Prepared by: Matthew Baldwin Air Quality Engineer

Approved by: David A. Valler, Jr.

Air Pollution Control Officer 

# F EATHER 

# R IVER 

# A IR 

# Q UALITY 

# M ANAGEMENT 

# D ISTRICT

S TAFF 

## R EPORT



## P ROPOSED 

## A MENDMENTS 

## :

R EGULATION 

## X R ULE 

## 10.1 N EW 

## S OURCE 

## R EVIEWi



### T ABLE OF 

### C ONTENTS

Table of Contents

................................ ................................ ................................ ......................... i

1.0 Executive Summary

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

2.0 Background

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

3.0 Legal Mandates

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

4.0 Proposed Rule Summary

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

5.0 Impacts of the New Rule

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

6.0 Environmental Review and Complia nce

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

7.0 Required Findings

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

8.0 Comparison with Other Applicable Regulations and Requirements

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

9.0 Public Notice

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

ATTACHEMENT A:

Proposed Lineout/Strikeout of Regulation X: Rule 10.1: New Source ReviewStaff Report Page 1 of 6

Regulation X; Rule 1 0.1 New Source Review



### 1.0 E XECUTIVE 

### S UMMARY

The Feather River Air Quality Management District’s (District) New Source Review (NSR) program was established in February 1993 to ensure that construction and operation of new

and modified sources do es not interfere with progress towards attainment of the National and
State Ambient A ir Quality Standards. Because portions of the District have been designated as

nonattainment for failure to meet the federal 8

- hour ground

- level ozone standard, the United States Environmental Protection Agency (USEPA) requires the District to implement m easures to reduce sources of ozone and its precursors. The District makes its commitment to reduce pollution through the State Implementation Plan (SIP). The SIP is federally enforceable through USEPA and the Federal Clean Air Act (CAA). A New Source Re view, or Preconstruction Review, is required as part of the State Implementation Plan (SIP).

The purpose of the proposed amendments to Rule 10.1 are to address concerns brought up by a review by the Califor nia Air Resources Board, to differentiate differen t state and federal requirements, and to submit only those federally enforceable portions to be approved by
USEPA for inclusion in the SIP.



### 2.0 B ACKGROUND

From May through August 2005, the California Air Resources Board (ARB) conducted a review

of the District ’s air quality program. The ARB reviewed the District’s New Source Review Rule (Rule 10.1) and made recommendations for improvement to improve clarity and address inconsistencies. The findings were summarized in their report “Feather River Air Quality

Ma nagement District Program Review” prepared by the ARB Stationary Source Division

October 2007.

A summary of their recommendations can be found in Appendix B of the above referenced report.



### 3.0 L EGAL 

### M ANDATE S



### F EDERAL 

### M ANDATE The District has multiple designatio ns regarding attainment of the air quality standards set forth by the USEPA . The southern portion of Sutter County has been designated as a serious

nonattainment area for the federal 8

- hour ozone standard , and is proposed to be designated

severe

- 15 by the USEPA . This portion of Sutter County, along with Sacramento, Yolo, and portions of Placer, El Dorado and Solano Counties are incorporated into the Sacramento Federal Nonattainment Area (SFNA). In addition a portion of the Sutter Buttes (portions above

2 000 feet elevation) in Sutter County is designated as a basic nonattainment for the federal

ozone standard. Section 173 of Title I of the Federal Clean Air Act Amendments of 1990 requires permitting authorities to establish a permitting program for review ing applications for construction of new sources or modification of existing sources of air pollutants. A New Source Review, or Preconstruction Review, is required as part of the State Implementation Plan (SIP) under 40 Code of Federal Regulations (CFR) P art 51 Subpart 1 to ensure that the construction or modification of a source will not cause violations of the State’s control strategy or interfere with attainment or maintenance of ambient air quality standards. 40 CFR Part 51 also requires

the District to adopt a permitting program that requires the application of BACT for any net increase in emissions at a major stationary source, and Lowest Achievable Emission RateStaff Report Page 2 of 6

Regulation X; Rule 1 0.1 New Source Review

(LAER) for a new stationary source or modification to an existing stationary source that results in a significant emission increase.



### S TATE 

### M ANDATES
California Health and Safety (CH&S) Code §§ 40918 and 40919 , require that the District’s permitting program be designed to achieve no net increase in emissions of nonattainment pollutants from sta tionary sources with emissions exceeding specified thresholds. Furthermore, Title 17, § 70600 requires ozone non

- attainment Districts in the Broader Sacramento Area to adopt more stringent thresholds. The Broader Sacramento Area is Defined in Title 17 CC R § 70500. This area is equal to the area designated as the SFNA portion of FRAQMD

. T he

thresholds applicable to the District are outlined in Table 3.1. CH&S Code §§ 40918 and 40919 also require the District’s permitting program to require the use of BA CT for any new or modified stationary source which has a potential to emit greater than or equal to the thresholds listed in Table 3.2 for nonattainment pollutants. District rule 10.1 New Source Review as amended on June 7, 2004 complies with these requir ements.

Table 3

. 1

– No Net Increase (offset) Threshold

Pollutant SFNA portion of FRAQMD North FRAQMD

Ozone Precursors (NOx & ROG) 10 tons/year 25 tons/year

PM

- 10 25 tons/year 25 tons/year

Table 3

. 2

– BACT Thresholds

Pollutant SFNA portion of FRAQMD North FRAQMD

Ozone Precursors (NOx & ROG) 10 pounds/day 25 pounds/day

PM

- 10 25 pounds/day 25 pounds/day

Chapter 4.5, Protect California Air Act of 2003 Requiremen ts : In an effort to minimize the potential impact of federal NSR reform, the state legislature passed the Protect California Air Act of 2003 (SB288). The Act ( CH&S Code § 42500 through 42507) is intended to minimize the impact of the relaxation of the fed eral new source review program on air quality in California. The Act prohibits districts from making revisions to their SIP approved NSR rules in existence on December 30, 2002 that would result in weakening their rules. These revisions include but

are not limited to, revisions to rule applicability, changing the definition of modification so that NSR is not triggered or triggered at a higher level of emission increases, or relaxing BACT, air quality analysis, and public participation requirements. The Act does permit districts to deviate from these requirements under specified conditions.

The proposed amendments to Rule 10.1 meet this mandate . Rule 10. 1 does not relax the requirements to obtain a permit and undergo NSR analysis; does not relax the require ment to apply BACT to a new or modified emission unit; does not relax the requirements or thresholds for performing an air quality impact analysis as required by Rule 10.1 G; does not relax theStaff Report Page 3 of 6

Regulation X; Rule 1 0.1 New Source Review

requirements for monitoring, recordkeeping, and reporting; doe s not relax the requirement for regulating any air pollutant; and does not relax any requirement for public participation.



### 4.0 P ROPOSED 

### R ULE 

### S UMMARY

Table 4.1 summarizes the proposed rulemaking by section:

Table 4

. 1

– Summary of Proposed Amendments

SECTION NUMBER PROPOSED LANGUAGE

10.1 A Added recommended language in A.1 to incorporate review of

applicable District rules into the purpose of the rule.

10.1 B Include EPA recommended language that allows for federal

requirements not yet incorporated into the rule to be applicable to a source when an application is deemed complete.

10.1 D The definitions for Best Available Control Technology and Emissions

Unit have been modified as recommended by ARB to improve clari ty. Additionally, the definition for Halogenated Hydrocarbon has been deleted and incorporated into the definition of Reactive Organic Gases. The definition for Reactive Organic Gases has been modified to be

consistent with the ARB definition and include s additional pollutants listed in 40 CFR 51.100(s) . The definition for Offset has been clarified as recommended by ARB.

The definitions for Actual Emissions, Actual Emission Reductions, Effected Pollutants, Complete Application, Control Efficiency, Cost

E ffecitve, Daily Emission Limitation, Historic Actual Emissions, Historic Potential Emission, Impact Analysis, Major Stationary Source , Major Modification, Non

- Attainment Pollutant, Non

- Permitted Emissions, Potential To Emit, Precursor, Proposed Emissions, Shutdown, and Stationary Source have been modified as suggested by EPA.

The definition for Real, Surplus, Permanent, Quantifiable, and

E nforceable , has been separated into five definitions. Each definition has been modified as suggested by EPA.

10.1 E Th e sections describing requirements and thresholds for Best Available

Control Technology and Offsets have been modified as suggested by
EPA and CARB to improve clarity between the different attainment portions of the District , differentiate state and federa l requirements, and add a provision for alternative siting.

10.1 F This section has been modified as suggested by EPA to include actual

to potential provisions for determining a major modification, while retaining the potential to potential provisions for determining an emissions change in regards to offsets. Additionally, these sections

have been modified such that sources cannot net out of BACT for new

or modified emissions units.

10.1 G This section has been modified to update rule references and

inco rporate federal requirements as suggested by EPA.

10.1 H This section has been modified as suggested by EPA to improve clarity

and to address approval issues into the SIP.Staff Report Page 4 of 6

Regulation X; Rule 1 0.1 New Source Review

SECTION NUMBER PROPOSED LANGUAGE

10.1 A Added recommended language in A.1 to incorporate review of

applicable District rules into the purpose of the rule.

10.1 B Include EPA recommended language that allows for federal

requirements not yet incorporated into the rule to be applicable to a source when an application is deemed complete.

10.1 I This section has been modified for consistency. The term “Permit to

Constr uct” has been replaced with “Authority to Construct”

.



### 5.0 I MPACTS OF THE 

### N EW 

### R ULE



### E MISSION 

### I MPACTS These proposed amendments do not implement additional measures for new or existing stationary sources . The District does not anticipate any emission impacts fr om the proposed

rule.



### S OCIOECONOMIC 

### I MPACT California Health and Safety Code § 40728.5 requires, in part, that:

“Whenever a district intends to propose the adoption, amendment or repeal of a rule or regulation that will significantly affect air quality or emissions limitations, that agency shall, to the extent that data are available, perform an assessment of the socioeconomic impacts of the adoption, amendment, or repeal of the rule or regulation.”

However, districts with a population of less than 500,000 persons are exempt from the provisions of CH&S § 40728.5 (a). The District’s population is estimated to be approximately 155,679, below the 500,000 person threshold. Therefore, a socioeconomic analysis for this rulemaking is not required.



### C OST 

### I MPACTS
Ca lifornia Health and Safety Code Section 40703 requires that all air quality districts consider and make public findings relating to the cost effectiveness of implementing an emission control

measure.

The proposed rule does not implement an emission control measure and therefore is not subject to the cost effectiveness mandate. Also, staff does not anticipate an additional need for staff resources upon adoption of the rule.



### 6.0 E NVIRONMENTAL 

### R EVIEW AND 

### C OMPLIANCE

The proposed amendments for Rule 10. 1 New Source Review c onsist of clarifying existing District, state and federal requirements. As the District has not exercised discretion by modifying federal requirements, it is ministerial in natu re and the proposed amendments to Rule
10.1 New Source Review are sta tutorily exempt from CEQA pursuant to Section 15268 of the
state CEQA Guidelines.Staff Report Page 5 of 6

Regulation X; Rule 1 0.1 New Source Review



### 7.0 R EQUIRED 

### F INDINGS

California Health and Safety Code Section 40727 (a) requires that prior to adopting or amending a rule or regulation, an air district’s board must make find ings of necessity, authority, clarity, consistency, non

- duplication and reference. The findings must be based on the following:

1. Information presented in the District’s written analysis, prepared pursuant to CH&S §
40727.2;

2. Information contained in the rul emaking records pursuant to CH&S § 40728; and

3. Relevant information presented at the Board’s hearing for the rule.

The table below describes the finding and the basis for making the finding.

Table 7

. 1

FINDING F INDING DETERMINATION Necessity: The District must find that the rulemaking demonstrates a need exists for the rule or for its amendment or repeal. (CH&S § 40727 (b)(1)) Rule 10.1 It is necessary for the District to adopt the proposed

amendments in order to receive approval from the

EPA and for submittal into the ozone non

- attainment
SIP. Authority: The District must find that a provision of law or of a state or federal regulation permits or requires the District to adopt, amend, or repeal the rule. (C H&S § 47027(b)(2)) Rule 10.1 The District is authorized to adopt rules and regulations by CH&S § 40001, 40702, 40919, 41010,

and 42300.

Clarity: The District must find that the rule is written or displayed so that its meaning can be easily understood by the persons directly affected by it. (CH&S § 40727(b)(3)) Rule 10.1 The District has reviewed the proposed amendments and determined that they can be easily understood by the affected industry. In addition, the record contains no evidence that the person s directly affected by the

rule cannot understand the rule. Consistency: The rule is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, or state or federal regulations. (CH&S § 40727(b)(4)) Rule 10.1 The pr oposed rule does not conflict with and are not contradictory to existing statutes, court decisions, or state or federal regulations.

Non

- Duplication: The District must find that either: 1) The rule does not impose the same requirements as an existing sit e or federal regulation; or 2) that the duplicative requirements are necessary or proper to execute the powers and duties granted to, and imposed upon the District. (CH&S § 40727(b)(5) Rule 10.1 The proposed rule duplicates federal rules or regulations fo r permitting programs. The duplicative requirements are necessary in order to execute the powers and duties imposed upon the District.

Reference: The District must refer to any statute, court decision, or other provision of law that the District implement s, interprets, or makes specific by adopting, amending or repealing the rule. (CH&S § 40727(b)(6)) Rule 10.1 The proposed amendments are intended to clarify existing law. References to statutes are noted where applicable

.



### 8.0 C OMPARISON WITH 

### O THER 

### A PPLICABL E 

### R EGULATIONS AND 

### R EQUIREMENTS

California Health and Safety Code Section 40727.2 requires districts to prepare a written analysis (may be in the form of a matrix) that identifies all existing federal air pollution controlStaff Report Page 6 of 6

Regulation X; Rule 1 0.1 New Source Review

requirements, including, but not l imited to, emission control standards constituting BACT, that apply to the same equipment or source type as the rule or regulation proposed for adoption or modification by the District. In addition, the analysis shall identify any other District rule or

r egulation that applies to the same equipment or source type.

Under CH&S § 40727.2(g), the District finds that the proposed amendments do not strengthen or impose new emission limits or impose more stringent monitoring, reporting, or recordkeeping require ments; therefore complies with CH&S Code § 40727.2.



### 9.0 P UBLIC 

### N OTICE

The notice for this rule adoption was ma iled to all permitted sources and a notice of the hearing was published in the Appea l Democrat on February 27, 2009. Subsequently, a second notice

wa s mailed to all permitted sources and published on August 28, 2009 to allow for public comment. To date, no comments have been received from the general public

.

A public workshop to discuss the proposed amendments was conducted on February 20, 2009.

A no tice of the workshop was mailed to all permitted sources and interested parties. Two members of the public attended the workshop. No significant comments were received during the workshop.

The proposed amendments were se n t to the Air Resources Board and the Environmental Protection Agency on February 12, 2009. Significant Comments were received. The hearing scheduled for April 6, 2009 was continued to June 1, 2009. Additional significant comments
from EPA and verbal comments from CARB were received whi ch included approvability issues.

The hearing was subsequently continued to August 3, 2009, and to October 5, 2009 to address

those comments

.

### ATTACHEMENT A :

P ROPOSED 

### L INEOUT



### /S TRIKEOUT OF 

### R EGULATION 

### X: R ULE 

### 10.1: N EW 

### S OURCE 

### R EVIE W