2014-14031. Partial Approval and Partial Disapproval and Promulgation of Air Quality Implementation Plans; South Dakota; Revisions to South Dakota Administrative Code; Permit: New and Modified Sources

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is taking final action to partially approve and partially disapprove State Implementation Plan (SIP) revisions submitted by the State of South Dakota on June 14, 2010, June 20, 2011, and July 29, 2013. All three SIP submittals revise the portion of the Administrative Rules of South Dakota (ARSD) that pertain to the issuance of South Dakota air quality permits. In addition, the June 14, 2010 submittal revises certain definitions and dates of incorporation by reference. The June 14, 2010 submittal contains new, amended and renumbered rules; the June 20, 2011 submittal contains new rules; and the July 29, 2013 submittal contains amended rules. In this rulemaking, we are taking final action on all portions of the June 14, 2010 submittal, except for those portions of the submittal which do not belong in the SIP. We are also taking final action on portions of the June 20, 2011 submittal that were not acted on in our April 18, 2014 rulemaking regarding greenhouse gases and the State's Prevention of Significant Deterioration (PSD) program. We are taking final action on portions of the July 29, 2013 submittal that supersede portions of the two previous submittals; the remainder of the July 29, 2013 submittal will be acted on at a later date. This action is being taken under section 110 of the Clean Air Act (CAA).

DATES:

This final rule is effective July 28, 2014.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. EPA-R08-OAR-2014-0241. All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Air Program, Environmental Protection Agency (EPA), Region 8, 1595 Wynkoop Street Denver, Colorado 80202-1129. EPA requests you contact the individual listed in the FOR FURTHER INFORMATION CONTACT section to view the hard copy of the docket. You may view the hard copy of the docket Monday through Friday, 8:00 a.m. to 4:00 p.m., excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Kevin Leone, Air Program, Mailcode 8P-AR, Environmental Protection Agency, Region 8, 1595 Wynkoop Street, Denver, Colorado 80202-1129, [phone], or [e-mail].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Response to Comments

III. Basis for our Final Action

IV. Final Action

V. Statutory and Executive Orders Review

Definitions

For the purpose of this document, we are giving meaning to certain words or initials as follows:

(i) The words or initials Act or CAA mean or refer to the Clean Air Act, unless the context indicates otherwise.

(ii) The initials ARSD mean or refer to the Administrative Rules of South Dakota.

(iii) The initials DENR mean the Department of Environment and Natural Resources.

(iv) The words EPA, we, us or our mean or refer to the United States Environmental Protection Agency.

(v) The words minor NSR mean NSR established under section 110(a)(2)(C) of the Act and 40 CFR 51.160 through 51.164.

(vi) The initials NAAQS mean or refer to National Ambient Air Quality Standards.

(vii) The initials NSR mean new source review, a phrase intended to encompass the stationary source regulatory programs that regulate the construction and modification of stationary sources as provided under CAA section 110(a)(2)(C), CAA Title I, parts C and D, and 40 CFR 51.160 through 51.166.

(viii) The initials PSD mean or refer to Prevention of Significant Deterioration.

(ix) The initials SIP mean or refer to State Implementation Plan.

(x) The words State or South Dakota mean the State of South Dakota, unless the context indicates otherwise.

I. Background

The CAA (section 110(a)(2)(C)), 40 CFR 51.160, and the other statutory and regulatory provisions discussed in this final notice, require states to have legally enforceable procedures in their SIPs to prevent construction or modification of a source if it would violate any SIP control strategies or interfere with attainment or maintenance of the national ambient air quality standards (NAAQS). Such minor new source review (NSR) programs are for pollutants from stationary sources that do not require PSD or nonattainment NSR permits. A state may customize the requirements of its minor NSR program as long as the program meets the minimum statutory and regulatory requirements.

On June 14, 2010, South Dakota submitted revisions to its minor source NSR program. The June 14, 2010 submittal included: (1) Revisions to the definitions associated with the Air Pollution Control Program to ensure the definitions are current and consistent with other chapters in the regulations. These revisions include: grammatical changes, renumbering, modified definitions, new definitions and deleted definitions; (2) Revisions to the date of federal regulations referenced throughout ARSD Article 74:36; (3) Addition of a construction permit program for new minor sources and minor modifications to existing sources, created by adding new Chapter 74:36:20 (Construction Permits for New Sources or Modifications); and (4) Revisions to the minor source operating permit programs to incorporate the changes associated with the new proposed construction permit program.

In South Dakota's regulations in ARSD Article 74:36 that are currently approved into the SIP, the minor source construction permit and operating permit programs are combined so, in practice, a source receives one permit from the State which serves as both a construction and operating permit.^[1] The revisions in the June 14, 2010 submittal separate the two programs into a new minor source construction permit program and a minor source operating permit program. Under the new revisions, a source would first apply for a construction permit before applying for an operating permit. A cross-walk table, which discusses the rule revisions in Article 74:36 individually, and the action we are proposing, is included in the docket for this rulemaking.

South Dakota's June 14, 2010 submittal also contains rule revisions that are not included in SIPs. These rules, which we are not taking action on here (i.e., New Source Performance Standards, operating permits for part 70 sources, etc.), are outlined in the cross-walk table located in the docket for this rulemaking.

South Dakota's June 20, 2011, submittal includes the following rule revisions: (1) Revises Sections 74:36:01:01, 74:36:01:08, 74:36:01:15 and 74:36:09:02 related to regulation of greenhouse gases (revisions to Sections 74:36:01:08, 74:36:01:15 and 74:36:09:02 to comply with EPA's Greenhouse Gas Tailoring Rule were previously acted on); ^[2] EPA is taking final action on 74:36:01:01 in this rulemaking); (2) Revises Chapter 74:36:20 by revising Section 74:36:20:02 (Construction Permits Required); and (3) Adds new Section 74:36:20:02.01 (Initiating Construction Prior to Permit Issuance). Section 74:36:20:02.01 allows sources who meet certain conditions to start construction prior to receiving a permit provided they meet the requirements in that section. EPA is taking final action on 74:36:20:02 and 74:36:20:02.01 in this rulemaking.^[3]

With respect to South Dakota's July 29, 2013 submittal, we are only taking final action on the following revisions: (1) The removal of section 74:36:04:03.01 (Minor Source Operating Permit Variance); and (2) Revisions to section 74:36:10 (New Source Review).

In our April 16, 2014 proposed action (79 FR 21424), we proposed to: (1) Approve 74:36:01:01 (Definitions); 74:36:02 (Ambient Air Quality); 74:36:03 (Air Quality Episodes); 74:36:04 (Operating Permits for Minor Sources); 74:36:10 (New Source Review); 74:36:11 (Performance Testing); 74:36:12 (Control of Visible Emissions); 74:36:13 (Continuous Emissions Monitoring); 74:36:18 (Regulations for State Facilities in the Rapid City Area); and 74:36:20 (Construction Permits for New Sources or Modifications); 74:36:01:01(73) (Subject to Regulation); the deletion of 74:36:04:03.01 (Minor Source Operating Permit Variance); (2) Disapprove 74:36:20:02.01 (Initiating Construction Prior to Permit Issuance); the phrase: “unless it meets the requirements in 74:36:20:02.01” in 74:36:04:20:02 (Construction Permit Required); (3) Not take action on 74:36:05 (Operating Permits for Part 70 Sources); 74:36:07 (New Source Performance Standards); 74:36:08 (National Emission Standards for Hazardous Air Pollutants); 74:36:09 (Prevention of Significant Deterioration); 74:36:16 (Acid Rain Program); and 74:36:19 (Mercury Budget Trading Program).

We provided a detailed explanation of the bases for our proposal. See 79 FR 21426-21429. We invited comment on all aspects of our proposal and provided a 30-day comment period. The comment period ended on May 16, 2014.

In this action, we are responding to the comments we received and taking final rulemaking action on the rules from the State's June 14, 2010, June 20, 2011, and July 29, 2013 submittals.

II. Response to Comments

In response to our April 16, 2014 proposed rulemaking, we received comments from Department of Environment and Natural Resources (DENR) Secretary Steven M. Pirner on behalf of the State of South Dakota. In this section, we summarize these comments and provide our responses.

Comment: The comments explain that DENR submitted a draft copy of ARSD 74:36:20:02.01 in December 2010 to EPA for informal comments prior to beginning the State's formal rule making process; and that EPA provided preliminary comments back to DENR via email on January 11, 2011. DENR's comments on our proposal suggest that DENR notified EPA that those preliminary concerns were addressed in ARSD 74:36:20:02.01(1), 74:36:20:02.01(2) and 74:36:20:02.01(6). DENR's comments further explain that it believed EPA's concerns were addressed at that time, since EPA did not provide the same comment during the public notice phase of the rule making.

Response: EPA disagrees with this comment. While we aim to provide comments before and during a state's rule making process, the CAA neither requires that EPA comment on proposed SIP rules, nor does it preclude EPA from carrying out its statutory duty to disapprove an inadequate SIP if EPA does not provide comments to a state. The notion that EPA's silence suggests a SIP is approvable—simply because EPA did not comment during the State's formal rule making process—has no support in the Act, it is contrary to the purposes of the Act and EPA's express obligation to approve only SIP submittals that meet the requirements of the Act, as explained elsewhere in this final action. Moreover, nothing in EPA's preliminary comments suggested that the State's draft rules would be approvable if the State were to make the suggested changes.^[4]

DENR comments indicate that it provided notification to us that our preliminary concerns were addressed by provisions in ARSD 74:36:20:02.01(1), 74:36:20:02.01(2) and 74:36:20:02.01(6). The comment does not cite to a particular communication from the State. Therefore, we are unclear what notification DENR is referring to. We are aware of one email from the State regarding this topic; ^[5] however, that email summarizes other provisions in the State rules.

Comment: DENR provided an analysis of the public comments received on the State's proposed rule, and disagreed with “EPA's implication that all public commenters were concerned about allowing construction prior to receiving a construction permit.”

Response: We disagree with the assertions in this comment. The comment does not cite to specific language in the proposed notice; however, we assume the commenter is referring to Footnote 5 in our proposed rulemaking where we stated: “[t]he State also received public comments from 13 individuals on this issue and related concerns.” 79 FR 21428. EPA did not intend to interpret the meaning or intent of the public comments on the State's proposed rule, but simply included this footnote to point out that the State received adverse comments during its rulemaking process that expressed concerns regarding the State's proposed rules.

Comment: DENR suggests that EPA is being arbitrary and capricious in enforcing the language in 40 CFR 51.161 for public participation in minor NSR permitting programs. DENR indicates that there are “EPA approved state implementation plans that have been in place for many years which do not require a 30-day public notice for any non-PSD construction permits,” and provides as an example “Iowa's state implementation plan which is South Dakota's neighbor and competitor for economic development projects.” The comment states that “EPA cannot give one state an advantage over another in economic development by requiring inconsistent mandates to SIPs.” DENR's comment suggests that even if EPA's argument had validity, DENR is required by its regulations to notice the construction permit “before the applicant can operate any equipment which emits air pollutants into the air.”

Response: EPA disagrees with this comment. We apply applicable CAA provisions and EPA regulations to determine the approvability of the SIP. As we explained in our proposed notice, EPA regulations “require a minimum 30-day period for public comment on the information submitted by the owner or operator prior to construction.” 79 FR 21428. These regulations explicitly mandate that state SIP minor permitting regulations “include the opportunity for public comment on information submitted by owners and operators.” 40 CFR 51.160, 51.161(a). The regulations further require that the information available to the public “must include the agency's analysis of the effect of construction or modification on ambient air quality, including the agency's proposed approval or disapproval.” EPA's regulations specify that state SIP permitting procedures “shall include, as a minimum . . . a 30-day period for submittal of public comment.” These public participation requirements apply to “construction or modification” ^[6] of a “facility, building, structure or installation.” ^[7] Finally, the regulations require that public notice be sent to the EPA Regional Office and to all other state and local air pollution control agencies having jurisdiction in the region in which the new or modified source “will be located.” 40 CFR 51.161(d).

The State rule allows owners and operators to “initiate construction prior to issuance of the construction permit,” ARSD 74:36:20:02.01, and public notice is provided after construction. DENR's comment notes that notice of the construction permit is provided “before the applicant can operate any equipment.” Providing an opportunity for public comment before the applicant can operate the equipment does not meet the requirements in 40 CFR 51.161, as the State rules fail to provide the opportunity for comment prior to construction and therefore are inconsistent with EPA regulations. They also fail to provide either the public or EPA and local permitting authorities either notice or an opportunity to comment on where the facility “will be located.” Moreover, DENR's comment lacks any analysis of how the State rule, which provides for public participation after construction, is consistent with the regulatory requirements.

The comment suggests, but provides no evidence that, EPA's disapproval of this rule would give another state an advantage over South Dakota's economic development. Neither the CAA nor EPA's implementing regulations contain any specific requirement that we take economic development into account in determining the approvability of SIP amendments. While we are not required to consider economic development impacts, the State's comments provide no details regarding economic development impacts for us to consider. Additionally, DENR's SIP rules have contained the 30-day public comment period minor source permits for many years.^[8] While the DENR's comments indicate that it has been implementing new rule ARSD 74:36:20:01.01 for approximately three years,^[9] it provides no information regarding impacts to economic development in the State prior to implementation of the new program.

Finally, the comments suggest there are other state SIPs where EPA has approved less than the 30-day public comment period, and mentions Iowa, without, however, providing either citations to any relevant Iowa regulations or references to prior EPA interpretations. Therefore, we do not know what the comment refers to. To the extent EPA may have approved provisions in other SIPs that allow for less than the 30-day public comment period, as we explained in the proposed notice and this final action, our current interpretation of 40 CFR 51.161 is that it requires that state SIPs include a minimum of a 30-day period for submittal of public comments on proposed minor source permits.

Comment: DENR asserted that the CAA (Section 110(a)(2)(C)) and the federal regulations (40 CFR 51.160(a) and (b)) “do not state a construction permit must be issued prior to construction activities beginning.” For support of this assertion, DENR references EPA's preliminary comments on the proposed rules,^[10] as well as EPA's mention in the proposed notice of prior approval of such programs.^[11]

Response: We disagree with this comment. The CAA contains provisions for the preconstruction review and approval of new and modified sources of air pollution, which are generally implemented by a state through a permitting program as part of an approved SIP, or in some cases by EPA. For minor sources, which are those sources that have the potential to emit below major source thresholds of the PSD and nonattainment NSR program, the CAA has specific requirements. Under CAA section 110(a)(2)(C), the state's SIP must provide for “the regulation of the modification and construction of any stationary source . . . as necessary to ensure that national ambient air quality standards are achieved.” ^[12] Therefore, all SIPs must contain minor source preconstruction approval programs. The CAA contains separate and distinct requirements for operating permits, which we are not reviewing in this action.

EPA's implementing regulations specify the requirements for minor NSR programs, and the relevant provisions are discussed here. 40 CFR 51.160-51.164. Each state SIP must set forth legally enforceable procedures which will allow the state to determine whether the construction or modification of a minor source, or a “minor modification” of an existing source, “will” (1) result in a violation of applicable portions of the State's control strategy, or (2) interfere with attainment of maintenance of any NAAQS in the State or in a neighboring state. 40 CFR 51.160(a). The SIP must also include the means by which a state can “prevent” construction that “will interfere with the attainment or maintenance of a national standard.” 40 CFR 51.160(b). Therefore, SIPs must require that owners or operators of source that are subject to minor NSR submit information to the state so the state can determine if the construction or modification of the source will result in a violation of the control strategy or interfere with attainment of maintenance of the NAAQS. 40 CFR 51.160(b). SIPs must also contain, among other elements, a “control strategy,” which is a combination of measures (including emission limitations and measures that apply to stationary sources) designed to achieve the reduction of emission necessary for attainment and maintenance of the NAAQS. 40 CFR 51.100(n). Therefore, there are minimum statutory and regulatory requirements that apply to minor source permit programs, adherence to which is determined under the CAA by EPA. CAA section 110.

Under the current, federally-approved South Dakota SIP, minor sources are subject to the State's permitting requirements and must receive authorization to proceed with the construction or modification in accordance with the SIP, [ARSD 74:36:04:02], unless they meet exemption requirements in ARSD 74:36:04:03.

Under the State's proposed program that allows for initiating construction prior to issuance, the owner or operator may begin construction or modification if they meet two basic requirements: (1) Submit a permit application to the department; and (2) notify the department that they intend to initiate construction. ARSD 74:36:20:01.01(1), (2). Once these two requirements are met, the owner or operator may begin and complete construction or modification of true minor sources. ARSD 74:36:20:01.01(3), (4). The proposed rules do not require State review of the proposed construction or modification before the construction of modification occurs. The State rules also do not provide for the State to affirmatively approve the proposed modification or construction before it commences or before completion of the construction or modification. While there are provisions in the rule that cover activities after construction and modification,^[13] there is no State administrative approval or review of any kind prior to construction activities. The State receives notice from the owner or operator before construction starts; however, there are no provisions in the rule that specify any action the State is to take regarding that notice or any mechanism to ensure preconstruction review and approval. Therefore, neither the State, public, nor EPA can determine whether the project will be in compliance with the CAA and implementing regulations before construction is initiated and completed.

The State rules allow construction to proceed, and provide for review of the construction while it is underway (or after the construction is complete). As discussed above, we interpret the CAA and implementing regulations to require regulation and approval of construction of any stationary source before the construction occurs, not as proposed by the State, review and approval construction in process or after it has occurred. While we have not interpreted the CAA and regulations to require that states implement the SIP requirement for a minor source program through the mechanism of a permitting program, we have required that SIPs include some mechanism for preconstruction review and approval of proposed minor sources before the activities commence. Such review and approval is necessary to determine whether the proposed construction or modification will violate a control strategy or interfere with attainment or maintenance of the NAAQS and to “prevent such construction or modification” that will do so as required by 51.160(a) and (b).^[14] The proposed rules provide for State approval before the owner or operator begins operating the source and emitting pollutants but provide no mechanism to evaluate or prevent proposed construction. Therefore, the proposed changes to the SIP are incomplete as they lack the “legally enforceable procedures that enable” the State to make the necessary determination and ensure that the State “will prevent such construction” if the source “will” violate the control strategy or interfere with NAAQS attainment. Finally, the commenter appears to imply that our preliminary comments to the State are controlling or binding on our final action. As explained above, while we aim, and often do, provide comments early and throughout a state's rulemaking process, those comments are not final agency actions. There is nothing in the Act that requires such comments, much less that makes them binding on EPA such as to require that EPA approve a SIP that does not meet regulatory requirements. To the contrary, Congress entrusted with EPA an oversight role to ensure the requirements of the Act are met. Moreover, nothing in EPA's preliminary comments suggested that the State's draft rules would be approvable if the State were to make the suggested changes.

Comment: DENR also takes exception to EPA's implication that DENR's decision to approve or deny a permit would be influenced by a facility that has been built (the “equity in the ground” issue) and could potentially cause a violation of a NAAQS. The comments also note EPA's concerns expressed in the proposal regarding fundamental design issues that cannot be overcome should the State seek modifications to protect the NAAQS. DENR explains that: (1) The State rules require the owner or operator to assume these risks and make required changes before operation; (2) the State “has taken enforcement action when necessary on facilities that have violated their permits and/or that began construction and operation prior to obtaining the appropriate permits;” (3) since the State established its initial SIP in the 1970's “the construction and operation of a true minor source has not caused or interfered with attaining or maintaining a National Ambient Air Quality Standard;” and (4) if DENR believes a NAAQS would be violated, “DENR would prevent a source from operating until appropriate changes were made to protect” the NAAQS.

Response: EPA agrees in part with this comment. First, we acknowledge that there are some safeguards in the proposed rule; however, we remain concerned that there is no mechanism for either the public or local regulatory authorities with jurisdiction to comment on where “the source will be located.” And leaving aside the lack of regulatory and public input into siting decisions, after a source has been constructed there may remain fundamental design issues that cannot be overcome by the provisions in the proposed rules. Second, the comment indicates that the State has taken enforcement action where necessary; however, it provides no details regarding such actions. Third, the comment suggests that true minor sources have not caused or interfered with attaining or maintaining the NAAQS, but provides no evidence to support this statement and does not address the legal requirement for legally enforceable procedures to “prevent” construction of a source that “will” have such effects. Finally, the comments indicate that if DENR believes enforcement were necessary, it would prevent the source from “operating.” The comment does not include a reference to what authority the DENR would use for such enforcement. Moreover, the comment asserts that the State has authority to prevent source operation but does not attempt to assert that the program authorizes the state to “prevent such construction” as may violate the control strategy or interfere with attainment. EPA acknowledges that 74:36:20:02.01 (Initiating construction prior to permit issuance) has some safeguards in place; however, the rules fall short of meeting the requirements of the CAA and implementing regulations.

Comment: DENR indicates it “believes it has provided enough provisions in allowing construction prior to DENR completing its analysis (i.e., statement of basis) of the project and issuing a construction permit after a 30-day public comment period to protect” both the State's control strategy and the NAAQS. DENR explains this is demonstrated by approximately three years of program implementation. DENR also explains that the State is in full attainment with all the NAAQS.

Response: EPA disagrees with this comment because the final rule, as adopted by the State, allows no review or comment on siting decisions and does not require any type of administrative approval from the State prior to allowing unpermitted “construction” activities. Therefore, neither the State, public, nor EPA can evaluate siting decisions or determine whether the project “will” be in compliance with the CAA and implementing regulations before construction occurs. Regardless of South Dakota's current attainment status of the NAAQS, 74:36:20:02.01 does not meet the minimum requirements as outlined in the beginning of Section II of this rulemaking.

The fact that South Dakota has implemented the proposed changes to the SIP before EPA's final action, is not, as the comment appears to suggest, a basis for EPA approval. Under CAA section 116, a state may not implement any emission limitation or any control or abatement requirement that is less stringent than the applicable, approved SIP. The current SIP requires that sources obtain a permit from the State prior to construction. The proposed SIP revisions are less stringent than the existing SIP because they allow sources to construct without obtaining a permit prior to construction. Therefore, proposed SIP revisions violate CAA section 116 by exempting sources from the existing SIP requirement to obtain a permit before beginning construction.

Furthermore, as we explained in our proposal, Section 110(i) of the CAA specifically precludes states from changing requirements of the SIP except through SIP revisions approved by EPA. SIP revisions will be approved by EPA only if they meet all requirements of the Act and the implementing regulations. The CAA gives EPA both the authority and the obligation to review a proposed program's compliance with the Act and applicable regulations and to disapprove regulations that do not meet legal requirements. Therefore, a state's implementation of proposed SIP amendments prior to EPA approval, does not limit EPA's authority to take final rulemaking action to disapprove SIP provisions that the state has been implementing without SIP approval.

Finally, the commenter suggests the permit rules preventing sources from operating protect the State's control strategy and the NAAQS, and points to the State's attainment status for all the NAAQS. However, the commenter provides nothing further in its comments in the way of rationale and data to show that allowing unpermitted construction will ensure the State's continuing and future attainment status. CAA section 110(l) requires a demonstration that a SIP revision does not interfere with any requirement concerning attainment and maintenance of the NAAQs and that any relaxation is sufficiently protective of air quality and other CAA requirements in order for EPA to approve. The fact that the SIP submittal and the comments lack a demonstration (e.g., air quality monitoring data and trends, projected minor source participation and impacts, and emission inventory data and trends) to show that the minor source permitting rule revisions are not likely to interfere with NAAQS or the State's SIP control strategy provides further evidence that the SIP is not approvable. Without a demonstration from the State that shows the minor sources that are subject to this program will not impact attainment and maintenance, we have no information to determine the significance of the proposed rule and whether the sources will impact the NAAQS. Minor sources, either individually or collectively, may impact attainment. Finally, even if we assume the substitution of the new program for the prior minor source permit program were allowed under section 110(l), the State has provided no demonstration to show the new rules achieve the same results as the existing rules for these sources. Therefore, we lack information and a basis to approve these amendments to the SIP under section 110(1).

III. Basis for Our Final Action

We have fully considered the comments we received, and have concluded that no changes from our proposed rule are warranted. As discussed in our proposal and this rule, our action is based on an evaluation of South Dakota's rules against the requirements of CAA sections 110(a)(2)(C), 110(i), 110(l), 116, our minor source NSR regulations at 40 CFR 51.160-51.164, and other requirements discussed in section II of this action.

Section 110(a)(2)(C) of the Act contains the requirements for preconstruction review programs for minor sources and requires that each SIP include a program to regulate the construction and modification of stationary sources as necessary to assure that the NAAQS are achieved.

EPA's minor source implementing regulations are in 40 CFR 51.160-51.164. The regulations require that a SIP include “legally enforceable procedures that enable” the permitting agency to determine whether construction “will result in” interference with the NAAQS, 40 CFR 51.160(a). The SIP must also include the means by which a state or local agency can “prevent” construction that “will interfere with the attainment or maintenance of a national standard.” 40 CFR 51.160(b). 40 CFR 51.161(a) requires that the legally enforceable procedures in 40 CFR 51.160 must also require the state or local agency to provide opportunity for public comment on information submitted by owners or operators. The public information must include the agency's analysis of the effect of construction or modification on ambient air quality, including the agency's proposed approval or disapproval. 40 CFR 51.161(b) requires a minimum 30-day public comment period. Finally, the regulations require that public notice be sent to the EPA Regional Office and to all other state and local air pollution control agencies having jurisdiction in the region in which the new or modified source “will be located.” 40 CFR 51.161(d).

We are approving those rules that meet the relevant requirements and disapproving those rules that do not meet the relevant requirements, or are not appropriate for inclusion in the SIP. Specifically, we are disapproving 74:36:04:20:01 (Initiating Construction Prior to Permit Issuance), and the related phrase: “unless it meets the requirements in 74:36:20:02.01” in 74:36:04:20:02 (Construction Permit Required). We are disapproving the related phrase because it references the rule we are disapproving.

For a detailed description of the bases for our actions on the individual rules, please refer to our notice of proposed rulemaking (79 FR 21424) and our response to comments in section II of this action.

We are sensitive to the concerns expressed in the State's comments. We also understand the State's goals in promulgating rule 74:36:20:02.01, as expressed during the State's rulemaking, were to “expedite the construction of specific facilities that will have minimal impact to the ambient air and for those projects that may be impacted by inclement weather (i.e. winter months),” ^[15] “and to ensure that new businesses and existing businesses looking to expand are permitted in an expedited manner.” ^[16] 79 FR 21428. If requested by South Dakota, EPA will work with the State to develop revised rules that are consistent with the State goals and consistent with the CAA and implementing regulations.^[17]

IV. Final Action

In this rulemaking, we are taking final action to: (1) Approve revisions to 74:36:01:01 (Definitions); 74:36:02 (Ambient Air Quality); 74:36:03 (Air Quality Episodes); 74:36:04 (Operating Permits for Minor Sources); 74:36:10 (New Source Review); 74:36:11 (Performance Testing); 74:36:12 (Control of Visible Emissions); 74:36:13 (Continuous Emissions Monitoring Systems); 74:36:18 (Regulations for State Facilities in the Rapid City Area); and 74:36:20 (Construction Permits for New Sources or Modifications); (2) Disapprove 74:36:20:02.01 (Initiating Construction Prior to Permit Issuance), and the phrase “, unless it meets the requirements in 74:36:20:02.01” in 74:36:20:02 (Construction Permit Required); (3) Not take action on 74:36:05 (Operating Permits for Part 70 Sources); 74:36:07 (New Source Performance Standards); 74:36:08 (National Emission Standards for Hazardous Air Pollutants); 74:36:09 (Prevention of Significant Deterioration); 74:36:16 (Acid Rain Program); and 74:36:19 (Mercury Budget Trading Program).

V. Statutory and Executive Orders Review

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this final action merely approves certain state law as meeting Federal requirements, disapproves other state law as not meeting Federal requirements, and does not impose additional requirements beyond those imposed by state law. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

The 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 action 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 not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 26, 2014. 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 CAA section 307(b)(2).)

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Carbon monoxide
• Incorporation by reference
• Intergovernmental relations
• Lead
• Nitrogen dioxide
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Sulfur oxides
• Volatile organic compounds

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

Dated: May 29, 2014.

Shaun L. McGrath,

Regional Administrator, Region 8.

40 CFR part 52 is amended as follows:

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart QQ—South Dakota

2. Section 52.2170 is amended in the table titled “State of South Dakota Regulations” in paragraph (c)(1):

a. By revising the table entries for “74:36:01:01” and “74:36:01:05”;

b. By adding the table entry for “74:36:01:10” in numerical order;

c. By revising the table entry for “74:36:01:20”;

d. By adding the table entry for “74:36:01:21” in numerical order;

e. By revising the table entries for “74:36:02:02” through “74:36:02:05”, “74:36:03:01”, and “74:36:03:02”;

f. By adding the table entries for “74:36:04:02”, “74:36:04:02.01”, and “74:36:04:03” in numerical order;

g. By revising the table entry for “74:36:04:04”;

h. By adding the table entries for “74:36:04:06”, “74:36:04:07”, “74:36:04:09”, “74:36:04:10”, “74:36:04:12”, “74:36:04:12.01”, “74:36:04:13”, “74:36:04:15” through “74:36:04:18”, “74:36:04:20”, “74:36:04:20.01”, “74:36:04:20.04”, “74:36:04:23”, “74:36:04:27”, and “74:36:04:32” in numerical order;

i. By revising the table entries for “74:36:10:02”, “74:36:10:03.01”, “74:36:10:05”, “74:36:10:07”, and “74:36:10:08”;

j. By removing the table entries for “74:36:10:09” and “74:36:10:10” and the second entry for “74:36:13:07” ;

k. By revising the table entries for “74:36:11:01”, “74:36:12:01”, “74:36:12:03”, “74:36:13:02”, “74:36:13:03”, “74:36:13:04”, “74:36:13:06”, the first entry for “74:36:13:07”, and the entries for “74:36:13:08”, and “74:36:18:10”; and

l. By adding a new centered heading for “74:36:20 [Construction Permits For New Sources Or Modifications]” and the table entries “74:36:20:01 through 74:36:20:24”, in numerical order.

The amendments read as follows:

§ 52.2170

Identification of plan.

* * * * *

(c) * * *

State citation	Title/subject	State effective date	EPA approval date and citation 1	Explanations
74:36:01 Definitions
74:36:01:01	Definitions	4/20/2011	6/27/2014, [Insert Federal Register citation]
74:36:01:05	Applicable requirements of the Clean Air Act defined	6/28/2010	6/27/2014, [Insert Federal Register citation]
*         *         *         *         *         *         *
74:36:01:10	Modification defined	6/28/2010	6/27/2014, [Insert Federal Register citation]
*         *         *         *         *         *         *
74:36:01:20	Physical change in or change in the method of operation defined	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:01:21	Commence construction defined	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:02 Ambient Air Quality
74:36:02:02	Ambient air quality standards	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:02:03	Methods of sampling and analysis	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:02:04	Air quality monitoring network	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:02:05	Ambient air monitoring requirements	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:03 Air Quality Episodes
74:36:03:01	Air pollution emergency episode	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:03:02	Episode emergency contingency plan	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04 Operating Permits for Minor Sources
74:36:04:02	Minor source operating permit required	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:02.01	Minor source operating permit exemption	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:03	Emission unit exemptions	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:04	Standard for issuance of a minor source operating permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:06	Timely and complete application for operating permit required	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:07	Required contents of complete application for operating permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:09	Permit application—Completeness review	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:10	Time period for department's recommendation	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:12	Public participation in permitting process	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:12.01	Public review of department's draft permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:13	Final permit decision—Notice to interested persons	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:15	Contents of operating permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:16	Operating permit expiration	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:17	Renewal of operating permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:18	Operating permit revision	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:20	Procedures for administrative permit amendments	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:20.01	Minor permit amendment required	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:20.04	Department deadline to approve minor permit amendment	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:23	Reopening operating permit for cause	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:27	Operating permit termination, revision, and revocation	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:04:32	General permits	6/28/2010	6/27/2014, [Insert Federal Register citation]
*         *         *         *         *         *         *
74:36:10 New Source Review
74:36:10:02	Definitions	6/25/2013	6/27/2014, [Insert Federal Register citation]
74:36:10:03.01	New source review preconstruction permit required	6/25/2013	6/27/2014, [Insert Federal Register citation]
74:36:10:05	New source review preconstruction permit	6/25/2013	6/27/2014, [Insert Federal Register citation]
74:36:10:07	Determining credit for emission offsets	6/25/2013	6/27/2014, [Insert Federal Register citation]
74:36:10:08	Projected actual emissions	6/25/2013	6/27/2014, [Insert Federal Register citation]
74:36:11 Performance Testing
74:36:11:01	Stack performance testing or other testing methods	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:12 Control of Visible Emissions
74:36:12:01	Restrictions on visible emissions	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:12:03	Exceptions granted to alfalfa pelletizers or dehydrators	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:13 Continuous Emissions Monitoring Systems
74:36:13:02	Minimum performance specifications for all continuous emission monitoring systems	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:13:03	Reporting requirements	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:13:04	Notice to department of exceedance	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:13:06	Compliance certification	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:13:07	Credible evidence	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:13:08	Compliance assurance monitoring	6/28/2010	6/27/2014, [Insert Federal Register citation]
*         *         *         *         *         *         *
74:36:18 Regulations for State Facilities In the Rapid City Area
*         *         *         *         *         *         *
74:36:18:10	Visible emission limit for construction and continuous operation activities	6/28/2010	6/27/2014, [Insert Federal Register citation]
*         *         *         *         *         *         *
74:36:20 Construction Permits For New Sources Or Modifications
74:36:20:01	Applicability	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:02	Construction permit required	4/20/2011	6/27/2014, [Insert Federal Register citation]	Except for “, unless it meets the requirements in section 74:36:20:02.01”.
74:36:20:03	Construction permit exemption	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:04	Emission unit exemptions	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:05	Standard for issuance of construction permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:06	Timely and complete application for a construction permit required	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:07	Required contents of complete application for a construction permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:08	Applicant required to supplement or correct application	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:09	Permit application—Completeness review	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:10	Time period for department's recommendation	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:11	Public participation in permitting process	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:12	Public review of department's draft permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:13	Final permit decision—Notice to interested persons	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:14	Right to petition for contested case hearing	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:15	Contents of construction permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:16	Administrative permit amendment	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:17	Procedures for administrative permit amendments	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:18	Reopening construction permit for cause	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:19	Procedures to reopen construction permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:20	Construction permit does not exempt from other requirements	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:21	Expiration of a construction permit	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:22	Notice of constructing or operating noncompliance—Contents	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:23	Petition for contested case on alleged violation	6/28/2010	6/27/2014, [Insert Federal Register citation]
74:36:20:24	Circumvention of emissions not allowed	6/28/2010	6/27/2014, [Insert Federal Register citation]
*         *         *         *         *         *         *
1 In order to determine the EPA effective date for a specific provision that is listed in this table, consult the Federal Register cited in this column for that particular provision.

* * * * *

Footnotes

1.  For major sources and major modifications, the State already has two SIP-approved construction permit programs (PSD and nonattainment NSR) and, separately for major sources, a title V operating permit program that has been approved through the title V (not the SIP) process.

2.  On February 11, 2014 (79 FR 8130) EPA proposed action on these provisions. EPA finalized its action on April 18, 2014 (79 FR 21852).

3.  Under a consent decree, by May 30, 2014, EPA is required to sign a notice of final action to approve, disapprove, approve in part and disapprove in part, or conditionally approve this June 20, 2011 SIP submittal. WildEarth Guardians v. EPA, Civil Action No. 1:12-cv-03307 (D. Colo.).

4.  Email from Laurel Dygowski, South Dakota SIP Program Manager, EPA Region 8 Air Program, to Brian Gustafson, South Dakota (January 11, 2011).

5.  Email from Kyrk Rombough, Natural Resource Engineering Director DENR Air Quality Program, to Kevin Leone, Environmental Scientist, EPA Region 8 Air Program (January 18, 2011).

6.  40 CFR 51.160(a).

7.  Id.

8.  For example, EPA approved 74:36:04:12 (Public Participation in Permitting Process) on April 7, 2003. [68 FR 16726.]

9.  Normally, a state should generally not be implementing a SIP revision prior to EPA approval, when the revision is a relaxation of the existing SIP. General Motors Corp. v. United States, 496 U.S. 530, at 540 (“There can be little or no doubt that the existing SIP remains the `applicable implementation plan' even after the State has submitted a proposed revision”). EPA reviews SIP revisions for compliance with the Act and regulations.

10.  The comments reference the following from EPA's preliminary comments, “[i]t should be noted that EPA's regulations at 40 CFR 51.160 do not require the issuance of a permit for the construction of modification of minor sources, but only that the SIP include a procedure to prevent the construction of a source or modification that would violate the SIP control strategy or interfere with attainment or maintenance of the NAAQS.” Email from Laurel Dygowski, South Dakota SIP Program Manager, EPA Region 8 Air Program, to Brian Gustafson, South Dakota (January 11, 2011). EPA's regulations do not explicitly require that a state's minor source program provide approval of construction through the specific mechanism of a permit, so long as there is some preconstruction approval process that meets the requirements of 40 CFR 51.160-161.

11.  The comments do not refer to a particular quotation from the proposed rule; however, we assume the commenter is referring to the following: “[w]e acknowledge that EPA may have approved some state minor source programs with approaches/requirements similar to those proposed by South Dakota, which may warrant EPA evaluation in the future.” 79 FR 21428. Our current interpretation of the CAA and regulatory requirements are as explained in this action.

12.  The Act defines “construction” when used on connection with any source or facility, to include “modification,” which “means any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted. CAA sections 111(a)(4), 169(2)(C).

13.  The proposed SIP rule provides that: The owner or operator assume liability for construction (ARSD 74:36:20:02.01(5)); the owner or operator may not operate the equipment and emit air pollutants prior to receiving a construction permit (ARSD 74:36:20:02.01(5)); if the department demonstrates that the construction or modification will interfere with the attainment or maintenance of the NAAQS or increment, the owner or operator must cease construction (ARSD 74:36:20:02.01(6)); and (4) the owner or operator will be required to make any changes to the new source or modification of an existing source that may be imposed in the construction permit (ARSD 74:36:20:02.01(7)).

14.  We would note, however, to a substantial degree, it is the permit process itself, embodied in South Dakota's current SIP regulations, that provides the vehicle to identify and make enforceable specific measures necessary to protect the NAAQS. As explained in the notice, it is the lack of such authority for the State to review and approve the modification or construction that is fatal to the proposed revisions.

15.  State of South Dakota SIP Submittal, at PDF pages 170-171 (June 14, 2011, part 1 of 2).

16.  State of South Dakota SIP Submittal, at PDF page 105 (June 14, 2011, part 2 of 2) (Board of Minerals and Environment Minutes, February 17, 2011).

17.  One option for South Dakota is to amend its “initiating construction prior to permit issuance” section to allow only certain limited, seasonal, pre-permit construction activities and specify which activities are allowed, and exclude construction of any emitting unit. An example of this type of pre-permit construction language can be found in the Administrative Rules of Montana (ARM) 17.8.743(2), which EPA approved on August 8, 2011 (76 FR 40237).