United States Environmental Protection Agency, Region IX

Air Division

Technical Support Document

for

EPA's Notice of Proposed Rulemaking

for the 

California State Implementation Plan

Imperial County Air Pollution Control District

Rule 204 – Applications

Rule 206 – Processing of Applications

Rule 207 – New and Modified Stationary Source Review 

Docket No. EPA-R09-OAR-2015-0621

Prepared by:

Roberto Gutierrez and Laura Yannayon

Reviewed by Gerardo Rios

November 28, 2016
Table of Contents

1 Introduction............................................................................................................................. 1

2 Submittal Information............................................................................................................. 2

2.1 Submittal Agency Information......................................................................................... 2

2.2 Air Quality in Imperial County ........................................................................................ 2

3 Rule Summaries...................................................................................................................... 3

3.1 Current SIP Approved Rules............................................................................................ 3

3.2 Submitted Rules for SIP Approval................................................................................... 3

4 Rule Evaluation....................................................................................................................... 4

4.1 Nonattainment NSR Requirements.................................................................................. 4

4.2 General NSR Requirements........................................................................................... 11

5 New Source Review Reforms............................................................................................... 15

5.1 NSR Reform Program Requirements............................................................................. 17

5.2 Impacts of Federal NSR Reforms on California NSR Permitting Programs................. 18

6 Section 110(l) of the Act....................................................................................................... 19

7 Section 193 of the Act........................................................................................................... 22

8 Recommendations................................................................................................................. 22

9 Notes..................................................................................................................................... 23
1

1 Introduction

This technical support document (TSD) focuses on the preconstruction permitting requirements 

for stationary sources, also called New Source Review or NSR, in title I of the Clean Air Act 

(CAA or the Act) and EPA’s implementing regulations addressing the State Implementation Plan 

(SIP) requirements for State NSR programs at title 40 of the Code of Federal Regulations (CFR) 

part 51, subpart I. This TSD will address the requirements for two of the three main components 

of the federal NSR program (Nonattainment NSR (NSR) and General NSR) and discuss EPA’s 

findings on whether the rules and regulations related to NSR that have been submitted by the 

Imperial County Air Pollution Control District (ICAPCD or District) for approval into the 

California SIP meet federal NSR requirements. The TSD also discusses EPA’s findings under 

sections 110(l) and 193 of the Act relevant to this action.

The three main components of the federal NSR program are briefly summarized as follows:

PSD Program

Part C of title I of the Act, and the implementing regulations at 40 CFR 51.166, contain the 

requirements for states to establish preconstruction permitting programs for the prevention of 

significant deterioration of air quality (PSD) in areas designated as attainment or unclassifiable 

for the national ambient air quality standards (NAAQS). The PSD program requirements under 

part C apply to major stationary sources and major modifications, as those terms are defined in 

40 CFR 51.166, at stationary sources located within attainment or unclassifiable areas. The PSD 

requirements apply to all regulated NSR pollutants, except those pollutants for which an area has 

been designated as nonattainment.1

Nonattainment NSR Program

Part D of title I of the Act, and the implementing regulations at 40 CFR 51.165, contain the NSR 

requirements for areas designated nonattainment for a NAAQS. The requirements under part D, 

referred to as nonattainment NSR or simply NSR, apply to nonattainment pollutants at major 

stationary sources and major modifications, as those terms are defined in 40 CFR part 51.165, at 

sources located in nonattainment areas. 

General NSR Program Requirements

Section 110(a)(2)(C) of the Act requires that each SIP include a program to provide for 

“regulation of the modification and construction of any stationary source within the areas 

covered by the plan as necessary to assure that national ambient air quality standards are 

achieved, including a permit program as required in parts C and D” of title I of the Act.

Thus, in addition to the permit programs required in parts C and D of title I of the Act, which 

apply to new major stationary sources and major modifications, each SIP must include a program 

regulating stationary sources with emissions below the major source thresholds. These general 

preconstruction requirements are commonly referred to as the “minor NSR program”

requirements and are implemented through EPA’s regulations at 40 CFR 51.160 through 51.164. 

 

1 EPA has approved Imperial’s Rule 904 –Prevention of Significant Deterioration (PSD) Permit Program, as 

satisfying the CAA’s PSD program requirements. 77 FR 73316 (Dec. 10, 2012). Therefore, this TSD does not 

evaluate the submitted rules for PSD program requirements.
2

These more general program requirements are the only federal requirements that apply to these 

“minor” stationary sources and non-major modifications. These requirements also apply to major 

sources and major modifications, in addition to the more detailed requirements in parts C and D 

of the Act and their implementing regulations at 40 CFR 51.166 and 51.165, respectively. 

2 Submittal Information

2.1 Submittal Agency Information

Imperial County is located in the southeast corner of California, and is bordered by Riverside 

County to the north, San Diego County to the west, the State of Arizona to the east, and the 

Country of Mexico to the south. The ICAPCD is the air pollution control agency for all of 

Imperial County.

2.2 Air Quality in Imperial County

Imperial County is currently designated as a moderate nonattainment area for the 2008 8-hr 

ozone,2and portions of the county are designated as a serious nonattainment area for the 1987 

24-hr PM10, as a moderate nonattainment area for the 2006 24-hr PM2.5 and as a moderate 

nonattainment area for the 2012 annual PM2.5 NAAQS. 40 CFR 81.305. In addition, Imperial 

County was designated nonattainment for the 1979 1-hour ozone (moderate) and 1997 8-hour 

ozone (moderate) NAAQS. Although EPA has revoked these standards, the most stringent major 

source applicability threshold and offset ratio are required to be maintained until the District 

either attains the current 2008 8-hour ozone standard, or EPA approves a “redesignation 

substitute” request for the revoked standards. 40 CFR 51.1105(b). Based on the District’s 

nonattainment designations and classifications, the District’s nonattainment NSR program must 

regulate new major sources and major modifications of (i) nitrogen oxides (NOx) and volatile 

organic compounds (VOC) as ozone precursors for a moderate area; (ii) PM2.5 and its precursors,

NOx, SO2, VOC and ammonia, for a moderate area; and (iii) PM10 and its precursors, NOx and

SO2, for a serious area.

Imperial County is currently designated attainment or unclassifiable for the nitrogen dioxide 

(NO2), carbon monoxide (CO), sulfur dioxide (SO2), and lead (Pb) NAAQS. 40 CFR 81.305.

The PSD permit program requirements apply to new major stationary sources and major 

modifications at existing major stationary sources that emit these pollutants, as well as certain 

other pollutants, which are also regulated under the CAA. See 51.166(b)(23)(i). The District has 

a SIP-approved PSD program, ICAPCD Rule 904 – Prevention of Significant Deterioration 

 

2 The EPA initially designated Imperial County as a marginal nonattainment area for the 2008 ozone NAAQS, but 

recently reclassified the county as a moderate nonattainment area for that standard. 81 FR 26697 (May 4, 2016). 

Under our 2016 reclassification rule, we established a January 1, 2017 deadline for submittal of SIP revisions, 

including those for NNSR, for the newly reclassified moderate nonattainment areas. Id, at 26704. Although the 

submittal deadline for newly reclassified areas for the 2008 ozone NAAQS has not yet expired, we have reviewed 

the amended Imperial County NSR rules for compliance with, among other things, moderate ozone nonattainment 

area requirements because Imperial County has been subject to moderate ozone nonattainment requirements since 

2008 when the EPA reclassified the county as moderate nonattainment for the 1997 ozone NAAQS. 73 FR 8209 

(February 13, 2008).
3

(PSD) Permit Program;

3

therefore, we are not evaluating Rules 204, 206 or 207 for PSD 

program approval.

3 Rule Summaries

3.1 Current SIP Approved Rules

The main components of ICAPCD’s current SIP-approved NSR program are Rule 206 –

Processing of Applications, Rule 207 – New and Modified Stationary Source Review, and Rule 

209 – Implementation Plans. These rules contain the general and specific program requirements 

for minor sources emitting both attainment and nonattainment pollutants, and for major sources 

emitting nonattainment pollutants. EPA approved Rule 206 into the SIP on January 3, 2007 (72

FR 9) and Rules 207 and 209 on November 10, 1980 (45 FR 74480).

ICAPCD’s Governing Board adopted revisions to Rules 206 and 207 on October 22, 2013. The 

California Air Resources Board (CARB) submitted revised Rule 206 to EPA on February 10, 

2014, and revised Rule 207 on January 21, 2014.

4 Upon approval into the SIP, the updated 

versions of Rules 206 and 207 will replace current SIP Rules 206, 207, and 209.

Currently, there is no version of Rule 204 – Applications in the SIP. ICAPCD’s Governing 

Board adopted revisions to Rule 204 on September 14, 1999, which CARB submitted to EPA on 

May 26, 2000. 

Final approval of the submitted rules will also allow EPA to delete our prior approval of Rules 

206, 207 and 209 codified in 40 CFR 52.220 (c)(279)(i)(A)(14) and (c)(56)(i)(A); and our 

disapproval of Rule 207 subparagraph C.5 codified in 40 CFR 52.233(a)(1). EPA disapproved 

this subparagraph of Rule 207 in our November 10, 1980 action because it exempted some 

sources from the requirement to apply LAER. The submitted version of Rule 207 no longer 

contains such a provision. 

3.2 Submitted Rules for SIP Approval

Rule 204 – Applications

Rule 204 contains the requirements for permit applications that are necessary under Rule 201 –

Permits Required. Under the rule, Imperial County can prescribe the information, analyses, plans 

or specifications relating to a project’s air emissions that must be submitted so that the District 

can assess the project and make the determinations necessary to issue a permit.

Rule 206 – Processing of Applications

Rule 206 is comprised of three sections: Section A – Guidelines, Section B – Ministerial Permits, 

and Section C – Discretionary Permits. Section A includes guidelines for processing either 

ministerial or discretionary permit applications. Section B outlines which projects qualify under 

the ministerial permits program and how to process applications for ministerial permits. Section 

 

3 77 FR 73316, December 10, 2012.

4 CARB is the governor’s designee for submitting official revisions of the California SIP to EPA.
4

C contains the administrative requirements for processing discretionary permits, including the 

timeline for approving applications and then public noticing permit action decisions, as well as 

the availability of documents related to the project. 

Rule 206, Section B – Specifies that Discretionary Permits include all actions that are not 

Ministerial Permits. Ministerial Permits include the following types of actions; burn permits, 

permits for minor projects, transfer of named permittee, annual renewals, and permits to operate 

issued pursuant to a valid Authority to Construct permit. Minor projects are defined as projects 

with uncontrolled emissions below 35 pounds per day of any pollutant that do not emit any toxic 

air contaminants or nonattainment pollutants. All other permits are considered Discretionary 

Permits.

Rule 207 – New and Modified Stationary Source Review

Rule 207 is comprised of six sections: Section A – General, Section B – Definitions, Section C –

Standards, Section D – Administrative Requirements, Section E – Calculations, and Section F –

Air Quality Impacts Analysis. Section A includes provisions that outline the purpose and 

applicability of the rule, as well as specific exemptions from the rule or portions thereof. Section 

B contains 68 definitions, and clarifies which other rules may be used to define a term if it is not 

defined within this section. Section C contains the standards that apply to projects undergoing

new source review, including Best Available Control Technology (BACT) and emission offset 

requirements. Section D contains administrative requirements, including provisions for 

determining when an application is complete, which air quality models must be used, public 

notice requirements, requirements for a final action, specific requirements solely for power plant 

applications, and other administrative provisions. Section E contains calculation provisions, 

including calculations of actual emission reductions for the purpose of determining offsets and 

calculating the potential to emit of a stationary source. Section F contains provisions for 

performing an air quality impact analysis. This rule applies to all minor sources and all stationary 

sources that met the definition of a major source for a nonattainment pollutant.

4 Rule Evaluation

For this TSD, we have reviewed submitted Rules 204, 206 and 207 to ensure they meet the 

requirements of section 110 and part D of title I of the CAA and EPA’s implementing 

regulations at 40 CFR 51.160 through 51.165. We also relied on EPA regulatory and guidance 

materials, including the following: General Preamble for the Implementation of Title I of the 

Clean Air Act Amendments of 1990 (57 FR 13498, April 16, 1992), EPA’s Emission Offset 

Interpretive Ruling (40 CFR part 51, Appendix S), and EPA’s policy document entitled, 

“Improving Air Quality with Economic Incentive Programs” published in January 2001. EPA 

has condensed relevant approval criteria into this section of the TSD, which provides the basis 

for our proposed action on Rules 204, 206 and 207.

4.1 Nonattainment NSR Requirements

The Act requires all states with nonattainment areas to submit a NSR program that contains 

the following nonattainment NSR provisions. To demonstrate that ICAPCD has met each 

provision, EPA identifies the section(s) of Rules 204, 206 or 207, or other SIP approved 
5

rules that satisfy the listed requirement. Where necessary, we provide a detailed discussion 

of how the rule satisfies a specific provision.

1. Provisions, pursuant to CAA section 173(a)(1)(A), to ensure that the emissions baseline 

for offset purposes is calculated in a manner consistent with the emissions baseline used 

to demonstrate RFP.

Emissions inventories prepared by the District for nonattainment plans and reasonable further 

progress (RFP) are based on actual emissions for stationary sources. For new or modified major 

sources of VOC, NOx, SOx, PM10 and PM2.5, Rule 207 sections C.2.c and C.2.d require offsets 

when increases in actual emissions exceed the thresholds consistent with the definitions for 

Major Source and Major Modification. Rule 207 defines ERCs as reductions of “actual emissions” 

and further defines actual emissions reductions as being real, quantifiable, surplus, permanent 

and enforceable. Thus, the basis for the demonstration of RFP and the calculation of NSR 

emissions offsets is actual emissions in both cases.

So long as a new source or modification obtains offsets in an amount equal to or greater than the 

amount specified in the applicable offset ratio (or, where the statute does not specify an offset 

ratio, in an amount equal to or greater than 1:1), the new source or modification will not interfere 

with RFP. Rule 207 section C.3.a provides the ratios for offset purposes, which are all equal to or 

greater than 1:1 for the nonattainment pollutants. These offset ratio requirements ensure that the 

program for permitting new or modified major sources will not interfere with RFP. These 

provisions satisfy the statutory requirement.

2. Provisions, pursuant to CAA section 173(a)(2), to assure that all major sources and 

major modifications of non-attainment pollutants comply with LAER.

Rule 207, section B defines Best Available Control Technology (BACT) as the more stringent of 

(i) the most effective emission control device, emission limit, or technique which has been 

achieved in practice for such class or category of source; or (ii) any other alternative emission 

control device, technique, equipment, fuel or process determined to be technologically feasible 

and cost-effective. Rule 207’s definition of BACT further states that under no circumstance will 

BACT be determined to be less stringent than any emission control that is required by any 

applicable provision of law, including the most stringent emission limitation contained in the 

implementation plan of any state, unless the applicant demonstrates technical infeasibility. Taken 

together, these provisions are at least as stringent as the federal definition of LAER as defined at 

CAA 171(3) and 40 CFR 51.165 (a)(1)(xiii).

In addition, Section C.1 requires new major stationary sources to apply BACT (which is at least 

as stringent as federal LAER) on a pollutant by pollutant basis for any new emission unit (C.1.a) 

or any modified emission unit (C.1.b) with a potential to emit 25 pounds per day or more (4.56 

tons per year) of any nonattainment pollutant or its listed precursors. This threshold is 

significantly more stringent than the federal major source thresholds of 100 tpy for NOx and VOC 

as ozone precursors and PM2.5 and its precursors, and 70 tpy for PM10. It is also lower than the 

major modification thresholds of 40 tpy for NOx, SOx and VOC, 15 tpy for PM10 and 10 tpy for 

PM2.5. Taken together these provisions satisfy the statutory requirement.
6

3. Provisions, pursuant to CAA section 173(a)(3), to assure that owners or operators of

each proposed new or modified major stationary source demonstrate that all other 

major stationary sources under the same ownership in the state are in compliance with 

the Act.

Rule 207, subsection C.5.c requires the owner or operator of a proposed new or modified 

emissions unit to demonstrate that all stationary sources owned or operated by such person in 

California, which are subject to emission limitations, are in compliance or on a schedule for 

compliance with all applicable emission limitations and standards. This provision satisfies the 

requirements of section 173(a)(3).

4. Provisions, pursuant to CAA section 173(a)(5), that, as a prerequisite to issuing any 

part D permit, requiring an analysis of alternative sites, sizes, production processes, and 

environmental control techniques for proposed sources that demonstrates that the 

benefits of the proposed source significantly outweigh the environmental and social 

costs imposed as a result of its location, construction or modification.

Rule 207, subsection C.5.a requires applicants to prepare an analysis that is functionally 

equivalent to the requirements of Division 13, Section 21000 et. seq. of the California Public 

Resources Code for any source for which an analysis of alternative sites, sizes, and production 

processes is required under section 173 of the CAA. This provision satisfies the section 173(a)(5) 

requirement.

5. Provisions to assure, pursuant to CAA section 173(c)(1), that any emissions offsets 

obtained in conjunction with the issuance of a permit to a new or modified source must 

be enforceable by the time of issuance of the permit, and in effect by the time the new 

or modified source commences operation. 

Rule 207, section D.3 – Offset Conditions, paragraph “c” requires that such reductions be 

enforceable at the time the permit is issued and requires that the emission reduction credits be in 

effect upon initial operation of the new or modified source. In addition, Section E.2 provides 

requirements for calculating AERs that will be used as offsets, and Subsection E.2.d.1. requires 

AERs to be enforceable. These provisions satisfy the statutory requirement.

6. Provisions to assure, pursuant to CAA section 173(c)(1), that emission increases from 

new or modified major stationary sources are offset by real reductions in actual 

emissions.

Rule 207, section C.2 requires offsets to be Actual Emission Reductions (AERs). Section B, 

Definitions, defines AERs as reductions that are “Real, Quantifiable, Surplus, Permanent and 

Enforceable.” Rule 207, Section B further defines “real" emission reductions as emissions that 

are actually reduced from actually occurring emissions and not artificially devised. In addition, 

Section E.2 provides requirements for calculating AERs that will be used as offsets, and 

Subsection E.2.d.1. requires AERs to be real. Considered collectively, these provisions assure 

that emission increases from new or modified major stationary sources are offset by real 

reductions in actual emissions as required by section 173(c)(1).
7

7. Provisions, pursuant to CAA section 173(c)(2), to prevent emissions reductions 

otherwise required by the Act from being credited for purposes of satisfying the part D 

offset requirements.

Rule 207, section E.2 provides requirements for calculating AERs that will be used as offsets,

and Subsection E.2.d.1. requires AERs to be surplus. In addition, Section E.2.d.2 requires that all 

AERs be in excess of any reductions that would be required by any laws, rules, regulations, 

agreements, orders or contained in an adopted District plan, SIP or California Clean Air Act 

attainment plan applicable to the District. These provisions prevent emissions reductions 

otherwise required by the Act from being credited for purposes of satisfying the part D offset 

requirements as required by section 173(c)(2).

8. Definition of “stationary source” that certain internal combustion engines must be 

subject to control under state programs (i.e., those not used for transportation purposes), 

but excluding the category of “nonroad engines.” [See section 302(z) of the Act.]

SIP approved Rule 201 – Permits Required, requires a permit for all emission units, unless 

specifically exempted pursuant to Rule 202. SIP approved Rule 202 – Exemptions, provides an 

exemption from permitting requirements for various types of emission units. Section E.1.a

exempts internal combustion engines with a rating of 50 brake horsepower or less. Section E.2

exempts various mobile sources which are classified as nonroad engines. All other engines are 

therefore subject to permit requirements as part of the stationary source as required by CAA 

section 302(z). Since all stationary engines, down to a reasonable de minimis exemption 

threshold, are required to obtain a permit from the District we find that these provisions satisfy 

the statutory requirement.

9. Provisions, pursuant to 40 CFR 51.307(b)(2), that identify additional requirements for 

any new major source or major modification, proposing to locate in a nonattainment 

area, that may have an impact on visibility in any mandatory Class I Federal Area.

Subsection D.1.f requires the Air Pollution Control Officer to consult with the Federal Land 

Manager (FLM) on a proposed major stationary source or major modification that may impact 

visibility in any Class I Area. The subsection also requires that “an Authority to Construct permit 

shall address the potential to impact air quality (including visibility) of any Class 1 federal areas.” 

These provisions are acceptable to meet the visibility analysis requirements.

10. Provisions, pursuant to 40 CFR 51.161 that require opportunity for public comment, as 

well as the consideration of any comments received during this period in the final 

permit determination. These provisions must also ensure the availability of all 

information relevant to the proposed permit during the comment period. 

Rule 206, section C, Discretionary Permits, ensures that the requirements of 40 CFR 51.161 are 

met. Sections C.2 and C.3 require the District to provide a 30 day public notice if the potential 

emissions of the new or modified stationary source exceeds 100 lbs/day (18.25 tpy) of VOC, 

NOx, SOx or PM10 including fugitive emissions, 80 lbs/day (14.6 tpy) of non-fugitive PM10, or 40 

lbs/day (7.3 tpy) of PM2.5. Thus Rule 206 requires public notice for all federal major sources and 

major modifications. Section C also requires that all related materials be made available for 
8

inspection at the District offices. Taken together these provisions satisfy the regulatory 

requirement.

11. Definitions that contain language that is either identical or equivalent to that found in 

40 CFR 51.165(a)(1) and 51.100.

Rule 207, Section B – Definitions, incorporates by reference the definitions contained in 40 CFR 

51.165(a)(1) for any terms not listed in Rule 207. Thus, the requirements of 40 CFR 51.165(a)(1) 

are satisfied for the terms not listed in Rule 207. We have evaluated the approvability of the 

terms listed in Rule 207, section B, Definitions, that are required by 40 CFR 51.165(a)(1). In most 

cases, the definitions are either identical to or equivalent to language used in 40 CFR

51.165(a)(1). However, in some instances, the definitions do not match the federal definitions as 

closely. Our evaluation of such definitions is provided below. Overall, the definitions provided in 

section B satisfy the requirements to include definitions in the NSR program that are either 

identical or equivalent to those found in 40 CFR 51.165(a)(1) and 51.100.

Federally enforceable

Rule 207 does not define or use this term. Instead the rule defines “enforceable” which is used 

throughout the rule. The use of the term “enforceable” and its definition ensures legal as well as 

practical enforceability of specified provisions throughout the rule and is therefore an acceptable 

substitution.

Lowest Achievable Emission Rate (LAER)

Rule 207 does not provide a definition for this term. Instead the rule provides a definition for the 

term “Best Available Control Technology (BACT).” Rule 207, section B defines BACT as the 

more stringent of (i) the most effective emission control device, emission limit, or technique which 

has been achieved in practice for such class or category of source; or (ii) any other alternative 

emission control device, technique, equipment, fuel or process determined to be technologically 

feasible and cost-effective. Rule 207’s definition of BACT further states that under no 

circumstance will BACT be determined to be less stringent than any emission control that is 

required by any applicable provision of law, including the most stringent emission limitation 

contained in the implementation plan of any state, unless the applicant demonstrates technical 

infeasibility. Taken together, these provisions are at least as stringent as the federal definition of 

LAER as defined in 40 CFR 51.165 (a)(1)(xiii). This is an acceptable substitution.

Regulated NSR Pollutant

Rule 207 does not provide a definition for this term, but does define the term “Affected Pollutants” 

as any pollutant for which a National or State Ambient Air Quality Standard has been 

established. This definition is consistent with the federal definition of Regulated NSR Pollutant. 

The rule also specifically defines “Nonattainment Pollutant” as any pollutant or a precursor to 

such air pollutant that has been designated “nonattainment” by the US EPA or by CARB. This is 

an acceptable substitution.

12. Provisions, pursuant to 40 CFR 51.165(a)(1)(iv)(C), which require that fugitive 

emissions be included in the major source applicability determination if the source 

belongs to one of the source categories listed in this section. Otherwise, fugitives may 

be excluded from the applicability determination.
9

Rule 206, section A.4.a requires that all fugitive emissions be included in assessing the 

emissions for a project. This requirement includes more sources than what is federally required 

and therefore satisfies the regulatory requirement. 

13. Provisions, pursuant to 40 CFR 51.165(a)(3)(ii)(C), that limit “prior shutdown” or 

“prior curtailment” emission reduction credits (ERCs), i.e., ERCs that are generated by 

facilities that have ceased or reduced operations prior to the last day of the base year 

inventory. These ERCs may be allowed if (i) such reductions are surplus, permanent, 

quantifiable, and federally enforceable; and (ii) the projected emissions inventory for 

the attainment demonstration explicitly includes these emissions; however, in no event 

may credit be given for shutdowns that occurred before August 7, 1977. 

Rule 207, section C.2 requires offsets to be Actual Emission Reductions (AERs). Section B, 

Definitions, defines AERs as reductions that are “Real, Quantifiable, Surplus, Permanent and 

Enforceable.” Thus the rule satisfies the first requirement for prior shutdown or curtailment ERCs 

to be used. 

Rule 207, section E.2.d states that “Emission reductions achieved before the base year used in 

an attainment plan demonstration for that pollutant must be included in the inventory as growth to 

be eligible for use.” Thus the rule satisfies the second criterion applicable to ERCs generated 

prior to attainment plan baselines.

14. Provisions, pursuant to 40 CFR 51.165(a)(5)(ii), which require new source review for a 

source or modification which becomes major due solely to a relaxation in a federallyenforceable limit taken to avoid major NSR requirements. Such sources and 

modifications must be subject to NSR “as though construction had not yet 

commenced.” 

Rule 207 A.2.d includes language requiring new sources and modifications subject to NSR due 

solely to a relaxation in a federally-enforceable limit to be reviewed as though construction had 

not yet commenced and comply with all applicable requirements of the rule. This provision 

satisfies the regulatory requirement.

15. Provisions, pursuant to 40 CFR 51.165(a)(10), which assure that the control 

requirements applicable to major stationary sources and major modifications of PM10

also apply to major stationary sources and major modifications of PM10 precursors in a 

PM10 nonattainment area. 

Rule 207 Section B provides a definition for the term precursor, which lists VOC, NOx and SOx 

as PM10 precursors. This provision satisfies the regulatory requirement. 

16. Provisions, pursuant to 40 CFR 51.165(a)(13), which assure that the control 

requirements applicable to major stationary sources and major modifications of PM2.5

also apply to major stationary sources and major modifications of PM2.5 precursors in a 

PM2.5 nonattainment area. This section also provides that a District may exempt major 

stationary sources and major modifications from this requirement if the District submits 
10

to EPA, and EPA approves, a demonstration which meets the conditions for a 

nonattainment NSR precursor demonstration as set forth in 40 CFR 51.1006(a)(3). 

Rule 207 Section B provides a definition for the term precursor, which lists NOx and SOx as PM2.5

precursors. This provision satisfies the regulatory requirement for these two pollutants. 

For both VOC and ammonia, the Rule 207 definition of the term precursor includes these 

pollutants if they “are determined to be a necessary part of the PM2.5 control strategy in the 

attainment demonstration approved by the US EPA in the SIP”. This rule language concerning 

VOC and ammonia is not consistent with EPA’s recent PM2.5 implementation plan requirements, 

entitled “Fine Particulate Matter National Ambient Air Quality Standard: State Implementation 

Plan Requirements.” 81 FR 58010 (August 24, 2016). This rulemaking was issued as part of 

EPA’s response to the DC Circuit Court decision in Natural Resources Defense Council (NRDC) 

v. EPA, 706 F.3d 428 (D.C. Cir. 2013). (We note that Imperial’s adoptions of the revisions to Rule 

207 occurred prior to the DC Circuit’s decision.) EPA’s current definition of PM2.5 precursor

includes “VOC and ammonia in any PM2.5 nonattainment area.” (See 40 CFR 

51.165(a)(1)(xxxvii)(C)(2)) 

Because Imperial County is classified as a moderate ozone nonattainment area, Rule 207 

regulates VOC as a precursor to ozone; therefore, EPA also evaluated Rule 207’s requirements 

as they apply to VOC emissions to determine if Rule 207 adequately regulates VOC as a 

precursor to PM2.5. 

Rule 207 section C.1 requires BACT (equivalent to federal LAER) for any new or modified 

emission unit with a PTE equal to or greater than 25 lbs per day (4.56 tpy) of any nonattainment 

pollutant or its precursor. Rule 207 sections C.2.c, C.2.d and C.3.a also require any new or 

modified stationary source whose project emissions exceed the major source or major 

modification thresholds for any nonattainment pollutant, except PM2.5, to offset those emissions 

at a 1.2:1 ratio. The required major source threshold for a moderate PM2.5 nonattainment area is 

100 tpy for both PM2.5 and its precursors, and the major modification threshold is 10 tpy for PM2.5

and 40 tpy for its precursors NOx, SOx and VOC. The required offset ratio for PM2.5 and its 

precursors is 1:1. All new major sources and major modifications, as defined by these thresholds, 

must apply LAER and provide offsets at the specified ratios. 

Thus, the NSR requirements contained in Rule 207 pertaining to VOC (LAER and offset 

applicability thresholds, and offset ratios) are at least as stringent as would be required if VOC 

was specifically listed as a PM2.5 precursor. Therefore we find that Rule 207 satisfies the 

requirements of 40 CFR 51.165(a)(13) for VOC. In the event Imperial is redesignated to 

attainment for the 2008 8-hr ozone NAAQS and the District revises Rule 207’s LAER and offset 

thresholds for VOC emissions such that they do not adequately regulate VOC as a PM2.5

precursor, EPA will re-evaluate Rule 207 with regard to VOC as a PM2.5 precursor pursuant to 40 

CFR 51.165(a)(13). 

Rule 207 does not specify ammonia as a PM2.5 precursor and the District has not provided a 

nonattainment NSR precursor demonstration for ammonia consistent with the demonstration 

required in 40 CFR 51.1006(a)(3). Therefore we find that Rule 207 is deficient in regards to 

meeting the requirements of 40 CFR 51.165(a)(13) for ammonia. The District may remedy this 
11

deficiency by either revising Rule 207 to include ammonia as a PM2.5 precursor or providing an 

approvable demonstration consistent with the requirements of 40 CFR 51.1006(a)(3) for 

ammonia. 

17. Provisions, pursuant to 40 CFR 51.307(b)(2), that identify additional requirements for 

any new major source or major modification, proposing to locate in a nonattainment 

area, that may have an impact on visibility in any mandatory Class I Federal Area.

Subsection D.1.f requires the Air Pollution Control Officer to consult with the Federal Land 

Manager (FLM) on a proposed major stationary source or major modification that may impact 

visibility in any Class I Area. The subsection also requires that “an Authority to Construct permit 

shall address the potential to impact air quality (including visibility) of any Class 1 federal areas.” 

These provisions are acceptable to meet the visibility analysis requirements.

4.2 General NSR Requirements 

General NSR Requirements 

We reviewed the submitted rules for compliance with EPA’s regulations in 40 CFR 

51.160-164, which apply to both major and minor sources. 

1. 40 CFR 51.160 – Legally enforceable procedures

(a) Each plan must set forth legally enforceable procedures that enable the permit authority

to determine whether the construction or modification of a facility, building, structure 

or installation or combination of these will result in (1) a violation of applicable 

portions of the control strategy; or (2) 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.

Rule 206, Section A.3 requires District guidelines and procedures for processing and issuing 

permits to insure that no Project will prevent or interfere with the attainment or maintenance of 

applicable Ambient Air Quality Standards, and that no project will be permitted unless that APCO 

is satisfied that all applicable Rules, orders and regulations will be complied with. This provision 

satisfies this requirement. 

(b) Such procedures must include means by which the permit authority responsible for 

final decision-making on the application for approval to construct or modify will 

prevent such construction or modification if (1) it will result in a violation of applicable 

portions of the State Implementation Plan; or (2) it will interfere with the attainment or 

maintenance of a national standard.

Rule 207, Section D.1.a prohibits issuance of a permit unless the new or modified emissions unit 

complies with applicable District rules and regulations. In addition, Section C.5.b.1 prohibits the 

emissions from a new or modified stationary source from causing or making worse a violation of 

an ambient air quality standard. These provisions are acceptable to satisfy this requirement.

(c) The procedures must provide for the submission, by the owner or operator of the 
12

building, facility, structure, or installation to be constructed or modified, of such 

information on (1) the nature and amounts of emissions to be emitted by it; (2) the 

location, design, construction, and operation of such facility, building, structure, or 

installation as may be necessary to allow the permit authority to make necessary 

determinations.

Rule 204 – Applications, specifies the application requirements, including the requirement to 

submit all information necessary for the District to assess and make determinations for sources 

that require a permit under Rule 201. The District may request specific information, analyses, 

plans or specifications needed to make all of the determinations required by paragraph (a) of 40 

CFR 51.160, therefore this provision is acceptable to satisfy this requirement. 

(d) The procedures must provide that approval of any construction or modification must not 

affect the responsibility of the owner or operator to comply with applicable portions of 

the SIP.

Rule 207 – New and Modified Stationary Source Review, section C.5.e states “Issuance of an 

Authority to Construct shall not relieve any Owner or Operator of the responsibility to comply fully 

with any applicable provision of the District portion of the California SIP and any other 

requirements under District, State or Federal law.” This provision is acceptable to satisfy this 

requirement. 

(e) The procedures must identify types and sizes of facilities, buildings, structures, or 

installations that will be subject to review under the permit program. The plan must 

discuss the basis for determining which facilities will be subject to review.

Rule 207, Section A.2 discusses the applicability of the rule and Subsection A.2.a requires all 

new Stationary Sources and all Modifications of existing sources that emit or have the Potential 

to Emit (PTE) one or more Affected Pollutants, to comply with the requirements of Rule 207. SIPapproved Rule 201 – Permits Required, specifies that a permit is required for all sources except 

those specifically listed in Rule 202 – Exemptions. EPA approved the latest version of Rule 202 

on May 9, 2011. In that action, EPA determined that the types and sizes of sources exempted 

from permit requirements were consistent with the provisions of 40 CFR 51.160(e) in that it was 

not necessary to regulate the sources listed in Rule 202 in order for the District to attain or 

maintain the NAAQS. Thus, taken together, these rules satisfy the requirements of this provision. 

(f) The procedures must discuss the air quality data and the dispersion or other air quality 

modeling used to meet the requirements of this subpart. (1) All applications of air 

quality modeling involved in this subpart shall be based on the applicable models, data 

bases, and other requirements specified in 40 CFR part 51, Appendix W of this part 

(Guidelines on Air Quality Models). (2) Where an air quality model specified in 

appendix W is inappropriate, the model may be modified or another model substituted. 

Such a modification or substitution of a model may be made on a case-by-case basis or, 

where appropriate, on a generic basis for a specific state program. Written approval of 

the EPA must be obtained for any modification or substitution. In addition, use of a 

modified or substituted model must be subject to notice and opportunity for public 

comment under procedures set forth in 40 CFR 51.102.
13

Rule 207, Section F, Air Quality Impact Analysis, provides the requirements for analyzing air 

quality data. Specifically, Subsection F.1 allows the APCO the discretion to require applicants to 

provide estimates of the effects caused by the new or modified emission source using air quality 

modeling, consistent with the requirements of 40 CFR Part 51, Appendix W. The rule also allows 

for the District to use an alternate model, if more appropriate, after allowing for public comment 

along with concurrence from EPA and CARB. This language satisfies this requirement. 

2. 40 CFR 51.161 – Public availability of information

(a) Procedures which require the permit authority to provide opportunity for public 

comment on information submitted by owners and operators. The public information 

must include the agency’s analysis of the effect of construction or modification on 

ambient air quality, including the agency’s proposed approval or disapproval.

Rule 206 Section C, Discretionary Permits, addresses this requirement. Subsection C.2 requires

the District to provide notice of a preliminary decision in at least one newspaper of general 

circulation and inform the public on how to obtain more information and provide public comment. 

Subsection C.4 specifies that the information shall be made available for public inspection at the 

District’s office. This includes the information provided by the applicant, the District’s analysis, 

including the District’s proposed permit action and a copy of the proposed permit. Section C. is 

acceptable to satisfy the requirement regarding the type of information to be provided.

Rule 206, Section C ensures that the requirements of 40 CFR 51.161 are met. This section 

requires the District to provide a 30 day public notice for each new or modified stationary source 

when the facility’s emissions exceed 100 lbs/day (18.25 tpy) of VOC, NOx, SOx or PM10 including 

fugitive emissions, 80 lbs/day (14.6 tpy) of non-fugitive PM10, or 40 lbs/day (7.3 tpy) of PM2.5. 

Thus Rule 206, Section C requires public notice for all major sources and major modifications. 

Rule 206, Section C also requires public notice for minor sources and minor modifications at 

specified thresholds that are approximately 50 percent of the PSD significant emission rates 

(SERs) for VOC, NOx, or SOx, 75 percent of the PSD SER for PM2.5 and slightly less than the 

PSD SER for PM10. See 40 CFR .51.166(b)(23)(i) for PSD SER. EPA finds these public notice 

thresholds reasonable for minor sources. Section C also requires that all related materials be 

made available for inspection at the District offices. Taken together these provisions satisfy the 

regulatory requirement.

(b) Opportunity for public comment shall include, at a minimum, (1) Availability for public 

inspection in at least one location in the area affected of the information submitted by 

the owner or operator and of the permit authority’s analysis of the effect on air quality; 

(2) A 30-day period for submittal of public comment; and (3) A notice by prominent 

advertisement in the area affected, of the location of the source information and 

analysis specified in paragraph 40 CFR 51.161(b)(1). 

Rule 206 subsections C.2 and C. 4 address this requirement. Subsection C.2 requires the District 

to provide a 30-day public comment period prior to issuing a permit for construction or 

modification. The notice requesting public comment must be published in at least one newspaper 

of general circulation and state how pertinent information can be obtained. Subsection C.4
14

specifies that the information shall be made available for public inspection at the District’s office. 

This includes the information provided by the applicant, the District’s analysis, including the 

District’s proposed permit action and a copy of the proposed permit. These provisions are 

acceptable to satisfy this requirement.

(c) Where the 30-day comment period required in paragraph (b) of this section would 

conflict with existing requirements for acting on requests for permission to construct or 

modify, the state may submit for approval a comment period which is consistent with 

such existing requirements.

This is a discretionary component of a permit program that ICAPCD’s submitted rules do not 

contain. All permits subject to public notice requirements under Rule 206 are subject to a 30-day 

public comment period. This is acceptable. 

(d) A copy of the notice required by paragraph (b) of this section must also be sent to the

EPA through the appropriate Regional Office, and to all other state and local air 

pollution control agencies having jurisdiction in the region in which such new or 

modified installation will be located. For lead, a copy of the notice is required for all 

point sources. The definition of point source for lead is given in 40 CFR 51.100(k)(2).

Rule 206, subsection C.2 requires the District to send a copy of the information submitted by the 

applicant, the District’s analysis and a copy of the proposed permit to ARB, EPA and any other 

interested public agency or party requesting it in addition to public noticing. 

Rule 206, subsection C.3 lists the pollutant thresholds at which new or modified stationary 

sources are exempted from the subsection C.2 public noticing requirements. New and modified 

sources with a potential to emit less than 100 lbs/day (18.25 tpy) of VOC, NOx, SOx or PM10

(including fugitive emissions), 80 lbs/day (14.6 tpy) of non-fugitive PM10, or 40 lbs/day (7.3 tpy) of 

PM2.5, or less than 5 tpy of lead are exempted from the public notice requirements of subsection 

C.2. Thus public notice is required for all major sources and major modifications and for certain 

minor sources with emissions greater than approximately fifty percent of the PSD significant 

emission rates (SERs) for VOC, NOx, or SOx, seventy-five percent of the PSD SER for PM2.5 and 

slightly less than the PSD SER for PM10. (See 40 CFR .51.166(b)(23)(i) for PSD SER) EPA finds 

these public notice thresholds reasonable for minor sources. These provisions are acceptable to 

satisfy this requirement.

3. 40 CFR 51.162 – Identification of responsible agency

Each plan must identify the state or local agency which will be responsible for meeting 

the requirements of this subpart in each area of the state. Where such responsibility 

rests with an agency other than an air pollution control agency, such agency will 

consult with the appropriate state or local air pollution control agency in carrying out 

the provisions of this subpart.

California law provides for the creation and authority of each air District. (See H&SC Division 26, 

Part 3.) California law specifically provides that “Local and regional authorities [e.g., the Districts] 

have the primary responsibility for control of air pollution from all sources other than vehicular 
15

sources.” (See CH&SC § 39002.) Accordingly, the California SIP has been divided into sections 

for each of the 35 state permitting authorities. Each District that adopts rules and regulations and 

submits them for SIP approval is responsible for implementing and enforcing those submitted 

rules. For the rules under review, all of the rules were adopted and submitted by the ICAPCD.

Therefore, this provision has been satisfied.

4. 40 CFR 51.163 – Administrative procedures

The plan must include the administrative procedures which will be followed in making 

the determination specified in paragraph (a) of 40 CFR 51.160.

Rule 204 – Application, requires applications for permits required under Rule 201 to be filed in 

the manner and form prescribed by the District, and requires the applicant to provide all of the 

information necessary to enable the District to make the determinations required by the District 

Rules. This provision satisfies this requirement. 

5. 40 CFR 51.164 – Stack height procedures

Such procedures must provide that the degree of emission limitation required of any 

source for control of any air pollutant must not be affected by so much of any source’s 

stack height that exceeds good engineering practice or by any other dispersion 

technique, except as provided in 40 CFR 51.118(b). Such procedures must provide that 

before a state issues a permit to a source based on a good engineering practice stack 

height that exceeds the height allowed by 40 CFR 51.100(ii)(1) or (2), the state must 

notify the public of the availability of the demonstration study and must provide 

opportunity for public hearing on it. This section does not require such procedures to 

restrict in any manner the actual stack height of any source.

Discussion: Rule 207, subsection F.1.b states that for the purposes of modeling, a stack height 

that exceeds those dictated by good engineering practices shall not be used. Instead, the actual 

height used for modeling shall be calculated according to good engineering practices as 

specified in 40 CFR 51.100(ii). This provision is sufficient to ensure that the air quality impacts of 

stationary sources are not underestimated due to stack heights that exceed good engineering 

practice or air dispersion modeling techniques that do not satisfy the criteria of set forth in CFR 

51.118(b). This provision satisfies this requirement.

5 New Source Review Reforms

California Clean Air Act – New Source Review Program

The air quality in California has historically been some of the worst in the nation. In light 

of this fact, California has always been at the forefront in implementing strict air quality 

regulations to address the state’s serious air quality problems. 

In 1959, the State passed its first air quality standards for total suspended particulates, 

photochemical oxidants, sulfur dioxide, nitrogen dioxide, and carbon monoxide. These 

state standards were amended in 1969 by the Air Resources Board. At that time, the 
16

California ambient air quality standard for ozone was lower than the federal standard, thus 

most of California was exceeding the state standard for Ozone. As a result, most California 

Air Pollution control agencies developed permitting programs that contained nonattainment new source review requirements such as Lowest Achievable Emissions Rate 

(LAER) and offsets around the same time as the adoption of the federal Clean Air Act in 

1970. 

In 1988, California adopted the California Clean Air Act of 1988 (California CAA). This 

legislation established new preconstruction review requirements for new and modified 

sources. It established uniform emission thresholds that trigger control and offset 

requirements for ozone (VOC and NOx), carbon monoxide (CO), sulfur dioxide (SO2) and 

nitrogen dioxide (NO2) at levels significantly lower than the federal thresholds in effect at 

the time of adoption. These thresholds are even lower than the thresholds established two 

years later by the federal Clean Air Act Amendments of 1990 (federal CAA). 

Under both state and federal requirements, all ozone nonattainment areas were classified 

according to the severity of the ozone violations measured for each area. Instead of a single 

major source threshold for all areas, the federal CAA set new major source and major 

modification thresholds of 100 and 40 tpy respectively, for areas classified as moderate or 

marginal; 50 and 25 tpy respectively, for areas classified as serious; 25 and 25 tpy 

respectively, for areas classified as severe; and 10 and 0 tpy respectively, for areas 

classified as extreme. These thresholds are used to determine when a proposed project 

requires the application of LAER and emission offsets. 

In comparison, the California CAA set thresholds for when project emissions trigger the 

application of the California version of Best Available Control Technology (BACT) and 

offsets. (Note that California BACT is defined in such a manner as to be equivalent to 

federal LAER requirements.) The application of California BACT is triggered for emission 

increases of 25 lb/day in areas classified as moderate and 10 lbs/day in areas classified as 

serious, severe or extreme. In addition, some California Districts have adopted even lower 

California BACT thresholds of two and zero lb/day. The requirement to provide offsets is 

triggered for all emission increases, once a facility’s emissions exceed 25 tpy in areas 

classified as moderate; 15 tpy in areas classified as serious; and 10 tpy in areas classified as 

severe or extreme. 

California and Federal BACT/LAER and Offset Thresholds for 1-hr Ozone

CA Ozone Classification

(ppm)

Marginal Moderate

(0.09 - ≤0.12)

Serious

(0.13 - ≤0.15)

Severe

(0.16 - ≤0.20)

Extreme

(>0.20)

CA BACT5(tpy) [lb/day] NA 4.6 [25] 1.8 [10] 1.8 [10] 1.8 [10]

CA Offset (tpy) NA 25 15 10 10

EPA Ozone Classification

(ppm)

Marginal

(0.121 - <0.138)

Moderate

(0.138 -

≤0.160)

Serious

(0.160 -

≤0.180)

Severe

(0.180 -

≤0.280)

Extreme

(>0.28)

Federal Major Source (tpy)

(Triggers both LAER & Offsets)

100 100 50 25 10

 

5 California Health & Safety Code §§ 40918, 40919, 40920 and 40920.5
17

Federal Major Mods (tpy) 

(Triggers both LAER & Offsets)

40 40 25 25 0

Note: California design values are lower than federal values for the same classification.

5.1 NSR Reform Program Requirements

On December 30, 2002, EPA published a final rulemaking action to provide additional 

flexibility in the permitting of modified sources subject to the federal major source NSR 

and PSD programs. EPA’s intent was to allow existing sources additional flexibility in the 

NSR/PSD permitting process that would encourage facilities to make process 

improvements or undertake energy efficiency projects that would provide additional 

environmental benefits by reducing emissions on a capacity basis. In 2005, a court vacated 

two NSR Reform provisions,

6

but also upheld three key provisions. These provisions all 

pertain to how emission increases from proposed modifications of existing sources are 

calculated. 

One provision allows an existing facility to set a Plantwide Applicability Limit (PAL), 

which in effect is a facility-wide emissions cap for a specific pollutant. Once the PAL is 

determined, a facility can make any physical modification or change in the method of 

operation, which might otherwise trigger a major modification, without obtaining a NSR 

permit, as long as the plantwide emissions remain below the PAL level. For certain types of 

industries that need significant operational flexibility to make quick changes in response to 

changing market conditions, the ability to make changes without having to wait for the 

issuance of construction permits is worth the additional work to ensure emissions from all 

operations remain below the PAL and maintain the additional records needed to verify 

compliance with the plant-wide emission limits. 

Another provision changed the allowable time frame to be used to determine baseline 

actual emissions. Baseline emissions are generally considered to be the pre-project 

emissions from the facility or emission units proposed to be modified. Prior to 

implementing the NSR Reforms, EPA required a source to use the actual emissions emitted 

during the two year period immediately preceding the application date for the new project. 

Sources were allowed to use a different two year period within the five year period 

immediately preceding the application date if they could demonstrate that the alternative 

two year period was more representative of normal operations. The NSR Reforms revised 

the allowable time frame to be any 24 month period during the 10 year period immediately 

preceding the application date. EPA believes that the use of a 10 year period allows a 

source to look back to a period from a more representative business cycle, i.e., 10 years vs. 

five years, and that significant resources are conserved by allowing the source to choose the 

24 month period used to establish baseline actual emissions, rather than spend time and 

resources determining what period most represents “normal operations.” While going back 

further in time means a source may be able to choose a period with higher average 

emissions, the NSR Reforms also added requirements to ensure the baseline period is 

adjusted for any excess emissions or any additional emission reductions required by new 

regulations which have become effective since the baseline period. 

 

6 State of New York, et al., v. U.S. Environmental Protection Agency, et al., 413 F.3d 3 (D.C. Cir. 2005)
18

The third provision upheld by the court changed how post-project emissions are 

determined. Prior to implementing the NSR Reforms, EPA required a source to use the 

worst case potential to emit (PTE) assumptions (i.e., operating at 100% capacity, 24 

hrs/day, 7 days a week), unless the applicant agreed to practically enforceable permit 

conditions to limit operation of the emission unit (i.e. fuel usage limits or limits on hours of 

operation). In this “actual to potential” test, often the difference between the baseline actual 

emissions and the PTE of an operation would be greater than the major modification 

significance thresholds. As a result, many modifications were treated as major 

modifications, even when the actual emissions would decrease, not change, or the actual 

increase in emissions would not be significant. The NSR Reforms changed the post-project 

emission calculation methodology to allow a source to use the highest actual emission rate 

projected to occur over the next 5 or 10 years and to subtract emissions the emission units 

could have accommodated prior to the project, that were unrelated to the project, in order to 

determine the emission increase from the proposed project. 

It is important to note that none of these revisions changed the major modification 

significance thresholds for triggering control technology and offset requirements. They 

only changed the calculation to determine if the major modification threshold is triggered. 

5.2 Impacts of Federal NSR Reforms on California NSR Permitting Programs

By not adopting the NSR Reforms, the NSR programs in California Districts do not include 

the three program elements described earlier: use of PALs, a 10 year look back period for 

baseline actual emissions and projected actual emissions. The use of two of these three 

provisions (baseline actual emissions and projected actual emissions) is required under 40 

CFR 51.165(a)(2). The requirement to adopt a NSR program that allows the use of PALs is 

found in 40 CFR 51.165(f). 

Section 116 of the CAA7provides that nothing in the Act shall preclude the rights of States 

to adopt air pollution regulations that are more stringent than those contained in the CAA 

or implementing regulations. As noted above, the California CAA of 1988 adopted lower 

emission thresholds for triggering emission control (BACT/LAER) and offset requirements 

for new and modified sources as part of its NSR program. Consistent with this concept, 

when EPA adopted new calculation methods to implement the NSR reforms in 40 CFR 

51.165(a)(2), we also stated that each plan must use the specific applicability provisions 

specified unless the State specifically demonstrates that the submitted plan provisions “are 

more stringent than or at least as stringent” in all respects as the specified paragraphs. 

These applicability provisions specify the use of baseline actual emissions and projected 

 

7 Section 116 of the CAA: Except as otherwise provided in sections 119 (c), (e), and (f) (as in effect before the date 

of the enactment of the Clean Air Act Amendments of 1977), 209, 211(c)(4), and 233 (preempting certain State 

regulation of moving sources) nothing in this Act shall preclude or deny the right of any State or political 

subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) 

any requirement respecting control or abatement of air pollution; except that if an emission standard or limitation is 

in effect under an applicable implementation plan or under section 111 or 112, such State or political subdivision 

may not adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation 

under such plan or section.
19

actual emissions, two of the new NSR Reform provisions, but also retain the option for a 

source to use the actual to potential emission test. 

Several air districts in California have argued that their NSR and PSD permit programs are 

inherently more stringent than the required federal program because the applicability 

thresholds for applying CA BACT and offsets are significantly lower than those in the 

federal CAA. In addition, for modifications, a source does not need to be a major source, as 

it does for federal purposes, before these lower applicability thresholds apply to a proposed 

project. The districts also point out that if a District adopted the NSR Reform calculation 

methods, and a project using these methods was no longer classified as a major 

modification, it would not be subject to Federal LAER and offsets requirements for NSR or 

Federal BACT for PSD; but the project would still have to apply CA BACT and provide 

offsets in accordance with the CA CAA requirements. These lower State emission 

thresholds are already in almost all Districts’ portion of the California SIP, making these 

requirements enforceable under both state and federal law. 

As a result, CA Districts have argued that the regulatory framework found in other states, 

where adopting the NSR Reforms provide additional permitting flexibility and 

environmental benefits, do not exist in California because adoption of the reform 

requirements would have no effect on the application of control technology or offset 

requirements. 

EPA has reviewed the Districts’ claims and considered how the CA CAA provisions affect 

the effectiveness of the NSR Reforms to provide the intended regulatory relief, and we 

agree that the application of CA BACT and offsets at significantly lower thresholds means 

that the federal NSR Reform provisions do not provide any of EPA’s intended additional 

flexibility to proposed projects that may otherwise trigger federal major modification 

requirements. If the State adopts these provisions, a new project will have to complete two 

different sets of emission calculations; and even if the federal requirements are not 

applicable, the source will still have to comply with the CA BACT control and offset 

requirements if they are triggered. In light of these facts, EPA is proposing to find that it is 

acceptable for ICAPCD to not incorporate the NSR Reform provisions into their SIP 

approved NSR program, since the same level of control will be required for modified 

sources, with or without inclusion of these provisions in the SIP, and their program will not 

be any less stringent than the federal program.

6 Section 110(l) of the Act

Section 110(l) of the Act prohibits EPA from approving any revision of a SIP if the 

revision would interfere with any applicable requirement concerning attainment and 

reasonable further progress, or any other applicable requirement of the Act. EPA approved 

Rules 206 and 207 into the SIP on January 3, 2007 and November 10, 1980, respectively. 

See 72 FR 9 and 45 FR 74480. For the purposes of the 110(l) evaluation, we compare the 

submitted rules with the current SIP versions.
20

With respect to the procedural requirements of CAA section 110(l), based on our review of 

the public process documentation included in the May 26, 2000, January 21, 2014 and 

February 10, 2014 SIP submittal packages, we find that ICAPCD has provided sufficient 

evidence of public notice and opportunity for comment and public hearings prior to 

adoption and submittal of these rules to EPA. 

With respect to the substantive requirements of section 110(l), as discussed further below, 

we have determined that our approval of submitted Rules 206 and 207, as described in this 

TSD, would represent a strengthening of ICAPCD’s NSR program as compared to the 

current SIP-approved versions of Rules 206 and 207, and that our approval of submitted 

Rules 206 and 207 would not interfere with any applicable requirement concerning 

attainment and RFP, or any other applicable requirement of the Act.

Rule 206 – Processing of Applications 

The provisions contained in Rule 206 are mainly administrative in nature. The revisions 

contained in the submitted rule will help clarify the application process and provide 

additional enforceability. The revisions to Rule 206 will not interfere with any applicable 

requirement concerning attainment and reasonable further progress, or any other applicable 

requirement of the Act.

Rule 207 – New and Modified Stationary Source Review

The most significant differences between the current SIP-approved version and the 

submitted version of Rule 207 are the emission thresholds at which a project triggers

LAER and offset requirements. SIP Rule 207 requires LAER for any new or modified 

source with a net emission increase of 250 pounds per day (45.6 tpy) or more of any 

nonattainment pollutant or their precursors. Submitted Rule 207, sections C.1.a and C.1.b,

require BACT (which Rule 207 defines in a manner consistent with the federal definition 

of LAER) for any new or modified emission unit with the potential to emit 25 pounds per 

day (4.56 tpy) or more of any nonattainment pollutant or their precursors.

8

The expected result of lower LAER applicability thresholds is that more equipment and 

projects will be subject to LAER; therefore, the new rule will reduce new emissions 

because significantly smaller sources (10 times smaller) will now be required to utilize 

LAER. Table 1 below shows the applicable LAER thresholds for both the current SIP rule 

and submitted rule.

Table 1

Applicable LAER Thresholds for New and Modified Sources (tpy)

VOC NOx SOx PM10 PM2.5

SIP Rule 207 45.6 45.6 45.6 45.6 45.6

Submitted Rule 207 4.6 4.6 4.6 4.6 4.6

SIP-approved Rule 207 requires offsets for any project emitting a nonattainment pollutant 

at the applicable LAER thresholds. Submitted Rule 207, sections C.2.c and C.2.d, requires 

 

8 For PM2.5, this provision only applies to sources located in the PM2.5 NA portion of Imperial County. 
21

offsets for emission increases of nonattainment pollutants that result in a new major 

stationary source or major modification, as defined in the rule. Table 2 below shows the 

applicable offset thresholds applicable to new major sources and major modifications, for 

both the current SIP rule and submitted rule. 

Table 2

Applicable Offset Thresholds for New Major Sources (tpy)

VOC NOx SOx PM10 PM2.5

SIP Rule 207145.6 45.6 45.6 45.6 45.6

Submitted Rule 207 100 70 70 70 100

Applicable Offset Thresholds for Major Modifications (tpy)

VOC NOx SOx PM10 PM2.5

SIP Rule 207145.6 45.6 45.6 45.6 45.6

Submitted Rule 207 40 40 40 15 10

1. The existing SIP rule specifically excludes nitrous oxides as an ozone precursor, 

but it is also a PM10 precursor. 

EPA notes that the offset applicability thresholds for new major sources are higher in 

submitted Rule 207 than those set forth in SIP-approved Rule 207, but the offset 

applicability thresholds for major modifications are lower in submitted Rule 207 than those 

set forth in SIP-approved Rule 207 (substantially lower for PM10 and PM2.5). While it is 

possible that the higher offset thresholds for new major sources may result in fewer new 

sources obtaining offsets, it is also reasonable to assume that the lower offsets thresholds 

for major modifications will result in more modified sources obtaining offsets. Overall, we 

do not believe the changes will interfere with applicable requirements of the CAA, 

including requirements for attainment or reasonable further progress towards attainment of 

the NAAQS. The SIP is also strengthened because submitted Rule 207 will regulate NOx as 

an ozone precursor, whereas current SIP-approved Rule 207 does not. 

In addition, because the ICAPCD is now designated as a nonattainment area for PM2.5, the 

revised rule includes additional provisions for the regulation of PM2.5 as a nonattainment 

pollutant, such as a definition for PM2.5, major source and major modification thresholds, 

and provisions to require emission offsets and application of LAER control requirements.

These new provisions also strengthen the SIP. Other changes to Rule 207 include 

administrative changes to improve the readability and clarity of the rule and will not 

interfere with any applicable requirements of the CAA.

While submitted Rule 207 contains some provisions regarding offset applicability 

thresholds which are less stringent than those currently in the SIP, submitted Rule 207 also 

contains several provisions that strengthen the SIP. In particular, submitted Rule 207 

imposes significantly lower trigger for BACT (federal LAER), which will significantly

increase the stringency of Rule 207 as it applies to nonattainment pollutants. EPA 

anticipates that the benefits of this more stringent provision outweigh other provisions that 

may represent potential reductions in reduce stringency. Therefore, overall, EPA has 
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determined that these changes will not interfere with the area’s ability to attain or maintain 

the NAAQS and will strengthen ICAPCD’s NSR program.

Accordingly, we have concluded that the revisions summarized above for Rules 206 and 

207 will not interfere with the District’s ability to maintain the NAAQS and are therefore

approvable under section 110(l).

7 Section 193 of the Act

Section 193 of the Act, which was added by the Clean Air Act Amendments of 1990, 

includes a savings clause which provides, in pertinent part: “No control requirement in 

effect, or required to be adopted by an order, settlement agreement, or plan in effect before 

November 15, 1990, in any area which is a nonattainment area for any air pollutant may be 

modified after November 15, 1990, in any manner unless the modification insures 

equivalent or greater emission reductions of such air pollutant.”

The application of this provision of the savings clause to revisions in a SIP-approved NSR 

program is not straightforward. NSR program revisions are inherently difficult to evaluate 

with respect to changes in emissions reductions because NSR covers all types of stationary 

sources and provides for application of different emissions limitations to different types of 

sources depending upon what is considered LAER for a particular source. In the context of 

the ICAPCD NSR SIP submittal, a determination of whether the SIP submittal would 

provide for equivalent or greater emission reductions relative to the existing SIP NSR 

program can be made by reviewing the control technology review requirements (e.g., 

BACT (LAER) applicability thresholds).

Rule 206 – Processing of Applications 

The provisions contained in Rule 206 are mainly administrative in nature and contain no 

control requirements, therefore revisions to the rule are not subject to the requirements of 

CAA section 193. 

Rule 207 – New and Modified Stationary Source Review

As noted above in the section of this TSD entitled “Section 110(l) of the Act,” compared to 

the SIP-approved version of Rule 207, the submitted version of Rule 207 contains a much 

lower emission threshold for the application of LAER for each nonattainment pollutant.

Therefore, in this regard, new Rule 207 satisfies the CAA section 193 requirements.

For the reasons set forth above, we are proposing to approve the submitted Rule 207 – New 

and Modified Stationary Source Review under section 193 of the Act.

8 Recommendations

Pursuant to section 110(k)(3) of the Act, we recommend a full approval of Rules 204 and 

206 based on our determination that the rules comply with applicable statutory and 

regulatory provisions requiring regulation of stationary sources in general and requiring 

permit programs for major stationary sources in particular, including section 110(a)(2)(C) 
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and part D of title I of the Act. In addition, we recommend a limited approval/limited 

disapproval of Rule 207 based on our determination that this rule satisfies all but one 

applicable statutory and regulatory provisions requiring regulation of stationary sources in 

general and requiring permit programs for major stationary sources in particular, including 

section 110(a)(2)(C) and part D of title I of the Act. This limited disapproval pertains to the 

rule’s inconsistency with the requirements of 40 CFR 51.165(a)(13) in that the rule does 

not require that the control requirements applicable to major stationary sources and major 

modifications of PM2.5 also apply to major stationary sources and major modifications of 

ammonia as a PM2.5 precursor, in the PM2.5 nonattainment area. 

In support of this recommendation, we have concluded that our approval of Rules 204, 206, 

and 207 complies with sections 110(l) and 193 of the Act as discussed above. If we finalize 

this action as proposed, our action would be codified through revisions to 40 CFR 52.220

(Identification of Plan).

In addition, EPA recommends that ICAPCD review section C.5.d of Rule 207 and clarify if 

necessary. This provision states: “Except for Major Stationary Sources or Major 

Modifications, Projects which burn municipal waste, landfill gas or digester gas shall also 

be reviewed with H&SC Section 42314.1 and 42315.” It is not clear whether ICAPCD 

intended to exclude major stationary sources or major modifications from review under this

state code. 

9 Notes

Documents cited in TSD are included in the Rulemaking Docket.