Technical Support Document

for

EPA's Notice of Proposed Rulemaking

for Revisions to the 

California State Implementation Plan

South Coast Air Quality Management District

Rule 1325

Federal PM2.5 New Source Review Program

Prepared by:

La Weeda Ward and Laura Yannayon

Reviewed by:

Gerardo Rios

Air Division, Permits Office

United States Environmental Protection Agency, Region IX

San Francisco, California

February 13, 2015
ii

Table of Contents

1 Introduction ......................................................................................................................................... 1

2 NNSR Program SIP Revision Submittal ............................................................................................. 1

3 Background.......................................................................................................................................... 1

4 Rule Summary ..................................................................................................................................... 4

4.1 Applicability................................................................................................................................. 4

4.2 Definitions.................................................................................................................................... 5

4.3 Requirements................................................................................................................................ 5

4.4 Emissions Calculations ................................................................................................................ 6

4.5 Plantwide Application Limitation ................................................................................................ 6

4.6 Two Year Limit on Facility Exemption ....................................................................................... 6

4.7 Recordkeeping Requirements ...................................................................................................... 6

4.8 Test Methods................................................................................................................................ 7

5 Rule Evaluation ................................................................................................................................... 7

5.1 CAA Title I, Subpart 4 Requirements........................................................................................ 14

5.2 Section 110(l) of the Act ............................................................................................................ 17

5.3 Section 193 of the Act................................................................................................................ 18

6 EPA’s Proposed Action ..................................................................................................................... 18
1

1 Introduction

Portions of the South Coast Air Basin1are currently designated as moderate nonattainment

areas for the 1997 and 2006 24-hour and annual PM2.5 standards. 79 FR 31566, 31586 – 31601 

(June 2, 2014 amending 40 CFR 81.305). The South Coast Air Quality Management District 

(SCAQMD or the District) is the regulatory agency with jurisdiction over a large portion of the 

four-county area that makes up the South Coast Air Basin. 

Part D, Sections 172(c)(5) and 189(a)(1)(A) of the Clean Air Act (CAA or Act), require each 

state in which a moderate PM2.5 nonattainment is located to submit an implementation plan that

includes the provisions set forth in Section 173 of the CAA. Section 189(a)(1)(A) provides: “For 

the purpose of meeting the requirements of section 7502(c)(5) of this title, a permit program 

providing that permits meeting the requirements of section 7503 of this title are required for the 

construction and operation of new and modified major stationary sources of PM10”.

2 The 

requirements in Section 173 of the CAA are referred to as “Nonattainment New Source Review,” 

or simply NNSR. The NNSR program applies to “major stationary sources” and “major 

modifications” as those terms are defined in CAA Section 302 and 40 CFR Part 

51.165(a)(1)(iv)(A)(1) and (a)(1)(v)(A).

The District currently has a robust NNSR program for other pollutants not in attainment of 

the National Ambient Air Quality Standards (NAAQS), but its SIP-approved NNSR program 

does not yet regulate PM2.5. Rule 1325 contains the NNSR permit requirements for major 

sources and major modification of PM2.5 emissions. The purpose of this Technical Support 

Document (TSD) is to set forth the basis for the United States Environmental Protection 

Agency’s (EPA’s) proposed approval of Rule 1325 for inclusion in the SIP.

2 NNSR Program SIP Revision Submittal

SCAQMD’s Governing Board adopted Rule 1325 – Federal PM2.5 New Source Review 

Program on December 5, 2014. The California Air Resources Board (CARB) submitted the rule 

to EPA for inclusion in the California SIP on December 29, 2014. 

CARB is the Governor’s designee for submitting official revisions of the California SIP to 

EPA, and SCAQMD is the local agency responsible for regulating the construction and 

modification of stationary sources within the South Coast Air Basin, Salton Sea Air Basin, and a 

portion of the Mojave Desert Air Basin.

3 Background

Airborne particulate matter with a nominal aerodynamic diameter of 2.5 micrometers or 

less are considered to be “fine particles,” and are also known as PM2.5. Fine particles in the 

 

1 See 40 CFR Part 81.305 for a description of the air basin.

2 For a further discussion about why Section 189 applies to PM2.5 as well as PM10, see NRDC v. EPA, 706 F.3d 428 

(D.C. Cir. 2013).
2

atmosphere are made up of a complex mixture of components, including sulfate, nitrate, 

ammonium, elemental carbon, organic compounds, and inorganic material. There are substantial 

health effects associated with exposure to PM2.5 emissions. Epidemiological studies have shown 

a significant correlation between elevated PM2.5 levels and premature mortality. Other important 

health effects associated with PM2.5 exposure include aggravation of respiratory and 

cardiovascular disease, lung disease, decreased lung function, asthma attacks, and certain 

cardiovascular problems. Individuals particularly sensitive to PM2.5 exposure include older 

adults, people with heart and lung disease, and children.3

In 1997, EPA established new NAAQS for PM2.5 (62 FR 38652, July 18 1997). The 

primary annual standard was set at a level of 15 micrograms per cubic meter (μg/m3), as 

determined by the 3-year average of annual mean PM2.5 concentrations from single or multiple 

community-oriented monitors. The 24-hour standard was set at a level of 65 μg/m3, as 

determined by the 3-year average of the 98th percentile of 24-hour concentrations at each 

population-oriented monitor within an area. In this rulemaking, EPA also established secondary 

PM2.5 standards identical to the primary standards (40 CFR 50.13).

EPA has revised the NAAQS for PM2.5 on two occasions since the 1997 promulgation. On 

October 17, 2006, the 24-hour PM2.5 primary standard was strengthened from 65 μg/m3to a level 

of 35 μg/m3, based on the 3-year average of the 98th percentile of 24-hour concentrations. On 

December 14, 2012, the annual primary standard for PM2.5 was lowered from 15 μg/m3to 12 

μg/m3. The existing 24-hour standards (primary and secondary) were retained at 35 μg/m3, as 

was the annual secondary standard of 15 μg/m3. 

After EPA promulgated the NAAQS for PM2.5 in 1997, EPA issued a guidance document 

entitled “Interim Implementation for the New Source Review Requirements for PM2.5” (John S. 

Seitz, EPA)

4

. This guidance stated that sources would be allowed to use implementation of a 

PM10 program as a surrogate for meeting PM2.5 Prevention of Significant Deterioration (PSD) 

requirements until certain technical difficulties were resolved, primarily the lack of necessary 

tools to calculate the emissions of PM2.5 and related precursors, the lack of adequate modeling 

techniques to project ambient impacts, and the lack of PM2.5 monitoring sites.

On January 5, 2005 (70 FR 944), EPA designated portions of the South Coast Basin as 

nonattainment for the 1997 24-hour and annual PM2.5 standards (See 40 CFR 81.305). EPA has 

since made subsequent PM2.5 nonattainment designations for SCAQMD. On November 13, 

2009, EPA designated the South Coast Air Basin as moderate nonattainment for the 2006 24-

hour PM2.5 standard. 74 FR 58688. SCAQMD adopted an attainment plan on December 7, 2012 

to provide for attainment of the 2006 24-hour PM2.5 standard. On January 15, 2015, EPA 

designated the South Coast Air Basin as moderate nonattainment for the 2012 PM2.5 standard. 80 

FR 2206, 2215-16.

 

3 70 FR 65984 General Preamble, November 1, 2005.

4 United Stated Environmental Protection Agency Memorandum from John S. Seitz, Director Office of Air Quality 

Planning & Standards, Director to Regional Air Division Directors, “Interim Implementation of New Source 

Review Requirements for PM2.5,” October 23, 1997.
3

On April 5, 2005, (the same date that the 1997 PM2.5 standard designations took effect) 

EPA issued a guidance document entitled “Implementation of New Source Review

Requirements in PM–2.5 Nonattainment Areas” (Stephen D. Page, EPA).

5 This second memo 

provides guidance on the implementation of the NNSR provisions in PM2.5 nonattainment areas 

in the interim period between the effective date of the designations (April 5, 2005) and the 

promulgation date of final NNSR regulations. As reflected in the guidance memo, states were

allowed to use their existing PM10 NNSR programs as a surrogate to address the requirements of 

NNSR for PM2.5. Therefore, areas such as the South Coast Air Basin were not required to be 

regulated by a NNSR rule for emissions of PM2.5 at that time, if there was a SIP approved PM10

NNSR program.

In 2007, EPA published an Implementation Rule applicable to attainment plans and control 

measures for the PM2.5 NAAQS. 40 CFR 51.1002. The 2007 Implementation Rule contained 

rebuttable presumptions concerning the four PM2.5 precursors, providing that states should 

address SO2 and NOx emissions in their attainment plans but that regulation of VOCs and 

ammonia was presumptively not necessary. Id. at 51.1002(c). On May 16, 2008, EPA published 

its final rule pertaining to PM2.5 implementation requirements for NNSR entitled 

“Implementation of New Source Review (NSR) Program for Particulate Matter Less Than 2.5 

Micrometers (PM2.5)” (the 2008 NSR PM2.5Rule). This rule promulgated NNSR requirements 

for implementation of PM2.5 in nonattainment areas as well as PSD requirements for 

attainment/unclassifiable areas.6(73 FR 28321, May 16, 2008).

With respect to NNSR, the 2008 NSR PM2.5 Rule established for PM2.5 the major source 

threshold, significant emissions rates, offset ratios, interpollutant offset trading provisions, and 

applicability of NNSR to PM2.5 precursors. The 2008 NSR PM2.5 Rule contained the same 

rebuttable presumptions for precursors as our 2007 Implementation Rule for PM2.5 (i.e., NOx and 

SOx are precursors, VOCs and ammonia are not). 

Promulgation of the 2008 NSR PM2.5 Rule ended application of the PM10 surrogacy policy 

under the Page Memo for NNSR permitting. Because it takes time for a local permitting agency 

to revise its rules to include all of the new NNSR program requirements, EPA’s regulations 

provide in 40 CFR 52.24(k) that the Emission Offset Interpretative Ruling, contained in 40 CFR 

part 51, Appendix S shall govern permits to construct and operate during the period between the 

date of designation as nonattainment and the date a NNSR permitting program meeting the 

requirements of part D of the CAA is approved into the SIP. The 2008 NSR PM2.5Rule therefore 

also codified revisions to Appendix S for states that lack a major NNSR program covering PM2.5. 

Therefore, new and modified major sources of PM2.5 emissions locating in SCAQMD are subject 

to the provisions of Appendix S until our final approval of Rule 1325, which SCAQMD adopted 

to implement the requirements of EPA’s final 2008 NSR PM2.5 Rule. Once approved into the 

SIP, Rule 1325, rather than the Appendix S PM2.5 NNSR requirements, will apply to new and 

modified PM2.5 major sources located in the South Coast Air Basin. 

 

5 United Stated Environmental Protection Agency Memorandum from Stephen D. Page, Director to Regional Air 

Division Directors, “Implementation of New Source Review Requirements in PM2.5 Nonattainment Areas,” April 

5, 2005.

6 Codified in 40 CFR Parts 51 & 52, including Appendix S to Part 51.
4

Environmental groups challenged the 2007 Implementation Rule and the 2008 NSR PM2.5

Rule asserting that EPA had erroneously applied only subpart 1, and not also subpart 4, of Title I, 

Part D of the CAA to our regulation of PM2.5. In 2013, the D.C. Circuit agreed and remanded the 

2007 and 2008 rules in their entirety, including the presumptions concerning VOCs and 

ammonia set forth in 51.1002(c). NRDC v. EPA, 706 F.3d 428 (D.C. Cir. 2013). Although the 

court expressly declined to decide the specific challenge to the precursor presumptions (see 706 

F.3d at 437, n.10), the court cited CAA section 189(e) to support its observation that “[a]mmonia 

is a precursor to fine particulate matter, making it a precursor to both PM2.5 and PM10,” and that 

“[f]or a PM2.5 nonattainment area governed by subpart 4, a precursor is presumptively 

regulated.” 706 F.3d at 436, n.7 (citing CAA section 189(e)). Consistent with the NRDC 

decision, EPA now interprets the Act to require that under subpart 4, a state must subject all 

PM2.5 precursors to major source control requirements unless it provides a demonstration that the 

sources do not contribute significantly to [PM2.5] levels which exceed the standard in the area.

4 Rule Summary

Rule 1325 – Federal PM2.5 New Source Review Program, implements federal NNSR

requirements for PM2.5. The proposed rule mirrors federal requirements for applicability, 

emissions calculations, Lowest Achievable Emission Rate (LAER) and offsets found in CAA 

Section 173 and 189(a)(1)(A) and 40 CFR 51.165.

4.1 Applicability

Section (a) specifies that Rule 1325 applies to:

 Any new major polluting facility;

 Any modification to an existing facility that would constitute a major polluting 

facility in and of itself; and

 Any major modifications on a pollutant-specific basis for which:

1) The source is major,

2) The modification results in a significant increase, and

3) The modification results in a significant net emissions increase.

Rule 1325 defines a major polluting facility as any source located in areas federally 

designated pursuant to 40 CFR 81.305 as nonattainment for PM2.5, which has actual emissions 

of, or the potential to emit, equal to 100 tons per year (tpy) or more of PM2.5 or its precursors

(NOx, or SO2).

7 As it pertains to major modifications, Rule 1325 defines significant as:

“...a net emissions increase or the potential of a source to emit any of the following 

pollutants, [at] a rate of emissions that would equal or exceed any of the following rates:

 

7As discussed above in the Background section, VOCs and ammonia are also precursors of PM2.5 unless the District

makes an adequate demonstration required by CAA section 189(e) that major stationary sources of ammonia do not 

contribute significantly to nonattainment of the PM2.5 NAAQS. We discuss the District’s section 189(e) 

demonstration and our evaluation of it in Section 5.1 of this TSD.
5

Nitrogen oxides: 40 tons per year

Sulfur dioxide: 40 tons per year

PM2.5: 10 tons per year”

Rule 1325 does not require new or additional control equipment for existing facilities, 

unless the source or facility makes a major modification. For such sources, the Lowest 

Achievable Emission Rate (LAER) and offsets are required if the resulting emission increases 

from the modification are above specified thresholds. Table 1 lists the emissions thresholds

applicable to new or modified sources subject to Rule 1325.

Table 1 – Rule 1325 Applicability Emissions Thresholds

Emissions Threshold

(tons per year)

PM2.5 NOx or SO2

New major facility 100 or more 100 or more 

Modifications at existing 

non-major facility 

100 or more 100 or more 

Modifications at existing 

major facility 

10 or more 40 or more 

4.2 Definitions

Section (b) of Rule 1325 generally incorporates definitions from 40 CFR 51.165(a)(1), as 

they existed on June 3, 2011, the date of the original rule adoption, unless the same term is 

defined within the rule. Rule 1325 provides slightly modified definitions of the following terms

to either maintain consistency with the District’s existing NNSR permit program nomenclature 

or provide additional clarifications: Baseline Actual Emissions, Building, Structure, Facility, or 

Installation (replaced with a definition for Facility), Major Modification, Major Source (replaced 

with a definition for Major Polluting Facility), Plantwide Applicability Limitation, Precursors

(as a separate defined term, rather than part of the definition of Regulated NSR Pollutant), 

Projected Actual Emissions, Regulated NSR Pollutant, Reviewing Authority, Significant, and 

Stationary Source (replaced with a definition for Source).

4.3 Requirements

Section (c) of Rule 1325 states that the Executive Officer shall deny a Permit for new 

major polluting facilities; or major modifications to major polluting facilities of PM2.5; or any 

facility with an emissions increase of a potential to emit 100 tons per year or more of PM2.5 or its 

precursors (which are defined as NOx and SO2), unless the following requirements are met: 

(1) New or modified sources must employ LAER;
6

(2) Emission increases are offset8at a ratio of 1.1:1 for PM2.5. The offset ratio for NOx and 

SO2 shall be the ratio required under the applicable NNSR rule (Regulation XIII or Rule 

2005);

(3) Owner or operators of all major sources (as defined in the jurisdiction where the facilities 

are located) in the State of California must certify for those sources subject to emission 

limitations that they are in compliance or on a schedule for compliance with all 

applicable emission limitations and standards under the Clean Air Act; and

(4) Owner or operators must conduct an analysis of alternative sites, sizes, production 

processes, and environmental control techniques for a proposed source and demonstrate 

that the benefits of the proposed source outweigh the environmental and social costs 

associated with that project.

4.4 Emissions Calculations

Section (d) of Rule 1325 specifies the emission calculations to be used to determine if a 

project will result in a major source or major modification, as defined within Rule 1325.

4.5 Plantwide Application Limitation

Section (e) of Rule 1325 incorporates the provisions of 40 CFR 51.165(f) for Plantwide 

Applicability Limitations (PALs). PALs are a voluntary option that allows a major stationary 

source to manage emissions without triggering major new source review. PALs can be utilized 

for PM2.5 and SO2 emissions but not for NOx as PALs are not allowed for ozone precursors in 

extreme ozone nonattainment areas, such as the South Coast Air Basin. Public notice pursuant to 

Rule 212(g) is required prior to the issuance of a PAL. 

4.6 Two Year Limit on Facility Exemption

Section (f) of Rule 1325 states that any facility with accumulated emission increases in 

excess of 100 tons per year of PM2.5 due to permit actions within any two-year period after June

3, 2011, shall offset the total emission increases during such period to zero. This is an “antipiecemealing” provision designed to prevent sources which currently emit less than 100 tons per 

year of PM2.5 from increasing their PM2.5 emissions by more than 100 tons per year without 

providing offsets by phasing or piecemealing the project.

4.7 Recordkeeping Requirements

Section (g) of Rule 1325 specifies that records are required when either of the following 

situations occur:

(1) The projected actual emission increase is 50 percent or more of a significance level,

as defined in section (b)(12) of the rule;

 

8 Offsets must be either Emissions Reduction Credits (ERCs) for non-RECLAIM pollutants or RECLAIM Trading 

Credits (RTCs) for sources in the RECLAIM program for either NOx or SOx. The SCAQMD RECLAIM program 

is a market incentive program designed to allow facilities flexibility in achieving emission reduction requirements 

for NOx and SOx under a set of rules in its Regulation XX.
7

(2) The projected actual emissions increase, when added to the amount of emissions 

excluded under paragraph (b)(9)(C), sums to 50 percent or more of a significance

level as defined in section (b)(12) of the rule.

Recordkeeping is also required if the baseline actual to projected future actual or the hybrid 

emissions calculation methodology is used to determine that the modification at issue does not 

result in a major modification and hence does not trigger the requirements of Rule 1325.

4.8 Test Methods

Section (h) of the rule states that testing for point sources shall be in accordance with U.S. 

EPA Test Methods 201A and 202. The referenced test methods are specific for Rule 1325 and 

are not applicable to any other SCAQMD rules, including any other Regulation XIII rules.

5 Rule Evaluation

EPA reviewed Rule 1325 – Federal PM2.5 New Source Review Program for compliance 

with: 1) the CAA requirements for SIPs in general as set forth in CAA section 110(a)(2); 2) the 

requirements for stationary source preconstruction permitting programs in CAA sections 173(a) 

through (c) and 189; 3) requirements related to the review and modification of new sources in 40 

CFR part 51.165; and 4) the requirements related to SIP revisions in CAA sections 110(l) and 

193. The paragraphs and sections that follow contain EPA’s evaluation and discussion of Rule 

1325 as it pertains to these regulatory requirements.

1. Provisions to assure that calculation of emissions offsets, as required by section 

173(a)(1)(A), are based on the same emissions baseline used in the demonstration of 

reasonable further progress.

Discussion: Section (c) of Rule 1325 states that the Executive Officer shall deny the 

Permit for new major polluting facilities; or major modifications to major polluting 

facilities of PM2.5; or any facility with an emissions increase of a potential to emit 100 

tons per year or more of PM2.5 or its precursors (which are defined as NOx and SO2), 

unless the emission increases are offset at a ratio of 1.1:1 for PM2.5. Rule 1325 Section 

(c)(1)(B) specifies that the offset ratio for NOx and SO2 shall be the ratio required under 

the applicable NSR rule (Regulation XIII or Rule 2005). The SCAQMD based the offset 

ratio of 1.1:1 for PM2.5 on its “Summary of Reasonable Further Progress Calculations” 

from the 2007 Air Quality Management Plan.

9 These calculations show that a 1% annual 

percent reduction is needed to show linear progress toward PM2.5 attainment. As Rule 

1325 uses an offset ratio of 1.1:1 (or a 10% discount in offsets applied), this offset ratio 

provides consistency with the South Coast’s demonstration of reasonable further progress 

and is therefore sufficient to meet this requirement. 

 

9 2007 Air Quality Management Plan, South Coast Air Quality Management District, June 7, 2007.
8

2. Provisions, pursuant to section 173(a)(2), which require LAER, for a major source or 

major modification.

Discussion: Section (c)(1)(A) states that the Executive Officer shall deny a Permit for a 

major source or major modification, unless LAER is employed for the new or modified

source. By requiring the use of LAER as a condition of permit issuance, this provision 

satisfies the regulatory requirement.

3. Provisions, pursuant to section 173(a)(3), to assure that owners or operators of each 

proposed new or modified major stationary source demonstrate that all other major 

stationary sources under the same ownership in the State are in compliance with the Act.

Discussion: Rule 1325 Section (c)(1)(C) requires certification by the owner or operator 

that “all major sources, as defined in the jurisdiction where the facilities are located that 

are owned or operated by such person (or by any entity controlling, controlled by, or 

under common control with such person) in the State of California are subject to emission 

limitations and are in compliance or on a schedule for compliance with all applicable 

emission limitations and standards under the Clean Air Act.” This provision is consistent 

with the language in section 173(a)(3) and therefore satisfies the regulatory requirement.

4. Provisions, pursuant to section 173(a)(5), that, as a prerequisite to issuing any part D 

permit, the rule must require an analysis of alternative sites, sizes, production processes, 

and environmental control techniques for the proposed source that demonstrates that the 

benefits of the proposed source significantly outweigh the environmental and social costs 

imposed as a result of its location, construction, or modification. 

Discussion: Rule 1325 Section (c)(1)(D) requires that an “analysis is conducted of 

alternative sites, sizes, production processes, and environmental control techniques for 

such proposed source and demonstration made that the benefits of the proposed project 

outweigh the environmental and social costs associated with that project.” This provision 

is consistent with the language in section 173 (a)(5) and therefore satisfies the regulatory 

requirement.

5. Provisions to assure, pursuant to section 173(c)(1), that any emissions offsets obtained in 

conjunction with the issuance of a permit to a new or modified source must be 

enforceable by the time of issuance of the permit, and in effect by the time the new or 

modified source commences operation. 

Discussion: Rule 1325 Section (c)(1)(B) requires that all emission increases be offset.

SCAQMD Rule 1309 (Emission Reduction Credits) and Rule 1303 (Requirements), 

which are part of SCAQMD’s SIP-approved NNSR program, satisfy this CAA 

requirement. Specifically, Rule 1309 Section (d)10 ensures that offsets, in the form of 

 

10 SCAQMD Rule 1309 – Emission Reduction Credits, 61 FR 64291 December 4, 1996.
9

Emission Reduction Credits (ERCs), are in effect and enforceable when used to offset 

emission increases from a new or modified source subject to Rule 1303. Rule 1303 

Subsection (b)(2)11 states that offsets are required before a permit is issued. These

provisions are consistent with the language in section 173 (c)(1) and therefore satisfy the 

regulatory requirement.

6. Provisions to assure that emissions increases from new or modified major stationary 

sources are offset by real reductions in actual emissions as required by section 173(c)(1).

Discussion: SCAQMD Rules 1306 (Emissions Calculations) and 1309 (Emission 

Reduction Credits), which are part of SCAQMD’s SIP-approved NNSR program, satisfy 

this CAA requirement. Specifically, Rule 1309 (b)(4) requires that the emissions 

reductions calculated pursuant to Rule 1306 must be real, quantifiable, permanent and 

federally enforceable. Rule 1306 includes a process for banking ERCs and ensures all 

ERCs issued are based on real reductions in actual emissions. These provisions are

consistent with the language in section 173 (c)(1) and therefore satisfies the regulatory 

requirement.

7. Provisions, pursuant to section 173(c)(2), to prevent emissions reductions otherwise 

required by the Act from being credited for purposes of satisfying the part D offset 

requirements.

Discussion: SCAQMD Rule 1309 (Emission Reduction Credits), which is part of 

SCAQMD’s SIP-approved NNSR program, contains language which satisfies this CAA 

requirement. Specifically, Rule 1309 includes procedures for creating ERCs and prohibits

the creation of ERCs if the emission reductions are not surplus. Specifically, Rule 

1309(b)(5) requires that:

“the same emission reductions from the same equipment type as those proposed 

by the applicant are not (A) required by a Control Measure in the AQMP which 

has been assigned a target implementation date; or (B) required by a proposed 

District rule for which the first public workshop to consider such a rule has been 

conducted. This exclusion shall remain in effect for 12 months from the date of 

such workshop, or until the Executive Officer or designee determines that the 

proposed rule is abandoned or the provisions of subparagraph (5)(C) become 

effective; or (C) required by an adopted federal, State, or District rule, 

regulation, or statute; or (D) from a category or class of equipment included in a 

demonstration program required by a District rule or regulation.”

In addition, Rule 1309(b)(4)(E) requires that the amount of emission reduction credits to 

be granted in the non-Southeast Desert Air Basin area “...are not greater than the 

equipment would have achieved if operating with [LAER].” This requirement to reduce 

 

11 SCAQMD Rule 1306 – Emission Calculations, 61 FR 64291 December 4, 1996.
10

the quantity of ERCs granted down to what the LAER would be at the time of granting 

the ERCs is a requirement that is more stringent than the surplus requirement in the CAA. 

EPA has previously approved the use of this provision in lieu of the requirement for 

ERCs to be adjusted at the time of use to reflect current emission limits required by the 

CAA. For a further discussion of our approval of the surplus adjustment in Rule 1309, 

please see our 1996 TSD for the approval of Regulation XIII, which is included in the 

docket for this proposed action.

Taken together these provisions prohibit the creation and use of ERCs if the emission 

reductions are otherwise required by the Act and therefore satisfy the regulatory 

requirement contained in CAA section 173(c)(2).

8. Definition of “stationary source” that includes certain internal combustion engines 

subject to control under State programs (i.e., those not used for transportation purposes), 

but excluding the category of “nonroad engines.” [See section 302(z) of the Act.]

Discussion: Rule 1325 does not directly define the term “stationary source” but in section 

(b) incorporates by reference the following definition at 40 CFR 51.165(a)(1)(i):

“Stationary source means any building, structure, facility, or installation which emits 

or may emit a regulated NSR pollutant.”

Although this definition does not explicitly include internal combustion engines not used 

for transportation purposes or specifically exclude “nonroad engines,” SCAQMD’s 

Regulations I (General Provisions) and II (Permits) include provisions that exempt 

internal combustion engines used for transportation purposes from the requirement of

obtaining permit. Specifically, EPA finds that the following requirements in SIPapproved SCAQMD Rules 102, 203 and 219 satisfy the CAA 302(z) definition of 

stationary source because it requires a permit for all engines except non-road engines:

a) Rule 102 (Definition of Terms)12 defines “Equipment” as “any article, machine, 

or other contrivance.”

b) Rule 203 (Permits)13 requires a permit for any equipment that “...may cause the 

issuance of air contaminants...”

c) Rule 219 (Equipment Not Requiring a Written Permit Pursuant to Regulation II),

14

contains Section (a)(1) which exempts from permit requirements: “Equipment 

mounted upon vehicles used exclusively to transport materials on streets or 

highways but not to include any equipment mounted on such vehicles that would 

otherwise require a permit under the provisions of these rules.”

 

12 SCAQMD Rule 102 – Definition of Terms, 72 FR 656, January 8, 2007.

13 SCAQMD Rule 203 – Permit to Operate, 64 FR 25828, May 13, 1999.

14 SCAQMD Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II, 47 FR 29231, July 6, 

1982.
11

9. Definitions which contain language which is either identical or equivalent to that found in 

CAA Sections 169, 169A(g) and 171, and in 40 CFR 51.100 and 51.165(a)(1).

Discussion: Rule 1325 Section (b) incorporates by reference the definitions contained in 

40 CFR 51.165(a)(1), but also defines some terms separately or additionally in order to 

maintain consistency with existing terms in the SCAQMD Regulation XIII NNSR

program. We reviewed all such definitions and find the definitions are either consistent 

with, substantially equivalent to, or more stringent than those required by 40 CFR 

51.165(a)(1) and therefore sufficient to meet the requirements of a NNSR program.

We note one definition in Section (b) of Rule 1325 that is substantially different than 

those contained in 51.165(a)(1) yet sufficient to satisfy this requirement.

 In Section (b)(5) of Rule 1326, the District defines Major Source as:

“...as used in any definition [ of Major Source] found in 40 CFR 51.165(a)(1), 

means the same as Major Polluting Facility, as defined in this rule.”

Major Polluting Facility is subsequently defined as “on a pollutant specific

basis, any emissions source located in areas federally designated pursuant to

40 CFR 81.305 as nonattainment for the South Coast Air Basin (SOCAB) which

has actual emissions of, or the potential to emit, 100 tons or more per year of 

PM2.5, or its precursors. A facility is considered to be a major polluting 

facility only for the specific pollutant(s) with a potential to emit of 100 tons or 

more per year.”

The effect of the these two definitions is to replace the term “Major Source” with 

the term “Major Polluting Facility” wherever the term is used in 40 CFR 

51.165(a)(1), and provide a new definition for the term Major Polluting Facility. 

The SCAQMD definition provided for Major Polluting Facility differs from the 

definition found in 51.165(a)(1) for Major Source, mostly because it is missing a 

provision regarding the treatment of fugitive emissions when determining if a 

source’s emissions exceed the major source threshold. The definition of Major 

Source provided in subparagraph 51.165(a)(1)(iv)(C) states that fugitive 

emissions are only to be counted if the source belongs to one of the 28 listed 

source categories. EPA interprets the definition of Major Polluting Facility to 

require all sources to include fugitive emissions when determining if emissions 

exceed the thresholds provided in the Major Polluting Facility definition, since 

there is no language specifying when fugitive emission do not need to be included 

in emission calculations. However, because the SCAQMD definition of Major 

Polluting Facility, in requiring inclusion of fugitive emission for all sources, is 

more stringent than the federal definition, it is acceptable and sufficient to satisfy 

this requirement.
12

10. Provisions, pursuant to 40 CFR 51.161, that require opportunity for public comment, as 

well as the consideration of any comments received during the comment period. These 

provisions must also ensure the availability of all information relevant to the proposed 

permit during the comment period.

Discussion: The public notice requirements for all new or modified sources are found in 

the District’s general permitting rules, specifically the SIP-approved version of 

SCAQMD Rule 212 – Standards for Approving Permits,

15 rather than Rule 1325. Section 

(c) of Rule 212 specifies the public notice criteria for significant projects (i.e. located 

within 1,000 feet of school; exceeds daily maximum emissions levels [per section (g) of 

Rule 212]; exceeds health-based levels for cancer or public nuisance) prior to granting a 

Permit to Construct. Rule 212 specifies that public notice is required for a project if the 

PM10 emissions exceed 30 pounds per day. EPA notes that the daily maximum emissions 

levels specified in Rule 212 pertain to PM10 and not PM2.5. In a letter dated, December 

20, 2013,

16 the District explains their position that since all PM2.5 emissions are also

PM10 emissions, the PM10 public notice thresholds are sufficient to satisfy the required 

major source PM2.5 public notice requirements. As Rule 212, which is contained in the 

SCAQMD SIP, satisfies the requirement pursuant to 40 CFR 51.161 that requires

opportunity for public comment (per Section (g)(4) of Rule 212), we find this 

requirement is satisfied.

11. Provisions, pursuant to 40 CFR 51.165(a)(1)(iv), that provide a definition of major 

stationary source that identifies all nonattainment pollutants, including any precursors, at 

their proper thresholds based on an area’s classification. 

Discussion: The definition of Major Polluting Facility in Section (b)(4) satisfies this 

requirement by defining this term as any emission source located in any nonattainment 

area (as specified in 40 CFR 81.305) within the South Coast Air Basin, which has actual 

or potential emissions of 100 tpy of PM2.5 or its precursors, which is the proper emission 

threshold. Thus we find that Rule 1325 satisfies this CAA provision. Rule 1325(b)(8) 

defines Precursors as NOx and SOx. However, as discussed in more detail below, 

Section 189(e) allows EPA to approve this definition if we determine that the other PM2.5

precursors (VOCs and ammonia) “do not contribute significantly to [PM2.5] levels which 

exceed the standard in the area.” (See CAA section 189(e))

12. Provisions, pursuant to 40 CFR 51.165(f), to ensure program adequacy of Plantwide 

Applicability Limitations.

 

15 SCAQMD Rule 212 – Standards for Approving Permits, 61 FR 64291, December 4, 1996.

16 Letter from Barbara Baird, Chief Deputy Counsel, South Coast Air Quality Management District to Deborah 

Jordan, Air Division Director, Region IX, U.S. Environmental Protection Agency, December 20, 2013.
13

Discussion: Rule 1325 Section (e) specifies the federal NNSR requirements for 

Plantwide Applicability Limitations (PAL). We find Section (e) is nearly identical in 

every aspect to 40 CFR 51.165(f) and is therefore adequate to satisfy this requirement.

13. Provisions, pursuant to 40 CFR 51.165(a)(1)(iv)(C), which specifies how fugitive 

emissions should be treated when determining if a source constitutes a major source,

states the fugitive emissions of a stationary source must be included in the major source 

applicability determination if it belongs to one the source categories listed. 

Discussion: Please see the discussion for item No. 9 above regarding how this 

requirement has been met.

14. Provisions to implement the applicability procedures of 40 CFR 51.165(a)(2).

Discussion: Rule 1325 Sections (d)(2) through (d)(5) are substantially equivalent with the 

language of 40 CFR 51.165(a)(2)(A) through (F) and therefore satisfy this requirement.

15. Provisions to implement the enforcement procedures of 40 CFR 51.165(a)(5)(i) to 

provide that issuance of an approval to construct shall not relieve any owner or operator 

of the responsibility to comply fully with applicable provisions of the plan and any other 

requirements under local, State or Federal law.

Discussion: Rule 1325 Section (c)(3) contains language that is identical to 40 CFR 

51.165(a)(5)(i) and thus is sufficient to satisfy this requirement. 

16. Provisions, pursuant to 40 CFR 51.165(a)(5)(ii), which require a source or modification 

which becomes major due solely to a relaxation in a federally-enforceable limit to 

comply with all NNSR requirements “as though construction had not yet commenced.”

Discussion: Rule 1325 Section (c)(2) states, “At such time that a particular source or a 

source undergoing modification becomes a major polluting facility or major modification 

solely by virtue of a relaxation in any enforcement limitation which was established after

(June 3, 2011) on the capacity of the polluting facility or modification otherwise to emit 

PM2.5 or its precursors to avoid applicability of this rule, such as a restriction on hours of 

operation, then the requirements of this rule shall apply to the source or modification as 

though construction had not yet commenced on the source or modification.” This 

language is consistent with 40 CFR 51.165(a)(5)(ii), therefore this provision satisfies this 

requirement. 

17. Provisions, pursuant to 40 CFR 51.165(a)(6) & (7), which require certain records to be 

maintained if there is a reasonable possibility that a project that used the “actual-toprojected actual” test may result in a major modification.
14

Discussion: Rule 1325 Section (g) states, “If an owner or operator uses the calculation 

methods specified in paragraphs (d)(2) or (d)(4) of this rule to calculate projected actual 

emissions, and where there is a reasonable possibility, within the meaning of paragraph 

(g)(6) of this rule, that a project that is not a part of a major modification may result in a 

significant emissions increase of such pollutant, then before beginning actual 

construction of the project, the owner or operator shall document and maintain a record 

of the following information...” This language is consistent with 40 CFR 51.165(a)(6) & 

(7), therefore this provision satisfies this requirement. 

5.1 CAA Title I, Subpart 4 Requirements

As noted above in our Background discussion, on January 4, 2013, the U.S. Court of 

Appeals for the District of Columbia Circuit, in Natural Resources Defense Council v. EPA17, 

issued a decision that remanded the EPA’s 2007 and 2008 rules implementing the 1997 PM2.5

NAAQS. The court found that EPA erred in implementing the PM2.5 NAAQS in these rules 

solely pursuant to the general implementation provisions of subpart 1 of Part D of Title I of the 

CAA, rather than pursuant to the additional implementation provisions specific to particulate 

matter nonattainment areas in subpart 4. The court ordered the EPA to “repromulgate these rules 

pursuant to Subpart 4 consistent with this opinion.”18 Although the court declined to establish a 

deadline for EPA’s response to the remand, on June 2, 2014, EPA finalized a rule that provides a

response, in part, to the NRDC v. EPA remand. The June 2014 final rule set a deadline of 

December 31, 2014, for states to submit “remaining required SIP submissions for 

[nonattainment] areas, pursuant to and considering the application of subpart 4” as to the 1997 

and 2006 PM2.5 NAAQS.

19

CAA Title I subpart 4 includes section 189(e), which requires the control of major 

stationary sources of PM10 precursors (and hence under the court decision, PM2.5 precursors) 

“except where the Administrator determines that such sources do not contribute significantly to 

PM10 levels which exceed the standard in the area.” The provisions of subpart 4, do not define 

the term “precursor” for purposes of PM2.5, nor does subpart 4 explicitly require the control of 

any specifically identified particulate matter precursor. The statutory definition of “air pollutant,” 

however, provides that the term “includes any precursors to the formation of any air pollutant, to 

the extent the Administrator has identified such precursor or precursors for the particular purpose 

for which the term “air pollutant” is used.” CAA Section 302(g). The EPA has identified the 

main precursor gases associated with PM2.5 formation as SO2, NOx, VOCs, and ammonia.

Accordingly, the NNSR permit program for PM2.5 presumptively applies to emissions of all four 

precursors listed above, and direct PM2.5 from major sources in the South Coast Air Basin.

Rule 1325(b)(8) provides a definition of the term Precursors that only includes SO2 and 

NOx emissions as precursors for PM2.5. As noted above, Section 189(e) provides an exemption 

“where the Administrator determines that such sources do not contribute significantly to [PM2.5]

 

17 706 F.3d 428 (D.C. Cir. 2013).

18 Id. at 437

19 EPA’s final rule classifies all PM2.5 nonattainment areas as moderate (see 79 FR 31566, June 2, 2014).
15

levels which exceed the standard in the area.” In reviewing any determination of the state to 

exclude a PM2.5 precursor from the required evaluation of potential NNSR applicability, the EPA 

considers both the magnitude of the precursor’s contribution to ambient PM2.5 concentrations in 

the nonattainment area and the sensitivity of ambient PM2.5 concentrations in the area to 

reductions in emissions of that precursor. (See 80 FR 1816, January 13, 2015).

20

With respect to VOCs, both new and modified sources of VOC emissions are already 

subject to SCAQMD’s Best Available Control Technology (BACT) (equivalent to federal 

LAER) requirements at a zero emission rate threshold for new and modified sources under its 

existing NNSR program for an extreme ozone nonattainment area.

21 The existing NNSR 

program for ozone also requires VOC emissions to be offset at a 1:1.2 ratio when a new or 

modified source has the potential to emit four tons per year or more of VOC, which is well 

below the 100 tpy threshold for new sources and the 40 tpy threshold for major modifications 

that would be required as a PM2.5 precursor.

22 Because the District’s SIP-approved NNSR 

program for an extreme ozone nonattainment area already contains control and offset

requirements for VOC as an ozone precursor, which are consistent with federal NNSR 

requirements that would apply to VOC as a PM2.5 precursor, we are proposing to find that the 

requirements of CAA section 189(e) have been satisfied for VOC.

23

To determine if the District appropriately excluded ammonia emissions from Rule 

1325(b)(8), EPA is relying primarily on two sources of information: 1) SCAQMD Staff Report, 

Proposed Amended Rule 1325-Federal PM2.5 New Source Review Program, December 2014

(Staff Report); and 2) SCAQMD Draft Supplement to the 24-Hour PM2.5 State Implementation 

Plan for the South Coast Air Basin, January 2015 (Draft Supplement).

First, the District provided information showing that the magnitude of actual ammonia 

emissions from major sources in the South Coast Air Basin is small. There are only four major 

sources of ammonia emissions (i.e. 100 tpy or greater of actual ammonia emissions). These four

major sources contribute 1.7 tons per day (tpd) of ammonia emissions while all sources of 

ammonia in the South Coast Air Basin emit 99 tpd.24 The relative contribution of the existing 

major sources to the overall ammonia emissions in the area, therefore, is 1.7%.

Attachment E to the Draft Supplement provided further evaluation of the magnitude of 

the contribution of major sources of ammonia, reiterating that those existing sources accounted 

for less than 2 percent of the Basin’s inventory of ammonia emissions. The District noted that 

 

20 80 FR 1616, Approval and Promulgation of Implementation Plans; Designation of Areas for Air Quality Planning 

Purposes; California; San Joaquin Valley Moderate Area Plan and Reclassification as Serious Nonattainment for 

the 2006 PM2.5 NAAQS; (Proposed Rule), January 13, 2015, page 1822.

21 SCAQMD Rule 1303 – Requirements, 61 FR 64291, December 4, 1996.

22 SCAQMD Rule 1304 – Exemptions, 61 FR 64291, December 4, 1996.

23 57 FR at 13542, April 16, 1992.

24 SCAQMD Rule 1325 Staff Report, pages 2-3.
16

there were only four major source emitters in the inventory “with the single highest major source 

accounting for less than 0.50 TPD direct [ammonia] emissions.” The major sources of ammonia 

in the South Coast Air Basin are natural gas fired power plants that are required to operate 

Selective Catalytic Reduction (SCR) systems to comply with NNSR emission limits for NOx and 

refineries.

25 The operation of SCR relies on using ammonia.

Second, the Staff Report and Draft Supplement point to another factor limiting the 

magnitude of future emissions of ammonia. Both new and modified sources of ammonia 

emissions are already subject to SCAQMD’s BACT (equivalent to federal LAER) requirements

for new and modified sources under its existing NNSR program at a zero emission rate threshold. 

These ammonia control requirements in the existing NNSR rule ensure that growth in ammonia 

emissions will be minimized going forward and support a finding that new or modified major 

stationary sources of ammonia emissions will not contribute significantly to PM2.5 levels that 

exceed the standard in the area.

Third, the District considered the sensitivity of ambient PM2.5 concentrations in the area to 

reductions of ammonia emissions. The District included Attachment E to the Draft Supplement 

to demonstrate for attainment planning purposes that emissions of ammonia do not significantly 

contribute to nonattainment of the PM2.5 NAAQS in the South Coast Air Basin.

The District notes that before it developed its 2003 AQMP, it was trying to develop interpollutant trading ratios for NSR. The District conducted an evaluation of the effect of using SCR 

as a NOx control mechanism for mobile sources and the impact on future PM2.5 emissions. The 

results of this analysis showed that a 10 tpd increase in ammonia would result in a net 0.22 

μg/m3increase in regional PM2.5 concentrations. From this, the District determined that “the 

minimal PM2.5 simulated increase from a 10 percent increase in the Basin inventory reflected the 

degree of saturation of ammonia in the Basin and minimal sensitivity of changes in ammonia 

emissions to PM2.5 production.” The District also conducted a sensitivity analysis to test the 

impact of reducing bovine ammonia emissions in the Mira Loma area where the majority of the 

South Coast Air Basin’s dairy emissions occur. The District found that a 2.9 tpd reduction of 

ammonia emissions would result in a reduction in PM2.5 emissions of approximately 0.16 μg/m3 

at the Mira Loma monitoring station. The District’s conclusion from this study was that “the 

reduction in regional ammonia emissions resulted in a minimal PM2.5 impact per ton emissions 

reduced.” In evaluating all of the available information, the District stated: “Thus, ammonia 

controls also have a much less significant impact on 24-hour PM2.5 exceedances than other 

precursors.”

Finally, EPA is taking into consideration the District’s air quality monitoring data. EPA 

recently proposed to find that the South Coast Air Basin has attained the 1997 24-hour and 

annual PM2.5 NAAQS. 79 FR 72999 (Dec. 9, 2014). According to the District, preliminary air 

 

25 SCAQMD Draft 2015 Supplement, Attachment E
17

quality monitoring data for 2014 indicates that the South Coast Air Basin is meeting the 2006 24-

hour PM2.5 NAAQS at all monitors except at the Mira Loma monitor.26 Additionally, we note 

that PM2.5 air quality monitoring data collected during the 2002-2012 monitoring period show 

that both annual and 24-hour PM2.5 concentrations have declined significantly at all monitors in 

the South Coast area during this 10-year period. See 78 FR 37741 at 37749-50 (June 24, 2013) 

(proposed rule to approve South Coast PM2.5 contingency measures), finalized at 78 FR 64402 

(October 29, 2013).

As noted above, section 189(e) requires NNSR to apply to major stationary sources of 

PM2.5 precursors “except where the Administrator determines that such sources do not contribute 

significantly to [PM2.5] levels which exceed the standard in the area.” Given the PM2.5 impacts 

from ammonia emissions reductions in the sensitivity modeling, and the relatively small amount 

of ammonia emissions from major point sources, and the level of controls that are required on 

new major ammonia sources, we can conclude that the PM2.5 impacts from major stationary 

source ammonia emissions are insignificant. Based on all of these considerations, we are 

proposing to determine that major stationary sources of ammonia emissions do not contribute 

significantly to PM2.5 levels that exceed the 2006 24-hour PM2.5 standard in the South Coast 

nonattainment area and, therefore, are not subject to the NNSR precursor requirements for the 

PM2.5 permitting program.

Conclusion. For the reasons set forth above, EPA is proposing to approve the submitted NNSR 

program under section subpart 4 of the Act.

5.2 Section 110(l) of the Act

CAA section 110(l) states: “Each revision to an implementation plan submitted by a State 

under this chapter shall be adopted by such State after reasonable notice and public hearing. The 

Administrator shall not approve a revision of a plan if the revision would interfere with any 

applicable requirement concerning attainment and reasonable further progress (as defined in 

section 7501 of this title), or any other applicable requirement of this chapter.”

With respect to the procedural requirements of CAA section 110(l), based on our review of 

the public process documentation included in the December 29, 2014 submittal, we find that

SCAQMD has provided sufficient evidence of public notice and opportunity for comment and 

public hearings prior to adoption and submittal of Rule 1325. With respect to the substantive 

requirements of section 110(l), the SIP currently contains no provisions to regulate PM2.5

emissions from new and modified stationary sources, therefore the inclusion of SCAQMD Rule 

1325 would only strengthen the applicable SIP.

Conclusion. For the reasons set forth above, we are proposing to approve the submitted NNSR

program under section 110(l) of the Act.

 

26 Mira Loma had a 2011-2013 design value of 36 μg/m3. 79 FR 72999, 73004, December 9, 2014.
18

5.3 Section 193 of the Act

Section 193 of the Act, which was added by the Clean Air Act Amendments of 1990, 

includes a savings clause which provides, in pertinent part: “No control requirement in effect, or 

required to be adopted by an order, settlement agreement, or plan in effect before November 15, 

1990, in any area which is a nonattainment area for any air pollutant may be modified after 

November 15, 1990, in any manner unless the modification insures equivalent or greater 

emission reductions of such air pollutant.” 

Since PM2.5 is a new NAAQS, there are no existing PM2.5 control requirements that would 

be subject to the provisions of Section 193 of the CAA. Therefore, for the purposes of our 

analysis of Rule 1325, we find that Section 193 of the CAA does not apply to this action. 

6 EPA’s Proposed Action

For the reasons stated above in Section 5 and pursuant to section 110(k)(3) of the Act, we 

are proposing to approve Rule 1325 into the SCAQMD portion of the California SIP. 

ATTACHMENTS

1. SCAQMD Amended Rule 1325 – Federal PM2.5 New Source Review Program, 

December 5, 2014

2. SCAQMD Proposed Amended Rule 1325 – Federal PM2.5 New Source Review Program 

Staff Report, dated December 2014

3. Memorandum from John S. Seitz, Director Office of Air Quality Planning & Standards, 

Director to Regional Air Division Directors, “Interim Implementation of New Source 

Review Requirements for PM2.5,” October 23, 1997.

4. Memorandum from Stephen D. Page, Director to Regional Air Division Directors, 

“Implementation of New Source Review Requirements in PM2.5 Nonattainment Areas,” 

April 5, 2005.

5. 2007 Air Quality Management Plan, South Coast Air Quality Management District, June 

7, 2007.

6. SCAQMD Rule 1309 – Emission Reduction Credits, 61 FR 64291 December 4, 1996.

7. SCAQMD Rule 1306 – Emission Calculations, 61 FR 64291 December 4, 1996.

8. SCAQMD Rule 102 – Definition of Terms, 72 FR 656, January 8, 2007.

9. SCAQMD Rule 203 – Permit to Operate, 64 FR 25828, May 13, 1999.

10. SCAQMD Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation 

II, 47 FR 29231, July 6, 1982.

11. SCAQMD Rule 212 – Standards for Approving Permits, 61 FR 64291, December 4, 

1996.

12. Letter from Barbara Baird, Chief Deputy Counsel, South Coast Air Quality Management 

District to Deborah Jordan, Air Division Director, Region IX, U.S. Environmental 

Protection Agency, December 20, 2013.