ENVIRONMENTAL PROTECTION AGENCY 

40 CFR Part 52 

Approval and Promulgation of Implementation ~lks, State of. 

California, San Joaquin Valley Unified Air Pollution Control 

District, New Source Review 

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Proposed rule. 

SUMMAFtY: Under section 110(k)(6) of the Clean Air Act, EPA is 

proposing to correct our May 2004 final approval of revisions to 

the San Joaquin Valley Unified Air ~dllution Control District 

portion of the California State Implementation Plan. EPA is also 

proposing to take action on three amended District rules, one of 

which was submitted on March 7, 2008 and tde other two of which 

were submitted on March 17, 2009. Two of the submitted rules 

reflect revisions to approved District rules that provide for 

review of new and modified stationary sources ("new source 

review" or NSR) within the District, and the third reflects 

revisions to an approved District rule that provides a mechanism 

by which existing stationary sources may be exempt from the 

requirement to secure a federally-mandated operating permit. The 

NSR rule revisions relate to exemptions from permitting and from 

offsets for certain agricultural operations, to the establishment 

of NSR applicability and offset thresholds consistent with a 

classification of "extreme" nonattainment for the ozone standard, 
and to the implementation of EPAfs NSR Reform Rules. With respect 

/ 

' to the revised District NSR rules, EPA is proposing a limited 

approval and limited disapproval because, although the changes 

would strengthen the SIP, there are deficiencies in ) 

enforceability that prevent full approval. With respect to the 

operating permit rule, EPA is proposing a full approval. ~astly, 

EPA is proposing to rescind certain obsolete permitting 

requirements from the District portion of the. California plan. 

If EPA were to finalize the limited approval and limited 

di'sapproval action, as proposed, then a sanctions clock, and 

EPAfs obligation to promulgate a Federal implementation plan, 

would be triggered because certain revisions to the District 

rules that are'the subject of this action are required under 

anti-backsliding principles established for the transition from 

the 1-hour to the 8-hour ozone standard. 

DATE: Any comments must arrive by [Insert date 30 days from the 

date of publication in the Federal Register]. 

ADDRESSES: Submit comments, identified by docket number EPA-R09- 

OAR-2010-0062, by one of the following methods: 

Federal eRulemaking Portal: www.regulations.gov. Follow the 

on-li,ne instructions. 

E-mail: R9airpermits@epa.gov. 

Mail or deliver: Gerardo ~ib/s (Air-3) , U. S. Environmental 

Protection Agency Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105. 

Instructions: All comments will be included in the public docket 

without change and may be made available online at 

. ib TI.j ,,w. regulat i.or:s. gov, including any personal information provided, 

unless the comment includes Confidential Business Information 

(CBI) or other information whose disclosure is restricted by 

statute. Information that you consider CBI or otherwise protected 

should be clearly identified as such and should not be submitted 

through ivivw.reauldt~ons.q~~ or e-mail. www.regulations.gov is an 

"anonymous access" system, and EPA will not know your identity or 

contact information unless you provide it in the body of your 

comment. If you send e-mail directly to EPA, your e-mail address 

will be automatically captured and included as part of the public 

comment. If EPA cannot read your comment due to technical 

difficulties and cannot contact you for clarification, EPA may 

not be able to consider your comment. 

Docket: The index to the docket for this action is available 

\ 

electronically 'at wi*;ibT. r.eg;ll.atio;?s. qov and in hard copy at EPA 

Region IX, 75 Hawthorne Street, San Francisco, California. While 

all documen'ts in the docket are listed in the index, some 

information may be publicly available only at the hard copy 

location (e.g., copyrighted material), and some may not be 

publicly available in either location (e.g., CBI). To inspect the 

hard copy materials, please schedule an appointment during normal 
business hours with the contact listed in the FOR FURTHER 

INFORMATION CONTACT section below. 

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, Permits Off ice 

(AIR-3), U.S. Environmental Protection Agency, Region IX, (415) 

SUPPLEMENTARY INFORMATION: Throughout this document, "we," "us" 

and "our" refer to EPA. 

Table of Contents 

I. Regulatory Context 

11. Correction of EPA's May 2004 Final Approval 

A. CAA Legal Authority 

B. Background on District NSR Rules 2020 and 2201 and 

Related EPA Actions 

C. Correction of Erroneous Final Approval 

111. The State's Submittals of Revised District Rules 

A. What rules did the State submit? 

B. Are there other versions of these rules? 

C. What are the purposes for revisions to these rules? 

IV. EPA's Evaluation and Action on the Revised Rules 

A. How is EPA evaluating the rules? 

B. Do the rules meet the evaluation criteria? 

1. Regulatory Context 

2. Minor Source NSR Permitting Requirements 

3. "Extreme" Ozone Area NSR Requirements 
4. EPA's NSR Reform Rules 

5. Other Changes to District Rules 2020 and 2201 

6. Enforceability Considerations 

7. Federally Enforceable Restriction on Potential to 

Emit 

8. CAA Section 110(1) 

9. Conclusion and Proposed Action on Submitted Rules 

V. Deletion of Obsolete Conditions on SIP Approvals 

VI. Proposed Action and Opportunity for Public Comment 

VII. Statutory and Executive Order Reviews 

I. Regulatory Context 

On February 20, 2008 (73 FR 9260), under sections 110 (k) (2) 

and 110(k) (6) of the Clean Air Act (CAA or "Act"), we proposed to 

correct our May 2004 final approval of revisions to the San 

Joaquin Valley Unified Air Pollution Control District ("SJVUAPCD" 

or "District") portion of the California State Implementation 

Plan ("SIP") and to approve revisions to two District rules 

submitted to EPA by the California Air Resources Board (CARB) on c 

December 29, 2006.l The specific provisions proposed for approval 

The San Joaquin Valley includes all of San Joaquin, Stanislaus, Merced, 

Madera, Fresno, Kings and Tulare counties, and the western half of Kern 

County, in the State of California. The San Joaquin Valley is designated as a 

nonattainment area for the 1997 8-hour ozone national ambient air quality 

standard (NAAQS) and the 1997 fine particulate matter (PM2.5) NAAQS and is 

designated as attainment or unclassifiable for the other NAAQS. See 40 CFR 

81.303. The area is further classified as "serious" for the 8-hour ozone 

NAAQS, but the State of California has submitted a request to reclassify the 

area to "extreme." See 74 FR 43654 (August 27, 2009) for EPA's proposed 

approval of the State's reclassification request. The San Joaquin Valley was 

further classified as an "extreme" area for the now-revoked 1-hour ozone NAAQS 
b 

included paragraph 6.20 of District Rule 2020 ("Exemptions") and 

paragraph 4.6.9 of District Rule 2201 ("New and Modified 

Stationary Source Review Rule"). These provisions relate to 

review and permitting of new or modified stationary sources 

("NSR") specifically in connection with agricultural sources. We 

received substantive comments on our proposed rule, and, since 

publication of the February 2008 proposed rule, the District has 

adopted further revisions to Rules 2020 and 2201 that have been 

submitted to EPA for approval by CARB. The further amended 

District rules carry forward the revisions submitted on December 

29, 2006 but reflect more recent changes by the District as well. 

In light of the comments on our February 2008 proposed rule, and 

the more recent submittals of District Rules '2020 and 2201, we 

have decided not to take any further action on our February 2008 

proposed rule, but rather to propose action anew. Published in 

today's Federal Register is a withdrawal of our February 20, 2008 

proposed rule. 

11. Correction of EPArs May 2004 Final Approval 

A. CAA Legal Authority 

Section 110(k)(6) of the Clean Air Act, as amended in 1990, 

provides: "Whenever the Administrator determines that the 

Administrator's action approving, disapproving, or promulgating 

any plan or plan revision (or part thereof), area designation, 

when EPA designated the area with respect to the 8-hour ozone NAAQS. 
redesignation, classification or reclassification was in error, 

the Administrator may in the same manner as the approval, 

disapproval, or promulgation revise such action as appropriate 

without requiring any further submission from the State. Such 

determination and the basis thereof shall be provided to the 

State and the public." 

We interpret this provision to authorize the Agency ,to make 

corrections to a promulgated regulation when it is shown to our 

satisfaction (or we discover) that (1) we clearly erred by 

failing to consider or by inappropriately considering information 

made available to EPA at the time of the promulgation, or the 

information made available at the time of promulgation is 

subsequently demonstrated to have been clearly inadequate, and 

(2) other information persuasively supports a change in the 

regulation. See 71 FR 75690, at 75693 (December 18, 2006); 57 FR 

56762, at 56763 (November 30, 1992). 

B. Background on District NSR Rules 2020 and 2201 and Related EPA 

Actions 

EPA originally approved District NSR Rules 2020 

("Exemptions") and 2201 ("New and Modified Stationary Source 

Review Rule") into the California SIP on July 19, 2001 (66 FR 

37587) .2 EPA's July 19, 2001 action was, however, a limited 

- Rules 2020 and 2201 were adopted by the District to meet NSR requirements 

under the Clean Air Act, as amended in 1990, for areas that have not attained 

the National Ambient Air Quality Standards (NAAQS). District Rules 2020 and 
8 

approval and limited disapproval reflecting our conclusion that 

District Rules 2020 and 2201 could not be fully approved as 

meeting all applicable requirements because, among other reasons, 

District Rule 2020 exempted all agricultural sources from 

District permitting requirements. 66 FR at 37590. At that time, 

District Rule 2020, citing California Health & Safety Code 

(CH&SC) section 42310(e), included a permitting exclusion for 

"any equipment used in agricultural operations in the growing of 

crops or the raising of fowl or animals," except for certain 

orchard and citrus grove heaters in the southern portion of the 

Di~trict.~ Our limited disapproval stated that the District could 

not exempt major stationary sources or major modifications at 

existing major sources from NSR requirements and be found to meet 

applicable CAA requirements. 4 

To correct this deficiency, the District adopted a revision 

to Rule 2020 which eliminated the agricultural permitting 

exemption in its entirety, and CARB submitted the revised Rule 

2020 to EPA on December 23, 2002 as a revision to the California 

SIP. In response, on February 13, 2003, EPA proposed several 

2201 replaced existing NSR rules from the individual county air pollution 

control districts that were combined into the San Joaquin Valley Unified Air 

Pollution Control District ("District") in 1991. 

" For more information on the status of the state law exclusion from 

permitting for agricultural sources in the California SIP, please see the 

related proposed rule published in today's Federal Register. 

"District NSR permitting rules do not adopt the distinction between minor 

sources and major sources as set forth under the CAA. District Rules 2020 and 

2201 generally apply to both federal. minor and major stationary sources. Our 

limited approval and limited disapproval specified that the rule deficiency 

was exempting major agricultural sources and major modifications. See 65 FR 
9< 

actions regarding the exemption of agricultural sources from 

major source NSR permitting requirements. First, EPA proposed 

approval of revised District Rule 2020. See 68 FR 7330 (February 

13, 2003).' In that notice, EPA specifically noted that 

"California Health & Safety Code 42310(e) continues to preclude 

the District, as well as all other districts in California, from 

permitting agricultural sources under either title I or title V 

of the CAA." See 68 FR 7330, at 7335. 

To address this issue, EPA published a proposal finding that 

California's statutory exemption of agricultural sources in CH&SC 

section 42310(e)x from major source NSR permitting rules violated 

the requirements of CAA section 110 (a) (2) (E) . See 68 FR 7327 

(February 13, 2003). This action, titled "Finding of Substantial 

Inadequacy of Implementation Plan; Call for California State 

Implementation Plan Revision" (hereinafter "SIP Call"), 

determined that California lacked adequate legal authority to 

carry out its NSR permitting requirements because CH&SC section 

42310(e) exempted major agricultural 'sources. EPA finalized the 

SIP Call on June 25, 2003, and thereby required California to 

submit the necessary assurances of authority by November 23, 2003 

to support an affirmative finding by EPA under CAA section 

110 (a) (2) (E) . If the State failed to submit the necessary 

58252, at 58254 (September 28, 2000). ' EPA also published an Interim Final Determination that SJVUAPCD had 

corrected the July 2001 limited approval deficiencies and EPA stayed or 

deferred the imposition of CAA sanctions on the District. See 68 FR 7321. 
assurances, then EPA indicated that the sanctions clock under CAA 

section 179 would be triggered.6 See 68 FR 37746 (June 25, 2003). 

Later that summer, the California legislature enacted Senate 

Bill (SB) 700, which the Governor of California signed on 

September 22, 2003. SB 700 removed the wholesale exemption from 

permitting for agricultural sources provided under CH&SC section 

42310(e) and subjected major agricultural sources to permitting 

requirements. SB 700, .however, retained exemptions for new source 

permitting for certain minor agricultural sources, and limited 

the ability to require minor agricultural sources to obtain 

federal offsets.' California notified EPA of the legislature's 

action by letter dated November 3, 2003 thereby avoiding the 

triggering of a sanctions clock. California enclosed a copy of SB 

700 with the November 3, 2003 letter. 8 

"n May 22, 2002, EPA issued a Notice of Deficiency for California's Title V 

program based on the exemption of agricultural sources from Title V 

permitting. See 67 FR 35990 (May 22, 2002). EPAts decision was upheld..See 

California Farm Bureau Fed'n v, EPA, No. 02-73371 (9th Cir. July 15, 

2003) (memorandum opinion) . AS explained in Section 1I.C below, sources with emissions below 50 percent 

of the major source threshold are exempt from permitting unless the District 

makes certain findings, while sources at or above 50 percent of the major 

source threshold are subject to permitting unless the District makes certain 

findings. See CH&SC section 42301.16(b) and (c). In addition, offsets may not 

be required unless they meet the criteria for real, permanent, quantifiable, 

and enforceable emission reductions. See CH&SC section 42301.18(c). 

It is worth noting that EPA and California interpret CH&SC section 

42301.16(a) to require all sources that emit or have the potential to emit at 

or above the major source threshold to be subject to new source permitting and 

offset requirements, as required by the Clean Air Act, without regard to the 

provisions of sections 42301.16(c) or 42301.18(c). Thus, an agricultural 

source with actual emissions less than 50 percent of the major source 

threshold but potential emissions above the major source threshold is subject 

to new source permitting and offset requirements. 

"ee Letter from Bill Lockyer, Attorney General, California Office of the 

Attorney General, to Marianne Horinko, Acting Administrator, EPA, dated 

November 3, 2003. 
11 

On May 17, 2004, EPA took final action approving the 

District's permitting rules, Rules 2020 and 2201, as proposed in 

February 2003. See 69 FR 27837 (May 17, 2004). These rules, as 

approved by EPA, did not on their face exempt any agricultural 

sources from permitting or limit the applicability of offset 

requirements. EPA's final approval stated that the District had 

removed its exemption for agricultural sources and that the Btate 

had also "removed a similar blanket exemption, thereby providing 

the District with authority to require air permits for 

agricultural sources, including federally required NSR permits." 

See 69 FR 27837, at 27838. EPA's final approval cited SB 700 in a 

footnote, but did not note the limited scope of authority for 

permitting and offset requirements under SB 700, which allowed 

permitting of only certain minor agricultural sources. 

C. Correction of Erroneous Final Approval 

In this instance, we believe that our May 2004 final full 

approval of District Rules 2020 and 2201 was erroneous. For all 

SIP revisions, States must provide evidence that the State has 

the necessary legal authority under State law to adopt and 

implement the plan. See CAA section 110(a)(2)(E); 40 CFR part 51, 

appendix V, section 2.l(c). Thus, to support the approval CARB 

was required in December 2002 to provide evidence that the 

District had the necessary legal authority under State law to 

implement Rules 2020 and 2201, which purported to require permits 
and offsets for all agricultural sources. CARB could nob have C 

done so because CH&SC section 42310(e), applicable at that time, 

continued to preclude such authority under State law with respect 

to all agricultural sources. 

Nonetheless, we proposed to fully approve Rules 2020 and 

2201 on February 13, 2003, with the expectation that the 

California legislature would act to remove CH&SC section 

42310(e)'s exemption for agricultural sources thereby aligning 

/ 

Rule 2020 with District authority under State law. 68 FR 7330 

(Feb. 13, 2003). While the legislature did act shortly thereafter 

to remove the exemption for major agricultural sources and major 

modifications at existing major agricultural sources, the 

legislature also retained the exemption from permitting for 

certain minor agricultural sources, leaving the words of Rule 

2020 broader than the District's authority under State law. The 

legislature also exempted minor agricultural sources from 

obtaining offsets pending a determination that emissions 

reductions from such sources meet certain criteria, leaving Rule 

2201, on its face, also at odds with State law. 

As noted above, on May 17, 2004, EPA took final action to 

approve District Rules 2020 and 2201, as proposed in February 

2003. See 69 FR 27837 (May 17, 2004). We now understand that our 

final approval action on Rules 2020 and 2201 should have ensured 

that the authority in those rules was consistent with the 
1 

13 

authority granted by SB 700. At that time, since the ~istrict had 

made no findings to broaden (above 50 percent of the major source 

threshold) or narrow the permitting exemption (below 50 percent 

of the major source threshold), as allowed under SB 700 and now 

codified in CH&SC sections 42301.16(b) and (c), the permitting 

exemption provided by State law applied to minor agricultural 

sources with actual emissions less than 50 percent of the major 

source threshold, Thus, we should have limited our approval of 

Rule 2020 to exclude applicability to agricultural sources exempt 

from new source permitting under SB 700 (i.e., minor sources with 

actual emissions less than 50 percent of the major source 

threshold). Our approval of Rule 2201 should have been limited to 

provisions requiring offsets for major agricultural sources, 

because at the time, the District had not found emissions 

reductions from agricultural sources to meet the criteria for 

real, permanent, quantifiable, and enforceable emissions 

reductions and thus did not invoke the authority otherwise 

provided in SB 700 (and codified in CH&SC section 42301.18(c)) to 

impose an offset requirement on new or modified minor 

agricultural sources. Given that California submitted a copy of 

SB 700 in November 2003, we had information indicating that the 

District did not have the authority to implement Rules 2020 and2201 to the extent that the language of the rule appeared to 

allow (i,e,, to require permits and offsets from all new or 
14 

modified agricultural sources, including those exempt under SB 

700) prior to the time we took final action. We should have 

limited our approval of Rules 2020 and 2201 to conform with SB 

700, and promulgated language in 40 CFR part. 52 codifying that 

limitation on our approval. 

We note that recent enforcement actions have been brought 

pursuant to the CAA's citizen suit provisions against minor 

agricultural sources in the District that have emissions less 

than 50 percent of the major source threshold for failure to 

apply for and receive a new or modified source permit. The 

District, however, does not have the authority under State law to 

issue such permits. The fact that such cases are being brought 

persuasively supports the need to correct our error in approving 

Rules 2020 and'2201 in 2004. 

Therefore, pursuant to CAA section 110(k)(6), we are 

proposing to correct our error by limiting our approval of Rules 

2020 and 2201 to apply only to the extent the District has 

authority under state law to require permits and offsets. 

Specifically, with respect to agricultural sources, we are 

approving Rule 2020 only to the extent it applies to agricultural 

sources subject to permitting under SB 700. Also and again with 

respect to agricultural sources, we are approving Rule 2201 only 

to the extent it requires offsets for new major sources and major 

modifications until certain criteria set forth in state law are 
met. To codify this proposed error correction, we are proposing 

the following language to be added as a new section, 52.245, of 

40 CFR part 52, subpart F ("California") : 

52.245 New Source Review Rules 

(a) Approval of the,New Source Review rules for the San 

JoaquinqValley Unified Air Pollution Control District Rules 

2020 and 2201 as approved May 17, 2004, is limited, as it 

relates to agricultural sources, to apply the permit 

requirement only (1) to agricultural sources with potential 

emissions at or above a major source applicability threshold 

and (2) to agricultural sources with actual emissions at or 

above 50 percent of a major source applicability threshold. 

The offset requirement, as it relates to agricultural 

sources, does not apply to new minor agricultural sources 

and minor modifications to agricultural sources. 

In section IV of this document, we are proposing a limited 

approval/limited disapproval on subsequent submittals of District 

Rules 2020 and 2201 that carry forward the agricultural-sourcerelated provisions for which we proposed action in February 2008, 

but that reflect subsequent additional changes made by the 

District to the rules. If we finalize this action, as proposed, 

we intend to codify the above language to clarify the status of 

affected sources that were constructed or were modified during 

the period extending from the effective date of our February 2004 
final rule e., June 16, 2004) through the effective date of 

our action on revised District Rules 2020 and 2201 as described 

in 'section IV of this document. 

111. The State's Submittals of Revised District Rules 

A. What rules did the State submit? 

Table 1 lists the rules on which we are proposing action in 

this document with the dates that they were revised by the 

District and submitted to EPA by CARB. 

\. TABLE 1.--SUBMITTED RULES 

On April 17, 2008, we found that the submittal of District 

Rule 2020 met the completeness criteria in 40 CFR part 51 

appendix V, which must be met before formal EPA review. On April 

20, 2009, we found the submittal of District Rules 2201 and 2530 

to be complete. 

Local 

Agency 

SJVUAPCD 

S JVUAPCD 

SJVUAPCD 

B. Are there other versions of these rules? 

As discussed above, we approved a version of Rule 2020 into 

the SIP on May 17, 2004 (69 FR 27837) . On December 29, 2006, CARB 

submitted an amended version of District Rule 2020. On December 

Rule # 

2020 

2 2 0 1 

2530 

Rule Title 

Exemptions 

New and Modified Stationary 

Source Review Rule 

Federally Enforceable 

Potential to Emit 

Amended 

12/20/07 

12/18/08 

12i18/08 

Submitted 

03/07/08 

03/17/09 

03/17/09 
17 

20, 2007, the District adopted further amendments to Rule 2020, 

and CARB submitted the further amended rule to us on March 7, 

2008. The revision to District Rule 2020 that CARB submitted on 

December 29, 2006 was carried forward with the version that was 

submitted on March 7, 2008 and for which we propose action today. 

We also approved a version of Rule 2201 into the SIP on May 

17, 2004 (69 FR 27837). Since our May 2004 approval of Rule 2201 

into the SIP, the District has amended the rule on four 

occasions. One of those amendments added paragraph 4.6.9 to the 

rule. On December 29, 2006, CARB submitted only paragraph 4.6.9 

from District Rule 2201 to EPA. On December 18, 2008, the 

District adopted the latest amendments to Rule 2201. On March 17, 

2009, CARB submitted this latest version of District Rule 2201 to 

us. This latest version of District Rule 2020 that CARB submitted 

on March 17, 2009 carries forward with it all of the changes, 

including new paragraph 4.6.9, that the District has made in the 

rule since our May 2004 approval. 

Prior to our 2004 approval of Rules 2020 and 2201, the 

SJVUAPCD portion of the California SIP included a broad exemption 

from permitting for all agricultural sources, citing CH&SC 

section 42310(e). See section 4.0 of District Rule 2020, as 

amended on September 17, 1998, submitted on October 27, 1998, and 

approved on July 19, 2001 at 66 FR 37587. 

Lastly, we approved a version of Rule 2530 into the SIP on 
18 

April 26, 1996 (61 FR 18500). Since EPA's 1996 approval of Rule 

2530 into the SIP, the District has amended Rule 2530 twice, once 

on April 25, 2002 and then again on December 18, 2008. On March 

17, 2009, CARB submitted this latest version of District Rule 

2530 to us, and it includes all amendments to the rule by the 

District to date. 

Section 110(a) of the CAA requires states to submit 

regulations that control volatile organic compounds, nitrogen 

oxides, particulate matter, and other air pollutants which harm 

human health and the environment. Permitting rules were developed 

as part of the local air district's programs to control these 

pollutants. 

The purpose of District Rule 2020 ("Exemptions") is to 

specify emission units that are not required to obtain an 

Authority to Construct or Permit to Operate. Rule 2020 also 

specifies the recordkeeping requirements to verify such 

exemptions and outlines the compliance schedule for emission 

units that lose the exemption. 

Relative to the version of Rule 2020 that is approved into 

the SIP, the changes would revise and clarify certain exemptions 

and conform the rule to existing state law by explicitly 

exempting certain agricultural sources from permitting 

requirements. Specifically, the changes in District Rule 2020 
would: 

Revise the existing exemption for steam generators, steam 

superheaters, water boilers, water heaters, steam cleaners, 

and closed indirect heat transfer systems that have a 

maximum input heat rating of five million Btu per hour or 

less and that are fired exclusively on natural gas or 

liquefied petroleum gas (LPG) (see paragraph 6.1.1 of the 

submitted rule). The existing exemption is limited to the 

types of equipment described above but also establishes the 

following specifications for both natural gas and LPG 

combusted by the equipment: "provided the fuel contains no 

more than five percent by weight hydrocarbons ... and no 

more than 0.75 grains of total sulfur per 100 standard cubic 

feet of gas ... ." The revised exemption would establish 

separate specifications for natural gas and for LPG. The 

hydrocarbon content limit would remain five percent for 

natural gas but would drop to two percent for LPG. The 

sulfur content limit would increase from 0.75 grains, to 1.0 

grain for natural gas, and to 15 grains (per 100 standard 

cubic feet of gas). The revised exemption would require use 

of the latest versions of the relevant ASTM test methods. 

Clarify and tighten the existing exemption for certain types 

of transfer equipment, such as loading and unloading racks, 

and equipment used exclusively for the transfer of refined 
20 

lubricating oil (see paragraph 6.7 of the submitted rule). 

Specifically, with respect to crude oil, the existing 

exemption establishes a limiting specification in terms of 

specific gravity, and the revised exemption would add a 

second limiting specification in terms of True Vapor 

Pressure (TVP) and would establish certain test methods for 

determining the TVP of crude oil; and 

Conform District permit requirements to State law by 

explicitly exempting agricultural sources to the extent such 

sources are exempt pursuant to CH&SC section 42301.16 (see 

paragraph 6.20 of the submitted rule). Section 42301.16(a) 

requires local air permittin'g authorities to require permits 

for agricultural sources subject to the requirements of title 

I or title V of the federal Clean Air Act. Section 

42301,16(b) similarly requires permits for all agricultural 

sources unless specified findings are made at a public 

hearing or except as provided in section 42301.16(c). Section 

42301.16(c) requires the District to make specified findings 

at a public hearing prior to requiring permits for 

agricultural sources with emissions that are less than onehalf of any major source threshold. The net effect of this 

section is that all agricultural sources with actual 

emissions or a potential to emit at or above a major source 

applicability threshold are required to obtain a District 
permit pursuant to CH&SC section 42301.16(a). Agricultural 

sources with actual emissions at or above 50 percent of a 

major source applicability threshold are required to obtain a 

District permit, unless the District makes the findings 

specified by subsection (b). No permits are required for 

agricultural sources with actual emissions of less than 50 

percent of any major source applicability thresholds, unless 

the District makes the findings specified in subsection (c), 

subject to the limitation in CH&SC section 42301(a). 

The purpose of District Rule 2201 ("New and Modified 

Stationary Source Review Rule") is to provide for the review of 

new and modified stationary sources of air pollution and to 

provide mechanisms including emission trade-offs by which 

Authorities to Construct such sources may be granted, without 

interfering with the attainment or maintenance of ambient air 

quality standards. District Rule 2201 is also intended to provide 

for no net increase in emissions above specified thresholds from 

new and modified stationary sources of all nonattainment 

pollutants and their precursors. 

Key features of District Rule 2201 include: 

Best Available Control Technology (BACT)': mandates emission 

controls to minimize emission increases above de minimis 

values. 

While the District uses the term BACT as the level of control required, a 
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 (ERCs). 

Public notification: a 30 or 45 day notice period prior to 

issuance of an Authority to Construct (ATC) to accept 

comments on projects that result in emissions above 

specified levels. 

Required elements for Authority to Construct, Permit to 

Operate and administrative requirements for processing NSR 

applications. 

As submitted on March 17, 2009, District Rule 2201 

incorporates three major changes relative to the version of Rule 

2201 that is approved into the SIP. First, amended District Rule 

2201 would replace the term, "Major Modification," with two 

terms, "Federal major modification" and "SB 288 major 

modification." (See paragraphs 3.17 and 3.34 of the amended 

rule.) The former term incorporates EPArs NSR reform principles, 

and the latter term retains the pre-NSR reform approach to 

determining whether a modification is a major modification. 

Second, amended District Rule 2201 would incorporate the lower 

"major source" and "Federal major modification" emissions 

thresholds, and higher offset ratios, for the ozone precursors, 

review of the definition has shown that it is equivalent to the requirements 
23 

VOC and NO,, consistent with an "extreme" ozone classification. 

(See paragraphs 3.17, 3.23, and 3.34 of the amended rule). 

Lastly, changes to District Rule 2201 would conform the rule to 

existing state law by exempting new or modified agricultural 

sources from offset requirements, unless the offsets are required 

by federal CAA requirements. (See paragraph 4.6.9 of the amended 

rule. ) 

Other changes in amended Rule 2201 would: 

Tighten one of the conditions that qualify a replacement of 

"any article, machine, equipment, or other contrivance" as a 

"Routine Replacement;" the existing rule requires that such 

a replacement, among other conditions, not result in an 

increase in permitting emissions from the "stationary 

source," whereas, the modified definition of the term 

"routine replacement" requires no such increase from the 

"replacement unit(s) (see paragraph 3.33.1 of the amended 

rule) ; 

Expressly extend the existing emission offset exemption for 

portable equipment to equipment registered in accordance 

with the provisions of District Rule 2250 (Permit-Exempt 

Equipment Registration) (see paragraph 4.6.3 of the amended 

rule). The existing exemption covers portable equipment 

registered under District Rule 2280 (Portable Equipment 

for federal LAER. 
24 

Registration) or under the Statewide Portable Equipment 

Registration Program. Existing District Rule 2020 provides a 

permitting exemption for portable emissions units covered by 

a valid registration under the above registration programs 

"or other equipment registration program approved by the 

APCO." District Rule 2250 is such a program, and thus, 

portable equipment registered under District Rule 2250 are 

exempt, not just from the emission offset requirement, but 

also from the requirement for a permit. However, the 

District expressly added a reference to equipment registered 

under District Rule 2250 in the emission offset exemption 

portion of Rule 2201 to provide consistency with similar 

exemptions for portable equipment and to avoid confusion; 

and 

Provide for a lower offset ratio (from 1.5 to 1.2) in the 

event EPA approves a demonstration that all existing major 

sources of VOC and NO, in the San Joaquin Valley are equipped 

with BACT as defined in CAA section 169(3) (see paragraph 

4.8.2 of the amended rule). This change amends the SIP to add 

the lower offset ratio provision contained in CAA section 

182(e)(1). The lower offset ratio referred to in paragraph 

4.8.2 has no current effect, because the required 

demonstration has not been submitted to EPA. Moreover, EPA 

would be reviewing any such demonstration, most likely as a 
25 

SIP revision, and that review would include a review for 

compliance with the relevant statutory provision in CAA 

section 182(e) (1). 

Unlike District Rules 2020 and 2201, District Rule 2530 

("Federally Enforceable Potential to Emit") is not an NSR rule, 

but is a rule that relies on thresholds based on certain 

percentages of the major source thresholds established for NSR 

purposes as a basis to exempt sources from the requirements of 

Rule 2520 ("Federally Mandated Operating Permits"). Relative to 

the corresponding rule in the existing SIP, the amended rule 

would lower the thresholds below which sources of VOC or NO, are 

exempt from the requirements of Rule 2520 (see paragraph 6.1 of 

the amended rule), would lower the thresholds below which sources 

are exempt from certain recordkeeping and reporting requirements 

under Rule 2530 (see paragraph 5.4.1.2 of the amended rule); and 

would lower certain alternative operational limits (see, e-g., 

paragraph 6.2.4 of the amended rule). 

IV. EPA1s Evaluation and Action on the Rule Revisions 

The rules that are the subject of this proposed action amend 

rules that EPA has previously approved as meeting the statutory 

and regulatory requirements for SIPS regarding minor NSR, major 

nonattainment NSR, and enforceability of permit conditions. 

Therefore, we have focused our review on the changes in the rules 
2 6 

relative to the versions of the rules in the existing SIP to 

ensure the amended rules continue to meet the applicable 

requirements, taking into account that, in some instances, such 

as the "major source" threshold requirement, the applicable 

requirements have changed since we last acted on these rules. 

The relevant statutory provisions for our review of the 

submitted rules include CAA section 110(a), section 110(1), and 

section 182(e) and (f). Section 110(a) requires that SIP rules be 

enforceable, while section 110(1) precludes EPA approval of SIP 

revisions that would interfere with any applicable requirement 

concerning attainment and reasonable further progress or any 

other applicable requirement of the Act. Section 182(e) (together 

with section 182 (f) for NO,), requires NSR SIPS in "extreme" 

nonattainment areas to define "major sources" in terms of 10 tons 

per year of VOC or NO,, to lower the threshold for "major 

modifications" to zero, and to increase the offset ratio to 1.5 

to 1. In addition, we have reviewed the submitted rules for 

compliance with EPA implementing regulations for NSR, including 

40 CFR 51.160 through 40 CFR 51.165. 

B. Do the rules meet the evaluation criteria? 

1. Regulatory Context 

Other than rule clarifications and other minor revisions, 

the changes to the District's rules that are the subject of this 

action fall into four broad categories: changes affecting minor 
27 

source NSR permitting requirements; changes relating to the 

area's extreme classification for the 1-hour ozone standard; 

changes relating to NSR Reform; and changes affecting the 

mechanism used by sources to avoid title V requirements. 

First, however, to provide the proper context for evaluating 

the submitted changes in the District's rules, it is important to 

consider the designations and plan status for the valley with 

respect to the relevant national ambient air quality standards. 

Area designations for California are set forth in 40 CFR 81.305 

and shown in table 2, below. As shown in table 2, the San Joaquin 

Valley Air Basin is designated "nonattainment" for'the 1997 8- 

hour ozone standard. With respect to particulate matter, the 

valley is designat'ed "attainment" for PMl0 and "nonattainment" 

for PM2.5. 

TABLE 2.--SAN JOAQUIN VALLEY AREA DESIGNATIONS 

Pollutant 

(Revoked) Ozone - 

1-hour standard 

Ozone - 1997 8- 

hour standard 

Respirable 

Particulate 

Matter (PMlo) 

Fine Particulate 

Matter (PM2.5) 

Carbon Monoxide 

Designation 

Nonattainment 

Nonattainment 

Attainment 

Nonattainment 

Attainment (4 urban 

areas); Unclassifiable/ 

Attainment (rest of 

valley) 

Classification 

Extreme (at the 

time of designation 

for the 1997 8-hour 

ozone standard) 

seriousa 

Not Applicable 

Not Applicable 

Not Applicable 
As to ozone, the valley is classified as a "serious" ozone 

nonattainment area for the 1997 8-hour ozone standard, but the 

State of California has requested reclassification of the area to 

"extreme." See 74 FR 43654 (August 27, 2009) . The designation of 

an area as "nonattainment" triggers certain SIP planning 

requirements, and on November 16, 2007, the State of California 

responded to those requirements by submitting the San Joaquin 

Valley 2008 Ozone Plan to EPA as a revision to the California 

SIP. EPA has not yet acted on the plan. Significantly, because, 

as a general matter, the SIP requirements that applied by virtue 

of an area's classification for the now-revoked 1-hour ozone 

standard continue to apply to an 8-hour ozone nonattainment area, 

we note that the San Joaquin Valley was designated as an 

"extreme" nonattainment area for the 1-hour ozone standard at the 

time of designation for the 8-hour ozone standard. Recently, EPA 

approved the San Joaquin Valley 2004 Ozone Plan, which had been 

developed to address the SIP requirements for "extreme" areas for 

the 1-hour ozone standard. 

As to PMlo, in 2008, EPA approved a redesignation request 

Nitrogen Dioxide 

Sulfur Dioxide 

a The State of California has requested reclassification of the 

San Joaquin Valley to "extreme" for the 1997 8-hour ozone 

standard. See 74 FR 43654 (August 27, 2009). 

Unclassifiable/Attainment 

Unclassifiable/Attainment 

Not Applicable 

Not Applicable 
29 

for the area from "nonattainment" to "attainment". for the PMlo 

standard and also approved the San Joaquin Valley 2007 PMlo 

Maintenance Plan as a revision to the California SIP. See 73 FR 

66759 (November 12, 2008). 

As to PM2.5, in 2005, EPA designated th'e valley 

"nonattainment" for the 1997 PM2.5 standards. In response, on June 

30, 2008, the State of California submitted the San Joaquin 

Valley 2008 PM2.5 Plan as a revision to the California SIP. EPA 

has not yet taken action on the plan. More recently, EPA 

designated the valley as nonattainment for the more stringent 24- 

hour PM2.5 standard promulgated by EPA in 2006. See 74 FR 58688 

(November 13, 2009)(Air Quality Designations for the 2006 PM2.5 

NAAQS ) . 

With respect to carbon monoxide, the valley, outside of four 

urban areas, is designated as "unclassifiable/attainment." 

Bakersfield, Fresno, Modesto, and Stockton, the four urban areas 

where violations of the carbon monoxide standard had been 

monitored during the 1970's and 1980rs, were redesignated from 

"nonattainment" to "attainment" in 1998. Lastly, the valley is 

designated as unclassifiable or attainment for the nitrogen 

dioxide and sulfur dioxide standards. 

2. Minor Source NSR Permitting Requirements 

a. General Considerations 

The amended rules would affect minor source NSR ("minor 
30 

NSR") by revising an e2isting permitting exemption for certain 

natural-gas- or LPG-fired combustion and heat transfer systems 

(see paragraph 6.1 in submitted District Rule 2020), by exempting 

minor agricultural sources with emissions less than 50 percent of 

- 

the major source threshold (see paragraph 6.20 in submitted 

District Rule 2020) from permitting, and by exempting all new or 

modified minor agricultural sources from the offset requirement 

(see paragraph 4.6.9 of submitted District Rule 2201). 

The requirements in 40 CFR 51.160 ("Legally enforceable 

procedures"), subsections (a) and (e) provide the basis for 

evaluating exemptions from NSR permitting. The basic purpose of 

NSR permitting is set forth in 40 CFR 51.160(a). Section 

51.160(a) requires NSR SIPS to set forth legally enforceable 

procedures that enable the State or local agency to determine 

whether the construction or modification of a stationary source 

would result in a violation of applicable portions of the control 

strategy; or would result in interference with attainment or 

maintenance of a national standard in the State in which the 

proposed source or modification is located or in a neighboring 

state. Section 51.160(e) provides that the procedures must 

identify types and sizes of stationary sources, which will be 

subject to review. We view this provision as allowing a State to 

exempt certain types and sizes of stationary sources so long as 

the prpgram continues to serve the purposes outlined in 40 CFR 
31 

51.160(a). Thus, the revised exemption for certain natural gas or 

LPG-fired boilers, and the exemption from permitting for nonmajor agricultural sources whose actual emissions (excluding 

fugitive dust) are less than 50 percent of the major source 

thresholds are approvable so long as the minor source permitting 

program (i.e., including the exemption) continues to provide the 

necessary information to allow the District to determine whether 

new or modified stationary sources would result in a violation of 

applicable portions of the control strategy or would result in 

interference with attainment or maintenance of a national 

standard. In other words, exemptions are approvable if it can be 

shown that it is not necessary to review exempt sources in order 

to meet the purposes of 40 CFR 51.160(a). 

Under 40 CFR 51.160, the District has discretion in 

conducting its minor source permitting program to exempt certain 

small sources and, under federal law, minor sources are not 

required to obtain offsets. Congress directed the States to 

exercise the primary responsibility under the CAA to tailor air 

quality control measures, including minor source permitting 

programs, to the State's needs. See Train v. NRDC, 421 U.S. 60, 

79 (1975) (States make the primary decisions over how to achieve 

CAA requirements) ; Union Electric Co. v. EPA, 427 U.S. 246 

(1976); Greenbaum v. EPA, 370 F.3d 527 (6th Cir. 2006). 

b. Analysis 
32 

With respect to certain smaller combustion and heat transfer 

systems (steam generators, water boilers, etc.), amended Rule 

2020 revises the existing permitting exemption in paragraph 6.1.1 

of the rule by providing separate fuel specifications for natural 

gas and LPG for those types of equipment eligible for the 

exemption. The hydrocarbon specification would remain unchanged 

for natural gas but would be tightened for LPG from five percent 

to two percent (by weight). With respect to sulfur content, the 

fuel specification would be relaxed from 0.75 grains (of total 

sulfur per 100 standard cubic feet of gas) to 1.0 grain (for 

natural gas) and 15 grains (for LPG). Theoretically, the effect 

of this change would be that certain combustion and heat transfer 

systems, that otherwise would be covered by the permit 

requirement, would avoid NSR, and would not be subject to the 

applicable controls, such as BACT and offsets, thereby resulting 

in emissions increases that may or may not be accounted for in 

regional plans intended to attain or maintain the national 

standards. 

In response to a query from EPA concerning potential 

emissions impacts in the relaxation of the sulfur content 

specifications, the District explained how, notwithstanding the 

permitting exemption, certain prohibitory rules, such as Rule 

4308 (Boilers, Steam Generators, and Process Heaters 0.075 to 2 

MMBtu/hr) and Rule 4307 (Boilers, Steam Generators, and Process 
Heaters 2 to 5 MMBtu/hr) would still apply. See the District's 

November 13, 2009 memorandum, which we have placed in the docket 

for this rulemaking. Moreover, the District explained how, even 

if the BACT requirement were triggered by a source that otherwise 

would be exempt due to the relaxed sulfur content specification, 

BACT for emissions of sulfur oxides has historically been the use 

of LPG or natural gas, which is already a precondition for 

application of the exemption in the first place.1° We find the 

District's explanation sufficient to find that the relaxed sulfur 

content specification in amended Rule 2020, paragraph 6.1, would 

have no significant impact on emissions in the valley. 

In evaluating the limited permitting exemption for 

agricultural sources for consistency with 40 CFR 51.160(a), EPA 

is taking into account the specific pollutants emitted from 

agricultural operations, relevant non-permitting requirements, 

and regional air quality plans. First, California law defines 

"agricultural source" as a source of air pollution or group of 

sources used in Che production of crops or the raising of fowl or 

animals located on contiguous property under common ownership or 

control that is a confined animal facility (e.g., barn, corral, 

coop); is an internal combustion engine used in the production of 

crops or the raising of fowl or animals (e.g., irrigation pumps, 

but excluding nonroad vehicles such as tractors); or is a title V 

If, in the future, use of natural gas or LPG no longer represents BACT for 
source or is a source tha't is otherwise subject to regulation by 

a district or the federal Clean Air Act. See CH&SC section 

39011.5. As such, agricultural sources include both combustion 

sources (such as, internal combustion engines and boilers) and 

non-combustion sources [e.g., confined animal facilities and onand off-field vehicular activity (e.g., tilling and harvesting)]. f 

Among the non-combustion agricultural sources, some by their 

nature generate fugitive emissions such a tilling, harvesting, 

and vehicle travel over unpaved farm roads. 

Agricultural sources, as described above, emit volatile 

organic compounds (VOC), oxides of nitrogen (NO,), particulate 

matter (PMlo and PM2.5) , and carbon monoxide. As precursors for 

ozone, PMlo and PM2.5, emissions of NO, and VOC from agricultural 

sources are not a local concern but are logically evaluated from 

the standpoint of regional air quality planning efforts. Direct 

PMlo and PM2.5 are both of local and regional concern and thus our 

evaluation must consider both the potential for local exceedances 

of the standard due to the exemption, and for inconsistency with 

regional control strategies for these pollutants. Carbon monoxide 

is typically a pollutant of localized concern, and emissions of 

carbon monoxide from exempt agricultural sources would not be 

significant given the rural location of agricultural sites, which 

are well away from the urban centers and high traffic densities 

sulfur emissions, then this exemption may need to be re-evaluated. 
35 

historically associated with high ambient concentrations of 

carbon monoxide in the valley, and the long record.of attainment 

of the carbon monoxide standard even within the urban centers of 

the va1le.y. A pollutant-specific evaluation of the exemption for 

particulate matter and ozone is provided in the following 

paragraphs. 

Particulate Matter. With respect to PMlo and PM2.5, paragraph 

6.20 of amended Rule 2020 would exempt agricultural operations 

with emissions up to 50 tons per year (assuming that 100 tons per 

year is the current applicable major source threshold based on 

the valley's current area designations for PMlo and PM2.5). This 

( 

threshold value, however, excludes fugitive dust, and thus, the 

permitting exemption would extend to agricultural sources with 

overall actual emissions of PMlo and PM2.5 greater than 50 tons 

per year. Without application of some types of control measures, 

we would have no basis to categorically conclude that such 

sources would under no reasonably foreseeable circumstances cause 

or contribute to an exceedance of the PMlo or PM2.5 standard. 

However, because the District has adopted other rules that 

serve to control the fugitive dust emissions from agricultural 

-sources, including those that would not require a permit due to 

the exemption in amended District Rule 2020, paragraph 6.20, we 

believe the exemption can be approved consistent with 40 CFR 

51.160 (a) and (e) . Specifically, District Rule 4550 
("Conservation Management Practices") and the Districtf s 

Regulation VIII ("Fugitive PMlo Prohibitions", particularly, 

Rules 8011 and 8081) act as non-permitting means to reduce 

fugitive dust emissions at agricultural sources that fall under 

the exemption and reduce the potential for localized exceedances 

of the PMlo and PM2.5 standards. As explained further below, as a 

general matter, District Rule 4550 covers on-field agricultural 

operations and is implemented through an application and District 

approval process, whereasbDistrict Rules 8011 and 8081 cover offfield agricultural operations and are implemented as prohibitory 

rules. 

District Rule 4550 ("Conservation Management .Practicesu) 

applies to agricultural operation sites located within the San 

Joaquin Valley Air Basin and is intended to limit fugitive dust 

emissions from such sites. EPA approved Rule 4550 and associated 

List of Conservation Management Practices (CMP List) into the 

California'SIP in 2006. See 71 FR 7683 (February 14, 2006). Under 

the rule, an owner/operator must implement the applicable CMPs 

' . selected pursuant to section 6.2 (one CMP from the CMP list for 

each of the applicable CMP categories for each agricultural 

parcel of an agricultural operation site). An owner/operator must 

prepare and submit a CMP Application for each agric;ultural 

operation site to the APCO for approval. A CMP Application 

approved by the APCO constitutes a CMP Plan, and owner/operators 
must implement the CMPs as contained in the CMP Plan. 

Exemptions in District Rule 4550 include agricultural 

operation sites where the total acreage of all agricultural 

parcels is less than 100 acres and exempts Animal Feeding 

Operations (AFOs) involving less than a certain number of 

animals: less than 500 mature dairy cows, less than 190 cattle, 

less than 55,000 turkeys, less than 125,000 chickens (other than 

laying hens), or less than 82,000 laying hens. The District's 

staff report on Rule 4550 (dated August 19, 2004) concludes that 

Rule 4550 (with its 100-acre exemption level) will apply to 

approximately 91 percent of all irrigated farmland .in the SJV. 

The District also estimated emissions from 100-acre farms to 

determine the emission impact of an exemption. District staff 

analyzed different commodities and determined that PMlo emissions 

would be quite low for smaller farms, less than 1 ton per'year. 

See 71 FR 7683, at 7685 (February 14, 2006). The District also 

, 

calculated the emissions impact of the size-based exemptions for 

animal feeding operations. Rule 4550 is expected to apply to 73% 

of dairy cows, 94% of feedlot cattle, and nearly all poultry 

operations in the valley. The District also determined that any 

sites qualifying for- the size-based cut-offs would have emissions 

no greater than 1 ton per year. See 71 FR 7683, at 7685 (February . 

14, 2006). Such small farms would not be expected to cause or 

contribute to localized exceedances of the PMlo or PM2.5 standard. 
The Districtf s Regulation VIII ("Fugitive PMlo 

Prohibitions") is intended to reduce ambient concentrations of 

PMlo by requiring actions to prevent, reduce or mitigate 

anthropogenic fugitive dust emissions frdm specified outdoor 

fugitive dust sources. Rule 8011 establishes generally applicable 

definitions, exemptions, requirements, administrative 

\ 

requirements, recordkeeping requirements, and test methods under 

Regulation VIII. Rule 8081 ("Agricultural Sources") establishes 

specific requirements for off-field agricultural sources. EPA, 

approved Regulation VIII, including Rules 8011 and 8081, into the 

Cal'ifornia SIP in 2003 (68 FR 8830, February 26, 2003) and 

approved Regulation VIII amendments into the ~alifornia SIP in 

2006 (71 FR 8461, February 17, 2006). 

District Rule 8081 applies to off-field agricultural ' 

sources, which includes any agricultural source that meets the 

definition of: outdoor handling, storage and transport of bulk 

material; paved road; unpaved road; or unpaved vehicle/equipment 

traffic area. Under Rule 8081, an owner/operator must " 

sufficiently implement at least one of the control measures 

indicated in the rule to limit visible dust emissions (VDE) to 

20% opacity or to stabilize the affected surface consistent with 

the requirements in Rule 8011. Together, implementation of the 

fugitive dust control measures required under District Rule 4550 

and Rules 8011 and 8081 provide EPA with a reasonable basis to 
conclude that agricultural operations that escape permitting 

under paragraph 6.20 of amended District Rule 2020 would not 

cause or contribute to an exceedance of the PMlo or PM2.5 

standard. 

With respect to the regional planning context, we have 

reviewed the various approved and submitted San Joaquin Valley 

attainment or maintenance plans cited above, and note that none 

of these plans rely upon NSR for agricultural sources less than 

50 percent of the major source threshold. Further, for attainment - 

planning purposes, growth in emissions from agricultural sources 

has been established by CARBfs area source inventory growth 

methodologies, and no mitigation of that growth from an offsets 

requirement has been considered when determining the impact of 

the growth on the District's ability to achieve attainment with 

the standards.'' In contrast, emissions reductions from the 

prohibitory rules affecting agricultural sources, discussed 

above, are taken into account in the plan inventory projections. 

Because the plans do not rely on emission reductions from 

permitting of agricultural sources less than 50% of the major 

source threshold and not rely on offsets for new or modified 

minor agricultural sources, approval of the amended Rules 2020 

and 2201 would be consistent with regional planning efforts to 

11 Also see the District's Clean Air Act section 110(1) analysis, entitled 

"San Joaquin Valley Unified Air Pollution Control District Rules 2020 and 

2201, as amended September 21, 2006, District's Clean Air Act 110(1) 

Analysis," dated November 20, 2007. 
attain and maintain the NAAQS. 

? Ozone. With respect to ozone precursors (VOC AND NO,), 

paragraph 6.20 of amended District Rule 2020 would exempt 

agricultural operations with "actual" emissions (i.e., including 

fugitive emission^)^^ of less than 5 tons per year based on an 

applicable major source threshold of 10 tons per year. As such, 

the scope of the exemption therefore is limited to small-scale 

agricultural operations and is acceptable so long as the ozone 

plans for the valley do not count on permitting of such sources. 

As noted above, the regional plans do not rely on emission 

reductions from permitting of agricultural sources less than 50% 

of the major source threshold nor do the plans rely on offsets 

for new or modified minor agricultural sources. 13 

'' The District's view on the whether CH&SC section 42301.16 (and cited in 

District Rule 2020, section 6.20) covers fugitive VOC emissions is found in 

the District's Final Staff Report (page B-13, response to comment #19) on 

proposed amendments to Rule 2201 and Rule 2530 (dated December 18, 2008): "The 

District appreciates the opportunity to reiterate that, for the purposes of 

implementing CH&SC sections 40724.6(c) and 42301.16(c), all emissions, except 

for fugitive dust, must be included in calculations to determine district 

permitting requirements based on one-half of the major source thresholds. The 

statutory language of these sections is consistent, which read separately or 

in the interrelated nature in'which they were intended to be read, and [sic] 

District's implementation adheres to this statutory language." Thus, fugitive 

VOC emissions are'included in the determination of whether actual emissions 

from a minor agricultural operation are greater than 50% of the applicable 

major source threshold which, for VOC, is 10 tons per year, or, in ocher 

words, greater than 5 tons per year. 

l3 Like fugitive dust and District Rules 4550, 8011, and 8081, emissions of NO, 

from certain types of equipment found at agricultural sources, such as boilers 

and internal combustion engines, are covered by District prohibitory rules 

regardless of whether a given agricultural source is subject to permitting. 

Two such rules include District Rules 4308 and 4702. SIP-approved District 

Rule 4308 ("Boilers, Steam Generators, and Process Heaters") limit NO, 

emissions from boilers between 75,000 Btu/hour and 2 million Btu/hour. See 72 

FR 29886 (May 30, 2007). SIP-approved District Rule 4702 ("Internal Combustion 

Engines - Phase 2") limits NO,, VOC, and carbon monoxide from internal 

combustion engines with rated brake horsepower greater than 50 horsepower. See 
3. "Extreme" Ozone Area NSR Requirements 

The most recent version of the District's NSR rules that EPA 

has approved-into.the SIP was adopted by the District on December 

19, 2002. Since that time, with respect to major sources and , \ 

major modifications, there have been two significant regulatory 

changes affecting the NSR rules in San Joaquin Valley: (1) EPAfs 

approval of t.he State of California's request to reclassify the 

San Joaquin Valley to "extreme" for the 1-hour ozone standard, 

and (2) EPAfs promulgation of NSR Reform Rules. 

EPA approved the State of California's request to reclassify 

the San Joaquin Valley to "extreme" for the 1-hour ozone standard 

in 2004. See 69 FR 20550 (April 16, 2004). In doing so, EPA 

established a deadline of May 16, 2005 for submittal of revised 

District NSR rules that reflect the requirements for "extreme" 

ozone nonattainment areas. For such areas, the relevant NSR 

requirements include a major source threshold of 10 tons per year 

of VOC or NOx [see CAA section 182(e) and 182 (f) and 

51.165 (a) (1) (iv) 1, the offset ratio is 1.5 to 1 [see CAA section 

182:(e) (1) and 40 CFR 51.165 (a) (9) 1, and any change at a major 

stationary source which results in any increase in emissions from 

any discrete operation, unit, or other pollutant emitting 

activity at the source is considered a major modification [see 

73 FR 1819 (January 10, 2008). Such prohibitory rules further reduce the 

'chance that agricultural sources that would be exempt from permitting under 

District Rule 2020, paragraph 4.6.9, might interfere with attainment or 

maintenance of the national standards. 
42 

CAA section 182 (e) (2) and 40 CFR 51.165 (a) (1) (x) (E) ] . These NSR 

SIP requirements will also apply once we approve the State of 

California's request to reclassify San Joaquin Valley to 

"extreme" for the 8-hour ozone standard. 

As submitted on March 17, 2009, the VOC and NO, provisions 

in District Rule 2201 have been amended to include the 10 ton per 

year threshold (see section 3.23 of amended Rule 2201), the 1.5 , 

to 1 offset ratio (see section 4.8.1 of amended Rule 2201), and 

the "any increase" threshold for major modifications (see 

3.17.1.4 of amended Rule 2201). As such, District Rule 2201 has - / 

adequately been amended to reflect "extreme" ozone area 

r~quirements under the CAA and 40 CFR 51.165. 

4. EPA' s NSR Reform Rules 

On December 31, 2002 (67 FR 80186), EPA published final rule 

changes to 40 CFR parts 51 and 52, regarding the CAAfs PSD and 

Nonattainment NSR programs relating to major sources and major 

modifications. On November 7, 2003 (68 FR 63021), EPA published a 

notice of final action on the reconsideration of the December 31, 

2002 final rule changes. The December 31, 2002, and the November 

7, 2003, final actions are collectively referred to as the "2002 

NSR Reform Rules." The purpose of this action is to propose to 

approve the SIP submittal from the State of California that 

includes rule changes made as a result of EPAfs 2002 NSR Reform 

Rules. 
The 2002 NSR Reform Rules made changes to five areas of the 

NSR programs. In summary, the 2002 Rules: (1) Provide a new 

method for determining baseline actual emissions; (2) adopt an 

actual-to-projected-actual methodology for determining whether a 

major modification has occurred; (3) allow major stationary 

sources to -comply with Plantwide Applicability Limitations (PALS) 

to avoid having a significant emissions increase that triggers 

the requirements of the major NSR program; (4) provided a new 

applicability provision for emissions units that are designated 

clean units; and (5) excluded pollution control projects (PCPs) 

from the definition of "physical change or change in the method 

of operation." On November 7, 2003 (68 FR 63021), EPA published a 

notice of final action on its reconsideration of the 2002 NSR 

I 

Reform Rules, which added a definition for "replacement unit" and 

\ 

clarified an issue r.egarding PALS. For additional information on 

the 2002 NSR Reform Rules, see, 67 FR 80186 (December 31, 2002), 

and http://www.epa.yov/nsr. 

After the 2002 NSR Reform Rules were finalized and effective 

(March 3, 2003), industry, state and environmental petitioners 

3 

challenged numerous aspects of the 2002 NSR Reform Rules, along 

with portions of EPAf s 1980 NSR Rules (45 FR 52676, August 7, 

1980). On June 24, 2005, the United States Court of Appeals for 

the District of Columbia (D.C. Circuit Court) issued a decision 

on the challenges to the 2002 NSR Reform Rules. New York v. 
United States, 413 F.3d 3 (D.C. Cir.. 2005). In summary, the D.C.. 

Circuit Court vacated portions of the rules pertaining to clean 

units and PCPs, remanded a portion of the rules regarding 

recordkeeping and the term "reasonable possibility" found in 40 

CFR 52.21 (r) (6) and 40 CFR 51.166 (r) (6), and either upheld or did 

not comment on the other provisions included as part of the 2002 

NSR Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final 

action to revise the 2002 NSR Reform Rules to remove from federal - 

law all provisions pertaining to clean units and the PCP 

exemption that were vacated by the D.C. Circuit Court. 

With regard to the remanded portions of the 2002 NSR Reform Rules 

related to recordkeeping, on December 21, 2007, EPA took final 

action to establish that a "reasonable possibility" applies where 

source emissions equal or exceed 50 percent of the CAA NSR 

significant levels for any pollutant (72 FR 72607). The 

"reasonable possibility" provision identifies for sources and 

reviewing authorities the circumstances under which a major 

stationary source undergoing a modification that does not trigger 

major NSR must keep records. 

The 2002 NSR Reform Rules require that states adopt and 

submit revisions to their SIP permitting programs implementing 

the minimum program elements of the 2002 NSR Reform Rules no 

later than January 2, 2006. State agencies may meet the \ 

requirements of 40 CFR part 51 and the 2002 NSR Reform Rules with 
different but equivalent regulations. 

As submitted on March 17, 2009, District Rule 2201 has been 

amended to provide for the minimum program elements of the 2002 

NSR Reform Rules that remain in the wake of subsequent litigation 

and EPA rulemaking. The amended rule provides for the minimum 

program elements by replacing a single definition for "Major 

Modification" with two definitions, one for "Federal Major 

Modification" and the other for "SB 288 Major Modification." The 

former term captures the NSR Reform program elements (and the 

"any increase" emissions threshold required in "extreme" ozone 

areas), while the latter retains the pre-Reform approach to 

determining major modification status. Section 3.17.1 

incorporates the new method for determining baseline actual 

emissions and the actual-to-projected-actual methodology for 

determining whether a major modification has occurred. Section 

3.17.2 incorporates provisions allowing major stationary sources 

to comply with PALS. Amended District Rule 2201 avoids any issue 

concerning potential SIP relaxations due to these changes, 

because, consistent with State law (SB 288), the District 

retained the pre-reform requirements. The net effect of these 

changes are that the District will now perform two separate major 

modification determinations, one to determine if the project will 

result in a SB 288 Major Modification and the other to determine 

if it will result in a Federal Major Modification. Under the 
revised rule, a modification of an existing stationary source 

would be required at a minimum to meet the NSR SIP requirements 

that had applied prior to adoption by the District of the 2002 

NSR Reforms into Rule 2201, and may have to meet additional NSR 

requirements if the modification is determined to be a Federal 

Major Modification. 

5. Other Changes to District Rules 2020 and 2201 - 

As described in section 1II.C of this document, the District 

has made a number of changes to their NSR.Rules (i-e., Rules 2020 

and 2201) not directly related to fuel specifications, 

.agricultural sources, "extreme" area requirements, or NSR Reform. 

These changes include clarification and tightening of an existing 

exemption for certain types of transfer equipment and equipment 

used exclusively for the transfer of refined lubricating oil (see 

paragraph 6.7 of amended Rule 2020); tightening of one of the 

conditions that qualify a replacement of equipment as "routine 

replacement" (see paragraph 3.33.1 of amended Rule 2201); 

clarificat.ion of the scope of an existing emission offset 

exempti,on for portable equipment (see paragraph 4.6.3 of amended 

Rule 2201); and provision for a lower offset ratio if and when 

EPA makes the necessary findings under CAA section 182(e) (1) (see 

paragraph 4.8.2 of amended Rule 2210). We find these changes to 

either be neutral or strengthening relative to the existing SIP 

and consistent with all applicable requirements. 
6. Enforceability Considerations 

For the reasons given above, we find the amendments to 

District Rules 2020 and 2201 to be acceptable under applicable 

NSR regulations; however, SIP rules must also be enforceable [see 

CAA section 110(a)], and we find two specific deficiencies 

related to enforceability of Rules 2020 and 2201 that prevent our 

full approval. These deficiencies arise from the ambiguity 

introduced by the references in both paragraph 6.20 (of Rule 

2020) and paragraph 4.6.9 (of Rule 2201) to State law under 

circumstances where the State law has not been submitted to EPA 

for approval into the SIP. Specifically, paragraph 6.20 (of Rule 

2020) provides a permitting exemption for: "Agricultural sources, 

but only to the extent provided by California Health and Safety 

Code, Section 42301.16." In turn, CH&SC section 42301.16 requires 

districts to extend permitting requirements to all agricultural 

sources that are "major" under the CAA and to all "minor" 

agricultural sources with actual emissions one-half of the 

applicable major source emissions thresholds (or greater) for any 

air contaminant, but excluding fugitive dust. However, subsection 

(b) of CH&SC section 42301.16 provides a means through which a 

district can extend the exemption from "one-half of any 

applicable emissions threshold" to the "major source" threshold 

if certain findings are made in a public hearing. 

Because CH&SC section 42301.16 is not included in the 
48 , 

California SIP, nor has California submitted the section to EPA , 

for approval, the SIP would be ambiguous as to the extent of the 

agricultural source permitting exemption if EPA were to approve 

submitted District Rule 2020 into the SIP. Effective enforcement 

of the permitting requirements would rely on judicial notice of 

the statutory provision cited in the rule, and such judicial 

notice may or may not be forthcoming. There is no need to rely on 

judicial notice when the District can eliminate the ambiguity by 

clearly stating the exemption for agricultural sources in 

District Rule 2020 or by submitting CH&SC section 42301.16 to EPA 

for approval into the SIP. Moreover, even if we could assume that 

judicial notice of the statutory provision would be taken, CH&SC 

section 42301.16 by its terms allows for a relaxation of the onehalf of major source permitting threshold for agricultural 

sources, and such relaxations should be reviewed by EPA under 

section 110 for approval as a SIP revision. Therefore, we are 

proposing a limited approval and limited disapproval of submitted 

Rule 2020. 

\ Paragraph 4.6.9 of submitted Rule 2201 contains a similarlyambiguous reference to state law in listing emission offset 

exemptions: "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(a)." CH&SC section 42301.18(c) states: "A district 
may not require an agricultural source to obtain emissions' 

offsets for criteria pollutants for that source if emissions i 

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

permanent, quantifiable, and enforceable emission reductions." 

Our understanding is that the District has no plans to require 

emissions offsets for new or modified agricultural sources unless 

such new or modified source is a "Major Source" or a "Federal 

Major Modification" as defined in another section of Rule 2201. 

Once again, there is no need for ambiguity in the applicability 

of the emissions offset exemption, and therefore, EPAis 

proposin'g a limited approval and limited disapproval of submitted 

Rule 2201. ) 

7. Federally Enforceablg Restriction on Potential to Emit 

District ~ule 2530 establishes limits to restrict the PTE of 

a stationary source so that the source may be exempt from the 

District's rule implementing Title V operating permit 

requirements. The emission limits in section 6.1 of District Rule 

2530 are intended to represent 50% of the applicable major source 

threshold.'14 With the change in the valley's ozone classification 

to "extreme" for the 1-hour ozone standard, and the corresponding 

-- 

14 The approach in District Rule 2530 of establishing emission limits and 

alternative operational limits that are intended to represent percentages of 

the applicable major source threshold (50% for emission limits and 808 for 

alternative operational limits), as a mechanism to allow sources to avoid 

title V permitting requirements, is consistent with EPA guidance on this 

subject as set forth in a memorandum dated January 25, 1995 from John S. 

Seitz, Director, Office of Air Quality Planning and Standards, titled, 

"Options for Limiting the Potential to Emit (PTE) of a Stationary Source Under 
lowering of the applicable major source threshold from 25 tons 

per year to 10 tons per year, it follows that the District has 

amended Rule 2530 to change the corresponding emission limit in 

section 6.1 to 5 tons per year of VOC or NO,, to maintain the 

emission limit at 50% of the applicable major source threshold. 

Other emissions thresholds in District Rule 2530, such as those 

for exemptions from recordkeeping and reporting (20% of 

applicable major source threshold) and from reporting (25% of 

applicable major source threshold) have also been reduced 

accordingly. 

Certain alternative operational limits in section 6.2 of the 

rule, which were intended to allow sources using these types of 

limits to go up to 80% of the major source threshold (in actual 

emissions), were changed accordingly but certain other limits in 

I 

section 6.2 were left unchanged or were changed by a lesser 

proportion. The District explained how the values that were not 

revised downwards in proportion to the drop in the major source 

threshold met the underlying purpose of the provision allowing 

alternative operational limits, i.e., allowing certain types of 

sources to go up to 80% of the major source threshold (in actual 

emissions). For instance, the alterna,tive operational limit of - 

7,000,000 gallons per year of gasoline dispensed at gasoline 

dispensing facilities with phase I and I1 vapor recovery systems, 

Section 112 and Title V of the Clean Air Act (Act)." 
51 

as set forth in paragraph 6.2.1 of Rule 2530, was left unchanged 

because it still is well below the.80% (of 10 tons per year) 

threshold for underground storage tanks (16.9 million gallons per 

year) and for above ground storage tanks (12.2 million gallons 

per year). See District memorandum on Rule 2530 (dated December 

18, 2009), which we have placed in the docket. 

Therefore, we find the changes to District Rule 2530 to be 

acceptable, and we propose to approve amended District Rule 2530, 

as submitted on Marcli 17, 2009, as a revision to the California 

SIP. 

8. CAA Section 110 (1) 

The only remaining issue is whether this SIP revision would 

interfere with requirements' concerning attainment and reasonable 

further progress (or any other applicable CAA requirement) as set 

forth in CAA section 110(1). CAA section 110(1) provides: "Each 

revision to an implementation plan submitted by a State under 

this chapter shall be adopted by such State after reasonable 

notice and pudlic 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." 42 U.S.C. 5 

7410 (1) . 

For the purposes of CAA section 110(1), we take into account 
the overall effect of the revisions included in this action. 

Given the wide application of the lower major source thresholds 

to all-types of new or modified stationary sources of VOC and NO, 

and the limited extent of the exemptions from permitting and 

offsets for certain types of agricultural sources, we find that 

the overall effect of the revisions would strengthen the SIP, 

notwithstanding deficiencies identified above in enforceability. 

Moreover, we do not anticipate localized exceedances of the PMlo 

or PM2.5 standards, due to the permitting exemption for certain 

agricultural sources, given the application of non-permitting 

requirements in the SIP. Lastly, we note that the revisions are 

consistent with the assumptions of the various air quality plans 

developed for the valley. 

Accordingly, we conclude that the revisions to Rules 2020, 

2201, and 2530, if approved, would not interfere with any 

applicable requirements for attainment and reasonable further 

I-- 

progress or any other applicable requirement of the CAA and are 

approvable under section 110(1). 

9. Conclusion and Proposed Action on Submitted Rules 

For the reasons given above, under CAA section 110(k)(2) and 

301(a), we are proposing a limited approval and limited 

disapproval of amended Rules 2020 and 2201 because, although they 

would strengthen the SIP and meet all but one of the applicable 

requirements for SIPs in general and NSR SIPs in particular, they 
contain certain deficiencies related to enforceability that 

prevent our full approval. The deficiency in Rule 2020 can be 

remedied by the District by revision of Rule 2020 by replacing 

the statutory .reference to CH&SC section 42301.16 in paragraph 

6.'20 with a clear description of the sources covered by the 

exemption. The deficiency in Rule 2201 can be remedied by either 

submittal of the statutory provisions cited in paragraph 4.6.9 or 

by replacement of the references with a clear description of the 

applicability of the offset requirement to agricultural sources. 

For amended Rule 2530, we are proposing a full approval because 

we find that it has been appropriately modified to reflect the 

decrease in the major source threshold for VOC and NOx consistent 

with the area's "extreme" classification for the 1-hour ozone 

standard. 

V. Deletion of Obsolete Conditions on SIP Approvals 

In the 19801s, EPA placed conditions, including conditions 

related to NSR, on approvals of certain California nonattainment 

plans. As to certain San Joaquin Valley plans, EPA approved the 

plans on the condition that the State of California submit 

revised NSR rules for the individual county-based Air Pollution 

Control ~istricts (APCDs), then having jurisdiction in San 

Joaquin Valley, as revisions to the California SIP. These NSRrelated conditions are identified in table 3, below, by 

applicable county, EPA action, and CFR citation. 

,' 
54 

On September 23, 1999, in an action proposing approval of 

previous versions of District Rules 2020 and 2201 (later 

superceded by a proposed rule published on September 28, 2000), 

we proposed to remove these conditions. See 64 FR 51493, at 51494 

(September 23, 1999). Specifically, we proposed to delete the 

conditions set forth in 40 CFR 52.232(a) (5) (i) (A), (a) (6) (i) (A), 

- 

(a) (10) (i) (A) , and (a) (11) (i) (A). 

In our September 1999 proposed rule, we noted that the 

conditions required the prior county-based APCDs (now combined to 

form the San Joaquin Valley Unified Air Pollution Control 

~istrict)'~ to submit regulations consistent with EPA regulations 

that were current at the time the conditions were established in 

1981, 1982, and 1985. We also noted that the conditions are moot 

today because the District has submitted revised NSR rules (i.e., 

Rules 2020 and 2201) that comply with EPAfs current regulations 

and the Clean Air Act, as amended in 1990. However, we did not 

include the removal of these obsolete NSR-related conditions in 

the subsequent final rule on May 17, 2004 (69 FR 27837) fully 

approving the District's NSR rules, i.e., District Rules 2020 and 

TABLE 3.--OBSOLETE CONDITIONS PROPOSED FOR DELETION 

" Kern County ACPD, one of the original county-based APCDs covering San 

Joaquin Valley, was not entirely consolidated into the current unified 

District, but its jurisdiction is no longer county-wide, and is limited to the 

eastern portion of the county. 
In today's document, we are addressing the same provisions 

in 40 CFR 52.232 as our 1999 proposed rule, but we are not 

proposing exactly the same action as before. Today, we recognize 

that the condition in 40 CFR 52.232(a) (5) (i) (A) is obsolete as to 

Regulatory citation 

40 CFR 52.232(a) (5) (i) (A) 

40 CFR 52.232 (a) (6) (i) (A) 

40 CFR 52.232(a) (10) (i) (A) 

J 

40 CFR 52.232(a) (11) (i) (A) 

County 

 ern Countya 

San Joaquin 

County 

Kings, Madera, 

Merced, 

Stanislaus, 

and Tulare 

Counties 

Fresno County 

carbon monoxide and ozone in light of the approval of District 

NSR rules in 2004 (69 FR 27837,. May 17, 2004), the change in the 

a In today's document, we are proposing to remove the Kern County 

condition for carbon monoxide and ozone only. 

Conditional Approval 

Federal Register 

Citation 

46 FR 42450 '(August 

21, 1981) 

47 FR 19694 (May 7, ' 

1982), amended at 50 

FR 7591 (~ebruary 25, 

1985) 

47 FR 19694 (May 7, 

1982) 

47 FR 28617 (July 1, 

1982) 

boundary for the l-hour ozone nonattainment boundary for San . L 

Joaquin Valley (66 FR 56476, November 8, 2001), and the 

redesignation of the East Kern County l-hour ozone nonattainment 

area to attainment (69 FR 21731, April 22, 2004). However, as to 

particulate matter, we find the condition to be unfulfilled 

because the Kern County APCD retains jurisdiction over a small 

portion of the San Joaquin Valley planning area, the portion of 
the San Joaquin Valley planning area over which Kern County APCD 

retains jurisdiction remains nonattainment for PM-10 (see 73 FR 

66759, November 12, 2008), and because we have yet to approve a 

revision to Kern County APCD NSR ruLes that meet the condition in 

40 CFR 52.232 (a) (5) (i) (A) . Therefore, we propose to amend 40 CFR 

52.232 (a) (5) (i) to remove the references to carbon monoxide and 

ozone only. We will retain the condition as to particulate matter 

<until we approve the Kern County APCDfs nonattainment'~~~ rules 

for the East Kern County PMlo nonattainment area or until we 

approve a redesignation request for the East Kern PMlO area to 

"attainment. " 

We are also proposing to remove the conditions set forth in 

40 CFR 52.232 (a) (6) (i) (A), (a) (10) (i) (A)., and (a) (11) (i) (A) as 

obsolete in light of the approval of District NSR rules in 2004 

(69 FR 27837, May 17, 2004) .I6 Unlike Kern Co.unty, the counties 

subject to the conditions in 40 CFR 52.232(a) (6), (lo), and (11) 

(i .e., San Joaquin, Kings, Madera, Merced, Stanislaus, Tulare, 

and Fresno) all lie entirely within District jurisdiction. If we 

finalize this aspect of this action as proposed, we will be 

\ 

removing and reserving 40 CFR 52.232 (a) (6), (a) (lo), and (a) (11) 

because the conditions proposed for removal are the last 

conditions on approval that remain. 

l6 The condition establish in 40 CFR 52.232(a) (11) also relates to Ventura 

County, but removal of the condition is proper as to Ventura County in light 

of EPA1s subsequent approval of the Ventura County nonattainment NSR rules at 

68 FR 9561 (February 28, 2003). 
VI. Proposed Action and Opportunity for Public Comment 

For the reasons set forth above, we are proposing to correct \ 

a previous approval of San Joaquin Valley District NSR rules, 

Rule 2020 ("Exemptions") and Rule 2210 ("New and Modified 

Stationary Source Review Rule"), to approve amended District Rule 

2530 ("Federally Enforceable Potential to Emit"), and to take a 

limited approval and limited approval action for amended District 

NSR Rules 2020 and 2201. 

More specifically, we are proposing to correct our May 2004 

final approval of revisions to the San Joaquin Valley Unified Air 

Pollution Control District portion of the California State 

Implementation Plan under section 110(k)(6) of the Clean Air Act. 

We do so because, by virtue of information submitted by 

California to us in November 2003, we should have limited our 

approval consistent with the legal authority provided in State 

law to air districts to permit, and require offsets for, new or 

modified agricultural sources. To correct our error, we are 

proposing the following language to be added as a new section, 

52,245, of 40 CFR part 52, subpart F ("California") : 

52.245 New Source Review Rules 

(a) Approval of the New Source Review rules for the San 

Joaquin Valley Unified Air Pollution Control District Rules 

2020 and 2201 as approved May 17, 2004, is limited, as it 

relates to agricultural sources, to apply the permit 
requirement only (1) to agricultural sources with potential 

emissions at or above a major source applicability threshold 

and (2) to agricultural sources with actual emissions at or 

, 

above 50 percent of a major source applicability threshold. 

The offset requirement, as it relates to agricultural 

sources, does not apply to new minor agricultural sources 

and minor modifications to agricultural sources. 

Under CAA sections 110(k)(2) and 301(a), we are proposing a 

limited approval and limited disapproval of amended D-istrict 

Rules 2020 and 2201, as submitted on March 7, 2008 and March 17, 

2009, respectively. The amended District Rules 2020 and 2201 

would establish an exemption from permitting, and from offsets, 

for certain minor agricultural operations, would establish 

applicability thresholds (for major sources and major 

modifications) and offset thresholds consistent with a 

classification of "extreme" for the ozone standard, and would 

implement NSR Reform. We are proposing a limited approval and 

limited disapproval, because, although the amended rules meet 

most of the applicable requirements and strengthen the SIP, they 

contain unacceptably ambiguous references to statutory 

provisions. 

With respect to amended District Rule 2530, as submitted on 

March 17, 2009, we are proposing full approval because we find 

that it has been appropriately modified to reflect the decrease 
in the major source threshold for VOC and NO, consistent with an 

"extreme" classification. 

Lastly, EPA is proposing to rescind conditions placed on 

1980's era approvals by EPA on various nonattainment plans 

submitted by California for -the San Joaquin Valley that have 

become obsolete by EPA approval of subsequent revisions to the 

District's NSR rules. Therefore, we propose to amend 40 CFR 

52.232(a)(5)(i) to remove the references to carbon monoxide and ' 

ozone and to remove and reserve 40 CFR 52.232(a) (6), .(a) (lo), and 

If EPA were to finalize the limited approval and limited 

disapproval action, as proposed, then a sanctions clock, and 

EPAfs obligation to promulgate a Federal implementation plan, 

would be triggered because the revisions to the District rules 

for which a limited approval and limited disapproval is proposed 2 

are required under anti-backsliding principles established for 

the transition from the 1-hour to the 8-hour ozone standard. 

We will accept comments from the public on this proposal for 

the next 30 days. 

VII. Statutory and Executive Order Reviews 

A. Executive Order 12866, Regulatory Planninq and Review 

The Office of Management and Budget (OMB) has exempted this 

regulatory action from Executive Order 12866, entitled 

"Regulatory Planning and Review." 
B. Paperwork Reduction Act 

This proposed action does not impose an information 

collection burden under the provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an 

agency to conduct a regulatory flexibility analysis of any rule 

subject to notice and comment rulemaking requirements unless the 

agency certifies that the rule will not have a significant 

economic impact on a substantial number of small entities. Small 

entities include small businesses, small not-for-profit 

enterprises, and small governmental jurisdictions. 

This proposed rule will not have a significant impact on a 

substantial number of small entities because SIP approvals under - - - - --- - - - - 

section 110 and subchapter I, part D of the Clean Air Act do not 

create any new requirements but simply approve requirements that 

the State is already imposing. Therefore, because the Federal SIP 

approval does not create any new requirements, I certify that 

this action will not have a significant economic impact on a 

substantial number of small entities. 

Moyeover, due to the nature of the Federal-State 

relationship under the Clean Air Act, preparation of flexibility 

analysis would constitute Federal inquiry into the economic 

reasonableness o$ State action. The Clean Air Act forbids EPA to 
base its actions concerning SIPS on such grounds. Union Electric 

CO., V. U.S. EPA, 42.7 U.S. 246, 255-66 L(1976); 42 U.S.C. 7410(a) 

D. Unfunded Mandates Reform Act 

Under sections 202 of the Unfunded Mandates Reform Act of 

1995 ("Unfunded Mandates Act"), signed into law on March 22, 

1995, EPA must prepare a budgetary impact statement to accompany 

any proposed or final rule that includes a Federal mandate - that 

may result in estimated costs to State, local, or tribal 

governments in the aggregate; or to the private sector, of $100 < 

million or more. Under section 205, EPA must select the most 

cost-effective and least burdensome alternative that achieves the 

objectives of the rule and is consistent with statutory 

requirements. Section 203 requires EPA to establish a plan for 

informing and advising any small governments that may be 

significantly or uniquely impacted by the rule. 

EPA has determined that the proposed action does not include 

a Federal mandate that may result in estimated costs of $100 

million or more to either State, local, or tribal governments in 

the aggregate, or to the private sector. This Federal action 

proposes to approve pre-existing requirements under State or 

local law, and imposes no n.ew requirements. Accordingly, no . 

additional costs to State, local, or tribal governments, or to 

the private sector, result from this action. 
E. Executive Order 13132, Federalism 

Federalism (64 FR 43255, Aug~st 10, 1999) revokes and 

replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing 

the Intergovernmental Partnership). Executive Order 13132 

requires EPA to develop an accountable process to ensure 

"meaningful and timely input by State and local officials in the i 

development of regulatory policies that have federalism 

implications." "Policies that have federalism implications" is 

defined in the Executive Order to include regulations that have 

"substantial direct effects on the States, on the relationship 

between the national government and the States,. or on the 

distribution of power and responsibilities among the various 

levels of government." Under Executive Order 13132, EPA may not 

issue a regulation that has federalism implications, that imposes 

substantial direct compliance costs, and that is not required by 

statute, unless the Federal government provides the funds 

necessary to pay the direct compliance costs incurred by State 

and local governments, or EPA consults with State and local 

officials early in the process of developing the proposed 

regulation. EPA also may not issue a regulation that has 

federalism implications and that preempts State law unless the 

Agency consults with State and local officials early in the 

process of developing the proposed regulation. 

This proposed rule will not have, substantial direct' effects 
63 

on the States, on the relationship between the national i 

government and the states, or on the distribution of power and , 

/ 

responsibilities among the various levels of government, as 

specified in Executive Order 13132, because it merely proposes to 

approve a State rule implementing a Federal standard, and does 

not alter the relationship or the distribution of power and 

responsibilities established in the Clean Air Act. Thus, the 

requirements of section 6 of the Executive Order do not apply to 

this rule. 

F. Executive Order 13175, Coordination with Indian Tribal 

Governments 

Executive Order 13175, entitled "Consultation and 

Coordination with Indian Tribal Governments" (65 FR 67249, 

November 9, 2000), requires EPA to develop an accountable process 

to ensure "meaningful and timely input by tribal officials in the 

development of regulatory policies thet hive tribal 

implications." This proposed rule does not have tribal 

- 

implications, as specified in Executive Order 13175. It will not 

have substantial direct effects on tribal governments, on the 

relationship between the Federal governmept and Indian tribes, or 

on the distribution of power and'responsibilities between the 

Federal government and Indian tribes. Thus, Executive Order 13175 

p does not apply to this rule. 

G. Executive Order 13045, Protection of Children from 
64 

Environmental Health Risks and Safety Risks 

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 

1997) as applying only to those regulatory actions that concern 

health or safety risks, such that the analysis required under 

section 5-501 of the Executive Order has the potential to 

influence the regulation. This rule is not subject to Executive 

Order 13045, because it proposes to approve a State rule 

implementing a Federal standard. 

H. - Executive Order 13211, Actions that Significantly Affect 

Energy Supply, Distqibution, or Use 

This rule is not subject to Executive Order 13211, "Actions 

Concerning Regulations That Significantly Affect Energy Supply, 

Distribution, or Use" (66 FR 28355, May 22, 2001) because it is 

not a significant regulatory action under Executive Order 12866. 

I. National Technology Transfer and Advancement Act 

Sectian 12 of the National Technology Transfer and 

Advancement Act (NTTAA) of 1995 requires 'Federal agencies to 

evaluate existing technical standards when developing a new 

regulation. To comply with NTTAA, EPA must consider and use 

"voluntary consensus standards" (VCS) if available and applicable 

when developing programs and policies unless doing so would be 

4 

inconsistent with applicable law or otherwise impractical. 

The EPA believes that VCS are inapplicable to this action. 

Today's proposed action does not require the public to perform 
activities conduciveto the use of VCS. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air pollution control, 

Intergovernmental relations, Ozone,. Particulate matter, Reporting 

and recordkeeping requirements. 

/*%/* zo/o 

Dated: 

~egion IX.