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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

REGION IX AIR DIVISION

Technical Support Document 

for

EPA’s Rulemaking for the

California State Implementation Plan

as submitted by the California Air Resources Board

Regarding

San Joaquin Valley Unified Air Pollution Control District

Rule 9510, “Indirect Source Review (ISR)”

Prepared by: Lily Wong

May 10, 2010
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TABLE OF CONTENTS

1. Rule Identification

2. Background

a. San Joaquin Valley Nonattainment Status

b. Indirect Source Review Programs

3. Rule Summary

a. Purpose and Applicability

b. Baseline Emission Projections and Mitigation Requirements

c. Administrative Process and Implementation Mechanisms

d. Analysis and Quantification Using APCO-Approved Model

e. Two Distinct Portions of the Program

4. EPA Review Criteria

5. EPA Evaluation

a. Roadmap to EPA Evaluation

b. ISR Portion of the Rule

i. Rule Relaxation

ii. Stringency

iii. Adequate Personnel, Funding, and Authority

A. Ongoing Legal Challenge to Rule 9510 

iv. Enforceable

v. EIP Guidance 

A. Fundamental Principles

a) Environmental Benefit

b) Equity

c) Surplus

d) Quantifiable

e) Permanent

B. Enforceable Commitment

a) Program Evaluation, Procedures, and Reporting

b) Remedy Emission Reduction Shortfall

c. Off-site Emission Reduction Portion of the Rule
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d. Voluntary Measures Policies

i. Enforceable Commitment

ii. Percent Limitation on SIP Credit

iii. Limitations on Use

iv. Timing of Emission Reductions 

v. Consistent Methodologies for Estimating Emission Reductions

e. Consideration of Separate Incentive Program SIP Submittal

f. Summary of Evaluation

6. EPA Action

7. Additional Recommendations

8. Attachments (6)
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1. RULE IDENTIFICATION

Agency: San Joaquin Valley Unified Air Pollution Control District

(SJVUAPCD)

Subject of this TSD: Rule 9510, “Indirect Source Review (ISR)”

Adopted: December 15, 2005

Submitted: December 29, 2006

Previous Rule Submittals: None

Current SIP-Approved

Rule: None

2. BACKGROUND: 

a. San Joaquin Valley Nonattainment Status

Eight counties comprise the San Joaquin Valley (SJV) nonattainment area. From north to 

south, these counties are San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare, 

and the valley portion of Kern (40 CFR 81.305).

The SJV is designated nonattainment for the 1-hour ozone standard1, the 1997 8-hour ozone 

standard, both the 1997 24-hour and annual PM2.5 standards, and the 2006 24-hour PM2.5

standard. 

For the 1-hour ozone standard, the area is classified as extreme with an attainment date of 

November 15, 2010. For the 8-hour ozone standard, the area is classified as extreme with an 

attainment date of June 15, 2024. 

For the 1997 PM2.5 standards, the area

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has an attainment date of April 5, 2010 which may be 

extended up to five years until April 5, 2015. For the 2006 PM2.5 standards, the area has an 

attainment date of December 14, 2014 which may be extended to December 14, 2019. 

EPA recently redesignated the SJV to attainment for the PM10 standards (73 FR 66759 

(November 12, 2008). 

California submitted an extreme area attainment demonstration plan for 1-hour ozone 

standard in November 2004 (2004 1-Hour Ozone Plan) and for the 8-hour ozone standard in 

November 2007. The area’s plan for attaining the 1997 PM2.5 standards was submitted in 

June 2008. The 2004 1-Hour Ozone Plan as submitted relied on reductions from Rule 9510 

in its attainment demonstration. However, the plan as approved by EPA does not rely on 

these reductions because EPA had not yet approved Rule 9510 into the California SIP and 

 

1 The 1-hr ozone standard was revoked in June 2005; therefore transportation and general conformity do not 

apply to the area for the 1-hr ozone plan.

2

PM nonattainment areas are not classified.
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thus it could not credit its reductions. See 74 FR 10420, 10436 (March 8, 2010). The 8-hour 

ozone and PM2.5 plans for the 1997 standards incorporate reductions from the rule in their 

baseline inventories. 

b. Indirect Source Review Programs

Development projects include the building of residential housing, and commercial, industrial, 

office, educational, government, and recreational space. Development projects indirectly 

result in new emissions from mobile, stationary, and area sources, including those from new 

or longer vehicle trips, fuel combustion from stationary and area sources, use of consumer 

products, landscaping maintenance, and construction activities. These growth emissions 

would be reflected in the non-attainment area’s projected baseline emissions inventory. 

Generally, indirect source review (ISR) programs would reduce growth emissions through 

incorporating mitigating features into the planning and design of the development project 

(e.g., mixed use/high density, bicycle and pedestrian paths, proximity to mass transit, shuttle 

services, energy efficient buildings and appliances, etc.) which primarily target a reduction in 

total vehicle trips and vehicle miles traveled (VMT), as well as implementing measures to 

reduce construction emissions. 

3. RULE SUMMARY

This section describes specific rule provisions and how the program functions. It does not 

include EPA’s analysis which is found in a subsequent section. The subsections below are: 

a) Purpose and Applicability, b) Baseline Emission Projections and Mitigation Requirements, 

c) Administrative Process and Implementation Mechanisms, d) Analysis and Quantification 

Using APCO-Approved Model, and e) Two Distinct Portions of the Program.

a. Purpose and Applicability

The purpose of Rule 9510 is to achieve emission reductions from new development projects 

meeting a defined size threshold (e.g., 50 residential units, 2,000 square feet of commercial 

space, 25,000 square feet of light industrial space, etc.) [Sections 1.0 and 2.0]. The rule also 

applies to transportation and transit projects where construction exhaust emissions are equal 

to or greater than 2 tons of NOx or 2 tons of PM10. The rule does not apply to the 

development of facilities whose primary function is subject to SJVUAPCD’s permitting 

requirements (e.g., stationary sources) [Section 4.4.3]. 

b. Baseline Emission Projections and Mitigation Requirements

Based on the developer’s project application, baseline emissions (i.e., NOx and PM10

emissions from the proposed development project without considering any mitigation 

measures) are estimated using a computer model. The rule requires that baseline emissions 

be reduced/mitigated pursuant to Sections 6.1, 6.2 and 6.3. Expected total project emissions 

mitigation is calculated based on a proportion attributable to construction equipment 

emissions [section 6.1: reduce NOx emissions by 20% and PM10 emissions by 45%], and a 

proportion attributable to operational emissions [section 6.2 - reduce NOx emissions by 33% 

and PM10 emissions by 20%]. Section 6.3 says the combined emission mitigation 

requirements in Sections 6.1 and 6.2 may be met by any combination of on-site emission 

reduction measures or off-site fees paid to SJVUAPCD. The SJVUAPCD Air Pollution 
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Control Officer (APCO) would utilize the fees to fund off-site projects to reduce NOx and 

PM10 emissions [Section 10.0].

c. Administrative Process and Implementation Mechanisms

The rule requires an applicant to submit an Air Impact Assessment (AIA) application to 

SJVUAPCD no later than when it applies for a final discretionary approval on a proposed 

development project from the public agency [Section 5.0]. The AIA application includes:

a detailed project description 

an On-site Emission Reduction Checklist which identifies on-site measures to be 

incorporated into the design of the development project and to minimize construction 

emissions 

a Monitoring and Reporting Schedule (MRS) which outlines how selected on-site 

emission reduction measures will be implemented and enforced if the measure is not 

being enforced by another public agency 

an optional Off-Site Fee Deferral Schedule for payment of fees in accordance with a 

schedule 

The AIA is conducted using an APCO-approved model (e.g., URBEMIS; see 

www.urbemis.com) to calculate emissions, emission reductions from on-site measures, and 

any Off-Site Fees if applicable [Section 5.6]. The inputs to URBEMIS include type of land 

use, number of units, and mitigation measures selected, and the outputs are total area source 

emissions, total vehicle emissions, total overall emissions and total reduced emissions in 

terms of lbs/summer day, lbs/winter day, or tons/year. URBEMIS emission factors are based 

on the EPA approved model for California, EMFAC2007. The AIA could be conducted by 

the applicant or by the SJVUAPCD. The AIA is approved or disapproved by the APCO. If 

approved, the APCO enters into a contract with the applicant to implement any applicable 

MRS. Upon completion, the APCO would issue an MRS Compliance letter, although active 

operational on-site measures must be implemented for 10 years after build out of the project. 

Implementation of on-site emission reduction measures relies in part on local land use 

authorities’ existing mechanisms. For instance, a city or county may require building permits 

for development projects, and the implementation of the on-site emission reduction measures 

could be subject to enforcement by that city or county agency. If the city or county agency 

does not have enforcement authority over the on-site measures, the developer and 

SJVUAPCD would sign a MRS contract on the implementation of the on-site measures. 

SJVUAPCD is responsible for administering the program which utilizes Off-Site Fees to 

fund off-site projects to reduce NOx and PM10 emissions. The rule requires SJVUAPCD to 

track the funds in dedicated accounts, establish criteria for off-site projects, review emission 

reduction calculations, enter into contracts with off-site project applicants on the 

implementation and reporting of the emission reductions from off-site projects, conduct 

inspections of off-site projects, and prepare annual reports on expenditure of monies, 

including the amount of monies collected and spent, details on projects funded, and emission 

reductions realized [Section 10.0].
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The Staff Report at Appendix E (see Attachment 2) identifies the following existing grant 

programs administered by SJVUAPCD which could be used to obtain the off-site emission 

reductions: Heavy-Duty Engine Incentive Program, REMOVE II Program, Lawnmower 

Buyback Program, Light and Medium Duty Vehicle Program, and Voluntary Accelerated 

Vehicle Retirement. The Staff Report also identified new programs which appeared to be in 

the conceptual stages: Stationary Source Incentive Program, PM10 Public Agency Road and 

Unpaved Surface Program, and Agricultural Project Incentive Program. 

d. Analysis and Quantification of Specific Projects Using APCO-Approved Model

In order to assess the air impacts of the development project, the rule at Section 5.6.2 

requires the use of an APCO-approved model which estimates construction, area source, 

and/or operational emissions of NOx and PM10 from potential land uses, using the most recent 

approved version of relevant ARB emissions models and emissions factors. The Staff Report 

at section IV.E, pp. 19-22 (see Attachment 2) states that in most cases, the model will be 

URBEMIS since it includes several features which make it the recommended tool. For 

example, URBEMIS contains: California specific emission factors with motor vehicle 

emission factors based on the latest version of EMFAC, emissions calculations for PM10, 

motor vehicle activity based on trip rates from the Institute of Transportation Engineers 

(which are nationally accepted and widely used), emissions calculations for area sources, and 

flexibility to modify defaults if project-specific information is known. The inputs to 

URBEMIS are, at a minimum: type of land use, number of units, and mitigation measures 

selected. The URBEMIS outputs are: total area source emissions, total vehicle emissions, 

total overall emissions and total reduced emissions in terms of lbs/summer day, lbs/winter 

day, or tons/year. 

e. Two Distinct Portions of the Program

The implementation of Rule 9510 could be viewed as having two distinct portions. Because 

this TSD includes discussions which may focus on only one portion of the program, this TSD 

will use the following terms: 1) “ISR portion” of the program refers to the portion of the 

program that includes: the application and approval process, estimating emissions from 

proposed development projects, determining the required level of emission mitigation, 

determining the reductions from on-site emission reduction measures,3determining the 

amount of fees, if any, to be paid, and the schedule and payment of fees. 2) “Off-site 

emission reduction portion” of the program pertains to SJVUAPCD’s program to use the fees 

to fund off-site emission reduction measures.4 

4. EPA REVIEW CRITERIA: EPA generally focuses on 3 criteria in evaluating state and 

local rules for approval into the SIP. For this rulemaking, we are including three additional 

considerations. 

 

3 On-site emission reduction measure is defined as “any feature, activity, device, or control technology of a 

project, which is incorporated into the design of that project or through other means, which will avoid, 

minimize, reduce or eliminate the project’s emissions” (Section 3.16.1).

4 Off-site emission reduction measure is defined as “any feature, activity, or emission reduction project used, 

undertaken, or funded to compensate for a project’s emission that is not part of the development project” 

(Section 3.16.2). 
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1. Rule Relaxation - Where previous versions of rules or plans are SIP approved, EPA 

must evaluate whether new submittals comply with sections 110(l) and 193 of the 

Clean Air Act (CAA) regarding SIP relaxations. 

2. Stringency - Section 182(b)(2) of the CAA requires certain SIP rules to apply 

Reasonably Available Control Technology (RACT). Other sections of the Act require 

other control levels. 

3. Enforceability - Section 110(a) of the CAA requires enforceable SIP requirements. 

Several EPA guidance documents are used to evaluate rule enforceability, including 

the “Bluebook” (Issues Relating to VOC Regulation Cutpoints, Deficiencies, and 

Clarification to Appendix D, November 24, 1978, 52 FR 45044), EPA Region IX’s 

Guidance Document for Correcting Common VOC and Other Rule Deficiencies

(August 21, 2001, the “Little Bluebook”), and State Implementation Plans; Nitrogen 

Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 

Implementation of Title I; Proposed Rule, (the NOx Supplement), 57 FR 55620, 

November 25, 1992. Section 110(a) of the CAA also requires assurances that the State 

has adequate personnel, funding, and authority to carry out SIP provisions.

4. Economic Incentive Programs - EPA published the guidance, “Improving Air Quality 

with Economic Incentive Programs” on January 2001 (EPA-452/R-01-001) and 

available at http://www.epa.gov/ttn/oarpg/t1/memoranda/eipfin.pdf. This document

will be referred to in this TSD as the “EIP Guidance.” The EIP Guidance applies to 

discretionary economic incentive programs (EIPs) and represents the agency’s 

interpretation of what EIPs should contain in order to meet the requirements of the 

CAA. EIPs use market-based strategies to encourage the reduction of emissions in the 

most efficient manner. Three fundamental principles apply to EIPs: environmental 

benefit, equity, and integrity (i.e., reductions are surplus, quantifiable, enforceable, and 

permanent). Because the EIP Guidance is non-binding and does not represent final 

agency action, EPA is using the guidance as an initial screen to determine whether 

potential approvability issues arise.

5 & 6. Voluntary Measures –

EPA recognized that many areas have implemented most of the traditional control 

measures and are continuing to experience challenges in meeting air quality standards. 

Many states and local agencies are trying new emission reduction strategies to meet 

the SIP requirements for attainment, reasonable further progress, rate of progress, or 

maintenance. In recognition and in support of these efforts, EPA developed two 

policies to provide states and local agencies with flexibility to test and use these 

innovative measures. 

EPA’s “Guidance on Incorporating Voluntary Mobile Source Emission Reduction 

Programs in State Implementation Plans (VMEP),” October 24, 1997, applies to 

programs achieving emission reductions from mobile source strategies which may 

not meet EPA’s traditional criteria on federal enforceability. This document is 

available at http://www.epa.gov/otaq/stateresources/policy/general/vmep-gud.pdf. 

In this TSD, we will refer to this guidance as “VMEP.”
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EPA’s guidance “Incorporating Emerging and Voluntary Measures into a State 

Implementation Plan (SIP)," September 2004, applies to stationary and area source 

emission reduction measures which do not meet EPA’s traditional criteria on 

quantification and enforceability. This document is available at 

http://www.epa.gov/ttn/oarpg/t1/memoranda/evm_ievm_g.pdf. In this TSD, we 

will refer to this guidance as the “Emerging & Voluntary Measures Policy.” 

Under these policies, EPA could approve such measures into the SIP, subject to the 

terms and conditions of the guidance documents. Because both guidance documents 

are non-binding and do not represent final agency action, EPA is using the guidance 

documents as an initial screen to determine whether potential approvability issues 

arise.

5. EPA EVALUATION

a. Roadmap to EPA Evaluation

SIP control measures must meet the criteria in the CAA regarding rule relaxation, stringency, 

enforceability, and adequate personnel, funding and authority. Because Rule 9510 allows a 

developer who does not fully meet his/her emission reduction requirement from on-site 

measures to pay a fee, and the program relies on SJVUAPCD to obtain other emission 

reductions from the use of these fees, Rule 9510 is an economic incentive program. As a 

result, we have evaluated the rule against the EIP Guidance. 

Because of the two distinct portions of the rule, we will first discuss our evaluation of the 

ISR portion of the rule against the criteria followed by the evaluation of the off-site emission 

reduction portion of the rule. For criteria where our evaluation and conclusion of the off-site 

emission reduction portion of the rule are the same as the ISR portion of the rule, we will not 

duplicate the discussions and simply refer to the previous discussions.

The initial evaluation against the criteria in CAA and the EIP Guidance will show that Rule 

9510 does not meet the traditional enforceability criteria. In such cases, the rule may be 

evaluated against two other policies on voluntary measures (EPA’s VMEP and the Emerging 

& Voluntary Measures Policy). In order to clarify the stepwise evaluation process, we have 

included the following diagram. This diagram also illustrates that some criteria are found in 

multiple documents. Consequently, where the TSD discusses the evaluation of a given 

criterion, we will not repeat that discussion under the heading of a subsequent guidance. 

 
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b. ISR Portion of the Rule

i. RULE RELAXATION

There is no previous version of this rule in the SIP so this rule strengthens the SIP and 

complies with 110(l) requirement regarding relaxation. 

ii. STRINGENCY

Section 182 of the CAA requires areas that are designated at moderate or above for ozone to 

implement RACT on sources covered by a Control Techniques Guidelines (CTG) document 

and on any major non-CTG source. As an extreme ozone nonattainment area, the SJV is 

subject to the RACT requirement. There are no CTGs for the source categories covered by 

Rule 9510 and the majority of the emissions from this source category are mobile source 

emissions and not subject to the RACT requirement. Therefore, Section 182 of the CAA 

does not apply to Rule 9510, so stringency is not being evaluated for SIP approval.

iii. ADEQUATE PERSONNEL, FUNDING, AND AUTHORITY

Section 110(a)(2)(E) of the CAA requires the State and responsible local agencies (e.g., 

SJVUAPCD) to provide necessary assurances that the State and air district have adequate 

personnel, funding, and authority to carry out its overall State Implementation Plan. EPA 

most recently addressed this issue in our approval of the 2004 1-Hour Ozone Plan for SJV 

and concluded that California and SJVUAPCD have demonstrated that they have adequate 

personnel, funding, and authority. (See proposed approval at 74 FR 333933 (July 14, 2009) 

and final approval at 75 FR 10420 (March 8, 2010)). However, Rule 9510 raises unique 

issues regarding SJVUAPCD’s authority to promulgate and enforce a rule regarding 

emissions from mobile sources. 

A) Ongoing Legal Challenge to Rule 9510

We are aware of the ongoing legal challenge by the National Association of Home Builders 

(NAHB) to the District’s legal authority to implement Rule 9510. See National Association 

of Home Builders v. San Joaquin Valley Unified Air Pollution Control District, No. 08-

17309 (9th Circuit). In that case, NAHB asserts that the SJVUAPCD, through Rule 9510, is 

attempting to establish and enforce an emissions standard for new nonroad engines without 

first having received a waiver as required by CAA section 209, 42 U.S.C. § 7543. Based on 

the information before us for this proposal, we believe that the SJVUAPCD has the authority 

to adopt and implement Rule 9510 without such a waiver.

Rule 9510 is designed to reduce emissions from development projects, which could include 

emissions from vehicles (from increases in vehicle miles traveled by residents and industrial 

or commercial service providers), entrained and re-entrained road dust, construction 

equipment, and landscape equipment. While Sections 6.1 and 6.2 of the rule establish 

emission reduction requirements, Section 6.3 states, “The requirements listed in Sections 6.1 

and 6.2 above can be met through any combination of on-site emission reduction measures or 

off-site fees.” A developer has numerous options to meet the emission reduction obligation, 

including options that do not involve any changes to nonroad equipment. For instance, all 

reductions can come from on-site emission reduction measures where the developer chooses 

design features such as increasing the density of a residential project, selecting a 
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development location that is in close proximity to retail and commercial services and transit 

stops, adding bicycle lanes and bicycle storage, adding pedestrian walkways, providing 

shuttle and carpooling assistance and transit pass subsidy, reduced parking at the project, 

including street block patterns forming interconnected grids, using lower emitting water 

heaters, and other energy efficiency measures. Alternatively, a developer could simply pay 

fees to meet the entire emission reduction obligation, or any portion of the obligation.

This “mix and match” flexibility means a developer can select which of the mitigation 

options are most cost effective and compatible with the proposed project. In addition, the 

SJVUAPCD’s process for reviewing applications from project developers demonstrates that 

Rule 9510 does not function as a prohibitory rule controlling emissions from nonroad 

engines. The SJVUAPCD has created a flow chart which is available on its website 

(Attachment 4). This flow chart shows the steps taken by the SJVUAPCD to confirm 

emissions calculations, review monitoring and reporting schedules, and either assess off-site 

mitigation fees or confirm that no fees are due.

CAA section 209 draws a distinction between state standards affecting the emissions of 

nonroad engines and other state requirements relating to use of nonroad engines that are no 

longer new. See, e.g. 40 CFR part 89, subpart appendix A to subpart A. Rule 9510’s 

assessment of emission reductions and/or off-site mitigation fees is based upon the total 

unmitigated emissions from a development project. It does not require any changes in design 

or emission rates from nonroad engines. Indeed, projects can comply without any reduction 

in expected emissions from nonroad engines. Therefore, Rule 9510 is not within the scope of 

preemption under section 209.

However, in-use controls on nonroad engines could operate in such a way that they amount 

to a standard controlling emissions of nonroad engines and may be subject to the preemption 

provision applicable to nonroad engines or vehicles. If the in-use control either 1) acted to 

compel the manufacturer or user of a nonroad engine to change the emission control design 

or equipment of the nonroad engine, or 2) created incentives so onerous as to be in effect a 

mandate to manufacture or use one engine over another, the in-use control could fall within 

the scope of preemption under section 209.

As described earlier, Rule 9510 allows project developers to choose construction equipment, 

operational equipment, and project design features which mitigate emissions of NOx and PM10. Alternatively, the off-site mitigation fee schedules established by Rule 9510 are set forth 

in section 7.2. The upper bounds of these fees are $9,350 per ton for NOx and $9,011 per ton 

for PM-10. The magnitude of these fees neither compels changes to the emission control 

design or equipment of any nonroad engine, nor mandate the manufacture or use of one 

vehicle over another. In its Staff Report regarding Rule 9510, the SJVUAPCD projected that

approximately only 13% of the NOx emissions reductions achieved through implementation 

of Rule 9510 would occur at the development project. The remaining 87% of the NOx

emission reductions would be accomplished through off-site mitigation fees. SJVUAPCD 

also projected that approximately 31% of PM10 emission reductions would occur from on-site 

measures at the development project and 69% of PM10 emission reductions would be 

accomplished through off-site mitigation fees. (See Attachment 2, pages B-26 to B-29). The 
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non-coercive nature of the off-site mitigation fees is confirmed by the SJVUAPCD’s 

experience with implementing Rule 9510. From March 1, 2006, to February 29, 2008, the 

SJVUAPCD received a total of $18,310,429 in off-site mitigation fees from project 

developers. (See Attachment 5) The project developers that paid these off-site mitigation 

fees obviously believed it was to their economic advantage to pay the fees and that Rule 9510 

did not effectively compel then to purchase new nonroad engines or vehicles.

EPA accepts comment on this analysis, which should be provided in response to EPA’s 

proposed rulemaking published in the Federal Register.

iv. ENFORCEABLE

Typically, a rule is enforceable5if the rule is clearly written, the provisions and criteria are 

objective, and the rule includes appropriate recordkeeping, monitoring, and other provisions 

to enable enforcement of the substantive requirements. The source is normally liable for the 

emission reductions. If the source fails to comply with the rule, the source would be in 

violation, would be subject to penalties, and could be compelled by SJVUAPCD, EPA, or 

citizens to implement corrective measures to achieve the emission reductions. 

In Rule 9510, the “source” or entity subject to the rule is the developer. The rule requires the 

developer to comply with the emission mitigation requirements by implementing on-site 

measures or paying a fee. SJVUAPCD would then use the fees to achieve emission 

reductions from off-site measures. 

While the provisions requiring payment of fees are enforceable (in that a failure by an 

applicant to pay required fees constitutes a violation of the rule), Rule 9510 does not meet the 

CAA enforceability criteria because it does not ensure that the emission reductions will be 

achieved. Under Rule 9510, the developer is not always liable for the emission reductions. 

If a developer’s on-site measures are not subject to enforcement by a public agency6

(e.g., a city or county who issues building permits for development projects), the 

mechanism to ensure that on-site measures are implemented is an MRS contract 

between the developer and SJVUAPCD. Contracts raise federal enforceability 

concerns.

If a developer’s on-site measures are subject to enforcement by a public agency Rule 

9510 implicitly relies on the public agency to ensure that on-site measures are 

implemented. However, Section 8.2 of the rule specifically says, “No section or 

provision within this rule requires action on the part of the public agency.” 

Consequently, the rule relies on a mechanism outside the jurisdiction of SJVUAPCD 

for enforcement of the provision. There are two potential problems. First, the on-site 

measures identified and agreed to in the AIA application process may not be included 

in the public agency’s permit or other instrument. Second, even if the on-site 

measures are being required by the public agency, failure by the developer to 

implement those measures is not a violation of Rule 9510. Therefore, these on-site 

 

5 The TSD describes federal enforceability, which is the relevant criteria for SIP approval. If a provision is 

enforceable by another authority but not by EPA, we conclude that the provision is not enforceable, 

6 The rule does not identify which public agencies have enforcement authority over on-site measures, and the 

rule does not specify the process to make this determination. 
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measures raise federal enforceability concerns.

v. EIP GUIDANCE

A) Fundamental Principles

The fundamental principles in EPA’s EIP Guidance are: environmental benefit, equity, and 

integrity (i.e., emission reductions are surplus, quantifiable, enforceable, and permanent). 

1) Environmental Benefit

Rule 9510 adequately addresses the environmental benefit principle because it regulates a 

sector that was not previously regulated, resulting in emission reductions for air quality 

benefit. 

2) Equity

The equity principle says that all segments of the population are protected from public health 

problems and no segment of the population receives a disproportionate share of a program’s 

disbenefits. Status quo would be development not subject to an ISR program, and one would 

see increases in emissions from population growth and increased VMTs. With Rule 9510, 

mitigation of emissions is required, resulting in emission reductions that would not 

otherwise occur as well as potential benefits to the surrounding population, e.g., potentially 

better access to public transit, bike paths, pedestrian friendlier environment, and lower 

energy costs from energy efficient measures in the development projects. This program does 

not result in disbenefits to communities as it would only result in decreases in emissions. 

Consequently, Rule 9510 adequately addresses the equity principle. 

3) Surplus

The EIP Guidance also states that in order to ensure that there is no double counting of 

emission reductions, the emission reductions must be surplus – i.e., the reductions are not 

already relied upon in the SIP. Reductions from this rule are surplus in that this is a new 

rule establishing new requirements on a sector that has not been regulated. 

4) Quantifiable

While Rule 9510 relies on an APCO-approved model to estimate a developer’s baseline 

emissions and emission mitigation obligations, the baseline emissions and projected emission 

reductions on a programmatic basis must be quantifiable. For the ISR portion of the 

program, we believe that the quantifiable criterion is met in the context of this source 

category – development projects. The APCO-approved model is based on the EPA-approved 

model EMFAC. Modeling land use and the related transportation impacts is an inherently 

uncertain process, since relationships between land use and travel are complex. Land use 

activities may interact with each other, either acting synergistically and improving emissions 

reductions or in some cases limiting the beneficial effects where isolation of the development 

reduces shifts away from single occupancy vehicles. Operational reductions from on-site 

measures would primarily be from reductions in vehicle miles traveled (VMT). As such, this 

measure is similar to estimations from transportation control measures (TCMs) which also 

include basic inherent uncertainties in estimating baseline emissions and emission reductions 

from TCMs. The APCO-approved model was updated to include the latest information on 
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land use, what design features consistently reduced vehicle activity (and consequently 

emissions) in the real world and by how much to minimize uncertainties. With the level of 

emission reductions expected from on-site mitigation, the inherent uncertainties in these 

emissions are acceptable.

Appendix B of the Staff Report (see Attachment 2) includes the methodology and 

assumptions for estimating the overall emissions reductions from Rule 9510. Attachments 2 

and 3 of Appendix B (see Attachment 2 of this TSD) indicate that the vast majority of the 

growth in NOx operational emissions would be from motor vehicle emissions, and the 

majority of the growth in PM10 operational emissions would be from re-entrained paved road 

dust. NOx and PM10 emissions would also increase from the use of construction equipment. 

Total annual growth in emissions was calculated from the estimated total growth in motor 

vehicle emissions from 2006 - 2014 using EMFAC2002.7 Taking into account expected 

growth, an assumption of 85% rule penetration, and a staff estimate of the percentage of 

developers choosing on-site measures vs. off-site measures, SJVUAPCD staff estimated that 

2010 NOx reductions would be 0.7 tons per day (tpd) from on-site measures, and 4.7 tpd from 

off-site measures for a total NOx reductions of 5.4 tpd. Taking into account the uncertainties 

associated with this program, SJVUAPCD claimed 4.0 tpd NOx reductions from this measure 

in the 1-Hr Ozone Plan (or approximately 74% of the estimated emission reductions from the 

program) in 2010. See SJV 1-Hr Ozone Plan, Table 4-1. Based on the above, it appears to 

EPA that the 4.0 tpd claimed NOx reductions would translate to 0.52 tpd NOx from on-site 

measures and 3.48 tpd NOx from off-site measures.

SJVUAPCD also projected the total estimated PM10 reductions (from re-entrained paved road 

dust, construction equipment NOx emissions that was converted at a ratio of 1.5 to 1 to PM10

emissions based on modeling, and PM10 exhaust from construction equipment) would be 5.8 

tpd, of which 1.8 tpd were projected to be from on-site measures and 4.0 tpd would be from 

off-site measures (see Staff Report at Attachment 2, pp. B-27 to B-29). 

5) Permanent

The reductions are permanent as described below. Some on-site emission reduction 

measures that are factored into the design of the project (e.g., creation of pedestrian and 

bicycle paths, increased housing density, reduced parking, energy efficiency measures, etc.) 

would be permanent because the measure is imbedded in the project design. When the 

development is constructed with mitigating design features, the development project would 

result in a permanent and continuous stream of emission reductions. While there could be 

on-site measures which are not design features, the rule requires the developer to implement 

the selected on-site emission reduction measures. If the enforceability issue were addressed, 

these would be permanent reductions. 

B) Enforceable Commitment

The EIP Guidance says the EIP submittal should include an enforceable commitment from 

the state or local air agency to: 

1. monitor, evaluate, and report on the resulting emission effects of the measure

 

7 At the time the District adopted Rule 9150, EMFAC2002 was the EPA-approved model for calculating onroad motor vehicle emissions in California. See 68 FR 1570 (April 1, 2003).
16

2. remedy any SIP credit emission reduction shortfalls if the program does not achieve 

the projected emission reductions. 

Rule 9510 falls short on these two considerations as described below. 

1) Program Evaluation, Procedures, and Reporting

SJVUAPCD may make the enforceable commitment in their submittal, or Rule 9510 could 

include provisions: a) requiring SJVUAPCD to monitor, evaluate, track and report on 

implementation of the entire program, and b) describing the procedures for comparing 

projected emission reductions with actual emission reductions achieved, and require 

reporting of this comparison. 

SJVUAPCD did not include an enforceable commitment in the submittal of Rule 9510 and 

Rule 9510 does not include all provisions noted above. While Section 10 of the rule includes 

some provisions on monitoring, evaluating, tracking, and reporting, this section only pertains 

to the off-site emission reduction portion of the program. The rule also needs to address 

program evaluation and reporting on the ISR portion of the program, and include the 

procedures and reporting of the comparison of projected and actual emission reductions from 

the entire program (i.e., ISR portion and off-site emission reduction portion).

2) Remedy Emission Reduction Shortfall

SJVUAPCD did not provide an enforceable commitment to remedy any emission reduction 

shortfall from the Rule. The staff report stated that SJVUAPCD’s general contingency 

measures in the 2004 1-hour ozone plan would be sufficient to address any emission 

reduction shortfall.8 The reliance on the plan’s contingency measures is not appropriate. 

The 2004 plan’s contingency measures were submitted to meet the requirement in CAA 

sections 172(c)(9) and 182(c)(9) for such measures. As a result, their reductions are already 

relied on in the SIP and, therefore, are not surplus. We discuss above that one of the 

fundamental principles in EPA’s EIP guidance is that emission reductions from such 

programs must be surplus. It follows that any additional reductions used to backstop those

reductions must also be surplus. 

c. Off-site Emission Reduction Portion

See the discussions above for evaluation of the following criteria: rule relaxation, stringency, 

adequate personnel, funding, and authority, environmental benefit, equity, and enforceable 

commitment.

Section 10 of the rule, “APCO Administration of the Off-Site Fee Funds,” describes in 

general terms SJVUAPCD’s program to obtain emission reductions from off-site measures. 

As stated earlier, the submittal included only cursory details on the off-site emission 

reduction portion of the program. Consequently, the off-site emission reduction portion of 

the program does not meet the enforceability criteria. Also, the rule relies on a contractual 

agreement between SJVUAPCD and the off-site project applicant to ensure implementation 

 

8

Staff Report Appendix A, pp. A-42 & A-43, (see Attachment 2 of the TSD) states, “In the event that the rule 

did not achieve a milestone and altering the project mix was not successful, contingency measures are in place 

in the SIP to make up the shortfall while revisions to the rule are made or new rule(s) are adopted to correct the 

situation.”
17

of the off-site project. Contracts raise federally enforceability concerns unless the rule is 

written to make a violation of the contract a violation of the rule. Because there is little detail

in this rule submittal on the off-site emission reduction portion of the program, it was not 

possible to evaluate whether this portion of the program met the approvability criteria that the 

emission reductions are surplus, quantifiable, and permanent. 

In order to ensure that this part of the program results in emission reductions that meet EPA’s 

criteria on surplus, quantifiable, enforceable, and permanent, it is necessary that this 

component of the program be fully described and included in a SIP submittal. While the 

Staff Report in Appendix E (see Attachment 2 of this TSD) identified several possible 

programs that SJVUAPCD could rely on to fund off-site projects, the submittal of Rule 9510 

does not include the necessary program details on how creditable emission reductions will be 

achieved. At a minimum, the submittal should describe and provide supporting 

documentation on: the protocols and quantification methodology and procedures to calculate 

emission reductions; criteria, policies, and procedures to ensure that the reductions are 

surplus (including identifying potential source categories for the reductions); publicly 

accessible and transparent tracking and evaluation of the program on a real-time basis; 

evaluation of program implementation and a summary of how any concerns (e.g. 

quantification or surplus issues) were resolved; annual reporting of amount of emission 

reductions achieved versus predicted; the audit and enforcement program; and how the public 

input is provided for in the development and implementation of the program. 

In evaluating Rule 9510 against criteria in the EIP Guidance as well as the CAA, EPA has 

concluded that Rule 9510 does not meet the traditional enforceability criteria. As such, we 

turn to EPA’s voluntary measures guidances. 

d. Voluntary Measures Guidances

i. ENFORCEABLE COMMITMENT

EPA’s guidance on voluntary measures relies on two fundamental components – enforceable 

commitment to: 1) evaluate and report on the emission effects of the program, and 2) 

remedy any SIP credit emission reduction shortfall. As previously discussed under the EIP 

Guidance section, Rule 9510 does not adequately address the enforceable commitment 

condition of the policies. However, because the enforceable commitment deficiency could 

readily be addressed by SJVUAPCD, we have also evaluated Rule 9510 against other 

provisions in VMEP and the Emerging & Voluntary Measures Policy.

ii. PERCENT LIMITATION ON SIP CREDIT

In light of the uncertainties and untested nature of the projects considered for approval under 

VMEP and the Emerging & Voluntary Measures Policy, EPA has set a qualified SIP credit 

limit of 3 % and 6% respectively of projected future emission reductions required for 

attainment. For instance, if 100 tpd of NOx reductions were needed to attain in the year 2013, 

a state could claim up to 3 tpd of NOx reductions under VMEP and claim up to 6 tpd of NOx

reductions under the Emerging & Voluntary Measures Policy. 

Although the 2004 1-Hour Ozone Plan approved by EPA did not rely on these reductions 
18

(because EPA had not yet approved Rule 9510 into the California SIP and thus could not 

credit its reductions), we are nonetheless evaluating Rule 9510 for consistency with this 

criterion in the event that the SIP may rely on these emission reductions in the future. 

 

Under the 1-hour ozone plan, SJVUAPCD needed 214.1 tons per day (tpd) of NOx reductions 

to attain in 2010, and the 3% and 6% limit are equal to 6.42 tpd and 12.85 tpd respectively. 

The 1-hour ozone plan assumes emission reductions from the Rule 9510 of 4.0 tpd NOx, 

which is well below the 3% and 6% limit of reductions needed for attainment. (See 

Attachment 6)

iii. LIMITATIONS ON USE

The voluntary policies reiterate that reductions from voluntary control measures are subject 

to existing applicable SIP policy. Consequently, the reductions cannot be used by a source to 

meet RACT, BACT, BART, LAER, NSPS, NESHAPS, or NSR offsets. Rule 9510 is 

consistent with such limitations and does not provide for such use. 

iv. TIMING OF EMISSION REDUCTIONS 

The timing of when the emission reductions from a voluntary measure occur must be 

considered under EPA’s policies. For example, the claimed reductions should occur no later 

than the attainment date; therefore, by necessity, the evaluation period, reporting, and remedy 

of emission reduction shortfall for the rule should occur before the attainment date. Even 

though EPA did not approve the 2004 1-Hour Ozone Plan with any reliance of emission 

reductions from Rule 9510, SJVUAPCD adopted this rule to meet a commitment in the 2004 

1-Hour Ozone Plan to achieve 4.0 tpd reduction in NOx emissions in the area’s attainment 

year of 2010. SJVUAPCD is conducting an annual evaluation and reporting. While 

SJVUAPCD needs to address the issues previously described on program evaluation and 

reporting, the timing considerations appear consistent with the policies. 

v. CONSISTENT METHODOLOGIES FOR ESTIMATING EMISSION REDUCTIONS

While it is unclear what methodology SJVUAPCD will be relying on to determine emission 

reductions achieved from this rule, SJVUAPCD should use a methodology that is consistent 

with the methodology SJVUAPCD used in its projection of emission reductions for SIP 

credit described in the Final Staff Report, Appendix B “Emission Reductions Analysis for 

Proposed Rule 9510 (Indirect Source Review) and Rule 3180 (Administrative Fees for 

Indirect Source Review), December 15, 2005.” 

e. Consideration of Separate Incentive Program SIP Submittal

Subsequent to the submittal of Rule 9510, SJVUAPCD took several actions which appear to 

relate to the deficiencies noted above, particularly with respect to the Off-site emission 

reduction portion of the program. We have summarized SJVUAPCD’s actions below and 

have considered whether these actions are sufficient to address those deficiencies. 

On April 30, 2007, SJVUAPCD adopted its 2007 Ozone Plan to address the 8-hour ozone 

standard. The 8-hour ozone plan was submitted to EPA on November 16, 2007. This 

submittal included SJVUAPCD’s Board Resolution No. 07-04-11b entitled, “In the Matter 
19

of: Adopting Commitments to Enhance SIP Creditability of Incentive-Based Emission 

Reductions.” In the Board Resolution, SJVUAPCD enforceably committed to: ensure that 

emission reductions from the program would be surplus, quantifiable, enforceable, and 

permanent; implement incentive programs through enforceable contracts between 

SJVUAPCD and the grantee; use established protocols or ones that were developed through a 

transparent public process; conduct inspections and monitor incentive projects; prepare and 

provide annual reports to EPA which includes a description of the amount of funds spent, 

amount of reductions achieved, and other findings; if there is a shortfall in emission 

reductions, revise any air quality plan within 12 months of the annual report; make publicly 

available the tracking of emission reductions from incentive-based programs on a real-time 

basis; and provide adequate resources to ensure grantees fulfill their contractual 

requirements. 

Does SJVUAPCD’s Board Resolution adequately address the deficiencies with Rule 9510? 

Because SJVUAPCD’s Board Resolution No. 07-04-11b included an enforceable 

commitment to make up emission reduction shortfalls from incentive programs, one could 

potentially argue that the Board Resolution addresses any emission reduction shortfall from 

Rule 9510. While it is likely that Board Resolution No. 07-04-11b addresses the off-site 

emission reduction portion of Rule 9510, Rule 9510 includes emission reductions from the 

ISR portion of the program which is not covered by Board Resolution No. 07-04-11b since 

Rule 9510 is a regulatory program. Since the Board Resolution does not specifically address 

the ISR portion of Rule 9510, an enforceable commitment to make up any emission 

reduction shortfall is still needed, if only for the ISR portion of Rule 9510. 

Chapter 7 of the 8-hour ozone plan (“Action Plan for Reducing Emissions With Incentive 

Funds”) describes more fully SJVUAPCD’s incentive program and Chapter 7.5 describes 

SJVUAPCD’s proposal to enhance the SIP creditability of incentive based emission 

reductions. SJVUAPCD describes Chapter 7 as “an action plan in progress” and 

acknowledges that it establishes a framework for enforcement and accountability and that the 

development of the policies and procedures for the incentive program would be forthcoming 

as a subsequent effort. 

While SJVUAPCD has taken many steps to address the SIP creditability of their incentive 

programs, additional steps will still be necessary as outlined in the Board Resolution. 

Furthermore, it appears that SJVUAPCD has not yet fulfilled commitments that were due 

(e.g., the annual reporting to EPA by March 31). 
20

f. Summary of Evaluation

Evaluation & Findings How to Address Deficiency

1. Rule 9510 does not meet the 

traditional enforceability criteria under 

CAA and the EIP Guidance

Revise rule to address traditional 

enforceability criteria, or

Be consistent with VMEP and Emerging & 

Voluntary Measures Policy as noted below 

by the adoption of a Board Resolution. 

2. Rule 9510 is not fully consistent with 

the VMEP & Emerging & Voluntary 

Measures Policy conditions

Adopt a Board Resolution which includes:

Enforceable commitment to monitor, 

evaluate, and report in a timely manner on 

the entire ISR program. 

A description of SJVUAPCD’s process, 

procedures, and timing for evaluating 

program implementation and results, 

including procedures for how projected 

emission reductions will be compared with 

actual emission reductions achieved. The 

timing of the evaluation and reporting must 

be appropriate to ensure that any shortfall 

could be remedied before any rate of 

progress/reasonable further progress 

milestone date or the attainment date.

Enforceable commitment to make up any 

emission reduction shortfall in a timely 

manner from the entire ISR program.

3. Rule 9510 and SIP submittal lack 

sufficient detail on the policies and 

procedures to implement the District’s 

program to achieve emission 

reductions from off-site emission 

reduction measures, raising 

enforceability concerns. 

Implement commitments in Board 

Resolution 07-04-11b on incentive-based 

emission reductions (see “Consideration of 

Separate Incentive Program SIP Submittal” 

on pages 18-19 of this TSD).

If implementation of the steps to address deficiency #3 above is delayed, it may be 

appropriate to assign SIP credit for on-site measures if steps to address deficiency #2 above 

are adequately addressed.

6. EPA ACTION:

Although Rule 9510 does not fully comply with EPA’s approvability criteria and policies, 

Rule 9510 is a novel approach for advancing air quality goals. We commend the 

SJVUAPCD for this ground-breaking approach to achieving emission reductions. 

Innovations of this type are particularly critical to making progress given SJVUAPCD’s 
21

extremely challenging air quality problems. In addition, Rule 9510 is directionally sound 

and if approved, would generally strengthen the SIP. Consequently, EPA staff is 

recommending approving the rule into the SIP, but is also recommending that the reductions 

from the Rule should not be credited in any attainment and rate of progress/reasonable 

further progress demonstrations or used to meet contingency measure requirements until the 

District corrects the identified problems, which we believe the District should easily be able 

to do.

9

 Approval is recommended because ISR programs represent an important effort by 

state and local air districts to address emissions which heretofore have not been easily 

regulated. ISR programs are innovative and important because of the targeted sector (e.g., 

emissions from vehicle travel), the way the programs achieve emission reductions (e.g., 

generally through selection of location and infrastructure design vs. emission control 

technologies), and the potentially significant co-benefits of reduced energy use which is an 

important strategy for reducing green house gases. It is noteworthy that EPA is prohibited by 

the CAA from requiring states and local air agencies to include ISR programs in SIPs or 

subjecting areas to ISR under a Federal Implementation Plan. EPA staff believes approval 

without SIP credit is warranted because SJVUAPCD has voluntarily chosen to develop this 

innovative program which highlights the importance of land use planning as an integral part 

of an attainment strategy. 

7. ADDITIONAL RECOMMENDATIONS:

We recommend SJVUAPCD provide additional information regarding consistency with the 

Plan. 

SJVUAPCD should provide a description of the reductions that are being claimed by 

the metropolitan planning organizations in the San Joaquin Valley for land use 

changes and transportation control measures and demonstrate that these reductions 

will not overlap with reductions being claimed for Rule 9510 in current and future 

analyses. SJVUAPCD should also explain how the rule’s assumptions on stationary 

and area source emissions and emission reductions from development projects are 

consistent with those assumed for growth in the nonattainment area plans.

SJVUAPCD should describe the methodology for tracking emission reductions and 

show how it is consistent with the methodology SJVUAPCD used in its projection of 

emission reductions for SIP credit described in the Final Staff Report, Appendix B 

(see Attachment 2).

Rule section 10.2.6 allows SJVUAPCD, for the off-site emission reductions, to 

substitute NOx reductions for PM10 at a 1.5 to 1 ratio. SJVUAPCD should describe 

how this provision is consistent with the ozone nonattainment area plan and the PM10 

maintenance plan and provide the technical justification for this substitution and the 

rationale for the specific ratio. 

 

9

 EPA recently approved the attainment and rate-of-progress demonstrations in the SJV 1-hour ozone plan. 

These approvals do not rely on reductions from Rule 9510. See 75 FR 10420 (Mar. 8, 2010).
22

8. ATTACHMENTS:

1. SJVUAPCD Rule 9510, “Indirect Source Review (ISR).” 

2. “SJVUAPCD Final Draft Staff Report” for Rule 9510 (including Appendices A 

through G) dated December 15, 2005 and submitted to EPA on December 29, 2006. 

We will refer to this document as the “Staff Report.” These documents are also 

available on SJVUAPCD’s web site at 

http://www.valleyair.org/ISR/ISRSupportDocuments.htm.

3. SJVUAPCD’s Board Resolution No. 07-04-11b, “In the Matter of: Adopting 

Commitments to Enhance SIP Creditability of Incentive-Based Emission 

Reductions.”

4. SJVUAPCD’s March 1, 2006 document entitled, “Application Review Process Flow 

Chart.” This document is also available at: 

http://www.valleyair.org/isr/Documents/ISRProcessFlowChart.pdf

5. SJVUAPCD Annual Reports to the Governing Board. Page 5 of “2008 Annual 

Report on the District’s Indirect Source Review Rule,” and page 3 of “2007 Annual 

Report on the District’s Indirect Source Review Rule.” These documents are also 

available at: http://www.valleyair.org/ISR/ISRResources.htm#ISRReports

6. Excerpts: Table 4-1 in the 2004 1-hour Ozone Plan and Table 2 in EPA’s proposed 

approval of the plan at 74 FR 33933 (July 14, 2009)