Document ID: EPA-HQ-OAR-2015-0071-0001
Agency: epa
Document Type: Rule
Title: Prevention of Significant Deterioration Permitting for Greenhouse Gases: Providing Option for Rescission of EPA-Issued Tailoring Rule Step 2 Prevention of Significant Deterioration Permits
Posted Date: 2015-05-07T04:00Z

[Federal Register Volume 80, Number 88 (Thursday, May 7, 2015)]
[Rules and Regulations]
[Pages 26183-26189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-10628]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2015-0071; FRL-9926-98-OAR]
RIN 2060-AS57

Prevention of Significant Deterioration Permitting for Greenhouse 
Gases: Providing Option for Rescission of EPA-Issued Tailoring Rule 
Step 2 Prevention of Significant Deterioration Permits

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking direct 
final action to amend the federal Prevention of Significant 
Deterioration (PSD) program regulations to allow for rescission of 
certain PSD permits issued by the EPA and delegated reviewing 
authorities under Step 2 of the Prevention of Significant Deterioration 
and Title V Greenhouse Gas (GHG) Tailoring Rule (Tailoring Rule). We 
are taking this action in order to provide a mechanism for the EPA and 
delegated reviewing authorities to rescind PSD permits that are no 
longer required in light of the United States (U.S.) Supreme Court's 
decision in Utility Air Regulatory Group (UARG) v. EPA and the amended 
appeals court judgment in Coalition for Responsible Regulation 
(Coalition) v. EPA, vacating that rule. These decisions determined that 
Step 2 of the Tailoring Rule was not required under the Clean Air Act 
(CAA or Act)

[[Page 26184]]

and vacated the EPA regulations implementing Step 2. When effective, 
this action will authorize the EPA and delegated reviewing authorities 
to rescind Step 2 PSD permits in response to requests from applicants 
who can demonstrate that they are eligible for permit rescission.

DATES: This rule is effective on July 6, 2015 without further notice, 
unless the EPA receives adverse comment by June 8, 2015. If the EPA 
receives adverse comment, we will publish a timely withdrawal in the 
Federal Register informing the public that the rule will not take 
effect. If anyone contacts the EPA requesting to speak at a public 
hearing by May 18, 2015, the EPA will hold a public hearing on May 22, 
2015 in Research Triangle Park, North Carolina.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2015-0071, by one of the following methods:
     http://www.regulations.gov. Follow the online instructions 
for submitting comments.
     Email: a-and-r-docket@epa.gov. Include docket ID No. EPA-
HQ-OAR-2015-0071 in the subject line of the message.
     Fax: (202) 566-9744.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, Mail Code 28221T, Attention Docket ID No. EPA-HQ-OAR-2015-0071, 
1200 Pennsylvania Avenue NW., Washington, DC 20460.
     Hand/Courier Delivery: EPA Docket Center, Room 3334, EPA 
William Jefferson Clinton West Building, 1301 Constitution Avenue NW., 
Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2015-0071. 
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-
2015-0071. The 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 email. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means the EPA will not know 
your identity or contact information unless you provide it in the body 
of your comment. If you send an email comment directly to the EPA 
without going through http://www.regulations.gov, your email 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, the EPA recommends that you include 
your name and other contact information in the body of your comment and 
with any CD you submit. If the EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, the 
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 the 
EPA's public docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    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 
at http://www.regulations.gov or in hard copy at the EPA Docket Center, 
Room 3334, EPA William Jefferson Clinton West Building, 1301 
Constitution Avenue NW., Washington, DC 20004. 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 Office of Air and 
Radiation Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Questions concerning this direct final 
should be addressed to Mrs. Jessica Monta[ntilde]ez, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Planning Division, (C504-03), Research Triangle Park, NC 27711, 
telephone number (919) 541-3407, email at montanez.jessica@epa.gov. To 
request a public hearing or questions concerning a public hearing, 
please contact Ms. Pamela Long, U.S. Environmental Protection Agency, 
Office of Air Quality Planning and Standards, Air Quality Planning 
Division, (C504-01), Research Triangle Park, NC 27711, telephone number 
(919) 541-0641, email at long.pam@epa.gov.

SUPPLEMENTARY INFORMATION: The information in this SUPPLEMENTARY 
INFORMATION section of this preamble is organized as follows:

I. Why is the EPA using a direct final rule?
II. Does this action apply to me?
III. Background
    A. What is the PSD program?
    B. What is the Tailoring Rule?
    C. What is the UARG v. EPA decision and why does the EPA need to 
revise the permit rescission provisions under 40 CFR 52.21(w) in 
light of the decision?
    1. What is the UARG v. EPA U.S. Supreme Court decision?
    2. Why are we revising the permit rescission provisions under 40 
CFR 52.21(w) in light of the Supreme Court decision in UARG v. EPA 
and the amended appeals court judgment in Coalition?
IV. Direct Final Action
V. Environmental Justice Considerations
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    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. Executve Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution and Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act (CRA)
    L. Determination Under Section 307(d)
VII. Judicial Review

I. Why is the EPA using a direct final rule?

    The EPA is publishing this rule without a prior proposed rule 
because we view this as a non-controversial amendment and anticipate no 
adverse comment. This action narrowly amends the permit rescission 
provisions in the federal PSD regulations found in 40 CFR 52.21(w) to 
allow for the rescission of EPA-issued PSD permits \1\ that were

[[Page 26185]]

issued under Step 2 of the Tailoring Rule \2\ permitting regulations.
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    \1\ For purposes of this rule, the phrases ``EPA-issued PSD 
permits that were issued under Step 2 of the Tailoring Rule'' and 
``EPA-issued Step 2 PSD permits'' are intended to have the same 
meaning. The use of the term ``EPA-issued'' in both phrases includes 
PSD permits issued by the EPA as well as permits issued by state or 
local reviewing authorities exercising federal law authority 
delegated by an EPA Regional Office under 40 CFR 52.21(u).
    \2\ Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule (75 FR 31514, June 3, 2010); 40 CFR 
52.21(b)(49)(v).
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    The U.S. Supreme Court determined the permitting requirements under 
Step 2 of the Tailoring Rule to be invalid in UARG v. EPA, 134 S. Ct. 
2427 (2014). The Supreme Court affirmed in part and reversed in part an 
earlier decision of the United States Court of Appeals for the District 
of Columbia Circuit (D.C. Circuit) in Coalition for Responsible 
Regulation v. EPA, 684 F.3d 102 (D.C. Cir. 2012). In further 
proceedings upon consideration of the Supreme Court decision, the D.C. 
Circuit amended its judgment in the Coalition case. The Amended 
Judgment vacated particular provisions of the EPA's regulations 
implementing Step 2 of the Tailoring Rule.
    This direct final action does not itself rescind any permits; it 
only provides the regulatory mechanism through which the EPA or state 
or local program administering the PSD program through a delegation of 
federal authority from the EPA could rescind, upon request of a source, 
an EPA-issued Step 2 PSD permit consistent with the U.S. Supreme Court 
decision and the amended judgment of the D.C. Circuit vacating the 
regulations. However, in the ``Proposed Rules'' section of this Federal 
Register publication, we also are publishing a separate document that 
will serve as the proposed rule to amend the same federal PSD 
regulations at 40 CFR 52.21(w) if adverse comments are received on this 
direct final rule. If the EPA receives adverse comment, we will publish 
a timely withdrawal in the Federal Register informing the public that 
this direct final rule will not take effect. In that case, we would 
address all public comments in any subsequent final rule based on the 
proposed rule. We will not institute a second comment period on the 
proposed rule, and any parties interested in commenting must do so at 
this time. For further information about commenting on the proposed 
rule, see the ADDRESSES section in that separate document in this 
Federal Register publication.

II. Does this action apply to me?

    The entities potentially affected by this rule include new and 
modified stationary sources that obtained an EPA-issued Step 2 PSD 
permit under the federal PSD regulations found at 40 CFR 52.21 solely 
because the source or a modification of the source was expected to emit 
or increase GHG emissions over the applicable thresholds. This includes 
(1) sources classified as major for PSD purposes solely on the basis of 
their potential GHG emissions; and (2) sources emitting major amounts 
of other pollutants that experienced a modification resulting in an 
increase of only GHG emissions above the applicable levels in the EPA 
regulations. Entities affected by this rule may also include state or 
local reviewing authorities that have been delegated federal authority 
to implement the federal PSD regulations under 40 CFR 52.21(u) and that 
have issued Step 2 PSD permits to sources within their jurisdiction. 
This rule does not address the requirements for approval of a PSD 
program into a state implementation plan (40 CFR 51.166) or the 
rescission of PSD permits issued by states and local programs with such 
approved programs. Stationary sources with questions on the PSD 
permitting obligations arising from Step 2 PSD permits issued by state 
or local reviewing authorities under the permitting programs approved 
into state implementation plans should review the governing statutory 
provisions and provisions in the applicable approved state or local 
permitting program to determine how to address any Step 2 PSD 
permitting issues and consult with the EPA as necessary.

III. Background

A. What is the PSD program?

    Part C of title I of the Act contains the requirements for a 
component of the major New Source Review (NSR) program known as the PSD 
program. This program sets forth procedures for the construction review 
and permitting of new and modified stationary sources of air pollution 
locating in areas meeting the National Ambient Air Quality Standards 
(NAAQS) (``attainment'' areas) and areas for which there is 
insufficient information to classify an area as either attainment or 
nonattainment (``unclassifiable'' areas).
    The applicability of PSD to a particular source must be determined 
in advance of construction of a new source or major modification of an 
existing source and is pollutant-specific. Once a source is determined 
to be subject to PSD, among other requirements, the source must 
demonstrate that it will not cause or contribute to a violation of any 
NAAQS or PSD increment,\3\ and that it will use the Best Available 
Control Technology (BACT).\4\
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    \3\ CAA section 165(a)(3).
    \4\ CAA section 165(a)(4).
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    The reviewing authority must provide notice of its preliminary 
decision on a source's application for a PSD permit, and must provide 
an opportunity for comment by the public, industry, and other 
interested persons. After considering and responding to comments, the 
reviewing authority must issue a final determination on the permit.

B. What is the Tailoring Rule?

    On June 3, 2010, the EPA issued a final rule, known as the 
Tailoring Rule, which phased in permitting requirements for GHG 
emissions from stationary sources under the CAA PSD and title V 
permitting programs (75 FR 31514).
    For Step 1 of the Tailoring Rule, which began on January 2, 2011, 
PSD or title V requirements applied to sources' GHG emissions only if 
the sources were subject to PSD or title V ``anyway'' due to their 
emissions of non-GHG pollutants. These sources are referred to as 
``anyway sources.'' Step 2 of the Tailoring Rule, which began on July 
1, 2011, applied the PSD and title V permitting requirements under the 
CAA to sources that were classified as major, and, thus, required to 
obtain a permit, based solely on their potential GHG emissions and to 
modifications of otherwise major sources that required a PSD permit 
because they increased only GHG above applicable levels in the EPA 
regulations.

C. What is the UARG v. EPA decision and why does the EPA need to revise 
the permit rescission provisions under 40 CFR 52.21(w) in light of the 
decision?

1. What is the UARG v. EPA U.S. Supreme Court decision?
    On June 23, 2014, the U.S. Supreme Court issued a decision in UARG 
v. EPA, 134 S. Ct. 2427, addressing the application of stationary 
source permitting requirements to GHGs. In summary, the U.S. Supreme 
Court said that the EPA may not treat GHGs as an air pollutant for the 
specific purpose of determining whether a source (or a modification 
thereof) is required to obtain a PSD or title V permit,\5\ and

[[Page 26186]]

declared that the EPA regulations implementing that approach for 
determining permitting applicability are invalid. However, the U.S. 
Supreme Court also said that the EPA could continue to require that PSD 
permits, otherwise required based on emissions of conventional 
pollutants (i.e., non-GHG pollutants), contain limitations on GHG 
emissions based on the application of BACT. That is, the ruling 
effectively upheld PSD permitting requirements for GHG emissions under 
Step 1 of the Tailoring Rule for ``anyway sources,'' and invalidated 
PSD permitting requirements for Step 2 sources.
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    \5\ Among other things, title V of the CAA requires all major 
stationary sources of air pollution and certain other sources to 
apply for a title V operating permit that includes emission 
limitations and other conditions as necessary to assure compliance 
with applicable requirements of the CAA. The title V operating 
permit program is a vehicle for ensuring that air quality control 
requirements are appropriately applied to facility emission units 
and for assuring compliance with such requirements, but does not 
generally impose new substantive air quality control requirements. 
The title V program is implemented through regulations promulgated 
under 40 CFR part 70, for programs implemented by state or local 
agencies and tribes, and 40 CFR part 71, for programs generally 
implemented by the EPA.
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    To describe the EPA's preliminary views on the U.S. Supreme Court 
decision, on July 24, 2014, the EPA issued a memorandum titled, ``Next 
Steps and Preliminary Views on the Application of Clean Air Act 
Permitting Programs to Greenhouse Gases Following the Supreme Court's 
Decision in UARG v. EPA'' (Preliminary Views Memo).\6\ In that 
memorandum, the EPA explained that it ``will no longer require PSD . . 
. permits for Step 2 sources'' (Preliminary Views Memo at 2) and that 
the EPA expected ``to provide additional views in the future with 
respect to Step 2 sources that had already obtained a PSD permit . . 
.'' (Preliminary Views Memo at 4).
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    \6\ http://epa.gov/nsr/documents/20140724memo.pdf.
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    The EPA provided additional views regarding EPA-issued Step 2 
permits when it issued two memoranda on December 19, 2014. In the 
memorandum issued by the Office of Air and Radiation (OAR) and titled, 
``Next Steps for Addressing EPA-Issued Step 2 Prevention of Significant 
Deterioration Greenhouse Gas Permits and Associated Requirements'' (OAR 
Next Steps Memo),\7\ the EPA explained that it intended to complete 
this rulemaking ``authorizing the rescission of Step 2 PSD permits.'' 
In the second memorandum, which was issued by the Office of Enforcement 
and Compliance Assurance (OECA) and titled, ``No Action Assurance 
Regarding EPA-Issued Step 2 Prevention of Significant Deterioration 
Permits and Related Title V Requirements Following Utility Air 
Regulatory Group v. Environmental Protection Agency'' (OECA No Action 
Assurance Memo),\8\ OECA issued a narrowly tailored No Action Assurance 
for sources with EPA-issued Step 2 PSD permits. The OECA No Action 
Assurance Memo establishes that the EPA will exercise its enforcement 
discretion not to pursue enforcement of the terms and conditions 
relating to GHGs in a source's EPA-issued Step 2 PSD permit, and for 
related GHG terms and conditions that are contained in the source's 
title V permit, if any.
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    \7\ http://epa.gov/nsr/ghgdocs/Step2PermitRescissinsMemoFinal_12-19-14.pdf.
    \8\ http://epa.gov/nsr/ghgdocs/OECANoActionAssuranceMemo_December192014.pdf.
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    The Supreme Court decisions affirmed in part and reversed in part 
an earlier decision of the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) in Coalition for 
Responsible Regulation v. EPA, 684 F.3d 102 (D.C. Cir. 2012). In 
further proceedings upon consideration of the opinion in UARG, on April 
10, the D.C. Circuit in Coalition issued an amended judgment in 
accordance with that decision. Coalition for Responsible Regulation, 
Inc. v. EPA, Nos. 09-1322, 10-073, 10-1092 and 10-1167 (D.C. Cir. April 
10, 2015) (Amended Judgment). As relevant to this rulemaking action, 
the court ordered that the EPA regulations under review (including 40 
CFR 52.21(b)(49)(v)) be vacated to the extent they require a stationary 
source to obtain a PSD permit if greenhouse gases are the only 
pollutant (i) that the source emits or has the potential to emit above 
the applicable major source thresholds, or (ii) for which there is a 
significant emissions increase from a modification.
    We are aware that between the effective date of Step 2 (July 1, 
2011) and the date of the UARG v. EPA decision (June 23, 2014), several 
sources obtained EPA-issued Step 2 PSD permits either directly from the 
EPA or from state or local agencies with delegated PSD programs under 
40 CFR 52.21 because the sources (or modifications thereof) were 
classified as ``major'' solely on the basis of their GHG emissions. For 
some of these sources, the appropriate reviewing authorities also 
issued title V permits that incorporated the terms and conditions of 
the EPA-issued Step 2 PSD permits. To ensure this rule covers all 
stationary sources eligible for rescission of EPA-issued Step 2 PSD 
permits, this action provides that owners or operators of stationary 
sources with EPA-issued Step 2 PSD permits with final permit issuance 
dates from July 1, 2011 to 60 days after the effective date of this 
rule would be able to request a permit rescission from EPA or delegated 
reviewing authorities as applicable. For more information on the 
process for requesting a permit rescission for EPA-issued Step 2 PSD 
permits, see section V of this action titled, ``Direct Final Action.''
2. Why are we revising the permit rescission provisions under 40 CFR 
52.21(w) in light of the U.S. Supreme Court decision in UARG v. EPA and 
the amended appeals court judgment in Coalition?
    To implement the U.S. Supreme Court's decision and the amended 
appeals court judgment vacating the regulations implementing Step 2 of 
the Tailoring Rule, it is necessary to undertake a process to rescind 
PSD Step 2 permits. The EPA's implementing permitting regulations at 40 
CFR 52.21 provide that ``[a]ny [PSD] permit issued under this section 
or a prior version of this section shall remain in effect, unless and 
until it expires . . . or is rescinded'' (40 CFR 52.21(w)(l)).
    Section 52.21(w) provides authority for a source holding a PSD 
permit to request rescission of the permit and for the EPA to ``grant 
an application for rescission if the applicant shows that this section 
[40 CFR 52.21] would not apply to the source or modification.'' 
However, as currently written, the scope of this rescission authority 
is limited to permits issued under 40 CFR 52.21 as in effect on or 
before July 30, 1987. Since any EPA-issued Step 2 PSD permits were 
issued under regulations effective after July 30, 1987, the rescission 
authority in 40 CFR 52.21(w) is not currently available to sources with 
EPA-issued Step 2 PSD permits. This rulemaking action is a narrow 
revision to 52.21(w) solely to enable the rescission of Step 2 PSD 
permits consistent with the U.S. Supreme Court decision and the D.C. 
Circuit amended judgment.
    This rule does not address any issues concerning the federal PSD 
permit rescission regulations at 40 CFR 52.21(w) that are not related 
to the Supreme Court decision in UARG v. EPA and the amended appeals 
court judgment vacating the Step 2 regulations. We recognize, however, 
that other circumstances may arise in the future where the appropriate 
course of action may be permit rescission. We would expect these 
circumstances to be rare. Under the current rules, a rulemaking would 
need to be undertaken in each such circumstance as we are doing here. 
Therefore, the EPA is developing a separate rulemaking action that will 
provide an opportunity for the public to comment on any other 
situations where the July 30, 1987 date in 52.21(w) may be an 
impediment to the rescission of PSD permits under particular 
circumstances where that might be appropriate.

[[Page 26187]]

IV. Direct Final Action

    In this action, the EPA is revising 40 CFR 52.21(w)(2) by adding 
references to 40 CFR 52.21(49)(b)(v)(a) and (b) to allow for rescission 
of any EPA-issued Step 2 PSD permits upon request by the permitted 
source, which is consistent with the EPA's understanding of the Supreme 
Court decision and the amended appeals court judgment vacating the 
regulations. In addition, the EPA is adding the following sentence to 
40 CFR 52.21(w)(3) to make clear that PSD requirements no longer apply 
to Step 2 sources: ``As a result of a decision of the U.S. Supreme 
Court, this section does not apply to sources or modifications that 
meet only the applicability criteria in 40 CFR 52.21(b)(49)(v).''
    This regulatory action does not make any change to 40 CFR 
52.21(w)(1) or (4). In addition, it does not affect the standard for 
determining whether a source is eligible for permit rescission under 40 
CFR 52.21(w)(3). It serves only to revise 40 CFR 52.21(w)(2)-(3) of the 
EPA's federal PSD regulations to authorize the EPA to undertake permit 
rescissions for EPA-issued Step 2 PSD permits. As the EPA previously 
explained in its December 19, 2014, OAR Next Steps Memo, once this rule 
is final, sources with EPA-issued Step 2 PSD permits will be able to 
seek a permit rescission from the EPA or delegated state or local 
reviewing authority.
    Specifically, consistent with the 2014 OAR Next Steps Memo at page 
3, the EPA expects that PSD permit-holders interested in qualifying for 
the rescission of an EPA-issued Step 2 PSD permit under 40 CFR 52.21(w) 
will need to provide information to demonstrate that either (1) the 
source did not, at the time the source obtained its EPA-issued Step 2 
PSD permit, emit or have the potential to emit any regulated pollutant 
other than GHGs above the major source threshold applicable to that 
type of source; or (2) a modification at a source emitting major 
amounts of a regulated NSR pollutant other than GHGs did not result in 
an increase in emissions of any regulated pollutant other than GHGs in 
an amount equal to or greater than the applicable significance level 
for that pollutant. Furthermore, the EPA intends to consider whether 
the EPA or another reviewing authority is relying on the EPA-issued 
Step 2 PSD permit for any other regulatory purpose. Rescission of a PSD 
permit that is no longer required should not extend to eliminate 
regulatory obligations that remain regarding non GHG-pollutants or 
inadvertently place the permitted source in a situation where it may be 
out of compliance with other requirements that the PSD permit 
satisfied. For example, as noted in the memoranda mentioned previously, 
a source with an EPA-issued Step 2 PSD permit may now have other 
regulatory or permitting obligations (e.g., minor NSR requirements), 
which generally concern sources emitting pollutants subject to a NAAQS. 
The source may have previously not needed to obtain a minor source 
permit because it used its Step 2 permit to satisfy its preconstruction 
permitting obligations, but it might now need to obtain a minor NSR 
permit. Until such time as the source and the permitting authority can 
determine whether and how to replace Step 2 PSD permit conditions for 
such pollutants with a permit satisfying minor NSR requirements, 
continued compliance with PSD permit terms and conditions for such 
permits is important to protect the NAAQS, and rescission may, thus, be 
premature. Further, if the GHG condition in an EPA-issued Step 2 PSD 
permit has been used to satisfy another state or federal requirement, 
rescission may not be appropriate without assurances that another 
method will be established for complying with other federal, state, and 
local requirements (e.g., if the state is presuming the source builds 
consistent with the efficiency requirement in the EPA-issued Step 2 
permit in order to satisfy other state air pollution requirements). In 
sum, the rescission of any EPA-issued Step 2 PSD permits should not 
proceed without an understanding of how minor source construction 
permitting requirements and other legal obligations will be met going 
forward. Since the EPA generally does not issue construction permits 
for minor sources except in Indian country, the EPA Regional Offices 
and sources holding EPA-issued Step 2 PSD permits should consult with 
the appropriate state or local reviewing authorities and develop a plan 
to ensure that sources remain in compliance with applicable minor 
source and other legal requirements after rescission of EPA-issued Step 
2 PSD permits.
    As part of the rescission process for EPA-issued Step 2 PSD 
permits, the EPA anticipates that some sources will also want to seek 
revisions to title V operating permits that include the EPA-issued Step 
2 PSD permit terms and conditions. Therefore, once an EPA-issued Step 2 
PSD permit is formally rescinded by the EPA or delegated reviewing 
authority, the EPA or delegated reviewing authority will encourage the 
applicable title V state or local permitting authorities to take 
appropriate actions with the sources to resolve any issues related to 
the incorporation of the EPA-issued PSD Step 2 permit requirements into 
title V permits that have already been issued and as further described 
in the OAR Next Steps Memo at page 4. The EPA is not revising its title 
V regulations in this action because the EPA believes that its existing 
title V regulations contain sufficient procedures for the actions 
discussed in the OAR Next Steps Memo and no revisions to EPA's title V 
regulations are necessary to enable these steps to proceed.
    This action only contains the regulatory revisions necessary to 
allow for rescission of EPA-issued Step 2 PSD permits in order to 
conform to the U.S. Supreme Court decision and the amended judgment of 
the D.C. Circuit. In this action, the EPA is not making any other 
regulatory changes in response to the U.S. Supreme Court's decision or 
the amended judgment of the D.C. Circuit. The EPA intends to take 
additional rulemaking action to remove the vacated provisions from the 
Code of Federal Regulations and make further revisions to its PSD and 
title V regulations, as appropriate.

V. Environmental Justice Considerations

    This action amends one provision of the federal PSD program 
regulations to allow for the rescission of EPA-issued Step 2 PSD 
permits in order to conform to a decision by the U.S. Supreme Court 
that declared invalid regulations that implemented the requirement that 
Step 2 sources obtain PSD permits and an amended judgment by the D.C. 
Circuit vacating those regulations. When effective, this action will 
authorize the EPA and delegated reviewing authorities to rescind Step 2 
PSD permits in response to requests from applicants who can demonstrate 
that they are eligible for permit rescission. Therefore, this action 
itself does not compel any specific permit action that will affect the 
fair treatment and meaningful involvement of all people. Rather, it 
ensures that the EPA has the authority to implement the U.S. Supreme 
Court's decision and the amended judgment of the D.C. Circuit. 
Rescission of any EPA-issued Step 2 PSD permits under this rule 
revision would follow all applicable permitting requirements.

[[Page 26188]]

VI. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. OMB has previously approved the information collection 
activities contained in the existing regulations and has assigned OMB 
control number 2060-0003.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This rule relieves regulatory burden by 
providing a mechanism for the EPA and delegated reviewing authorities 
to rescind PSD permits that are no longer required in light of the U.S. 
Supreme Court decision in UARG v. EPA, which invalidates Step 2 of the 
Tailoring Rule and of the amended judgment of the D.C. Circuit vacating 
that rule. We have, therefore, concluded that this action will relieve 
regulatory burden for all directly regulated small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. The action imposes no enforceable duty on any state, 
local or tribal governments or the private sector to rescind these EPA-
issued Step 2 PSD permits. Sources can ask for rescission of their EPA-
issued Step 2 PSD permits at their discretion.

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.

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

    This action does not have tribal implications, as specified in 
Executive Order 13175. Although the Tribal Air Rule (76 FR 38748, July 
1, 2011) under the CAA gives tribes the opportunity to request and be 
granted delegation of the federal PSD program found at 40 CFR 52.21 to 
issue PSD permits, there are no tribal agencies currently implementing 
the federal PSD permitting program. As a result, this action will not 
affect any tribal reviewing authorities. In addition, any tribally-
owned sources with EPA-issued Step 2 PSD permits have the discretion to 
request the EPA to rescind their permit. Thus, Executive Order 13175 
does not apply to this action.

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

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it does not concern an environmental 
health risk or safety risk.

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

    This action is not subject to Executive Order 13211, because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

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

    The EPA believes the human health or environmental risk addressed 
by this action will not have potential disproportionately high and 
adverse human health or environmental effects on minority, low-income 
or indigenous populations. The results of this evaluation are contained 
in the section VI titled, ``Environmental Justice Considerations'' for 
this action.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the U.S. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).

L. Determination Under Section 307(d)

    Pursuant to CAA section 307(d)(1)(V), the Administrator determines 
that this action is subject to provisions of section 307(d). Section 
307(d) establishes procedural requirements specific to rulemaking under 
the CAA. Section 307(d)(1)(V) provides that the provisions of section 
307(d) apply to ``such other actions as the Administrator may 
determine.''

VII. Judicial Review

    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the U.S. Court of Appeals for the D.C. 
Circuit within 60 days from May 7, 2015. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements (see section 307(b)(2) of the CAA).
    Parties with objections to this direct final rule are encouraged to 
file any comment in response to the parallel notice of proposed 
rulemaking for this action published in the ``Proposed Rules'' section 
of this Federal Register publication, rather than file an immediate 
petition for judicial review of this direct final rule to allow the EPA 
to withdraw this direct final rule and address the comment(s) in the 
proposed rulemaking.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Greenhouse gases, Incorporation by reference, Intergovernmental 
relations, Lead, National ambient air quality standards, New source 
review, Nitrogen dioxide, Ozone, Particulate matter, Permit 
rescissions, Preconstruction permitting, Sulfur oxides, Tailoring rule, 
Volatile organic compounds.

    Dated: April 30, 2015.
Gina McCarthy,
Administrator.

    For the reasons stated in the preamble, title 40, Chapter I of the 
Code of Federal Regulations is amended as follows:

[[Page 26189]]

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTAION PLANS

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart A--General Provisions

0
2. Section 52.21 is amended by revising paragraphs (w)(2) and (3) to 
read as follows:

Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (w) * * *
    (2) Any owner or operator of a stationary source or modification 
who holds a permit for the source or modification may request that the 
Administrator rescind the permit or a particular portion of the permit 
if the permit for the source or modification was issued:
    (i) Under Sec.  52.21 as in effect on July 30, 1987 or any earlier 
version of this section;
    (ii) Under Sec.  52.21 between July 1, 2011 and July 6, 2015 to a 
source that was classified as a major stationary source under paragraph 
(b)(1) of this section solely on the basis of potential emissions of 
greenhouse gases, which were defined as a regulated NSR pollutant 
through the application of paragraph (b)(49)(v)(a) of this section as 
in effect during this time period; or
    (iii) Under Sec.  52.21 between July 1, 2011 and July 6, 2015 for a 
modification that was classified as a major modification under 
paragraph (b)(2) solely on the basis of an increase in emissions of 
greenhouse gases, which were defined as a regulated NSR pollutant 
through the application of paragraph (b)(49)(v)(b) of this section as 
in effect during this time period.
    (3) The Administrator shall grant an application for rescission if 
the application shows that this section would not apply to the source 
or modification. As a result of a decision of the United States Supreme 
Court, this section does not apply to sources or modifications that 
meet only the applicability criteria in paragraph (b)(49)(v) of this 
section.
* * * * *
[FR Doc. 2015-10628 Filed 5-6-15; 8:45 am]
 BILLING CODE 6560-50-P