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environmental impact statement is not required. The final EA and Finding of No Significant Impact may be reviewed
atthe Los Angeles District Office. Please
contact Peggy Bartels at the phone number specified above for further information.

d. UnfundedMandatesReformAct. This rule does not impose an enforceable duty among the private
sector and, therefore, is not a Federal private sector mandate and is not subject to the requirements ofSection 202 or 205 ofthe Unfunded Mandates Reform Act (Pub. L. 104-4, 109 Stat. 48, 2U.S.C. 1501 etseq.). We have also found, under Section 203 ofthe Act, that small governments will not be significantly or uniquely affected by this rule.

List of Subjects in 33 CFRPart334

Danger zones, Navigation (water), Transportation, Waterways. * Forthereasons statedinthepreamble, the Corps is amending 33 CFR part 334
to read as follows:

PART 334-DANGER ZONE AND RESTRICTED AREA REGULATIONS

m 1. The authority citationfor 33 CFR part 334 continues toread as follows:

Authority: 40 Stat. 266 (33 U.S.C. 1) and 40 Stat. 892 (33 U.S.C. 3).

* 2.Add §334.866 toread asfollows:
§334.866 PacificOcean at Naval Base Coronado, inthe CityofCoronado, San Diego County, California; Naval Danger Zone. (a) The area.Afan-shaped area extending westerly into the waters of the Pacific Ocean from a point on the beach ofNaval Base Coronado, Coronado, California beginning at latitude 32°41'13" N, longitude 117°12'45" W; thence easterly, along the

mean high water mark, tolatitude 32°41'14 " N, longitude 117'12'32" W; thence southerly tolatitude 32'40'31" N, longitude 117'12'12" W; thence westerly
to latitude 32'40'25" N, longitude 117°12'43" W; thence northerly, landward, to the point of origin. (b) The regulations.(1)Range live firing on the Naval Base Coronado, Coronado, California small arms range may occur at any time. Information on live firing schedules and coordination for community concerns canbe obtained bycalling the Naval Base Coronado Small Arms Range Safety Officer at 619-545-8413 during normal working hours. Assistance is also available via theNaval Base Coronado Hotline at 619-545-7190 or the Naval Base Coronado operator at 619-545- 1011. Ifthe phone numbers are changed, they willbe updated on the Naval Base Coronado Web sitehttp:// www.cnic.navy.mil/Coronado.

(2)The danger zone willbe opento fishing and general navigation when no weapons firing is scheduled, which will be indicated bythe absence ofany warning flags or flashing lights on land in the locations specified in paragraphs (b)(3) and (b)(4)of this section.

(3)When live firing is about to be undertaken or is in progress during daylight hours, three (3)large red warning flags will be displayed at the top ofthe flag poles on the southern berm ofthe small arms range, so as to be clearly visible from all points of entry into the danger zone. The west flag pole is located on the southernberm at latitude 32o41'21.5" N, longitude 117'12'42.8" W, the middle flag pole is located at latitude 32o41'21.7" N, longitude 117o12'40.9" W, and the east flag pole is located at latitude 32o41'22.4" N, longitude 117'12'38.7" W.(4) When live firing is about to be undertaken or is in progress during periods ofdarkness, three (3) red flashing warning lights willbe displayed at the top ofthe flag poles on the southernberm ofthe small arms range at the locations described in paragraph (b)(3) ofthis section, so as to be clearly visible from all points of entry into the danger zone. (5)The danger zone is not considered safe forvessels or individuals when live firing is in progress. When live firing is about tobegin or is scheduled as indicated bythe warning flags or flashing warning lights described in paragraphs (b)(3) and (b)(4)ofthis section, all vessels will be required to expeditiously vacate the danger zone. (6) Anchoring by any vessel within the danger zone is prohibited. (7)Prior to conducting live firing, Navy personnel willvisually scan the danger zone to ensure that novessels or individuals are located withinit.Any vessels or individuals inthe danger

zone will be notified by the Navy Range Safety Officer using a marine VHF-FM marine radio andby other means as necessary, to exit the danger zone and remain outside the area until conclusion oflive firing. As new technology becomes available, the VHF-FM marine radio communications system maybe updated. (8) Safety observers will be posted in accordance with range standard operating procedures at all times when the warning flags orflashing lights described in paragraphs (b)(3) and (b)(4) ofthis section are displayed. Operation ofthe small arms range will only occur when visibility is sufficient tomaintain visual surveillance ofthe danger zone andvicinity. In the event oflimited visibility due to rain, fog or other conditions, live firing will be postponed until the danger zone canbe confirmed clear ofall vessels andindividuals.

(9) Naval Base Coronado will maintain a schedule oflive firing atthe small arms range on itsWeb site, http://www.cnic.navy.mil/Coronado, which willbe accessible to the public, mariners, and recreationists. The Navy will maintain the Web site on a year round basis and update information as needed for public safety. (c) Enforcement.The regulation in this section will be enforced by the Commanding Officer, Naval Base Coronado, and such agencies and
persons as he/she may designate.

Dated: April 30, 2010. Approved:
Michael G. Ensch, Chief,Operations, Directorate ofCivil Works.

[FRDoe. 2010-11125 Filed 5-10-10; 8:45 am]

BILLING CODE 3720-58-P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52 [EPA-R09-OAR-2010-0062; FRL-9141-3]
Approval and Promulgation of Implementation Plans, State of California, San Joaquin Valley Unified Air PollutionControl District,New Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

SUMMARY: EPA is taking final action on revisions to the San Joaquin Valley Unified Air Pollution Control District portion ofthe California State Implementation Plan. Specifically, EPA is taking final action on three amended District rules, one of which was submitted onMarch 7, 2008 andthe other two ofwhich were submitted on March 17, 2009. Two ofthe submitted rules reflect revisions to approved District rules that provide for review of

new andmodified stationary sources ("new source review" orNSR) within the District, and the thirdreflects revisions to an approved Districtrule that provides a mechanism by which existing stationary sources may voluntarily limittheir operations to avoid the requirement to secure a Federally-mandated operating permit. The NSR rule revisions relate to exemptions from permitting and offsets requirements for certain agricultural 

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operations, tothe establishment ofNSR applicability and offset thresholds consistent with a classification of "extreme" nonattainment for the ozone standard, and to the implementation of EPA's NSR Reform Rules. With respect to the revised District NSRrules, EPA is finalizing 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 rule pertaining to operating permit requirements, EPA is finalizing a full approval. EPA is also taking final action to remove certain obsolete conditions placed on previous approvals ofvarious California nonattainment plans. Lastly, EPA is deferring further action on the Agency's proposal to correct the May 2004 approval oftheprevious version ofthe District's NSR rules pending receipt from California ofan interpretation of the District's legal authority with respect to agricultural sources under
state law.

The limited approval and limited disapproval action triggers a sanctions clock, and EPA's obligation to promulgate a Federal implementation plan, because the revisions to the District rules that are the subject ofthis action are required under antibacksliding principles established for the transition from the 1-hour to the 8- hour ozone standard.

DATES: EffectiveDate:This rule is effective on June 10, 2010.

ADDRESSES: EPAhas established docket number EPA-R09-OAR-2010-0062 for this action. The index to the docket is available electronically athttp:// www.regulations.govandin hard copy atEPA Region IX, 75 Hawthorne Street, SanFrancisco, California. While all documents in the docket are listed in the index, some information maybe 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 normalbusiness hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, Permits Office (AIR3), U.S. Environmental Protection Agency, Region IX, (415) 972-3534, yannayon.laura@epa.gov. SUPPLEMENTARY INFORMATION: Throughout this document, "we," "us" and "our"refer to EPA.

Table ofContents
I.Proposed Action

A. Correction ofEPA's May 2004Final

Approval B. Proposed Action on Amended District

Rules 1.Summary ofEvaluation ofChanges

Related toMinor NSR 2. Summary ofEvaluation ofChanges

Related to "Extreme" Ozone Area NSR Requirements 3. Summary ofEvaluation ofChanges

Implementing EPA's NSR ReformRules 4. Summary ofEvaluation ofAmended

Rules forEnforceability 5. Summary ofEvaluation ofAmended

Rule 2530 6. Summary ofEvaluation ofAmended

Rules forCompliance with CAA Section 110(1) C.Removal ofObsolete Conditions onSIP

Approvals II.Public Comments and EPA's Responses II. Final Action IV. Statutory and Executive Order Reviews

I.Proposed Action

On January 29, 2010 (75 FR 4745), under the Clean AirAct (CAA or "Act"),

we proposed three actions in connection with thepermitting rules for the San Joaquin Valley Unified Air Pollution Control District ("District")portion of the California State Implementation Plan (SIP).'

A. CorrectionofEPA'sMay2004 Final Approval

First, we proposed to correct an error in our May 2004 final rule approving the District's Rules 2020 and 2201 that establish the requirements and exemptions for review ofnew or modified stationary sources ("new

source review" or "NSR"). In our

1The San Joaquin Valley includes all of San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings and Tulare counties, and the western half ofKern County, in the State ofCalifornia. 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 (annual) and 2006 (24-hour) 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, butthe 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 Valleywas further classified as an "extreme" area for the now-revoked 1-hour ozone NAAQS when EPA designated the area withrespect to the 8-hour ozone NAAQS. proposed rule, we explained howour

error arose from the failure, based on information available at the time, to recognize that the District did not have the authority under State lawto implement Rules 2020 and 2201 with respect to permitting ofminor agricultural sources with actual emissions less than 50% ofthe applicable "majorsource" thresholds and with respect to the imposition of emissions offset requirements for minor agricultural sources.

In response to our proposed rule, several comments were submitted that objectto ourproposed correction action andthe interpretation of State lawupon which itisbased, and raise significant questions as to the true extent ofDistrict authority with respect to agricultural

sources under State law. Specifically, the commenters who object to our proposed correction cite "savings" clauses in State lawthat they contend ratify District NSR rules that contain no permitting or offsets exemptions for agricultural sources notwithstanding otherprovisions in State law thatwould otherwise limit suchDistrict authority

over those sources. To ensure our action isbased on a correct interpretation of State law, we have decided to request the State ofCalifornia toprovide us with a legal interpretation ofthe extent ofDistrict authority with respect to agricultural sources under State law and
to defer further rulemaking on the correction proposal until we have the opportunity to consider the StateY's response to ourrequest.

B. Proposed Action onAmendedDistrict Rules

In this section, we summarize the information we provided in the proposed rule concerning the submitted rules subject tothis final action, the changes in the rules relative to the corresponding rules in the existing SIP, and our evaluation ofthe amended rules relative to the applicable CAA and EPA requirements. We provide only a summary ofthis information herein. For

amore detailed discussion ofthese issues, please see ourJanuary 29, 2010 proposed rule.

Table 1lists therules on which we proposed action in ourJanuary 29, 2010 proposed rule with the dates that they

were revised by the District and submitted to EPAbythe California Air Resources Board (CARB). Today, we are taking final action on the three listed rules. 

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TABLE 1-SUBMITTED RULES FOR WHICH WE ARE TAKING FINAL ACTION IN TODAY'S ACTION

Local agency Rule # Rule title Amended Submitted

SJVUAPCD

................................. 2020 Exemptions

........................ . .. ...................................... 12/20/07 03/07/08 SJVUAPCD

................................. 2201 New and Modified Stationary Source Review Rule

....................... 12/18/08 03/17/09 SJVUAPCD

................................. 2530 Federally Enforceable Potential to Emit

......................................... 12/18/08 03/17/09

With respect to District Rule 2020 ("Exemptions"), the rule's purpose is to specify emission units that are not required to obtain an Authority to Construct or Permit to Operate and to specifythe recordkeeping requirements
to verify such exemptions. Generally, the changes that we are taking action on today relative to the existing SIP version would revise and clarify certain exemptions and exempt certain agricultural sources from permitting requirements.

Among the changes in amended District Rule 2020 relative tothe version previously approved into the SIP are changes thatwill do the following:

* Revise the existing exemption for
steam generators, steam superheaters,
water boilers, water heaters, steam cleaners, and closed indirect heat transfer systems thathave a maximum input heat rating offive million Btu per hour or less and that are fired exclusively on natural gas or liquefied petroleum gas (LPG) (see paragraph 6.1.1 ofthe submitted rule); 2

* Clarify and tighten the existing exemption for certain types oftransfer equipment, such as loading and unloading racks, and equipment used exclusively for the transfer ofrefined lubricating oil (see paragraph 6.7 ofthe submitted rule); and

* Exempt agricultural sources to the
extent such sources are exempt pursuant to California Health &Safety Code (CH&SC) section 42301.16 (see paragraph 6.20 ofthe submitted rule).
CH&SC section 42301.16 essentially exempts agricultural sources with actual emissions less than 50 percent ofa major source applicability threshold from permitting unless the District makes certain findings.

With respect to District Rule 2201 ("New andModified Stationary Source Review Rule"), therule's purpose is to provide for thereview ofnew and

2 The existing exemption is limited to the types ofequipment described abovebut also establishes thefollowing specifications for bothnatural gas and LPG combustedby the equipment: "provided the fuel contains no more thanfivepercent by weight hydrocarbons * * * andno morethan 0.75 grains oftotal sulfur per 100 standard cubic feet ofgas * * *."Therevised exemption establishes separate specifications for natural gas and for LPG. The hydrocarbon content limitremains fivepercent for natural gas but drops totwo percent for LPG.The sulfurcontent limit increases from 0.75 grains, to modified stationary sources ofair pollution andto 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 alsointended to provide for no net increase in emissions above specified thresholds from new and modified stationary sources ofall nonattainment pollutants and their
precursors.

Generally, amended District Rule 2201 incorporates three major changes relative tothe version ofRule 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 ofthe amended rule.) The former term incorporates EPA's NSR reform principles, andthe latter term retains the pre-NSR reform approach to determining whether amodification is a major modification. 3 Second, amended District Rule 2201 would incorporate the lower "major source" and "Federal major modification" emissions thresholds, and higher offsetratios, for the ozone precursors, VOC and NOx, consistent with an "extreme" ozone classification. (See paragraphs 3.17, 3.23, and 3.34 ofthe amended rule.) Lastly, changes to District Rule 2201 would exempt new or modified agricultural sources from offset requirements to the extent provided by CH&SC section 42301.18(c), which exempts agricultural sources from the offsets requirement ifemissions reductions from such sources would not meet the criteria for real, permanent, quantifiable, and enforceable emissions reductions, unless the offsets are required by Federal CAArequirements.

1.0 grain for natural gas, and to 15 grains (per 100 standard cubic feet ofgas). The revised exemption requires use ofthe latest versions ofthe relevant ASTM test methods.

3Usingthese two definitions, the District performs two separate "major modification" determinations. Where the modification ofan existing source falls within the definition of"SB 288 MajorModification," the modification willbe required at a minimum to meet the NSR SIP requirements that had applied prior to adoption by (Seeparagraph 4.6.9 ofthe amended rule.)

Unlike District Rules 2020 and 2201, District Rule 2530 ("Federally Enforceable Potential toEmit") isnot an NSR rule, but is a rule thatrelies on thresholds based on certain percentages ofthe major source thresholds established for NSR purposes as a basis
to exempt sources from the requirements ofRule 2520 ("Federally Mandated Operating Permits"). Relative
to the corresponding rule in the existing SIP, the amended rule would lower the thresholds below which sources ofVOC

orNOx are exempt from the requirements ofRule 2520 (see paragraph 6.1 ofthe 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 ofthe amended rule); and would lower certain alternative operational limits (see, e.g., paragraph 6.2.4 ofthe amended rule).

In evaluating the amendments to the three District Rules, we found that significant changes fall into fourbroad categories: Changes affecting minor

source NSR permitting requirements; changes relating to the area's extreme classification for the 1-hour ozone standard; changes relating toNSR Reform; and changes affecting the mechanism used by sources to avoid title V requirements, andwe evaluated these changes for compliance with the requirements under CAA section 110(a), section 110(1), and section 182(e) and (f). In addition, we reviewed the amended rules for compliance with EPA's regulations for NSR, including 40 CFR 51.160 through 40 CFR 51.165. In

so doing, we tookinto account the pollutant-specific designations for the San Joaquin Valley, summarized in table 2. 4

the District ofthe 2002 NSR Reforms into Rule 2201. Where the modification alsofalls within the definition of"Federal Major Modification," the modification will have to meet additional NSR Requirements consistent with 2002 NSR Reform.

4We also identified and evaluated a number of other, less substantive changes, and found all of them to beeither neutral or strengtheningrelative

to the existing SIP and consistent with all applicable requirements. See section IV.B.5 ofthe January 29, 2010 proposedrule. 

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TABLE 2-SAN JOAQUIN VALLEY AREA DESIGNATIONS

Pollutant Designation Classification

(Revoked) Ozone-i -hour standard

.................. Nonattainment

.................................................. Extreme (at the time of designation for the 1997 8-hour ozone standard). Ozone- 1997 8-hour standard

........................... Nonattainment

.................................................. Serious.a Respirable Particulate Matter (PM o)

................. Attainment

........................................................ Not Applicable. Fine Particulate Matter (PM 2
. 5)

........................... Nonattainment

.................................................. Not Applicable. Carbon Monoxide

............................................... Attainment (4 urban areas); Unclassifiable/At- Not Applicable. tainment (rest of valley). Nitrogen Dioxide

................................................. Unclassifiable/Attainment

................................. Not Applicable. Sulfur Dioxide

..................................................... Unclassifiable/Attainment

................................. Not Applicable.

aThe State of California has requested reclassification of the San Joaquin Valley to "extreme" 43654 (August 27, 2009).

1.Summary ofEvaluation ofChanges Related to Minor NSR

As tothe changes related to minor

source NSR permitting requirements, we found that the amended rules would affect minor source NSR ("minorNSR") by revising an existing permitting exemption for certain natural-gas- or LPG-fired combustion andheat transfer systems (seeparagraph 6.1 in submitted District Rule 2020), by exempting minor agricultural sources with actual emissions less than 50 percent ofthe major source threshold (seeparagraph 6.20 in submitted District Rule 2020) from permitting, andby exempting all

new ormodified minor agricultural

sources from the offset requirement (see paragraph 4.6.9 ofsubmitted District Rule 2201).

We concluded that the amended rules
met EPA's minor NSRrequirements in 40 CFR 51.160 because, even with the

new and amended exemptions, the District NSR program would continue to provide the District with the information necessary to determine whether the construction or modification ofa stationary source would result in a violation ofapplicable portions ofthe control strategy; or would result in interference with attainment or maintenance ofthe NAAQS. With respect to the revised exemption for certain smaller combustion and heat transfer systems,

we based this conclusion on our determination that therelaxed sulfur
content specification in amended Rule 2020, paragraph 6.1, would have no significant impact on emissions in the valley.

With respect the limited permitting exemption for agricultural sources, we based this conclusion on a number of factors. Forparticulate matter, we rely
upon the implementation ofcertain prohibitory rules, such as District Rule 4550 ("Conservation Management Practices") andthe District's Regulation VIII ("FugitivePM 10Prohibitions", particularly, Rules 8011 and 8081) to act as non-permitting means to reduce fugitive dust emissions at agricultural

sources thatfall under the exemption and thereby reduce the potential for localized exceedances ofthe PM10 and PM2. 5 standards. For ozone precursors (VOCand NOx), we noted thatthe limited permitting exemption would only apply to agricultural operations with "actual" emissions (i.e.,including fugitive emissions) 5ofless than 5tons per year, and that, as such, the scope of the exemption would be limited to small-scale agricultural operations and would be acceptable so long as the

ozone plans for the valley do not count

on permitting of such sources.

With respect to the regional planning context, for the proposed rule, we reviewed the various approved and submitted San Joaquin Valley attainment ormaintenance plans, and noted that none ofthese plans relyupon reductions from NSR for agricultural

sources less than 50 percent ofthe major

source threshold. We also noted that, for attainment planning purposes, growth in emissions from agricultural sources has been established by CARB's area

source inventory growth methodologies, and no mitigation ofthat growth from

an offsets requirement hasbeen considered when determining the

5TheDistrict's view on whether the CH&SC section 42301.16 (and cited in District Rule 2020, section 6.20) covers fugitive VOC emissions is found in the District'sFinal Staff Report (page B13, response to comment #19) on proposed amendments to Rule2201 and Rule 2530 (dated December 18, 2008): "The District appreciates the opportunity toreiterate that, forthe purposes of implementing CH&SC sections 40724.6(c) and 42301.16(c), all emissions, except for fugitive dust,
must beincluded in calculations to determine district permitting requirements based on one-half ofthe major source thresholds. The statutory language of these sections is consistent, which read separately orin the interrelated nature inwhich they were intended to be read, and [sic] District's implementation adheres to this statutory language." Thus, fugitive VOC emissions areincluded in the determination ofwhether actual emissions from a minor agricultural operation aregreater than50% ofthe applicable major source threshold which, for VOC, is 10 tons peryear, or,in other words, greater than 5 tons peryear. for the 1997 8-hour ozone standard. See 74 FR

impact ofthe growth on the District's ability to achieve attainment with the standards.6 We concluded that, because the plans do notrely on emission reductions from permitting of agricultural sources less than 50% ofthe major source threshold and do not rely

on offsets for new or modified minor agricultural sources, approval ofthe amended Rules 2020 and 2201 would be consistent with regional planning efforts
to attain and maintain the NAAQS.

Lastly, with respect tominor source NSR changes, we notedthat, under Federal law, minor sources are not required to obtain offsets, and thus, the exemption for minor agricultural

sources from the offsets requirement is consistent with Federal requirements.

2.Summary ofEvaluation ofChanges Related to "Extreme" Ozone Area NSR Requirements

In ourJanuary 29, 2010 proposed rule,

we identified the applicable requirements for nonattainment areas classified as "extreme" for the 1-hour

ozone standard and reviewed the amended District rules for compliance with the applicable requirements. For such areas, the relevantNSR requirements include a major source threshold of 10 tons per year ofVOC or NON [seeCAA section 182(e) and 182(f) and 51.165(a)(1)(iv)], an offset ratio of 1.5 to 1 [seeCAA section 182(e)(1) and 40 CFR 51.165(a)(9)], and definition of major modification that applies to 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 [see CAA section 182(e)(2) and 40 CFR 51.165(a)(1)(x)(E)].

As submitted on March 17, 2009, the VOC and NON provisions in District Rule 2201 have been amended to include the 10 ton per year threshold

6Also see the District's Clean Air Act section 110(1) analysis, entitled "SanJoaquin ValleyUnified Air Pollution ControlDistrict Rules 2020 and 2201,

as amended September 21, 2006, District's Clean Air Act 110(1) Analysis," dated November 20, 2007. 

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(see paragraph 3.23 ofamended Rule 2201), the 1.5 to 1 offsetratio (see paragraph 4.8.1 ofamended Rule 2201), andthe "any increase" threshold for major modifications (see paragraph 3.17.1.4 ofamended Rule 2201). As such, we concluded that DistrictRule 2201 has adequately been amended to reflect "extreme" ozone area requirements under the CAA and 40 CFR 51.165.

3.Summary ofEvaluation ofChanges Implementing EPA's NSR Reform Rules

In our proposed rule, we described EPA's implementation ofNSR Reform Rules and the ensuing litigation and identified thebasic program elements that NSR programs mustbe amended to include. We concluded that, as submitted onMarch 17, 2009, District Rule 2201 has been amended to provide for the minimum program elements of the 2002 NSR Reform Rules thatremain in the wake ofsubsequent litigation and EPA rulemaking. The amended District Rule provides for the minimum program elementsby replacing a single definition for "Major Modification" with two definitions, one for "Federal Major Modification" and the other for "SB 288 Major Modification." As discussed above, the former term captures the NSR Reform program elements (andthe "any increase" emissions threshold required in "extreme" ozone areas), while the latter retains thepre-Reform approach to determining major modification status. Paragraph 3.17.1 ofamended Rule 2201 incorporates the new methodfor determining baseline actual emissions and the actual-to-projected-actual methodology for determining whether a major modification has occurred. Paragraph 3.17.2 incorporates provisions allowing major stationary

sources to comply with Plantwide Applicability Limits (PALs).

4. Summary ofEvaluation ofAmended Rules for Enforceability

For the reasons givenin the January 2010 proposed rule and summarized above, we found the amendments to District Rules 2020 and 2201 to be acceptable under applicable NSR regulations; however, SIP rules must also be enforceable [seeCAA section 110(a)], and we found two specific deficiencies related to enforceability of Rules 2020 and 2201 thatprevent our full approval. These deficiencies arise from the ambiguity introduced by the references inboth paragraph 6.20 (of Rule 2020) and paragraph 4.6.9 (ofRule 2201) to State law under circumstances where the State lawhas 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(a) requires districts to extend permitting requirements to all agricultural sources that are "required to obtain a permit pursuant to Title I * * *

or Title V * * * ofthe Federal Clean Air Act," which wehave interpreted as referring to "major" sources under the CAA, and to all other agricultural

sources (referred to herein as "minor") with actual emissions one-halfofthe applicable major source emissions thresholds (orgreater) for any air contaminant, excluding fugitive dust. See CH&SC section 42301.16(b). However, CH&SC section 42301.16(b) also provides a means through which a district can extend the exemption from "one-half ofany applicable emissions threshold" tothe "major source" threshold ifcertain findings are made in

a public hearing.

Because CH&SC section 42301.16 is
not included in the California SIP, nor has California submitted the sectionto EPA for approval, the SIP would be ambiguous as tothe extent ofthe agricultural source permitting exemption ifEPA were to approve submitted District Rule 2020 into the SIP. Effective enforcement ofthe permitting requirements would rely on judicial notice ofthe statutory provision cited in the rule, and such judicial notice may or may not be forthcoming. There isno need torely onjudicial notice when the District can eliminate the ambiguity byclearly statingthe 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 thatjudicial notice of the statutory provision wouldbe taken, CH&SC section 42301.16 by itsterms allows for a relaxation ofthe one-halfof 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 proposed a limited approval and limited disapproval ofsubmitted Rule 2020. In

our January 2010 proposed rule, we noted that the deficiency inRule 2020

can be remedied by the Districtby replacing the statutory reference to CH&SC section 42301.16 in paragraph 6.20 with a clear description ofthe

sources covered by the exemption, and by submitting the amended ruleto EPA (viaCARB) as a SIP revision. In today's document, we are taking final limited approval and limited disapproval action today on amended Rule 2020 consistent with ourJanuary 29, 2010 proposal.

Paragraph 4.6.9 ofsubmitted Rule 2201 contains a similarly-ambiguous reference to state lawin listing emission offset exemptions: "Agricultural sources, to the extent provided byCalifornia Health and Safety Code, section 42301.18(c), except thatnothing 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 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 ormodified agricultural sources unless such new or modified source is

a "Major Source" or a "Federal Major Modification" as defined in another section ofRule 2201. Once again, there is no need for ambiguity in the applicability ofthe emissions offset exemption, and therefore, EPAproposed

a limited approval and limited disapproval ofsubmitted Rule 2201. The deficiency in Rule 2201 can be remedied by either submittal ofthe statutory provisions cited in paragraph 4.6.9 orby replacing the references with

a clear description ofthe applicability of the offset requirement to agricultural
sources, and by submitting the amended rule to EPA (viaCARB) as a SIP revision. In today's document, we are taking final limited approval and limited disapproval action today on amended Rule 2201 consistent with our January 29, 2010 proposal.

5.Summary ofEvaluation ofAmended Rule 2530

In ourJanuary 2010 proposed rule, we discussed the purpose ofDistrict Rule 2530 and the applicable EPA guidance and corresponding parameters for such rules, and explained thatthe emission limits and the alternative operational limits in therule were amended bythe District in step with the valley's classification of "extreme" forthe 1-hour

ozone NAAQS. We reviewed the amended limits in District Rule 2530, as submitted onMarch 17, 2009, and found them to be acceptable. Based on

our review ofthe amended rule in relation toits underlying purpose, we

are taking final action today to approve amended District Rule 2530because we find thatit has been appropriately modified to reflect the decrease inthe major source threshold forVOC and NOx consistent with the area's 

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"extreme" classification for the 1-hour

ozone standard.

6. Summary ofEvaluation ofAmended Rules for Compliance with CAA Section 110(1)

CAA section 110(1) provides: "Each revision to an implementation plan submitted by a State under this chapter shall be adoptedby such State after reasonable notice and public hearing. The administrator shall not approve a revision ofa plan ifthe revision would interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in section 7501 ofthis title) or any other applicable requirement ofthis chapter." 42 U.S.C. 7410(1).

In ourJanuary 2010 proposed rule, for the purposes ofCAA section 110(1), we took into account the overall effect of the revisions included in this action. Given the wide application ofthe lower major source thresholds to all types of

new or modified stationary sources of VOC andNOx and the limited extent of the exemptions from permitting and offsets for certain types ofagricultural
sources, we found thatthe overall effect ofthe revisions would strengthen the SIP, notwithstanding deficiencies identified above in enforceability. Moreover, we concluded that we do not anticipate localized exceedances ofthe PM10 or PM 2.5 standards, due to the permitting exemption for certain agricultural sources, given the application ofnon-permitting requirements in the SIP.Lastly, we noted that the revisions are consistent with the assumptions ofthe various air quality plans developed for the valley. Accordingly, we concluded thatthe revisions to Rules 2020, 2201, and 2530 would not interfere with any applicable requirements for attainment and reasonable further progress or any other applicable requirement ofthe CAA and

are approvable under section 110(1) of the Clean Air Act.

C.Removal ofObsoleteConditionson SIPApprovals

In ourJanuary 29, 2010 proposed rule,

we also proposed toremove certain obsolete conditions placed on SIP approvals ofcertain California nonattainment plans in the 1980's. These NSR-related conditions are identified in table 3,below, by applicable county, EPA action, and CFR citation.

TABLE 3-OBSOLETE CONDITIONS BEING REMOVED

County Conditional approval Federal Register Regulatory citation citation

Kern County a

..................................................... 46 FR 42450 (August 21, 1981)

...................... 40 CFR 52.232(a)(5)(i)(A) San Joaquin County

........................................... 47 FR 19694 (May 7, 1982), amended at 50 40 CFR 52.232(a)(6)(i)(A) FR 7591 (February 25, 1985). Kings, Madera, Merced, Stanislaus, and Tulare 47 FR 19694 (May 7, 1982)

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

Counties. Fresno County

.................................................... 47 FR 28617 (July 1, 1982)

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

aIntoday's document, we are removing the Kern County condition for carbon monoxide and ozone only.

We proposed removal ofthe condition in 40 CFR 52.232(a)(5)(i)(A) because we concluded that itwas obsolete as to carbon monoxide and ozone inlight of the approval ofDistrict NSR rules in 2004 (69 FR 27837, May 17, 2004), the change in theboundary for the 1-hour

ozone nonattainment boundary for San Joaquin Valley (66 FR 56476, November 8, 2001), andthe redesignation ofthe East Kern County 1-hour ozone nonattainment area to attainment (69FR 21731, April 22, 2004). However, as to particulate matter, we found the condition tobe unfulfilled because the Kern County Air Pollution Control District (APCD)7retainsjurisdiction

over a small portion ofthe SanJoaquin Valley planning area, the portion ofthe SanJoaquin Valley planning area over which Kern County APCD retains jurisdiction remains nonattainment for PM1o(see 73 FR 66759, November 12, 2008), and because we haveyet to approve a revision to Kern County APCD NSR rules thatmeetthe condition

7Kern County ACPD, one ofthe original countybased APCDs covering SanJoaquin Valley, was not entirely consolidated into the current SanJoaquin Valley Unified Air PollutionControl District (herein, referred to as "District"),but its jurisdiction is no longer county-wide, and is limited to the
eastern portion ofthe county. in 40 CFR 52.232(a)(5)(i)(A). We proposed removal ofthe 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 ofthe approval ofDistrict NSR rules in 2004 (69 FR 27837, May 17, 2004).8 We are taking final actiontoday
to remove the obsolete provisions described above for the reasons given in

our January 29, 2010 proposed rule and that are summarized above. We are retaining the condition in40 CFR 52.232(a)(5)(i)(A) as to particulate
matter until we approve the Kern County APCD's nonattainment NSR rules for the EastKern County PM10 nonattainment area or until we approve

a redesignation request for the East Kern PM10 area to "attainment."

II. Public Comments and EPA's Responses
OurJanuary 29, 2010 proposed rule (75 FR 4745) provided for a 30-day
comment period. During that period, we received adverse comments fromthree groups: Greenberg-Glusker lawfirm

8Thecondition established in40 CFR 52.232(a)(11) also relates to Ventura County,but removal ofthe condition is proper as to Ventura County in light ofEPA's subsequent approval ofthe Ventura County nonattainment NSRrules at 68 FR 9561 (February 28, 2003). (referredto herein as "DairyCares"), on behalfofDairy Cares, a coalition of California's dairy producer and
processor associations, by letter dated March 1, 2010; Earthjustice, byletter dated March 1, 2010; and the Center on Race, Poverty &the Environment (referredto herein as "AIR"), on behalf ofthe Association ofIrritated Residents and other community and environmental groups, by letter dated March 1, 2010. AIR joins in the
comments from Earthjustice, but also adds comments ofits own. Asnoted previously, we have decided to defer further rulemaking action on our proposal to correct our May 2004 approval oftheprevious version of District NSR rules pending a legal interpretation from the state regarding the extent ofthe District's permitting and offsets authority in connection with agricultural sources under State law. Thus, we have not responded to the
comments related to thataspect ofour proposal in this document, but will respond to those comments in a separate final rule ifwe subsequently finalize our proposed correction as proposed on January 29, 2010. In the following paragraphs, we provide a summary of the significant adverse comments and 

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our responses (i.e.,related to the aspects ofourproposal other than the error correction).

Comment#1: Dairy Cares disagrees with EPA's approval ofthe District's Rule Revisions to the extent itis predicated on an interpretation thatthe exemption for emission offsets does not apply to major sources. Dairy Cares claims that CH&SC section 42301.18(c) prohibits any district fromrequiring any agricultural source to obtain offsets until agricultural source reductions meetthe criteria for creditability. Dairy Cares claims that, under CH&SC 42301.18(c), the District does not have the requisite State authority to require emission offsets unless the offsets canbe credited. Dairy Cares acknowledges thatCH&SC section 42301.16(a) requires that agricultural sources obtain permits "consistent with Federal requirements," andthat the Clean Air Act generally requires certain emission offsets from

new orexpanding Federal major
sources, but argues thatintegral to such emission offsets requirements is the abilityto credit emission reductions. To the extent there is a conflict between sections 42310.16(a) and 42301.18(c), Dairy Cares asserts that the more specific provision-section 42301.18(c)-must control.

Response #1: Dairy Cares iscorrect that EPA's proposed (limited)approval (andlimited disapproval) ofrevised District Rule 2201 is predicated in part

on an interpretation ofCH&SC sections 42301.16(a) and 42301.18(c) to the effect that CH&SC section 42301.16(a) limits the applicability ofthe emission offset exemption in CH&SC section 42301.18(c) so asto exclude major agricultural sources from the exemption. In other words, we have concluded that State law requires the District toimpose the emissions offsets requirements on

new ormodified agricultural sources that are considered new major sources

ormajor modifications, notwithstanding the limitation on District authority set forth in CH&SC section 42301.18(c).

Paragraph 4.6.9 ofrevised District Rule 2201 provides that emission offsets shall not be required for:

"Agricultural sources, to the extent provided byCalifornia Healthand Safety Code, section 42301.18(c), except that nothing in this section shall circumvent the requirements ofsection 42301.16(a)."

CH&SC section 42301.16(a) provides:
"Inaddition tocomplying withthe requirements ofthis chapter, a permit system established by a district pursuant to section 42300 shall ensure that any agricultural

source that isrequired to obtain a permit pursuant to Title 1(42 U.S.C. Sec. 7401 et seq.) orTitle V (42U.S.C. Sec. 7661 et seq.) ofthe Federal Clean Air Act is required by district regulations to obtain a permit in a

manner that is consistent withthe Federal requirements."

CH&SC section 42301.18(c) provides:

"A district may not require an agricultural

source to obtain emissions offsets for criteria pollutants forthat source ifemissions reductions fromthat source would not meet the criteria forreal, permanent, quantifiable, and enforceable emission reductions."

EPA interprets the reference in CH&SC section 42301.16(a) to "any agricultural source that isrequired to obtain a permit pursuant to Title I * * *

or Title V * * * ofthe Federal Clean Air Act" as a reference to sources considered "major sources" under the Clean Air Act and not to "minor

sources" because only the former are required to obtain a permit. A state may exempt new or modified minor sources from regulation so long asthe overall program for regulation ofnew or modified stationary sources assures that the NAAQS are achieved. See section 110(a)(2)(C) ofthe Act.

EPA interprets the directive in CH&SC 42301.16(a) tothe Districts to ensure that their permit rules require major agricultural sources (andmajor modifications ofsuch sources) to obtain

a permit in a manner "thatis consistent with theFederal requirements" as referring to, in this context, the minimum requirements for new or modified major sources, including but
not limited to, emission offsets [see CAA section 173(a)(1)] anduse of emissions control technology representing the lowest achievable emission rate [seeCAA section 173(a)(2)]. With certain exceptions not relevant here (e.g., rocket engines), the Act does not exempt any major sources

or major modifications in nonattainment

areas from the offset requirement, regardless ofwhether emissions reductions for a given source meetthe criteria for real, permanent, quantifiable, and enforceable emission reductions. In other words, contrary to Dairy Cares' claim, the ability to credit emission reductions is not integral to the emissions offset requirements.

We find no statutory or regulatory basis to support Dairy Cares' claim that exemption ofmajor agricultural sources from the offset requirement does not conflict with the Clean Air Act.Dairy Cares points to Clean Air Act sections 173(c) and 182(e)(2), 40 CFR 51.165(a)(1)(vi)(A) and 40 CFR part 51, appendix S as support for the general principle that credits are an integral part ofthe statutory and regulatory scheme for offsets, and further, that one cannot be imposed (emission offsets requirements) without allowing for the other (credits for emissions reductions from the source).

First, section 173 ("* * * may comply with any offset requirement only by obtaining emission reductions from the

same source or other sources * * * I provides two basic approaches to meeting the emissions offset requirement, by obtaining emissions reductions from the same source or by obtaining emissions reductions from other sources. The factthat, for the time being, one approach (internaloffsets) is quite limited (i.e.,limited to certain discrete units at afarm from which emissions reductions are considered creditable, e.g., boilers and stationary engines and pumps) does notjustify a full exemption from the emissions offset requirement for all major agricultural

sources. IfCongress had intended major agricultural sources tobe exempt from the offset requirement, it could well have carved out an exception as ithas for rocket engines [seeCAA section 173(e)]. Moreover, a new major agricultural source is inno different position than any other new major

source in thatboth have no internal emissions reductions to use to comply with the offset requirement.

Two other provisions cited byDairy Cares, CAA section 182(e)(2) (" * * not considered a modification ifthe

owner * * * elects to offset the increase

* * * from discrete operations, units or activities within the source") and 40 CFR 51.165(a)(1)(vi)(A) ("net emissions increase means * * * any other increases and decreases in actual emissions that are * * * otherwise creditable")relate toidentification of modifications as "majormodifications." Dairy Cares is correct in thatthe limited abilityby agricultural sources to use internal credits may well make it harder
to avoid "major modification" status and the corresponding requirements. However, there is simply no language in either the statutory provision or regulatory provision cited above that conditions "majormodification" status

onwhether or not the source can credit its emissions reductions. Furthermore,

as noted above, discrete units at agricultural sources, such asboilers and stationary pumps, can already be used for internal credits in a major modification applicability determination at an agricultural source.

Dairy Cares points to a provision in 40 CFR part 51, appendix S, that allows, under certain circumstances, emissions reduction credits from shutdowns or curtailments as further evidence that allowance for credits from a source are integral to the imposition ofthe emissions offset requirement on the

source. However, once again, the 

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provision allowing under certain circumstances the use ofcredits from shutdowns or curtailments isbut one
means to comply with the offset requirement, and itsunavailability to a certain category of sources does not negate the underlying statutory requirement on all new major sources andmajor modifications, including the category ofsources for which shutdown

orcurtailment credits are unavailable, in nonattainment areas toprovide emissions offsets for the applicable nonattainment pollutants.

Hence, with respect to agricultural
sources, tobe "consistent with the Federal requirements" within the meaning ofCH&SC 42301.16(a) means a District permitting program must impose an emissions offset requirement for new major sources andmajor modifications. We view CH&SC 42301.16(a) as not only agrant of authority toDistricts to establish a permitting system that, in nonattainment areas, requires imposition ofan emissions offset requirement on all agricultural sources that are new major sources or major modifications, but as an affirmative directive to do so.

Lastly, we recognize that CH&SC section 42301.18(c), read in isolation, withholds the authority from Districtsto require emissions offsets from any (i.e., major andminor) new ormodified agricultural sources until agricultural

source reductions meet the criteria for creditability. As explained above, however, such a reading would prevent District from establishing permitting
programs for major sources and major modifications "consistent with Federal requirements" as required by the Legislature through CH&SC section 42301.16(a).

We also do not agree that CH&SC section 42301.18(c) is simply a more specific statute that should be given precedence over the more general
statute CH&SC section 42301.16(a). The
two CH&SC sections simply address different permitting issues; one generally relates to emissions offsets for (bothmajor andminor) agricultural

sources whereas the other generally relates topermitting ofmajor sources. We see no reason to interpret the two statutory provisions in question as in direct conflict and thereby to choose

one provision over the other, butrather
to give effect toboth by interpreting CH&SC section 42301.18(c) as withholding the authority from Districts
to impose an emission offset requirement on new or modified agricultural sources (until emissions reductions from such sources are creditable) but only with respect tononmajor agricultural sources and modifications. Our interpretation ofCH&SC sections 42301.16(a) and 42301.18(c) is further supported by our knowledge ofthe regulatory context in which Senate Bill 700 (SB 700), which established the two cited provisions, was promulgated by the California Legislature. One ofthe principal purposes for promulgation of SB 700 was to respond to a "SIP call" under CAA section 110(k)(5) byEPA based on the lack of State or District authority to carry outthe applicable nonattainment NSR or PSD portions of the SIP with respectto major agricultural sources. See 68 FR 37746 (June 25, 2003). Under DairyCares' interpretation, the CaliforniaLegislature would have failed to address this deficiency by failing to provide the
necessary authority with respect to nonattainment NSR. However, for the

reasons stated above, therelevant provisions ofSB 700, i.e., CH&SC sections 42301.16(a) and 42301.18(c), need notbe interpreted that way.

Finally, we note that CARB and the District interpret therelevant State law in the same way as EPA. In aletter to Air Pollution Control Officers dated September 3, 2008, the CARB Executive Officer requests the heads ofthe various air districts inCalifornia to update their permit rules as they applyto agricultural sources in accordance with CH&SC 42301.16. In reference to agricultural sources that are major, the CARB Executive Officer states that "Both Federal and State law require "best available control technology" (BACT) and offsets for these sources. Any exemption for major sources from permit requirements that can arguably be considered to be inyour District's rule and in the SIP must be removed." See page 3ofthe CARB September 3, 2008 letter.Later, in this letter, in reference to the offsets exemption in CH&SC 42301.18(c), the CARB Executive Officer states "This exemption should be narrowly applied, and, in any event, cannot be used to exempt major Federal sources from offset requirements." Seepage 4 ofthe CARB September 3, 2008 letter.

The District's interpretation canbe found in its response to a similar
comment as addressed herein, wherein the District stated:

"The District appreciates the opportunity to further clarify this very important issue. To
state it as clearly aspossible, the offset exemption ofsection 4.6.9 is NOT [emphasis from original] available to agricultural

sources which are major sources ofair pollution. Only non-major sources are provided any exemption fromoffsetting requirements bythis section. This is not newlanguage, nor is it new interpretation. There is no confusion in the legislative history, or inCAPCOA's white
paper on SB 700 implementation. The
purpose ofthe language ofsection 42301.16(a) is to specificallyrequire [emphasis from original] offsets from major

sources ofair contaminants, as this was specifically necessary to fulfill the mandates ofthe Federal SIP call that the statewas under at the time. Without this language specifically requiring offsets ofmajor agricultural sources, the lawwould not have
met EPA's requirement that we subject major California agricultural sources to Federal permitting requirements, and EPA would not have beenable to stop the SIP call and the impending sanctions. Therefore the suggested change cannot be made."
See the District's final staffreport on proposed amendment to Rule 2201 (page B-12).

In light ofEPA's, CARB's, and the District's interpretation ofCH&SC sections 42301.16(a) and 42301.18(c),

we viewparagraph 4.6.9 ofrevised District Rule 2020 as simply, and correctly, reflecting current State law as set forth in the two cited sections ofthe CH&SC. In other words, with respectto the issue of emissions offsets requirements, we see no difference between the authority granted to the District under applicable State law and the language found in paragraph 4.6.9 of revised District Rule 2020. Thus, we disagree withDairy Care's assertion that

we are again making the error of approving a rule change that is in conflict with California law. Comment#2:Earthjustice claims that EPA's rationale for approval ofthe various exemptions being added to the District's NSR rules is flawed because it is premised on the false claim thatthe District has a plan thatwill achieve the national standards for particulate matter and ozone.

Response#2: In ourJanuary 2010 proposed rule, we reviewed the status of air quality plans in the SanJoaquin Valley, and relied upon the plans as a basis to conclude that the net effect of the changes in the rules would not interfere with reasonable further progress or attainment ofany ofthe NAAQS and thus are approvable under CAA section 110(1). See sections IV.B.1 ("Regulatory Context") and IV.B.8 ("CAA Section 110(1)") ofthe proposed rule. In

our proposed rule, we noted thatEPA has not yet taken action onthe submitted SanJoaquin Valley 2007 Ozone Plan or the submitted San Joaquin Valley 2008 PM2.5Plan. Thus, it is incorrect to saythat we have based

our proposed approval ofthe revised District NSR rules on the premise that the District has a plan thatwill achieve the national standards for those 

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pollutants. Instead, we havereviewed the plans to ensure thatthe changes to the District's NSR rules are consistent with the assumptions and control strategies in these plans and found that the changes are indeed consistent with the plans and would strengthen the SIP. Furthermore, we continue tobelieve that theplans are facially valid, contrary to the unsupported claims by Earthjustice thatthey are not meaningful plans or thatthe plans have been undermined by the state.

Our detailed review of theplans and subsequent notice-and-comment rulemaking may lead to the requirement that California adopt additional control

measures to provide for attainment of the ozone and particulate matter standards, but California willnot necessarily be required to extend permitting and offsets requirements to minor agricultural sources to meet that requirement. While certain SIP requirements are prescribed by the Act andEPA regulations, extending permitting and offsets requirements to minor agricultural sources would be considered a discretionary control

measure and thus the state may well decide to select some other measure.

Comment#3:Earthjustice claims that EPA's analysis under CAA section 110(1) oftheboilers and steam generator exemptions is incomplete because it does not address whether the District

can allow these sources tobe constructed or expanded with no mitigation for emissions increases.

Response#3: As an initial starting point, the exemption in amended Rule 2020, paragraph 6.1, would notbe a new permitting exemption. Rather, the existing exemption found in the current SIP version ofparagraph 6.1 ofRule 2020 isbeing revised in certain ways, only one ofwhich arguably expands the exemption. The revision that arguably expands the exemption involves changes in the maximum sulfur content specifications for natural gas and liquefied petroleum gas (LPG) combusted by the applicable types of

sources (such asboilers and steam generators with maximum input heat ratings of5millionBtu perhour (gross)

or less).

With respect to the sulfur content specification, the amended rule would raise the maximum allowable limitfrom 0.75 grains (oftotal sulfur) per 100 standard cubic feet (scf)for both natural gas and LPG,to 1.0 grain per 100 scffor natural gas and 15 grains per 100 scffor LPG. The District's memo dated November 13, 2009, which is cited in the proposed rule, indicates thatthe

reason for the increase is to align the maximum sulfur content specification in the exemption to the corresponding specification usedby the relevant utilities in their own contracts for delivery ofnatural gas. For LPG,the

reason for the increase isto alignthe specification in the exemption with the corresponding industry standard specifications as setby the Gas Processors Association (GPA). The industry practice by LPG distributors of adding odorant for safety purposes (typicallymercaptan) containing between 1and 3grains ofsulfur per 100 scfalone exceeds the existing specification of0.75 grains ofsulfur.

For perspective, we note that the sulfur dioxide emissions fromnatural gas combustion at 5million Btu per hour orless amounts to 0.35 lb per day and 0.06 tons per year, assuming maximum operation 24 hours per day, 365 days per year (basedon AP-42 (section 1.4) emissions factors, sulfur
content of 1grain per 100 cubic feet). The corresponding sulfur dioxide emissions for LPG are 1.97 lb/day and 0.36 ton per year, once again, assuming maximum continuous operation (based

on AP-42 (section 1.5) emissions factors for propane, and sulfur content of 15 grains per 100 cubic feet). In other words, this particular exemption relates
to very small emissions sources, that would not be subject toBACT under District Rule 2201, paragraph 4.1.1 * *BACT shall be required for

• * * any new emissions unit * * *
with a Potential to Emit exceeding 2.0 pounds in any one day"), evenifsuch

sources were subject topermitting.

Sulfur dioxide is a criteria pollutant in its own right,but is also a precursor pollutant for PMo and PM2. 5. While San Joaquin Valley is designated as "attainment"for both the sulfur dioxide NAAQS and the PM1oNAAQS, the valley isdesignated as nonattainment for the PM2.5NAAQS. Thus, to satisfy Federal Clean Air Act requirements regarding NSR, the valley must require emissions offsets for new major sources of sulfur dioxide and major modifications at existing major sources of sulfur dioxide. The applicable major

source threshold for sulfur dioxide, as a precursor to PM2.5,is 100 tons per year.

The District's NSR rule ismore broad than required in this respect and applies the emission offset requirement for sulfur dioxide to sulfur dioxide sources with emissions exceeding 54,750 pounds peryear (27.4 tons peryear). See paragraph 4.5.3 ofthe District Rule 2201. Clearly, at less than 1ton of sulfur dioxide per year, new sources ofthe type covered by the revised exemption would not otherwise be subject to the offset requirement unless they were located at an existing sulfur dioxide source with emissions greater than 27.4
tons per year. To gain some perspective

asto the number offacilities with sulfur dioxide emissions greater than 27.4 tons per year within the valley, we used CARB's California Emission Inventory Development and Reporting System (CEIDARS) database and reviewed the listings of 3,651 facilities and discovered a total ofonly 26 that had sulfur dioxide emission greater than 27.4 tons per year based on actual emission in 2007. Based on the low rate ofsulfur dioxide emissions generated by types ofsources covered by the revised exemption and the small number of

sources subject to the offset requirement, the potential in foregone sulfur dioxide emission reductions (offsets) due to the installation ofthe types ofsources covered by this particular exemption isvery limited.

Therefore, for the reasons stated in the proposed rule and supplemented herein, we continue tobelieve thatthe relaxed sulfur content specification in amended Rule 2020, paragraph 6.1, would have no significant impact on emissions in the valley. Even ifthere would be some small incremental increase in sulfur dioxide emissions due
to the hypothetical relaxation in an otherwise applicable emissions offset requirement on account ofthe revised exemption, such an increase would be

more than offset itselfby the reductions in emissions that would flow from the lower major source emissions thresholds and more stringent emissions offsetrequirement for the other PM2.5 precursors, volatile organic compounds andnitrogen oxides. Moreover, we have concluded that overall set ofchanges in District Rules 2020, 2201, and 2530, including the change inthe sulfur fuel
content specification, other changes in the permitting and offsets exemptions, the lower major source emissions thresholds, and the more stringent emissions offset requirement, would not interfere with reasonable further progress or attainment ofany ofthe NAAQS and thus are approvable under CAA section 110(1). Comment#4:Earthjustice contends that, in addition to the relaxations highlighted by EPA in the notice of proposed rulemaking, the Districtis also relaxing its equivalency demonstration outlined in section 7.0 ofRule 2201 by removing therequirement to demonstrate equivalency with the Federal new source review program that

was in effect in December 2002. Earthjustice asserts thatthe purpose of this provision was to enshrine equivalency with the Federal program prior to the relaxations adopted by EPA

aspart ofNSR Reform and thatthe 

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District now seeks to take advantage of the less stringent NSRReform provisions governing major modifications. Earthjustice claims that the change to section 7.1.1 means that fewer offsets willbe required in order to demonstrate equivalence, that EPA's analysis completely fails to address this relaxation, and thatEPA needs to quantify the reduction in offsets this change will allow and explain howthis growth in emissions can be reconciled with the fact thatthe District has no real strategy for attaining the national standards.

Response#4: Earthjustice claims that the revisions toRule 2201 have the effect of (1)relaxing the equivalency demonstration required in Section 7.0 of Rule 2201, because itremoved the requirement to demonstrate equivalency with the Federal NSR program thatwas in effect in December 2002, i.e., prior to the effective date ofEPA's NSRreform rules, and (2)now requires demonstration with current "less stringent" Federal NSR program requirements. EPA disagrees withboth ofthese claims. First, the only significant revisions made to Section 7.0

was toremove the December 2002 date reference as to which version of40 CFR 51.165 should be used for determining equivalency with Federal offset requirements. The underlying requirements for demonstrating equivalency with the Federal NSR
program offsetrequirements remain unchanged.

Second, regarding the claim that the
current Federal NSR regulations are less stringent, and therefore fewer Federal offsets are now required, we do not agree that fewer offsets necessarily

means that the San Joaquin Valley NSR
program would achieve fewer emissions reductions overall. Even ifthe District's implementation ofrevised NSR rules that incorporate NSR reform requires fewer emissions offsets, EPA concludes that any such foregone offsets are themselves offsetby the new lower "major modification" threshold ofzero for ozone precursors, down from 25 tons per year under the existing SIP District Rule 2201, and higher offsetratio of 1.5
to 1, up from 1.2 to 1. Moreover, the regional air quality plans do not take credit for reductions and mitigations required under the District's NSR rules in that they do not reduce future year's emissions bytaking credit for emissions reductions provided through permitting actions. See,e.g., page D-4, ofappendix D to the San Joaquin Valley 2007 Ozone Plan. Comment#5: AIRtakes issue with EPA's statement in theproposed rule that the Agency's 2001 limited approval and limited disapproval ofRule 2020 had the effect ofexempting all agricultural sources from permitting in the SanJoaquin Valleyportion ofthe SIP. AIR contends thatEPA's statement is at odds with the plain language ofthe Clean Air Act, which neither exempts major agricultural stationary sources nor affords EPA the authority to grant an exemption through a limited approval/ limited disapproval action.

Response #5: AIR is objecting to EPA's background discussion concerning the effect ofEPA's approval (in2001) ofthe versions ofthe District's NSR rules that preceded the versions of the rules in the current applicable SIP (whichwere approved in 2004), and thus AIR's comment has no direct bearing on today's final action on amended District NSR rules, as submitted in 2008 and 2009.9

III. FinalAction

Under CAA sections 110(k)(2) and 301(a) andfor the reasons set forth above and in ourJanuary 29, 2010 proposed rule, we are finalizing a limited approval and limited disapproval ofamended District NSR Rules 2020 and 2201, as submitted on March 7, 2008 and March 17, 2009, respectively. The amended District Rules 2020 and 2201 revise certain existing exemptions; establish an exemption from permitting, and from offsets, for certain minor agricultural operations; establish applicability thresholds (formajor sources and major modifications) and offset thresholds consistent with a classification of "extreme" for the ozone standard; and implement NSR Reform.

We are finalizing a limited approval and limited disapproval action, because the individual provisions within District Rules 2020 and 2201 are not separable,

9Nonetheless, we affirm our statement that, prior
to our 2004 approval ofthe District's NSR rules (Rules 2020 and 2201), theDistrict portion ofthe California SIP included abroad exemption from permitting for all agricultural sources. This is because our 2001 action on previous versions of District Rule 2020 and 2201 was a limited approval and limited disapproval action and that the version ofRule 2020 approved in 2001 included a full exemption from permittingfor agricultural sources consistent with statelaw at the time. Seeparagraph 4.1.2 ofDistrict Rule2020, as amended on September 17, 1998, and approved on July 19, 2001. We identified the agricultural permitting exemption

as oneofthe deficiencies that prevented ourfull approval of therules and that triggered a "sanctions clock." As explained in our July 2001 finalrule, the limited approval and limited disapproval action incorporated the rules into the SIP, as they were submitted, with no exception as to those provisions that we found deficient. We generally take limited approval and limited disapproval actions where a given SIPrevision is notcomposed ofseparable parts, and while the overall submittal strengthens the SIP, there are deficiencies that prevent full approval. See 66 FR 37587, at 37590 (July 19, 2001). and, because, although the rule amendments would strengthen the SIP and meet allbut one ofthe applicable requirements for SIPs in general and NSR SIPs in particular, they contain unacceptably ambiguous references to statutory provisions that prevent full approval. This action incorporates amended Rules 2020 and 2201 into the District portion ofthe Federally enforceable California SIP, including those provisions identified as deficient. The amended Rules 2020 and 2201 approved herein supersede the versions ofthe corresponding rules thatwere approved in May 2004 inthe applicable SIP.

The final limited disapproval triggers

a sanctions clock and EPA's obligation
to promulgate a Federal implementation plan. Sanctions willbe imposedunless EPA approves subsequent SIP revisions that correct therule deficiencies within 18 months ofthe effective date ofthis action. These sanctions will be imposed under section 179 ofthe Act according
to 40 CFR 52.31. In addition, EPA must promulgate a FIP under section 110(c) unless we approve subsequent SIP revisions that correct the rule deficiencies within 24 months.Note that the submitted rules have been adopted by the District, andEPA's final limited disapproval does not prevent the local agency from enforcing it.

With respect to amended District Rule 2530, as submitted on March 17, 2009,

we are taking final action to approve the amended rulebecause we find thatit hasbeen appropriately modified to reflect the decrease in the major source threshold for VOC and NON consistent with an "extreme" classification. This action incorporates amended Rule 2530 into the District portion ofthe Federally enforceable California SIP. The amended Rule 2530 approved herein supersedes the previous version ofthe corresponding rule that was approved in April 1996 in the applicable SIP.

EPA is also removing certain obsolete conditions placed on 1980's era approvals by EPA on various nonattainment plans submitted by California for the San Joaquin Valley.

Lastly, we have decided to defer further action on the Agency's January 2010 proposal to correct a previous approval ofthe District NSR rules pending receipt from California ofa legal interpretation ofthe extent of District authority withrespect to agricultural sources under state law. 

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IV. Statutory andExecutive Order Reviews

A. Executive Order12866,Regulatory PlanningandReview

The Office ofManagement and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled "Regulatory Planning and Review."

B. Paperwork ReductionAct
This action does not impose an information collection burden under the provisions ofthe Paperwork Reduction Act, 44 U.S.C. 3501 etseq.Burden is defined at 5CFR 1320.3(b).

C.RegulatoryFlexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency to conduct

a regulatory flexibility analysis ofany rule subject to notice and comment rulemaking requirements unlessthe agency certifies thatthe rule will not have a significant economic impact on

a substantial number of small entities. Small entities include smallbusinesses, small not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because SIP approvals and limited approvals/limited disapprovals under section 110 and subchapter I, part D ofthe Clean Air Act do not create any

new requirements but simply approve requirements that the State is already imposing. Therefore, because this limited approval/limited disapproval action and approval action does not create any new requirements, I certify that this action will nothave a significant economic impact on a substantial number of small entities.

Moreover, due tothe nature ofthe Federal-State relationship under the Clean Air Act, preparation offlexibility analysis would constitute Federal inquiry into the economic reasonableness ofState action. The Clean Air Act forbids EPA tobase its actions concerning SIPs on such grounds. UnionElectricCo., v. U.S. EPA,427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

D. UnfundedMandatesReformAct

Under section 202 of the Unfunded Mandates Reform Act of 1995 ("UnfundedMandates Act"), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes aFederal 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 costeffective and leastburdensome alternative that achieves the objectives ofthe rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments thatmay be significantly

or uniquely impactedby the rule.

EPA has determined thatthe limited approval/limited disapproval action and approval action promulgated today do
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 approves pre-existing requirements under State or local law, andimposes

no new requirements. Accordingly, no additional costs to State, local, or tribal governments, orto the private sector, result from this action.

E.Executive Order13132,Federalism

Federalism (64 FR 43255, August 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 development ofregulatory policies that have federalism implications." "Policiesthat have federalism implications" is defined in the Executive Order to include regulations thathave "substantial direct effects onthe States, on the relationship between the national government and the States, or on the distribution of
power and responsibilities among the various levels ofgovernment." Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, andthat is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance
costs incurred by State andlocal governments, orEPA consults with State andlocal officials early in the
process ofdeveloping the proposed regulation. EPA also may not issue a regulation thathas federalism implications and thatpreempts State law unless the Agency consults with State andlocal officials early in the
process ofdeveloping the proposed regulation.

This rule will not have substantial direct effects on the States, onthe relationship between the national government and the States, or onthe distribution ofpower and responsibilities among the various levels ofgovernment, as specified in Executive Order 13132, because it merely approves a State rule implementing a Federal standard, and does not alter the relationship orthe distribution ofpower and responsibilities established in the Clean Air Act. Thus, therequirements of section 6 ofthe Executive Order do not applyto this rule.

F.Executive Order13175, Coordination WithIndian TribalGovernments

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 andtimely input by tribal officials in the development of regulatory policies thathave tribal implications." This rule does not have tribal implications, as specified in Executive Order 13175. Itwill not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or onthe distribution of
power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not applyto this rule.

G.Executive Order13045,Protectionof ChildrenFromEnvironmentalHealth Risks andSafetyRisks

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 thatthe analysis required under section 5-501 ofthe Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045, because it
approves a State rule implementing a Federal standard.

H. Executive Order13211,Actions That Significantly Affect EnergySupply, Distribution,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 itis
not a significant regulatory actionunder Executive Order 12866.

L NationalTechnologyTransferand AdvancementAct

Section 12 ofthe National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing anew regulation. To comply with NTTAA, EPA must consider anduse "voluntary

consensus standards" (VCS) ifavailable and applicable when developing 

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programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPAbelieves that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use ofVCS.

J. Congressional ReviewAct
The Congressional Review Act, 5 U.S.C. section 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides thatbefore a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House ofthe Congress andto the Comptroller General ofthe United States. EPA will submit a report containing this rule and otherrequired information to the U.S. Senate, the U.S. House ofRepresentatives, and the Comptroller General of the United Statesprior to publication ofthe rule in the FederalRegister. A majorrule
cannot take effect until 60 days after it is published in the Federal Register. This action is not a "major rule" as defined by 5U.S.C. section 804(2).

K.Petitions forReview ofThisAction
Under section 307(b)(1) ofthe Clean Air Act, petitions forjudicial review of this action must be filed inthe United States Court ofAppeals for the appropriate circuit byJuly12,2010. Filing a petition for reconsideration by the Administrator ofthis final rule does
not affect the finality ofthis rule for the
purposes ofjudicial review nor does it extend the time within which apetition forjudicial review maybe filed, and shall not postpone the effectiveness of suchrule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

Listof Subjects in40 CFRPart52

Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Oxides ofnitrogen, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.

Dated: April 12, 2010. Jared Blumenfeld,
RegionalAdministrator, RegionIX. * Part52, Chapter I,Title 40 oftheCode ofFederal Regulations is amended as follows:

PART 52-[AMENDED]

m 1. The authority citationfor part52 continues to read as follows:

Authority: 42 U.S.C. 7401 et seq. Subpart F-California

* 2.Section 52.220 is amendedby adding paragraphs (c)(354)(i)(E)(14) and (c)(363)(i)(A)(5) and (6)to read as follows:
§52.220 Identificationof plan.

* * * * *

(c) * * * (354) * * * 

### (i) * * *
(E) * * * (14) Rule 2020, "Exemptions," adopted on September 19, 1991 and amended on December 20, 2007.

(363) * * * 

### (i)* * *
(A) *** (5) Rule 2201, "New andModified Stationary Source Review Rule," adopted on September 19, 1991, and amended on December 18, 2008. (6)Rule 2530, "Federally Enforceable Potential toEmit," adopted on June 15, 1995, and amended onDecember 18, 2008.

* * * * *

* 3.Section 52.232 is amendedby removing and reserving paragraphs (a)(6), (a)(10), and (a)(11) and by revising paragraph (a)(5)(i) toread as follows:
§52.232 PartDconditional approval.

(a) * * * (5) * * * (i) ForPM: (A) ByNovember 19, 1981, the NSR rules must be revised and submitted as

an SIP revision. The rules must satisfy section 173 ofthe Clean Air Act and40 CFR Subpart I, "Review ofnew sources and modifications." In revising Kern County's NSR rules, the State/APCD
must address all the requirements in EPA's amended regulations for NSR (45 FR 31307, May 13, 1980 and 45 FR 52676, August 7, 1980) which the APCD rules donot currently satisfy including those deficiencies cited in EPA's Evaluation Report Addendum which still apply despite EPA's new NSR requirements (contained in document File NAP-CA-07 at theEPA Library in Washington, DC and the Regional Office).

* * * * *

[FRDoe. 2010-10925 Filed 5-10-10; 8:45 am]

BILLING CODE 6560-50-P ENVIRONMENTAL PROTECTION
AGENCY

40 CFR Parts 52 and 81 [EPA-R05-OAR-2009-0512; FRL-9147-2]
Approval and Promulgation of Implementation Plans and Designation ofAreas forAirQuality Planning Purposes; Indiana; Redesignation of Lake and Porter Countiesto Attainment forOzone

AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.

SUMMARY: EPA is taking several related actions affecting Lake and Porter Counties and the State ofIndiana for the 1997 8-hour ozone NationalAmbient Air Quality Standard (NAAQS or standard). EPA is approving arequest from the State ofIndiana to redesignate Lake and Porter Counties, the Indiana portion ofthe Chicago-Gary-Lake County, Illinois-Indiana (IL-IN) 8-hour

ozone nonattainment area, to attainment ofthe 1997 8-hour ozone NAAQS. In addition, EPA is approving, as a revision to the Indiana State Implementation Plan (SIP), the State's plan for maintaining the 1997 8-hour

ozone NAAQS through 2020 in Lake and Porter Counties and in the ChicagoGary-Lake County, IL-IN ozone nonattainment area. EPA is also approving the 2002 Volatile Organic Compounds (VOC) and Nitrogen Oxides (NOx) emission inventories for Lake and Porter Counties as a SIP revision and as meeting therequirements ofthe Clean Air Act (CAA). Finally, EPA finds adequate and is approving the State's 2010 and 2020 VOC and NOx Motor Vehicle Emission Budgets (MVEBs) for Lake and Porter Counties. DATES: This final rule is effective May 11, 2010.
ADDRESSES: EPAhas established a docket for this action: DocketID No. EPA-R05-OAR-2009-0512. All documents in the docket are listed on the http://www.regulations.govWeb site. Although listed in the index, some information is not publicly available, i.e., Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and willbe publicly available only in hard copy form. Publicly available docket materials are available either electronically in http:// www.regulations.govorin hard copy at the Environmental Protection Agency, Region 5,Air and Radiation Division, 77 

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