## U.S. Environmental Protection Agency Region 9



## TECHNICAL SUPPORT DO CUMENT

Notice of Proposed Rulemaking

Revisions to the California State Implementation Plan Butte County Air Quality Management District

Rule 400

– Permit Requirements

Rule 401

– Permit Exemptions

Rule 432

– Federal New Source Review (FNSR)

Prepared by Laura Yannayon

Approved by Gerardo Rios

August 5 , 201 6

### Table of Contents

1. Introduction

................................ ................................ ................................ ................................ ........... 1

2. Submittal Information

................................ ................................ ................................ ........................... 1

2.1 Submittal Agency Information

................................ ................................ ................................ ...... 1

2.2 Air Quality in Butte County

................................ ................................ ................................ .......... 1

2.3 SIP Submittals

................................ ................................ ................................ ............................... 1

2.4 Current SIP Approved Rules

................................ ................................ ................................ ......... 2

2.5 Relationship Between Current SIP Rules and Submitted Revised Rules

................................ ..... 3

2.6 Completeness Determination

................................ ................................ ................................ ........ 3

3. General Requirements for SIP

- Approved NSR Programs

................................ ................................ .... 4

3.1 Nonattainment NSR

................................ ................................ ................................ ...................... 4

3.2 Gene ral NSR (aka Minor NSR) Program Requirements

................................ .............................. 5

4. Rule Summaries

................................ ................................ ................................ ................................ .... 5

4.1 Rule 400

– Permit Requirements

................................ ................................ ................................ .. 5

4.2 Rule 401

– Permit Exemptions

................................ ................................ ................................ ..... 6

4.3 Rule 432

– Federal New Source Review

................................ ................................ ...................... 7

5. Evaluation of New Source Review Program Requirements

................................ ................................ . 9

5.1 Rule Evaluation Criteria

................................ ................................ ................................ ................ 9

5.2 Nonattainment NSR Requirements

................................ ................................ ............................... 9

5.3 General NSR Requirements

................................ ................................ ................................ ........ 23

5.4 Rule 401

– Permit Exemptions

................................ ................................ ................................ ... 26

6. New Source Review Reforms

................................ ................................ ................................ .............. 33

6.1 California Clean Air Act

– New Source Review Program

................................ ............................. 33

6.2 NSR Reform Program Requirements

................................ ................................ .......................... 35

6.3 Impacts of Federal NSR Reforms on California NSR Permittin g Programs

................................ . 36

7. Clean Air Act Section 110( l ) Analysis

................................ ................................ ................................ 37

8. Clean Air Act Section 193 Analysis

................................ ................................ ................................ ... 38

9. EPA’s Proposed Action

................................ ................................ ................................ ...................... 38

10. References

................................ ................................ ................................ ................................ ...... 391 

### 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 St ate 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 (See Section 3 , General Requirements for SIP

- Approved NSR Programs ) , and discuss EPA’s findings on whether the rules and regulations related to NSR that have been submitted by the Butte County Air Quality Management District (B C AQMD or District) for approval into the Ca lifornia SIP meet federal NSR requirements. Last, the TSD discusses EPA’s findings under Sections 110(l) and 193 of the Act relevant to this action.



### 2. SUBMITTAL INFORMATION

2.1 S UBMITTAL A GENCY I NFORMATION

The Butte County Air Quality Management District ( B CAQMD or District) is the air pollution control agency for all of Butte County, California.

2.2 A IR Q UALITY IN B UTTE C OUNTY

Butte County is designated nonattainment for the 2008 8

- hour ozone (marginal) and 2006

24

- hour particulate matter less than 2.5 micro meters in diameter and smaller (PM 2.5 ) (moderate) NAAQS. (See 40 CFR 81.305.) Based on the District’s current nonattainment designations, their nonattainment NSR program is required to regulate new major sources and major modifications of nitrogen oxides ( NO
x ) and volatile organic compounds (VOC) as ozone precursors under a moderate classification, and PM 2.5 and its precursors: NO
x , SO 2 , VOC and ammonia under a

moderate classification. Accordingly, this TSD will evaluate whether the submitted rules meet

NSR program requirements.

Butte County is currently designated attainment or unclassifiable for the nitrogen dioxide (NO 2 ), carbon monoxide (CO), particulate matter less than 10 micrometers (PM 10 ), sulfur dioxide (SO 2 ), and lead (Pb) NAAQS. (See 40 CFR 81.305.) Therefore, 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. On November 12, 2015 , EPA approved Rule 1107

– Prevention of Significant Deterioration ( PSD ) Permits into the Butte County portion of the C alifornia SIP. (80 FR 69880) Accordingly, this TSD will not evaluate whether the submitted rules meet PSD program requirements.

2.3 SIP S UBMITTAL S

BCAQMD adopted revised permit program related rules to comply with the federal nonattainment NSR and minor NSR program requirements. These rules were amended on th e
dates listed below in Table 1 and submitted to EPA via the California Air Resources Board2 (ARB) on the submittal dates indicated in the table. ARB is the governor’s designee for submitting official revisions of the California Stat e Implementation Plan (SIP) to EPA.

Table 1

– Submitted Rules

Rule # Rule Title Adopted or

Amended Submitted

400 Permit Requirements 5/26/11 2/6/13

401 Permit Exemptions 5/26/11 2/6/13

432 Federal New Source Review 5/26/11 2/6/13

On April 24, 2014, the BCAQMD adopted additional revisions to these submitted rules to address approval issues identified by EPA. These amended rules were submitted to EPA via the

California ARB. While we can act on only the most recently submitted version s of these rules, we have also reviewed materials provided with previous submittals . Table 2 provides the name, number, adoption and submittal dates for each rule evaluated as part of this TSD.

Table 2

– Submitted Rules

Rule # Rule Title Adopted or

Amended Submitted

400 Permit Requirements 0 4/24/14 11/0 6/ 14

401 Permit Exemptions 0 4/24/14 11/06/14

432 Federal New Source Review 0 4/24/14 11/06/14

2.4 C URRENT SIP A PPROVED R ULES

Table 3 lists the dates of the current SIP approved rules which new submitted rules 400 and 401 will replac e in the SIP. There is no previous version of Rule 432 approved in the SIP

.

Table 3

– SIP Approved Rules

Rule # Rule Title SIP Approval

Date Federal Register

Citation

4

- 4 Exemptions from Permit Requirement 05/31/72 37 FR 10856

401 General Requirements 02/03/87 52 FR 3226

402 Authority to Construct 02/03/87 52 FR 3226

403 Permit to Operate 5/2/01 66 FR 21875

405 Permit Conditions 05/31/72 37 FR 10856

406 Emission Calculations 02/03/87 52 FR 3226

407 Anniversary Date 02/03/87 52 FR 3226

420 Standards for Granting Applications 02/03/87 52 FR 3226

421 Conditional Approval 02/03/87 52 FR 3226

424 State Implementation Plan 5/2/01 66 FR 218753 2.5 R ELATIONSHIP B ETWEEN C URRENT SIP R ULES AND S UBMITTED R EVISED R ULES

As shown in Table 4 below, newly submitted Rule 400

– Permit Requirements will replace several existing SIP rules. For most of these rules, the District has simply collected the very short existing rules and codified in them in to a single r ule. New Rule 40 1

– Permit Exemptions will replace e xisting SIP Rule 4

- 4

– Exemption from Permit Requirements

.

Table 4

– Cross Reference of Current SIP Rules to be Replaced with Submitt ed Revised Rules

Existing SIP Rule Applicable New Rule Reference

4

- 4 Exemptions from Permit Requirements Rule 401

— Permit Exemptions 401 General Requirements Rule 400, Sections 1, 4.1, and 4.4.1; Rule 432, Section 1.1 402 Authority to Construct Rule 400, Sections 4.1 and 4.1.4 403 Permit to Operate Rule 400, Section 1.1, Sections 4.2 and 4.4 (relating to sources subject to Title V must comply with Rule 400)

405 Permit Conditions Rule 400, Section 5.2.4

406 Emission Calculations Rule 400, Section 4.3 407 Anniversary Date Rule 400, Section 4.6

420 Standards for Granting Applications A. Rule 400, Section 4.8 B. Rule 400, Sections 4.4.3 and 4.4.4 C. Rule 400, Sections 4.4.6 421 Conditional Approval Rule 400, Section 4.4.8 and 5.2.4 424 State Implementation Plan Rule 400, Section 4.4.3

2.6 C OMPLETENESS D ETERMINATION

With respect to procedures, CAA sections 110(a) and 110(l) require that revisions to a SIP be adopted by the State after reasonable notice and opportunity for a public hearing. EPA has promulgated specific procedural requirements for SIP rev isions in 40 CFR part 51, Subpart F. These requirements include publication of notices by prominent advertisement in the relevant geographic area, a public hearing on the proposed revisions, a public comment period of at least 30 days, and an opportunity f or a public hearing. Based on our review of the public process

documentation included in the November 6, 2014 submittal, we find that B C AQMD has provided sufficient evidence of public notice and opportunity for comment and public hearings prior to adoption and submittal of these rules to EPA. On December 18 , 201 4 , EPA determined

that ARB’s November 6, 2014 SIP submittal package conformed to the completeness criteria in 40 CFR part 51, appendix V, and was determined to be complete.4 

### 3. GENERAL REQUIREMENTS FOR SIP

- APPROVED NSR PROGRAM S

The NSR program is a preconstruction review and permitting program established under CAA sections 110, 160

- 169, 172 and 173 that is applicable to certain new stationary sources and modifications at existing stationary sources. Th e specific regulatory requirements applicable to

SIP

- approved NSR programs are contained in 40 CFR part 51, subpart I. There are three specific sets of permitting requirements included in subpart I: the program commonly referred to as the

“ general ” or “ minor ” NSR program (40 CFR 51.160

- 51.164), nonattainment NSR (40 CFR 51.165), and PSD (40 CFR 51.166). On November 12, 2015 , EPA approved BCAQMD Rule

1107

– Prevention of Significant Deterioration ( PSD ) Permits into the California SIP (80 FR 69880). Theref ore our evaluation of the submitted rules listed in Table 2 does not include the provisions of 40 CFR 51.166.

3.1 N ONATTAINMENT NSR

Sections 172(c)(5) and 173 of Part D of title I of the CAA and EPA’s implementing regulations

at 40 CFR 51.165 contain the NS R requirements for areas designated nonattainment for a particular NAAQS. NSR only applies to pollutant s and their precursors, for which the area is designated as nonattainment for a NAAQS under the CAA

. The primary criterion for applicab ility of the program is whether the proposed project is sufficiently large (in terms of its emissions) to be a major stationary source or major modification. T he nonattainment NSR program has specific emission thresholds for determining which sources are m ajor stationary sources based on the nonattainment classification of the particular pollutant.

Generally, a major stationary source in a nonattainment area is defined as a stationary source

with a potential to emit ( PTE ) of 100 tpy or more of the nonatta inment pollutant. The major stationary source emissions threshold is lower in nonattainment areas that have been determined to have higher degrees of nonattainment. For example, ozone nonattainment areas are classified as being marginal, moderate, serious, severe, or extreme (listed in increasing order of the degree of nonattainment). The major source threshold for these areas varies between 100 tpy and 10 tpy.

U nder the nonattainment NSR program, a new major stationary source is subject to the NSR

program requirements only if the source is a major source for that nonattainment pollutant.

Modifications to existing major stationary sources (for a particular nonattainment pollutant) are subject to the nonattainment NSR program requirements at “significant” e mission rates. The significan ce rate is lower in certain nonattainment areas with higher degrees of nonattainment, with the specific level based on the area’s particular nonattainment classification.

Once a stationary source is subject to the nonattainme nt NSR program, the source must meet several criteria prior to receiving a pre

- construction permit. The most significant of these requirements are the application of the lowest achievable emission rate (LAER) to the stationary source or project and the req uirement to offset the emission increases from the project with

decreases in emissions from the same or other stationary sources.

Our analysis of how BCAQMD’s NSR submittal addresses the specific requirements for a nonattainment NSR program is discussed i n S ection 5.2 of this TSD.5 3.2 G ENERAL NSR ( AKA M INOR NSR ) P ROGRAM R EQUIREMENTS

Section 110(a)(2)(C) of the Act requires each SIP to include a program for the “ 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 th e 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. EPA’s regulations at 40 CFR 51.160

- 51.164 provide general programmatic requirements to implement this statutory mandate commonly

referred to as the “ general ” or “ minor ” NSR program. These more general program requirements are the only federal requirements that apply to these “minor” stationary sources and non

- maj or 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.

Under EPA’s regulations governing the general NSR program, States and local air agencies retain a level of discretion to define the types and sizes of sources subject to the program, whereas under the PSD and nonattainment NSR permitting programs, the sources subject to regulation are specified by the CAA and EPA regulations. However, EPA’s regulations require

that State general NSR programs ensure that the construction or modification of any stationary source would be prevented if (1) it would result in a violation of the applicable control strategy (i.e., SIP); or (2) it would interfere with the attainment or maintenance of a NAAQS. These general requirements are included in 40 CFR 51.160, 51.161, and 51.163.

40 CFR 51.162 requires that each SIP identify the State or local agency that will be responsible for meeting the requirements of 40 CFR part 51, subpart I in each area of the State. And 40 CFR 51.164 requires that SIPs establish procedures that ensure 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).

Our analysis of how BCAQMD’s NSR submittal addresses the specific requirements for the general NSR program is discussed in detail in S ection 5.3 of this TSD.



### 4. RULE SUMMAR IES

4.1 R ULE 400

– P ERMIT R EQUIREMENTS

Rule 400 is a new rule which will replace current SIP approved Rule 401

– General Requirements, Rule 402

- Authority to Construct , Rule 403

– Permit to Operate , Rule 405

– Permit Conditions , Rule 406

– Emission Calculations , Rule 407

– Anniversary Date , Ru le 420

– Standards for Granting Applications , Rule 421

— Conditional Approval , and Rule 424

– State Implementation Plan . Each of these short permit related rules are consolidated into a single new

R ule 400, which contains the administrative provisions for ap plying for and obtaining both an authority to construct and a permit to operate. This new rule contains several administrative6 provisions which also apply to the District to ensure permits are reviewed and issued in a

consistent and timely manner . This includes requirements for public notice of a proposed permit. BCAQMD made several minor revisions to the existing SIP rules as they were consolidated into a single rule pertaining to permit requirements. Below we provide a more detailed summary of

t he rule con tents described as they appear in each Section of the rule.

Rule 400 is structured as follows :

• Section 1, Purpose

– This section describes the purpose of the rule, which is to require a source to obtain a preconstruction permit and provide or derly procedure s for application,

review and authorization of new and modified sources. ( Partial r eplacement for SIP Rule s 401 and 403 )

• Section 2, Exemptions

– This section states that an Authority to Construct or Permit to Operate shall not be required for emissions units listed in Rule 401

– Exemptions

.

• Section 3, Definitions

– This section provides that the definitions in Rule 101

– Definitions apply to Rule 400, unless th e section specifically provides a definition for the

ter m.

• Section 4, Standards

– This section contains the standards that apply for obtaining an Authority to Construct and Permit to Operate, including the information to be submitted and public notice requirements. This section also provides provisions for sampling and testing facilities, source performance testing, air quality impact analysis and

indemnification. (Partial replacement for SIP Rules 401, 402, 403, 406, 407, 420, 421 and

424

. )

• Section 5, Administrative Requirements

– This section contains the administrative provisions needed for the review and issuance of Authorities to Construct and Permits to Operate , which include requirements for application submittal s and criteria for action on applications. It also contains other permit related provision s including the requirements regarding posting of the permit, prohibitions regarding altering the permit, and conditions under which the APCO may suspend, cancel or revoke a Permit to O perate. Finally this section provides the administrative procedures for appealing a permit action. (Partial replacement for SIP Rules 405 and 421

. )

• Section 6, Monitoring and Records

– This section contains provisions pertaining to testing procedures, and monitoring and recordkeeping requirements

.

4.2 R ULE 401

– P ERMIT E XEMPTIONS

Where as Rule 400

– Permit Requirements sets out the provisions for what type of emission units

must obtain an A uthority to C onstruct and P ermit to O perate, Rule 401 lists the specific types and sizes of emission units which may be constructed and operated without first obtaining a permit from the District. Rule 401 is a replacement for existing SIP approved Rule 4

- 4

– Exemptions from Permit Requiremen ts

. Rule 4

- 4 was approved in the Butte County portion of7 the California SIP on May 31, 1972, as part of the original California SIP submittal. While Butte County has submitted various revisions to this rule over the years, EPA has never approved a

new vers ion of th e rule into the SIP. The current SIP version of Rule 4

- 4 contains 15 specific permit exemptions, whereas Rule 401 contains 18 categories and 39 specific exemptions

. Below we provide a more detailed summary of the rule contents described as they appear in each

Section of the rule.

Rule 401 is structured as follows :

• Section 1, Purpose

– This section describes the purpose of the rule, which is to specify

the emissions units that are categorically or conditionally exempted from the requirements of Rule 400

– Permit Requirements

.

• Section 2, Applicability

– This section contains several provisions which clarify the applicability or non

- applicability of Rule 401 to certa in emission units.

• Section 3, Requirements

– This section specifies the type of information that the APCO may require from any person claiming an exemption pursuant to Rule 401. It also provides that if a n application is required for an APCO determinatio n, the source must submit an application and the APCO must provide a written determination.

• Section 4, Exempt Source Categories

– This section lists all of the types of emission units which are exempted from the requirement to obtain an A uthority to C onstruct and/or a

P ermit to O perate. The emission units are grouped by source categories.

• Section 5, Conditionally Exempt Sources

– This section provides that certain sources may be exempted from the requirements to obtain an A uthority to C onstruct and P ermit

to O perate if certain conditions are met, including written approval from the APCO. This section specifically applies to identical replacement of equipment and very low emitting sources (less than 500 lb/yr). The requirements for obtaining APCO written concurrence are also provided in this section.

• Section 6

, Record keeping

– This section specifies the types of records which must be maintained to demonstrate applicability of certain exemption provisions.

• Section 7, Compliance Schedule

– This sec tion provides time lines for sources that lose their permit exemption to submit an application pursuant to the requirements of Rule 400.

Compared to the Rule 4

- 4

– Exemptions from Permit Requirements , Rule 401 contains significant new administrative prov isions and several new types of exempt sources. The District reorganized and clarified certain other provisions, added some new provisions and deleted some other provisions.

4.3 R ULE 432

– F EDERAL N EW S OURCE R EVIEW8 Rule 432 is a new rule intended to satisfy the requirements of CAA Part D of title I, which applies to new and modified major sources located in areas classified nonattainment for one or more NAAQS. There is currently no SIP approved nonattainment NSR prog ram for Butte County. Below we provide a more detailed summary of the rule contents described as they appear in each Section of the rule.

Rule 4 32 is structured as follows:

• Section 1, Purpose

– This section describes the purpose of the rule, which is to specify the preconstruction review requirements for new and modified stationary sources emitting pollutants for which the area is designated nonattainment. This section also provides a summary of the rule requirements, including evaluation of all applic able requirements, the use of BACT (the State equivalent to LAER)

, providing offsets and an analysis of air quality impacts.

• Section 2, Applicability

– This section provides that the rule is applicable to al l new and modified stationary source s which are subject to Rule 400

– Permit Requirements . It also clarifies that regulations in effect at the time an application is deemed complete shall apply

, unless a new federal requirement which has not been incorporated into the rule would apply. Finally this sec tion provides that the provisions of Section 5.1 and 5.2 do not apply to portable, temporary or replacement emissions units, unless the unit is a major source or will operate at a major source.

• Section 3, Effective Date

– This section specifies the rule became effective on the date of rule adoption

– April 24, 2014.

• Section 4, Definitions

– This section provides that the definitions contained in Rule 101

– Definitions are applicable, unless a specific definition for a term is provided in this

section. T he definitions provided in this section are mainly those which specifically apply to a permit program.

• Section 5, Requirements

– This section contains the specific requirements that apply to

each emission s unit, includin g BACT and offset requirements. The section includ es specific provisions regarding the location of offsets and required offset ratios, as well as a provision for when interpollutant offsets may be allowed.

• Section 6, Emission and Offset Calculations

– This section specifies the method s to be used to calculate emissions from a project, including emission increases and decreases, as well as the treatment of fugitive emissions

.

• Section 7, Administrative Requirements

– This section provides several specific administrative requirements whi ch apply to new and modified major sources, such a s providing an alternative siting analysis, a certification of statewide compliance, an analysis of potential visibility impacts and air quality impacts.9 • Section 8, Power Plants

– This section contains ad ditional requirements applicable to the permitting of power plants. Under state law, any authority to construct permit may only be issued after a project has meet all applicable requirements of the California Energy

Commission. These requirements are in ad dition to the federal permit requirements

contained elsewhere in the rule.



### 5. EVALUATION OF NEW SO URCE REVIEW PROGRAM REQUIREMENTS

5.1 R ULE E VALUATION C RITERIA

For this TSD, EPA reviewed Rules 400, 40 1 and 43 2 to ensure they meet the applicable requirements of section 110 and part D of title I of the Act, and current implementing regulations at 40 CFR 51.160 through 51.16 5 , as well as CAA section 302(z) and 40 CFR 51.307, which both contain additional provisions for permit programs.

EPA also relied on the fol lowing materials in our review:

• General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990 (see 57 FR 13498, April 16, 1992),

• EPA’s Emission Offset Interpretive Ruling (40 CFR part 51, appendix S),

• EPA’s policy document e ntitled, “Improving Air Quality with Economic Incentive Programs” that was published in January 2001, and

• Other materials listed in the docket for this proposed action.

EPA has condensed the approval criteria contained in these various materials for use i n this TSD, which describes the reasons for our proposed action on the SIP submittal for Rules 400, 401 and

432 for the B C AQMD.

5.2 N ONATTAINMENT NSR R EQUIREMENTS

The Act requires all States with nonattainment areas to submit a nonattainment NSR permit

progr am consistent with the NSR provisions discussed below. We are applying the requirements

in section 173 of the CAA and 40 CFR 51.165 to evaluate whether B C AQMD’s SIP submittal of

Rule s 401 and 432 , along with other SIP approved rules, satisf y these requirem ents.

5.2.1 Requirement: Pursuant to section 173(a)(1)(A) of the CAA, the SIP must contain provisions to assure that the calculation of emissions offsets is based on the same emissions baseline used in the demonstration of reasonable further progress.

Discussi on: First we note that the emissions inventories prepared by the District for the two nonattainment pollutants (ozone and PM 2.5 ) are based on actual emissions. For new or modified major sources emitting a nonattainment pollutant Rule 432 Section 5.2.4 require s offsets to be provided when emission increases exceed specified thresholds.

Section 4.11 define s the term Emission Reduction Credits (ERCs) such that all ERCs must be based on “actual” emission reductions. Thus, the basis for the demonstration of RFP and the calculation of NSR emissions offsets is the same (i.e., actual emissions).10 Second, regarding the amount of offsets that are necessary to show noninterference with
RFP, EPA believes that so long as a new source obtains offsets in an amount equa l 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 or greater than 1:1), the new source will

not interfere with RFP. Rule 43 2 Section 5.3 provide s the ratios for federal offset purposes, which are all equal to or greater than 1:1 for nonattainment pollutants. These offset ratio requirements ensure that the program for permitting of new or modified major sources will not interfere with RFP. These provisions sati sfy the statutory requirement.

5.2.2 Requirement: Pursuant to section 173(a)(2) of the CAA, the SIP must require LAER for a new major stationary source or major modification at an existing major stationary

source.

Discussion: The term “Lowest Achievable Emission Rate (LAER)” is defined in Section

4.19 as “The same as BACT is defined in this Rule.” The term “Best Available Control Technology (BACT)” is defined in Section 4.7 as the most stringent emissions limitation

or control technique of a list of options. The provisions listed in Subsection 4.7.1 and

4.7.2 are the same as EPA’s definition of LAER. If no controls are available that meet these first two criteria, then the definition provides additional provisions which require the application of BACT as defined in EPA’s PSD regulations. Therefore we find that the Rule 432 provides an equivalent definition to the term “LAER” as found in 40 CFR 51.165(x iii)

.

Section 5.1 requires the application of BACT to any new or modified em ission unit which results in a net emission increase of at least 100 tpy for new sources, and a significant net emission increase for modifications. These thresholds match the regulatory

thresholds for the District’s nonattainment status for ozone and PM 2. 5

. This provision satisfies the statutory requirement.

5.2.3 Requirement: Pursuant to section 173(a)(3) of the CAA, the SIP must contain provisions 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.

Discussion: Rule 432 Section 7.2 requires an applicant for any new major stationary source or any major modification regulated by the rule to provide a ce rtification stating that all existing major stationary sources owned or operated by such person (or by any entity controlling, controlled by, or under common control with such person) in California which are subject to emission limitations are in complianc e, or on an expeditious schedule for compliance, with all applicable emission limitations and standards. This provision satisfies the statutory requirement.

5.2.4 Requirement: Pursuant to section 173(a)(5) of the CAA, as a prerequisite to issuing any permit in accordance with part D of the CAA, the SIP must contain provisions that require an analysis of alternative sites, sizes, production processes, and environmental control techniques for proposed sources that demonstrates that the benefits of the11 proposed sou rce significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modification.

Discussion: Rule 432 Section 7.1 requires an applicant for any new major stationary source or any major modification regulated by the rule to provide an analysis which is functionally equivalent to the requirements of Division 13 of the Public Resources Code.

Th is state law provision requires an analysis of alternative sites, sizes, production processes, and environmenta l control techniques for such proposed source that demonstrates the benefits of the proposed source significantly outweigh the environmental and social costs imposed as a result of its location, construction or

modification. This provision satisfies the st atutory requirement.

5.2.5 Requirement: Pursuant to section 173(c)(1) of the CAA, the SIP must contain provisions to assure that any emissions offsets required in conjunction with the issuance of a permit to a new or modified stationary source must be enforceab le by the time of issuance of the permit, and in effect by the time the new or modified stationary source commences operation.

Discussion: Rule 432 Section 5.2.2 contains the general provision that all offsets must be

enforceable. Section 5.2.6 requires offsets to be identified at the time of application and must be surrendered prior to the operation of the permitted emission unit. Th ese provision s ensure that emissions offsets required in conjunction with the issuance of a n ATC for a new or modified stat ionary source will be enforceable by the time the ATC is

issued.

5.2.6 Requirement: Pursuant to section 173(c)(1) of the CAA, the SIP must contain provisions to assure that emissions increases from new or modified major stationary sources are offset by real reductions in actual emissions.

Discussion: Rule 432 Section 4.2 defines Actual Emission Reductions as “A reduction in

actual emi ssions from an emissions unit. Actual emissions reductions shall be real, enforceable, quantifiable, surplus, and permanent. ” In addition, under Section 5.2 which specifies Offset Requirements, Subsection 5. 2.2 requires that “ Offsets shall be real, permanent, enforceable, surplus at time of use, and quantifiable. ” Taken together these provisions satisfy this requirement.

5.2.7 Requirement: Pursuant to section 173(c)(2) of the CAA, the SIP must contain provisions

t o prevent emissions reductions otherwise required by the Act from being credited for purposes of satisfying the part D offset requirements.

Discussion: Rule 432 Section 4.45 defines Surplus as “The amount of actual emission reductions that are not otherwise required by federal, State, or local law, not required by any legal settlement or consent decree, and not relied upon to meet any requirement

related to the Ca lifornia SIP at the time of use. However, emission reductions required by a State statute that provides that the subject emission reductions shall be considered surplus may be considered surplus for purposes of this Rule if those reductions meet all12 other applicable requirements.” In addition, under Section 5.2 which specifies Offset Requirements, Subsection 5.2.2 requires that “ Offsets shall be real, permanent, enforceable, surplus at time of use, and quantifiable. ” Taken together these provisions satisfy this requirement.

5.2.8 Requirement: Pursuant to section 302(z) of the CAA, the SIP must provide that control of a “stationary source” does not include emissions resulting directly from an internal combustion engine for transportation purposes or from a nonroad engine or nonroad

vehicle.

Discussion: Rule 432 Section 4.44 defines the term Stationary Source. Subsection 4.44.3 states that the definition of Stationary Source excludes non

- road engines as defined in CAA Section 216. This provision satisfies the stat utory requirement.

5.2.9 Requirement: The District’s NSR program must contain the specific definitions found in 40 CFR 51.165(a)(1).

Discussion: In most cases, the definitions contained in B C AQMD’s Rule 100

– Definitions and Rule 432

– Federal New Source Review are equivalent to language used

in 40 CFR 51.165(a)(1). Deviations from the wording provided in 40 CFR 51.165(a)(1) may be approved if the submitted definition is more stringent, or at least as stringent, in all respects. We evaluate below the defin itions which do not match the federal definitions as closely to determine if they are acceptable substitutions. EPA’s evaluation of these

definitions is provided below

.

Actual Emissions

The definition of this term found in Rule 432 Section 4.1 contains the same basic definition of the term, but does not specify the calculation methodologies provided in the definition of this term is 40 CFR 51.165 (a)(x ii ). However, in Section 4.16, the definition

for the term Historic Actual Emissions does provide the sa me timeframes for dete rmining

actual emission rates. EPA finds these two definitions acceptable to satisfy the requirement to define this term.

Construction; Commence; Necessary Preconstruction Approvals; Begin Actual

Construction

The District’s NSR rule does not provide definitions for these specific terms found in 51.165(a)(1)(xvi)

- (xviii). To the extent the purpose of these terms is to ensure actual construction is not begun prior to obtaining necessary preconstruction approvals, EPA

has determined that the language in Rule 400 Section 4. 1 serves the same purpose, in that it prohibits equivalent pre

- construction activities. EPA finds this alternative provision acceptable. 1

1 See EPA’s TSD dated October 29, 1996 for South Coast AQMD NSR rules (page 8).13 Emissions Unit While Rule 432 Section 4.13 provides an adequate definition for th is term generally , the definition does not include any provisions to differ entiate between a “new” or “existing” emission unit, as provided in 40 CFR 51.165(a)(1)(vii). EPA added a definition for this term to our regulations as part of the 2002 NSR Reforms in order to allow different treatment of new or existing emission units for the purposes of determining NSR program applicability. As discussed in Section 6 of this TSD , EPA has determined that it is acceptable for BCAQMD to not include provisions related to NSR Reform as a part of their NSR program, therefore we find it is acceptable for the definition of emission unit provided in Rule 432 to not differentiate between new and existing emission u nits.

Federally Enforceable

Rule 432 Section 4.14 uses the term “E nforceable ” to provide the same definition as found in 51.165 (a)(1)(xiv) , and specifies that this definition applies for the purposes of federal requirements. This is acceptable.

Lowest Achievable Emission Rate (LAER) BCAQMD’s rules do not define this term found in 40 CFR 51.165(a)( 1)(xiii). Instead the rule provides a definition in Section 4.7 for the term “Best Available Control Technology (BACT),” which incorporates the definition of LAER by specifying that BACT is the most stringent of (1) applied in practice technology (analogou s to LAER standard) or (2) the technology that is technically feasible and cost

- effective (analogous to PSD BACT standard). EPA finds this acceptable.

Major Modification Rule 432 Section 4.20 provides a definition for this term which includes the key

ele ments, such as requiring the modification to occur at a major source and to have a signi ficant net emissions increase. The definition incorporates the “significant” emission rates directly into the definition rather than referencing the term “significant.” The rule also provides a definition for the term “modification” in Section 4.22 which provides the additional elements from the federal definition of major modification pertaining to what type of changes are not considered to be modifications. Taken toget her these provisions satisfy the requirement to define the term “major modification.”

Net Emissions Increase, Emission Unit, Significant, Electric Utility Steam Generating Unit, Allowable Emissions, Significant Emissions Increase, Projected Actual Emissi ons, Baseline Actual Emissions, and R egulated NSR Pollutant BCAQMD’s rules do not provide specific definitions for the se NSR Reform related terms found in 40 CFR 51.165(a)(1)(v), (vi), (vii), (x), (xx), (xxvii), (xxviii), (xxxv), and (xxxvii)

. These terms are all used to determine whether a change at a major stationary source will result in a major modification. As discussed in Section 6 of this TSD , EPA has determined that it is acceptable for BCAQMD to not include provisions related to NSR Reform as a pa rt of their NSR program, therefore we find it is acceptable that Rule 432 does not provide definitions for these terms.14 Project 40 CFR 51.165(a)(1)(xxxix) defines this term as “Project means a physical change in, or change in the method of operation of, an existing major stationary source. ” , whereas Rule 432 defines this term as “All emissions units associated with the scope of an application submitted in accordance with Rule 400 for a new or modified stationary source including any emissions units indir ectly affected.” While Rule 432 does not provide a definition

similar to the federal definition for this term, it does provide the same definition within the definition of the term “Modification” in Section 4.22. Therefore, we find the definition provided in the term “modification” adequate for the purposes of determining the applicable requirements of Rule 432.

Reviewing Authority

B C AQMD’s rules use the terms “Air Pollution Control Officer” and “District” in place of the term reviewing authority in 40 CFR 51.165(a)(1)(xxxviii). These terms are defined in

Sections 4.8 and 4.29 of Rule 101

- Definitions , which is SI P approved. 2 This is acceptable.

Secondary Emissions

B C AQMD’s rules do not provide a definition for this term found in 40 CFR 51.165(a)( 1)(viii). EPA’s implementing NSR regulations only use this term is within the definition of PTE, which states that secondary emissions are to be excluded when calculating PTE. The District’s definition of PTE in Section 4.32 does not exclude secondary emis sions when determining the PTE of a stationary source or emission unit. Since not excluding secondary emissions from PTE calculations makes the District’s definition at least as stringent as the federal definition of PTE, we find it is acceptable for

the B C AQMD’s rules to not include a definition for the term Secondary Emissions.

Significant BCAQMD’s rules do not provide a spec ific definition for this term. Instead it incorporates the thresholds provided in th is definition in the definition of “Major

Modi fication” i n Section 4.20. EPA finds the definition provided in Section 4.20 is acceptable to satisfy the requirement to provide a definition for the term “significant” as defined in 40 CFR 51.165 (a)(x).

Volatile Organic Compounds (VOC)

Rule 1 01

– Definitions , which is SIP approved, provides a definition for the term

“ Volatile Organic Compound” in Section 4.107 , which is substantially equivalent to the federal definition of VOC in 40 CFR 51.165(a)(1)(xix). We find this substitution acceptable.

Rule 432 includes two additional terms which are not contained in 40 CFR 51.100 or

51.165 and have not yet been considered in this TSD

. The first term is Basic Design

Parameters found in Section 4.5. The definition for this terms is consistent with the

definit ion of the term EPA promulgated as part of our Routine Maintenance, Repair and Replacement (R MR R) rulemaking. 68 FR 61248 (October 27, 2003)

. While the R M R R

2 80 FR 33195, June 11, 201515 rulemaking was vacated in its entirety by the DC Circuit Court, 3 the definition for this is still acceptable and is appropriate to be included because the term Replacement Unit

, which is included in 40 CFR 51.165(a)(xxi) includes the term Basic Design Parameters

.

The second term is Best Available Control Measures (BACM) found in Section 4.6

. This term is used in the definition of “Surplus” found in Section 4.45, as an example of the types of SIP

- related requirements for which emission reduction credit cannot be granted for the purposes of providing offsets required by the rule. EPA finds thi s definition acceptable.

5.2.10 Requirement: Pursuant to 40 CFR 51.165(a)(1)(iv)(C), the SIP must contain provisions that require fugitive emissions to be included in the major stationary source applicability determination if the source belongs to one of the source categories listed in that section.

Discussion: In Rule 432 Section 4.21 the definition of the term “Major Stationa r y Source” specifies that “The fugitive emissions associated with an emissions unit or a stationary source shall not be included in determining whether the source is a major stationary source unless the source is a category source or sources included in 40 CFR 51.165(a)(1)(iv)(C).” In addition, under Section 6, which specifies how emission s and offset calculations are to be performed, Section 6.4 provides the following procedu re: “The fugitive emissions associated with an emissions unit or a stationary source shall not be included in determining whether a stationary source is a major stationary source or major modification to a stationary source unless the source belongs to one of the categories of sources included in 40 CFR 51.165(a)(1)(iv)(C).” These provisions satisfy the regulatory requirement.

5.2.11 Requirement: Pursuant to 40 CFR 51.165(a)(2), (a)(6), and (a)(7), the SIP must contain specific applicability procedures for determ ining whether a proposed change to an existing major stationary source is a major modification and maintain specific records depending on the specific calculation method chosen.

Discussion: The applicability procedures contained in paragraphs (a)(2) (ii)(A ) through (F) are often referred to as “ NSR Reform ” applicability provisions because they were promulgated as part of EPA’s December 31, 2002 rulemaking entitled NSR Reform. In that rulemaking EPA provided new additional methods for determining if a projec t would result in a major modification. Paragraph (a)(2)(ii) states that “Deviations from these provisions will be approved only if the State specifically demonstrates that the submitted provision are more stringent than or at least as stringent in all res pects as the corresponding provisions in paragraphs (a)(2)(ii)(A) through (F) of this section.” California has provided a demonstration showing that because of more stringent state law permit requirements , projects in California are not able to utilize the additional flexibilities provided by the NSR R eform provisions . Please see Section 6 of the TSD for additional information on EPA’s review of this demonstration. Based on this review, EPA is proposing to find that it is acceptable for BCAQMD to not incorporate the NSR Reform provisions into their SIP approved NSR program, since the same level of control

3 New York, et al v. EPA, Case No. 03

- 1380, 2006 WL 662746 (D.C. Cir. March 17, 2006)16 will be required for modified sources, with or without inclusion of these provisions in the SIP, and th eir programs will not be any less strin gent than the federal program.

5.2.12 Requirement: 40 CFR 51.165(a)(3)(i) requires that the baseline for determining credit for emissions reductions be the emissions limit under the applicable SIP in effect at the

time the application to construct is filed, except that the offset baseline must be the actual emissions of the stationary source from which offset credit is obtained where (1) the demonstration of reasonable further progress and attainment of ambient air quality standards is based upon the actual emissions of sources located within a designated nonattainment area for which the preconstruction review program was adopted; or (2) the applicable SIP does not contain an emissions limitation for that source or source

ca tegory.

Discussion: This provision allows emission reduction credit based on reductions below applicable SIP required emission limits except when an area ’ s attainment plan uses an

actual emission inventory as the basis for planning requirements. B C AQMD used actual

emissions from its sources in the emissions inventories it has submitted for planning

purposes. 4 Therefore the requirement to use actual emissions as the baseline for determining credit for emission reductions is applicable, pursuant to 40 CFR 51.165(a)(3)(i).

Rule 432 Section 4.11 defines an Emission Reduction Credit (ERC) as “reductions of actual emissions...”. Therefore all reductions that are eligible for credit as an ERC are

based on actual emission reductions in accordance with this r equirement. This provision satisfies the requirement s of 40 CFR 51.165(a)(3)(i )

.

5.2.13 Requirement: Pursuant to 40 CFR 51.165(a)(3)(ii)(C)(1), the SIP must provide that emissions reductions achieved by shutting down an existing emission unit or curtailing prod uction or operating hours may be generally credited for offsets if they meet the following requirements: (i) such reductions are surplus, permanent, quantifiable, and federally enforceable; and (ii) the shutdown or curtailment occurred after the last day o f the base year for the SIP planning process (a reviewing authority may choose to consider a prior shutdown or curtailment to have occurred after the last day of the base year if the projected emissions inventory used to develop the attainment demonstratio n explicitly includes the emissions from such previously shutdown or curtailed emission units; however, in no event may credit be given for shutdowns that occurred before August 7, 1977).

Discussion: Rule 432 S ubs ection 5.2.2 requires that “Offsets shall be real, permanent, enforceable, surplus at time of use and quantifiable,” which satisfies the first requirement specified in 40 CFR 51.165(a)(3)(ii)(C)( 1 )( i ).

EPA determined that Butte County attained the 1997 8

- hour oz one NAAQS in 20 1 2 , the

2008 8

- hr ozone NAAQS in 201 6 and the 24

- hour PM 2.5 NAAQS in 2013. 5 Accordingly,

4 May 23, 2014 Emission Inventory for the State of California, submitted by ARB on July 17, 2014.

5 77 FR 71551, December 3, 2012 ; 81 FR 26697, May 4, 2016; and 78 FR 55225, September 10, 2013.17 the District is not currently required to submit an attainment demonstration for these

standards. Since the BCAQMD is classified as a marginal ozone attainment area for the

2008 8

- hour ozone NAAQS, it was not required to submit an attainment demonstration

for the 8

- hour ozone NAAQS. Because the District is not required to submit an attainment demonstration for any of these pollutants, there is no “projected emission inventory” in which to explicitly include the emissions from previously shutdown or curtailed emission units. Therefore, EPA finds that emission reductions from any shutdown or curtailment occurring after A ugust 7, 1977 may be used as offsets as long as such reductions are real, surplus, permanent, quantifiable, and federally enforceable

.

5.2.14 Requirement: Pursuant to 40 CFR 51.165(a)(3)(ii)(C)(2), the SIP must provide that emissions reductions achieved by shutting down an existing emissions unit or curtailing production or operating hours and that do not meet the requirements in 40 CFR 51.165(a)(3)(ii)(C)( 1 )( ii ) may be generally credited only if (1) the shutdown or curtailment occurred on or after the date the construction permit application is filed; or (2) the applicant can establish that the proposed new emissions unit is a replacement for

the shutdown o r curtailed emissions unit, and the emissions reductions achieved by the shutdown or curtailment met the requirements of 40 CFR 51.165(a)(3)(ii)(C)(1)(i). ( Emphasis added )

Discussion: This requirement only applies if the source does not meet the requirements in 40 CFR 51.165(a)(3)(ii)(C)( 1 )( ii ). Because the District has complied with these requirements, the provisions of 40 CFR 51.165(a)(3)(ii)(C)( 2 ) are not applicable at this

time.

5.2.15 Requirement: Purs uant to 40 CFR 51.165(a)(3)(ii)(D), the SIP must that provide that no emissions credit may be allowed for replacing one hydrocarbon compound with another of lesser reactivity, except for those compounds listed in Table 1 of EPA’s “Recommended Policy on Con trol of Volatile Organic Compounds” (42 FR 35314, July 8, 1977).

Discussion: The District’s rules do not distinguish between the reactivity of organic compounds and the District’s rules do not allow emissions credit for replacing one hydrocarbon compound with another of lesser reactivity . The lack of any provisions to

allow credit for replacing one hydrocarbon compound with another of lesser reactivity is sufficient to satisfy this regulatory requirement

.

5.2.16 Requirement: Pursuant to 40 CFR 51.165(a)(3)(ii)( E), the SIP must provide that all emission reductions claimed as offset credit shall be federally enforceable.

Discussion: Rule 432 Subsection 5.2.2 requires that “Offsets shall be real, permanent, enforceable, surplus at time of use and quantifiable

. ” Because the rule defines enforceable in a manner to include federal enforceability, this provision satisfies th is regulatory requirement.18 5.2.17 Requirement: Pursuant to 40 CFR 51.165(a)(3)(ii)(F), the SIP must provide procedures relating to the permissible loc ation of offsetting emissions which are at least as stringent as those set out in 40 CFR part 51, appendix S, section IV.D. Appendix S states that a new or modified major stationary source may comply with the offset requirements for emission increases by o btaining emissions reductions from the same source or other sources in the same nonattainment area, except that the reviewing authority may allow emissions reductions in another nonattainment area if (i) the other area has an equal or higher nonattainment classification than the area in which the source is located, and (2)

emissions from such other area contribute to a violation of the national ambient air quality standard in the nonattainment area in which the source is located. ( Emphasis

added )

Discussio n: Subsection 5.3.1 provides that “...offsets can only be provided from a nonattainment area, with the same or higher nonattainment classification, for the same pollutant or precursor of that pollutant. This satisfies the requirements of 40 CFR part 51,

appe ndix S, section IV.D.1

. Subsection 5.3.1 provides that the “Use of offsite offsets must result in a net air quality benefit, as determined by the APCO.” While the rule language does not specify that the area the offsets are being obtained from must contribute to a violation of a NAAQS in the nonattainment area the source is to be permitted in, it does provide that the emission reduction must result in a ne t air quality benefit, which can only occur from a different air basin if that air basin in contributing to

the local areas non

- attainment. Therefore, while EPA believes the District’s rule could be improved by clarifying this provision, we find the curren t language sufficient to satisfy the intent of the regulatory requirement found in 40 CFR 51.165(a)(3)(ii)(F).

5.2.18 Requirement: Pursuant to 40 CFR 51.165(a)(3)(ii)(G), the SIP must provide that credit for an emissions reduction can only be claimed to the exte nt that the reviewing authority has not relied on it in issuing any permit under regulations approved pursuant to 40 CFR part 51, subpart I, or the State has not relied on it in an attainment demonstration or reasonable further progress.

Discussion: Rule 432 Subsection 5.2.2 requires that “Offsets shall be real, permanent, enforceable, surplus at time of use and quantifiable.” Section 4.45 provides a definition for the term “surplus” which ensures the requirements of this provision is met.

5.2.19 Requirement: P ursuant to 40 CFR 51.165(a)(3)(ii)(J), the District’s nonattainment NSR rule must require the total tonnage of increased emissions resulting from a major modification to be offset in accordance with section 173 of the CAA and that the quantity

of offsets s hall be the difference between the allowable emissions (i.e. PTE) after the

modification and the actual emissions before the modification for each emissions unit.

Discussion: Rule 432 Section 6.2 provides the provisions for determin ing emission

increase s or decreases for the purposes of offsets. Specifically it provides tha t the

emission increase or decrease for each emission unit shall be calculated as the Proposed Emissions minus the Historical Actual Emissions. While this provision uses different

terms to describe the pre

- and post

- project emissions, the terms as defined ensure the19 required calculation is consistent with the requirements of 40 CFR 51.165(a)(3)(ii)(J).

Therefore we find that this regulatory requirement is satisfied.

5.2.20 Requirement: Pursuant to 40 CFR 51.165(a)(5), the SIP must include enforceable procedures to provide that (1) approval to construct shall not relieve any owner or operator of the responsibility to comply fully with the SIP and any other requirements under local, State or Federal law; and (2) at such time that a particular stationary source or modification becomes a major stationary source or major modification solely by virtue of a relaxation in any enforcement limitation which was established after August 7, 1980,

on the capacity of the stationary source or modification otherwise to emit a pollutant, such as a restriction on hours of operation, then the requirements of regulations approved pursuant to 40 CFR 51.165 shall apply to the stationary source or modification a s though construction had not yet commenced on the source or modification.

Discussion: Rule 400 Section 4.4.6 states that the “Issuance of an Authority to Construct shall not relieve any owner or operator of the responsibility to comply fully with all

ap plicable requirements.” This language satisfies the first provision . Rule 432 Section 7.5

states “ If any source or modification becomes a major stationary source or major modification as defined in Section 4 of this Rule solely by virtue of a relaxation in any federally enforceable limitation which was established after August 7, 1980, on a capacity of the source or modification to emit a federal nonattainment pollutant or its precursor, such as a restriction on hours of operation, then the requirements of this Rule shall apply to such a source or modification as though construction had not yet

commenced on the source or modification. ” This language satisfies the second provision

. These two provisions taken together satisfy these regulatory requirements.

5.2.21 Re quirement: Pursuant to 40 CFR 51.165(a)(8), the SIP must provide that the requirements of 40 CFR 51.165 applicable to major stationary sources and major modifications of volatile organic compounds shall apply to nitrogen oxides emissions from major station ary sources and major modifications of nitrogen oxides in any ozone

nonattainment area.

Discussion: The substantive nonattainment NSR provisions in Rule 43 2 apply to both

NO
x and VOC. These provisions include the BACT (equivalent to federal LAER) and

offs et requirements in S ubsections 5.1 and 5.2, respectively. These provisions satisfy th is regulatory requirement.

5.2.22 Requirement: Pursuant to 40 CFR 51.165(a)(9)(i), the SIP must provide that in meeting the emissions offset requirements of 40 CFR 51.165(a)(3), the ratio of total actual

emissions reductions to the emissions increase shall be at least 1:1 unless an alternative ratio is provided for the applicable nonattainment area in 40 CFR 51.165(a)(9)(ii)

- (iv).

Discussion: Butte County is designated nonattainment for the 2008 8

- hour ozone (marginal), and 2006 24

- hour PM 2.5 (moderate) NAAQS. Based on the District’s current nonattainment designation s , their nonattainment NSR program requires offset ratios of 1.1:1 for ozone ( marginal ) and 1:1 for PM 2.5 (moderate) , including applicable precursors.20 Section 5.3 of Rule 432 provides the District’s offset ratio requirements for all nonattainment pollutants. S ubs ection 5.3.3.2 requires offsets at a ratio of 1.2 to 1, if the

offsets come from a source located within 20 miles of the project. If the offsets are obtained from a source farther than 20 miles away, the required offset ratio increases.

These offset ratios are satisfactory to comply with the requirements of this regulatory requirement.

5.2.23 Requirement: Pursuant to 40 CFR 51.165(a)(10), the SIP must provide that the requirements of 40 CFR 51.165 applicable to major stationary sources and major

modifications of PM 10 shall also apply to major stationary sources and major

modifications of PM 10 precursors, except where the Administrator determines that such sources do not contribute significantly to PM 10 levels that exceed the PM 10 ambient

standards in the area.

Discussion: Butte County is designated as unclassified /attainment for PM 10 . (See 40 CFR 81.305.) Therefore PM 10 is treated as an attainment pollutant subject to PSD regulations, rather than the nonattainment program requirements of 40 CFR 51.165. Therefore, 40 CFR 51.165 (a)(10) is not applicable to PM 10 emissions in Butte County

.

5.2.24 Requi rement: The requirement found in 40 CFR 51.165(a)(10) that nonattainment NSR plan requirements shall also apply to major stationary sources and major modifications of

PM 10 precursors is derived from CAA section 189(e). Section 189(e) is found in subpart

4 of Part D of Title I of the CAA, which outlines provisions applicable to particulate matter nonattainment areas. Section 189(e) requires the control of major stationary

so urces of PM 10 precursors “except where the Administrator determines that such sources do not contribute significantly to PM 10 levels which exceed the standard in the area.” In Natural Resources Defense Council (NRDC) v. EPA , 706 F.3d 428 (D.C. Cir. 2013), the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) remanded EPA’s 2007 and 2008 rules implementing the 1997 PM 2.5 NAAQS, holding that EPA must regulate PM 2.5 nonattainment areas pursuant to the same subpart 4 provisions that apply to PM 10 nonattainment areas. Accordingly, the court held that the requirements of CAA section 189(e) also apply to PM 2.5 nonattainment areas. Butte County is designated as nonattainment for the 2006 PM 2.5 NAAQS. (See 40 CFR 81.305.) The EPA has recently promulgated a new provision at 40 CFR 51.165(a)(13) that, consistent with the NRDC decision, applies the section 189(e) requirements directly

to sources of PM 2.5 . Therefore, consistent with section 189(e) and the new section 51.165(a)(13), the Dis trict’s nonattainment NSR program must regulate major stationary sources of VOC, NO
x , SO 2 , and ammonia as PM 2.5 precursors, except where the Administrator determines that such sources will not contribute significantly to PM 2.5 levels that exceed the PM 2.5 ambient standards in the area.

Discussion: In its 2013 decision, the D.C. Circuit ordered the EPA to “repromulgate these [2007 and 2008 implementation] rules pursuant to subpart 4 consistent with this opinion.” 6 On June 2, 2014, EPA took a first step to r esponding to the D.C. Circuit’s

6 706 F.3d at 437

.21 order and finalized a rule that set a deadline of December 31, 2014, for States to submit “remaining required SIP submissions for [nonattainment] areas, pursuant to and considering the application of subpart 4” as to the 199 7 and 2006 PM 2.5 NAAQS. Subsequently, on March 23, 2015, EPA issued a proposed rule for addressing state implementation requirements for areas designated nonattainment for any PM 2.5 NAAQS. 7
On July 29, 2016, the Administrator signed a final notice governin g nonattainment area SIP requirements for the PM 2.5 NAAQS (PM 2.5 SIP Requirements Rule), which is intended to fully respond to the NRDC decision and implement the requirements of subpart 4. 8

As noted earlier, CAA title I subpart 4 includes section 189(e), which requires the control of major stationary sources of PM 10 precursors (and hence pursuant to the NRDC decision, PM 2.5 precursors) “except where the Administrator determines that such sources do not contribute significantly to PM 10 [or PM 2.5 ] le vels which exceed the standard in the

area.” The EPA has identified the main precursor gases associated with PM 2.5 formation

as SO 2 , NO
x , VOC, and ammonia. Accordingly, consistent with section 189(e), the final

PM 2.5 SIP Requirements Rule revises the defin ition of “regulated NSR pollutant” at 40 CFR 51.165(a)(1)(xxxvii), which identifies all four of these pollutants as precursors to

PM 2.5 for purposes of nonattainment NSR permitting.

The PM 2.5 SIP Requirements Rule also includes a new provision at 40 CFR 51.165(a)(13) that implements the section 189(e) requirements with respect to PM 2.5 . The new provision provides that each state’s nonattainment NSR permitting program for PM 2.5 shall apply to

m ajor stationary sources and major modifications of PM 2.5 precursors in each PM 2.5 nonattainment area, “except that a reviewing authority may exempt new major stationary sources and major modifications of a particular precursor from the requirements of this

section for PM 2.5 if the NNSR precursor demonstration submitted to and approved by the Administrator shows that such sources do not contribute significantly to PM 2.5 levels that exceed the standard in the area.” A new provision at 40 CFR 51.1006(a)(3) in turn provides the minimum requirements for an approvable NNSR precursor demonstration. That provision provides that “a NNSR precursor demonstration must evaluate the sensitivity of PM 2.5 levels in the nonattainment area to an increase in emissions of a

par ticular precursor in order to determine whether the resulting air quality changes are significant.” 40 CFR 51.1006(a)(3). If such demonstration is approved for a particular

PM 2.5 nonattainment area, the provision provides that the state “may exempt such ne w major stationary sources or major modifications of the particular precursor from the requirements for PM 2.5 in §51.165 of this part.” Id.

The EPA reviews a state’s SIP submission consistent with the requirements in place at the time the EPA acts to appr ove or disapprove the plan. Accordingly, consistent with the requirements of section 189(e) and the final PM 2.5 SIP Requirements Rule, the EPA has reviewed Butte County’s revisions to its nonattainment NSR permit program for PM 2.5 to

7 80 FR 15340 (March 23, 2015)

8 Final Rule, Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements, pre

- publication copy available at https://www.epa.gov/sites/production/files/2016

- 07/documents/pm25

- naaqs

- implementation

- final

- preamble

- rul e

- signature.pdf

.22 determine whether the revisions appropriately regulate new major stationary sources and major modifications of direct PM 2.5 emissions and emissions of PM 2.5 precursors locating

in the nonattainment area.

The District’s regulations, Rule 432 Section 4.42, define the term “Regul ated NSR Pollutant” as any pollutant for which a national ambient air quality standard has been established by EPA “and the precursors to such pollutants.” Section 4.33 defines the term

“Precursor” to include SO
x , NO
x and VOC as PM 2.5 precursors. According ly, Rule 432 appropriately regulates sources of direct PM 2.5 emissions and three of the four PM 2.5 precursors identified by the EPA, consistent with the requirements of CAA Section 189(e) and the final PM 2.5 SIP Requirements Rule.

Rule 432 does not list ammonia as a PM 2.5 precursor; therefore the District’s nonattainment NSR permitting program does not require the regulation of new major sources or major modifications of ammonia emissions as it should in the absence of a precursor demonstration showing th at sources of ammonia do contribute significantly to

PM 2.5 levels in the area. BCAQMD stated in their April 24, 2014 Staff Report that because of their relatively small ammonia inventory (1,933 tpy), of which area sources contribute 92.4% (mainly fugitives from farming), mobile sources contribute 4.9% and stationary sources contribute only 2.7%, they do not believe ammonia contributes significantly to PM 2.5 levels that exceed the standard in the area. In addition, they noted that there are no major stationa ry sources of ammonia located in Butte County, the largest ammonia source only emits about 12 tpy and all ammonia point sources only emit 51.15 tpy. The District also noted that i n 2012 EPA determined through the issuance of a Clean

Data Determination that the region’s PM 2.5 levels do not currently exceed the 24

- hour

PM 2.5 standard. 9

While the BCAQMD Staff Report addresses current levels of ammonia emissions and current air quality, the Staff Report does not consider the sensitivity of the area to an

incre ase in ammonia emissions that may occur if one or more new major stationary sources were to locate in the area. Such consideration is the minimum requirement finalized at 40 CFR 51.1006(a)(3) in the PM 2.5 SIP Requirements Rule for states that seek

to exemp t new major sources and major modifications of a precursor from nonattainment NSR permitting in a given area. As explained in the final rule, an analysis that evaluates the sensitivity of the atmosphere in an area to increases in emissions is important bec ause it would most closely replicate the effects on air quality when precursor emissions from new major stationary sources or major modifications are added to the existing inventory

for the area.

While the EPA recognizes that the BCAQMD plan was submitted prior to the final PM 2.5 SIP Requirements Rule containing requirements for a NNSR precursor demonstration, the EPA, nevertheless finds that the demonstration provided by Butte County as part of their NSR program submittal is not adequate to allow the Admi nistrator to determine that potential new major sources and major modifications of ammonia emissions will not contribute significantly to PM 2.5 levels which exceed the standard in the area.

9 78 FR 55225 (September 10, 2013)23 Accordingly, EPA finds Rule 432 deficient because it does not incl ude ammonia as a

PM 2.5 precursor and lacks an adequate demonstration of insignificant contribution. This rule deficiency may be corrected by revising the definition of the term “precursor” in

section 4.33 to include ammonia as a PM 2.5 precursor. Alternativ ely, the state may continue to work with the EPA Regional Office to develop an appropriate NNSR precursor demonstration that appropriately evaluates the effect on PM 2.5 levels in Butte County of increases in ammonia emissions, consistent with the final pro visions of the

PM 2.5 SIP Requirements Rule.

5.2.25 Requirement: Pursuant to 40 CFR 51.165(a)(11), the SIP must require that in meeting the emissions offset requirements of 40 CFR 51.165(a)(3), the emissions offsets obtained shall be for the same regulated NSR pollutant unless interprecursor offsetting is permitted

for a particular pollutant.

Discussion : Section 5.4 contains the requirements pertaining to interpollutant offsets. It specifies, that except for PM 2.5 , with the approval of the APCO and EPA, interpollutant offsets may be used on a case

- by

- case basis provid ed the applicant demonstrates through the use of an air quality impact analysis that the overall emissions will result in a net air quality benefit and not cause or contribute to a violation of any ambient air quality

standard. This provision satisfies the regulatory requirement.

5.2.26 Requirement: Pursuant to 40 CFR 51.165(f), the SIP must provide for PALs according to the requirements in 40 CFR 51.165(f)(1) through (15).

Discussion: As discussed in Section 6 of this TSD , EPA has determined that it is acceptable for BCAQMD to not include provisions related to NSR Reform as a part of their NSR program, therefore we find it is acceptable that Rule 432 does not provide PAL

program.

5.2.27 Requirement: Pursuant to 40 CFR 51.307(b) (2), the SIP must contain provisions 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.

Discussion : Rule 432 Subsection 7.3.1 requires an applicant of a proposed new major stationary source or any major modification that may affect visibility of a Class I area to provide the APCO with a visibility impact analysis in accordance with the requirements

of 40 CFR 51.307 and 51.166(o). Subsection 7.3.2 requires the APCO to deny an ATC if after considering the comments from the appropriate Federal Land Manager, he finds that the proposed project would have an adverse impact on visibility. These provisions sati sfy the regulatory requirement.

5.3 G ENERAL NSR R EQUIREMENTS24 CAA section 110(a)(2)(C) requires all States to submit a minor source NSR permitting program

consistent with the provisions contained in 40 CFR 51.160 through 164 for the review of all new stationary sources and modifications of existing stationary sources. The following provides a summary of the requirements in 40 CFR 51.160 through 164, and evaluates whether R ules 400,

401 and 432 satisf y these requirements.

5.3.1 Requirement: Pursuant to 40 C FR 51.160(a), a permit program must provide the District with the authority to require any information required to determine if a proposed project will (1) cause a violation of the SIP or (2) interfere with attainment or maintenance of a NAAQS.

Discussion : Rule 4 00 Section 4.3 states that the APCO may require an applicant to provide any information, analyses, plans, or specifications which will disclose the nature, extent, quality of degree of air contaminants which may be discharged by the source. This

pr ovision satisfies the regulatory requirement.

5.3.2 Requirement: Pursuant to 40 CFR 51.160(b)

, a permit program must provide the District with the authority to prevent construction or modification if a proposed project will (1)

cause a violation of the SIP or (2) interfere with attainment or maintenance of a NAAQS.

Discussion: Rule 400 Subsection 4.4.1 states that the APC O shall not grant an ATC or PTO unless the APCO determines the source will comply with all applicable requirements and will not interfere wit h maintenance or attainment of an AAQS. This provision satisfies the regulatory requirement.

5.3.3 Requirement: Pursuant to 40 CFR 51.160(c), a permit program must provide the District with the authority to require information on (1) the nature and amounts of emissions to be emitted by the project ; and (2) the location, design, construction, and operation of the project as may be necessary to allow the APCO to make the determination s required by 40 CFR 51.160(a).

D iscussion: Rule 400 Section 4.3 states that the APCO may require an applicant to provide any information, analyses, plans, or specifications which will disclose the nature, extent, quality of degree of air contaminants which may be discharged by the source

. While the rule does not contain a specific provision requiring an applicant to submit information regarding the nature and amounts of emissions, EPA has determined that this general provision requiring the submittal of all information required to determi ne compliance with the rules is sufficient. Therefore we find that this provision satisfies the regulatory requirement.

5.3.4 Requirement: Pursuant to 40 CFR 51.160(d), a permit program must provide that approval of any construction or modification must not affect the responsibility on the owner or operator to comply with applicable portions of the SIP

.25 Discussion: Rule 400 Subsection 4.4.1 states that the issuance of an ATC shall not

relieve any own er and operator of the responsibility to comply fully with all applicable requirements. This provision satisfies the regulatory requirement.

5.3.5 Requirement: Pursuant to 40 CFR 51.160(e), a permit program must identify the types and sizes of facilities, buildings, structures, or installations which will be subject to review under 40 CFR part 51, subpart I.

Discussion: Rule 400 Subsection 4.1 generally require s all emission units to obtain an ATC prior to construction and operation of any emission unit. H owever, Section 2

– Exemptions, specifies that an ATC shall not be required for emission units listed in Rule

401

– Exemptions

. In effect, all new or modified stationary sources must obtain an ATC unless specifically exempted by a provision in Rule 40 1. Ta ken together, these provisions satisfy 40 CFR 51.160(e) because they identify the types and sizes of emission units subject to the permit program. We evaluate the approvability of Rule 401

– Exemptions

in Section 5.4 of this TSD.

5.3.6 Requirement: Pursuant to 40 CFR 51.160(f), a permit program must discuss the air quality data and the dispersion or other air quality modeling required to be used to meet the requirements of 40 CFR part 51, subpart I. 40 CFR 51.160(f)(1) states that a ll applications of air quality modeling shall be based on the applicable models, data bases, and other requirements specified in appendix W of this part (Guideline on Air Quality Models).

Discussion: Rule 400 Subsection 4.10.1 specifies that for the purpose of performing an impact analysis, the air quality model shall be consistent with the requirements specified in 40 CFR Part 51, Appendix W (“Guidelines on Air Quality Models”), unless the APCO finds that such model is inappropriate for use ; and that a fter making such a f inding, the APCO may designate an alternative model only after allowing for public comment and only with the concurrence of CARB and EPA. This provision satisfies the regulatory requirement.

5.3.7 Requirement: Pursuant to 40 CFR 51.161, a permit program must co ntain provisions that require an opportunity for public comment on information submitted by the applicant , must allow public inspection of information in the area affected, provide a 30

- day comment period, place the notice in a prominent advertisement, send a copy to EPA, and for lead, a copy of the notice is required for all point sources. These requirements apply for review of new stationary sources and modifications.

Discussion: Rule 400 Section 4

. 5 requires the APCO to publish a public notice in at least one newspaper of general circulation in the District , which specifies the primary decision, how the public may obtain pertinent information, request a public hearing and invite written comment for a period of at least 30 days. Subsection 4.5.4 requi res the APCO to make the application information and analysis and the proposed pe rmit available for inspection. Subsection 4.5.3 requires the APCO to provide a copy of all public notice documents to ARB and EPA. These provisions satisfy the regulatory requ irement.26 5.3.8 Requirement: Pursuant to 40 CFR 51.162, a permit program must identify the State or local agency which will be responsible for meeting the requirements of 40 CFR part 51, subpart I.

Discussion: Section 40200 and 40201 of the California Health and Safety Code identifies

the Butte County Air Quality Management District as the responsible air pollution agency

for Butte County. These provisions satisfy the regulatory requirement.

5.3.9 Requirement: Pursuant to 40 CFR 51.163, a perm it program must include administrative procedures which will be followed in making the determinations specified in 40 CFR 51.160(a).

Discussion: The administrative procedures for the District’s NSR permitting program are

set forth in Rule 400

– Permit Requirements . The primary provisions used in making the determinations specified in 40 CFR 51.160(a) include: 1) Section 4

. 1 which requires a new or modified stationary source to obtain an ATC from the District befo re construction or modification; 2) Sections 4

. 3 which contain s the requirements for submitting an application for an ATC , including the provision that the APCO may require “any information, analyses, plans, or specifications which will disclose the nature, extent, quality, or degree of air contaminants which are or may be discharged by the source” ; and 3) S ubs ection 4

. 4

. 3 requires that a Permit to Operate not be issued unless information is

submitted that enables the APCO to determine the source or emissions unit is in compliance with all ap plicable requirements and that it will not interfere with maintenance or attainment of an AAQS. Taken together, the se provisions satisfy the regulatory requirement

.

5.3.10 Requirement: Pursuant to 40 CFR 51.164, a permit program must provide procedures that 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 dispersi on technique, except as provided in 40 CFR 51.118(b). Such procedures must provide that before a permitting agency issues a permit to a stationary source based on a good engineering practice stack height that exceeds the height allowed by 40 CFR 51.100(ii) (1) or (2), the permitting agency must notify the public of the availability of the demonstration study and must provide opportunity for public hearing on it. 40 CFR 51.164 does not require such procedures to restrict in any manner the actual stack height of any stationary source.

Discussion: Rule 400 Subsection 4.10.3 specifies that for the purpose of performing an air quality impact analysis, if the proposed stack height is higher than is dictated by good engineering practices, as defined in 40 CFR 100(i i), then the actual height used for the purposes of modeling shall be calculated in accordance with good engineering practices. This provision satisfies the regulatory requirement

.

5.4 R ULE 401

– P ERMIT E XEMPTIONS27 In Section 4.2 of this TSD we provide a des cription and summary of the contents of this rule. For the administrative portions of the rule, including Purpose and Applicability

Section s 1 & 2, we review the rule for clarity and general enforceability. While Section 3 Requirements is not an administrative portion of the rule, there are no particular standards that apply to this section so we are also evaluating it for clarity and general enforceability. Section 3.2 does provide the APCO with the authorit y to require from any source claiming an exemption under the rule to provide any information necessary to verify the applicability of the relevant exemption. Section 3.1 clarifies that an application is not required to claim applicability of an exemption a s long as the records necessary to

s ubstantiate the exemption are maintained. Finally for the exemptions provided in Section 5, it provides that the APCO must take a timely action on the submitted application. We

have reviewed each of these sections of the rule and find them to satisfy requirements for clarity and general enforceability.

As discussed above in Subsection 5.3.5 of this TSD, 40 CFR 51.160(e) requires a permit

program to identify the types and sizes of facilities, buildings, structures, or in stallations which will be subject to review under 40 CFR part 51, subpart I. BCAQMD Rule 432

– Federal New Source Review require s all sources to obtain a permit, unless specifically listed as exempted from pe rmit requirements in Rule 401

– Permit Exemptions . A n approved NSR program may exempt from permit requirements sources which EPA exempts from the NSR program, such as mobile sources ; sources with d e minimi s emissions ; and other selected sources if permitting such sources is not necessary to

ens ure an area can attain and maintain air quality consistent with the NAAQS.

5.4.1 Sources Exempted by EPA from NSR Program Requirement s Section 4.6 of Rule 401 provides exemptions for motor vehicles (excluding any equipment mounted on a motor vehicle that would otherwise require a permit), locomotives, airplanes, watercraft and self

- propelled mobile construction equipment other than pavement burners. CAA Section 302(z) defines the term stationary s ource for purposes of the CAA. The definition specifically excludes emissions resulting directly from internal combustion engines used for transportation purposes or from nonroad engines or vehicles as defined in CAA Section 216. Because the CA A exempts these specific types of mobile sources from the definition of stationary source, it is appropriate to provide an exemption from permit requirements for these sources, to clarify that they are not subject to the NSR permit program for new and modi fied stationary sources. Therefore EPA finds these exemptions acceptable.

5.4.2 Sources Currently Exempted by Rule 04

- 04

– Exemptions from Permit Requirements The following exemptions contained in Rule 401 already exist in Rule 04

- 04 as approved

in the Butte Co unty portion of the California SIP. As each of these sources are small emitters and have been exempt from permit requirements since 1972, EPA believes it is appropriate to continue to allow these sources to remain exempt from NSR review permit requirements without further review

.28 Equipment Description Rule

04

- 04 Rule

401 Notes

Equipment used at dwellings for not more

than 4 families c 4.7.1 Rule 401 increases

number of families from 2 to 4, consistent with

state law.

Comfort air condition er s and ventilation systems, not designed to remove air

containments d.1 4.7.2 Identical

Refrigeration units, except those used as, or in conjunction with, air pollution control equipment d.2 4.7.3 Identical

Water cooling towers and ponds not used for evaporativ e cooling of process water or evaporative cooling of water from barometric jets or condensers. d.4 4.1.2 Identical

Equipment used exclusively for steam cleaning. d.5 4.1.1 Identical

Equipment used for space heating, other

than boilers e 4.1.4 Provision ha s been

clarified to exclude boilers as a type of space heater. Equipment used in, or in conjunction with, eating establishments for the purpose of preparing food for human consumption, except coffee roasters. f 4.2.1 Provision has been

clarified to excl ude

coffee roasters.

5.4.3 Internal Combustion Engines

Rule 04

- 04 Section d.3 contains an exemption for all piston

- type internal combustion engines. Rule 401 significantly limits this existing provision by providing four separate exemption provisions for internal combustion engines (ICE) in Section 4.1.5 . This

includes : 1) engines which have a brake horsepower rating of less than 50; 2) ICEs used to educate students in the operation, maintenance, repair and rebuildin g of such engines; 3) any gas

- fired engine rated at 250 bhp or less if operated less than 200 hrs per year for

non

- emergency purposes; and 4) f uel cells or micro

- turbines used to generate heat or power if specific emission limits are met. Each of these pro visions contain specific limitations (size of engine, hours of operation, emission limits) which ensure that the annual emissions from these sources will be relatively small. In addition, there are no specific applicable control requirements for these engi nes. The revision to this exemption means that larger engines and engines operated more frequently will now be required to obtain an authority to co nstruct and permit to operate. Not requiring permits for these sources will not likely affect the District’s ability to attain or maintain the NAAQS, therefore EPA finds these exemptions acceptable.29 5.4.4 Steam Generators, Water Boilers or Water Heaters

Rule 04

- 04 Section g contains an exemption for steam heated by natural gas, LPG, or both. There is no size limitation for this existing permit exemption. Rule 401 Section

4.1.3 significantly limits this existing provision by setting a maximum fuel input heating value of less than 1 million BTU per hou r or 30 boiler horsepower for steam heated units, while retaining the restriction on the type of fuel allowed. It also clarifies that steam heated units include steam generators, water boilers and water heaters. Th ese revision s mean that steam heating unit s which use larger amounts of fuel will now be required to obtain an authority to c onstruct and permit to operate. Because this e xemption limits the allowable fuel to natural gas or LPG and to very small units with a capacity of 1
MMBTU/hr or 30 boiler HP, or less ; therefore not requiring permits for these sources will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds these exemptions acceptable.

5.4.5 Food and Beverage Processing Equipment

Rule 04

- 04 Section f contains an exemp tion for equipment used in eating establishments for the purpose of preparing food for human consumption. As noted earlier, Rule 401, Section 4.2.1 provides a nearly identical exemption, although it excludes coffee roasters. Section 4.2.2 provides an exemp tion for coffee roasters with a maximum throughput rating of 25 lbs/hr or less. This revision means that now only relatively small coffee roasters will be exempt from permit requirements.

N ew exemptions are provided in Section 4.2 for barbecue equipment not used for : 1)

commercial purposes; 2) ovens located at bakeries, provided total productions does not exceed 5,000 lbs/day and each oven is rated at less than 1 MMBTU/hr; and 3) breweries

with an annual production rate of less than 1 million gallons, unl ess any hea t ing source is larger than 1 MMBTU/hr.

Overall, these new provisions exempt relatively small emission sources and therefore not requiring permits for these sources will likely not affect the District’s ability to attain or
maintain the NAAQS. E PA finds these exemptions acceptable.

5.4.6 Sources and Equipment Emitting Voltile Organic Compounds (VOC) Rule 401 provides new exemptions for four source categories whose primary emissions are VOC. These include certain Surface Coating Operations, Solvent Cleaning Operations, Composting Operations and Printing and Reproduction Equipment.

• Section 4.3 provides an exemption for non

- automotive coating operations using less than 1 quart per day and 8 gallons per year of spray coatings, including the use of handheld aerosol spray cans.

• Section 4.4 provides an exemption for unheated solvent cleaning operations which lose less than 25 gallons per year of s olvent to the atmosphere.

• Section 4.5 provides an exemption for operations that compost less than 125 tons of green waste per year.30 • Section 4.12 exempts a graphic arts operation or group of graphic arts operations that emit less than an average of 15 lbs of VOC per operating day and less than 300 lbs of VOC per year. In each case the annual usage limit (8 and 25 gallons of paint and solvent , respectively, and 125 tpy of green waste processed) or the annual emission limit (300 lbs of VOC per year) ensure that the equipment or operation being exempted only result in small annual

emissions and therefore not requiring permits for these sources will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds these exemptions acceptable.

In addition , Section 4.7.4 of Rule 401 provides an exemption for the application of architectural or industrial coatings, which are subject to requirements of other District rules which provide VOC content limitations when applied to structures and their

appurtenances. District Rule 230

– Architectural Coatings, limits the VOC content of all architectural coatings supplied, sold, offered for sale, applied solicited for application or

manufactured for use within the District. Because the VOC content of these coatings are controlled through the sale of the materials, EPA finds it acceptable to provide an exemption from permit requirements for the application of these coatings.

5.4.7 Process Heaters Rule 401 Section 4.1.6 provides ne w exemptions for certain types of small metal melting furnaces, provided their maximum rated capacity is less than 450 cubic inches of any molten metal; and for kilns firing ceramic ware if they are heated exclusively with natural gas, liquefied petroleum gas and/or electricity. For these process heaters

, the 450 cubic inch size limitation for the furnaces and the requirement to use clean gaseous fuels for the kilns ensure that the equipment being exempted will only result in small annual emissions

and ther efore will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds these exemptions acceptable.

5.4.8 Portable Equipment Rule 401 Sections 4.8 and 4.14 provide new exemptions for various types of portable equipment. Section 4.8 exempts por t able handheld equipment used for various types of machining of metal, wood, plastic or similar materials. This type of small handheld equipment can be expected to have only small annual emissions due to portability of the equipment which causes the equipment to also be small. This ensures that the equipment being exempted will only result in limited annual emissions and will not likely affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

Section 4.14 exempts any portable equipment that is registered with the District or the Statewide Portable Equipment Registration Program, but excludes equipment used to

screen soils in contamina ted soil remediation projects. In this case, the District is choosing a different form of regulation, registration in place of permitting. Rule 101

– Definitions , defines a portable emissions unit as one that does not remain at a fixed

location for more th an twelve consecutive months. Such portable equipment would not31 meet the definition of a stationary source and is therefore not subject to NSR permit program requirements. EPA finds this exemption acceptable

.

5.4.9 Abrasive Blasting Equipment

Rule 401 Section 4 .9 provides new exemptions for abrasive blasting equipment which uses a suspension of abrasive in water

, or cabinets with a v olume of less than 100 cubic feet which are vented through a control device. The requirement to use only wet

abrasives or within a relatively small cabinet ensures that the equipment being exempted will only result in only very small quantities of annual emissions and therefore will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acce ptable.

5.4.10 Routine Repairs and Maintenance Rule 401 Section 4.11 provides a new exemption for routine repairs and maintenance which do not involve structural changes to an emission unit. This provision is consistent with the definition of major modification found in 40 CFR 51.165((a)(1)(v)(C)( 1 ) which states that routine maintenance, repair and replacem e nts are not physical changes or changes in the method of operation and t herefore are not modifications. These activities are specifically excluded from the de finition of modification to ensure such activities are not subject to NSR permit requirements. Therefore we find this permit exemption acceptable.

5.4.11 Wastewater Facilities Rule 401 Section 4.13 provides new exemptions for wastewater treatment facilities, wa ter reclamation facilities, and wastewater pump stations with a design throughput capacity of less than one (1) million gallons of wastewater per day. For these types of wastewater facilities, the design limitation of less than one million gallons per day ensures that the equipment being exempted will only result in small annual emissions and therefore will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

5.4.12 Fabrication Operations

Rule 401 Section 4.13 provides new exemptions woodworking and other fabrication operation that utilize shop dust collection systems that do not vent outside the working area of the facility. For these fabrication operations, the provision prohibiting the exhaust

from the d ust collection system from being vented outside of the work area ensures that

these devices will be well controlled and therefore will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds th is exemption acceptable.

5.4.13 Walnut Hu llers Rule 401 Section 4.17 provides a new exemption for walnut hulling facilities processing only crops grown by the owner that utilize a wet process hull removal, and with a drying fuel consumption of less than 5

, 500 gallons of propane per year or 52 the rms of natural

gas per year. For walnut huller facilities, the applicability restrictions of being owner operated and using a wet process, as well as the limitations on the amount and type of fuel used ensure that the equipment being exempted will only res ult in small annual32 emissions and therefore will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

5.4.14 Pilot Tests Rule 401 Section 4.16 provides a new exemption for pilot tests used to determine contamination levels for designing a soil remediation system providing; 1) t he pilot test will not last more than five (5) days; and 2) t he effluent stream emissions from the pilot

test are controlled

. For these operations, the exemption is limited to a short testing period (5 days) and the emissions from the test must be controlled. Both of these provisions ensure that the equipment being exempted will only result in small ann ual emissions and therefore will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

5.4.15 Agricultural Sources

Rule 04

- 04 Section j contains an exemption for agricultural implements used in agricultural operations

. Rule 401 Section 4.13 provides a new exemption for any engine or equipment used in agricultural operations at an agricultural source except when the agricultural source: 1) is a new major source or m ajor modification as defined in Rule

432

– Federal N ew Source Review ; 2) emits more than 50% of the major source threshold as defined in 40 CFR Part 70.2, excluding Hazardous Air Pollutants (HAP); 3) emits more than 5 tpy of a single HAP or 12.5 tpy of any combination of HAPs; or 4) 50% of any lesser HAP threshold established by EPA. BCAQMD revised the existing general exemption for agricultural operations in accordance with state law (SB700) provisions regarding air permit requirements for agricultural sou rces

.

While the exemption threshold of 50% of any applicable major source threshold (in Butte County this equates to 50 tpy for any pollutant with a NAAQS) is a relatively high

emission threshold for providing a permit exemption , EPA notes that this thre shold is significantly less than the existing exemption which contained no emission thresholds. We also note that the BCAQMD has been able to come into attainment with both the

2008 8

- hr ozone NAAQS and the 24

- hr PM 2.5 NAAQS while exempting agricultural operations at this threshold. Therefore maintaining this exemption threshold will likely

not affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

5.4.16 Low Emitting Sources

Rule 4 01 Section 4.18 provides a new exemption for any other emission unit (source) with uncontrolled emissions at the following rates: 1) for CO , emissions of less than 500 lbs/day

, and 2) for all other NAAQS pollutants except lead, at less than or equal to 2

l bs/day or 75 lbs/yr. This general exemption allows the District to exempt very small emission sources that are not specifically listed in the rule from permit requirements. Since this new provision exempts only very small e mission sources, not requiring pe rmits for these sources will likely not affect the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

5.4.17 Conditionally Exempt Sources33 Rule 401, Section 5 contains two exemption provisions which require the source to

subm it a permit application so that the request for exemption may be evaluated. The provision in Subsection 5.1.1 applies to identical replacements where the equipment has the same manufacturer, model number and type and the resulting emissions are less than

o r equal to those from the original equipment, and the modification does not require a change in permit conditions. Such an identical replacement ensures that there is no increase in the potential to emit of the equipment while allowing the District to revi ew such modifications to ensure they meet all of the specified requirements.

The provision in Subsection 5.1.2 applies to any other emission unit with an uncontrolled emission rate of less than 500 lbs/yr for each air contaminant. This provision allows t he APCO to exempt any other low emitting source that was not considered when Rule 401 was written. The emission limitation of 500 lbs/yr ensures that the equipment being exempted will only result in small annual emissions and therefore will likely not affe ct the District’s ability to attain or maintain the NAAQS. EPA finds this exemption acceptable.

5.4.18 Recordkeeping and Compliance Schedule Rule 401 Section 6 provides recordkeeping requirements for sources claiming an exemption pursuant to the rule. It specifies the types of records that must be maintained

to demon strate with the exemption requirements, such as fuel use, operating hours and material usage. It also requires that all records me maintained on site for at least two years and made available u pon request. These provisions provide a mechanism to verify

com pliance with the provisions of Rule, and EPA finds them acceptable.

Rule 401 Section 7 provides a compliance schedule for sources that lose their permit exemption, either through the adoption of Rule 401 revisions or because the source

exceeds one of the exemption limiting parameters, such as an annual fuel limit. Providing such a timeline for required action provides additional clarity to rule which also improves enforceability. EPA finds the se provisions acceptable.



### 6. NEW SOURCE REVIEW RE FORMS

6.1 C ALIFORNIA C LEAN A IR A CT

– N EW S OURCE R EVIEW P ROGRAM

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 California Air Resources Board. At th at time, the 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 program s that contained non

- attainment new34 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 NO
x ), carbon monoxide ( CO), sulfur dioxide (SO 2 ) and nitrogen dioxide (NO 2 ) 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 A mendments 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 tons per year (tpy) respectively, for areas classified as moderate or marginal; 50 and 25 tpy respectively, for areas classified as serious; 25 and 25 tpy respectively, fo r 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 thre sholds for when project emissions trigger the application of the California version of Best Available Control Technology (BACT) and offsets. (Note that CA BACT is defined in such a manner as to be equivalent to federal LAER requirements.) The application o f CA 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 CA BACT thresholds of two and

zero l b/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.

Cali fornia 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 BACT 10 (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

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.

10 California Health & Safety Code §§ 40918, 40919, 40920 and 40920.535 6.2 NSR R EFORM P ROGRAM R EQUIREMENTS

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 wou ld 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, 11 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 p ermit, 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 provis ion changed the allowable time frame to be used to determine baseline actual

emissions for non

- Electric Generation Units . Baseline emissions are generally considered to be the pre

- project emissions from the facility or emission units proposed to be modifie d. 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 th e 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 ma y 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 effec tive since the baseline period.

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., opera ting at 100% capacity, 24 hrs/day, 7 days a week), unless the applicant agreed to practically enforceable permit conditions to limit operation of the

11 The United States Court of Appeals for the District of Columbia Circuit in State of New York, et al., v. U.S.

Environmental Protectio n Agency, et al., 413 F.3d 3 (D.C. Cir. 2005)36 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 emissio ns 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 nex t 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 the se 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.

6.3 I MPACTS OF F EDERAL NSR R EFORMS ON C ALIFORNIA NSR P ERMITTING P ROGRAMS

By not adopting the NSR Reforms, the NSR program in California Districts would not include the three program elements described earlier: use of PALs, a 10 year look back period for baseline actual emissions and proje cted actual emissions non

- Electric Generation Units . 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 PA Ls is found in 40 CFR 51.165(f).

Section 116 of the CAA 12 provides 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 R eforms 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 a t least as stringent” in all respects as the specified paragraphs. These applicability provisions specify the use of baseline actual emissions and projected 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 an d offsets are significantly lower than those in the federal CAA. In

12 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 poll ution; 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 string ent than the standard or limitation under such plan or section.37 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 dist ricts 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 N SR 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 pro posed 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 applicabl e, 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 BCAQMD to not incorporate the NSR Reform provisions into their SIP a pproved 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.



### 7. CLEAN AIR ACT SECTIO N 110( l ) ANALYSIS

Rules 400, 401 and 43 2 are intended to satisfy the requirements of section 110(a)(2)(C) and part D of title I of the Act. Section 110(l) of the CAA states that each SIP revision submitted by a State shall be adopted by such State after reasonable notice and public hearing. It also states that the Administrator shall not approve a SIP revision if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress, or any other CAA applicable requiremen t.

With respect to the procedural requirements of CAA section 110(l), based on our review of the public process documentation included in the November 6, 2014 SIP submittal package, we find

that B C AQMD 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), only Rules 400 and 401 are SIP revisions, as Rule 432 is a new ru le submitted for SIP appr oval. As outlined in Table 3 of this

TSD , Rules 400 and 401 replace several existing rules in the current SIP. All of the provisions Rule 400 are replacing are administrative rules which will not affect in any way the District’s ability to attain and maint ain the NAAQS. Rule 401 provides several new provisions exempting38 additional emission sources from permit requirements. Some of these exemptions, such as the ones for mobile sources are not subject to NSR permit program requirements regardless of

whether R ule 40 1 provides a permit exemption. For the remaining new exemptions, as discussed in Section 5.3 of this TSD, we have found as part of our evaluation that the se exemptions represent small emission sources which are typically not subject to any specific r egulatory requireme nt to control their emissions. Therefore EPA has determined that our approval of Rule

401 will not interfere with any applicable requirement concerning attainment and RFP or any other applicable requirement of the Act.

For the reasons s et forth above, we can approve the B C AQMD SIP revision as proposed in this action under section 110(l) of the Act.



### 8. CLEAN AIR ACT SECTIO N 193 ANALYSIS

Section 193 of the Act, which was added by the Clean Air Act Amendments of 1990, includes a savings claus e 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 provisions of Section 193 are not applicable to this action because currently there are no NSR program provision s contained in the Butte County portion of the California SIP.



### 9. EPA’S PROPOSED ACTIO N

Pursuant to section 110(k)(3) of the Act, we are proposing full approval of Rules 400 and 401 as part of BCAQMD’s general NSR permitting program because we have determined that these rules satisfy the substantive statutory and regulatory requirements for a general NSR permit program as contained in CAA section 110(a)(2)(C) and 40 CFR 51.160

- 51.164. . We are proposing a limited approval of Rule 432 because we have determined that Rule 432 satisfies all of the statutory and regulatory requirements for a nonattainment NSR permit program as set forth in the applicable provisions of part D of title I of the Act (sections 172, 173 and 182(a)) and in

40 CFR 51.165 and 40 CFR 51.307. We are also proposing a limited disapproval of Rule 432 because we have determined that the rule does not fully satisfy CAA section 189(e)’s requirements for regulation of PM2.5 precursors as it pertains to ammonia.

EPA is also proposing to find that it is acceptable for BCAQMD to not incorporate the NSR Reform provisions of 40 CFR 51.165 into its NSR permit program because BCAQMD’s permitting program will not be any less stringent than the federal permitting program. In support of this propo sed action, we have concluded that our approval of the submitted rules would comply with the requirements of section 110(l) of the Act because the amended rules will not interfere with continued attainment of the NAAQS in Butte County . If we finalize this action as proposed, our action will be codified through revisions to 40 CFR 52.220 (Identification of Plan).39 

### 10. REFERENCES

Copies of all documents referenced in this TSD are located in Docket No. EPA

- R09

- OAR

- 2016

– 0322 for this rulemaking action.