1



## States Moving Full Speed Ahead on Greenhouse Gas Pe **rmitting**

National Association of Clean Air Agencies

September 15, 2010

The vast majority of states are moving full speed ahead to begin permitting emissions of greenhouse gases (GHGs) under the Clean Air Act, an d expect to complete revisions of state and/or loca l rules by, or within a few months after, January 2, 2011 – the date that GHG permitting under the Act’s Prevention of Significant Deterioration (PSD) and T itle V programs begins. Nearly 80% of states have indicated that they will be ready to permit the lar gest sources of GHGs by the time permitting requirements take effect. The U.S. Environmental P rotection Agency (EPA) issued rules earlier this ye ar regulating GHGs under the Clean Air Act, including rules that exempt smaller sources and subject only the largest GHG emitters to permit requirements. I n response to calls from the states for more time t o revise state and local regulations to exempt smalle r sources, the agency also delayed the commencement of GHG permitting until January 2, 201 1.

In December 2009, pursuant to the Supreme Court’s 2007 decision in Massachusetts v. EPA that GHGs are an air pollutant under the Clean Air Act, EPA determined that GHGs do indeed contribute to air pollution that endangers public health and welf are. 1 Following on that finding, EPA and the U.S. Department of Transportation issued a final rule co ntrolling GHGs from new motor vehicles and engines on April 1, 2010. 2 Once GHGs become subject to regulation under the Clean Air Act, permitting provisions under PSD and Title V are triggered, req uiring the implementation of control technologies t o abate emissions of GHGs. In anticipation of this, EPA promulgated the final Johnson Memo
Reconsideration 3 in March 2010, which interpreted the phrase “subje ct to regulation” as occurring when an actual control requirement contained within a na tionwide rule takes effect. Therefore, under the agency’s interpretation, once GHGs became subject t o regulation with promulgation of the final lightduty vehicle rule, PSD and Title V permit requireme nts apply to GHGs as of January 2, 2011.

The PSD and Title V Greenhouse Gas Tailoring Rule 4 (Tailoring Rule) was promulgated in June 2010 to address concerns regarding the crippling ad ministrative burden that would result from issuing millions of permits to sources emitting only very s mall amounts of GHGs. The Tailoring Rule raised th e thresholds for GHG permitting to include only the l argest sources and extended the onset of GHG permitting in order to give states time to revise t heir own rules to include the Tailoring Rule requirements and exempt smaller sources. Most stat es are moving forward with legislative and/or regulatory processes to incorporate the Tailoring R ule provisions.

1 Endangerment and Cause or Contribution Findings fo r Greenhouse Gases under Section 202(a) of the Clea n Air Act, 74 Federal Register

66496 (December 15, 2009).

2 Light-Duty Vehicle Greenhouse Gas Emission Standard s and Corporate Average Fuel Economy Standards; Fin al Rule, 75 Federal Register 25324 (May 7, 2010).

3 Reconsideration of Interpretation of Regulations t hat Determine Pollutants Covered by Clean Air Act P ermitting Programs; Final Action on Reconsideration of Interp retation, 75 Federal Register 17004 (April 2, 2010).

4 75 Federal Register

31514 (June 3, 2010).2

In the final Tailoring Rule, EPA asked states to s end letters to the agency by August 2, 2010 with information regarding how the state intends to impl ement the Tailoring Rule. EPA asked each state to respond by indicating whether or not the state need s to undertake a regulatory or legislative process in order to incorporate the provisions of the Tailorin g Rule, as well as the timeline for completing any such process. States were also asked to notify EPA if t hey do not have any authority to permit GHGs and, i f not, to indicate whether or not they intend to revi se their rules to include GHGs.

The National Association of Clean Air Agencies (NA CAA), the association of air pollution control agencies in 52 states and territories and over 165 metropolitan areas across the country, has reviewed and briefly summarized letters from all applicable states, as well as those from a number of local and territorial air pollution control agencies. NACAA’ s analysis shows that the vast majority of states a re working quickly to prepare for GHG permitting and i ncorporate the provisions of the Tailoring Rule int o applicable state and local rules and State Implemen tation Plans (SIPs) as soon as possible. Nearly 80 % of states expect to have rules in place by January 2, 2011 or shortly thereafter. Of the minority of sta tes that will not yet have rules in place by January 2, 2011 or shortly thereafter, most are working to incorporate the provisions of the Tailoring Rule, b ut will be delayed due to state legislative and/or regulatory requirements.

Below, NACAA provides a brief summary of each stat e’s response to the questions posed by EPA, and includes all letters submitted to EPA by s tates pursuant to the agency’s request in the final Tailoring Rule. The 57 letters summarized below, f rom 48 states and territories and 9 local air pollu tion control agencies, provide a snapshot of the impleme ntation plans of the states as of August 2010. Man y of these plans are subject to current regulatory an d/or political processes. Three states – Nebraska, Nevada, and the District of Columbia – have not sub mitted Tailoring Rule letters to EPA as of Septembe r 2010, though both Nevada and the District of Columb ia implement delegated PSD programs under federal regulations. 5 In California, local air pollution control agenci es throughout the state are responsible for stationary source permitting, and t he PSD program in most of California is implemented by EPA under federal regulations.

5 Programs operating under the federal regulations i nclude the provisions of the Tailoring Rule as of t he date the
final rule took effect.3 

### State-By-State Summary

**AGENCY & DATE**  **SUMMARY O F**  **RESPONSES**
Alabama July 31, 2010  A labama has the authority to permit GHGs under both PSD and T itle V; no revisions need to be made for this purpose.  State PSD regulations need to be revised to be cons istent with the Tailoring
Rule thresholds.  The state plans to begin the rulemaking process to revise its PSD regulations by August 22, 2010. The revisions should be consid ered for adoption in December 2010, and, if approved, submitted to EPA i n January 2011. The state has requested parallel processing for this SI P revision. Title V regulations will be revised at a later date.

Alaska August 2, 2010  A laska needs to undertake a regulatory process in order to incorporate the provisions of the Tailoring Rule and comply with fe deral rules regarding GHG permitting.  The state has already initiated the rulemaking proc ess, and anticipates that the regulations will be adopted and in effect by Ja nuary 2, 2011.

Arizona August 27, 2010  A rizona does not have the authority to permit GHGs under it s PSD and Title V programs. The state does not agree that its PSD pr ogram is inadequate because it does not apply to GHGs.  Completing the rulemaking and SIP approval process by January 2011 would be nearly impossible.

Arkansas July 26, 2010  A rkansas does not currently have the authority to permit GHG s under state
law.  State PSD and Title V regulations need to be revise d to be consistent with the Tailoring Rule thresholds.  The state estimates that it will take 10-18 months to revise the regulations, and will not make the January 2, 2011 deadline.

Colorado July 29, 2010  C olorado needs to revise its PSD and Title V regulations to incorporate the Tailoring Rule thresholds.  The state has begun the rulemaking process and hope s that regulatory changes will be complete by the end of November 201 0. Regulatory changes then need to undergo legislative review, which is e xpected to conclude by winter or spring 2011. The state requests that EPA limit approval of its PSD and delegated Title V program to match the GHG perm itting thresholds under the Tailoring Rule.

Connecticut July 20, 2010  C onnecticut does not currently have the authority to permit GHGs under its PSD or Title V programs.  The state intends to revise its regulations to incl ude GHGs for both programs, as well as to incorporate the Tailoring R ule thresholds for both its PSD and Title V programs.  The regulatory adoption process generally takes 14- 20 months. The state will try to expedite the process, but expects regul atory revisions by late summer/early fall 2011.

Delaware July 29, 2010  D elaware does have the author ity to interpret subject to regulation for both its PSD and Title V programs.  However the state will also undertake rulemaking to explicitly add the4 Tailoring Rule thresholds to its regulations.  The state has begun the regulatory process, and ant icipates finalizing the revised regulations by the end of 2010 with a compl iance date of January 2,

2011.
Florida July 2, 2010  F lorida does not have the authority to permit GHGs under ei ther its PSD or Title V programs, and cannot automatically interpre t subject to regulation.  The state needs to amend its regulations to incorpo rate GHGs into its permitting programs, but cannot at this time estima te how long this will
take. Georgia August 2, 2010  G eorgia intends to adopt EPA’s interpretation of subject to regulation for both its PSD and Title V programs, and will do so b y undertaking a rulemaking process.  The state anticipates completing rulemaking for bot h PSD and Title V by January 1, 2011.

Hawaii July 28, 2010  H awai i currently has the authority to permit GHGs and can implement the Tailoring Rule thresholds under its delegated PSD p rogram. The state also has the authority to permit GHGs under its Title V program.  Rule changes are required in order to apply the def inition of subject to regulation for the state’s Title V program.  The state estimates that the Title V regulatory cha nges will be completed by
the end of 2011.

Idaho July 28, 2010  I daho must under take a regulatory /legislative pro c ess in orde r to incorporate GHGs as subject to regulation, as well as to incorporate the provisions of the Tailoring Rule.  The state expects to complete the process by late M arch/early April 2011.

Illinois July 29, 2010  I llinois has the authority to permit GHGs consistent with the Tailoring Rule provisions under its delegated PSD program.  The statute and regulations governing its Title V p rogram need to be revised in order to incorporate the Tailoring Rule threshol ds and update the fee structure. State regulations will also be revised to ensure that smaller sources do not require permits under state law.  The state anticipates that the Title V legislative revisions will be completed in spring or summer 2011, with regulatory revisions fo llowing shortly
thereafter.

Indiana July 23, 2010  I ndiana currently has the authority to permit GHGs under both its PSD and Title V programs, and intends to apply EPA’s defini tion of subject to regulation.  PSD and Title V regulations need to be revised in o rder to incorporate the Tailoring Rule thresholds.  The state plans to use emergency rulemaking as an i nterim measure to make the Tailoring Rule thresholds effective by January 2, 2011. A permanent, expedited rulemaking process is expected to be comp leted in March 2011.

Iowa July 20, 2010  I owa needs to undertake a rulemaking process in order to adopt the Tailoring Rule definition of subject to regulation for both its PSD and Title V

programs.  The state plans to finish rule revisions and submit these to EPA for inclusion in its SIP by the end of December 2010.5

Kansas August 2, 2010  K ansas needs to revise its regulations in order to implement the Ta iloring Rule provision for both its PSD and Title V program s.  The state estimates that regulatory changes will be completed by April 1,

2011. Kentucky July 27, 2010  K entucky intends to amend current regulations to adopt the definition of subject to regulation for both its PSD and Title V programs.  The state anticipates finalizing regulatory changes and submitting SIP revisions to EPA by the beginning of December 2010.

Louisiana August 2, 2010  L ouisiana rules do not appear to prohibit permit ting GHGs under its PSD and Title V programs.  The state intends to apply the meaning of subject t o regulation consistent with the Johnson Memo Reconsideration without regul atory changes; however PSD and Title V regulations need to be revi sed in order to incorporate the Tailoring Rule thresholds.  If it undertakes fast track rulemaking, the state c ould have final rules by December 20, 2010, though the effective date could be delayed.  The state also needs to amend other state regulatio ns in order to revise thresholds for small source exemptions; these revis ions will not be final by January 2, 2011.

Maine August 5, 2010  M aine has the authority to implement PSD and Title V permitting for GHGs

.  Certain regulatory changes need to be made in order to incorporate the Tailoring Rule thresholds.  The state expects that regulatory changes will be a dopted before January 2,

2011. Maryland August 2, 2010  M aryland intends to amend its regulations consistent with the Tailoring Rule thresholds contained in the definition of subject t o regulation for both its PSD and Title V programs. PSD regulations will als o be amended to clarify that sources are subject to the Tailoring Rule prov isions.  The state anticipates completing rulemaking by Janu ary 2, 2011.
Massachusetts August 2, 2010  M assachusetts currently implements a delegated PSD program.  GHGs are not currently a regulated pollutant under its Title V program. The state needs to undertake a rulemaking process in or der to adopt the definition of subject to regulation and incorporate the Tailoring Rule thresholds for its Title V program.  The goal is to provide regulatory language for publ ic review during the first
half of 2011. Michigan July 27, 2010  M ichigan intends to interpret subject to regulation as defin ed in the T ailoring Rule; no rule changes are required to incorporate t he Tailoring Rule requirements for its PSD program.  The state needs to undertake a rulemaking process i n order to amend its rules to incorporate the Tailoring Rule provisions under its Title V program.  The rulemaking process normally takes 12-18 months, and the state anticipates completing this process before July 1, 2012.

Minnesota June 23, 2010  M innesota implements a delegated PSD program , and no changes are required to incorporate the Tailoring Rule provisio ns.  Title V rules need to be revised in order to incorp orate the Tailoring Rule thresholds. Various rule requirements for state-on ly permits may also be6 modif ied

.  The state expects to initially use an expedited rul emaking process to complete regulatory changes for its Title V program by January 2, 2011. It
will then need to undertake a traditional rulemakin g process beginning in early 2011, and expects to have final rulemaking fi nished by mid/late 2012. Mississippi July 28, 2010  M ississippi needs to amend its regulations in order to i mplement the Tailoring Rule provisions for its PSD and Title V p rograms.  The state expects that the regulatory amendment pro cess should be completed by January 2, 2011, pending public intere st.

Missouri July 27, 2010  M issouri needs to amend its regulations in order to incorporate th e T ailoring Rule thresholds for its PSD and Title V programs.  The state is currently reviewing the final Tailorin g Rule and state regulations to determine the necessary changes, and will then b egin the rulemaking process. The process usually takes 12-18 months fo r permanent rules; the state may be able to propose emergency rulemaking, though rules would only then be effective for 180 days.

Montana August 20, 2010  M ontana’s existing rules and regulations provide the framework for implementing its PSD and Title V programs consisten t with the Tailoring Rule provisions. New Hampshire July 30, 2010  N ew H ampshire needs to undertake a rulemaking process in order to incorporate the Tailoring Rule thresholds for both its PSD and Title V

programs.  The state has initiated a rulemaking process, and e xpects to complete it in December 2010, with an effective date of January 2, 2011. New Jersey July 30, 2010  N ew J ersey implements a delegated PSD program.  For its Title V program, the state intends to apply EPA’s definition of subject to regulation, and does not need to undertake a reg ulatory or legislative process in order to do so.  In the future, the state may specifically add the 1 00,000 tpy threshold to the Title V major source definition as a matter of clar ification.

New Mexico June 24, 2010  N ew M exico needs to amend is PSD and T itle V rules in order to incorporate the Tailoring Rule requirements.  The state intends to request a hearing in November 2010, and expects rule revisions to be effective by January 1, 2011.

New York August 11, 2010  N ew Y ork has the authority to permit GHGs under both its PSD and T itle V

programs.  Though the state is currently not PSD SIP-approved, it has submitted a SIP and is awaiting final approval; therefore the lette r addresses relevant PSD questions in anticipation of approval.  The state will interpret subject to regulation in t he same manner as EPA, and intends to undertake rulemaking in order to impleme nt the Tailoring Rule approach for both its PSD and Title V programs.  The state has initiated a formal state rulemaking p rocess, and seeks to finish in less than one year.

North Carolina August 2, 2010  N orth C arolina needs to undertake a rulemaking process in order to incorporate the Tailoring Rule thresholds under its PSD program.  Its Title V program automatically incorporates the federal definition of major7 source; the state will review regulations, including fees, to ensure sufficient resources to permit GHGs under Title V.  The state has begun the rulemaking process for PSD. The earliest completion date is January 2, 2011. However if there are lett ers of objection the rule will be forwarded to the next legislative session; if so , it may take as long as
summer 2011 for the rules to take effect.

North Dakota 6

June 21, 2010  North Dakota intends to apply the definition of sub ject to regulation under both its PSD and Title V programs, and will impleme nt the definition as of January 2, 2011.  The state will also update state rules to incorpora te the definition of subject to regulation.  The process of updating state rules has already beg un and is expected to be completed by April 1, 2011.

Ohio July 26, 2010  O hio needs to modify its PSD and T itle V rules in order to permit GHGs consistent with the Tailoring Rule.  The state has begun the rulemaking process, which c ould be completed by December 2010 if there are no delays.

Oklahoma July 15, 2010  O klahoma regulations could support an interpretation that th e state does have the authority to permit GHGs under its PSD and Title V programs.  State rules for PSD and Title V need to be revised in order to incorporate the Tailoring Rule thresholds.  The state plans to initiate a rulemaking process. It will not be possible to have rules in place by January 2, 2011. The earlie st date that rules could be in place is July 2011, but it may be as long as Jul y 2012 if the rulemaking process results in unexpected problems. Oregon July 29, 2010  O regon needs to undertake a regulatory process in order to include GHGs as a regulated pollutant under its PSD program and inc orporate the Tailoring Rule definition of subject to regulation.  The state expects to complete its regulatory proces s on February 17, 2011
and submit SIP revisions to EPA. Pennsylvania August 4, 2010  P ennsylvania has the authorit y to apply the Tailoring Rule definition of subject to regulation without making any regulatory or legislative changes for both its PSD and Title V programs.

Puerto Rico July 29, 2010  P uerto R ico needs to amend its regulations in order to incorporate the Tailoring Rule thresholds for its Title V program.  A public hearing for the proposed Title V amendment s is expected by
December 2010.

Rhode Island August 3, 2010  R hode I sland has the aut hority to permit GHGs

.  PSD and Title V regulations need to be revised in o rder to incorporate the Tailoring Rule thresholds.  The state anticipates adopting the necessary regula tions before January 2,

2011.
South Carolina August 2, 2010  S outh C arolina needs to revise its regulations in order to incorporat e the Tailoring Rule thresholds for both its PSD and Titl e V programs.

6 On July 29, 2010, North Dakota submitted a follow up letter clarifying that nothing in the initial, J une 21, 2010 letter, summarized above, was intended to waive the state’s right to challenge the legality of any EPA rule or

action.8  As a temporary measure, the S outh C arolina legislature enacted a Joint Resolution, effective June 11, 2010, that makes the Tailoring Rule provisions
effective in South Carolina until the state revises its PSD and Title V regulations.  The temporary measure is already in effect; permane nt regulatory revisions are expected to take at least 18 months.

South Dakota July 30, 2010  South Dakota needs to take action to incorporate th e Tailoring Rule definition of subject to regulation into its rules for both PSD and Title V.  The state estimates that the adoption of the defini tion of subject to regulation and submittal of SIP revisions will take until at least January 2011.

Tennessee July 30, 2010  T ennessee has the a uthority to permit GHGs under both its PSD and T itle V

programs.  The state needs to undertake a rulemaking process i n order to incorporate the Tailoring Rule thresholds for PSD and Title V.  The state is working to complete the regulatory rev isions by January 2, 2011.

Texas August 2, 2010  T exas does not have the authority to permit GHGs , and does not intend to interpret or amend its laws to compel GHG permittin g. Utah July 29, 2010  U tah intends to adopt the Tailoring Rule definition of subject to regulation for both its PSD and Title V programs, and needs to undertake rule changes
in order to do this.  The state plans to adopt final rule changes by end of December 2010.

Vermont July 22, 2010  V ermont needs to amend its laws and regulations in order to incorporate the Tailoring Rule thresholds.  Statutory changes took effect July 1, 2010. Regula tory changes are now underway and are expected to be completed by the en d of 2010. Virginia July 28, 2010  V irginia needs to revise i ts regulations in order to incorporate the T ailoring Rule thresholds under its PSD and Title V programs.  The state anticipates, pending approval, using an e xpedited process to present proposed regulatory revisions in September 2010. Assuming the revisions are adopted they would take effect by Jan uary 2, 2011. Washington July 29, 2010  W ashington needs to amend its general permitting and T itle V regulations in order to apply the Tailoring Rule definition of sub ject to regulation.  The state expects that the rulemaking process will be completed, and the amended rules in effect, by January 2, 2011. West Virginia July 30, 2010  W est V irginia will undertake a legislative process in order to incorporate the Tailoring Rule thresholds under its PSD and Title V programs.  Provisionally, the state plans to apply the Tailori ng Rule definition of subject to regulation in its PSD and Title V programs, whil e also pursuing rulemaking.  The state intends to send PSD amendments to its leg islature in the 2011 session; if approved, it anticipates the amendments would take effect in June 2011. The state intends to undertake emergency rul emaking to amend its Title V rules by early February 2011, and will also pursue a permanent rule that will likely be effective in May 2012.

Wisconsin July 28, 2010  W isconsin needs to revise its state rules, and also plans to revise its SIP, in order to incorporate the Tailoring Rule provisions for both its PSD and Title V

programs.  The state intends to promulgate emergency rules tha t will take effect no9 later than January 2, 2011 , and estimates that permanent rulemaking will
take 9-12 months. Wyoming 7 July 30, 2010  W yoming is still evaluating its options, including regulato ry and legislative processes, and wants to take time to understand the implications of each option. Butte Co., CA July 30, 2010  Butte Co. does not implement a PSD program.  The district can apply the meaning of subject to re gulation to its Title V program without rule changes, though it may in the future add the specific
definition to its rules for clarification. Monterey Bay, CA July 28, 2010  Monterey Bay can implement the T ailoring R ule provisions under its PSD program without undertaking regulatory changes. Th e district intends to revise its Title V regulations to mirror the Tailor ing Rule.  The district plans to propose Title V revisions; no timeline given.

Northern Sonoma Co., CA July 30, 2010  Northern Sonoma Co. needs to revise its rules in order to incorporate the Tailoring Rule provisions under its PSD and Title V programs.  The district intends to propose rules to its govern ing board by the end of

2010. Sacramento, CA July 27, 2010  Sacramento needs to revise its rules to include GHGs under its PSD and T itle V programs, and will also revise its rules consiste nt with the Tailoring Rule
thresholds.  The district plans to prepare rule changes and pres ent them for adoption on January 27, 2011. The district will also submit SI P revisions to EPA. San Luis Obispo Co., CA August 3, 2010  San Luis Obispo Co. does not implement a PSD program.  The district needs to revise its Title V rules in o rder to incorporate the Tailoring Rule thresholds.  The district anticipates presenting the revised rul e for adoption on January 27, 2011. South Coast, CA July 30, 2010  South Coast currently implements a PSD program under partial delegation.  The district intends to amend its local rules for P SD and Title V in order to incorporate the Tailoring Rule requirements.  The district anticipates presenting the proposed am endments to its local rules by December 3, 2010, though it cannot guarant ee final action on the proposed amendments by the end of 2010.
Ventura Co., CA July 30, 2010  Ventura Co. does not implement a PSD program.  The district needs to revise its Title V rules in o rder to incorporate the Tailoring Rule requirements.  The district intends to adopt rule amendments by De cember 14, 2010. Louisville, KY August 2, 2010  Louisville needs to revise its regulations in order to implement the Tailoring Rule definition of subject to regulation for its PS D and Title V programs. It will also need to revise a number of other regulati ons to clarify the scope of GHG regulations.  The district anticipates adoption of the revisions by the end of December

2010.

7 Wyoming’s letter in response to the Tailoring Rule request for information is summarized here. The s tate subsequently submitted a letter in response to EPA’ s proposed SIP Call indicating that it does not bel ieve it has the authority to regulate GHG emissions.10

Clark Co., NV August 2, 2010  Clark Co. does not have the authority to permit GHGs for PSD or T itle V under its existing SIP-approved rule. The departme nt is in the process of submitting a SIP revision to EPA that more closely tracks federal language for PSD and Title V and includes the term subject to re gulation.  The county needs to undertake a regulatory process in order to adopt the definition of subject to regulation in the Tailorin g Rule.  The county will work with EPA to determine the best approach for making sure that federally enforceable PSD and Title V per mits are available beginning January 2, 2011.