Linda 3. Adarns 

Secretarv for 

Air Resources Board 

Mary D. Nichols, Chairman 

1001 1 Street P.O. Box 281 5 

Sacramento, California 9581 2 www.arb.ca.gov RE 

~nvironrnental~~rotection 

SEP 10 2008 

September 3,2008 Air Division, AIR - 3 

U.S. EPA, REGION 9 

Air Pollution Control Officers 

Air Pollution Control Districts 

RE: Implementation of Permit Provisions of Senate Bill 700 

Dear Air Pollution Control Officers: 

The purpose of this letter is to request that you update your permit rules as they apply to 

agricultural sources of air pollution in accordance with the requirements of Health and 

Safety Code section 42301.16, a provision of SB 700 (Stats. 2003, ch. 479). The 

amended rule should be forwarded to the Air Resources Board (ARB) so that we may 

submit it to the United States Envirorlmental Protection Agency (U.S. EPA) for inclusion 

into the State Implementation Plan (SIP). This will ensure not only compliance with 

SB 700, which became effective January I, 2004, but will also harmonize District rule 

requirements with SIP requirements, facilitate consistency among Districts, and provide 

greater clarity and assurance to the agricultural cornmunity and the general public. 

U.S. EPA is very supportive of this effort. 

Our recent examination of the permit provisions in the SIP, which upon approval by 

U.S. EPA become federal law, indicates a checkerboard of permit requirements as they 

pertain to agricult~~ral sources. Many District permit rules were submitted for inclusion 

into the SIP as early as 1972, and their treatment of agl-icultural sources ranges from 

explicitly exempting them from permit requirements, in accordance with state law at that 

time, to no mention of these sources at all, leaving open the question of permit rule 

applicability. This confusion needs to be corrected quickly, and for most Districts this 

can be easily accomplished. 

Historically, Califorr~ia agl-iculture had few restrictions with regard to air pollution control. 

Until 2004, permits could not be required for "[alny equipment used in agricultural 

operations in the growing of crops or the raising of fowl or animals . . ." (See former 

Health & Saf. Code, 5 42310(e)). After many years of discussion and negotiation, 

Senator Florez introduced SB 700, which eliminated the permit exemption from state 

law and also imposed numerous substantive control requirements upon both agriculture 

and regulatory agencies to ensure the reduction of err~issions from agl-icultural sources. 

SB 700 was signed by the Governor on September 22,2003, and become effective 

January 1,2004. 

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California Environmental Protection Agency 

Printed on Recycled Paper 
Air Pollution Control Officers 

September 3, 2008 

Page 2 

The Health and Safety code' defines "agricultural source" as a source or group of 

sources of air pollution "used in the production of crops or the raising of fowl or animals 

that is located on contiguous property under common ownership or control" and that is 

either a confined animal facility, an internal combustion engine used in agricultural 

operations (except an engine used to propel implements of husbandry), a Title V 

source, or "a source that is otherwise subject to regulation by a district pursuant to this 

division [26 of the Health and Safety Code] or the federal Clean Air Act . . . ." 

(§ 3901 I .5(a).) The specific permit provisions are set forth in section 42301.16, as 

follows: 

(a) In addition to complying with the requirements of this chapter, a permit 

system established by a district pursuant to Section 42300 shall ensure 

that any agricultural source that is required to obtain a permit pursuant to 

Title 1 (42 U.S.C. Sec. 7401 et seq.) or Title V (42 U.S.C. Sec. 7661 et 

seq.) of the federal Clean Air Act is required by district regulation to obtain 

a permit in a manner that is consistent with the federal requirements. 

(b) Except as provided in subdivision (c), a district shall require an 

agl-icultural source of air pollution to obtain a permit unless it makes all of 

the following findings in a public hearing: 

(1) The source is subject to a permit requirement pursuant to 

section 40724.6. 

(2) A permit is not necessary to impose or enforce reductions of 

emissions of air pollutants that the district show[s] cause or 

contribute to the violation of [a] state or federal ambient air quality 

standard. 

(3) The requirement for the source or category of sources to obtain 

a permit would impose a burden on those sources that is 

significantly more burdensome than permits required for other 

similar sources of air pollution. 

(c) Prior to requiring a permit for an agricultural source of air pollution with 

actual emissions that are less than one-half of any applicable emissions 

threshold for a major source in the district, for any air contaminant, but 

excluding fugitive dust, a district shall, in a public hearing, make all of the 

following findings: 

1 All references are to the California Health and Safety Code, unless otherwise indicated. 
Air Pollution Control Officers 

Septerr~ber 3, 2008 

Page 3 

(1) The source is not subject to a permit requirement pursuant to 

Section 40724.6. 

(2) A permit is necessary to impose or enforce reductions of 

emission[s] of air pollutants that the district show[s] cause or 

contribute to a violation of a state or federal ambient air quality 

standard. 

(3) The requirement for a source or category of sources to obtain a 

permit would not impose a burden on those sources that is 

significantly more burdensome than permits required for other 

similar sources of air pollution. 

ARB interprets this statute to have set up three categories of permits for agricultural 

sources. First, new and modified sources that are considered to be "major sources" 

under Title I or Title V of the federal Clean Air Act must be required by every District to 

obtain a permit. As you know, Title I permit programs are required pursuant to section 

11 O(a)(Z)(C) and Parts C (Prevention of Significant Deterioration) and D (Plan 

Requirements for Nonattainment Areas) of the Clean Air Act, and are reviewed and 

approved by U.S. EPA as part of the SIP. It is these permit rules that require immediate 

attention to ensure that your District SIP rule complies with federal law and is updated in 

response to SB 700. Both federal and state law require "best available control 

technology" (BACT) and offsets for these sources. Any exemption for major sources 

from permit requirements that can arguably be considered to be in your District's rule 

and in the SIP must be removed. We urge you to do this as soon as possible, and no 

later than December 31, 2008. 

The second permit category is comprised of all agricl-~ltural sources that emit one-half or 

more of "any applicable emissions threshold for a major source" in your District, except 

for large confined animal facilities (CAF), which have their own permit and substantive 

requirements. (Please note that any CAFs that are "major sources" under the federal 

Clean Air Act must get permits as required by that Act.) The applicable emissions 

threshold varies by District, depending upon attainment status. Also, in accordance with 

section 42301.1 8, an agric~~~ltural source that existed before January I, 2004, and 

becomes subject to a District rule that was adopted prior to that date is to be permitted 

as an existing source, i.e., it needs a permit to operate, but not an authority to construct, 

based upon its potential to emit as of the effective date of SB 700. 

The third permit category is for smaller sources that emit less than one-half of the 

District's major source threshold. A District may require these sources to obtain permits 

only if the District affirmatively finds that such permits are necessary to control criteria 
Air Pollution Control Officers 

September 3, 2008 

Page 4 

pollutants and that a permit requirement would not be more burdensome for agricult~~ral 

sources than for similar nonmajor sources. (§ 42301.16(c).) ARB encourages, but is 

not currently requiring, Districts to consider treating these smaller agricultural sources 

the same way they treat other small sources, depending upon the air quality benefits 

that might result in your District. 

Agricultural sources that are required to have permits must be permitted in accordance 

with the California Clean Air Act requirements that pertain to BACT and "no net 

increase" (offsets), set forth in sections 40918, 40919, 40920, and 40920.5. With 

regard to offsets, SB 700 provides that "a district may not require an agricultural source 

to obtain emissions offsets for criteria pollutants for that source if ernissions reductions 

from that source would not meet the criteria for real, permanent, quantifiable, and 

enforceable emission reductions". (§ 42301.18(c).) 

This limited exemption from the offset requirement means that agricultural sources that 

are not amenable to District prohibitory rules or control measures that would qualify for 

SIP credit-or that are unable to generate emission reductions that would qualify as 

offsets-because they fail to meet one or more of the basic criteria for a creditable rule 

or for offset credit cannot be required to provide offsets. 

We believe this exemption is based upon considerations of equity. If a source cannot 

get credit for its emission reductions in the SIP or cannot qualify its surplus emission 

reductions for banking and later use as offsets, it should not be required to provide 

offsets. This exemption should be narrowly applied, and, in any event, cannot be used 

to exempt major federal sources from offset requirements. 

Permit provisions for sources considered "major sources" under federal law must be 

included in the SIP. While California law does not specifically require the o.ther pern-lit 

provisions to be included in the SIP, we encourage you to do so in order to gain federal 

enforceability-just as most Districts are currently doing for other types of sources. 

Amending your permit rules in a timely fashion will enhance California's ability to meet 

our air quality goals and will irr~plement California and federal law. ARB is aware that a 

handful of air districts face a special situation with regard to their SIPs. Our staff will 

work with these and other Districts, upon request, to amend their permit rules and SIPs, 

as necessary to comply with SB 700 and with federal Clean Air Act requirements. 
Air Pollution Control Officers 

September 3, 2008 

Page 5 

If you have any questions or desire assistance, please do not hesitate to call Mr. Robert 

Fletcher, Chief, Stationary Source Division, at (916) 324-8167 for technical issues, or 

Ms. Leslie Krinsk, Senior Staff Counsel, at (805) 473-7325 for legal questions. Please 

review your permit rules; we are committed to expedite SIP amendments that are 

submitted in response to this request. We appreciate your immediate attention to this 

important matter. 

( kxecutive Officer 

w 

cc: Ms. Deborah Jordan / 

United States Enviror~mental Protection Agency 

Region 9 

75 Hawthorne Street 

San Francisco, California 941 05 

Mr. Robert Fletcher, CI-lief 

Stationary Source Division 

Ms. Leslie Krinsk 

Senior Staff Counsel 

Office of Legal Affairs