[Federal Register Volume 75, Number 170 (Thursday, September 2, 2010)]
[Proposed Rules]
[Pages 53892-53907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21701]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2010-0107; FRL-9190-7]
RIN-2060-AQ08


Action To Ensure Authority To Issue Permits Under the Prevention 
of Significant Deterioration Program to Sources of Greenhouse Gas 
Emissions: Finding of Substantial Inadequacy and SIP Call

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to find that 13 States with EPA-approved 
State implementation plan (SIP) New Source Review Prevention of 
Significant Deterioration (PSD) programs are substantially inadequate 
to meet Clean Air Act (CAA) requirements because they do not appear to 
apply PSD requirements to GHG-emitting sources. For each of these 
States, EPA proposes to require the State (through a ``SIP Call'') to 
revise its SIP as necessary to correct such inadequacies. EPA proposes 
an expedited schedule for States to submit their corrective SIP 
revision, in light of the fact that as of January 2, 2011, certain GHG-
emitting sources will become subject to the PSD requirements and may 
not be able to obtain a PSD permit in order to construct or modify. As 
for the rest of the States with approved SIP PSD programs, EPA solicits 
comment on whether their PSD programs do or do not apply to GHG-
emitting sources. If, on the basis of information EPA receives, EPA 
concludes that the SIP for such a State does not apply the PSD program 
to GHG-emitting sources, then EPA will proceed to also issue a finding 
of substantial inadequacy and a SIP Call for that State.

DATES: Comments. Comments must be received on or before October 4, 
2010.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2010-0107 by one of the following methods:
    <bullet> http://www.regulations.gov: Follow the online instructions 
for submitting comments.
    <bullet> E-mail: <a href="/cdn-cgi/l/email-protection#38591559565c154a155c575b535d4c785d4859165f574e"><span class="__cf_email__" data-cfemail="82e3afe3ece6aff0afe6ede1e9e7f6c2e7f2e3ace5edf4">[email protected]</span></a>.
    <bullet> Fax: (202) 566-9744.
    <bullet> Mail: Attention Docket ID No. EPA-HQ-OAR-2010-0107, U.S. 
Environmental Protection Agency, EPA West (Air Docket), 1200 
Pennsylvania Avenue, NW., Mail code: 6102T, Washington, DC 20460. 
Please include a total of 2 copies. In addition, please mail a copy of 
your comments on the information collection provisions to the Office of 
Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Attn: Desk Officer for EPA, 725 17th Street, NW., Washington, DC 
20503.
    <bullet> Hand Delivery: U.S. Environmental Protection Agency, EPA 
West (Air Docket), 1301 Constitution Avenue, NW., Room 3334, 
Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2010-0107. 
Such deliveries are only accepted 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 received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The

[[Page 53893]]

http://www.regulations.gov Web Site is an ``anonymous access'' system, 
which means EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through http://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 on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment and with any disk or CD-ROM you 
submit. If EPA cannot read your comment due to technical difficulties 
and cannot contact you for clarification, EPA may not be able to 
consider your comment. Electronic files should avoid the use of special 
characters, avoid any form of encryption, and be free of any defects or 
viruses. For additional information about EPA's public docket visit the 
EPA Docket Center homepage at http://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 http://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 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 http://www.regulations.gov or in hard copy at the U.S. Environmental 
Protection Agency, Air Docket, EPA/DC, EPA West Building, Room 3334, 
1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
(202) 566-1744, and the telephone 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, Research Triangle Park, NC 27711; 
telephone number: (919) 541-3450; fax number: (919) 541-5509; e-mail 
address: <a href="/cdn-cgi/l/email-protection#eb989e9f9f8485c58782988aab8e9b8ac58c849d"><span class="__cf_email__" data-cfemail="13606667677c7d3d7f7a6072537663723d747c65">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: For questions related to a specific State, 
local, or tribal permitting authority, or to submit information 
requested in this action, please contact the appropriate EPA regional 
office:

----------------------------------------------------------------------------------------------------------------
  EPA regional    Contact for regional office (person,
     office        mailing address, telephone number)                     Permitting authority
----------------------------------------------------------------------------------------------------------------
I...............  Dave Conroy, Chief, Air Programs      Connecticut, Massachusetts, Maine, New Hampshire, Rhode
                   Branch, EPA Region 1, 5 Post Office   Island, and Vermont.
                   Square, Suite 100, Boston, MA 02109-
                   3912, (617) 918-1661.
II..............  Raymond Werner, Chief, Air Programs   New Jersey, New York, Puerto Rico, and Virgin Islands.
                   Branch, EPA Region 2, 290 Broadway,
                   25th Floor, New York, NY 10007-
                   1866, (212) 637-3706.
III.............  Kathleen Anderson, Chief, Permits     District of Columbia, Delaware, Maryland, Pennsylvania,
                   and Technical Assessment Branch,      Virginia, and West Virginia.
                   EPA Region 3, 1650 Arch Street,
                   Philadelphia, PA 19103-2029, (215)
                   814-2173.
IV..............  Dick Schutt, Chief, Air Planning      Alabama, Florida, Georgia, Kentucky, Mississippi, North
                   Branch, EPA Region 4, Atlanta         Carolina, South Carolina, and Tennessee.
                   Federal Center, 61 Forsyth Street,
                   SW, Atlanta, GA 30303-3104, (404)
                   562-9033.
V...............  J. Elmer Bortzer, Chief, Air          Illinois, Indiana, Michigan, Minnesota, Ohio, and
                   Programs Branch (AR-18J), EPA         Wisconsin.
                   Region 5, 77 West Jackson
                   Boulevard, Chicago, IL 60604-3507,
                   (312) 886-1430.
VI..............  Jeff Robinson, Chief, Air Permits     Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.
                   Section, EPA Region 6, Fountain
                   Place 12th Floor, Suite 1200, 1445
                   Ross Avenue, Dallas, TX 75202-2733,
                   (214) 665-6435.
VII.............  Mark Smith, Chief, Air Permitting     Iowa, Kansas, Missouri, and Nebraska.
                   and Compliance Branch, EPA Region
                   7, 901 North 5th Street, Kansas
                   City, KS 66101, (913) 551-7876.
VIII............  Carl Daly, Unit Leader, Air           Colorado, Montana, North Dakota, South Dakota, Utah, and
                   Permitting, Monitoring & Modeling     Wyoming.
                   Unit, EPA Region 8, 1595 Wynkoop
                   Street, Denver, CO 80202-1129,
                   (303) 312-6416.
IX..............  Gerardo Rios, Chief, Permits Office,  Arizona; California; Hawaii and the Pacific Islands;
                   EPA Region 9, 75 Hawthorne Street,    Indian Country within Region 9 and Navajo Nation; and
                   San Francisco, CA 94105, (415) 972-   Nevada.
                   3974.
X...............  Nancy Helm, Manager, Federal and      Alaska, Idaho, Oregon, and Washington.
                   Delegated Air Programs Unit, EPA
                   Region 10, 1200 Sixth Avenue, Suite
                   900, Seattle, WA 98101, (206) 553-
                   6908.
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I. General Information

A. Does this action apply to me?

    Entities potentially affected by this rule include States, local 
permitting authorities, and tribal authorities.\1\ Any SIP-approved PSD 
air permitting regulation that is not structured such that it includes 
GHGs among pollutants subject to the PSD program will potentially be 
found to be substantially inadequate to meet CAA requirements, under 
CAA section 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 individual 
pollutant and the list omits GHGs, then the regulation is substantially 
inadequate.
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    \1\ EPA respects the unique relationship between the U.S. 
government and tribal authorities and acknowledges that tribal 
concerns are not interchangeable with State concerns. However, for 
convenience, we refer to ``States'' in this rulemaking to 
collectively mean States, local permitting authorities, and tribal 
authorities.
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    Entities potentially affected by this rule also include sources in 
all industry groups, which have a direct obligation under the CAA to 
obtain a PSD permit for GHGs for projects that meet the applicability 
thresholds set forth in the Tailoring Rule.\2\ This independent 
obligation on sources is specific to PSD and derives from CAA section 
165(a). Any source that is subject 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 section 165(a). The 
majority of entities potentially affected by this

[[Page 53894]]

action are expected to be in the following groups:
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    \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 later in this 
preamble.

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             Industry group                         NAICS \a\
------------------------------------------------------------------------
Utilities (electric, natural gas, other  2211, 2212, 2213.
 systems).
Manufacturing (food, beverages,          311, 312, 313, 314, 315, 316.
 tobacco, textiles, leather).
Wood product, paper manufacturing......  321, 322.
Petroleum and coal products              32411, 32412, 32419.
 manufacturing.
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              3271, 3272, 3273, 3274, 3279.
 manufacturing.
Primary and fabricated metal             3311, 3312, 3313, 3314, 3315,
 manufacturing.                           3321, 3322, 3323, 3324, 3325,
                                          3326, 3327, 3328, 3329.
Machinery manufacturing................  3331, 3332, 3333, 3334, 3335,
                                          3336, 3339.
Computer and electronic products         3341, 3342, 3343, 3344, 3345,
 manufacturing.                           4446.
Electrical equipment, appliance, and     3351, 3352, 3353, 3359.
 component manufacturing.
Transportation equipment manufacturing.  3361, 3362, 3363, 3364, 3365,
                                          3366, 3366, 3369.
Furniture and related product            3371, 3372, 3379.
 manufacturing.
Miscellaneous manufacturing............  3391, 3399.
Waste management and remediation.......  5622, 5629.
Hospitals/nursing and residential care   6221, 6231, 6232, 6233, 6239.
 facilities.
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 other related 
information?

    In addition to being available in the docket, an electronic 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 Site, under Regulations & Standards, at 
http://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 
http://www.regulations.gov or e-mail. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information in a disk 
or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM 
as CBI and then identify electronically within the disk or CD-ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2. Send or deliver information 
identified as CBI only to the following address: Roberto Morales, OAQPS 
Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, 
NC 27711, Attention Docket ID No. EPA-HQ-OAR-2010-0107.
    2. Tips for preparing your comments. When submitting comments, 
remember to:
    <bullet> Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
    <bullet> Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
    <bullet> Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
    <bullet> Describe any assumptions and provide any technical 
information and/or data that you used.
    <bullet> If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    <bullet> Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    <bullet> Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
    <bullet> Make sure to submit your comments by the comment period 
deadline identified.

D. How is the preamble organized?

    The information presented in this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
    C. What should I consider as I prepare my comments for EPA?
    D. How is the preamble organized?
II. Overview of Proposed Rule
III. Background
    A. CAA and Regulatory Context
    B. State PSD SIPs
IV. Proposed Action: Finding of Substantial Inadequacy and SIP Call
    A. Introduction
    B. States With SIP PSD Applicability Provisions That Do Not 
Appear To Apply to GHG-Emitting Sources
    C. States With SIP PSD Applicability Provisions That Do Appear 
To Apply to GHG-Emitting Sources
    D. Proposed Finding of SIP Substantial Inadequacy and SIP Call; 
Solicitation of Comment
    E. Comment Period
    F. State Actions
    G. EPA Actions on SIP Submittals; Findings of Failure To Submit 
and Promulgation of FIPs
    H. Streamlining the State Process for SIP Development and 
Submittal
    I. Primacy of the SIP Process
    J. Sanctions
    K. Title V
V. 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 Coordination With 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

[[Page 53895]]

    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
VI. Statutory Authority

II. Overview of Proposed Rule

    In this rulemaking, along with the companion rulemaking described 
elsewhere in this preamble, EPA is taking another in a series of 
actions concerning the PSD program for GHG-emitting sources that will 
begin on January 2, 2011. These two rulemakings take steps to assure 
that in 13 States that do not appear to have authority to issue PSD 
permits to GHG-emitting sources at present, either the State or EPA 
will have the authority to issue PSD permits by January 2, 2011. 
Although for most states, either the State or EPA is already authorized 
to issue PSD permits for GHG-emitting sources as of that date, our 
preliminary information shows that these 13 States have EPA-approved 
PSD programs that do not appear to include GHG-emitting sources and 
therefore do not appear to authorize these states to issue PSD permits 
to such sources. In this rulemaking, EPA proposes to find that these 13 
States' SIPs are substantially inadequate to comply with CAA 
requirements and, accordingly, proposes to issue a SIP Call to require 
a corrective SIP revision that applies their SIP PSD programs to GHG-
emitting sources. In a companion rulemaking, EPA proposes a FIP that 
would give EPA authority to apply EPA's PSD program to GHG-emitting 
sources in case such a State is unable to submit a corrective SIP 
revision by its deadline.
    Under the CAA PSD program, stationary sources must obtain a permit 
prior to undertaking construction or modification projects that would 
result in specified amounts of new or increased emissions of air 
pollutants that are subject to regulation under other provisions of the 
CAA. CAA sections 165(a), 169(1). The permit must, among other things, 
impose emission limitations associated with the best available control 
technology (BACT). CAA section 165(a)(4).
    In recent months, EPA has taken four related actions that, taken 
together, trigger PSD applicability for GHG sources on and after 
January 2, 2011, but limit the scope of PSD. These actions included, as 
they are commonly called, the ``Endangerment Finding'' and ``Cause or 
Contribute Finding,'' which were issued in a single final action,\3\ 
the ``Johnson Memo Reconsideration,'' \4\ the ``Light-Duty Vehicle 
Rule,'' \5\ and the ``Tailoring Rule.'' \6\ Taken together, these 
actions established regulatory requirements for GHGs emitted from new 
motor vehicles and new motor vehicle engines, determined that such 
regulations, when they take effect on January 2, 2011, will subject 
GHGs emitted from stationary sources to PSD requirements, and limited 
the applicability of PSD requirements to GHG sources on a phased-in 
basis.
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    \3\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 
66496 (December 15, 2009).
    \4\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 
2, 2010). This action finalizes EPA's response to a petition for 
reconsideration of ``EPA's Interpretation of Regulations that 
Determine Pollutants Covered by Federal Prevention of Significant 
Deterioration (PSD) Permit Program'' (commonly referred to as the 
``Johnson Memo''), December 18, 2008.
    \5\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
    \6\ ``Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 
2010).
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    We are taking this action on the basis of: Our analysis of the 
affected States' SIP provisions and other relevant State law; the 
States' analyses of their SIP provisions and State law, as indicated in 
letters sent to us as required under the Tailoring Rule; \7\ and direct 
consultation with the individual states and with the National 
Association of Clean Air Agencies (NACAA). As further described in 
section IV.D of this preamble, EPA compiled relevant provisions of the 
affected States' SIPs and other State law into a Technical Support 
Document for this rulemaking, which can be found in the docket for this 
rulemaking. Our analysis, along with information received from 
consulting with the states, indicates that the EPA-approved SIPs for 13 
States appear to not apply the PSD program to GHG sources. In many of 
these states, the SIP applicability provisions apply the PSD program to 
sources of specifically listed air pollutants and do not include GHGs. 
In one State, Connecticut, the SIP explicitly precludes the application 
of PSD to GHG-emitting sources. In other states, the SIP applicability 
provisions apply the PSD program generally to regulated pollutants, and 
these provisions, by their terms, cover GHGs; however, these states 
have other constitutional, State law, or SIP provisions that may limit 
their State laws or SIP requirements to applying only when specifically 
approved by the appropriate State authority. These constitutional or 
statutory provisions may limit the scope of the State PSD applicability 
provisions expressly to pollutants identified at a certain point in 
time as subject to PSD. For example, if the State has not yet expressly 
identified GHGs as subject to its PSD program, the authority to 
regulate GHG-emitting sources may not exist. As a result, absent 
further action, GHG sources that will be required to obtain a PSD 
permit for construction or modification on and after January 2, 2011, 
will be unable to obtain that permit and therefore may be unable to 
proceed with planned construction or modification in those states.
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    \7\ In the Tailoring Rule, EPA asked states to advise EPA by 
letter, within 60 days of publication of the Tailoring Rule, how the 
states intended to implement the requirements of the Tailoring Rule, 
including whether the states had authority to apply their PSD 
program to GHG-emitting sources.
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    In this rulemaking, we are proposing to find that under CAA section 
110(k)(5), the SIP for each of these 13 States is substantially 
inadequate to meet the CAA PSD requirements, and we are proposing a SIP 
Call to require that each affected State submit a corrective SIP 
revision that applies the PSD program to GHG sources. These states are 
listed in table IV-1, ``States with SIPs that Do Not Appear to Apply 
PSD to GHG Sources (Presumptive SIP Call List).''
    As for the remaining States with EPA-approved SIP PSD programs, our 
preliminary research indicates that their SIP PSD applicability 
provisions apply the PSD programs more broadly--for example, many apply 
to sources of ``regulated NSR pollutants''--and therefore appear to 
include GHG-emitting sources. Moreover, we have not to this point 
received information about other provisions in the State constitutional 
or other State or SIP law that would have the effect of limiting the 
applicability of the PSD provisions to exclude GHG-emitting sources. 
Those remaining States, which include all the states with EPA-approved 
PSD programs not listed in table IV-1, are listed in table IV-2, 
``States with SIPs that Appear to Apply PSD to GHG Sources (Presumptive 
Adequacy List).''
    Even so, we are aware of the possibility that some of those states 
may also have other State law provisions that may have the effect of 
limiting their PSD SIP requirements to applying only to pollutants 
specifically approved by the appropriate State authority, which would 
not include GHGs. In light of this possibility, we are soliciting 
comment on whether each of those remaining States' SIPs (see table IV-
2) apply PSD to GHG-emitting sources. If, for any such State, we 
receive information that leads us to conclude that its SIP does not 
apply PSD to GHG-emitting sources, we will take final action to issue a

[[Page 53896]]

finding of substantial inadequacy and a SIP Call for that State, on the 
same schedule as that for the 13 States.
    In a companion action to this rulemaking, we are proposing to 
promulgate, in any State that is not in a position to make a timely 
submittal of the corrective SIP revision, a FIP that will assure that 
sources will be able to obtain the necessary permits, with EPA as the 
permitting authority for GHG emissions.
    In view of the need for prompt action to eliminate or significantly 
limit any time period during which certain GHG sources are precluded 
from constructing or modifying because no entity has the authority to 
issue them permits, we intend to finalize this rulemaking action on or 
about December 1, 2010, and we propose in this rulemaking to give 
states a deadline of 12 months from the date we finalize to submit 
their corrective SIP revision. However, we are also proposing to 
authorize states to accept a shorter deadline, as short as three weeks 
from the date we finalize. If any State is not able to submit a 
corrective SIP revision by its deadline, then EPA, by virtue of the 
authority of the FIP provisions under CAA section 110(c), will 
immediately make a finding that the State has failed to submit the 
required SIP revision and will immediately promulgate the FIP.
    Some states may already be in the process of developing the legal 
authority needed and may be able to submit a SIP revision sooner than 
December 2010. EPA encourages states to take action as expeditiously as 
possible and will assist states as much as possible. Therefore, for 
each State for which EPA is proposing a SIP Call, it is possible that 
by January 2, 2011, when certain GHG sources in the State may be 
required to obtain PSD permits, the State would have the authority in 
place to act on the sources' permit applications. The availability of 
this authority to regulate GHGs would depend on whether the State 
submits a SIP revision before EPA finalizes this action or, 
alternatively, on which deadline the State receives for the corrective 
SIP submittal.
    We ask that, within the comment period for this action, each of the 
states listed in table IV-1 confirm to EPA that its SIP does not apply 
the PSD program to GHG-emitting sources. We also ask that within this 
comment period, every other State in the nation with an approved SIP 
(see table IV-2) review its SIP and inform EPA if its SIP does not 
apply the PSD program to GHG-emitting sources. Further, we ask that the 
states (see table IV-1) for which we are proposing a SIP Call identify 
the deadline--between 3 weeks and 12 months from the date of signature 
of the final SIP Call--that they would accept for submitting their 
corrective SIP revision. For example, assuming that, as we anticipate, 
this rulemaking is signed in final form by December 1, 2010, a State 
may specify that it would accept a SIP submittal deadline that falls 
between December 22, 2010, and December 1, 2011, inclusive.

III. Background

A. CAA and Regulatory Context

    EPA described the relevant background information in the Tailoring 
Rule. Knowledge of this background information is presumed and will be 
only briefly summarized here.
1. SIP PSD Requirements
    Under the CAA PSD requirements, a new or existing source that emits 
or has the potential to emit ``any air pollutant'' in the amounts of 
either 100 or 250 tons per year (tpy), depending on the source 
category, cannot construct or modify unless it first obtains a PSD 
permit that, among other things, imposes emission limitations that 
qualify as BACT. CAA sections 165(a)(1), 165(a)(4), 169(1). 
Longstanding EPA regulations have interpreted the term ``any air 
pollutant'' narrowly so that only emissions of any ``regulated NSR 
pollutant'' trigger PSD. 40 CFR 51.166(j)(1), 52.21(j)(2). 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 promulgated;
    (ii) any pollutant subject to an NSPS promulgated under CAA section 
111;
    (iii) any pollutant subject to a standard promulgated under CAA 
title VI; and
    (iv) ``any pollutant that otherwise is subject to regulation under 
the Act'' (excluding HAPs listed under CAA section 112). 40 CFR 
51.166(b)(49), 52.21(b)(50).
    The CAA contemplates that the PSD program be implemented in the 
first instance by the states and requires that states include PSD 
requirements in their SIPs. CAA section 110(a)(2)(C) requires that--

    Each implementation plan * * * shall * * * include a program to 
provide for * * * regulation of the modification and construction of 
any stationary source within the areas covered by the plan as 
necessary to assure that national ambient air quality standards are 
achieved, including a permit program as required in part[] C * * * 
of this subchapter.

    CAA section 110(a)(2)(J) requires that--

    Each implementation plan * * * shall * * * meet the applicable 
requirements of * * * part C of this subchapter (relating to 
significant deterioration of air quality and visibility protection).

CAA section 161 provides that--

    Each applicable implementation plan shall contain emission 
limitations and such other measures as may be necessary, as 
determined under regulations promulgated under this part [C], to 
prevent significant deterioration of air quality for such region * * 
* designated * * * as attainment or unclassifiable.

    These provisions, read in conjunction with the PSD applicability 
provision--which, as noted above, applies, by its terms, to ``any air 
pollutant,'' and which EPA has, through regulation, interpreted more 
narrowly as any ``NSR regulated pollutant''--and read in conjunction 
with other provisions, such as the BACT provision under CAA section 
165(a)(4), mandate that SIPs include PSD programs that are applicable 
to, among other things, any air pollutant that is subject to 
regulation, including, as discussed below, GHGs on and after January 2, 
2011.\8\
---------------------------------------------------------------------------

    \8\ In the Tailoring Rule, we noted that commenters argued, with 
some variations, that the PSD provisions applied only to NAAQS 
pollutants, and not GHGs, and we responded that the PSD provisions 
apply to all pollutants subject to regulation, including GHGs. See 
75 FR 31560-62, ``Prevention of Significant Deterioration and Title 
V GHG Tailoring Rule: EPA's Response to Public Comments,'' May 2010, 
pp. 38-41. We maintain our position that the PSD provisions apply to 
all pollutants subject to regulation, and we incorporate by 
reference our discussion of this issue in the Tailoring Rule.
---------------------------------------------------------------------------

    A number of states do not 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. On the other hand, most states have PSD programs that have 
been approved into their SIPs, and these states implement their PSD 
programs and act as the permitting authority. These approved SIPs are 
discussed in more detail below.
2. Recent EPA Regulatory Action Concerning PSD Requirements for GHG-
emitting Sources
    By notice dated December 15, 2009, pursuant to CAA section 202(a), 
EPA issued, in a single final action, two findings regarding GHGs that 
are commonly referred to as the ``Endangerment Finding'' and the 
``Cause or Contribute Finding.'' ``Endangerment and Cause or Contribute 
Findings for Greenhouse Gases Under Section 202(a) of the Clean Air 
Act,'' 74 FR 66496. In the Endangerment Finding, the Administrator 
found that six long-lived and directly emitted greenhouse gases--carbon 
dioxide (CO<INF>2</INF>), methane (CH<INF>4</INF>),

[[Page 53897]]

nitrous oxide (N<INF>2</INF>O), hydrofluorocarbons (HFCs), 
perfluorocarbons (PFCs), and sulfur hexafluoride (SF<INF>6</INF>)--may 
reasonably be anticipated to endanger public health and welfare. In the 
Cause or Contribute Finding, the Administrator ``define[d] the air 
pollutant as the aggregate group of the same six * * * greenhouse 
gases,'' 74 FR 66536, and found that the combined emissions of this air 
pollutant from new motor vehicles and new motor vehicle engines 
contribute to the GHG air pollution that endangers public health and 
welfare.
    By notice dated May 7, 2010, EPA published what is commonly 
referred to as the ``Light-Duty Vehicle Rule'' (LDVR), which for the 
first time established Federal controls on GHGs emitted from light-duty 
vehicles. ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324. In 
its applicability provisions, the LDVR specifies that it ``contains 
standards and other regulations applicable to the emissions of six 
greenhouse gases,'' including CO<INF>2</INF>, CH<INF>4</INF>, 
N<INF>2</INF>O, HFCs, PFCs, and SF<INF>6</INF>. 75 FR 25686 (40 CFR 
86.1818-12(a)).
    Shortly before finalizing the LDVR, by notice dated April 2, 2010, 
EPA published a notice commonly referred to as the Johnson Memo 
Reconsideration, which interpreted the term ``subject to regulation,'' 
a term that is one of the regulatory triggers for PSD applicability.\9\ 
The Johnson Memo Reconsideration concluded that for GHGs, promulgation 
of the LDVR would trigger PSD applicability for GHG-emitting sources on 
or after January 2, 2011, which according to EPA is the date upon which 
the LDVR takes effect.
---------------------------------------------------------------------------

    \9\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs,'' 75 FR 17004 
(finalizing EPA's response to a petition for reconsideration of 
``EPA's Interpretation of Regulations that Determine Pollutants 
Covered by Federal Prevention of Significant Deterioration (PSD) 
Permit Program'' (commonly referred to as the ``Johnson Memo''), 
December 18, 2008).
---------------------------------------------------------------------------

    By notice dated June 3, 2010, EPA published what is commonly 
referred to as the ``Tailoring Rule,'' \10\ which limits the 
applicability of PSD through a multi-step phase-in approach to only the 
highest-emitting GHG-emitting sources for a specified period of time, 
and not all GHG-emitting sources at the 100/250-tpy statutory 
thresholds. The Tailoring Rule established the first two steps of the 
approach, which take effect on January 2, 2011, and July 1, 2011, 
respectively. In the Tailoring Rule, EPA codified the Johnson Memo 
Reconsideration interpretation of the term ``subject to regulation'' 
and added a further interpretation of that term designed to expedite 
the adoption of the phase-in approach for PSD permitting for GHGs by 
the states into their SIPs. In addition, in the Tailoring Rule, EPA 
identified the air pollutant that, if emitted or potentially emitted by 
the source in excess of specified thresholds, would subject the source 
to PSD requirements, as the aggregate of the six GHGs, again, 
CO<INF>2</INF>, CH<INF>4</INF>, N<INF>2</INF>O, HFCs, PFCs, and 
SF<INF>6</INF>. The Tailoring Rule further provided that for purposes 
of determining whether the GHGs emitted (or potentially emitted) 
exceeded the specified thresholds, the amount of the GHGs must be 
calculated first on a mass emissions basis and then on a carbon dioxide 
equivalent (CO<INF>2</INF>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 [six] 
gases is multiplied by the Global Warming Potential (GWP) of that gas, 
and then summed for all six gases.'' 75 FR 31518. In the Tailoring 
Rule, we asked states to submit to us letters within 60 days of 
publication describing how they intended to incorporate into their SIPs 
the limitations on PSD applicability included in the rule's phase-in 
approach.
---------------------------------------------------------------------------

    \10\ Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule. 75 FR 31514 (June 3, 
2010).
---------------------------------------------------------------------------

    Further information on the Endangerment and Cause or Contribute 
Findings, the LDRV, the Johnson Memo Reconsideration, and the Tailoring 
Rule is contained in the Tailoring Rule.

3. SIP Inadequacy and Corrective Action

    The CAA provides a mechanism for the correction of flawed SIPs, 
under CAA section 110(k)(5), which provides:
    (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 to correct such 
inadequacies. The Administrator shall notify the State of the 
inadequacies and may establish 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 Administrator to ``find[] 
that [a SIP] * * * is substantially inadequate to * * * comply with any 
requirement of this Act,'' and, based on that finding, to ``require the 
State to revise the [SIP] * * * to correct such inadequacies.'' This 
latter action is commonly referred to as a ``SIP Call.'' In addition, 
this provision provides that EPA must notify the State of the 
substantial inadequacy and authorizes EPA to establish a ``reasonable 
deadline[] (not to exceed 18 months after the date of such notice)'' 
for the submission of the corrective SIP revision.
    If the State fails to submit the corrective SIP revision by the 
deadline, CAA section 110(c) authorizes EPA to ``find[] that [the] 
State has failed to make a required submission.'' CAA section 
110(c)(1)(A). Once EPA makes that finding, CAA section 110(c)(1) 
requires EPA to ``promulgate a Federal implementation plan at any time 
with 2 years after the [finding] * * * unless the State corrects the 
deficiency, and [EPA] approves the plan or plan revision, before [EPA] 
promulgates such [FIP].''

B. State PSD SIPs

1. SIP PSD Applicability Provisions
    As noted earlier in this preamble, most states have approved PSD 
SIPs. Most of those SIPs identify the pollutants addressed under their 
PSD program as any ``regulated NSR pollutant.'' This definition covers 
any ``pollutant subject to regulation'' and therefore, by its terms, in 
effect is automatically updating and needs no revision in order to 
cover pollutants that become subject to regulation under the CAA. As a 
result, these provisions cover GHG emissions when they become subject 
to regulation under other provisions of the CAA. See 40 CFR 
52.21(b)(50).
    However, EPA has become aware that a minority of approved SIPs fail 
to include this broad approach to identifying pollutants subject to PSD 
and instead simply list the individual pollutants by name. These SIPs 
do not identify GHGs as among the pollutants addressed under their PSD 
program. As a result, these applicability provisions, by their terms, 
do not appear to apply the PSD requirements to sources of GHGs when 
GHGs become ``subject to regulation'' under the CAA on January 2, 2011.
    In addition, the PSD SIP applicability provisions of one State that 
we are aware of, Connecticut, explicitly excludes CO<INF>2</INF> as an 
``air pollutant,'' so that CO<INF>2</INF> is not subject to PSD 
requirements.
2. Other Relevant State Law Provisions
    Some states may have other State laws, including other SIP 
provisions that bear upon the applicability of their PSD programs to 
GHG-emitting sources.
    First, some states may have in their SIPs some sort of ``general 
authority clause'' that affirms the State's legal authority to issue, 
and enforce

[[Page 53898]]

compliance with, permits that are consistent with Federal requirements. 
If one of the states listed in table IV-1 of this preamble as having a 
SIP that does not explicitly apply PSD to GHG emitters nevertheless has 
such a ``general authority clause,'' then the SIP, read as a whole, may 
be considered to apply PSD to GHG sources.
    For an example of the type of ``general authority clause'' that may 
have this effect, we refer to correspondence between the California Bay 
Area Air Quality Management District (BAAQMD) and EPA Region IX that is 
included in the docket for this rulemaking. In a letter dated October 
28, 2009, the BAAQMD proposed to exercise general authority in order to 
issue air permits to sources of PM<INF>2.5</INF> even though its air 
permit regulations did not contain specific provisions for 
PM<INF>2.5</INF> emissions. Under the proposed approach, with which EPA 
concurred, BAAQMD exercised general authority under the administrative 
requirements within its air permit regulations, which provide that the 
Air Pollution Control Officer ``may impose any permit condition that he 
deems reasonably necessary to insure compliance with Federal or 
California law or District regulations * * *.'' See Regulation 2-1-403 
included in the docket for this rulemaking.
    Second, some states may have, in their SIPs, statutes, or 
constitutions, a provision that precludes ``forward adoption,'' that 
is, that prevents the State law from incorporating by reference or 
otherwise adopting any requirements not specifically adopted by the 
State legislature or other State authority. In particular, some states 
may include a SIP PSD applicability provision that incorporates by 
reference (IBR) our Federal PSD rule at 40 CFR 52.21--including the 
definition of ``regulated NSR pollutant''--but that further provides 
that this IBR is not ``rolling'' and therefore is limited to only 
pollutants identified as regulated NSR pollutants as of the date the 
State adopted the PSD provision. Any of these provisions could limit 
the SIP PSD applicability rule to only the pollutants that were 
regulated as of the time the State adopted the PSD applicability rule, 
which means the SIP PSD program would not cover GHG-emitting sources 
until the State took specific action to that effect.

IV. Proposed Action: Finding of Substantial Inadequacy and SIP Call

A. Introduction

    Beginning on January 2, 2011, certain stationary sources that 
construct or undertake modifications will become subject to the CAA 
requirement to obtain a PSD permit for their GHG emissions. This is 
because of the following CAA statutory and EPA regulatory requirements: 
Under CAA sections 165(a) and 169(1), as interpreted through 
longstanding EPA regulations, PSD applies to sources that emit 
specified amounts of ``regulated NSR pollutants,'' which include 
specified air pollutants as well any other ``[air] pollutant'' that is 
``subject to regulation.'' 40 CFR 51.166(j)(1), (b)(49)(iv). By notice 
dated May 7, 2010, EPA promulgated the Light-Duty Vehicle Rule (LDVR), 
which establishes requirements for GHGs. 75 FR 25324. By the terms of 
the LDVR, these emission limits take effect on January 2, 2011. The 
LDVR identified the GHGs to which it applies as a single air pollutant 
that consists of CO<INF>2</INF>, CH<INF>4</INF>, N<INF>2</INF>O, HFCs, 
PFCs, and SF<INF>6</INF>. The LDVR followed EPA's Endangerment and 
Cause or Contribute Findings, issued by notice dated December 15, 2009, 
by which EPA found that GHGs--defined to include the same six 
constituents--may reasonably be anticipated to endanger public health 
and welfare. By notice dated April 2, 2010, EPA promulgated the Johnson 
Memo Reconsideration. 75 FR 17004. In this action, EPA made clear that 
the regulation of GHGs by the LDVR will trigger the applicability of 
PSD requirements to GHG-emitting stationary sources as of January 2, 
2011, because GHGs will become ``subject to regulation'' through the 
LDVR. By notice dated June 3, 2010, EPA promulgated the Tailoring Rule, 
which narrows PSD applicability to specified GHG-emitting sources on a 
specified phase-in schedule and makes clear that GHGs--defined as the 
same single pollutant, with six constituent gases, as described in the 
LDVR--are the ``[air] pollutant'' to which PSD requirements apply. 75 
FR 31514. Pursuant to the Tailoring Rule, PSD permitting requirements 
for construction or modification will apply to certain GHG-emitting 
stationary sources beginning on January 2, 2011, for the first step of 
the Tailoring Rule, and beginning on July 1, 2011, for the second step 
of the Tailoring Rule.
    A number of states do not have an approved PSD SIP; as a result, in 
these states \11\ the applicable regulatory authority is EPA's 
regulations, found in 40 CFR 52.21, which constitute a FIP. For sources 
in these states, either the EPA Regional Office or the State acting as 
EPA's delegatee is the permitting authority. Because EPA's regulations 
apply directly, sources in these states that emit GHGs will become 
subject to PSD for their GHG emissions, to the extent provided under 
the Tailoring Rule, on January 2, 2011. These sources will be able, on 
and after January 2, 2011, to apply for and receive in due course their 
PSD permits either from EPA directly or from those State permitting 
authorities acting on EPA's behalf.
---------------------------------------------------------------------------

    \11\ In the following listed State or local jurisdictions, as 
well as in all Indian country, EPA is the PSD permitting authority, 
implementing the Federal PSD regulation at 40 CFR 52.21: American 
Samoa; Arizona (some areas); California (most areas); District of 
Columbia; Guam; Massachusetts; New Jersey; New York; Northern 
Mariana Islands; Puerto Rico; Trust Territories; 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 Federal PSD regulation: Arizona 
(some areas); California (some areas); Hawaii; Illinois; Minnesota; 
Nevada (most areas); Pennsylvania (some areas); and Washington.
---------------------------------------------------------------------------

    All of the other states administer their PSD program through an 
approved SIP and, as a result, they or their local entities are the PSD 
permitting authority. This rulemaking concerns whether those approved 
SIP PSD programs include GHG-emitting sources and, for those that do 
not, the steps that EPA will take to assure that a PSD permit program 
that includes GHGs is in place.

B. States With SIP PSD Applicability Provisions That Do Not Appear To 
Apply to GHG-Emitting Sources

    Our review of the SIPs and other authorities, as well as 
consultation with states, as described further in section IV.D of this 
preamble and the Technical Support Document included in the docket for 
this rulemaking, indicates that for 13 of the states with approved PSD 
SIPs, the PSD programs of their SIPs do not appear to apply to GHG-
emitting sources. These states are listed in table IV-1, ``States with 
SIPs that Do Not Appear to Apply PSD to GHG Sources (Presumptive SIP 
Call List).'' In a number of these SIPs, the PSD applicability 
provisions do not mirror EPA's regulatory provisions by applying PSD 
requirements to sources of any air pollutant ``subject to regulation''; 
instead, the PSD applicability provisions specifically list the air 
pollutants to which the PSD program applies and do not include GHGs on 
that list. As a result, the PSD applicability provisions do not, by 
their terms, cover GHG-emitting sources.
    In addition, Connecticut's SIP appears by its terms to preclude the 
application of PSD to GHG-emitting sources.
    Further, some of these states have SIP PSD provisions that by their 
terms apply PSD to regulated NSR pollutants, or

[[Page 53899]]

have a substantially similarly phrased requirement, but also have State 
constitutional or other statutory or SIP provisions that appear to have 
the effect of limiting PSD applicability to air pollutants identified 
on a certain date. Therefore, State law, read as whole, would not 
appear to apply PSD requirements to GHGs until the appropriate State 
authority takes action to specifically subject PSD to GHGs, and the 
State has not yet done so.
    We conclude that the states with SIPs or State law with these 
provisions do not appear to apply the PSD program to GHG-emitting 
sources, and we are including them in table IV-1. We recognize that 
stakeholders may have other interpretations of these provisions, and we 
solicit comments from stakeholders on their interpretations. In 
addition, some of these SIPs may include what we will refer to as a 
``general authority provision,'' which is a provision for the State to 
issue PSD permits that comply with EPA requirements, as described 
earlier in this preamble. If so, it is possible that these provisions 
could be interpreted to authorize the State in some cases to issue to 
GHG sources PSD permits that incorporate EPA's regulatory requirements, 
as found in 40 CFR 51.166. As a result, we consider table IV-1 to be a 
presumptive SIP Call list.

   Table IV-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     IX
 Maricopa County, Pima County, and Indian
 Country).
Arkansas.........................................  VI
California: Sacramento Metropolitan AQMD.........  IX
Connecticut......................................  I
Florida..........................................  IV
Idaho............................................  X
Kansas...........................................  VII
Kentucky: Jefferson County; Rest of State........  IV
Nebraska.........................................  VII
Nevada: Clark County.............................  IX
Oregon...........................................  X
Texas............................................  VI
------------------------------------------------------------------------

C. States With SIP PSD Applicability Provisions That Do Appear To Apply 
to GHG-Emitting Sources

    On the other hand, as noted above, for most of the states with 
approved SIPs, those SIPs generally apply PSD to sources of any 
``regulated NSR pollutant,'' and we have not received information 
indicating that the State law includes other provisions that may have 
the effect of precluding PSD from applying to GHG-emitting sources. As 
a result, EPA is including a list of states with presumptively adequate 
SIPs in table IV-2, ``States with SIPs That Appear To Apply PSD to GHG 
Sources (Presumptive Adequacy List).''

  Table IV-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     IV
 State.
California: Mendocino County AQMD; Monterey Bay    IX
 Unified APCD; North Coast Unified AQMD; Northern
 Sonoma County APCD.
Colorado.........................................  VIII
Delaware.........................................  III
Georgia..........................................  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;      IV
 Western NC; Rest of State.
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;      IV
 Memphis; Rest of State.
Vermont..........................................  I
Virginia.........................................  III

[[Page 53900]]

 
West Virginia....................................  III
Wisconsin........................................  V
Wyoming..........................................  VIII
Utah.............................................  VIII
------------------------------------------------------------------------

    We have developed these two lists of states--one listing states 
whose PSD program appears to not apply to GHG-emitting sources and one 
listing states whose program appears to cover such sources--based on 
our own preliminary research, consultation with states, and review of 
the 60-day letters, described earlier in this preamble, submitted thus 
far by states in response to the Tailoring Rule. As explained elsewhere 
in this preamble, we ask that each State with an approved SIP submit 
information during the comment period for this rulemaking pertinent to 
whether its SIP--including the PSD applicability provisions and any 
other relevant provisions--covers GHG-emitting sources.

D. Proposed Finding of SIP Substantial Inadequacy and SIP Call; 
Solicitation of Comment

    For each of the states listed in table IV-1 of this preamble, we 
propose to issue a finding that the SIP is ``substantially inadequate * 
* * to * * * comply with [the PSD] requirement[s]'' and to ``require 
the State to revise the plan as necessary to correct such 
inadequacies,'' i.e., to issue a SIP Call. CAA section 110(k)(5). For 
each of these states, the SIP appears to not apply the PSD program to 
GHG-emitting sources.
    In consultation with the affected states, EPA compiled relevant 
provisions of the affected States' SIPs and other State law into a 
Technical Support Document for this rulemaking. The Technical Support 
Document, which can be found in the docket for this rulemaking, 
presents the basis for EPA's proposed finding of substantial inadequacy 
for the states listed in table IV-1.
    As discussed elsewhere in this preamble, we invite comment on this 
proposal. For any State listed in table IV-1, if we do not receive any 
further information from the State or other commenters, we expect to 
finalize our proposed finding and SIP Call. Also for any State listed 
in table IV-1, if we do receive additional information that our 
interpretation of these provisions is incorrect or that the SIP 
includes a general authority provision so that, read as a whole, the 
SIP applies the PSD program to GHG sources, we will not finalize our 
proposed finding and SIP Call.
    Our basis for the proposed finding--and the proposed SIP Call that 
is based on this finding--is that CAA section 110(k)(5) provides that 
EPA may make the finding when the SIP is ``substantially inadequate * * 
* to * * * comply with any requirement of [the CAA],'' and this 
includes the PSD requirements. As discussed earlier in this preamble, 
SIPs are required to include PSD programs that apply to sources that 
emit pollutants subject to regulation; as a result, the SIPs at issue 
merit a finding of substantial inadequacy because they fail to apply 
the PSD program to GHG-emitting sources on and after January 2, 2011.
    For all other states with approved PSD SIPs--which are the ones 
listed in table IV-2--we solicit comment on whether their SIPs, read as 
a whole, apply the PSD program to GHG-emitting sources. If, on the 
basis of additional information, we conclude that their PSD programs do 
not apply to GHG-emitting sources, we will issue a final finding of 
substantial inadequacy and SIP Call on the same schedule as that for 
any of the states for which we are issuing a proposed finding and SIP 
Call.
    We recognize that PSD requirements will not apply to GHG-emitting 
sources until January 2, 2011, but that for any State for which we 
finalize a finding of substantial inadequacy and a SIP Call, our plan 
is to do so approximately one month in advance of that date. EPA 
believes this timing is justified. SIPs must include, at least a month 
prior to January 2, 2011, a provision applying PSD requirements to GHG-
emitting sources as of January 2, 2011, in order to give sources notice 
that the requirement applies and that the State will act as the 
permitting authority. We recognize that as a practical matter, some 
states may wish that we impose a FIP effective as of January 2, 2011, 
in order to avoid any period of time when the GHG-emitting sources 
identified in the Tailoring Rule as subject to PSD are unable to obtain 
a permit due to lack of a permitting authority. We cannot impose a FIP 
until we have first finalized the SIP Call and given the State a 
reasonable period of time to make the corrective SIP submission. EPA 
strongly believes that this necessarily entails, for those states, 
finalizing the SIP Call prior to January 2, 2011.
    After the close of the comment period for this proposed action, we 
will review all comments. If we determine that the PSD SIP for any 
State either by its terms does not apply to sources of GHGs or has 
conflicting provisions that create ambiguity as to whether it applies 
to sources of GHGs (such as an applicability provision that explicitly 
excludes GHG sources, coupled with a general-authority provision that 
could be read to authorize permitting of GHG sources), then, for that 
State, we will finalize the finding that the SIP is ``substantially 
inadequate * * * to * * * comply with [the PSD] requirement[s].'' At 
the same time, we will finalize a SIP Call for that State. We will make 
the finding of substantial inadequacy, notify the State that we have 
made the finding, and issue the SIP Call in a final action that we 
intend to sign on or about December 1, 2010, and submit for publication 
in the Federal Register as soon as possible thereafter. We will notify 
the State of the finding of substantial inadequacy by letter and by 
posting the signed action on our Web Site. In view of the urgency of 
the task, which is to ensure that a PSD permitting authority for 
affected GHG sources is in place by January 2, 2011, we propose to give 
the final SIP Call an effective date of its publication date. We 
recognize that this process is highly expedited, but we believe that 
this is essential to maximize our and the States' opportunity to put in 
place a permitting authority to process PSD permit applications 
beginning on January 2, 2011, without which sources may be unable to 
proceed with plans to construct or modify. Commenters should feel free 
to advise us if they believe a different approach can achieve this 
goal.

[[Page 53901]]

E. Comment Period

    In order to deepen our understanding of what provisions are in the 
relevant PSD SIPs, and how they are to be interpreted, as well as to 
ensure that we have a comprehensive picture of all the SIPs in this 
regard, we ask each State to give us the following information by the 
close of the comment period on this rule:
1. States With SIP PSD Applicability Provisions That Do Not Appear To 
Include GHGs
    We ask that each of the states listed in table IV-1 of this 
preamble--for which we have information that their SIP PSD 
applicability provisions do not include GHGs, and for which we propose 
a finding of substantial inadequacy and a SIP Call--provide the 
following information by the end of the comment period for this action:
    (a) Confirm, with citations and a copy of the relevant language, 
that the SIP PSD applicability provisions do not explicitly include GHG 
sources;
    (b) Identify and provide a copy of any provision that specifically 
precludes PSD applicability for GHG sources;
    (c) Identify and provide a copy of any provision of State 
constitution or other law, including the SIP, that may be read to limit 
the applicability of the PSD program to pollutants identified at a 
certain point in time, and therefore not to GHGs.
    (d) Indicate, with citations and a copy of the relevant language, 
if any, whether the SIP includes general authority for the State to 
issue PSD permits that meet EPA requirements;
    (e) Indicate, with citations and a copy of the relevant language, 
any other provisions of the SIP or State law that may bear on the 
applicability of the PSD program to GHG-emitting sources.
    (f) Indicate the State's interpretation as to whether the SIP, read 
as a whole, does or does not apply the PSD program to GHG sources or 
authorize the State to issue PSD permits for GHG sources that meet EPA 
requirements. This statement should be made by the commissioner or 
general counsel of the State environmental agency, or by the 
counterpart at the local or tribal level, or by the State Attorney 
General.
    (g) If the SIP, read as a whole, does not apply the PSD program to 
GHG sources or authorize the issuance of permits to GHG sources, 
indicate whether the State plans to develop adequate authority to apply 
the PSD program to GHG sources and to submit it to EPA as a SIP 
revision by December 1, 2010, which is shortly before the date on 
which, as discussed below, EPA intends to finalize its finding of 
inadequacy and finalize the SIP Call.
    As discussed later in this preamble, we also ask these states to 
inform us, by the end of the comment period, of the period of time (as 
bounded in this preamble) that they would accept as the deadline for 
submittal of their SIP revisions in response to a SIP Call.
2. All Other States With Approved SIPs
    We request that each State with an approved PSD SIP (see table IV-
2) that is not also one of the 13 States for which we propose a SIP 
Call review its PSD provisions to confirm that it applies the PSD 
program to GHG sources. We request that each of these states inform us 
if it has a SIP PSD applicability provision that does not by its terms 
apply to pollutants ``subject to regulation'' or similar language, or 
otherwise apply to GHG sources. In addition, we request that each of 
these states inform us if it has another State law provision or legal 
interpretation that may have the effect of limiting PSD applicability 
to air pollutants covered by EPA's PSD program as of a certain date, 
and therefore does not include GHGs. For any State whose PSD program, 
for any of these reasons, may not apply to GHG-emitting sources, we 
request the same information described in section IV.E.1 of this 
preamble as soon as possible during the comment period. Once we receive 
this information, if we believe it shows that the State's SIP PSD 
program does not apply to GHG sources, we will finalize a finding of 
substantial inadequacy and a SIP Call on the same schedule as any of 
the states for which we are proposing a finding and SIP Call.

F. State Actions

1. State Submission of SIP Revision Prior to Final SIP Call
    If a State for whose SIP we propose a finding of substantial 
inadequacy submits a SIP revision by December 1, 2010, that purports to 
correct that inadequacy, we will not finalize the finding or SIP Call 
for that State. Rather, we will take action on their SIP submission 
promptly, as discussed below.
2. State Response to SIP Call
    a. Timing of State Submittal
    Under CAA section 110(k)(5), in notifying the State of the finding 
of substantial inadequacy and issuing the SIP Call, we ``may establish 
reasonable deadlines (not to exceed 18 months after the date of such 
notice) for the submission of such plan revisions.'' We propose to 
allow the State 12 months from the date of the notice, which will be 
the date on which we sign the final action, to submit the SIP revision, 
unless, during the comment period, the State expressly advises that it 
would not object to a shorter period--as short as 3 weeks from the date 
of signature of the final rule--in which case we will establish the 
shorter period as the deadline. As stated earlier in this preamble, EPA 
intends to finalize the SIP Call on or about December 1, 2010. If the 
Administrator signs the notice on that date, the earliest possible 
deadline would be December 22, 2010. The purpose of establishing the 
shorter period as the deadline--assuming that State advises us that it 
does not object to that shorter period--is to accommodate states that 
wish to ensure that a FIP is available as, in effect, a backstop to 
ensure that there is no gap in PSD permitting. If the State does not 
advise us that it does not object to a shorter deadline, then the 12-
month deadline will apply.
    It must be emphasized that for any State that receives a deadline 
after January 2, 2011, the affected GHG-emitting sources in that 
State--which are those larger GHG-emitters identified in the Tailoring 
Rule--will be unable to receive a federally approved permit authorizing 
construction or modification. Therefore, after January 2, 2011, these 
sources may not lawfully be able to construct or modify until the date 
that EPA either approves the SIP submittal or promulgates a FIP.
    EPA proposes that this 3-week-to-12-month time period, although 
expedited, meets the CAA section 110(k)(5) requirement as a 
``reasonable deadline[]'' and we welcome comment on this 
interpretation. The term ``reasonable deadline[],'' as it appears in 
that provision, is not defined. We interpret it to mean a time period 
that is sensible or logical, based on all the facts and circumstances. 
Those facts and circumstances include (i) the State SIP development and 
submission process, (ii) the imperative to minimize the period when 
sources will be subject to PSD but not have available a PSD permitting 
authority to act on their permit application, and therefore will be 
unable to construct or modify; and (iii) the preferences of the State. 
The following elaborates on those three facts and circumstances.
    First, although the 12-month period is consistent with the time 
period required for SIP revisions in at least one previous SIP call 
that EPA issued, the NOx SIP

[[Page 53902]]

Call,\12\ we recognize that a period shorter than 12 months is 
expedited in light of the time involved in most State SIP development 
and submission processes. In particular, we recognize that some states 
may need to undertake full-blown rulemaking actions, which may 
typically be time-consuming, and we acknowledge that some states may 
need to change their statutory provisions, which may typically be even 
more time-consuming. Even so, we understand that at least some states 
have emergency processes that may be used to significantly expedite 
action. Although this is a matter of State process, we are prepared, as 
described elsewhere in this preamble, to work with the states to 
develop expedited methods for developing, processing, and submitting 
SIP revisions.
---------------------------------------------------------------------------

    \12\ ``Finding of Significant Contribution and Rulemaking for 
Certain States in the Ozone Transport Assessment Group Region for 
Purposes of Reducing Regional Transport of Ozone; Rule.'' 63 FR 
57356 (October 27, 1998).
---------------------------------------------------------------------------

    Second, the need to minimize the period when sources may be unable 
to construct or modify due to the lack of regulatory authority to act 
on their permit applications is an essential consideration. A shorter 
period for SIP submittal means that either the State, through the SIP 
revision that it submits on an expedited basis in light of this tight 
schedule, or EPA, through a FIP, will become the permitting authority 
sooner and will then be able to act on permit applications and issue 
permits that allow new construction and modification of existing 
plants. The purposes of the PSD provisions include both the protection 
of the environment and the promotion of economic development, see, 
e.g., CAA section 160(3)-(4), and the D.C. Circuit has held that the 
terms of the PSD provisions should be interpreted with these goals in 
mind. New York v. EPA, 413 F.3d 3, 23(D.C. Cir.), rehearing en banc 
den., 431 F.3d 801 (2005). Accordingly, determining a ``reasonable 
deadline[]'' for the submittal of a PSD SIP revision should account for 
the need to promote economic development by assuring the availability 
of a permitting authority to process permit applications.
    Finally, the preference of the State is important because the 
deadline for submittal of the corrective SIP revision in response to a 
SIP Call acts as a burden on the State. If the State does not object to 
an earlier deadline under which it must operate--which, in a sense, is 
contrary to the State's self-interest because an earlier deadline 
typically increases burdens--then that is an indication of the 
reasonableness of the deadline.
    We suggest the following model language that a State wishing to 
indicate that it does not object to a deadline shorter than 12 months 
could consider using in its response to our request for comments. Of 
course, the State is not obligated to use this specific language, and 
we present it solely for the convenience of the states:

    U.S. EPA has proposed a finding of substantial inadequacy and 
SIP Call under Clean Air Act section 110(k)(5) concerning the 
State's SIP PSD applicability provisions. Further, U.S. EPA has 
proposed a deadline for the State's submittal of a corrective SIP 
revision. U.S. EPA has requested the State's comments on the 
proposed deadline. In light of EPA's perception of the importance of 
having in place as soon as possible a PSD permitting authority for 
any GHG-emitting sources that may be subject to PSD requirements, 
the State does not object to U.S. EPA's establishment of a deadline 
of [identify the deadline].

    b. Substance of State Submittal
    (i) Addition of GHGs to List of Pollutants Subject to PSD
    We propose to make a finding of substantial inadequacy and issue a 
SIP Call for each State whose SIP fails to apply the PSD program to 
GHG-emitting sources. Accordingly, for the State to correct its SIP, 
the State must submit a SIP revision that applies PSD to GHG sources. 
For those states whose SIP applies PSD to listed air pollutants, the 
State may accomplish this correction in at least two different ways. 
First, the State may revise its SIP so that instead of applying PSD to 
sources of individually listed pollutants, the SIP applies PSD to 
sources that emit any ``regulated NSR pollutant.'' We recommend that 
states follow this approach. It is consistent with our 2002 ``NSR 
Reform'' rule. ``Prevention of Significant Deterioration (PSD) and 
Nonattainment New Source Review (NSR); Final Rule and Proposed Rule,'' 
67 FR 80186, 80240 (December 31, 2001). In addition, it would resolve 
any issues about whether the State has authority to issue permits for 
sources of PM<INF>2.5</INF> emissions, as well as permits for sources 
of pollutants that EPA may subject to regulation for the first time in 
the future. Secondly, and as an alternative, the State may retain its 
approach of applying PSD to sources of individually listed pollutants 
but submit a SIP revision that includes GHGs on that list of 
pollutants. If a State chooses this second approach, we will approve 
the SIP revision as SIP strengthening.
    (ii) Definition and Calculation of Amount of GHGs
    In adding GHGs to the list of pollutants subject to PSD 
applicability, the State must define GHGs as a single pollutant that is 
the aggregate of the group of six gases: CO<INF>2</INF>, 
CH<INF>4</INF>, N<INF>2</INF>O, HFCs, PFCs, and SF<INF>6.</INF> As EPA 
stated in the Tailoring Rule, ``[t]he final LDVR for GHGs specifies, in 
the rule's applicability provisions, the air pollutant subject to 
control as the aggregate group of the six GHGs * * *. Because it is 
this pollutant that is regulated under the LDVR, it is this pollutant 
to which PSD * * * appli[es].'' 75 FR 31528.
    Although we propose to require that the State define GHGs as 
described immediately above, we solicit comment on whether the State 
may adopt a different definition that is at least as stringent, and, if 
so, what such a definition might be. We caution that a definition that 
includes more gases than the six identified above could prove to be 
less stringent in certain ways because it could allow greater 
opportunities for a source of different gases to net out of PSD.
    We note that in this rulemaking, we are not addressing the issue of 
accounting for emissions of GHGs from bioenergy and other biogenic 
sources (which are generated during the combustion or decomposition of 
biologically based material such as forest or agriculture products). 
When we finalized the Tailoring Rule, we noted that EPA planned to seek 
comment on how to address emissions of biogenic CO<INF>2</INF> under 
the PSD and title V programs through future action, such as a separate 
Advance Notice of Proposed Rulemaking (ANPR) (75 FR at 31591). As a 
first step, we recently issued a Call for Information (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 applicability under PSD and with 
regard to the BACT review process under PSD. See ``Call for 
Information: Information on Greenhouse Gas Emissions Associated with 
Bioenergy and Other Biogenic Sources,'' 75 FR 41173 (July 15, 2010).
    Additional information on this CFI is available at http://www.epa.gov/climatechange/emissions/biogenic_emissions.html. In the 
CFI we stated: ``In response to this Call for Information, interested 
parties are invited to assist 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 
options by providing policy analyses, proposed or published 
methodologies, or other relevant information. Interested parties are 
also invited to submit data or

[[Page 53903]]

other relevant information about the current and projected scope of GHG 
emissions from bioenergy and other biogenic sources.'' 75 FR at 41174.
    Without prejudging the outcome of the CFI process, EPA anticipates 
that the comments we receive in response to the CFI, with regard to 
applicability under PSD and with regard to the BACT review process 
under PSD, will inform any subsequent actions to address applicability 
of emissions of GHGs from bioenergy and other biogenic sources under 
the PSD program.
    (iii) Thresholds
    For a State to correct its SIP, the State must submit a SIP 
revision that applies PSD to GHG sources. Once a State applies the PSD 
program to GHG-emitting sources, the State must determine the threshold 
for emissions from those sources that will trigger PSD. In the 
Tailoring Rule, EPA promulgated a determination that the CAA thresholds 
of 100 or 250 tpy (depending on the source category) would not apply as 
of January 2, 2011, or for a period of years thereafter, in light of, 
in part, administrative concerns. Instead, EPA promulgated a phase-in 
approach that limits PSD applicability to only the largest GHG emitting 
sources for a period of time.
    A State, in revising its SIP to apply PSD to GHG sources, may adopt 
the Tailoring Rule phase-in approach into its SIP or it may adopt lower 
thresholds, but if it adopts lower thresholds, it must show that it has 
``adequate personnel [and] funding * * * to carry out,'' that is, 
administer and implement, the PSD program with those lower thresholds, 
in accordance with CAA section 110(a)(2)(E)(i).\13\
---------------------------------------------------------------------------

    \13\ We indicated in the Tailoring Rule (75 FR at 31525-26) that 
a State may undertake a SIP action to either: (1) Revise its PSD 
program, which already applies to GHG-emitting sources, in order to 
implement the tailoring approach; or (2) revise its PSD program so 
that it applies to GHG-emitting sources, in which case the State 
must also establish its PSD applicability thresholds for PSD. This 
rulemaking relates to the latter described SIP action.
---------------------------------------------------------------------------

    In the Tailoring Rule, EPA adopted a CO<INF>2</INF>e metric and use 
of short tons (as opposed to metric tons) for calculating GHG emissions 
in order to implement the higher thresholds. 75 FR 31530, 31532. As 
noted above, a State retains the authority to adopt lower thresholds 
than in the Tailoring Rule in order to meet statutory requirements. As 
a result, the states are not obligated to adopt the CO<INF>2</INF>e 
metric or use of short tons; however, the State must assure that its 
approach is at least as stringent as the thresholds in the Tailoring 
Rule.
    (iv) State Adoption of ``Regulated NSR Pollutants''
    Beyond this, we encourage--but do not propose to require--the 
states for which we propose a SIP Call to submit a SIP revision to 
adopt the PSD applicability provision found in EPA regulations--which 
is that PSD applies to ``regulated NSR pollutant[s],'' including any 
air pollutant ``subject to regulation''--instead of simply adding GHGs 
to the SIP's list of pollutants subject to PSD.
    There are many advantages for a State to revise its SIP PSD 
applicability provisions in the manner that we encourage. First, doing 
so would more readily incorporate, for State law purposes, the phase-in 
approach for PSD applicability to GHG sources that EPA has developed in 
the Tailoring Rule and expects to develop further through additional 
rulemaking. As explained in the Tailoring Rule, incorporating this 
phase-in approach for State law purposes--including Steps 1 and 2 of 
the phase-in as promulgated in the Tailoring Rule and additional steps 
of the phase-in that EPA may promulgate in the future--can be most 
readily accomplished through State interpretation of the ``subject to 
regulation'' prong of the definition of ``regulated NSR pollutant.'' 
If, instead of adopting into its SIP the ``regulated NSR pollutant'' 
trigger for PSD applicability, the State simply adds GHGs to its list 
of pollutants subject to PSD, then the SIP will not include the term 
``subject to regulation'' and therefore may not include any vehicle or 
``hook'' for the State to adopt by interpretation the current and any 
future steps of the phase-in approach. As a result, the State may have 
to adopt and submit for EPA approval additional SIP revisions to 
incorporate the current and future steps of the phase-in approach.
    There are other advantages to a State that adopts EPA's definition 
of ``regulated NSR pollutant.'' The SIP would apply PSD to sources 
emitting PM<INF>2.5</INF>, thereby resolving as well the problem that 
some SIPs have of failing to cover PM<INF>2.5</INF> for PSD purposes. 
That is, many of the states for which we propose a SIP Call due to 
their SIPs' failure to apply PSD to sources that emit GHGs also may 
fail to apply PSD to sources that emit PM<INF>2.5</INF>.\14\ To this 
point in time, this failure has not been a problem because we have 
allowed the State to issue PSD permits for sources of PM<INF>2.5</INF> 
emissions through what is commonly called EPA's ``1997 PM<INF>10</INF> 
surrogate policy.'' Under the 1997 PM<INF>10</INF> surrogate policy, 
sources and permitting authorities satisfy the CAA requirements for 
PM<INF>2.5</INF> in PSD permits by applying the PM<INF>10</INF> 
requirements as a surrogate for PM<INF>2.5</INF>. Each permit that 
relies on our PM<INF>10</INF> surrogate policy is subject to review as 
to the adequacy of the presumption that the PM<INF>2.5</INF> 
requirements are satisfied. However, we note that EPA has issued a 
notice of proposed rulemaking to end the prospective use of the 1997 
PM<INF>10</INF> surrogate policy by the end of 2010 (75 FR 6827, 
February 11, 2010). We are not at this time taking action with respect 
to these SIPs on account of PM<INF>2.5</INF>, but we encourage states 
to submit SIP revisions that apply PSD to sources of PM<INF>2.5</INF>.
---------------------------------------------------------------------------

    \14\ Following a 1997 review of our national ambient air quality 
standards (``NAAQS'') for particulate matter, we promulgated NAAQS 
for fine particles (PM<INF>2.5</INF>). We then designated all areas 
of the country as ``attainment,'' ``nonattainment,'' or 
unclassifiable for the PM<INF>2.5</INF> standards, which became 
effective in April 2005. Pursuant to the CAA, States are obliged to 
revise their PSD regulations to include the new PM<INF>2.5</INF> 
standards.
---------------------------------------------------------------------------

    In addition, the SIP would, in effect, automatically update the 
State PSD program to apply PSD to any newly regulated pollutants and 
thereby avoid recurrence of the present problem of a gap in the PSD 
program coverage for newly regulated pollutants. Finally, State 
adoption of EPA's definition of ``regulated NSR pollutant'' would allow 
the SIP to mirror EPA regulations and the SIPs of most states, which 
may promote consistency and ease administration.
    Notwithstanding the advantages to a State of revising its SIP to 
apply PSD to ``regulated NSR pollutants,'' we do not, at this time, 
propose a finding that the SIP is substantially inadequate to comply 
with a CAA requirement or propose to issue a SIP call that would 
require a SIP revision that applies PSD to ``regulated NSR 
pollutants.'' Instead, as noted above, our proposed finding and SIP 
call are limited to the failure to apply PSD to GHG-emitting sources, 
and the SIP revision may simply include GHGs on the State's list of 
pollutants subject to PSD. We do not propose to require the ``regulated 
NSR pollutant'' approach because that approach is not necessary to 
correct the substantial inadequacy--which is the failure of the PSD SIP 
to cover GHG sources--for which we propose to issue a SIP Call. Rather, 
that substantial inadequacy may be corrected more narrowly by listing 
GHGs.
3. General Authority Provision
    As noted earlier in this preamble, some SIPs that apply PSD to 
sources of specified pollutants, not including GHGs, may also include a 
general authority provision that provides general authority to issue 
PSD permits that meet EPA requirements. For states that include such 
general authority, it

[[Page 53904]]

may be possible to read their SIPs as a whole to authorize the issuance 
of PSD permits to GHG sources. In that case, EPA would not finalize a 
finding of substantial inadequacy or a SIP Call for that State.
    Even so, EPA encourages states with these SIP provisions to submit 
a SIP revision that applies PSD to GHG-emitting sources. Such a SIP 
revision would add clarity to the SIP and, in general, carry the 
benefits described earlier in this preamble.

G. EPA Actions on SIP Submittals; Findings of Failure To Submit and 
Promulgation of FIPs

1. Actions on SIP Submittals
    As noted above, for any State for which EPA proposes a finding of 
substantial inadequacy and SIP Call but that submits a SIP revision 
before December 1, 2010, EPA will not issue a final finding of 
substantial inadequacy or a SIP Call. Instead, EPA will take action on 
the SIP submittal as quickly as possible.
    By the same token, for any State for which EPA has issued a final 
finding of substantial inadequacy and a SIP Call, if the State submits 
the SIP revision within the submittal deadline, then EPA will not issue 
a finding of failure to submit or promulgate a FIP. Instead, EPA will 
take action on the SIP submittal as quickly as possible.
    We reiterate and encourage states to keep in mind that PSD 
applicability for certain GHG sources begins January 2, 2011. As such, 
even states with proposed SIP revisions will not be able to issue 
federally approved PSD permits for construction or modification to 
affected sources until those revisions are approved. The affected 
source would be able to receive a State-issued permit, but the lack of 
a federally approved permit means that the source would not be in 
accordance with Federal requirements if it constructed or modified. In 
light of this potential for burden on the affected sources, we intend 
to act on any SIP submittals that we receive as promptly as possible.
    For example, upon request of the State, we will parallel-process 
the SIP submittal. Under this approach, the State sends us the draft of 
the SIP revision on which it plans to seek public comment at the State 
level, in accordance with CAA section 110(a)(2), and we will publish a 
proposed approval of that draft SIP revision. In addition, at the same 
time the State solicits such public comment of its SIP revision at the 
State level, we will initiate a separate public proceeding on our 
proposed approval of the SIP revision at the Federal level. If, 
subsequently, the SIP revision that the State adopts and submits to EPA 
is substantially similar to the draft on which EPA solicited comment, 
then EPA will proceed to take final action on the SIP submittal and 
will not re-notice it for public comment. EPA has successfully employed 
the parallel-processing approach in past rulemakings, and we believe 
that to employ it in this process could significantly shorten the time 
EPA needs to act on the SIP revision.
2. Findings of Failure To Submit and Promulgation of FIPs
    If the State does not meet its SIP submittal deadline, we will 
immediately issue a finding of failure to submit a required SIP 
submission under CAA section 110(c)(1)(A) and immediately thereafter 
issue a FIP. This timing for FIP promulgation is authorized under CAA 
section 110(c)(1), which authorizes us to promulgate a FIP ``at any 
time within 2 years after'' finding a failure to submit a required SIP 
submission. We discuss our approach to the FIP in the companion notice 
to this rulemaking concerning FIPs for failure to submit the required 
PSD SIP revision.
3. Rescission of the FIP
    After we have promulgated a FIP, it must remain in place until the 
State submits a SIP revision and we approve that SIP revision. CAA 
section 110(c)(1). Under the present circumstances, we will act on a 
SIP revision to apply the PSD program to GHG sources as quickly as 
possible and, upon request of the State, will parallel-process the SIP 
submittal in the manner described earlier in this preamble. If we 
approve such a SIP revision, we will, at the same time, rescind the 
FIP. We discuss this approach in the companion notice to this 
rulemaking concerning FIPs for failure to submit the required PSD SIP 
revision.

H. Streamlining the State Process for SIP Development and Submittal

    As stated earlier in this preamble, we recognize that the deadline 
we are giving states to submit their SIP revisions is expeditious. EPA 
understands that each State must determine whether its own regulatory 
development process allows for streamlining, and we defer to the states 
on the extent to which they may choose to streamline the process. Given 
the exigencies, we believe a streamlining approach could be beneficial 
to a State in meeting its deadline. We are prepared to work with the 
states to develop methods to streamline the State administrative 
process, although we recognize that the states remain fully in charge 
of their own State processes. We solicit recommendations during the 
comment period for ways to streamline the State process for adopting 
and submitting these SIPs, and to streamline or simplify what is 
required for the SIP submittal.
    For example, we may streamline the process as it concerns public 
hearing requirements. Many states require that the underlying State 
regulation that the State intends to develop into the SIP submittal 
undergo a public hearing. In addition, the CAA requires that the State 
provide a public hearing on the proposed SIP submittal, under CAA 
section 110(a)(2). EPA solicits public comment on whether it may, 
consistent with the CAA, accept the public hearing that the State holds 
on the underlying regulation as meeting the requirement for the hearing 
on the SIP submittal, as long as the State provides adequate public 
notice of the hearing, and EPA will not require a separate SIP hearing.

I. Primacy of the SIP Process

    This proposal is secondary to our overarching goal, which is to 
assure that in every instance, it will be the State that will be that 
permitting authority. EPA continues to recognize that the states are 
best suited to the task of permitting because they and their sources 
have experience working together in the State PSD program to process 
permit applications. EPA seeks to remain solely in its primary 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 work 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 GHG-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 permitting authorities by the time businesses seeking 
construction permits need to have their applications processed and the 
permits issued--and to achieve that outcome by means of engaging with 
the states directly through a concerted process of consultation and 
support.
    EPA is taking up the additional task of proposing this SIP Call and 
the companion FIP action only because the Agency believes it is 
compelled to do so by the need to assure businesses, to the maximum 
extent possible and as

[[Page 53905]]

promptly as possible, that a permitting authority is available to 
process PSD permit applications for GHG-emitting sources once they 
become subject to PSD requirements on January 2, 2011.
    In order to provide that assurance, we are obligated 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 
States' affected sources confront the risk that they may have to put on 
hold their plans to construct or modify, a risk that may have adverse 
consequences for the economy.
    Given these exigent circumstances, EPA proposes this plan, within 
the limits of our power, with the intent to make a back-up permitting 
authority available--and to send a signal of assurance expeditiously in 
order to reduce uncertainty and thus facilitate businesses' planning. 
Within the design of the CAA, it is EPA that must fill that role of 
back-up permitting authority. This SIP Call action and the companion 
FIP action fulfill the CAA requirements to establish EPA in that role.
    At the same time, we propose these actions with the intent that 
states retain as much discretion as possible in the hand of the states. 
In this rulemaking, EPA proposes states may choose the deadline they 
consider reasonable for submission of their corrective SIP revision. 
If, under CAA requirements, we are compelled to promulgate 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 permit applications, albeit operating under Federal law. In 
addition, if we are compelled to issue a FIP, we intend to continue to 
work closely with the State to assist it in developing and submitting 
for approval its corrective SIP revision, so as to minimize the amount 
of time that the FIP must remain in place.
    Finally, we can report that in informal conversations, officials of 
various states have acknowledged the need for our SIP call and FIP 
actions. That is, they have acknowledged that a short-term FIP may be 
necessary in their states to establish permitting authority to 
construct and modify in accordance with environmental safeguards for 
these sources. In addition, some states have indicated that they will 
closely consider their opportunities to accept delegation of the 
permitting responsibilities.

J. Sanctions

    Under CAA section 179(a)(3)(A), if EPA finds that a State failed to 
submit a PSD SIP revision as required under a SIP Call, then a 
mandatory sanctions clock begins to run, so that if the State does not 
submit the required SIP revision within 18 months, EPA must impose one 
of two sanctions identified under CAA section 179; if the State does 
not submit the required SIP revision within another 6 months, EPA must 
impose the second of the sanctions. However, because each sanction 
applies only to nonattainment areas, it has been a longstanding EPA 
position that a finding that a State has failed to submit a required 
SIP revision for a PSD area will not trigger mandatory sanctions.
    The two sanctions are described in CAA section 179(b) and include: 
(i) ``Highway sanctions,'' which are ``a prohibition, applicable to a 
nonattainment area, on the approval'' of certain highway construction 
projects or certain Federal grants for highway construction, CAA 
section 179(b)(1); and (ii) ``[i]n applying the emission offset 
requirements of [CAA section 173] to new or modified sources or 
emissions units for which a permit is required under this part, the 
ratio of emissions reductions to increased emissions shall be at least 
2 to 1.'' CAA section 179(b)(2).
    Each of these sanctions applies, by its terms, to nonattainment 
areas. That is, as just quoted, CAA section 179(b)(1) limits the 
application of the highway sanctions ``to a nonattainment area,'' and 
the offsets sanctions under CAA section 173(c) apply only to 
nonattainment areas. See, e.g., CAA section 173(c)(1) (referring to 
``any offset requirement under this part [D],'' which is entitled, 
``Plan Requirements for Nonattainment Areas''); section 182(b)(5) 
(offset requirement for ozone moderate areas); section 182(c)(10) 
(offset requirement for ozone serious areas); section 182(d)(2) (offset 
requirement for ozone severe areas); section 182(e)(1) (offset 
requirement for ozone extreme areas). Neither of the mandatory 
sanctions provided under CAA section 179(b) applies to attainment/
unclassifiable areas.
    As a result, a finding that a State has failed to submit a required 
SIP revision will not trigger mandatory sanctions.

K. Title V

    We note that a number of states may have a similar problem with 
their approved title V operating permit programs, (i.e., that their 
title V programs do not apply to GHG-emitting sources). We intend to 
address this issue through separate rulemaking.

V. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because it raises 
novel legal or policy issues. Accordingly, EPA submitted this action to 
the Office of Management and Budget (OMB) for review under EO 12866 and 
any changes made in response to OMB recommendations have been 
documented in the docket for this action.

B. Paperwork Reduction Act

    This action imposes new information collection burden. Although 
this action asks states to provide information during the comment 
period, the information requested, which concerns whether the states 
have authority to regulate GHGs under their SIP PSD provisions, is 
substantially similar to the information already requested of the 
states in the Tailoring Rule. The OMB has previously approved the 
information collection requirements contained in the 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 2060-0336 respectively. The OMB control numbers 
for EPA's regulations in 40 CFR are listed in 40 CFR part 9.
    The tailoring rule does not establish any new requirements (either 
control or reporting) for any sources. It merely establishes the 
thresholds that trigger NSR and title V for GHG sources. The trigger 
for GHG and title V is not due to the tailoring rule but the result of 
the endangerment finding and the LDVR. The NSR and title V ICRs will 
need to be modified to include the new sources that will be triggered 
due to the GHG requirements (in July 2011). The Agency anticipates 
making such modifications upon renewal of the NSR and title V ICRs at 
the end of the year.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial

[[Page 53906]]

number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this notice on small 
entities, small entity is defined as: (1) A small 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 that 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 dominant 
in its field.
    This proposed rule will affect states and will not, in and of 
itself, directly affect sources. In addition, although this rule could 
lead to Federal permitting requirements for certain sources, those 
sources are large emitters of GHGs and tend to be large sources. After 
considering the economic impacts of this proposed rule on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    This rule does not contain a Federal mandate that may result in 
expenditures of $100 million or more for State, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
The action may impose a duty on certain State, local or tribal 
governments to meet their existing obligation for PSD SIP submittal, 
but with lesser expenditures. Thus, this rule is not subject to the 
requirements of sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments.

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 the states, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This action merely prescribes EPA's 
action for states that do not meet their existing obligation for PSD 
SIP submittal. Thus, Executive Order 13132 does not apply to this 
action.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on this proposed rule 
from State and local officials.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). In this action, 
EPA is not addressing any tribal implementation plans. This action is 
limited to states that do not meet their existing obligation for PSD 
SIP submittal. Thus, Executive Order 13175 does not apply to this 
action.
    Although Executive Order 13175 does not apply to this proposed 
rule, EPA specifically solicits additional comment on this proposed 
action from tribal officials.

G. Executive Order 13045--Protection of Children From Environmental 
Health Risks and Safety Risks

    EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying 
only to those regulatory actions that concern health or safety risks, 
such that the analysis required under section 5-501 of the EO has the 
potential to influence the regulation. This action is not subject to EO 
13045 because it merely prescribes EPA's action for states that do not 
meet their existing obligation for PSD SIP submittal.

H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as 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 action 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 and Advancement 
Act of 1995 (``NTTAA''), Public Law No. 104-113, 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide 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 use of any voluntary consensus 
standards.

J. Executive Order 12898--Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations 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 populations because it does not 
affect the level of protection provided to human health or the 
environment. This proposed rule merely prescribes EPA's action for 
states that do not meet their existing obligation for PSD SIP 
submittal.

VI. Statutory Authority

    The statutory authority for this action is provided by sections 
101, 111, 114, 116, and 301 of the CAA as amended (42 U.S.C. 7401, 
7411, 7414, 7416, and 7601).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon dioxide, 
Carbon dioxide equivalents, Carbon monoxide, Greenhouse gases, 
Hydrofluorocarbons, Intergovernmental relations, Lead, Methane, 
Nitrogen dioxide, Nitrous oxide, Ozone, Particulate matter, 
Perfluorocarbons, Reporting and recordkeeping requirements, Sulfur 
hexafluoride, Sulfur oxides, Volatile organic compounds.


[[Page 53907]]


    Dated: August 12, 2010.
Lisa P. Jackson,
Administrator.
[FR Doc. 2010-21701 Filed 9-1-10; 8:45 am]
BILLING CODE 6560-50-P


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