SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT 

FINAL DRAFT STAFF REPORT 

PROPOSED AMENDMENTS TO 

RULE 2201 (NEW AND MODIFIED STATIONARY SOURCE REVIEW RULE) 

Prepared by: Carlos Garcia, Senior Air Quality Engineer 

Reviewed by: David Warner, Director of Permit Services 

March 17, 2011 

I. SUMMARY 

As required under the federal Clean Air Act, the U.S. Environmental Protection Agency 

(EPA) set new national ambient air quality standards for particulate matter less than 2.5 

micrometers (PM2.5) to protect against public health impacts. Consequently, the EPA 

determined that the San Joaquin Valley Air Pollution Control District (District) was in 

nonattainment of the PM2.5 standards. This set into motion several actions for the 

District to take which included adoption of the District’s 2008 PM2.5 Plan which outlines 

the path to attainment of the federal PM2.5 standard. The Clean Air Act and applicable 

regulations require that PM2.5 nonattainment areas, such as our valley, incorporate 

permitting requirements into their New Source Review (NSR) rules. The District’s NSR 

program ensures that the emissions of new or modified stationary sources are mitigated 

and do not interfere with the District’s efforts to meet air quality standards. With this 

proposed rule development for Rule 2201, District staff is proposing amendments to our 

NSR rule to implement mandatory provisions of the federal nonattainment PM2.5 

permitting program requirements. 

Furthermore, the District amended Rule 2201 in September 2006 to add permitting 

requirements for agricultural sources (per SB 700, Florez) in the valley by directly 

referencing related portions of the California Health and Safety Code (CH&SC). EPA 

found this exemption to be ambiguous, since the referenced code is not contained in the 

State Implementation Plan, and therefore found it to be a deficiency in Rule 2201. 

Consequently, the District will revise Rule 2201 to explicitly add the language describing 

the applicability of offsets for agricultural sources in Rule 2201, section 4.6.9. The direct 

addition of the agricultural offset exemption language in Rule 2201 to address EPA’s 

limited disapproval will provide a clearer description of the exemption and does not change 

the intent of the rule or the methods with which the District permits agricultural sources. It 

should be noted that EPA also found partial disapproval issues with agricultural source 

permitting exemption language in Rule 2020, “Exemptions”, but this rule is being 

addressed in a separate rule amendment action. 
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Two workshops have been held under this rule development project to discuss, present 

and take comments on the Draft Rule 2201 amendments. Due to mandatory timelines for 

incorporating the federal PM2.5 requirements, the proposed rule amendments will be 

considered for adoption by our Governing Board on April 21, 2011. 

II. DESCRIPTION OF RULE 2201 (NEW AND MODIFIED STATIONARY SOURCE 

REVIEW RULE) 

The District’s NSR rule provides a regulatory mechanism for allowing continued 

economic growth while minimizing the amount of emission increases due to this growth. 

District Rule 2201 applies to all new stationary sources and all modifications to existing 

stationary sources that are subject to District permit requirements. However, there are 

certain permitting exemptions allowed for smaller sources of emissions which are 

identified in Rules 2201 and Rule 2020 (Exemptions). 

The District’s NSR program is designed to meet both the state and federal NSR 

requirements for nonattainment areas and applies to new and modified stationary 

sources that emit nitrogen oxides (NOx), volatile organic compounds (VOC), particulate 

matter with an aerodynamic diameter of less than ten microns (PM-10), sulfur oxides 

(SOx), carbon monoxide (CO), and other pollutants subject to District permitting 

requirements pursuant to District Rule 2010 (Permits Required). 

Key features of Rule 2201 include: 

 Best Available Control Technology (BACT): mandates emission controls to 

minimize emission increases above de minimis values; 

 Emission offsets: requires emissions above specified offset threshold levels to be 

mitigated with either concurrent reductions or past reductions which have been 

banked as emission reduction credits (ERC); 

 Public notification: a 30 or 45 day notice period prior to issuance of an Authority to 

Construct (ATC) to garner comments on projects that result in emissions above 

specified levels; 

 Required elements for Authority to Construct, Permit to Operate and administrative 

requirements for the processing of NSR applications. 

Rule 2201, New and Modified Stationary Source Review Rule, provides the mechanism 

for the San Joaquin Valley Unified Air Pollution Control District (District) to issue permits 

to new and expanding businesses. Its primary purpose is to minimize and mitigate 

emissions associated with new growth. The District’s NSR program is designed to meet 

both the state and federal NSR requirements for nonattainment areas, and applies to new 

and modified stationary sources that emit NOx, CO, VOC, SOx, PM10, PM2.5 (with this 

modification) and other pollutants subject to District permit. 
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III. DISCUSSION OF PROPOSED RULE AMENDMENTS 

A. Implementation of the New Source Review Program for Particulate Matter 

Less than 2.5 Micrometers (PM2.5) 

1. Background

The EPA set new national ambient air quality standards (NAAQS) for particulate 

matter less than 2.5 micrometers (PM2.5) to protect against public health 

impacts. Subsequently, the EPA determined that the San Joaquin Valley Air 

Basin was designated nonattainment for the 1997 PM2.5 NAAQS, and EPA also 

designated the Valley as nonattainment for the 2006 PM2.5 NAAQS on 

November 13, 2009 (effective December 14, 2009). Additionally, the SJVAB is 

designated as nonattainment under the PM2.5 California state standards (CCR 

Title 17 Section 60210). 

The federal Clean Air Act and applicable regulations require that PM2.5 

nonattainment areas, such as our valley, incorporate certain requirements into 

their New Source Review (NSR) rules for sources that emit PM2.5 and other 

pollutants that contribute to PM2.5. EPA issued final rules called Implementation 

of the New Source Review Program for Particulate Matter Less than 2.5 Microns 

(PM2.5 NSR Implementation Rule) requirements on May 16, 2008 (73 FR28321). 

The PM2.5 NSR Implementation Rule explains how to apply NSR to PM2.5 

emissions sources and establishes the major source threshold, significant 

emissions rate, offset ratios, interpollutant emission offset ratios, and offset 

applicability of PM2.5 precursors. 

District staff is proposing amendments to its NSR rule to meet these federal 

requirements. Submittal of the PM2.5 NSR program requirements is due to EPA 

before May 16, 2011. 

Currently, PM2.5 permitting requirements are being implemented through District 

policy, APR 1140, which outlines interim federal NSR requirements for PM2.5 for 

new major sources and federal major modifications. These requirements are 

specified in 40 CFR Part 51.165 and the EPA Emission Offset Interpretive Ruling 

(Part 51 - Appendix S) and are effective as of July 15, 2008. District Policy APR 

1140, Interim New Source Review Requirements for PM2.5, will continue to apply 

until Rule 2201 has been amended by the District’s Governing Board to 

incorporate the federal NSR provisions for PM2.5. 
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2. Major Source Thresholds 

The federal NSR permitting program relies on emissions thresholds to determine 

when program requirements apply to new facilities. If a new facility will emit 

target air pollutants in amounts greater than the major source threshold, the 

facility is considered a major source. Sources are defined as a major source for 

nonattainment NSR provisions if they have the potential to emit of 100 or more 

tons per year of PM2.5. 

3. Significant Emissions Rates 

The federal NSR program applies significant emission rate thresholds to 

determine when NSR requirements apply to existing major facilities. Significance 

thresholds are used to determine the emissions for a proposed project at an 

existing facility is considered a federal major modification (as defined in Rule 

2201 section 3.18.1.4). 

The PM2.5 NSR Implementation Rule outlines the following significant threshold 

emissions rate in tons per year (tpy) for direct PM2.5 and precursor pollutants: 

 Direct PM2.5 emissions at 10 tpy 

 SO2 emissions at 40 tpy 

 NOx emissions at 40 tpy 

The District will include the mandatory requirement for sulfur dioxide (SOx) and 

nitrogen oxides (NOx) to be regulated as precursors to PM2.5. However, 

because the District’s PM2.5 Plan did not demonstrate that volatile organic 

compounds (VOC) and ammonia are significant contributors to the formation of 

PM2.5 precursors in the SJVAB, they can not be considered precursors for NSR 

purposes. 

4. PM2.5 Offset Ratios 

The offset ratios established in EPA’s PM2.5 NSR Implementation Rule are 1 to 

1, so one pound of emissions reduction is required for one pound of emissions 

increase of PM2.5 or PM2.5 precursors. 

5. PM2.5 Interpollutant Emission Offset Ratios 

The federal PM2.5 NSR Implementation Rule allows provisions for interpollutant 

trading of emission offsets. In the federal rule, default interpollutant offset ratios 

were assigned for NOx to primary PM2.5 at a 100 to 1 ratio (100 tons NOx for 1 

ton PM2.5) and for SOx to primary PM2.5 at a 40 to 1 ratio. Ratios for other 

pollutants were not specifically established but states have an option to add them 

if the interpollutant ratios are established in attainment demonstration plans and 

approved into the State Implementation Plan (SIP). 
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The EPA’s interpollutant offset ratios established in the PM2.5 NSR 

Implementation Rule are to be used unless states choose to incorporate other 

ratios that are substantiated through modeling or other technical demonstrations 

to be more representative for specific geographic areas such as the valley. 

EPA acknowledges that variations that occur across geographic regions can vary 

the relationship between pollutants. Thus, the District is proposing to submit 

different trading ratios as outlined by EPA which include, but is not limited to: 

 The relative magnitude of emissions of direct PM2.5 and precursor 

gases (e.g., SO2 and NOX) within the geographic area of interest. 

 The relative contribution to local PM2.5 nonattainment of directly 

emitted PM2.5 and individual precursors from the various sources or 

source categories under consideration as part of a potential 

interpollutant trade. 

 The meteorological conditions and topography of the area, which 

result in different source-receptor relationships across pollutants 

within the local area. 

Through preliminary analysis, the District believes that the interpollutant offset 

ratios set by EPA are much greater than would be actually needed for sources to 

adequately offset their PM2.5 emissions increases in the valley. 

At the December 2010 workshop for Rule 2201, the District stated that it may 

propose new interpollutant offset ratios for inclusion into the SIP through 

amendments to Rule 2201 or through the PM2.5 plan. 

At this time, the District is proposing to prepare and send to EPA for approval 

alternative interpollutant ratios for SOx for PM2.5 and NOx for PM2.5 that are 

more appropriate for the valley, through amendments to the 2008 PM2.5 Plan 

SIP process. Therefore, Section 4.13.3.2 was added to allow the use of any EPA 

approved interpollutant offset ratios. This section is intended to allow the use of 

the District’s interpollutant offset ratios once they are approved by EPA into the 

SIP. 

The District is proposing to move rapidly on this issue, and will workshop the 

proposed PM2.5 interpollutant ratios by second quarter 2011, with the intent of 

taking them before the governing board for their consideration and approval by 

third quarter 2011. 
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B. Title V Program 

EPA established the major source threshold for PM2.5 at 100 tons per year. Sources with 

potential emissions over the threshold would be subject to federal permitting requirements 

under Title V. 

No changes to the District’s Title V rule, Rule 2520 (Federally Mandated Operating 

Permits), are needed because the major source definition refers to the definition in Rule 

2201 which will include the 100 tpy major source threshold level for PM2.5. 

C. Rule 2530 (Federally Enforceable Potential to Emit) 

The primary purpose of Rule 2530 is to provide facilities whose emissions are 

consistently low certain mechanisms to escape Title V permitting requirements. 

Facilities that maintain sufficient records to demonstrate that actual emissions from the 

facility are less than 50 percent of all major source emissions thresholds are considered 

to have a “federally enforceable potential to emit” that is less than the District’s major 

source, or Title V, thresholds. 

PM2.5 emissions constitute a portion of PM10 emissions. For example, PM2.5 emissions 

from sources of combustion generally account for more than 90% of the PM10 emissions. 

Non-combustion sources generally have a much smaller fraction of PM2.5. If a stationary 

source is not considered a major source for PM10, which threshold is 70 tons per year, then 

the source can not be a major source for PM2.5 since the PM2.5 major source threshold is 

established at the higher level of 100 tons per year. The District will utilize the PM10 Title V 

permitting exemption thresholds in Rule 2530 as a conservative measure to assure a 

federally enforceable limit on PM2.5 emissions also exists. 

In other words, facilities found to be exempt from Title V permitting because they maintain 

annual emissions of less than 35 tons of PM10 each year are automatically known to be 

exempt based on their PM2.5 emissions as well, as their PM2.5 emissions are obviously 

below 50 tons per year. Therefore, no change is necessary in Rule 2530. 

D. 2008 PM2.5 Plan: Pre-baseline Usage of Emission Reductions Credits 

(PM2.5 Caps) 

The rule amendments will also include limits, or caps, to the quantity of certain emission 

reduction credits (ERCs) that can be used as mitigation for new sources. The limits are 

specified in the District’s 2008 PM2.5 Plan and may be included in subsequent EPA 

approved attainment plans, and apply to so-called “pre-baseline” ERCs. Pre-baseline 

ERCs are those that pre-date the applicable baseline period for each of the District’s 

SIP approved attainment plans. The plans specify caps for each pollutant, and the NSR 

rule will incorporate language that references these limits. These caps have been 

established through a very conservative process, and we do not expect that ERC usage 
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will exceed the caps. However, if the quantity of pre-baseline ERCs that get used as 

offsets reaches the caps, use of pre-baseline offsets will be curtailed until the respective 

plans can be revisited to extend the caps. 

The District’s 2008 PM2.5 Plan outlines the strategy for achieving the NAAQS for PM2.5 

(1997 Standard). Pre-baseline ERCs are considered as growth and must be included in 

the PM2.5 plan to the extent that these credits will be used as offsets or netting prior to 

the attainment of the PM2.5 standards by 2015. Therefore, a cap on the amount of prebaseline credits that can be used is required to assure that the use of pre-baseline 

ERCs do not interfere with the attainment effort and the applicable rate of progress. 

The District committed to amending our Rules and Regulations to require tracking and 

enforcement of the cap within 12 months after EPA approval of this Plan. The 2008 

PM2.5 Plan has been submitted to EPA for approval, and it should be noted that on 

November 30, 2010, EPA issued it’s proposal of limited approval and limited disapproval 

of the plan (75 FR74518). 

As shown in Tables D-1 through D-4 of appendix D of the District’s 2008 PM2.5 Plan, 

the expected pre-baseline offset usage after 2005 through 2014, was estimated as 

follows: 

NOx ..................................... 4.8 tons/day 

VOC ..................................... 9.8 tons/day 

PM2.5.................................... 0.9 tons/day 

SOx ...................................... 1.7 tons/day 

References to these caps, and the related tracking and enforcement provisions, are 

incorporated into Rule 2201, Section 7.5. 

As currently written in Rule 2201, Section 7.5 allows the District to directly incorporate 

future pre-baseline emission reduction caps contained in District-adopted and EPA SIP 

approved attainment plans. 

E. Agricultural Permitting and EPA Approval and Disapproval of Rule 2201 

In January of 2004, new state laws took effect pertaining to the permitting of agricultural 

operations in the State of California (SB 700, Florez). In part, these laws removed the 

long-standing state air permitting exemption for agricultural operations and replaced it 

with a set of rules requiring agricultural sources with emissions over one-half a district’s 

major source thresholds to obtain permits, and requiring air districts to make certain 

findings before requiring permits of agricultural sources with emissions less than those 

thresholds. See California Heath and Safety Code (CH&SC), Section 42301.16. 

In addition, SB 700 enacted CH&SC Section 42301.18(c). This section prohibits 

districts from requiring minor agricultural sources to offset their emissions increases 
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unless certain criteria are met, which criteria would then allow the same types of 

agricultural sources to bank credits after generating voluntary emissions reductions. 

On May 11, 2010, EPA published in the Federal Register (75 FR26102) a final limited 

approval and limited disapproval of District Rule 2201 and Rule 2020 (Exemptions). 

The EPA’s final approval/disapproval was effective on June 10, 2010. The EPA’s final 

limited disapproval triggered an 18-month sanction clock requiring the District to submit 

a SIP approval revision of Rule 2201 by December 10, 2011. Unless the rule deficiency 

is corrected and a SIP approvable rule is submitted by the District before the sanction 

deadline expires, EPA will impose federal sanctions which include withholding highway 

funds and an increase emission offset ration requirement for stationary sources within 

the San Joaquin Valley. In addition to the 18-month sanction, the District could face a 

Federal Implementation Plan by EPA if the District fails to submit a fully approvable SIP 

revision of Rule 2020 within 24 months by June 10, 2012. 

EPA found that the limited permitting exemption for agricultural sources of emissions 

found in section 4.6.9 of the rule was inappropriately ambiguous due to a reference to 

state law, which law is not in the SIP. To correct the rule deficiency, EPA 

recommended replacing the statutory reference to the CH&SC with a clear description 

of the sources covered by the exemption. 

Specifically, current Rule 2201, Section 4.6.9, says that the following sources are 

exempt from permitting offset requirements: 

Agricultural sources, to the extent provided by California Health and Safety Code, 

Section 42301.18(c), except that nothing in this section shall circumvent the 

requirements of section 42301.16(a). 

Staff is proposing to remove the ambiguity caused by the reference to state law by 

restating that emissions offsets shall not be required for: 

4.6.9 Agricultural Sources, for criteria pollutants for that source if emissions 

reductions from that source would not meet the criteria for real, 

permanent, quantifiable, and enforceable emission reductions. 

4.6.9.1 In no case shall the offset exemption in section 4.6.9 apply to an 

agricultural source that is also a major stationary source for the 

pollutant for which the offset exemption is sought. 

To support the new language above, staff recommends the addition of a definition for 

“Agricultural Source” to Section 3.0 (Definitions) of Rule 2201 as follows: 

3.5 Agricultural Source: equipment or operations that emit air contaminants and 

that are used in the production of crops or the raising of fowl or animals. 
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These changes remove the ambiguity caused by referencing the state law but do not 

change the applicability of the exemption in any way because applying the referenced 

state law would lead to the same result. 

It should be noted that the White Paper on SB 700 produced by the California Air 

Pollution Control Officers Association (CAPCOA) interprets the language we have 

captured in Section 4.6.9 as saying that the District may not require offsets for minor 

agricultural sources unless we can issue emissions reduction credits to the same 

source-types. 

It should also be noted that SB 288 prohibits changes to certain permitting requirements 

such that they relax those requirements in place on December 30, 2002. As discussed 

later in this report (section IV) and more thoroughly in the District’s September 21, 2006 

final staff report for Rule 2201 and 2020, this is not a change in requirements at all, but 

merely an incorporation of existing state law requirements. In addition, all agricultural 

operations were exempt from permits by state law in 2002, and remained exempt until 

state law changed in 2004. Therefore, neither this change, nor the one discussed 

below, could relax any permitting requirements that existed on December 30, 2002, and 

so SB 288 is not violated. 

F. Proposed Rule Amendments 

The following changes are proposed for Draft Rule 2201: 

 Section 3.4: PM2.5 was added to the list of affected pollutants applicable to NSR. 

 Section 3.5: An agricultural source definition was added to support the offset 

exemption in section 4.6.9. 

 Section 3.18.1.4: Added the federal major modification significance thresholds for 

PM2.5 which include direct PM2.5 and the precursors of SOx and NOx. Ammonia 

and VOC were not included as precursors. 

 Section 3.24: Added the federal major source threshold for PM2.5. The threshold for 

major sources of PM2.5 is 200,000 pounds per year (100 tons per year). 

 Section 3.28: PM2.5 was defined as particulate matter with an aerodynamic 

diameter smaller than or equal to a nominal 2.5 microns. 

 Section 3.31: NOx and SOx are included as precursors for the nitrate fraction and 

sulfate fraction for PM2.5, respectively. 

 Section 4.5.4: Added the following language that requires PM2.5 offsets: “Offsets 

shall be required for PM2.5 and PM2.5 precursor emission increases for such 

increases that constitute new major sources or federal major modifications.” 
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In the initial version of this modification of Rule 2201 (12/14/2010), The District 

proposed to use language that would require major PM2.5 projects to offset their 

emissions using “surplus at time of use” creditable emissions reduction for offsetting 

purposes, consistent with the federal offsetting requirements. This would follow the 

existing federal offsetting requirements and would remove the need to include 

PM2.5 emissions in the Annual Offset Equivalency Demonstration tracking 

processes of Sections 7.1 through 7.4 of Rule 2201. 

However, stakeholders commenting on this draft of the rule were unanimously 

opposed to this concept because of the inherent discouragement of the development 

of innovative air pollution controls and techniques. 

The District agrees that requiring “surplus at time of use credits” creates a 

disincentive for the creation of ERCs, since there is no certainty that the reductions 

will be valid at the time they are used. Companies have indicated to the District in 

the past that they were not willing to invest in innovative and voluntary emissions 

reduction technologies if there was no certainty that the credits created would be 

valid at the time they were needed. We also agree that this issue was the reason 

that we negotiated the offset equivalency program with EPA. 

Section 7 of Rule 2201 specifies the tracking and reporting actions involved with the 

annual equivalency demonstration and steps to be taken to correct any ERC 

shortfalls. This section also details the required actions to be taken if an ERC 

shortfall occurred. Rule 2201 has a self-implementing offset shortfall remedy 

procedure which entails following the federal offsetting requirements directly, until 

the shortfall is eliminated. The system is designed to be invisible to permittees 

unless equivalency cannot be demonstrated and the indicated remedies must be 

implemented. 

Nothing in this section, or in the underlying agreement, prohibits that application of 

the equivalency tracking system to PM2.5 emissions. Therefore, the District is 

proposing to amend section 4.5.4 to eliminate the surplus at time of use 

requirement, and instead demonstrate through section 7 that we have, on an annual 

basis, required sufficient surplus at time of use PM2.5 emission reductions to satisfy 

federal PM2.5 offsetting requirements. We will, upon adoption of this rule, add 

PM2.5 to subsequent annual offset equivalency reports. 

 Section 4.6.9: Remove the CH&SC 42301.18(c) reference in Section 4.6.9 and add 

the specific language specified above that agricultural sources are provided some 

limited exemption from offsetting emissions increases. Agricultural sources subject 

to major source permitting, including federal major modifications, would need to 

provide offsets for the corresponding pollutants. This clarifies EPA’s limited 

disapproval issues, and does not change the District’s current practices and 

methods of permitting agricultural sources. 
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 Section 4.8.2 added the following language: “For PM2.5 and PM2.5 precursor 

offsets for new major sources and federal major modifications, the offset ratio shall 

be 1.0.” Again, this requirement is to remain consistent with the federal PM2.5 

permitting requirements. 

 Section 4.13.3.2: This section was added to allow a source to provide interpollutant 

offsets for PM2.5 emissions increases. As currently proposed, the interpollutant 

offset ratios are those set by EPA (see section III.A.5) until such time that the District 

demonstrates and submits alternative ratios to EPA, and EPA approves them into 

the SIP. 

IV. PROTECT CALIFORNIA AIR ACT OF 2003 - SENATE BILL 288 

California Health and Safety Code sections 42500 through 42507 (SB 288) mandates 

that a District’s New Source Review (NSR) rules cannot be made less stringent, in a 

variety of specified areas, than the rules that existed on December 30, 20021

. This 

legislation was crafted and signed into law specifically to prevent Districts from 

implementing any Federal NSR reforms that would have relaxed California’s stringent 

NSR requirements. The state Air Resources Board (ARB) has provided guidance on 

the implementation of SB 288, and has concluded that there are four components of 

NSR that are affected: 

1. NSR applicability determinations. 

2. The definitions of “modification”, “major modification”, “routine maintenance”, and 

“repair or maintenance”. 

3. The calculation methodology, thresholds, or other procedures of new source 

review. ARB further interprets this to apply to baseline determinations, 

calculating emissions changes, offset amounts required and major source and 

major modification thresholds. 

4. The definitions and requirements of NSR regulations, including, on a programwide basis, the requirement to obtain offsets2

. 

The proposed NSR rule amendments outlined in this report implement required federal 

provisions to add new requirements for PM2.5 and to reword, but not change 

implementation or meaning, a limited offsetting exemption. Neither of these changes 

relaxes existing District NSR requirements. 

 

1

 There are some narrowly defined exceptions to these “anti-backsliding” provisions, but none apply to 

this rule amendment and therefore the exceptions will not be discussed further in this staff report. 

2

 While the District believes that this final component is an overly broad legal interpretation of the 

legislation, and inconsistent with the development and intent of the legislation, we believe the District’s 

proposed amendments are complying with ARB’s interpretation on this issue. However, we will reserve 

our right to challenge ARB on this issue at a later date, or if ARB uses this interpretation to contravene 

any of the District’s proposed NSR amendments. 
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V. RULE DEVELOPMENT PROCESS 

EPA’s Final Rule To Implement the PM2.5 National Ambient Air Quality Standard; Final 

Rule (effective January 30, 2006) provides states three years to submit an approvable 

NSR program for the PM2.5 standard. Thus for this requirement, EPA mandates that 

our NSR program needs to be submitted into the SIP before May 16, 2011 (73 FR 

28321). 

Two workshops for public input to proposed amendments to Rule 2201 have been 

completed. District Staff conducted the first workshop meeting on December 14, 2010 

and the second workshop on February 10, 2011 to present, discuss and take comments 

on the proposed rulemaking. The District considered written comments received from 

the public, affected sources, ARB, and EPA during the public workshop process which 

were addressed in the previous staff report for Rule 2201. For the first workshop, 

comments have been incorporated into the draft rules as appropriate. There were no 

written comments received for the second workshop to address in this final draft staff 

report. 

Adoption by our Governing Board is scheduled for April 21, 2011, after which Rule 2201 

will be forwarded to EPA for inclusion into the SIP. 

VI. COST EFFECTIVENESS AND SOCIOECONOMIC IMPACT ANALYSIS 

Pursuant to CH&SC Section 40920.6(a), the District is required to analyze the cost 

effectiveness of new rules or rule amendments that implement Best Available Retrofit 

Control Technology (BARCT). The draft amendments do not add BARCT requirements 

and therefore are not subject to the cost effectiveness analysis mandate. 

Additionally, state law requires the District to analyze the socioeconomic impacts of any 

proposed rule amendment that significantly affects air quality or strengthens an 

emission limitation. The draft amendments will have neither effect, and is therefore not 

subject to the socioeconomic analysis mandate. 

VII. RULE CONSISTENCY ANALYSIS 

Pursuant to CH&SC Section 40727.2 (g) a rule consistency analysis of the draft rule is 

not required. The draft rule does not strengthen emission limits or impose more 

stringent monitoring, reporting, or recordkeeping requirements. 
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VIII. ENVIRONMENTAL ASSESSMENT 

Pursuant to §15061 of the Guidelines for Implementation of the California 

Environmental Quality Act (CEQA), District staff investigated the likely environmental 

impacts of the proposed amendments to Rule 2201. The purpose of this rule-amending 

project is to add the federal PM2.5 new source review requirements, which include 

establishing the PM2.5 major source permitting thresholds, offset ratios, and PM2.5 

precursor offset applicability. Additionally, the amendments will include some language 

changes to improve clarity and assure SIP approval of the limited offset exemption for 

minor agricultural sources. Draft amendments are based on federal requirements and 

do not change the meaning of current rule language. As such, District staff concludes 

that it can be seen with certainty that the proposed amendments to the rule will not have 

any significant adverse effect on the environment. Staff will recommend filing a Notice of 

Exemption under the provisions of California Code of Regulations section 15061(b)(3).