EN VIRONMENTAL PROTECTION AGENCY 40 

### CFR P art 52 lEPA-ROS-O AR-20 14 -0049; FRL-
___ _. 

### Approval and Promulgat ion of Air Q u a li ty Implementation P l ans; So uth Dakota ; Prevent ion of Sig nificant Deterioration; Greenh ouse Gas Tailoring Rule Revisions

AGENCY: Envi ronmental Protection Agency (EPA). ACTION: Final rule
. SUMMARY: EPA is partially approving and partially di s approvin g revisions to the South Dakota State Impl ementation Plan (SIP) submitted by th e So ut h Dakota Departme nt of E nv iron m ent and Natu ral Re sources ( D EN R ) to EPA on June 20 , 2011. The S IP re v i s ion s add r ess the permitti ng of source s of g r eenhouse gases (GHG s). Specifically , we are app rovi ng revi s ions to the State's Prevention of Significant Deterioration ( P SD) program to incorporate t h e provisions of the fe de ral PSD and T itl e V Greenhouse Gas Tailorin g Rule (Tail o ring Rul e). T he S IP r ev ision s in corpo rate by referen ce the f ederal Tai loring Rul e's e mi ss io n thr esh olds for dete rmi ni ng which new stationary sources a nd modifications to ex isting stati on ary sour ces become subject to South Dakota's P SD permitting requi rements fo r the ir GHG e mi ss ions. EPA i s finalizing disapproval of a r e lated provi si on that wou l d resci nd the State's Tailoring Rul e revision in certain c ircumstances. EPA wi ll take separate action on an amendment to the chapt er Co nstruction Permits for New So urce s or Modificatio ns in the June 20, 2011 submittal , re garding permits fo r m i nor so urces. E PA i s fina li zi n g this action under section 110 and part C
o f the C l ean Air Act (the Act or CAA). DATES: T hi s final rule is effecti ve [INSERT date 30 days after publication in the Federal Register].2 ADDRESSES: EPA has established a docket for 

### this action under Docket Identification No. EPA-R08-0AR-2014-0049. All documents in the docket are li sted in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other inform ation whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Air Program , Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop St., Denver, Colorado 80202-1129. EPA requests that if at all possible , you contact the individual listed in the FOR FURTHER INFOR MATIO N CONTACT section to view the hard copy ofthe docket. You may view the hard copy ofthe docket Monday through Friday , 8:00a.m. to 4:00 p.m., excluding Federal holidays. F OR FURTHER INFO RMATION C O NTACT : Jody Ostendorf, Air Prog ram, Mailcode SPAR, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop St., Denver, Colorado 80202-1129 , (303) 312-7814, ostendorf. jody@epa.gov
SUPPLEMENTARY INFOR M ATION: 

### D e fi nitio ns For the purpose of this document, the following definitions apply: 

### (i) The words or initial s Act or CAA mean or refer to the federal Clean Air Act, unless the context indicates otherwise. (ii) The initials DENR mean or refer to the South Dakota Department of Environment and Natural Resources.

### 3 (iii) The words EPA, we, us or ou r mean or refer to the United States Environmental Protection Agency. (iv) The initials GHG mean or refer to Greenhouse Gas. (v) The initials PSD mean or refer to Prevention of Significant Deteriorati on. (vi) The initials SIP mean or refer to State Implementation Plan. (vii) The words State or SD mean the State of South Dakota, unless the context indicates otherwise. Table of Contents I. Background for Our Final Action II. Response to Comments III. What Final Action is EPA Taking? IV. Statutory and Executive Orders R ev iew 

### I. Background for Our Final Action The June 20, 20 I 1 submittal incorporates by reference the provisions of the federal PSD and Title V Greenhouse Gas Tailoring Rule (Tai lorin g Rule), that estab li sh 1) that GHG i s a regulated pollutant under South Dakota's PSD program , and 2) emission thresholds for determining which new stationary sources and modification projects become s ubject to South Dakota's PSD permitting requirements for their GHG emissions. The background for today 's final rule , our rationale for disapproving the submitted rescission clause language, and EPA 's national actions pertaining to GHGs is discussed in detail in our proposal (see 79 FR 8130 , February 11 , 2014). The comment period was open for 30 days and we received two adverse
comment letters .

II. Response to Com ments

### 4 We received adverse comments on our proposed action, s p ecifica ll y o n our propo sed disapproval of the resc iss io n clause , from the South Dakota DENR. We received s im ilar comments from Otter Tail Power Company. After considering the comments , EPA has decided to finalize our actio n 

### as proposed. The comments and our responses follow. Comment: DENR states that EPA 's first proposed basis for disapp roval was that the rescission clause would allow for r evis ion of the SIP without the approval ofthe Admini str ator. EPA cited 40 CFR 51 .I 05 , which s tate s : Revisions of a plan, or portions thereof , will not be considered part of an applicable plan until such revisions h ave been approved by the Administrator in accordance with [part 51]. DENR c haracterizes EPA as stating th at the resc i ss ion clause wi ll be a revi sion of the plan down the road that the Ad mini s trator has not had a c hance to approve. DENR disagrees , stat in g th at E P A has the chance to approve the resci ss ion clause now. Otter Tail Power Company make s a
s imil ar argument, statin g that 40 CFR 51.105 will not be v i olated in the event of a triggering
action becau se the Admin is trator will have al rea dy approved th e fact that the rules ca n be
rev ised. Response: EPA disagrees w ith this comment. We did not say the rescission clause as submitted i s not before EPA for app r oval. Ins tead, we sa id that we were considerin g whether ahy future c hange to t he S IP that occurs as a res ult of the automatic re scission clause would be consiste nt with EPA's i nterpr etation of the effect of the tri ggering EPA or federal court acti on. In thi s case, even if EPA we r e to approve So uth Dakota' s rescission clau se now , the S IP would be modified without any EPA interpretation of the triggering federal co urt action. This vio l ates 4 0 CFR 51. 1 05.5 Comment: DENR states that EPA approval of the rescission clause would not violate any public notice requirements. DENR notes that the public had notice and opportunity to comment on both the State's rulemaking process and on EPA's SIP approval process; Otter Tail Power Company likewise states that there has already been adequate notice and comment. DENR states that the public is thus aware that if a court issues an o rder vacating or otherwise inva lid ating EPA's PSD GHG regulations, the South Dakota provisions will be rescinded
. Otter Tail Power Company states that any further public notice i s unnecessary. Response: EPA disagrees w ith this comment. EPA is not stating that there was insufficient notice that the rescission c lause says what it says. EPA is statin g that in the future there would be inadequate notice to the public as to the effects of a court decis i on. DENR does not dispute thi s, becau se DENR does not indicate that there is any notification mechani s m that would take place after the court decision. Likewise, Otter Tail Power Company does not explain how th e public would be adequately notified. Comment: DENR states that EPA's disapproval of the re sc i ss ion clause would place an undue burden on the regulated community. Businesses moving to South Dakota or trying to expand would be put o n hold until South Dakota could go through the rule proce ss of removing the vacated provisions and submitting the revisions to EPA for approval. D ENR and Otter Tai l Power Company note that EPA has taken nearly thre e years to act on this submittal. Otter Tai I Power Co mpany states that this s ho ws it wou ld take a similar amount of time to remove the provisions from South Dakota ' s SIP if the PSD GHG provisions are stayed or vacated. DENR states a concern that without the resci ss ion clause, there could be a scenario where South Dakota 's SIP would have a requirement the State could not enforce because the underlying rule
or law was no longer valid but a third party or EPA could attempt to enforce.6 

### Response: EPA disagrees with this comment. First, a rescission clause that meets the
r equirements we described in our proposal notice can become effective relatively quickly. For example, we have approved a rescission clause that takes effect upon EPA's publication of a noti ce in the Federal Register that a court has vacated GHG PSD permitting requireme nts. 77 FR 1 2484 (Mar. 1 , 20 12). This triggering event serves both the purpose of public notification and EPA interpretation of the court decision. In that notice , EPA stated : In the event of a court decision
... that triggers (or l ikely triggers) application of Tennessee's automatic rescission provisions, EP A intends to promptly desc ribe the imp act of th e court decision
.. . on the enforceability of i ts GHG permitting regu lations. 77 FR 12486. Thus, a rescission clause can meet CAA requirements and still become effective relatively quickly after a coutt decision , wi th o ut need for the ful l S IP revision process. Second, South Dakota provides no evidence that any businesses wou ld have to be put on hold. Mo s t sources that a r e subject to PSD G H G requirements a re subject to PSD permitting
a nyway due to their e mi ss i o n s of other pollutant s. F urth erm o r e, both states and EPA have issued many PSD permits that address GHG requirements, w ithout any a pparent impact on t he economy. 

### Comment: DENR notes th at during the state rulemaking process, EPA commented on South Dakota ' s resciss i on c lause and d id not objec t t o it, on ly as ki ng that South Dakota remove the word "reconsider" from the provision. DENR states that this estops EPA from objecting to the provision now. 

### Response: EPA disagrees with this comment. First, section 1 1 0(1) mandates that EPA cannot approve a SIP revision that interferes with any requirement of the CAA. Regardless of7 comments made during the state rulemaking, this requirement applies
. As explained in our proposal notice and response to comme n ts, EP A has determined in this action that the rescission clause does not comply with requirements in the CAA and in o ur regulations. Second, nothing in the CAA requi res EP A to part i cipate in a state rulemaking process or to reach a final determination during that process on whether a state rule meets the requirements of the CAA
. In addi tion, noth i ng in EPA's comm ent stated tha t the revised language would be approvable, that the comment was EP A's final determination, or that the submittal would not be subject to further EPA review. An d even if the comment had made such a statement, it would not give ri se to estoppel , as regardless of any such statement CAA section 11 0( 1 ) does not permit EPA to approve a SIP revision th at interferes with requirements ofthe CAA. See, e.g. Utah Power & Light Co. v. United States, 243 U.S. 389 ( 1 9 1 7) ("[T]he United States is neither bound
nor estopped by acts of its officer s or agents in entering into an arrangement or agreement to do
or ca u se to be done what the law does not sanction or permit."). Co mment: 

### DENR sta tes that South Dakota is in litigation with EPA regarding EPA's Tai l oring Ru le. EPA's disapproval of the resc i ssion c l ause i s tantamount to requiring the State to waive or compromise its claims in that lit i gation by taking a cont r ary position in its State rules , and is no less than coercion. R esponse: EPA s trongly disagrees w i th th is comment. I t appears to EPA that our disapproval of the rescission clause has no l egal conseque nces for the State, nor has 

### DENR identified any. F irs t, there are no legal consequences under the CAA. A rescission clause is not a required
e lement of the plan, and disapproval of it does not obligate the State in any way to make a new

### 8 SIP submittal and does not create any potential for sanctions. 1 The State's PSD program remains fully approved. Second, there are no consequences that are relevant to the litigation. EPA is not requiring DENR to change anything in state law. Nor is EPA requiring the State somehow to affirm EPA's legal position 

### in the cited litigation. The State is not required to make any response of any type to EPA's disapproval. There is nothing in EPA's disapproval of the State's rescis sion clause that can be characterized as coercion.

III. What Final Action is EPA Taki n g? EPA is approving in part, and disapproving in part, the June 20,2011 submittal that addresses the permitting of sources of GHGs for incorporation into the South Dakota SIP. Specifically, EPA is approving revisions to Chapter 74:36:09 that incorporate the Tailoring Rule into the State's definitions and requirements for PSD. EPA is disapproving the provision that would rescind the State's Tai loring Rule revision in certain c ircumstances. EPA will take separate action on an amendment in the June 20, 2011 submittal to Chapter 74:36:20, Construction Permits for New Sources or Modifications, regarding permits for minor sources. EP A is approv in g changes to Definitions, Section 74:36:01 :08(2) , which revises the major source definition so that it applies to any air pollutant "subject to regulation as required by EPA," and Section 74:36:0 I: 15(6) , which adds the six GHGs designated by EPA as regulated air pollutants to the definition of regulated air pollutant. EPA is not taking action on the addition of "(73) "Subject to regulation" as defined in 40 CFR Section 70.2 (July 1, 2009) , as revised in

1 Even if this di s approval did create pot ential for sanction s-which it does not
- that would not constitute coercion. Se e e.g., Vir g inia v. Br o wne r, 80 F.3d 869 (4th Cir. 1996).9 publication 75 Fed. Reg. 31607 (June 3, 20 l 0), in accordance with EPA requirements," because it applies to the title V permitting program which i s not part of the SIP. 

### IV. Statutory and Exec utive Orders Review U nde r the Clean Air Act, the Administrator i s required to approve a SIP submission t hat complies with the provisions of the Act and applicable federal r egulations. 42 U.S.C
. 741 O(k); 40 CFR 52.02(a)
. Thus, in reviewing SIP submissions , EPA's role is to approve state choices, provided that they meet the criteria of the C lean Air Act. Accordingly, this proposed action merely approves state J aw that meets federal requirements and disapproves state law that does not meet federal requi re ments; when finali zed, this action wou l d not impose additional requirements beyond those imposed by state law. For that reason, this action:
• is not a "significant regulatory acti on " subject to review by the Office of Management and B udget under Exec utive Order 1 2866 (58 FR 51735, October 4, 1993);
• does not impose an info rmation collec ti on burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 

### et seq.);
• is ce r t ifi ed as n ot hav in g a s i gn ific a nt economic imp act on a sub stant i a l number of smal l entities under the Regulatory Flexibi li ty Act (5 U.S.C. 601 

### et seq.);
• does not contain any unfunded mand ate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1 995 (Public Law 104-4);
• does not have Feder alism implicati ons as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);10
• is not an economically significant regulatory action based on health or safety risks subject to Executive O r der 13045 (62 FR 19885, April 23, 1997);
• is not a significant regulatory action subject to Executive O r der 13211 (66 FR 28355, May 22, 2001 );
• is not subject to requ irements of Section 12( d) of the National Technology Transfer and Advancement Act of 1995 ( 1 5 U.S
. C. 272 note) because appl i cat ion of those requirements would be incons i stent with the Clean Air Act; and
• does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 1 2898 (59 FR 7629, February 16, 1994). In addition, this ru le does not have tribal implications as specified by Executive O r der 13175 (65 FR 67249 , November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. The Co ngressiona l Review Act, 5 U.S.C. 801 et seq . , as added by the Small Business Regulatory Enforcement fairness Act of 1996, genera ll y provides that before a rule may take effect, the agency promulgating the rule must submit a ru le report, which includes a copy of the rule, to each House of the Congr ess and to the Comptro ll er General ofthe United States. EPA will s u bmit a report co ntain ing this action and other required i n formation to the U.S. Senate, the U
. S
. House of Representatives, and th e Comptro ll er Gene ral of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published 

### in the Federal Register. This action is not a "ma j or rule" as defined by 5 U.S.C.II 804(2). Under section 307(b)( l) of the Clean Air Act, petitions for judicial review of this action must be fil e d in the U nited States Court of Appea ls f or the appropri ate circuit by [FEDERAL REGISTER OFFIC E: in sert date 60 days from date of publication of this document in the Federal Register]. Filing a petition for r econs iderat ion by the Administrator of this final rule does not affect the fina lity of this action for the purposes of judicial r ev iew no r does 

### it extend th e t i me within whi ch a petit ion for judicial review may be filed, and shall not postpone th e effectiveness of such ru le or action. This action may not be c h all enged later in proceedings to enfo rce its requirements. (See CAA secti on 307(b)(2).)

List of Subjects in 40 CFR Part' 52 Envi ronmental protection, Air pollution co ntrol, Carbon m onoxide, Intergovernmental relations, Lead, Nit r ogen dioxide, Ozone, Particulate matter, Reportin g and r ecordkeep ing requiremen ts, Su lfur oxides, and Volatil e organic compo und s. A u thority : 42 U.S.C. 7401 

### et seq

# ~ 

# I "Z-'1 

# I' ., Dated: Shaun 

### L. McGrath Regional A dmini stra tor Region 8

### 12 40 CFR part 52 i s amended to read as follows: 

### PART 52 -APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS I
. The authority citation for Part 52 continues to read as follows: Authority : 42 U
. S.C. 7401 et seq. Subpart 

### QQ

- South Dakota 2. Section 52.2170 is amended as follows :
a. In paragraph (c)(1) b y adding table entries for 74: 36 :01 :08 and 74 : 36:01:15. b
. In paragraph (c)(l) by revising the table entry for 74:36:09 : 02. T he amendments read as follows: § 

### 52
. 2170 Identification of plan
. 

## * * * * * ( c) 

## * * * ( 1) 

## * * 

## * State citation Title/subject Stat e EPA app roval Exp lanation s · effective date and date citation 1 

## I 

## * * * * * * * 74:36:01 Definitions 

## * * * * * * * 74:36:01:08 Major source defined 4/20/2011 [Insert Federal Register 

### date of publ ication] , [In sert Federal Register 

### page number where the document begins.] 

## * * * * * * * 74:36:01:15 Regulated air pollutant 4/20/20 11 [Insert Federal 

### defmed Register 

### date of publ ication] ,1 3 [Insert 

### Fede ral Regi ster page number wh ere th e doc ume nt begin s . ] 

## * * * * * * * 74:3 6:09 Preve ntion of Significant Deterioration 

## * * * * * * * 74: 3 6:09:02 Preve ntion of s ignificant 4/ 20/ 20 11 [Ins ert 

### Fede ral d ete ri o ra ti o n 

### Reg iste r d ate o f publica tion ] , [Insert 

### Federal Register page number w h ere th e doc ume nt be g in s . ] 

## * * * * * * * I ..

ln order to de t e rmm e th e EPA effect i ve date for a sp e cific provts t on li s te d m th1 s table , c onsult the F e d e r a l R eg ister no ti c e cite d in thi s column for the particular provi s io n. 

## * * * * *