruction after August 23, 2011. This standard is located in 40 CFRPart 60, subpart 

### 0000 (July 1, 2014). The approved rules adopt this standardby reference to ensure DENRhas the properregulations inplace in case these federal rules are applicable inthe future to the oil and natural gas industry in South Dakota.

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### Chapter 74:36:08 - National Emission Standards for Hazardous Air Pollutants Chapter 74:36:08 includes all ofthe federal regulations DENRhas adopted by reference to maintain delegation offederal standards applicable to hazardous airpollutants. The revision process for chapter 74:36:08 is similar to the revisionprocess for chapter 74:36:07. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's rules and EPA's federal regulations as ofJuly 1, 2014. There are 138 sections in this chapter. All but the first section is being revised. 

### Chapter74:36:09 - Prevention ofSignificant Deterioration Chapter 74:36:09 is DENR's Prevention ofSignificant Deteriorationpreconstructionpermit program for large sources in areas ofthe state that attain the federal National Ambient Air Quality Standards identified in Chapter 74:36:02. EPA approved the Prevention ofSignificant Deteriorationpreconstructionpermitprogram in South Dakota's SIP. The Prevention of Significant Deteriorationpreconstructionpermitprogram consists ofsections 74:36:09:01 through 74:36:09:03 ofthis chapter. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve sections 74:36:09:02 and 74:36:09:03. According to the Clean AirAct, once a pollutant is regulated under any part ofthe Act, (as was the case with greenhouse gas emissions afterthe motor vehicle regulations were finalized in March 2010) major new sources or major modifications are subject to the PSD program and Title V air quality operating permitprogram. Under the Clean Air Act, PSD and Title V air quality operating permits are required for all sources that emit a regulated airpollutant above 100 or 250 tons per year, depending on the source. This threshold, ifapplied to greenhouse gases, would greatly increase the number offacilities requiring a PSD review or Title V air quality operating permit. Based on administrative necessity, EPA increased these thresholds through the "Tailoring Rule." On May 13, 2010, EPA issued the final version ofthe "Tailoring Rule" for greenhouse gas emissions. The major source thresholds for greenhouse gases are listed below: 1. NewPSD source because ofa criteria air pollutant, the major source threshold for greenhouse gases is 75,000 tons per year ofcarbon dioxide equivalent or more; 2. NewPSD source ifgreenhouse gas emissions are 100,000 tons peryear ofcarbon dioxide equivalent or more; 53. For an existing PSD source because ofa criteria airpollutant, a major modification for greenhouse gases is an increase of75,000 tons peryear ofcarbon dioxide equivalent or more; 4. For an existing non-PSD source that has the potential to emit 100,000 tons peryear of carbon dioxide equivalent emissions or more, a majormodification for greenhouse gases is an increase of75,000 tons peryear ofcarbon dioxide equivalent ormore; and 5. In addition to subsection (2) and (4), a specific greenhouse gas, without calculating the carbon dioxide equivalent, also needs to emit greater than 100 or 250 tons peryear, whichever is applicable, to be regulated. OnJune 24, 2014, the Supreme Court ofthe United States ruled that greenhouse gases maynot be regulated under the PSD program unless the facility requires a PSD permit for the other regulated air pollutants. The Supreme Court ruling also changed the permitting requirements for greenhouse gases in Chapter 74:36:05. Therefore, the approved rules revised the greenhouse gas requirements for Chapter 74:36:05 and 74:36:09. 

### Chapter74:36:10 - New Source Review Chapter 74:36: 10 is DENR'sNew Source Reviewpreconstructionpermitprogram for large sources in areas ofthe state that are not attaining the federal National Ambient Air Quality Standards identified in Chapter 74:36:02. All ofSouthDakotais in attainment withthe federal standards; therefore, there are no facilities that require a preconstructionpermit underthis program. EPA approved sections 74:36:10:01 through 74:36:10:08 ofthis chapter into South Dakota's SIP. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve the following sections: I. 74:36: 10:02; 2. 74:36:10:03.01; 3. 74:36:10:05; 4. 74:36: 10:07; and 5. 74:36: 10:08. On December 24, 2003, several definitions for new source review were stayed indefinitely by a court order. On March 30, 2011, EPA extended the stay ofthe "Fugitive Emissions Rule" under the new source review program. The extension clarified the stay and revisions ofspecific paragraphs in the new source reviewprogram affected by the Fugitive Emissions Rule. The approved rules revised South Dakota's SIP to remove these references. These changes involve section 74:36: 10:02. OnJanuary 22, 2013, the United States Court ofAppeals for the District ofColumbia Circuit vacated the significant impact levels for particulate matter less than 2.5 microns (PM2.5) in the 6new source reviewprogram. The approved rules removed the significant impact levels for PM2.5 from South Dakota's SIP. These changes involve section 74:36:10:06. 

### Chapter 74:36:11- Performance Testing Chapter 74:36: 11 identifies the performance testing requirements used bypermitted facilities to demonstrate compliance withpermit limits. EPA approved sections 74:36: 11 :01 through 74:36: 11 :04 ofthis chapter into South Dakota's SIP. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve section 74:36:11:01. 

### Chapter74:36:12 - Control ofVisible Emissions Chapter 74:36:12 identifies visible emission limits for units that emit airpollution. Italso identifies exceptions to the limits for certain instances such as briefperiods during sootblowing, startup, shutdown, and malfunctions. EPA approved sections 74:36:12:01 through 74:36:12:03 of this chapter into SouthDakota's SIP. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve sections 74:36:12:01 and 74:36:12:03. 

### Chapter74:36:13 - Continuous Emission Monitoring Systems Chapter 74:36: 13 identifies the continuous emission monitoring requirements for sources required to install continuous monitoring equipmentbythe Secretary. EPA approved sections 74:36:13:01 through 74:36:13:07 ofthis chapter into SouthDakota's SIP. Section 74:36:13:08 is not part ofSouth Dakota's SIP butwas approved byEPA as part ofSouth Dakota's Title V air quality operating permitting programnoted in Chapter 74:36:05. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistencybetween South Dakota's SIP, approved Title V permitting Program and EPA's federal regulations as ofJuly 1, 2014. These changes involve the following sections: 1. 74:36:13:02; 2. 74:36:13:03; 3. 74:36: 13:04; 4. 74:36:13:06; 5. 74:36:13:07; and 76. 74:36:13:08. 

### Chapter74:36:16-Acid Rain Program South Dakota's Acid Rain Program is similar to Chapter 74:36:07

- New source performance standards and Chapter 74:36:08

- National emission standards for hazardous airpollutants. This chapter is delegated to South Dakotaby EPA. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve the following sections: 1. 74:36:16:01; 2. 74:36:16:02; 3. 74:36:16:04; and 4. 74:36: 16:05. 

### Chapter74:36:18 - Regulations for State Facilities in the Rapid CityArea Chapter 74:36:18 is part ofSouth Dakota's SIP and EPA approved sections 74:36:18:01 through 74:36:18:12 ofthis chapter into South Dakota's SIP. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistencybetween South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve section 74:36:18:10. 

### Chapter74:36:20 - Construction Permits for New Sources or Modifications Chapter 74:36:20 requires an air quality constructionpermit for newbusinesses/facilities and existing businesses/facilities that modify their operations that do not meet the requirements for obtaining apreconstructionpermit in Chapters 74:36:09 and 74:36: 10. DENR submitted Chapter 74:36:20 to EPA for inclusion in South Dakota's SIP. EPA approved Chapter 74:36:20 in South Dakota's SIP on June 27, 2014, except for the phrase, "unless it meets the requirements in section 74:36:20:02.01,"and all ofsection 74:36:20:02.01. Section 74:36:20:02.01 allows small projects to start constructionprior to receiving a constructionpermitbutdoes not allowthem to start operation until the constructionpermithas been issued. The intention ofthe language was to allow construction ofsmall sources thatwould notimpact South Dakota's ability to achieve and/or maintain the National Ambient Air Quality Standards because ofSouthDakota'srelative short construction season due to ground freezing during our winter season or other inclement weather that could potentially and unnecessarily delay the constructionproject. The approved rules try to resolve the issue with EPA's disapproval ofsection 74:36:20:02.01 in South Dakota's SIP. Currently, EPA allows the construction ofconcrete foundations, below8ground plumbing, ductwork, or otherinfrastructure and/or excavation work priorto the issuance ofthe constructionpermit. The approved rules limit what canbe constructedpriorto the issuance ofthe constructionpermitto what EPA has allowed. After completion ofthese pre-permit activities there should be no anticipated increases in emissions ofregulated airpollutants associated withthem. The changes would also minimize potential delays inthe construction of an entire project due to South Dakota's limited construction season. These changes involve sections 74:36:20:02 and 74:36:20:02.01. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistencybetween South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve section 74:36:20:05. A definition for "insignificant increase in allowable emissions" was included to account for all of the new federal standards covering small sources ofairpollutants, to stream line the permitting actions for these small sources, and to be consistent with the federal permitting requirements. As such, the approved rules add section 74:36:20:05.01 which will identify procedures for processing an application for activities that are considered an "insignificant increase in allowable emissions". This process will allow constructionprojects to move forward ifthe airpollution increase meets the definition ofan "insignificant increase in allowable emissions". 

### Chapter74:36:21 - Regional Haze Program Chapter 74:36:21 contains the requirements DENRagreed to as part ofSouth Dakota's Regional Haze Program. EPA approved sections 74:36:21:01 through 74:36:21:12 ofthis chapter into South Dakota's SIP. The reference date for the federal regulation was updated to the most current version ofthe federal reference ofJuly 1, 2014. This revision updates any minor inconsistency between South Dakota's SIP and EPA's federal regulations as ofJuly 1, 2014. These changes involve sections 74:36:21 :02; 74:36:21 :04; 74:36:21 :05; and 74:36:21 :09.

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# SupportingDocumentation

The enclosed CD contains the supporting documentation, which demonstrates the rules were revised in accordance with South Dakota's procedures for adopting rules, contains a copy ofthe following documents. The page numbernotes the page ofthe document file and not the page number listed at the bottom ofthe page.

• Effective Rules as ofOctober 13, 2015 (pages 1to129); • South Dakota's Procedure for adopting rules (pages 130 to 132); • Final Check List (page 133) • Admission ofService (page 134); • Authorization to Proceed (page 135); • Small business impact (pages 139 to 142); • Fiscal note (page 138); • Admission ofService signed by the Legislative Research Council (page 136); • Admission ofServiced signed by the Bureau ofFinance and Management (page 137); • Draft Rules (pages 143 to 365) • Public notice (pages 366 to 367); • Affidavit ofPublication (pages 368 to 382); • Interested Parties Affidavit (page 383); • List ofinterested parties (pages 384 to 393) • Comments (pages 394 to 398) • Minutes ofthe Board ofMinerals and Environment's public hearing (pages 399 to 402); • Approval ofRules (pages 403 to 404); • Board ofMinerals and Environment Approved Rules (pages 405 to 628); and • Interim Rules Admission ofService Affidavit (pages 629 to 630); • Interim Rules Committee Minutes (pages 631 to 634) • Chairman ofBoard ofMinerals and Environment Certificate (page 635).

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