necessary to authorize construction prior to Step 2.   This is because
such a Step 2 source that begins actual construction after Step 2 would
likely be doing so without having any permit meeting the requirements of
paragraphs (j) through (r)(5) of section 52.21, 51.166, or a state
equivalent.  A source that has obtained only a minor source permit prior
to Step 2 but that begins actual construction after July 1, 2011 would
violate the requirements of section 52.21(a)(2)(iii), 51.166(a)(7)(iii),
or a state equivalent ,unless the source took care to ensure that it was
authorized to construct under a PSD permit or could demonstrate that the
source’s minor source construction permit makes clear that requirement
of paragraphs (j) through (r)(5) of sections 52.21, 51.166, or a state
equivalent would be met by the source even though such a permit was not
nominally a PSD permit.  This difference in approach for non-PSD sources
is driven by the terms of sections 52.21(a)(2)(iii) and
51.166(a)(7)(iii).  Since we have not provided any prior notice that we
might be considering revisions to sections 52.21 and 51.166 to address
this topic, we are unable to revise the regulations in this action to
achieve the same result for non-PSD sources as for PSD sources.
Furthermore, this difference in approach is not unreasonable since
non-PSD sources will not trigger permitting for GHG until step 2  (only
anyway PSD source trigger in step 1).  Thus sources will have until July
1, 2010, an additional 6 months of lead time, to prepare for the
transition described here.

EPA has previously promulgated exemptions that have authorized some
sources that were not previously subject to the PSD regulations to
commence construction on the basis of minor source permits after the
date new PSD requirements have took effect in 1978 and 1980.   See e.g.
40 C.F.R. 52.21(i)(1)(iv)-(v).   There is a notable distinction between
these provisions, which use the term “commence construction,” and
the terms of sections 52.21(a)(2)(iii) and 51.166(a)(7)(iii), which use
the term “begin actual construction.’   Commerce construction is
defined more broadly than begin actual construction to include obtaining
all necessarily preconstruction approvals and either beginning actual
on-site construction or entering into binding contracts to undertake a
program of actual construction.    40 C.F.R. 52.21(b)(9); 40 C.F.R.
51.166(b)(9).   The term commence construction is also defined in the
Clean Air Act.  42 U.S.C. 7479(2)(A).   Among other purposes, the term
“commence construction” is generally used in the Act and EPA
regulations to distinguish construction activities that are exempt from
new PSD permitting requirements from those that are not.  See e.g. 42
U.S.C. 7475(a); 40 C.F.R. 52.21(i)(1)(i)-(v).   In the absence an
explicit exemption in the Clean Air Act or the PSD regulations that uses
the term “commence construction,” we do not believe we can use the
date a source “commences construction” under a minor source
construction permit approval as a demarcation point for Step 2 sources
that may continue ongoing construction activities without having to
obtain a PSD permit based on emissions of GHGs.  Since we did not
provide prior notice of an intention to adopt transition provisions
applicable to this situation, we are unable to adopt such an exemption
in this action that applies the term commence construction in this
context.   Consequently, the approach described above applies the term
“begin actual construction” based on the language in sections
52.21(a)(2)(iii) and 51.166(a)(7)(iii).

d.  Transitional Issues for Title V Permitting

Since the title V permitting regulations already include a robust set of
provisions to address the incorporation of new applicable requirements
and other transitional considerations, we do not see grounds to
establish unique transition or grandfathering provisions for GHGs in
this action.  Furthermore, since the purpose of title V is to collect
all regulatory requirements applicable to a source and ensure
compliance, we do not believe special exemptions for GHG requirements
are likely to be justified.   The existing title V rules do not provide
any exemptions that relieve the obligation to incorporate all applicable
requirements into a title V permit.  However, the title V regulations
contain numerous provisions that allow a reasonable period of time for
incorporating new applicable requirements or applying for a title V
permit that was not previously required.  Transitional issues for
incorporation of GHG requirements into title V permitting generally
involve questions in the following categories:  (1) permit application
requirements for sources not previously subject to title V that will
become subject to title V requirements in step 2 of the phase-in; (2)
the need for updates or amendments to title V permit applications that
are pending when GHGs become subject to regulation in Step 1 of the
phase-in; and (3) the incorporation of new applicable requirements for
GHGs into existing permits for sources currently subject to title V.

With respect to the first category, a title V source applying for the
first time must submit its permit application within 12 months after the
source “becomes subject to the [operating] permit program” or such
earlier time that the permitting authority may require (see
§70.5(a)(1)).  Sources not otherwise subject to title V can become
major sources subject to title V due to emissions of GHG no sooner than
July 1, 2011.  If a source becomes “subject to the [operating] permit
program” on July 1, 2011, then its permit application under the title
V operating permit program would typically have to be submitted no later
than July 1, 2012.

There are also existing regulations relevant for the second category of
GHG transition issues, where sources currently subject to title V have
title V permit applications pending with a permitting authority as of
January 2, 2011.  Where additional applicable requirements become
applicable to a source after it submits its application, but prior to
release of a draft permit, the source is obligated to supplement its
permit application.  See 40 CFR §§ 70.5(b); 71.5(b).  Furthermore,
title V permits are generally required to contain provisions to assure
compliance with all applicable requirements at the time of permit
issuance.  See CAA section 504(a); 40 CFR §§ 70.6(a)(1); 71.6(a)(1).
If a permitting authority determines that additional information is
necessary to evaluate or take final action on an application (e.g.
because of uncertainty over whether a draft permit assures compliance
with all applicable requirements), it may, and should, request
additional information from the source in writing and set a reasonable
deadline for a response.  See 40 CFR §§ 70.5(a)(2); 71.5(a)(2).

Likewise, the existing title V regulations provide sufficient transition
for the third category of issues, where a source has additional
GHG-related applicable requirements (such as the terms of a PSD permit)
that must be incorporated into its existing title V permit.  Where a
source is required to obtain a PSD permit, the source must apply for a
title V permit or permit revision within 12 months of commencing
operation or on or before such earlier date as the permitting authority
may establish (or prior to commencing operation if an existing title V
permit would prohibit the construction or change in operation).  See 40
C.F.R. §§ 70.5(a)(1)(ii); 71.5(a)(1)(ii); see also §§70.7(d) and
(e); 71.7(d) and (e) (permit modifications).  In addition, where a
source becomes subject to additional applicable requirements, the
permitting authority is required to reopen the permit to add those
applicable requirements if the permit term has three or more years
remaining and the applicable requirements will be in effect prior to the
date the permit is due to expire.   See  40 C.F.R. §§ 70.7(f)(1)(i);
71.7(f)(1)(i).

Finally, EPA notes that the existing title V regulations require sources
to furnish permitting authorities, within a reasonable time, any
information the permitting authority may request in writing to determine
whether cause exists for modifying, revoking, and reissuing, or
terminating the permit, and for other reasons, and further provide that
permitting authorities shall reopen and revise permits if EPA or the
permitting authority determine that the permit must be revised or
revoked to assure compliance with applicable requirements.  See
§§70.6(a)(6)(v);71.6(a)(6)(v) and §§ 70.7(f)(1)(iv); 71.7(f)(1)(iv).

Thus, EPA believes that the existing title V regulations provide an
adequate regulatory framework for managing the transition to
incorporating GHG requirements in title V permits and additional
specific exemptions or transition rules for title V are not currently
warranted.

VI. What are the economic impacts of the final rule?

This section of the preamble examines the economic impacts of the final
rule including the expected benefits and costs for affected sources and
permitting authorities.  The final rule uses a stepped phased-in
approach for sources of GHG emissions to comply with title V operating
permit and PSD statutory requirements, essentially lifting this burden
for a period of at least six years for a large number of smaller sources
of GHG. Thus, this rule provides regulatory relief rather than
regulatory requirements for these smaller GHG sources.  For larger
sources of GHG that will be required to obtain title V permits and/or
comply on PSD requirements, there are no direct economic burdens or
costs as a result of this final rule, because these requirements are not
imposed as a result of this rulemaking.  Statutory requirements to
obtain a title V operating permit or to adhere to PSD requirements are
already mandated by the CAA and by existing rules, not by this rule.
Similarly, this rule will impose costs to society in the form of
foregone environmental benefits resulting from GHG emission reductions
that, absent this rule, might otherwise have occurred at sources
deferred from permitting during the phase-in period.

The regulatory impact analysis (RIA) conducted for this final rule
provides details of the benefits or regulatory relief that smaller GHG
sources will experience in terms of costs avoided as a result of this
final rule and the potential for social costs in terms of foregone
environmental benefits during this 6-year period.  Complete details of
the regulatory impact analysis conducted for this final rule may be
found in the document "Regulatory Impact Analysis for the Final
Greenhouse Gas Tailoring Rule," in the docket for this rulemaking.

This rulemaking provides permitting thresholds for sources of GHG that
exceed levels contained in the CAA and these levels are phased in steps
based upon application of the administrative necessity and absurd
results doctrines as explained in section V.B.   For step 1 that is
effective from January 2, 2011 through June 30, 2011, only sources
required to undergo title V or PSD permitting based upon non-GHG air
pollutants are required to obtain an operating permit or PSD permit to
include GHG emissions.  Step 2, effective from July 1, 2011 until such
time as EPA acts on a rule to amend it (which for reasons described
above, we assume is June 30, 2013 for the purposes of this analysis),
requires larger sources emitting GHG above 100,000 CO2e tpy to obtain a
title V permit (if they do not already have one) and to comply with PSD
requirements when they are newly constructed or modify in a way that
increases emissions by more than a 75,000 CO2e tpy significance level.
Thereafter, EPA makes an enforceable commitment to consider a possible
step 3 to further lower thresholds below 100,000 CO2e tpy and/or
permanently exclude some sources from the program(s), but only after a
regulatory process is conducted addressing administrative necessity and
absurd results considerations based upon the actual permitting
experiences in the first two steps of the phase-in. In addition, EPA
provides a deferral of permitting until we take required action in April
2016 for sources and modifications that emit below 50,000 CO2e tpy.  The
deferral will end when a required study is conducted of the permitting
process for sources of GHG and EPA acts, based on the study, to
promulgate a rule that describes the additional GHG permitting
requirements beyond 2016.  In the 6 years following promulgation of this
rule, the EPA estimates that compared to baseline estimates that do not
include the effects of this rule, over six million sources of GHG
emissions in total will be allowed to continue to operate without a
title V operating permit.  During this period, tens of thousands of new
sources or modifying sources each year will not be subject to PSD
requirements for GHG.  For this large number of smaller sources, this
rule alleviates the regulatory burden associated with obtaining an
operating or PSD permit or complying with NSR BACT requirements.
Therefore, this final action may be considered beneficial to these small
sources because it provides relief from regulation that would otherwise
be required.

This decision does potentially have environmental consequences in the
form of higher emissions during the 6-year period of time (generally
because emissions increases would have been lower if BACT were applied).
 These consequences are limited due to the fact that sources between
100/250 and 100,000 CO2e tpy account for an estimated 11 percent of the
six directly emitted GHG nationally from industrial, commercial, and
residential source categories, while representing over 95 percent of the
total number of sources potentially requiring an operating or PSD permit
for GHG under current permitting thresholds in the CAA.  Moreover,
requiring such a large number of small sources to obtain permits for the
first time would overtax the permitting authorities' abilities to
process new permits and would therefore interfere with any such benefits
actually being achieved.  Moreover, reductions from these small sources
will still be occurring, notwithstanding the fact that permitting
requirements would not apply to them.  These smaller sources of GHG will
be the focus of voluntary emission reduction programs and energy
efficiency measures that lead to reductions in GHG.  We will also
reevaluate this decision after a 6-year period and complete a study of
the implications for those sources and permitting authorities of
permitting smaller GHG sources beyond 2016.

In reaching the preceding decisions for this final rule, we carefully
considered comments received on the tailoring rule proposal.  We
received several comments specifically on our description of the impacts
of this rule.  Most of these comments disagreed with our assertion that
the rule is a “relief” rule. Others assert that we should have
prepared a more comprehensive RIA than prepared for the rule proposal.
Those commenting contend: (1) we understated the burdens of the rule
while overstating its relief at proposal; (2) we erroneously omitted the
impacts for “larger sources” of GHG  from the proposal RIA and
should have recognized the burden to “larger sources” due to other
GHG actions; (3) the economic impacts the rule will have on industry and
the U.S. economy society in general will be burdensome, especially given
the current state of the economy; and (4) we need to propose a full RIA
or a complete estimation of impacts to comply with CAA section 307(d)
and the Administrative Procedure Act.

	EPA has carefully considered the comments addressing the issue of
whether the tailoring rule is a regulatory “relief rule”, and we are
not persuaded that we erred in concluding that the effect of the
tailoring rule is to provide regulatory relief to a large number of
sources of GHG for a period of up to six years.  This final rule will
provide relief from title V permitting to over 6 million sources of GHG
in this country.  Likewise tens of thousands of sources potentially
subject to PSD permitting requirements annually for GHG will have
regulation postponed for a period of up to 6 years under this rule,
followed by an additional required rule addressing the period beyond 6
years.  While larger sources of GHG may be required to obtain title V
permits or modify existing permits and to comply with PSD requirements,
these burdens result not from the tailoring rule but rather from the CAA
requirement to apply PSD to each pollutant subject to regulation, which
is triggered when the LDVR takes effect.  To clearly illustrate this,
consider what would occur if EPA did not complete the tailoring rule.
Sources would not be relieved of the requirement to obtain permits
addressing each pollutant subject to regulation when they construct or
modify, nor would they be relieved of their obligation to obtain title V
permits.  Instead, these requirements would simply apply to a much
larger population of sources and modifications, and would lead to the
absurd results and severe impairment to program implementation that this
rule is designed to address.

In response to comments asserting that the RIA completed for proposal of
this rulemaking: (1) understated the burdens of the rule and overstated
the benefits, (2) did not fully recognize the rule will be burdensome,
especially given the current state of the economy; and (3) does not
consider a complete estimation of impacts to comply with the
Administrative Procedure Act and CAA section 307(d) and needs to correct
flawed or erroneous assumptions, EPA did make improvements and
modifications to the RIA completed for this final rule.  Based upon
comments, EPA modified estimates of the number of sources affected at
various threshold levels upward.  EPA also improved the burden estimates
associated with obtaining permits for sources and permitting
authorities.  After consideration of the burden imposed by the proposed
rule with these improved estimates for affected sources, the EPA
modified the steps of the phase-in period to include two initial steps,
described in section V, that are higher, and therefore cover fewer
sources and are less burdensome than the proposal threshold of 25,000
CO2e tpy emissions.  EPA also increased the threshold below which
permitting would not apply for six years from 25,000 to 50,000 tpy CO2e.
 After the initial two step period, EPA has committed to consider lower
thresholds but only down to 50,000 tpy CO2e, and only after a regulatory
process that uses information gathered on actual permitting activity
during the first two steps of the phase-in period.  The RIA conducted
for the final rule also incorporates improvements in our estimates of
the number of sources affected at alternative thresholds and improved
estimates of the costs of obtaining permits by sources and processing
permits by permitting authorities. The EPA acknowledges that the
regulatory relief associated with the control costs due to BACT
requirements for PSD new and modifying sources is not included in the
RIA for the final rule due to the lack of sufficient data about the
nature of those requirements.  However, it is the case that, as it
relates to burden, those estimates would simply increase the amount of
regulatory relief associated with this final rule.

Finally, with regard to comments that the RIA should have been a more
comprehensive analysis to include the larger sources of GHG that will be
required to obtain permits when GHG are regulated, the EPA maintains as
previously explained that there are no direct economic burdens or costs
as a result of this rule for these sources. Requirements for larger GHG
sources to obtain title V or PSD permits are already mandated by the Act
and by existing rules and are not imposed as a result of the tailoring
rule.  Thus the economic impacts for larger sources of GHG do not occur
because of this tailoring rule.  To include these larger sources in the
RIA would actually be an inaccurate assessment of how this rule affects
sources and would ignore the fact that this rule is regulatory relief.

A. What entities are affected by this final rule?

As previously stated, this final rule does not itself result in the
application of permitting requirements to any industrial, commercial, or
residential entities.  Entities affected by this rule are those who
experience regulatory relief due to the higher thresholds and deferred
applicability set forth in this rule.  This action increases the
threshold to obtain a title V and PSD permitting from statutory CAA
levels using a phased-in step process as previously discussed. As table
VI-1 shows, this action lifts permitting requirements for over six
million potential title V sources in total and tens of thousands of
potential PSD new sources annually that would be otherwise required by
the CAA to obtain permits. Under step 1, over six million title V
sources in total and approximately 20 thousand new PSD sources per year
will not be required to obtain permits. Under step 2, requiring sources
over a 100,000 tpy CO2e to obtain a permit, over six million title V
sources in total and approximately 19.9 thousand new PSD sources per
year will obtain regulatory relief.  While the threshold approach
differs for steps 1 and 2 of the phase-in plan, the estimated number of
sources affected does not differ greatly as shown in Table VI-1. Sectors
experiencing this regulatory relief include electricity, industrial,
energy, waste treatment, agriculture, commercial and residential.

Table VI-1. Estimated Number of Affected Sources Experiencing Regulatory
Relief1,2

	Number of Sources Experiencing Regulatory Relief

	Non-GHG Based	<100,000 tpy

Sector	Title V	New PSD	Title V	New PSD

Electricity	285	93	285	33

Industrial	170,910	604	170,654	599

Energy	2,588	48	2,536	44

Waste Treatment	3,358	2	3,165	1

Agriculture	37,351	299	37,351	299

Commercial	1,355,921	12,041	1,355,870	12,039

Residential 	4,535,500	6,915	4,535,500	6,915

Totals	6,105,913	20,002	6,105,361	19,930

% Emissions Covered3

13%

11%

Notes: (1) Number of sources is determined on a potential to emit basis.
Estimates for title V are the total number of sources expected to
experience regulatory relief.  PSD sources are annual estimates of newly
constructed facilities and do not include modifications at existing
facilities that may also be subject to PSD requirements. (2) See
Appendices to ‘Regulatory Impact Analysis of the Final Greenhouse Gas
Tailoring Rule’ for more details of how thresholds and sources
affected are developed. (3) Percentage of emissions covered represent
estimated actual emissions from sources expected to experience
regulatory relief as a percentage of total stationary source GHG
emissions.

B.  What are the estimated annual benefits to sources due to regulatory
relief from the statutory requirements?

EPA estimated the annual benefits (avoided costs) to sources of GHG
emissions and permitting authorities anticipated from this final rule.
In addition, an accounting of the benefits from this action as measured
by avoided permit processing costs for state, local, and tribal
permitting authorities is provided.  These benefits or avoided costs
relate specifically to information collection costs or burden costs
postponed for smaller sources of GHG emissions otherwise required to
obtain an operating permit under title V or required to modify an
existing permit to address GHG emissions.  Avoided costs shown also
include information collection requirements for additional PSD permits
postponed for new or modifying smaller sources of GHG, as well as the
avoided costs to state, local and tribal permitting authorities.  These
estimates do not consider avoided emission control costs associated with
PSD requirements for potential BACT requirements.  Estimates for BACT
are unavailable at this time because of the difficulty predicting the
results of the BACT process as it would be applied to new pollutants and
classes of sources for which there is no previous BACT experience on
which to rely.

1.  What are annual estimated benefits or avoided burden costs for title
V permits?

Table VI-2 shows that the estimated annual title V benefits to sources
and to permitting authorities in terms of avoided information collection
cost resulting from this final action to be approximately $70,524.3
million under step 1 of the phase-in, the non-GHG based requirements
threshold.  These avoided costs become $70,517.1 million annually under
step 2 of the phase-in where permitting is required for sources at or
above the 100,000 tpy CO2e threshold.  Under the non-GHG based phase-in
step 1, approximately $49,457.3 million in regulatory relief will accrue
to sources and approximately $21,067 million to permitting authorities
annually in the form of avoided permit processing costs.  With the
<100,000 tpy CO2e threshold for phase-in step 2, these annual regulatory
relief benefits are expected to be quite similar at $49,455.4 million
for sources of GHG emissions and $21,061.7 million for permitting
authorities.  Industrial sources permitting costs are estimated to be
$46.4 thousand per permit for a new permit and $1.7 thousand for a
permit revision.  The EPA estimates that over tens of thousands of
industrial sources per year will avoid incurring these permitting costs
under steps 1 and 2 of the phase-in period.  The cost for a permit for
new commercial and residential sources is estimated to be $23.2 thousand
per permit with approximately 2 million of these permits avoided
annually.

State, local, and tribal permitting authorities will also benefit in
terms of avoided permitting administrative costs of over $21 billion as
a result of the decisions final in this action.  For industrial sources,
the cost for permitting authorities to process a new industrial title V

Table VI-2.  Annual Title V Regulatory Relief for Sources and Permitting
Authorities1, 2

 	 	Step One

Non-GHG Based	Step Two

<100,000 tpy CO2e

Activity	Cost per Permit (2007$)	Number of Permits	Avoided Costs
(millions 2007$)	Number of Permits	Avoided Costs (millions 2007$)

Sources

New Industrial	$46,350	71,829	$3,329.3	71,829	$3,329.3

New Commercial/Residential	$23,175	1,985,948	$46,024.3	1,985,930
$46,023.9

Permit revisions due to GHG	$1,677	61,836	$103.7	60,921	$102.2

Source Total	 	2,119,613	$49,457.3	2,118,508	$49,455.4

Permitting Authority

New Industrial	$19,678	71,829	$1,413.5	71,829	$1,410.1

New Commercial/Residential	$9,839	1,985,948	$19,539.7	1,985,930
$19,539.6

Permit revisions due to GHG	$1,840	61,836	$113.8	60,921	$112.1

Permitting Authority Total	 	2,119,613	$21,067.0	2,118,508	$21,061.7

Total Title V Regulatory Relief	$70,524.3	 	$70,517.1

Note  (1) Annual title V avoided costs estimates represent information
collection costs for one third of the total number of title V sources
obtaining regulatory relief shown in Table VI-1 potentially requiring
permits or permit revisions for GHG.

 (2) More details on these estimated regulatory relief benefits are
available in the Appendices to the “Regulatory Impact Analysis for the
Final Greenhouse Gas Tailoring Rule”.

permit is approximately $19.7 thousand per permit and $1.8 thousand for
a permit revision.  Similar permitting authority avoided permit
processing costs are approximately $9.8 thousand per permit for a new
commercial or residential title V permit.  All estimates are stated in
2007 dollars.

2.	What are annual benefits or avoided costs associated with NSR
permitting regulatory relief?

Table VI-3 summarizes the estimated annual information collection costs
avoided by sources and permitting authorities for PSD permitting due to
this tailoring rule. The benefits associated with avoided cost of
compliance for BACT for these sources is not included in these estimates
due to a lack of available data.  The estimated avoided burden or
reporting and recordkeeping cost that would occur absent this rule for
new industrial sources to obtain permits is estimated to be $84.5
thousand for a modifying PSD industrial source and $59.2 thousand for a
modifying commercial or multi-family residential source.  New PSD
sources will also be required to obtain a title V permit increasing
these costs to $130.9 thousand per permit for new industrial sources and
to $82.3 thousand per permit for new commercial or multi-family
residential sources.  (Note the title V costs for these new PSD sources
have been included in title V estimates shown in Table VI-2.)  New and
modifying sources avoid approximately $5.5 billion annually in PSD
permitting costs with this rule under the phase-in step 1, non-GHG based
threshold.  Under the phase-in step 2, <100,000 CO2e tpy threshold and
<75,000 tpy CO2e significance level, this avoided PSD permitting cost
estimate becomes $5.4 billion annually.  State, local, and tribal
permitting authorities are expected to avoid about $1.51 billion
annually in administrative expenditures associated with postponing PSD
program requirements for these GHG sources under step 1 and $1.49
billion under step 2.  All estimates are shown in 2007 dollars.

Table VI-3.  Annual PSD Regulatory Relief for Sources and Permitting
Authorities1,2

 	 	Step One

Non-GHG Based	Step Two

<100,000 tpy Threshold, <75,000 Significance Level

Activity	Cost per Permit (2007$)	Number of Permits	Avoided Costs
(millions 2007$)	Number of Permits	Avoided Costs (millions 2007$)

Sources

New Industrial	$84,530	26,089	$2,205.3	25174	$2,128.0

New Commercial/Residential	$59,152	55,509	$3,283.5	55505	$3,283.2

Source Total	 	81,598	$5,488.8	80679	$5,411.2

Permitting Authority

	0

New Industrial	$23,243	26,089	$606.4	25174	$585.1

New Commercial/Residential	$16,216	55,509	$900.1	55505	$900.1

Permitting Authority Total	 	 81,598	$1,506.5	80679	$1,485.2

Total Title V Regulatory Relief	 	$6,995.3	 	$6,896.4

Note: (1) All estimates are based upon potential to emit.  Regulatory
relief shown represents annual estimates of PSD permitting costs avoided
under steps 1 and 2 of the phase-in period.

(2) More details on these estimated regulatory relief benefits are
available in the Appendices to the “Regulatory Impact Analysis for the
Final Greenhouse Gas Tailoring Rule”.

C.  What are the economic impacts of this rulemaking?

This final rulemaking does not impose economic burdens or costs on any
sources or permitting authorities, but should be viewed as regulatory
relief for smaller GHG emission sources and for permitting authorities.
Although sources above the thresholds set in this rule will become
subject to permitting on January 2, 2011, those impacts are not
attributable to the present rulemaking.  Rather they are mandated by the
CAA and existing regulations and automatically take effect independent
of this action.

In addition to considering the regulatory relief expected for affected
entities as a result of this final rule, the EPA considered the impact
of this rulemaking to small entities (small businesses, governments and
non-profit organizations) as required by RFA and SBREFA.  For
informational purposes, the RIA includes the Small Business
Administration (SBA) definition of small entities by industry categories
for stationary sources of GHG and potential regulatory relief from title
V and NSR permitting programs for small sources of GHG.  Since this rule
does not impose regulatory requirements but rather lessens the
regulatory burden of the CAA requirements to smaller sources of GHG, no
economic costs are imposed upon small sources of GHG as a result of this
final rule.  Rather this action provides regulatory relief for small
sources. These avoided costs or benefits accrue because small sources of
GHG are not required to obtain a title V permit and new or modifying
small sources of GHG are not required to meet PSD requirements.  Some of
the small sources benefitting from this action are small entities, and
these entities will benefit from the regulatory relief finalized by this
rule. For discussion of comments received and EPA responses regarding
small entities impacts, see section VIII. of this preamble.

D.  What are the costs of the final rule for society?

EPA examined the social costs of this final rule.  These social costs
represent the foregone environmental benefits that will occur as a
result of the regulatory relief offered to sources of GHG emissions.
This action is one of regulatory relief since it increases the emissions
thresholds for the title V and PSD programs, as they apply to sources of
GHG emissions, to levels above those in the CAA.  In this preamble
section, the benefits or avoided regulatory costs of such relief are
discussed, but there is also a social cost imposed by such relief,
because this rule may forego some of the possible benefits associated
with title V and PSD programs for sources of GHG emissions below the
permitting thresholds established.  These benefits are those attributed
to title V and PSD permitting programs in general.  These benefits are
based upon the relevance of these programs to policymaking, transparency
issues, and market efficiency, and therefore are very difficult to
quantify and monetize.  For title V, they include the benefits of
improved compliance with CAA requirements that stem from (1) improved
clarity regarding applicability of requirements, (2) discovery and
required correction of noncompliance prior to receiving a permit, (3)
improving monitoring, recordkeeping, and reporting concerning compliance
status, (4) self-certification of compliance with applicable
requirements initially and annually, and prompt reporting of deviations
from permit requirements, (5) enhanced opportunity for the public to
understand and monitor sources’ compliance obligations, and (6)
improved ability of EPA, permitting authorities, and the public to
enforce CAA requirements.  However, it is important to remember that a
title V permit does not add new requirements for pollution control
itself, but rather collects all of a facility’s applicable
requirements under the CAA in one permit.  Therefore, the compliance
benefits above are less when title V permits contains few or no CAA
applicable requirements.  During the initial steps of the phase-in plan
established under this action, we expect that the vast majority of
sources excluded from title V would be sources that have no CAA
applicable requirements for GHG emissions and few or no requirements for
other pollutants because their emissions of those pollutants are so
small.  For this reason while it is extremely difficult to measure the
degree of improved compliance, if any, that would be foregone, or to
quantify the social costs that would be imposed, we expect that they
would be negligible.

	For PSD, the primary social cost imposed by the tailoring rule stems
from the foregone benefit of applying BACT to the tens of thousands of
small new sources and modifications that will be below our final
thresholds during the first steps of the phase-in.  This social cost
potentially weighs against the cost savings described above that stem
(in part) from avoiding the administrative and control costs of applying
BACT to these sources.  The BACT requirement assures that new and
modified sources, when they increase their emissions are using
state-of-the-art emission controls and affords the public an opportunity
to comment on the control decision.  It does not prohibit increases but
it assures that such controls are applied.  Delaying the BACT
requirement for numerous small sources during the first steps of the
phase-in for this final rule could allow increases from these smaller
sources that are greater than they would be if BACT were applied.  A
detailed analysis of this difference is beyond the scope of this rule,
because we do not have detailed information on the universe of these
tens of thousands of small PSD actions, the candidate BACT technologies
for each of them, how permitting authorities would make the BACT
decisions, and how the BACT limit would compare to what would otherwise
be installed absent BACT.

It is not possible at this time to quantify the social costs of avoided
BACT.  However we note that the universe of possible emissions that
would be regulated by sources excluded under the tailoring rule is small
compared to those that would remain subject to PSD.  The sources
excluded in these first two steps of the phase-in plan of this action
comprise only 11 percent of total stationary source GHG emissions, while
67 percent remain subject to regulation.  Furthermore, we expect the
emissions differences due to BACT controls for such sources to be
relatively small due to the lack of available capture and control
technologies for GHG at such sources that are akin to those that exist
for conventional pollutants and sources, as well as the likelihood that
even in the absence of BACT such sources would already be installing
relatively efficient GHG technologies to save on fuel costs.  Thus,
while potential benefits would be foregone by excluding smaller sources
from the permitting programs, these benefits are likely to be small.
Under the tailoring rule, we will be working during the 6-year period to
greatly improve our understanding of both the administrative costs of
regulating and the social costs of not regulating smaller sources under
PSD and title V, and we will be relying on that information to support
our future threshold analyses called for under the action.

In reaching the decisions for this GHG tailoring rule, the EPA
recognizes that GHG emissions can remain in the atmosphere for decades
to centuries, meaning that their concentrations become well-mixed
throughout the global atmosphere regardless of emission origin, and
their effects on climate are long lasting and significant.  A detailed
explanation of climate change and its impact on health, society, and the
environment is included in EPA's technical support document for the
endangerment finding action (Docket ID No. EPA-HQ-OAR-2009-0171).  The
EPA recognizes the importance of reducing climate change emissions for
all sources of GHG emissions including those sources afforded regulatory
relief in this rule and plans to address potential emission reductions
from these small sources using voluntary and energy efficiency
approaches.  Elsewhere, we have discussed EPA's interest in continuing
to use regulatory and/or non-regulatory tools for reducing emissions
from smaller GHG sources because we believe that these tools will likely
result in more efficient and cost-effective regulation than would
case-by-case permitting.

VII.   Comments on Statutory and Executive Orders Reviews

A.  Comments and Response on Statutory and Executive Orders Section in
the Proposed Rule

In this section, we provide responses to comments we received for
various Executive Orders.

A.  Comments on Executive Order 12866 - Regulatory Planning and Review

At proposal, EPA prepared an analysis of the potential costs and
benefits associated with EPA’s tailoring rule proposal in an RIA.
Several commenters state that EPA’s failure to estimate the full costs
of the effects of its interpretation of PSD applicability in the
proposed Tailoring Rule violates EO 12866.  Some of these commenters
maintain that EO 12866 directs EPA to submit to OMB new significant
regulations under consideration by the EPA.  These commenters assert
that, in the section 202 rule, EPA failed to analyze the effect on
stationary sources in the cost benefit analysis and there is no
indication that EPA included these impacts in its submission to OMB.
According to the commenters, in EPA’s proposal for this rulemaking,
EPA has similarly failed to analyze the costs and benefits of triggering
PSD for stationary sources.  The commenters assert that without this key
information, OMB could not fully review the impacts of the proposed
rule.  The commenters believe that EPA’s failure to account for known
costs that will occur as a direct result of the promulgation of the
proposed rule in conjunction with the section 202 rule violates several
applicable requirements of EO 12866, including sections 6(B)(ii) and
6(C)(iii), which require assessments of the potential costs and benefits
of the regulatory action and “reasonably feasible alternatives to the
planned regulation, identified by the Agencies or the public . . .”
thereby violating both the Administrative Procedures Act and CAA section
307(d) because they deprive businesses and permitting authorities alike
of a meaningful opportunity to comment on the rule.

	The EPA has prepared a revised RIA assessing the benefits and costs of
the final tailoring rule to support this rulemaking in accordance with
E.O. 12866 as was done with the proposal for this rulemaking.  Similarly
the RIA completed for this action is subject to review by an
Inter-agency review panel that includes the President’s Office of
Management and Budget as was the case with the proposal RIA.  Further,
the RIA completed for this final rule fully assesses the known benefits
and costs associated with the tailoring rulemaking.  This final rule is
one of regulatory relief from statutory requirements in which a large
number of sources of GHGs will be relieved of the burden of title V and
PSD permitting for a period of at least six years.  This final rule will
provide relief from title V permitting to over 6 million sources of GHG
in this country.  Likewise tens of thousands of sources potentially
subject to PSD permitting requirements for GHGs will have regulation
postponed for a period of at least 6 years.  While larger sources of GHG
may still be required to obtain title V permits or modify existing
permits and to comply with PSD requirements, these burdens result from
existing statutory requirements, not from this final tailoring rule.

B.  Comments on Paperwork Reduction Act

At proposal, we stated in the preamble that we did not believe that the
proposal would impose any new information collection burden.  We
concluded that the proposed action would reduce costs incurred by
sources and permitting authorities relative to the costs that would be
incurred if EPA did not revise the rule and provided estimates of those
reduced costs.  Further, we stated that, despite our estimated burden
reductions, it was unnecessary for us to submit a new ICR to the OMB
because the ICR contained in the existing regulations for PSD (see,
e.g., 40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) had already
been approved 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.

However, several commenters disagree that it was unnecessary for us to
submit a new ICR for the proposed action.  These commenters believe that
(1) prior approval of an ICR for the PSD and title V programs ignores
the fact that there would be an increase in the paperwork burden as a
result of applying PSD and title V permitting requirements; and (2)
unless EPA resubmits the information collection approval request to OMB
with a proper and fully-inclusive analysis, EPA will lack authority to
collect information from stationary sources for PSD and title V GHG
emissions permitting.

As we stated in the proposal, this is a burden relief rule and as such
it does not impose any new requirements for the NSR or title V programs
that are not currently required.  For that reason, we concluded that for
purposes of this rule it was unnecessary for us to submit a new ICR to
the OMB and that the ICR contained in the existing regulations for PSD
(see, e.g., 40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) that
had already been approved under the provisions of the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. and was assigned OMB control
number 2060–0003 and OMB control number 2060–0336, respectively,
still applies.

Nevertheless, we understand that once GHGs are regulated under the PSD
and title V programs, there might be an increase in the paperwork burden
and EPA will have to access this possible burden. We plan to do so once
the 3 year review period of the current ICR expires, which will be in
early 2011.

C.  Comments on Regulatory Flexibility Act

At proposal, EPA certified that the proposed rule would not have a
significant impact on a substantial number of small entities and
therefore we are not obligated to convene a formal Small Business
Advocacy Review (SBAR) panel.  This certification was based upon the
fact that the proposed action would relieve the regulatory burden
associated with the major PSD and title V operating permits programs for
new or modified major sources that emit GHGs, including small
businesses. Nevertheless, EPA was aware at proposal that many small
entities would be interested in the various GHG rulemakings currently
under development and might have concerns about the potential impacts of
the statutory imposition of PSD requirements that may occur as a result
of the group of EPA actions, notwithstanding the relief provided to
small businesses by the tailoring rule.  For these reasons, and in
collaboration with the Small Business Administration (SBA), EPA
conducted an outreach meeting designed to exchange information with
small entities that may be interested in these regulations.  The
outreach effort was organized and led by representatives from EPA’s
Office of Air Quality Planning and Standards within the Office of Air
and Radiation, EPA’s Office of Policy Economics and Innovation, the
Office of Information and Regulatory Affairs within the Office of
Management and Budget (OMB), and the Office of Advocacy of the Small
Business Administration.  This meeting was conducted on November 17,
2009 in Arlington, VA and documentation of this meeting, which includes
a summary of the advice and recommendations received from the small
entity representatives (SERs) identified for the purposes of this
process, can be obtained in the docket for this rulemaking.  (See Docket
No. EPA-HQ-OAR-2009-0517-19130).

During the comment period, several commenters alleged that EPA
inappropriately limited its RIA and RFA/SBREFA analysis, and that had we
done a comprehensive analysis, we would not have been able to certify
that any of the proposed rules will not have a significant economic
impact on a “substantial number of small entities.”  Thus they
conclude that EPA failed to prepare and publicize an initial regulatory
flexibility analysis (IRFA).  Additional commenters stated that EPA’s
failure to conduct an IRFA to assess the full costs of the effects of
its interpretation of PSD applicability in the Proposed Tailoring Rule
violates a host of statutes and Executive Orders requiring analysis and
public review of regulatory burdens. These commenters conclude that EPA
should have convened one or more Small Business Advocacy Review (SBAR)
Panels.

	EPA is not persuaded that EPA should have taken into account effects
beyond those caused by the tailoring rule when we made our certification
of no significant economic impact on a substantial number of small
entities for this rule.  No permitting requirements are imposed by this
final tailoring rule. Instead, this final tailoring rule offers
regulatory relief to over an estimated six million sources of GHG
emissions that would otherwise be required to obtain a title V permit
and tens of thousands of sources of GHG emissions subject to PSD
permitting requirements that would otherwise be required statutorily to
obtain permit. The RFA does not require that an agency complete a
regulatory flexibility analysis or conduct an SBAR panel where the rule
does not have any negative impact on small entities. For more discussion
of RFA issues, please see the RTC document.

The EPA completed an RIA to assess the economic benefits of regulatory
relief and the environmental benefits afforded by this final rule. The
EPA believes that the RIA completed for this final rule adequately
addresses economic issues associated with this tailoring rule.

D.  Comments on Unfunded Mandates Reform Act

At proposal, EPA asserted that the tailoring rule does not impose
unfunded mandates on any entities including sources and permitting
authorities.  Since the proposed tailoring rule is one of regulatory
relief, it alleviates the burden of adhering to statutorily required
permitting thresholds and does not impose regulatory requirements.

Some commenters on the proposed rule assert that EPA has failed to
comply with the requirements of UMRA, pursuant to which EPA must assess
the effects of the Proposed Rule on state, local, and tribal governments
and the private sector.  Specifically, these commenters state that
section 202 of the UMRA requires EPA to prepare a written statement,
including a cost-benefit analysis, for proposed rules with “federal
mandates” that may result in expenditures to state, local, and tribal
governments, in the aggregate, or to the private sector, of $100 million
or more in any one year.  According to the commenters, in concluding
that “the revisions would ultimately reduce the PSD and title V
program administrative burden that would otherwise occur in the absence
of this rulemaking,” EPA did not account for the billions of dollars
that permitting authorities and stationary sources will soon be required
to spend once PSD is triggered for GHGs.  Additionally, a few commenters
contend that the EPA underestimated the impacts to public utilities
which are owned/operated by local governments and also to state
regulatory agencies.

The EPA has carefully considered the comments on unfunded mandates
expressed by commenters to the proposed rule.  The EPA did complete a
RIA for the final rule assessing the benefits and costs of the tailoring
rule, including any unfunded mandates. As previously discussed, the
tailoring rule is one of regulatory relief because it increases the GHG
emissions threshold for NSR and title V permitting substantially above
otherwise statutory requirements.  As such, the EPA asserts this
tailoring rule does not impose unfunded mandates on any entities. This
RIA of the final rule incorporates the extensive changes made in this
final rule, including increased threshold levels for title V and PSD
above those contained in the proposed rule.  While we also incorporated
improved estimates of the costs for sources to obtain permits and for
permitting authorities to process permits, they do not change our
conclusion that this final rule does not impose unfunded mandates on any
entities.

E.  Comments on Executive Order 13132 – Federalism

Some comments received on the proposed rule assert that federalism
concerns were ignored, in violation of Executive Order No. 13132.
According to the commenters, EPA cannot maintain that the Tailoring Rule
"will not have a substantial direct effect on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities between various levels of
government," such that Executive Order No. 13132 does not apply.  Some
of these commenters assert that the proposed rulemaking would require
radical changes in state laws, interjects GHGs into permit programs
never once conceived for that purpose (any more than was EPA's),
requires massive staff hiring at state agencies, and rewrites SIPs in
place for years or even decades.

As we stated previously, this is a burden relief rule and as such it
does not impose any requirements for the NSR or title V programs that
are not currently required.  In addition, this action does not interject
GHGs into the permit programs, nor does it change state laws or SIPs to
impose any new permitting requirements.  Instead, this action will
significantly reduce the burden and costs incurred by sources and
permitting authorities relative to the burden and costs that would be
incurred if EPA did not revise the permitting provisions to account for
higher applicability thresholds for GHG emissions.

However, since this rule finalizes burden reducing thresholds that will
not otherwise apply to the PSD and title V programs, we are aware that a
few states will have to amend their SIPs to incorporate these new
thresholds.  These states will be the ones whose permitting authorities
do not implement the Federal PSD and title V rules by reference in their
SIPs.

F.  Comments on Executive Order 13175 - Consultation and Coordination
with Indian Tribal Governments

The National Tribal Air Association (NTAA) supports EPA’s proposed
rule but requests that tribal air grant funding be increased to reflect
the air quality-related needs of tribes across the nation, and to allow
these tribes the opportunity to implement the CAA’s PSD and title V
programs.  The NTAA states that, not only are Tribes eligible for
section 103 grant funding to conduct air quality monitoring, emissions
inventories, and other studies and assessments, but they may also obtain
section 105 grant funding to implement CAA regulatory programs.
According to the NTAA, Tribes are facing many of the same air-related
issues that neighboring state and local jurisdictions are facing, but
are significantly underfunded to address such issues.

	The Agency is aware and concerned about the resource needs for the
Tribal air program and we are working to see how grant funding might be
increased in the future.  Nevertheless and for the purpose of the
permitting programs, we want to clarify that tribes that develop Tribal
Implementation Plans (TIPs) can charge for permits and Tribes with
delegation can develop permit fee programs under their authority (e.g.,
Navajo’s permit fee program for their delegated title V permit
program)to fund both the NSR and title V programs.  For these reasons,
there are a number of ways we would like to work to address the funding
concern, includingencouraging delegation of permitting programs and
having model codes available for Tribes that want to do TIPs for NSR and
title V permitting.

G.  Executive Order 13211 - Actions That Significantly Affect Energy
Supply, Distribution, or Use

Other commenters assert that EPA’s analysis under Executive Order
13211 is insufficient because it addresses only smaller sources.  These
commenters contend that EPA has not meaningfully examined the energy
implications of its proposed actions and interpretations of the CAA.
The commenters disagree with EPA’s conclusion that the imposition of
costly PSD obligations on power plants would have no impact on power
supply, distribution, or use, when those plants will have had no time to
prepare for compliance and no idea what BACT may be for GHG emissions.
Other commenters opine that the adoption of BACT for some industries
newly-subject to PSD permitting requirements for GHGs could involve
fuel-switching, and increased energy costs (due to the need for a source
to convert from coal to natural gas to meet BACT).

Again, this action is a burden relief rule and as such it does not
create any new requirements for sources in the energy supply,
distribution, or use sectors.  For the purpose of the BACT
determinations for GHGs, the long-standing top-down BACT selection
process still applies.  Under the CAA and EPA’s implementing
regulations, BACT is still an emission limitation based on the maximum
degree of emission reduction achievable through application of
production processes and available methods, systems, and techniques that
considers energy, environmental, and economic impacts. In other words,
BACT determinations for GHGs will still have to consider energy,
environmental and economic feasibility for the various control
technologies under consideration before selecting a particular
technology as BACT for a particular source.  For that reason, what BACT
may be for GHG emissions will vary by source, and the technology that is
ultimately selected has to be one that is feasible based on the current
energy, environmental and economic impacts that the planned technology
might have.  Thus, we do not believe that this action is likely to have
a significant adverse effect on the supply, distribution, or use of
energy.

VIII.   Statutory and Executive Orders 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.

In addition, EPA prepared an analysis of the potential costs and
benefits associated with this action.  This analysis is contained in the
RIA for this final rule.  A copy of the analysis is available in the
docket for this action and the analysis is briefly summarized in section
VIII of this preamble.

B.  Paperwork Reduction Act

	This action does not impose any new information collection burden.
Instead, this action will significantly reduce costs incurred by sources
and permitting authorities relative to the costs that would be incurred
if EPA did not revise the rule.  Based on our revised GHG threshold data
analysis, we estimate that over 80,000 new and modified facilities per
year would be subject to PSD review based on applying a GHG emissions
threshold of 100/250 tpy using a CO2e metric.  This is compared to 280
PSD permits currently issued per year, which is an increase of more than
280-fold.  Similarly, for title V, we estimate that over six million new
sources would be affected at the 100-tpy threshold for GHGs using the
CO2e metric.  By increasing the volume of permits by over 400 times, the
administrative burden would be unmanageable without this rule.

	However, 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.  The OMB control numbers for EPA’s regulations in 40 CFR
are listed in 40 CFR part 9.

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 Procedures
Act (APA) or any other statute unless the agency certifies that the rule
will not have a significant economic impact on a substantial number of
small entities.  Small entities include small businesses, small
organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this final action 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.

After considering the economic impacts of this final rule on small
entities, I certify that this final action will not have a significant
economic impact on a substantial number of small entities.  In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the primary
purpose of the regulatory flexibility analyses is to identify and
address regulatory alternatives “which minimize any significant
economic impact of the rule on small entities.”  5 USC 603 and 604.
Thus, 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, or otherwise has a positive economic effect
on all of the small entities subject to the rule.

We have therefore concluded that this final rule will relieve the
regulatory burden for most affected small entities associated with the
major PSD and title V operating permits programs for new or modified
major sources that emit GHGs, including small businesses.  This is
because this rule raises the major source applicability thresholds for
these programs for the sources that emit GHGs.  As a result, the program
changes provided in this rule are not expected to result in a
significant economic impact on a substantial number of small entities.

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 1 year.
Only those few states whose permitting authorities do not implement the
Federal PSD and title V rules by reference in their SIPs will have a
small increase in burden.  These states will have to amend their
corresponding SIPs to incorporate the new applicability thresholds,
since the burden reducing thresholds that we are finalizing with this
rule will not otherwise apply to the PSD and title V programs.  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.  As discussed
earlier, this rule is expected to result in cost savings and an
administrative burden reduction for all permitting authorities and
permittees, including 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.  These final amendments will
ultimately simplify and reduce the burden on state and local agencies
associated with implementing the PSD and title V operating permits
programs, by providing that a source whose GHG emissions are below the
proposed levels will not have to obtain a PSD permit or title V permit.
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 solicited comment on the proposed rule from state and
local officials.

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

Subject to the Executive Order 13175 (65 FR 67249, November 9, 2000) EPA
may not issue a regulation that has tribal implications, that imposes
substantial direct compliance costs, and that is not required by
statute, unless the federal government provides the funds necessary to
pay the direct compliance costs incurred by tribal governments, or EPA
consults with tribal officials early in the process of developing the
proposed regulation and develops a tribal summary impact statement.

EPA has concluded that this action may have tribal implications.
However, it will neither impose substantial direct compliance costs on
tribal governments, nor preempt Tribal law.  There are no tribal
authorities currently issuing major NSR permits; therefore, it will not
currently impose direct compliance costs on tribal governments.

EPA consulted with tribal officials early in the process of developing
this regulation to permit them to have meaningful and timely input into
its development by publishing an ANPR that included PSD GHG tailoring
options for regulating GHGs under the CAA.  (73 FR 44354, July 30, 2008)
 As a result of the ANPR, EPA received several comments from tribal
officials on differing PSD GHG tailoring options presented in the ANPR
which were considered in the proposal and this final rule.
Additionally, we also specifically solicited comment from tribal
officials on the proposed rule (74 FR 55292, October 27, 2009).

As required by section 7(a) of Executive Order 13175, EPA’s Tribal
Consultation Official has certified that the requirements of the
Executive Order have been met in a meaningful and timely manner.  A copy
of the certification is included in the docket for this action.

G.  Executive Order 13045 - Protection of Children from Environmental
Health 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 does not establish an environmental standard intended
to mitigate health or safety risks.

H.  Executive Order 13211 - Actions 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.  Further, we have concluded that this rule is not
likely to have any adverse energy effects because this action would not
create any new requirements for sources in the energy supply,
distribution, or use sectors.

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.  The NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.

This action does not involve technical standards.  Therefore, EPA did
not consider 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 (Feb. 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
United States.

		EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it increases the
level of environmental protection for all affected populations without
having any disproportionately high and adverse human health or
environmental effects on any population, including any minority or
low-income population. Any impact that this final rule will have will be
global in nature and will increase the level of protection provided to
all human health and the environment.

K.  Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating the
rule must submit a rule report, which includes a copy of the rule, to
each House of the Congress and to the Comptroller General of the United
States. EPA will submit a report containing this rule and other required
information to the U.S. Senate, the U.S. House of Representatives, and
the Comptroller General of the United States prior to publication of the
rule in the Federal Register. A Major rule cannot take effect until 60
days after it is published in the Federal Register.  This action is a
“major rule” as defined by 5 U.S.C. 804(2). This rule will be
effective [INSERT DATE 60 DAYS FROM PUBLICATION IN THE FEDERAL
REGISTER].

L.  Judicial Review

Under section 307(b)(1) of the Act, petitions for judicial review of
this action must be filed in the United States Court of Appeals for the
District of Columbia Circuit by [INSERT DATE 60 DAYS FROM DATE OF
PUBLICATION IN THE FEDERAL REGISTER].  Any such judicial review is
limited to only those objections that are raised with reasonable
specificity in timely comments. Filing a petition for reconsideration by
the Administrator of this final rule does not affect the finality of
this rule 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. Under section
307(b)(2) of the Act, the requirements of this final action may not be
challenged later in civil or criminal proceedings brought by us to
enforce these requirements. Pursuant to section 307(d)(1)(V) of the Act,
the Administrator determines that this action is subject to the
provisions of section 307(d). Section 307(d)(1)(V) provides that the
provisions of section 307(d) apply to “such other actions as the
Administrator may determine.”  This action finalizes some, but not
all, elements of a previous proposed action – the Prevention of
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
Proposed Rule (74 FR 55292, October 27, 2009).

IX. Statutory Authority

The statutory authority for this action is provided by sections
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42
U.S.C. 7401, 7411, 7414, 7416, and 7601).  This action is also subject
to section 307(d) of the CAA (42 U.S.C. 7407(d)).

List of Subjects

40 CFR Part 51

Administrative practice and procedure, Air pollution control, Carbon
dioxide, Carbon dioxide equivalents, Environmental protection,
Greenhouse gases, Hydrofluorocarbons, Intergovernmental relations,
Methane, Nitrous oxide, Perfluorocarbons, Reporting and recordkeeping
requirements, Sulfur hexafluoride.

40 CFR Part 52

Administrative practice and procedure, Air pollution control, Carbon
dioxide, Carbon dioxide equivalents, Environmental protection,
Greenhouse gases, Hydrofluorocarbons, Intergovernmental relations,
Methane, Nitrous oxide, Perfluorocarbons, Reporting and recordkeeping
requirements, Sulfur hexafluoride.

40 CFR Part 70

Administrative practice and procedure, Air pollution control, Carbon
dioxide, Carbon dioxide equivalents, Environmental protection,
Greenhouse gases, Hydrofluorocarbons, Intergovernmental relations,
Methane, Nitrous oxide, Perfluorocarbons, Reporting and recordkeeping
requirements, Sulfur hexafluoride.

40 CFR Part 71

Administrative practice and procedure, Air pollution control, Carbon
dioxide, Carbon dioxide equivalents, Environmental protection,
Greenhouse gases, Hydrofluorocarbons, Methane, Nitrous oxide,
Perfluorocarbons, Reporting and recordkeeping requirements, Sulfur
hexafluoride.

___________________________________________

Dated:

___________________________________________

Lisa P. Jackson,

Administrator.

 The term “greenhouse gases” is commonly used to refer generally to
gases that have heat-trapping properties.  However, in this notice,
unless noted otherwise, we use it to refer to specifically to the
pollutant regulated in the LDVR.

 The relevant thresholds are 100 tpy for title V, and 250 tpy for PSD
except for 28 categories listed in EPA regulations for which the PSD
threshold is 100 tpy.

 This rule has not yet been published in the Federal Register.  The
signed version of the rule is available at   HYPERLINK
"http://epa.gov/otaq/climate/regulations.htm"
http://epa.gov/otaq/climate/regulations.htm  [update when published]

 We note that the PSD program has historically operated in this fashion
for all pollutants – when new sources or modifications are
“major”, PSD applies to all pollutants that are emitted in
significant quantities from the source or project.  This rule does not
alter that for sources or modifications that are major due to their GHG
emissions.

See 74 FR 66496, 66499, 66536-7.  December 15, 2009.

 A source need not meet the 100/250 thresholds for GHGs if it is already
a major stationary source as a result of emissions of another regulated
NSR pollutant.

 §86.1818-12 (a) (“Applicability. This section contains standards and
other regulations applicable to the emission of the air pollutant
defined as the aggregate group of six greenhouse gases:  carbon dioxide,
nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur
hexafluoride”).

 Although we commit to propose or solicit comment on lower thresholds
and to take final action on that proposal by July 1, 2012, we cannot, at
present, commit to promulgate lower thresholds.  It will not be until
the Step 3 rulemaking itself that we will gather and analyze data and
receive comments that determine whether we have basis for promulgating
lower thresholds.

 EPA notes, however, that many sources subject to title V under steps 1
and 2 will also be subject to the GHG mandatory reporting rule.  For
these sources, the emissions description requirements in the title V
regulations will generally be satisfied by referencing information
provided under the reporting rule.

  In the alternative, we also proposed to use our 110(k)(6) error
correction authority to revise SIP-approved PSD programs.

 See §86.1818-12(a)   Greenhouse gas emission standards for light-duty
vehicles, light-duty trucks, and medium-duty passenger vehicles.
(“Applicability.  This section contains standards and other
regulations applicable to the emission of the air pollutant defined as
the aggregate group of six greenhouse gases: carbon dioxide, nitrous
oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur
hexafluoride.”).

 We note that our approach does not entirely avoid the possibility that
a GWP change can occur while a permit is in progress although it will
ensure advance notice of such a change.  In the event that we plan to
propose a change to GWP values, we will work with permitting authorities
as necessary to provide guidance to sources on transitional issues.

 “Summary of ICR-based Data Used to Estimate Avoided Burden and
Evaluate Resource Requirements at Alternative GHG Permitting
Thresholds;” Prepared by EPA Staff; August 2009.

 Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

“Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010.

 “NACAA Summary on Permitting GHGs Under the Clean Air Act”;
Memorandum from Mary Stewart Douglas, National Association of Clean Air
Agencies to Juan Santiago, EPA/OAQPS, September 3, 2009.

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

  As explained in the preamble, "current program" figures for PSD
permits also reflect NSR permits in nonattainment areas that we assume
include a PSD component for at least one pollutant.

 Number of FTEs may be calculated as work hours divided by 2,000 hours.

 Although we set out an analysis of how the three doctrines fit into the
Chevron framework, we note that even if the doctrines are viewed
independently of the Chevron framework, they support our action today.

 Note that although Congress specifically authorized the states to
exempt "nonprofit health or education institutions" from the definition
of "major emitting facility," this statement by the D.C. Circuit should
be taken as the Court's view that Congress did not design PSD to cover
sources of the small size described.

 The initial PSD program that EPA established in 1973-74, and which EPA
built on in promulgating the PSD program necessary to implement the 1977
CAA Amendments had an even narrower focus.  In that initial program, in
response to a court order to ensure that state implementation plans
(SIPs) prevent significant deterioration of air quality, EPA imposed
both a technology-based requirement and an air-quality-review
requirement, which, in keeping with the focus on SIPs, were both limited
to national ambient air quality standards (NAAQS) pollutants.  This
program did not cover hazardous air pollutants that were regulated under
CAA section 112, much less air pollutants not regulated under any CAA
provision.  See 38 FR 18,986 (July 16, 1973) (proposed rule), 39 FR
31,000 (Aug. 27, 1974) (proposed rule), 39 FR 42,510 (Dec. 5, 1974)
(final rule).

 As noted elsewhere in today’s notice, in Alabama Power, the D.C.
Circuit noted that the definition of “major emitting facility” under
CAA section 169(1) could apply to air pollutants not regulated under
other provisions of the Act, and discussed  the contrast of this broad
definition to the narrower application of the BACT provisions.  636 F.2d
at 352-53 & n. 60.  In its rulemaking notices responding to Alabama
Power, EPA discussed at length certain issues, such as the applicability
of NSR to pollutants emitted below the “major” thresholds, that are
based on the reference in “major emitting facility” to “any air
pollutant.” However, throughout its discussion, EPA interpreted that
reference as “any regulated air pollutant,” again without
specifically acknowledging the difference or without acknowledging the
above-noted statements in Alabama Power.  See 45 FR at 52,710 –
52,711.  EPA did not indicate that it had received comments on this
issue.

 The House Committee on Energy and Commerce acknowledged that it was
“uncertain about the magnitude of permit applications likely to be
submitted under the bill initially and thereafter in each State or to
EPA,” H. Rep. 101-490 p. 346.

 That GHG will become subject to regulation moots, so far as GHGs are
concerned, any issue as to the validity of EPA’s narrowing the term
“any air pollutant” in the definition of “major emitting
facility” by reading into the term “subject to regulation under the
Clean Air Act.”

 EPA did receive comments that asserted in conclusory fashion that
permitting authorities could administer the 100/250 tpy levels.

 This tailoring, which is the subject of today’s rulemaking, is in
effect a further narrowing of the definition, as applied to GHG sources,
beyond what EPA accomplished in promulgating the regulatory definition
that includes the “subject to regulation” limitation.

  Indeed, as discussed elsewhere, by not limiting the applicability
provisions  to pollutants subject to regulation, Congress wrote them
overly broadly.

 Commenters raise additional arguments, including that PSD is limited to
pollutants (1) that cause only local effects, or (2) for which a source
has been subject to an NSPS.  We address these arguments in the RTC.

 We find no support for the proposition raised by some commenters that
this provision is limited to “NAAQs” pollutants.  To the contrary,
“under this chapter” unambiguous signals an intent to cover any
pollutant regulated under the Act.  Had Congress intended a narrower
focus,  they would have specified “any NAAQs pollutant” or any
pollutant subject to regulation under this Part (PSD)”

 That GHG will become subject to regulation moots, so far as GHGs are
concerned, any issue as to the validity of EPA’s narrowing the term
“any air pollutant” in the definition of “major source” by
reading into the term “subject to regulation” under the Clean Air
Act.

  We recognize that in a few states, we are the permitting authority.
We do not think that this changes the calculation of administrative
burdens.  We do not believe that we could reasonably be expected to
adjust our budget to accommodate the large new permitting burdens, and
even if we could, the administrative burdens would remain in most of the
rest of the nation where it is the state or local agencies that bear
permitting responsibility.

 For reasons explained elsewhere, our reference to the literal terms of
the applicability provisions means the literal terms of the definition
of “major emitting facility” for PSD and “major source” for
title V, as EPA has narrowed those definitions to refer to “any
pollutant” that is subject to regulation under the CAA.

  In the alternative, we also proposed to use our 110(k)(6) error
correction authority to revise SIP-approved PSD program.  We are also
delaying action on this proposal.

    We also think that this approach better clarifies our long standing
practice of interpreting open-ended SIP regulations to automatically
adjust for changes in the regulatory status of an air pollutant, because
it appropriately assures that the tailoring rule applies to both the
definition of “major stationary source” and “regulated NSR
pollutant.”

     We also think that this approach better clarifies our long standing
practice of interpreting open-ended SIP regulations to automatically
adjust for changes in the regulatory status of an air pollutant, because
it appropriately assures that the tailoring rule applies to both the
definition of “major stationary source” and “regulated NSR
pollutant.”

 The fee provisions are set forth in CAA Section 502(b)(3) and in our
regulations at 40 CFR 70.9 and 71.9

 We do not attempt to address or resolve the various opinions about what
legal or policy direction we must take regarding any of these
streamlining options.  The proper forum for doing that will be in the
action(s) where we apply a given option.  Nonetheless, our response to
comments document provides additional detail about the options we
described and what commenters said about our proposed options.  In
addition, the comments themselves can be accessed in the docket for this
action.

 The CAAAC is a senior-level policy committee established in 1990 to
advise the U.S. EPA on issues related to implementing the Clean Air Act
Amendments of 1990.  The committee is chartered under the Federal
Advisory Committee Act and has been renewed every two years since its
creation.  The membership is approximately 40 members and experts
representing state and local government, environmental and public
interest groups, academic institutions, unions, trade associations,
utilities, industry, and other experts. The CAAAC meets three times a
year, normally in Washington, D.C.  It provides advice and counsel to
EPA on a variety of important air quality policy issues.  The committee
has formed several subcommittees to provide more detailed discussion and
advice on many technical issues.

 On June 24, 2005, the United States Court of Appeals for the District
of Columbia Circuit vacated the portions of the 2002 and 1992 NSR rules
that pertained to PCP, among other provisions.  In response to this
Court action, on June 5, 2007, EPA removed these provisions from the NSR
regulations.  (See 72 FR 32526).  These provisions were added as part
of EPA’s NSR improvement rule that was issued on December 31, 2002.

 PAGE

 PAGE   63


[Federal Register Volume 80, Number 94 (Friday, May 15, 2015)]
[Notices]
[Page 27990]
[FR Doc No: 2015-11833]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4217-DR; Docket ID FEMA-2015-0002]

Kentucky; Amendment No. 1 to Notice of a Major Disaster
Declaration

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice amends the notice of a major disaster declaration
for the Commonwealth of Kentucky (FEMA-4217-DR), dated May 1, 2015, and
related determinations.

DATES: Effective Date: May 7, 2015.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The notice of a major disaster declaration
for the Commonwealth of Kentucky is hereby amended to make available
all Individual Assistance programs for the following areas determined
to have been adversely affected by the event declared a major disaster
by the President in his declaration of May 1, 2015.

    Bath, Bourbon, Carter, Elliott, Franklin, Jefferson, Lawrence,
Madison, Rowan, and Scott Counties for Individual Assistance.

The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households In
Presidentially Declared Disaster Areas; 97.049, Presidentially
Declared Disaster Assistance--Disaster Housing Operations for
Individuals and Households; 97.050 Presidentially Declared Disaster
Assistance to Individuals and Households--Other Needs; 97.036,
Disaster Grants--Public Assistance (Presidentially Declared
Disasters); 97.039, Hazard Mitigation Grant.

W. Craig Fugate,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2015-11833 Filed 5-14-15; 8:45 am]
 BILLING CODE 9111-23-P