Linda S. Adams 

Secretary for 

Environmental Protection

 

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California Environmental Protection Agency

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Air Resources Board Robert F. Sawyer, Ph.D., Chair 

1001 I Street • P.O. Box 2815 

Sacramento, California 95812 • www.arb.ca.gov Arnold Schwarzenegger

 Governor 

May 30, 2007 

Brent Newell 

Center on Race, Poverty and the Environment 

450 Geary Street, Suite 500 

San Francisco, CA 94102 

Dear Mr. Newell: 

The Office of Legal Affairs of the Air Resources Board (ARB or Board) has completed 

its review of your petition, dated October 18, 2006, requesting ARB to conduct a public 

hearing to review September 21, 2006 amendments adopted by the San Joaquin Valley 

Unified Air Pollution Control District (SJVUAPCD or District) to its Rules 2020 

(“Exemptions”) and 2201 (“New and Modified Stationary Source Review Rule.” Your 

Petition asserts that two elements of the amendments constitute impermissible 

weakenings of the District’s new source review (NSR) rule. Amendments to NSR rules 

that make them less stringent than the rule as it existed on December 30, 2002, are 

generally prohibited by Senate Bill 288 (Stats 2003 ch 476, Sher), the Protect California 

Air Act of 2003, which enacted Health and Safety Code (HSC) sections 42500-42507. 

We have also considered your letter of December 21, 2006, in which you offer your 

interpretation of provisions of SB 288 and SB 700 (Stats 2003 ch 479, Flores)

As enacted by SB 288, HSC section 42504(a) establishes a mechanism under which 

ARB may conduct a hearing to review whether a district’s amendments to its NSR rule 

meet SB 288 criteria. There are no provisions for petitions requesting ARB to conduct a 

HSC section 42504(a) hearing to review a district’s NSR rule amendments. As 

discussed below, I have concluded that the challenged amendments do not violate 

SB 288 as a matter of law and therefore do not trigger a need for an ARB hearing. If 

such a hearing were to be conducted, based on the information we have received I 

would advise the Board that as a matter of law the challenged amendments do not 

weaken the District’s NSR rule. Nevertheless, if you wish we are prepared in this 

particular instance to schedule a hearing by our Board at which you could present the 

basis for your position that the Board should find that adoption of the amendments 

violated SB 288. 

As you know, SB 700 was enacted both to remove the exemption from permit 

requirements for agricultural sources of air pollution and to impose numerous 

substantive and procedural control requirements on agricultural sources and air 
Mr. Newell 

May 30, 2007 

Page 2 

pollution control agencies. The bill became effective January 1, 2004 and offers many 

opportunities for interpretation of its provisions. SB 288 was enacted the same day as 

SB 700 and was chaptered first. It is important to note that public agencies may 

exercise only those powers given to them by law. (See Mountain Lion Foundation v. 

Fish & Game Com. (1997) 16 Cal.4th 105; Sierra Club v. Cal. Coastal Com. (2005) 

34 Cal.4th 839, and 3 Sutherland Statutory Construction sec. 65:2 (6th ed.)). Thus if 

the Legislature enacts a law that has the effect of directly prohibiting a district from 

taking certain actions under its NSR rule, those prohibitions apply to the district whether 

or not the district has amended its rule to conform to the statutory prohibition. 

 

The Challenged Amendment to Rule 2201 

Federal NSR regulates the construction and modification of sources that result in 

significant increases in emissions of air pollutants such as volatile organic compounds, 

oxides of nitrogen, and particulate matter. Along with requiring the use of highly 

effective emission controls by the new or modified source, federal NSR requires that all 

new emissions from the source be offset by emission reductions from other sources in 

the area. 

The District’s September 21, 2006 amendments to Rule 2201 added section 4.6.9, 

which provides that agricultural sources are not required to provide emission offsets to 

mitigate pollution from new and modified sources “to the extent provided by California 

Health and Safety Code, section 42301.18(c).” HSC section 42301.18(c), in turn, which 

was added to the Health and Safety Code by SB 700, provides: 

(c) A district may not require an agricultural source to obtain emission 

offsets for criteria pollutants for that source if emission reductions from 

that source would not meet the criteria for real, permanent, quantifiable, 

and enforceable emission reductions. 

We first had occasion to consider whether this amendment violated SB 288 in our 

review of an October 10, 2006 letter from Paul Cort on behalf of Earthjustice petitioning 

ARB to conduct an SB 288 hearing on the amendment. In a December 18, 2006 letter 

from Executive Officer Catherine Witherspoon, ARB denied the petition on the ground 

that the amendment simply references a provision of State law, and accordingly does 

not constitute a weakening of Rule 2201 in contravention of state law. We noted that 

the underlying issue raised by the petitioners was the District’s interpretation of 

HSC section 42301.18(c), rather than the District’s adding the reference to state law, 

and that the disputed interpretation was not cognizable under SB 288. Your 

December 21, 2006 letter asks ARB to explain our interpretation of HSC section 

42301.18(c), and why incorporation of that provision into Rule 2201 does not constitute 

an impermissible weakening of the rule in violation of SB 288. 
Mr. Newell 

May 30, 2007 

Page 3 

 

In addition, you ask us to reconcile the denial of the Earthjustice petition in light of 

HSC section 39011.5, added as part of SB 700, which had not been cited in Mr. Cort’s 

letter. HSC section 39011.5 provides in part: 

* * * * 

(b) Any district rule or regulation affecting stationary sources on 

agricultural operations adopted on or before January 1, 2004, is applicable 

to an agricultural source. 

(c) Nothing in this section limits the authority of a district to regulate a 

source, including, but not limited to, a stationary source that is an 

agricultural source, over which it otherwise has jurisdiction pursuant to this 

division [26] or pursuant to the federal Clean Air Act . . . or any rules or 

regulations adopted pursuant to that act that were in effect on or before 

January 1, 2003 . . . . 

SB 700’s enactment of HSC section 42301.18(c) on its face imposes an effective 

limitation on the offset requirements of any California air district, regardless of the 

requirements in the District’s NSR rule. However, you appear to take the position that 

since the District’s NSR rule on or before January 1, 2003 applied by its terms to 

agricultural sources, HSC section 39011.5 trumps HSC section 42301.18(c) in the case 

of the District. You indicate that the decision in Association of Irritated Residents v. 

Fred Schakel Dairy, 2005 U.S. LEXIS 36769 (E.D. Cal. 2005) supports your position. 

There the Court held that the December 19, 2002 version of the District’s NSR rule 

applied to the defendant dairy operation, citing HSC section 39011.5(b) and (c). 

The Challenged Amendment to Rule 2020 

Your October 18, 2006, petition also requested the ARB to hold a public hearing to 

consider the San Joaquin Valley APCD’s September 21, 2006 amendments to 

Rule 2020, which added section 6.20 to exempt specified agricultural sources from 

District permit requirements. As amended on September 21, 2006, section 6 of Rule 

2020 provides: 

6.0 District Exempt Source Categories 

Except as required by Section 5.0, no Authority to Construct or Permit to 

Operate shall be required for an emission unit specified below. All other 

equipment within that source category shall require an [Authority to 

Construct (ATC)] or [Permit to Operate (PTO)]. 
Mr. Newell 

May 30, 2007 

Page 4 

* * * * 

6.20. Agricultural sources, but only to the extent provided by California 

Health and Safety Code section 42301.16.

Enacted as part of SB 700, HSC section 42301.16 permits a district to exempt specified 

agricultural sources from permit requirements – including NSR requirements – if certain 

criteria are met. Thus a confined animal facility (CAF) that is required to obtain the 

special operating permit provided for CAFs in section 40724.6 may be exempt from 

NSR permit requirements if the District finds, at a public hearing, that a permit [other 

than the CAF permit] is “not necessary to impose or enforce” emission limits for criteria 

pollutants and that requiring another permit from the CAFs “would impose a burden on 

those sources that is significantly more burdensome than permits required for similar 

sources of air pollution.” In addition, section 42301.16(c) exempts entirely from the 

permit requirements “an agricultural source of air pollution with actual emissions that are 

less than one-half of any applicable emissions threshold for a major source in the 

district, for any air contaminant [except fugitive dust],” unless the District specifically 

finds that the source is not subject to the CAF permit requirement of section 40724.6; 

that a permit is necessary to impose or enforce emission reductions of criteria pollutants 

for which the District is nonattainment; and that the requirement to obtain a permit is not 

significantly more burdensome than it is for other similar sources of air pollution. 

(Permits are required for any agricultural source that must obtain a permit under the 

federal Clean Air Act; see section 42301.16(a)). 

Your analysis relies in large part on your construction of HSC section 39011.5(b) and 

(c): 

Notwithstanding other provisions in SB 700, section 39011.5 specifically 

requires agricultural sources’ compliance with the December 19, 2002 

versions of Rules 2020 and 2201. Nor does SB 700 limit the authority of 

the District to regulate agricultural sources under the December 19, 2002 

versions of Rules 2020 or 2201. The Legislature could not have spoken 

more clearly on this issue: agricultural sources must comply with the 

December 19, 2002 versions of Rules 2020 and 2201 and the District has 

the authority to mandate such compliance. 

Petition at 5-6. 

The Requirements of SB 288 

The key SB 288 restrictions on districts amending their NSR rules are contained in the 

four subsections of HSC section 42504. 
Mr. Newell 

May 30, 2007 

Page 5 

HSC section 42504(a) provides: 

No air quality management district or air pollution control district may 

amend or revise its new source review rules or regulations to be less 

stringent than those that existed on December 30, 2002. If the state board 

finds, after a public hearing, that a district's rules or regulations are not 

equivalent to or more stringent than the rules or regulations that existed on 

December 30, 2002, the state board shall promptly adopt for that district 

the rules or regulations that may be necessary to establish equivalency, 

consistent with subdivision (b). 

This provision sets forth an overall equivalency requirement that allows a district to relax 

one NSR element only as long as one or more other elements are sufficiently 

strengthened to result in overall equivalent stringency. We interpret this broadly-worded 

provision to include offset requirements and to apply on a programmatic basis. For 

example, a district would not be allowed to relax NSR offset requirements if the overall 

effect of the district’s amendments would render the NSR rules less stringent in the 

aggregate. 

HSC section 42504(b) supplements this general prohibition against weakening NSR 

rules and regulations by delineating four elements which cannot be revised if the 

revisions would “exempt, relax, or reduce the obligations of a stationary source. . . . ” 

These elements are listed in section 42504(b)(1): 

(A) The applicability determination for new source review. 

(B) The definition of modification, major modification, routine maintenance, 

or repair or replacement. 

(C) The calculation methodology, thresholds or other procedures of new 

source review. 

(D) Any definitions or requirements of the new source review regulations. 

HSC section 42504(b)(2) provides that the rule components listed above may not be 

amended if doing so would “exempt, relax, or reduce the obligations of a source” with 

regard to the following requirements: 

(A) Any requirements to obtain new source review or other permits to 

construct, prior to commencement of construction. 

(B) Any requirements for best available control technology (BACT). 
Mr. Newell 

May 30, 2007 

Page 6 

(C) Any requirements for air quality impact analysis. 

(D) Any requirements for recordkeeping, monitoring and reporting in a 

manner that would make recordkeeping, monitoring, or reporting less 

representative, enforceable, or publicly accessible. 

(E) Any requirements for regulating any air pollutant covered by the new 

source review rules and regulations. 

(F) Any requirements for public participation, including a public comment 

period, public notification, public hearing, or other opportunities or forms of 

public participation, prior to issuance of permits to construct. 

HSC section 42504(c) provides, 

In amending or revising its new source review rules or regulations, a 

district may change any of the items in paragraph (1) of subdivision (b) 

only if the change is more stringent than the new source review rules or 

regulations that existed on December 30, 2002. 

Finally, notwithstanding the general anti-backsliding provision set forth in HSC 

section 42504(a) and the source-specific prohibitions set forth in HSC section 42504(b), 

SB 288 allows revisions that may result in less stringent district NSR rules under the 

carefully circumscribed circumstances described in HSC section 42504(d). The rule 

amendment must be accomplished at a public hearing based upon substantial evidence 

in the record and the district must submit the amendment(s) to the ARB for approval at 

a public hearing in order to ensure that the several conditions for such rule revisions 

have been met. Since the SJVUAPCD has not attempted to invoke HSC 

section 42504(d) with respect to the amendments covered by your Petition, I do not list 

the conditions here. 

Applying SB 288 to the Challenged District Actions

The Amendment to Rule 2201 Referencing HSC Section 42301.18(c) 

The challenged amendments to Rule 2201 pertain to offset requirements, which are not 

included in the list of requirements in HSC section 42504(b)(2). We accordingly 

evaluate them under the equivalency requirements of HSC section 42504(a).

As state law, HSC section 42301.18(c) on its face prohibits every district in the state 

from requiring offsets from an agricultural source “if emission reductions from that 

source would not meet the criteria for real, permanent, quantifiable, and enforceable 

emission reductions” – regardless of any requirements to the contrary in a particular 
Mr. Newell 

May 30, 2007 

Page 7 

district’s NSR rule. The SJVUAPCD’s amendment to Rule 2201 simply acknowledges 

the existence of HSC section 42301.18(c). The effect of 42301.18(c) on the District’s 

NSR program before and after the September 21, 2006 amendment to Rule 2201 was 

exactly the same. If the Legislature were to repeal HSC section 42301.18(c), the 

District’s amendment would have no effect on the District’s NSR program. This is 

because all the amendment does is acknowledge the existence of the state law; it does 

not change how HSC section 42301.18(c) applies to the District’s NSR program. I 

accordingly conclude that the District’s September 16, 2006 amendment to Rule 2201 

does not constitute a weakening of the District’s NSR rules under HSC section 42504(a) 

or (b). 

You assert, however, that the clear and unambiguous limitation imposed on all districts 

by HSC 42301.18(c) does not apply to the SJVUAPCD because HSC section 

39011.5(b) and (c) grandfathers in the District’s December 19, 2002 version of its NSR 

rule and immunizes that rule from any restrictions SB 700 imposes on District NSR 

programs. I cannot agree. First, HSC section 39011.5(c) clearly does not have this 

effect. Since it starts out “Nothing in this section limits the authority of a district to 

regulate . . . ,” its only effect is to assure that the District’s NSR rule is not diminished by 

HSC section 39011.5. However, the issue here is not whether HSC section 39011.5 

limits the effect of the District’s NSR rule, but whether HSC section 42301.18(c) limits 

the effect of the rule. 

That leaves HSC section 39011.5(b), which, as noted above, provides "Any district rule 

or regulation affecting stationary sources on agricultural operations adopted on or 

before January 1, 2004, is applicable to an agricultural source." The Legislature 

included this subsection for a simple reason – to clarify the applicability of district 

prohibitory and permit rules that were adopted when former HSC section 42310(e) 

(repealed by SB 700) prohibited districts from requiring a permit for any equipment used 

in agricultural operations. Under HSC section 39011.5(b), as soon as SB 700 became 

effective January 1, 2004, the District could as a matter of state law require NSR 

permits from new and modified agricultural sources. (In accordance with HSC 

section 42301.18(a), agricultural sources that existed before January 1, 2004, were to 

be permitted as existing sources.) Otherwise there could be some validity to the 

assertion raised by the dairy in the Fred Shackel Dairy case that following enactment of 

SB 700 the District’s NSR rule was not applicable to an agricultural source that received 

its use permit from the county in 2003 when former HSC section 42310(e) was still in 

effect. Based on the terms of HSC section 39011.5(b), the Fred Shackel Dairy court 

rejected that assertion. 

Given the Legislature’s obvious interest in enacting HSC section 39011.5(b) for the 

limited purpose of assuring that the District was not altogether precluded from 

administering its NSR rule after enactment of SB 700, there is no reason to give the 
Mr. Newell 

May 30, 2007 

Page 8 

provision an interpretation so expansive that it nullifies other provisions of SB 700 as 

they apply to the District. Certainly the Fred Shackel Dairy court did not interpret HSC 

section 39011.5(b) so broadly. On the contrary, the Court noted that HSC 

section 42301.16(c) allows the District to require a permit for agricultural sources with 

actual emissions of less than half the major source threshold only after certain findings 

are made, but dismissed defendants’ reliance on the provision because “[t]here are no 

allegations that support an influence that the Dairy ‘actually emits’ less than one-half of 

the threshold quantities.” (Order at p. 21). The court would not have had to reach the 

factual issue had it believed that HSC section 39011.5(b) made HSC section 

42301.16(c) inapplicable in the SJVUAPCD. Moreover, there is no indication in the 

Court’s discussion of other SB 700 provisions such as HSC 42301.16(a) and (b) that 

section 39011.5(b) makes those SB 700 provisions inapplicable to the District’s NSR 

rule as in effect December 19, 2002. (Order at 21) 

HSC section 42301.18(c) imposes specific conditions that districts must meet before 

they require a permit in specific circumstances. HSC section 39011.5(b), on the other 

hand, states a more general requirement regarding the applicability of district NSR rules 

adopted before SB 700 became effective. A general statutory provision is normally 

controlled by a specific provision relating to a particular subject. (See People v. Superior 

Court, 28 Cal. 4th 798 (2002), Miller v. Superior Court, 21 Cal. 4th 883 (1999).) Had the 

Legislature included language that the preexisting NSR requirements applied 

“notwithstanding” the specific limits imposed by SB 700 on all district NSR programs, 

then section 39011.5(b) could be read as nullifying those specific limits in the case of 

the SJVUAPCD’s NSR rule. In the absence of such language, and given the 

reasonableness of according the statutory language a more limited effect that does not 

partially nullify other specific statutory conditions enacted by SB 700, we have 

concluded as a matter of law that HSC section 39011.5(b) does not exempt the 

District’s NSR program from the requirements of HSC section 42301.18(c). 

With respect to our interpretation of HSC section 42301.18(c), we believe that section 

42301.18(c) does not ask whether or not the District has a regulatory protocol to verify 

whether ERC’s offered by agricultural source are creditable, but rather sets forth the 

objective, generic criteria that must be satisfied by an agricultural source seeking credits 

for its emission reductions. If the proffered reductions were real (i.e. surplus to required 

reductions), quantifiable, and enforceable, then the source would be able to use (or 

bank) them as credits and the District may, therefore, require the source to provide 

offsets. The use of the subjunctive “would not meet” is critical in interpreting this 

provision; it focuses the inquiry on whether the emission reductions meet the generic 

criteria that the U.S. EPA and the ARB and air districts have, since 1976, required of 

sources in order for the reductions to “count” for purposes of attaining ambient 

standards and to qualify for use as offsets. The existence of a District rule allowing 

such offsets to be generated is not germane to determining whether emission 
Mr. Newell 

May 30, 2007 

Page 9 

 

reductions from a given agricultural source “would” meet the criteria for real, permanent, 

quantifiable, and enforceable. 

The Amendment to Rule 2020 

The amendments to Rule 2020 provide for the exemption of agricultural sources from 

District requirements to obtain an Authority to Operate or a Permit to Operate in certain 

circumstances – “only to the extent provided by [HSC] section 42301.16.” This falls 

under HSC section 42504(b)(2)(A) as it is a change to a requirement to obtain a permit 

to construct. We accordingly review the amendments under HSC section 42504(b) to 

determine whether they “exempt, relax, or reduce the obligations of any stationary 

source” in the District. 

A key issue is determining the applicability of HSC section 42301.16 to the District’s 

NSR rule. For the reasons described above in the discussion of the amendments to 

Rule 2201, I have concluded that HSC section 39011.5 does not affect the applicability 

of HSC section 42301.16 to the District’s NSR rule. As a state law applying to district 

permit requirements, HSC section 42301.16 applies to the District’s permit program 

whether or not the District adopts an exemption from its Authority to Construct or Permit 

to Operate requirements for “agricultural sources, but only to the extent provided by 

California Health and Safety Code section 42301.16.” But the issue regarding the 

amendment to Rule 2020 is more nuanced than the issue regarding the amendment to 

Rule 2201. The amendment to Rule 2201 clearly carved out an exemption only to the 

extent the exemption was otherwise required by law. With the amendment to 

Rule 2020, it is necessary to evaluate the effect of the amendment by determining 

whether there is any difference in the District’s mandate and authority before and after 

the amendment was adopted. 

We first consider the effect of HSC section 42301.16(b), which mandates permits for all 

agricultural sources unless a district makes all of the three specified findings in (b)(1)-(3) 

or a permit is not required under HSC section 42301.16(c). Thus while the District’s 

amendment is couched as a blanket permit exemption for agricultural sources “to the 

extent provided” in HSC section 42301.16, section 423016(b) “flips” that with the result 

that a permit remains mandated unless either the section 42301.16(b) or the 

section 42301.16(c) exception applies.1

With respect to agricultural sources that have been issued a confined animal feeding 

operation permit under HSC section 40724.6 and trigger the other two findings listed in 

section 42301.16(b), the statutory language indicates just that a permit is no longer 

1

 The blanket permit requirement in HSC section 42301.16(b) for agricultural sources except as otherwise 

provided makes the provisions of HSC section 42301.16(a) irrelevant for purpose of an SB 288 analysis. 
Mr. Newell 

May 30, 2007 

Page 10 

required for these sources. Since the literal language only removes the mandate, a 

district theoretically may remain able to require a permit for these sources if it wishes to 

do so. If this were to be the case, the amendment impermissibly weakens the District’s 

NSR rule because the amendment changes a District default requirement for a permit to 

a default exemption from a permit for sources for which the three findings can be made. 

However, the context indicates that the legislative intent was to prohibit Districts from 

requiring ordinary permits for a source for which the District makes the three findings, 

and thus the effect of section 42301.16(b) is the same with or without the challenged 

amendment. 

HSC section 42301.16(c) prohibits the District from requiring a permit for an agricultural 

source “with actual emissions that are less than one-half of any applicable emissions 

source for a major source in the district “(excluding fugitive dust) prior to making the 

three findings listed in section 42301.16(c)(1)-(3). Because of the “flipping” effect of 

HSC section 42301.16(b) both before and after the District’s challenged amendment the 

District is obligated to require a permit for the smaller sources, but only if it makes the 

three specified findings. We accordingly find that the challenged amendment does not 

in practice exempt, relax, or reduce the obligations of a smaller source that falls under 

HSC section 42301.16(c). In combination with the above analysis regarding the effect 

of HSC section 42301.16(b), this means that the challenged District amendment does 

not violate SB 288 because it does not weaken the District’s NSR rule or effect an 

actual exemption, relaxation or reduction of the obligations of a source. Due to the 

existence of HSC section 42301.16 the applicable requirements for sources were not 

changed by the adoption of the challenged amendments. 

 

Conclusion 

After considering the effect of the challenged amendments, I have concluded that they 

do not cause the District’s NSR rule to be less stringent than the rule was on 

December 30, 2002 because they do not change the effect of the state law 

requirements and limitations enacted by SB 700. Consequently, should a public 

hearing before our Board occur on this matter, based on the information now before me 

I would advise the Board of my opinion that, as a matter of law, the challenged 

amendments do not weaken the District’s NSR rule or otherwise violate SB 288. 

Notwithstanding my conclusions, we are prepared to schedule a hearing by the ARB 

Governing Board hearing on your Petition if you so desire. Please let us know if you 

wish to pursue that course of action. In the meantime, you have any questions about 

ARB’s legal analysis please contact me at (916) 323-9606 or Ms. Leslie Krinsk, Senior 
Mr. Newell 

May 30, 2007 

Page 11 

Staff Counsel at (805) 473-7325. For technical questions about the District’s NSR rule, 

please contact Mr. Chris Gallenstein, Staff Air Pollution Specialist in the Stationary 

Source Division at (916) 324-8017. 

Sincerely, 

/s/ 

W. Thomas Jennings 

Chief Counsel 

cc: Mr. Paul Cort 

Staff Attorney 

 Earthjustice 

 426 Seventeenth Street, 5th Floor 

 Oakland, California 94612 

 Mr. Seyed Sadredin 

Air Pollution Control Officer 

San Joaquin Valley Unified Air Pollution 

 Control District 

1990 East Gettysburg Avenue 

Fresno, California 93726-0244 

 
Mr. Newell 

May 30, 2007 

Page 12 

bcc: Tom Jennings, OLA 

Leslie M. Krinsk, OLA 

Robert Fletcher, SSD 

Michael Tollstrup, SSD 

Chris Gallenstein, SSD 

Kitty Howard, SSD