Prepared by: Matthew Baldwin Air Quality Engineer

Approved by: David A. Valler, Jr.

Air Pollution Control Officer 

# F EATHER 

# R IVER 

# A IR 

# Q UALITY 

# M ANAGEMENT 

# D ISTRICT

S TAFF 

## R EPORT



## P ROPOSED 

## A MENDMENTS 

## :

R EGULATION 

## X R ULE 

## 10.1 N EW 

## S OURCE 

## R EVIEWi



### T ABLE OF 

### C ONTENTS

Table of Contents

................................ ................................ ................................ ......................... i

1.0 Executive Summary

................................ ................................ ................................ ........... 1

2.0 Background

................................ ................................ ................................ ........................ 1

3.0 Legal Mand ates

................................ ................................ ................................ .................. 1

4.0 Proposed Rule Summary

................................ ................................ ................................ ... 3

5.0 Impacts of the New Rule

................................ ................................ ................................ .... 5

6.0 Environmental Review and Compliance

................................ ................................ ............. 6

7.0 Required Findings

................................ ................................ ................................ .............. 6

8.0 Co mparison with Other Applicable Regulations and Requirements

................................ .... 7

9.0 Public Notice

................................ ................................ ................................ ...................... 7
ATTACHEMENT A: Proposed Lineout/Strikeout of Regulation X: Rule 10.1: New Source

Review

................................ ................................ ................................ ................................ ....... 1Staff Report Page 1 of 8

Regulation X; Rule 1 0.1 New Source Review



### 1.0 E XECUTIVE 

### S UMMARY

The Feather River Air Quality Management District’s (District) New Source Review (NSR) program was established in February 1993 to ensure that construction and operation of new and modified sources does not interfere with progress towards attainment of the National and State Ambient Air Quality Standards. Because portions of the District have been designated as nonattainment for various pollutants , the United States Environmental Protection Agency (USEPA) requires the District to implement measures to redu ce sources of these pollutants and their precursors. The District makes its commitment to reduce pollution through the State Implementation Plan (SIP). The SIP is federally enforceable through USEPA and the Federal Clean Air Act (CAA). A New Source Revi ew, or Preconstruction Review, is required as part of the State Implementation Plan (SIP).

The purpose of the proposed amendments to Rule 10.1 are to (1) incorporate federal nonattainment requirements for PM2.5 in the Yuba City

- Marysville area and for ozone in the Sutter Buttes area; and (2) address deficiencies published by the USEPA.



### 2.0 B ACKGROUND

In October 2009, in response to an audit by the Californi a Air Resources Board (ARB), the District amended Rule 10.1

– New Source Review. Subsequently, the District submitted the rule for inclusion into the SIP. The EPA granted a partial approval / partial disapproval, since the overall rule was sufficient, but some specific parts of the rule were deficient.

Additionally, in October 2009, the EPA issued designations for the 24

- hour standard for PM2.5. A portion of the District was designated as non

- attainment for failing to meet this standard. As a result, the Di strict is required to implement NSR for major sources and major modifications to sources of PM2.5.

The District is also incorporating into the rule, requirements for the portion of Sutter County designated as non

- attainment for the 1997 ozone standard. Thi s area is the portion of the Sutter Buttes above 2000 feet in elevation.



### 3.0 L EGAL 

### M ANDATES



### F EDERAL 

### M ANDATE The District has multiple designations regarding attainment of the air quality standards set forth by the USEPA. The District currently has three separ ate nonattainment areas:

1. Sacramento Federal Non

- attainment Area (SFNA) for Ozone

The southern portion of Sutter County has been designated as a serious nonattainment area for the federal 8

- hour ozone standard. This portion of Sutter County, along with Sac ramento, Yolo, and portions of Placer, El Dorado and Solano Counties are incorporated into the SFNA.

2. Sutter Buttes Non

- attainment Area (SBNA) for OzoneStaff Report Page 2 of 8

Regulation X; Rule 1 0.1 New Source Review

T he Sutter Buttes (portions above 2000 feet elevation) in Sutter County is designated as a basic nonatta inment f or the federal ozone standard.

3. Yuba City

- Marysville Non

- attainment Area (YC

- MNA) for PM2.5

Sutter County and part of Yuba County is designated as non

- attainment for the federal PM2.5 standard. The portion of Yuba County in the YC

- MNA is listed in t he federal register notice as:

“ That portion of Yuba County which lies west of the line described as follows: (Mount Diablo Base and Meridian) Beginning at the intersection of the Yuba

- Nevada county line and the range line common to ranges R7E and R8E, nor th to the southeast corner of township T18N R7E, then west along the township line common to T17N and T18N, then north along the range line common to ranges R6E and R7E, then west along the township line common to T19N and T18N to the Yuba

- Butte County bou ndary. ”

Thus, the entire valley portion of Yuba County and the western portion of the foothills are included in the non

- attainment area.

Section 173 of Title I of the Federal Clean Air Act Amendments of 1990 requires permitting authorities to establish a p ermitting program for reviewing applications for construction of new sources or modification of existing sources of air pollutants. A New Source Review, or Preconstruction Review, is required as part of the State Implementation Plan (SIP) under 40 Code of Federal Regulations (CFR) Part 51 Subpart 1 to ensure that the construction or modification of a source will not cause violations of the State’s control strategy or interfere with attainment or maintenance of ambient air quality standards. 40 CFR Part 51 also requires the District to adopt a permitting program that requires the application of BACT for any net increase in emissions at a major stationary source, and Lowest Achievable Emission Rate (LAER) for a new stationary source or modification to an exi sting stationary source that results in a significant emission increase.



### S TATE 

### M ANDATES California Health and Safety (CH&S) Code §§ 40918 and 40919, require that the District’s permitting program be designed to achieve no net increase in emissions of nonat tainment pollutants from stationary sources with emissions exceeding specified thresholds. Furthermore, Title 17, § 70600 requires ozone non

- attainment Districts in the Broader Sacramento Area to adopt more stringent thresholds. The Broader Sacramento Ar ea is Defined in Title 17 CCR § 70500. This area is equal to the area designated as the SFNA portion of FRAQMD. The thresholds applicable to the District are outlined in Table 3.1. CH&S Code §§ 40918 and 40919 also require the District’s permitting prog ram to require the use of BACT for any new or modified stationary source which has a potential to emit greater than or equal to the thresholds listed in Table 3.2 for nonattainment pollutants. District rule 10.1 New Source Review as amended on June 7, 200 4 complies with these requirements.

The District is classified as attainment/unclassified for PM2.5 under the state standards. The no net increase thresholds do not apply.Staff Report Page 3 of 8

Regulation X; Rule 1 0.1 New Source Review

Table 3

. 1

– No Net Increase (offset) Threshold

Pollutant SFNA portion of FRAQMD North FRAQMD

Ozone Precursors (NOx & ROG) 10 tons/year 25 tons/year

PM

- 10 25 tons/year 25 tons/year

Table 3

. 2

– BACT Thresholds

Pollutant SFNA portion of FRAQMD North FRAQMD

Ozone Precursors (NOx & ROG) 10 pounds/day 25 pounds/day

PM

- 10 25 pounds/day 25 pounds/day

Chapter 4.5, Protect California Air Act of 2003 Requirements : In an effort to minimize the potential impact of federal NSR reform, the state legisla ture passed the Protect California Air Act of 2003 (SB288). The Act (CH&S Code § 42500 through 42507) is intended to minimize the impact of the relaxation of the federal new source review program on air quality in California. The Act prohibits districts fr om making revisions to their SIP approved NSR rules in existence on December 30, 2002 that would result in weakening their rules. These revisions include but are not limited to, revisions to rule applicability, changing the definition of modification so th at NSR is not triggered or triggered at a higher level of emission increases, or relaxing BACT, air quality analysis, and public participation requirements. The Act does permit districts to deviate from these requirements under specified conditions.

The p roposed amendments to Rule 10.1 meet this mandate . Rule 10. 1 does not relax the requirements to obtain a permit and undergo NSR analysis; does not relax the requirement to apply BACT to a new or modified emission unit; does not relax the requirements or t hresholds for performing an air quality impact analysis as required by Rule 10.1 G; does not relax the requirements for monitoring, recordkeeping, and reporting; does not relax the requirement for regulating any air pollutant; and does not relax any requir ement for public participation.



### 4.0 P ROPOSED 

### R ULE 

### S UMMARY

Table 4.1 summarizes the proposed rulemaking by section:

Table 4

. 1

– Summary of Proposed Amendments SECTION NUMBER PROPOSED LANGUAGE

Technical Amendment Adoption and amended dates have been moved to the Title based on

an EPA recommendation. Currently, these dates are been listed in each section. This change was recommended because the board adopts and amends the rule as a whole, not just the sections.

10. 1 A Added recommended language in A.1 to incorporate review of

applicable District rules into the purpose of the rule.Staff Report Page 4 of 8

Regulation X; Rule 1 0.1 New Source Review

10.1 B Added p rovision , pursuant to 40 CFR 51.165(a)(5)(ii), which require s

new source review for a source or modification which becomes major due to a relaxation in a federally

- enforceable limit. Such sources and modifications are subject to new source review “as though construction had not yet commenced.”

Added language such th at if the SBNA or the YC

- MNA is re

- designated as attainment, the provisions requiring offsets or BACT become non

applicable.
10.1 D Added: “Begin Actual Construction,” “Class I Area,” “Commence,”

“Construction,” “Federally Enforceable,” and “Necessary Preconstruction Approvals or Permits” in response to deficiencies identified by EPA in their TSD.

Added: “Sutter Buttes Nonattainment Area for Ozone (SBNA)” and “Yuba City

- Marysville Nonattainment Area for PM2.5” to incorporate NSR requirements for these t wo non

- attainment areas.

Amended: “Major Modification” in order to include requirements for Ozone in the SBNA and PM2.5 in the YC

- MNA. EPA recommended amending definition for clarity by moving the thresholds for significance into a new definition for “Sign ificant.” EPA also recommended the language for “significant emissions increase ” to replace “net increase in the potential to emit” to for clarity and consistency with the federal definition.

Added: “Significant ” and “Significant Emissions Increase,” in re sponse to amendment of “Major Modification.”

Added: “PM2.5”

Amended: “Precursor” to identify precursors for PM2.5Staff Report Page 5 of 8

Regulation X; Rule 1 0.1 New Source Review

Table 4

. 1

– Summary of Proposed Amendments SECTION NUMBER PROPOSED LANGUAGE
10.1 E Amended E.1

– Best Available Control Technology requirements to

include federal requirements for Ozone in the SBNA and PM2.5 in the YC

- MNA.

Amended E.2.a

– Offsets to include federal requirements for offsetting emissions increases of ozone in the SBNA and PM2.5 in the YC

- MNA for major sources and major modifications.

Amended E.2.e

– offset ratios. For Ozone in the SBNA, amended table
to require same ratios as Ozone in the SFNA. For PM2.5 in the YC

MNA, added table for offset ratios. The ratios used are the same as PM10. These ratios are also the same as Placer County APCD for PM2.5.

Amended E.2.f

– Interpollutant Offsets to allow for Inte rpollutant offsets from PM2.5 precursors at rates established by the EPA.

Added E.8

– “Potential Visibility Impacts” based on recommended language from EPA.
10.1 F This section has not been modified. 10.1 G This section has not been modified.
10.1 H This section has not been modified.
10.1 I This section has not been modified.



### 5.0 I MPACTS OF THE 

### N EW 

### R ULE



### E MISSION 

### I MPACTS These proposed amendments will require new major sources and major modifications to major

sources of PM2.5 within the YC

- MNA to comply with federal NSR requirements. The District currently does not have any major sources of PM2.5 within the YC

- MNA. Additionally, the proposed amendments will require new major sources and major modifications to major sources located in the SBNA comply with federal NSR requirements. There are no sources within the SBNA. The District does not anticipate any emission impacts from the proposed rule.



### S OCIOECONOMIC 

### I MPACT California Health and Safety Code § 40728.5 requires, in part, that:

“Whenever a district in tends to propose the adoption, amendment or repeal of a rule or regulation that will significantly affect air quality or emissions limitations, that agency shall, to the extent that data are available, perform an assessment of the socioeconomic impacts of the adoption, amendment, or repeal of the rule or regulation.”

However, districts with a population of less than 500,000 persons are exempt from the provisions of CH&S § 40728.5 (a). The District’s population is estimated to be approximately 155,679, belo w the 500,000 person threshold. Therefore, a socioeconomic analysis for this rulemaking is not required.Staff Report Page 6 of 8

Regulation X; Rule 1 0.1 New Source Review



### C OST 

### I MPACTS California Health and Safety Code Section 40703 requires that all air quality districts consider and make public findings relating to the cost effectiveness of implementing an emission control

measure.

The proposed rule does not implement an emission control measure and therefore is not subject to the cost effectiveness mandate. Also, staff does not anticipate an additional need for staff resources upon adoption of the rule.

Proposition 26, Supermajority Vote to Pass New Taxes and Fees (2010)

Section 2 (d) of Article XIII C, California Constitution reads:

“ No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two

- thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved.”

This rule does not impose any new taxes nor increa se any existing taxes.



### 6.0 E NVIRONMENTAL 

### R EVIEW AND 

### C OMPLIANCE

The proposed amendments for Rule 10. 1 New Source Review c onsist of incorporating existing District, state and federal requiremen ts. As the District has not exercised discretion by modifying federal requirements, it is ministerial in natu re and the proposed amendments to Rule 10.1 New Source Review are statutorily exempt from CEQA pursuant to Section 15268 of the state CEQA Guidelines.



### 7.0 R EQUIRED 

### F INDINGS

California Health and Safety Code Section 40727 (a) requires that prior to adopting or amending a rule or regulation, an air district’s board must make findings of necessity, authority, clarity, consistency, non

- duplication and reference. The findings must be based on the following:

1. Information presen ted in the District’s written analysis, prepared pursuant to CH&S § 40727.2;
2. Information contained in the rulemaking records pursuant to CH&S § 40728; and
3. Relevant information presented at the Board’s hearing for the rule.

The table below describes the finding and the basis for making the finding.

Table 7

. 1
FINDING FINDING DETERMINATION Necessity: The District must find that the rulemaking demonstrates a need exists for the rule or for its amendment or rep eal. (CH&S § 40727 (b)(1)) Rule 10.1 It is necessary for the District to adopt the proposed amendments in order to correct deficiencies found by the EPA during the SIP approval process from the EPA and for submittal into the PM2.5 non

- attainment SIP.Staff Report Page 7 of 8

Regulation X; Rule 1 0.1 New Source Review

FINDING FINDING DETERMINATION Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal the rule. (CH&S § 47027(b)(2)) Rule 10.1 The District is authorized to adopt rules and regulations b y CH&S § 40001, 40702, 40919, 41010, and 42300.

Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. (CH&S § 40727(b)(3)) Rule 10.1 The District has re viewed the proposed amendments and determined that they can be easily unders tood by the affected industry. In addition, the record contains no evidence that the persons directly affected by the rule cannot understand the rule. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations. (CH&S § 40727(b)(4)) Rule 10.1 The proposed rule does not conflict with and are not contradictory to existing statutes, court decisions, or state or federal regulations.
Non

- Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing site or federal regulation; or 2) that the duplicative requirements are necessary or proper to execute the powers and duties granted to, and imposed upon the District. (CH&S § 40727(b)(5) Rule 10.1 The proposed rule duplicates federal rules or regulations for permitting programs. The duplicative requirements are necessary in order to execute the powers and duties imposed upon the District.

Reference: The District must refer to any statute, court decision, or other provision of law that the District implements, interprets, or makes specific by adopting, amending or repealing the rule. (CH&S § 40 727(b)(6)) Rule 10.1 The proposed amendments are intended to clarify existing law. References to statutes are noted where applicable

.



### 8.0 C OMPARISON WITH 

### O THER 

### A PPLICABLE 

### R EGULATIONS AND 

### R EQUIREMENTS

California Health and Safety Code Section 40727.2 requires districts to prepare a written analysis (may be in the form of a matrix) that identifies all existing federal air pollution control requirements, including, but not limited to, emission control sta ndards constituting BACT, that apply to the same equipment or source type as the rule or regulation proposed for adoption or modification by the District. In addition, the analysis shall identify any other District rule or regulation that applies to the s ame equipment or source type.

Under CH&S § 40727.2(g), the District finds that the proposed amendments do not strengthen or impose new emission limits or impose more stringent monitoring, reporting, or recordkeeping requirements; therefore complies with CH&S Code § 40727.2.



### 9.0 P UBLIC 

### N OTICE

The notice for this rule adoption was ma iled to affected sources and a notice of the hearing was published in the Appea l Democrat on January 6, 2012

. N o comments ha ve been re ceived from the notice.

A publi c workshop to discuss the proposed amendments was conducted on January 10, 2012

. A notice of the workshop was mailed to all affected sources and interested parties. No sources or intereste d parties attended the workshop.Staff Report Page 8 of 8

Regulation X; Rule 1 0.1 New Source Review

The proposed amendments were se n t to the Air Resources Board and the En vironmental Protection Agency on October 10, 2011

. Significant Comment s were received from EPA. A revised version of the rule to address these comments was sent on January 10, 2012. No additional significant comments received.

### ATTACHEMENT A :

P ROPOSED 

### L INEOUT



### /S TRIKEOUT OF 

### R EGULATION 

### X: R ULE 

### 10.1: N EW 

### S OURCE 

### R EVIEW