106332 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 

the Congress and to the Comptroller 

General of the United States. This action 

is not a ‘‘major rule’’ as defined by 5 

U.S.C. 804(2). 

Under section 307(b)(1) of the CAA, 

petitions for judicial review of this 

action must be filed in the United States 

Court of Appeals for the appropriate 

circuit by February 28, 2025. Filing a 

petition for reconsideration by the 

Administrator of this final rule does not 

affect the finality of this action for the 

purposes of judicial review nor does it 

extend the time within which a petition 

for judicial review may be filed, and 

shall not postpone the effectiveness of 

such rule or action. Parties with 

objections to this direct final rule are 

encouraged to file a comment in 

response to the parallel notice of 

proposed rulemaking for this action 

published in the proposed rules section 

of this Federal Register, rather than file 

an immediate petition for judicial 

review of this direct final rule, so that 

EPA can withdraw this direct final rule 

and address the comment in the 

proposed rulemaking. This action may 

not be challenged later in proceedings to 

enforce its requirements. (See section 

307(b)(2).) 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Intergovernmental relations, 

Nitrogen dioxide, Reporting and 

recordkeeping requirements. 

Dated: December 19, 2024. 

Debra Shore, 

Regional Administrator, Region 5. 

For the reasons stated in the 

preamble, title 40 CFR part 52 is 

amended as follows: 

PART 52—APPROVAL AND 

PROMULGATION OF 

IMPLEMENTATION PLANS 

■ 1. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401 et seq. 

■ 2. In § 52.1870, the table in paragraph 

(c) is amended by revising entries 

‘‘3745–23–01’’ and ‘‘3745–23–02’’ under 

‘‘Chapter 3745–23 Nitrogen Oxide 

Standards’’ to read as follows: 

§ 52.1870 Identification of plan. 

* * * * * 

(c) * * * 

EPA-APPROVED OHIO REGULATIONS

Ohio citation Title/subject Ohio effective 

date EPA Approval date Notes 

*******

Chapter 3745–23 Nitrogen Oxide Standards 

3745–23–01 Definitions ....................................... 8/15/2024 12/30/2024, [INSERT FIRST PAGE OF Federal 

Register CITATION].

3745–23–02 Methods of Measurement ............... 8/15/2024 12/30/2024, [INSERT FIRST PAGE OF Federal 

Register CITATION].

* * * * * * * 

* * * * * 

[FR Doc. 2024–30734 Filed 12–27–24; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R09–OAR–2024–0228; EPA–R09– 

OAR–2022–0338; FRL–11830–02–R9] 

Federal Implementation Plan for 

Nonattainment New Source Review 

Program; Mojave Desert Air Quality 

Management District, California 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is finalizing a Federal 

Implementation Plan (FIP) under the 

Clean Air Act (CAA) that consists of 

Nonattainment New Source Review 

(NNSR) rules for areas within the 

jurisdiction of the Mojave Desert Air 

Quality Management District 

(MDAQMD or ‘‘District’’) in which air 

pollutant concentrations are above 

specific National Ambient Air Quality 

Standards (NAAQS). The NNSR rules 

will apply to construction of new major 

stationary sources and major 

modifications at existing major 

stationary sources of air pollution. The 

FIP will be implemented by the EPA, 

unless and until it is replaced by an 

EPA-approved state implementation 

plan (SIP). In this action, the EPA is also 

responding to a September 5, 2024 

decision of the United States Ninth 

Circuit Court of Appeals for the Ninth 

Circuit, which remanded the EPA’s 

disapproval of a MDAQMD rule 

provision related to the calculation and 

generation of emissions offsets. This 

response again disapproves MDAQMD 

Rule 1304(C)(2)(d) and provides 

additional information to support that 

decision. 

DATES: This final rule is effective on 

February 28, 2025. 

ADDRESSES: The EPA has established a 

docket for the FIP rulemaking under 

Docket ID No. EPA–R09–OAR–2024– 

0228. The EPA established a different 

docket (EPA–R09–OAR–2022–0338), for 

its 2023 limited approval/limited 

disapproval of a MDAQMD state 

implementation plan submission, which 

contained provisions addressing the 

calculation and generation of emissions 

offsets for the nonattainment area 

permitting program. This notification 

will be placed in both dockets, which 

are each accessible via the Federal 

eRulemaking Portal at https://

www.regulations.gov/. Although listed 

in the indices for these rules, some 

information is not publicly available, 

e.g., Confidential Business Information 

or other information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket 

materials are available either 

electronically at https://

www.regulations.gov or in hard copy at 

the U.S. Environmental Protection 

Agency, EPA Docket Center, William 

Jefferson Clinton West Building, Room 

3334, 1301 Constitution Ave. NW, 


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1The EPA’s finding of failure to submit triggered 

an obligation under CAA section 110(c) for the EPA 

to promulgate a FIP within two years (i.e., by March 

6, 2019). 82 FR 9158, 9161 (February 3, 2017). 

2See 40 CFR 81.305. The ozone nonattainment 

area is located within San Bernardino County. The 

PM10 nonattainment areas consist of all of the 

MDAQMD portion of San Bernardino County: the 

Trona Planning Area and the portion of San 

Bernardino County that excludes both the Trona 

Planning Area and the portion of San Bernardino 

County that is located in the South Coast Air Basin. 

A map of this area is available in the docket for this 

action. 

3 89 FR 56237, 56241. 

4 89 FR 56237. 

5 Mojave Desert Air Quality Mgmt. Dist. v. U.S. 

Env’t. Prot. Agency, No. 23–1411 (9th Cir. 

September 5, 2024), Docket No. EPA–R09–OAR– 

2022–0338, available in the docket for this action 

and at https://cdn.ca9.uscourts.gov/datastore/ 

memoranda/2024/09/05/23-1411.pdf. 

Washington, DC. The Public Reading 

Room is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

legal holidays. The telephone number 

for the Public Reading Room is (202) 

566–1744, and the telephone number for 

the Office of Air and Radiation Docket 

is (202) 566–1742. 

FOR FURTHER INFORMATION CONTACT: 

Tanya Abrahamian, Air and Radiation 

Division, Rules Office (AIR–3–2), 

Environmental Protection Agency, 

Region IX, telephone number: (213) 

244–1849; email address: 

Abrahamian.Tanya@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document, ‘‘we,’’ ‘‘us,’’ 

and ‘‘our’’ refer to the EPA. 

The information presented in this 

preamble is organized as follows: 

Table of Contents 

I. Summary of the Proposed Action 

II. EPA Response to the Ninth Circuit’s 

Remand 

III. Public Comments on FIP and EPA 

Responses to Comments and Court 

Remand 

IV. Final Action 

V. Supporting Information 

VI. Statutory and Executive Order Reviews 

Preamble Glossary of Terms and 

Abbreviations 

The following are abbreviations of 

terms used in the preamble. 

APA Administrative Procedure Act 

Appendix S 40 CFR part 51, appendix S 

BACT Best Available Control Technology 

CAA or Act Clean Air Act 

CARB California Air Resources Board 

CFR Code of Federal Regulations 

EPA we, us, or our The United States 

Environmental Protection Agency 

ERC Emission Reduction Credit 

FIP Federal Implementation Plan 

FR Federal Register 

LAER Lowest Achievable Emission Rate 

LA/LD Limited Approval-Limited 

Disapproval 

MDAQMD The Mojave Desert Air Quality 

Management District 

NAAQS National Ambient Air Quality 

Standards 

NOX Nitrogen Oxides 

NSR New Source Review 

NNSR Nonattainment New Source Review 

PSD Prevention of Significant Deterioration 

PAL Plantwide Applicability Limit 

PM10 Particulate Matter with a diameter of 

10 micrometers or less 

PTE Potential To Emit 

RACT Reasonably Available Control 

Technology 

RFP Reasonable Further Progress 

SER Simultaneous Emission Reduction 

SIP State Implementation Plan 

TSD Technical Support Document 

VOC Volatile Organic Compound 

2023 LA/LD The EPA’s rulemaking action 

at 88 FR 42258, which was published on 

June 30, 2023, in the Federal Register. 

I. Final Action To Establish Federal 

Implementation Plan 

On July 9, 2024 (89 FR 56237), the 

EPA proposed to establish a Federal 

Implementation Plan (FIP), pursuant to 

(Clean Air Act) section 110(c), for a 

nonattainment New Source Review 

(NNSR) program within the Mojave 

Desert Air Quality Management District 

(MDAQMD).1 This FIP relates to a 

finding of failure to submit issued by 

the EPA on February 3, 2017, and EPA’s 

action to disapprove a part of the 

MDAQMD’s Nonattainment New Source 

Review (NNSR) permitting program 

regulations on June 30, 2023 (88 FR 

42258) (‘‘2023 LA/LD’’). The latter 

action was a limited approval/limited 

disapproval action in which EPA 

disapproved MDAQMD’s Rule 

1304(C)(2)(d) because this rule failed to 

meet requirements for determining the 

quantity of offsets needed to issue a 

permit for a major modification. 

This FIP implements NNSR program 

requirements and will apply to the 

construction of new major sources and 

major modifications at existing major 

sources that are located within areas 

that are designated as nonattainment 

with specific National Ambient Air 

Quality Standards (NAAQS). This FIP 

will apply to pollutants for which the 

area is designated nonattainment. 

Therefore, this action applies only in 

the areas within the MDAQMD’s 

jurisdiction that are designated 

nonattainment, specifically, the San 

Bernardino County portion of the West 

Mojave Desert ozone nonattainment area 

and the San Bernardino County and 

Trona Planning Area Particulate Matter 

with a diameter of 10 micrometers or 

less (PM10) nonattainment areas.2 The 

EPA will implement the FIP in these 

areas until such time as the EPA 

approves a SIP submission from the 

MDAQMD that fully resolves the 

deficiencies identified in the EPA’s June 

30, 2023 limited approval/limited 

disapproval (‘‘2023 LA/LD’’) action on 

the MDAQMD’s NNSR program and 

identifies no new deficiencies.3 This FIP 

satisfies the statutory requirements for 

SIPs and NNSR programs in CAA 

sections 110(c)(1), 172(c)(5), 173, 182(c) 

and (d), 189(a)(1)(A) and (e), 301(a), and 

302. The provisions of the FIP are also 

designed to meet the requirements for 

state plans in the EPA regulations at 40 

CFR 51.165, 40 CFR 51.1114, and 40 

CFR 51.1314. 

The FIP that is finalized in this action 

addresses the deficiencies the EPA 

identified in the MDAQMD’s NNSR 

program by incorporating requirements 

from 40 CFR part 51, appendix S 

(‘‘Appendix S’’), as well as additional 

requirements to make the program 

administrable. Upon the effective date 

of this action, permit applicants will 

need to obtain two permits—one permit 

from the EPA under this FIP and one 

permit from the MDAQMD under the 

rules in the SIP. Where permit approval 

criteria between the MDAQMD’s SIP 

and this FIP conflict—for example, the 

procedures to determine the quantity of 

offsets at a major modification, a 

deficiency in the MDAQMD’s NNSR 

program—permit applicants need to 

demonstrate compliance with the 

requirements of this FIP, since this FIP 

fills the gaps in the MDAQMD’s NNSR 

program. To the extent that there are 

any differences in the required permit 

application materials under the FIP 

versus the SIP, the applicant will need 

to comply with both requirements when 

submitting its permit application. The 

EPA will enforce the FIP as provided 

under CAA section 113(a). Our 

notification proposing this action 

includes further information on the 

implementation, purpose, components, 

and severability of this FIP.4

II. EPA Response to the Ninth Circuit’s 

Remand 

In this rulemaking, the EPA is also 

taking final action in response to a 

remand to the Agency by the U.S. Court 

of Appeals for the Ninth Circuit in 

Mojave Desert Air Quality Management 

District v. U.S. Environmental 

Protection Agency (‘‘MDAQMD v. 

EPA’’).5 As background, on July 10, 

2023, the MDAQMD filed a petition for 

review in the Ninth Circuit Court of 

Appeals of the EPA’s 2023 LA/LD of the 

MDAQMD’s NNSR program. The focus 

of the litigation was the EPA’s 

disapproval of the MDAQMD’s Rule 

1304(C)(2)(d). The MDAQMD argued 

that the EPA had failed to adequately 

explain the disapproval in light of the 

Agency’s 1996 approval of a 


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6 Id. at 2. The court wrote that its disposition of 

the case ‘‘is not appropriate for publication and is 

not precedent. . . .’’ Id. at 1. 7 Id. at 5. 

8See, Biden v. Texas, 597 U.S. 785, 807–809 

(2022); Fischer v. Pension Benefit Guarantee 

Corporation, 994 F.3d 664, 669–70 (D.C. Cir. 2021). 

9See, Fischer, 994 F.3d. at 670 (additional 

administrative appeal not needed on remand where 

the factual record was fully developed). 

substantially similar, earlier version of 

the rule. On September 5, 2024, the 

Ninth Circuit found that the EPA’s 

disapproval of Rule 1304(C)(2)(d) was 

arbitrary and capricious because the 

Agency had failed to adequately explain 

‘‘the reversal of its prior approval of a 

similar Mojave rule.’’ 6 The court 

granted the District’s petition and 

remanded the matter ‘‘for further 

proceedings before the agency on an 

open record consistent with this 

decision.’’ 7

In response to a remand from a court 

and agency can choose one of two paths. 

The agency may offer a fuller 

explanation of its reasoning at the time 

of the remanded agency action, or EPA 

may take a new agency action that need 

not be limited to its prior reasons but 

must comply with the procedural 

requirements for a new agency action.8

The EPA is choosing to follow the 

second of these paths to respond to the 

Ninth Circuit’s remand, reexamining the 

remanded action and providing a fresh 

justification for the disapproval of Rule 

1304(C)(2)(d), including an explanation 

for the reversal of EPA’s 1996 approval. 

The EPA also received comments 

referencing our 1996 rulemaking action 

on the proposal for the FIP. In light of 

the overlapping subject matter, we have 

elected to include the following two 

final actions in one rulemaking: (1) a 

new EPA final action to disapprove Rule 

1304(C)(2)(d), as authorized under CAA 

sections 110(k)(3) and 301(a), that 

responds to the Ninth Circuit’s remand 

of a portion of our 2023 LA/LD; and (2) 

EPA’s final action on the FIP, as 

authorized under CAA section 110(c), 

described above. Our responses to 

comments in Section III of this action 

both respond to the comments received 

on the proposed FIP and provide 

additional explanation that supports 

EPA new final action to disapprove Rule 

1304(C)(2)(d), consistent with the 2023 

LA/LD rule. 

For the former action, the EPA must 

comply with the procedural 

requirement for a new agency action. 

Considering the grounds for the court’s 

remand, there is no need for the EPA to 

provide an additional opportunity for 

public comment before taking final 

action to disapprove Rule 1304(C)(2)(d). 

The EPA provided notice and 

opportunity to comment on the 

disapproval of Rule 1304(C)(2)(d) in the 

2023 LA/LD action. In reviewing that 

action, the Ninth Circuit held that EPA’s 

response to one of the public comments 

on that action was not adequate. The 

court found that the MDAQMD had 

sufficiently raised in its comment the 

contention that EPA’s 2023 action was 

inconsistent with the Agency’s prior 

approval of comparable rule in 1996. 

Then, the court held that the EPA did 

not sufficiently articulate a basis for our 

change of position to support the 1993 

disapproval of MDAQMD Rule 

1304(C)(2)(d). In this action, the EPA is 

responding to the MDAQMD’s comment 

in the manner that the Ninth Circuit 

directed. We have opened the record to 

the 2023 LA/LD action and provided 

additional information to support a new 

disapproval of Rule 1304(C)(2)(d). 

Considering that the court remanded for 

the EPA to provide a response to a 

comment, there is no need to provide an 

opportunity to submit comments.9

III. Public Comments on FIP and EPA 

Responses to Comments and Court 

Remand 

The public comment period on the 

proposed FIP rule opened on July 9, 

2024, the date of the proposal’s 

publication in the Federal Register, and 

closed on August 23, 2024. The EPA 

held a virtual public hearing on July 24, 

2024, for members of the public to 

provide oral comments. This section 

summarizes the written and oral public 

comments the EPA received on the 

proposed FIP rule and provides 

responses to those comments. The 

written comments as well as a transcript 

of the public hearing are available in the 

docket for this action. The responses 

below also provide additional analysis 

and explanation that supports the EPA’s 

disapproval of Rule 1304(C)(2)(d) in the 

2003 LA/LD rule. 

Twelve written comments were 

submitted to https://regulations.gov. 

The commenters are listed in Table 1. 

TABLE 1—LIST OF COMMENTERS PROVIDING WRITTEN COMMENTS

Commenter 

ID Commenter name Commenter organization Type of commenter Notes 

01 ................ Brad Poiriez, Executive Director ..... MDAQMD ........................................ State or Local Government Representative/Agency.This is the first comment letter submitted by the MDAQMD. 

02 ................ Brad Poiriez, Executive Director ..... MDAQMD ........................................ State or Local Government Representative/Agency.This is the second comment letter 

submitted by the MDAQMD regarding the MDAQMD’s August 

7, 2024 SIP submittal. 

03 ................ Garden Hills Org. & Co. Ltd ........... ......................................................... ......................................................... This comment is not relevant to the 

proposed action and the EPA will 

therefore not be providing a response to this comment. 

04 ................ Clean Future ................................... ......................................................... ......................................................... This commenter submitted four 

separate comments, two that 

supported the proposed FIP as 

drafted and two that made additional recommendations. 

05 ................ Karnig Ohannessian, Deputy Assistant Secretary of the Navy 

(Environment and Mission Readiness).

U.S. Department of Defense .......... Government Representative/Agency.

06 ................ L. Dugan ......................................... Marine Air Ground Task Force 

Training Command, Marine 

Corps Air Ground Combat Center 

(MAGTFTC–MCAGCC).

Government Representative/Agency.

07 ................ Nicole Valentine .............................. Pacific Gas and Electric Company Industry.

08 ................ Catalina Elias, Environmental Manager.CalPortland Company ..................... Industry.


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10 89 FR 52637, 52639. 

11 82 FR 9158 (February 3, 2017). 

12 Id. at 9161. 

13 Id. at 9158. 

14Center for Biological Diversity et al., v. Regan, 

No. 3:22–cv–03309–RS (N.D. Cal.) (‘‘2023 CBD 

Consent Decree’’). The consent decree, as entered 

by the court on June 15, 2023, is available in the 

docket for this action. 

15 Id. Prior to court’s entry of the 2023 CBD 

Consent Decree, the EPA published a notice in the 

Federal Register announcing the proposed 

settlement and providing an opportunity for 

interested persons to submit comments. 88 FR 

20166 (April 5, 2023). The EPA received no 

comments on the proposed settlement. The parties’ 

joint stipulation to extend the consent decree 

deadline is available in the docket for this action. 

16 2023 CBD Consent Decree, supra n. 13. 

17 83 FR 62998 (December 6, 2018). 

18 88 FR 42258 (June 30, 2023). CARB’s submittal 

stopped the sanctions clocks that started as a result 

of the 2017 Finding of Failure to Submit, but not 

the FIP clock, since the latter requires approval of 

the SIP submission. 

19 Id. 

20 Id. 

21 Id. at 42268. 

TABLE 1—LIST OF COMMENTERS PROVIDING WRITTEN COMMENTS—Continued 

Commenter 

ID Commenter name Commenter organization Type of commenter Notes 

09 ................ Michael Meinen, V.P. Environmental and Decarbonization Efforts.Mitsubishi Cement Corporation ...... Industry.

The EPA also received a total of three 

comments on the proposed rule during 

the public hearing. The commenters are 

listed in Table 2. 

TABLE 2—LIST OF COMMENTERS IN JULY 24, 2024 PUBLIC HEARING

Commenter 

ID Commenter name Commenter organization Type of commenter 

AA ................. Brad Poiriez, Executive Director ......................... Mojave Desert Valley Air Quality Management 

District (MDAQMD).

State or Local Government Representative/ 

Agency. 

BB ................. Pedro Dumaua .................................................... Ducommun, Inc ................................................... Industry. 

CC ................ Daniel McGivney ................................................. Southern California Gas Company (SoCalGas) Industry. 

As we stated in the July 24, 2024 

public hearing, the EPA considers 

written comments and oral comments 

equally in reaching its final decision on 

the proposed FIP. For clarity, we have 

divided our responses to the comments 

we received into two sections: the 

written comments we received during 

the public comment period and the oral 

comments we received during the 

public hearing. 

A. Summaries of Written Comments and 

the EPA’s Responses 

1. Basis and Timing for the FIP 

Comment A.1.1: Commenter 01 

asserts that the EPA proposed the FIP in 

‘‘haste,’’ that the proposed FIP relates to 

a single issue, and that it is unnecessary 

because it rests on an erroneous 

assumption. 

Response to Comment A.1.1: The EPA 

disagrees with the characterization that 

the EPA proposed the FIP in haste. As 

explained in our proposed 

rulemaking,10 the EPA’s FIP authority 

and obligation arises from our February 

3, 2017 finding of failure to submit, in 

which we found that the State of 

California had failed to submit a SIP 

revision for NNSR rules that apply to a 

‘‘Severe’’ classification for the 2008 

ozone NAAQS, as required under 

subpart 2 of part D of title 1 of the CAA 

and the 2008 Ozone SIP Requirements 

Rule.11 The EPA’s finding of failure to 

submit triggered an obligation under 

CAA section 110(c) for the EPA to 

promulgate a FIP no later than two years 

from the finding of failure to submit a 

complete SIP (i.e., by March 6, 2019).12

Specifically, the finding stated that if 

the State did not make the required SIP 

submission and the EPA did not take 

final action to approve the submission 

within two years of the effective date of 

the finding, the EPA would be required 

to promulgate a FIP for the affected 

nonattainment area.13 On June 7, 2022, 

the Center for Biological Diversity (CBD) 

filed a lawsuit against the EPA alleging 

that the EPA had failed to promulgate a 

FIP or approve a SIP by the statutory 

deadline of March 6, 2019 (‘‘2023 CBD 

Consent Decree’’).14 On June 15, 2023, 

the U.S. District Court of the Northern 

District of California entered a consent 

decree resolving this claim and 

requiring the EPA to sign a final 

rulemaking action to either promulgate 

a FIP or approve a SIP no later than 

November 29, 2024, although on 

November 8, 2024, the EPA and CBD 

agreed to extend the deadline to January 

10, 2025.15 The EPA proposed and is 

finalizing this FIP for the NNSR 

program in the MDAQMD to fulfill the 

EPA’s statutory duty by the deadline 

established under the consent decree.16

Relatedly, the 2015 Ozone NAAQS 

Implementation Rule required the 

MDAQMD to submit an updated NNSR 

rule to the EPA by August 1, 2021, no 

later than three years from the effective 

date of its nonattainment designation.17

On July 23, 2021, CARB submitted to 

the EPA the MDAQMD’s revised NNSR 

rules for the 2015 ozone NAAQS, which 

the MDAQMD adopted in March 2021.18

On June 30, 2023, the EPA finalized an 

LA/LD of the District’s NNSR rules.19 In 

this rulemaking, the EPA evaluated the 

SIP submission to determine its 

compliance with NNSR requirements 

for the 2008 and 2015 ozone NAAQS 

and for the 1987 PM10 NAAQS. The 

EPA’s rulemaking for the submitted 

rules explained that the EPA had 

identified six deficiencies in the 

submitted rules that did not fully satisfy 

the relevant requirements for 

preconstruction review and permitting 

in nonattainment areas under section 

110 and part D of title I of the Act. These 

deficiencies prevented full approval.20

As noted in that final action, this 

disapproval imposed an obligation on 

the EPA to promulgate a FIP pursuant 

to CAA section 110(c) within 24 months 

of the effective date of the action (i.e., 

July 31, 2023, setting a deadline of July 

31, 2025, for the EPA to promulgate a 

FIP), unless the EPA approved a SIP 

revision correcting the deficiencies. The 

June 2023 final action also noted the 

EPA’s existing obligation under the 

2023 CBD Consent Decree to promulgate 

a FIP for new source review (NSR) SIP 

elements that the Agency had not 

approved.21 The EPA is therefore 

finalizing this FIP for the NNSR 

program in the MDAQMD to fulfill the 

EPA’s statutory duty by the deadline 


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22 Id. 

23Center for Biological Diversity et al., v. Regan, 

No. 3:22–cv–03309–RS (N.D. Cal.). The consent 

decree, as entered by the court on June 15, 2023, 

is available in the docket for this action. On 

November 8, 2024, the parties stipulated to an 

extension of the consent decree deadline to January 

10, 2025. The joint stipulation is available in the 

docket for this action. 

24 82 FR 9158 (February 3, 2017). 

25Cover Letter, MDAQMD March 22, 2021 

Amendments to MDAQMD Regulation XIII—New 

Source Review and Rule 1600—Prevention of 

Significant Deterioration, sent from the MDAQMD 

to CARB. May 17, 2021, p. 2. 

26On November 8, 2024, CBD and the EPA filed 

a joint stipulation to extend the original November 

29, 2024 deadline to January 10, 2025. Center for 

Biological Diversity et al., v. Regan, No. 3:22–cv– 

03309–RS (N.D. Cal.). This consent decree is also 

available in the docket for this action. 27 89 FR 56237, 56243. 

established under the 2023 CBD 

Consent Decree. 

Comment A.1.2: Commenter 08 states 

that it understands that the EPA is 

proposing the FIP under both a statutory 

deadline established by a consent 

decree resulting from its failure to act in 

a timely manner on various SIP 

submissions and under a regulatory 

deadline required by CAA section 

110(c). Commenter 08 states that the 

EPA acted to propose the FIP nearly five 

months sooner than required by the 

consent decree. Commenter 08 believes 

that the proposed FIP presumes the 

outcome of the ongoing litigation, and 

the hasty action on the EPA’s part does 

not demonstrate a good faith effort to 

allow the MDAQMD to continue to 

implement its own NNSR program. 

Response to Comment A.1.2: The EPA 

proposed this FIP for the MDAQMD 

NNSR program to fulfill the EPA’s 

statutory duty by the deadline 

established under the 2023 CBD 

Consent Decree.22 The terms of the 

consent decree require the EPA to sign 

a notice of final rulemaking to approve 

a revised SIP submission, to promulgate 

a FIP, or to approve in part a revised SIP 

submission and promulgate a partial FIP 

for the Severe NNSR SIP element in the 

MDAQMD no later than January 10, 

2025.23 Because the FIP can only be 

promulgated through a notice and 

comment rulemaking, it was necessary 

for the EPA to propose the FIP several 

months before the final signature 

deadline to give time for the public to 

review the draft rulemaking, provide 

comments, and allow for the EPA to 

consider and respond to those 

comments in a final agency action. 

Commenter 08’s assessment of the 

basis for the EPA’s promulgation of the 

FIP and the timing of the FIP is not 

correct. The EPA’s obligation to 

promulgate a FIP stems from our 2017 

Finding of Failure to Submit the NNSR 

SIP element for a Severe-15 ozone 

nonattainment area.24 Our 2017 action 

started the clock for when the EPA 

would need to promulgate a FIP, 

consistent with CAA section 110(c). 

Thus, since March 6, 2019 (two years 

after the effective date of the action, 

under CAA section 110(c)), the EPA has 

had an obligation to promulgate a FIP 

unless it approved the MDAQMD’s 

NNSR program. Because the EPA has 

not fully approved the MDAQMD’s 

NNSR program, the EPA remains 

obligated to promulgate a FIP unless the 

MDAQMD addresses the deficiencies 

identified in the 2023 LA/LD. 

After extensive coordination between 

the EPA and MDAQMD, the MDAQMD 

adopted revised NSR rules on March 22, 

2021, which CARB, as the governor’s 

designee, submitted to the EPA on July 

23, 2021, for approval into the SIP. In 

the transmittal letter from the 

MDAQMD to CARB accompanying the 

amended NNSR rules, the MDAQMD 

wrote that the issue regarding 

MDAQMD Rule 1304(C)(2)(d) may need 

to be resolved in court.25 The EPA’s 

2023 LA/LD was the final action on the 

2021 submittal. The FIP clock that 

commenced with the 2023 LA/LD is 

separate from the FIP clock that began 

with the 2017 finding of failure to 

submit, in contrast to the statements 

Commenter 08 made in its comment 

number 1 on the proposed FIP; again, 

that deadline passed in 2019. 

Following the EPA’s finalization of 

the 2023 LA/LD on June 30, 2023, the 

MDAQMD filed a petition for review of 

that action in the U.S. Court of Appeals 

for the Ninth Circuit Court on July 10, 

2023. On September 5, 2024, the Ninth 

Circuit Court of Appeals in the case 

Mojave Desert Air Quality Management 

District v. EPA remanded to the EPA the 

Agency’s determination that the 

MDAQMD Rule 1304(C)(2)(d) is 

unlawful under the CAA. The Ninth 

Circuit did not render a substantive 

ruling on the legality of the MDAQMD 

Rule 1304(C)(2)(d); rather, it remanded 

to the EPA to explain the EPA’s finding 

that the MDAQMD rule was deficient, 

specifically in the context of the EPA’s 

1996 approval of the MDAQMD’s NNSR 

program containing similar provisions 

to today’s Rule 1304(C)(2)(d). The EPA 

therefore finds the MDAQMD SIP 

remains deficient with respect to Rule 

1304(C)(2)(d) and inconsistent with 

CAA requirements. Regardless of the 

Ninth Circuit’s remand, the EPA is 

required to promulgate the FIP, and it 

must do so by the consent decree 

deadline of January 10, 2025.26

Comment A.1.3: Commenter 02 states 

that since the MDAQMD made changes 

to address all but one of the six 

deficiencies the EPA identified in the 

2023 LA/LD, there is no longer a need 

to address those particular issues in the 

FIP other than to note that resolution 

has been reached and approval of those 

five issues is forthcoming. 

Commenter 08 states that because 

CARB submitted the MDAQMD’s 

revised rules to the EPA on August 7, 

2024, it is the commenter’s 

understanding that the FIP will only 

pertain to Simultaneous Emission 

Reduction (‘‘SER’’) calculations under 

MDAQMD Rule 1304(C)(2)(d). The 

commenter states that with CARB’s 

submission of the MDAQMD’s revised 

rules, the deficiencies in the 

MDAQMD’s rules are no longer broad in 

scope, nor do they affect multiple 

aspects of the program. The commenter 

urges the EPA to work cooperatively 

with the MDAQMD and not put the 

onus of the FIP on facilities. 

Commenter 07 states that the 

MDAQMD has made many changes to 

its NSR rules to meet the requirements 

of the 1990 Clean Air Act and requests 

that the EPA reevaluate its decision to 

promulgate the FIP. Similarly, 

Commenter 05 states that the EPA 

should reconsider or postpone 

implementing the FIP until it can 

resolve its disagreement with the 

MDAQMD regarding Rule 1304(C)(2)(d). 

Commenter 09 urges the EPA to defer 

the FIP until the ongoing litigation 

between the EPA and the MDAQMD is 

resolved. 

Response to Comment A.1.3: Section 

III.H of our FIP proposal described how 

SIP replacement of all or any part of the 

proposed FIP would work, noting that 

changes to the MDAQMD’s rules, if 

approved into the SIP, could replace the 

corresponding requirements of the 

FIP.27 The EPA received CARB’s 

submission of the MDAQMD’s revised 

rules (adopted by the MDAQMD on 

March 25, 2024) on August 7, 2024, 

which was after our July 9, 2024 

proposed action. For the EPA to narrow 

the scope of the FIP to just the 

remaining issue—the quantification and 

generation of offsets under MDAQMD 

Rule 1304(C)(2)(d)—the EPA would first 

need to approve the August 7, 2024 

CARB submittal containing the 

MDAQMD’s revised NNSR rules, which 

requires a 30-day notice and comment 

period. We are currently reviewing the 

submission for completeness and 

substance, as required under section 

110(k) of the CAA. Therefore, there is 

not enough time before the January 10, 

2025 consent decree deadline to 

accommodate the required notice and 

comment rulemaking on any action the 


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28The CBD Consent Decree deadline was 

November 29, 2024, until CBD and the EPA agreed 

to extend the deadline, following the EPA’s 

showing of need for an extension. Despite this 

extension, the EPA maintains that the extension of 

the CBD Consent Decree deadline to January 10, 

2025, is still an insufficient amount of time to act 

on the MDAQMD’s submittal and narrow the scope 

of the FIP before the deadline to finalize it. 

29Keystone-Conemaugh Projects LLC v. EPA, 100 

F.4th 434, 447 (3d Cir. 2024). The court further 

stated that ‘‘. . . if the EPA were required to act on 

each and every SIP revision submitted before it 

could issue a FIP, an untenable scenario could 

ensue. For instance, if a state were to submit 

multiple inadequate SIP revisions, it could 

effectively nullify the EPA’s ability to issue a FIP 

and thus delay the implementation of any emission 

limits.’’ (FN7) 

30See, Ariz. ex rel. Darwin v. United States, 815 

F.3d 519, 543–544 (9th Cir. 2016), in which the 

Ninth Circuit Court of Appeals upheld the EPA’s 

combined partial SIP disapproval and FIP, which 

the agency promulgated to meet a consent decree 

deadline stemming from a previous finding of 

failure to submit. The court stated that ‘‘it is 

unlikely that a different outcome would have 

resulted if EPA had provided [the State] with 

additional time to correct its . . . SIP . . . [the 

State] made no effort to correct its SIP in light of 

these comments. There is no reason to think it 

would have done so after the Final Rule 

disapproving the SIP issued either.’’ 

31See 40 CFR part 70, appendix A. 

32 42 U.S.C. 7410(a). 

33Center for Biological Diversity et al., v. Regan, 

No. 3:22–cv–03309–RS (N.D. Cal.). This consent 

decree is also available in the docket for this action. 

EPA takes on the August SIP 

submittal.28

Case law also supports the conclusion 

that the EPA is not required to act on 

the MDAQMD’s August 7, 2024 

submittal prior to finalizing the FIP. As 

the court held in Keystone-Conemaugh 

Projects LLC v. EPA, a case in which the 

EPA promulgated a FIP before acting on 

a revised SIP submittal, CAA section 

110(c) ‘‘contains no language requiring 

the EPA to act on the SIP revision before 

promulgating the FIP.’’ 29 (Emphasis in 

original.) Likewise, as Commenter 02 

indicates in its comment letter, the 

MDAQMD’s revised NNSR rules 

submitted by CARB on August 7, 2024, 

does not include any revisions of 

MDAQMD Rule 1304(C)(2)(d). 

Similar to the situation at issue in 

Arizona ex rel. Darwin v. United States, 

there is no reason to think that, after 

nearly five years of discussions of the 

MDAQMD’s NNSR program between 

EPA and the MDAQMD, additional time 

to correct Rule 1304(C)(2)(d) would lead 

to MDAQMD’s revising its NNSR 

program to resolve the deficiency.30

Comment A.1.4: Commenter 09 states 

that the proposed FIP is not necessary 

because the EPA already has authority 

under the existing MDAQMD rules to 

review applications for major facilities 

and enforce applicable federal NNSR 

requirements. This commenter states 

that MDAQMD Rule 1203(B)(1) requires 

that the EPA be given an opportunity to 

review and comment on applications for 

Federal Operating Permits (FOP), 

Significant Modifications to FOPs, and 

Renewals to FOPs. The commenter 

states that the EPA already has the 

discretion and authority to deny 

applications for a Major Facility that it 

believes has not complied with 

applicable federal NNSR requirements. 

Response to Comment A.1.4: The EPA 

disagrees with the comment. While the 

EPA can comment on, and enforce, Title 

V permits issued under the MDAQMD’s 

approved CAA Title V program,31 the 

Title V operating permit program is not 

the same permitting program as a NNSR 

pre-construction permitting program. 

Title I of the CAA has a separate 

requirement that the MDAQMD SIP 

contain a fully approved NNSR 

permitting program for the 2008 and 

2015 ozone NAAQS.32 Federal 

Operating Permits issued under Title V 

of the CAA (and under Regulation XII of 

MDAQMD’s approved Title V program) 

are not the same as pre-construction 

NNSR permits issued under a SIPapproved program under Title I of the 

CAA, and the EPA’s authority to review, 

comment on, and object to Title V 

permits does not remedy the 

deficiencies in the MDAQMD’s NSR 

program, nor does the EPA’s authority 

under Title V fulfill the EPA’s FIP 

obligation under CAA section 110(c). 

MDAQMD Regulation XIII, which 

contains the MDAQMD’s NNSR 

program, still needs to be approved into 

the SIP for the 2008 and 2015 ozone 

NAAQS. The EPA therefore has a 

statutory duty to promulgate a FIP as the 

result of its finding of failure to submit 

published in the Federal Register on 

February 6, 2017, and the EPA is now 

subject to a court order to either 

promulgate a FIP or approve a SIP 

submission that corrects all the 

deficiencies identified in the finding of 

failure to submit no later than January 

10, 2025.33

2. Comments on MDAQMD Rule 

1304(C)(2)(d) 

Comment A.2.1: Commenter 01 

asserts that the EPA erroneously 

assumed that SERs (Simultaneous 

Emissions Reductions) created under 

MDAQMD Rule 1304(C)(2)(d) (referred 

to by Commenter 01 as ‘‘1304(C)(2)(d) 

Offsets’’) are unlawful under the CAA. 

The commenter states that 1304(C)(2)(d) 

Offsets are created by a reduction in a 

source’s allowable emissions that were 

fully offset in a previous action. 

Commenter 01 states that 1304(C)(2)(d) 

Offsets are adjusted to reflect otherwise 

required reductions, may only be used 

to offset contemporaneous emission 

increases at the facility, and cannot be 

banked for future use. Commenter 01 

further asserts that 40 CFR 

51.165(a)(3)(ii)(J) does not relate to 

creditable emission reductions and that 

even that provision, through a crossreference to the definition of ‘‘actual 

emissions’’ at 40 CFR 51.165(a)(1)(xii), 

allows permitting agencies to ‘‘presume 

that source-specific allowable emissions 

for the unit are equivalent to the actual 

emissions of the unit.’’ 

Commenter 06 similarly asserts that 

while 40 CFR 51.165(a)(3)(ii)(J) requires 

offsets to be determined by summing the 

difference between the allowable 

emissions after the modification and the 

actual emissions before the modification 

(as defined in paragraph (a)(1)(xii)), 

paragraph (a)(1)(xii)(C) allows the 

MDAQMD to presume that sourcespecific allowable emissions for the unit 

are equivalent to the actual emissions of 

the unit. 

Therefore, Commenters assert, 

1304(C)(2)(d) Offsets and the potentialto-emit to potential-to-emit or potentialto-potential (PTE-to-PTE) test are valid 

and consistent with sections 173(c)(1), 

173(c)(2), and 182 of the CAA and the 

implementing regulations at 40 CFR 

51.160–165. 

Response to Comment A.2.1: The EPA 

disagrees with the assertion that the 

EPA made an erroneous finding that 

1304(C)(2)(d) Offsets are inconsistent 

with statutory and regulatory 

requirements. As the EPA previously 

explained in the 2023 LA/LD and 

reiterated in our proposed action for the 

FIP, 1304(C)(2)(d) Offsets are 

inconsistent with the CAA and the 

EPA’s regulations because they allow 

facilities to satisfy major NSR offset 

obligations using a baseline of allowable 

emissions before construction rather 

than a baseline of actual emissions 

before construction. We provide a more 

detailed explanation below. 

CAA sections 173(a)(1)(A) and 

173(c)(1) require that NNSR permits 

issued by states (or local air districts) 

pursuant to EPA-approved SIPs must 

require all proposed new or modified 

major sources that trigger NNSR to 

obtain sufficient offsetting emissions 

reductions. For example, section 

173(c)(1) requires owners or operators of 

new or modified major stationary 

sources to obtain emission reductions 

that ‘‘assure that the total tonnage of 

increased emissions of the air pollutant 

from the new or modified source shall 

be offset by an equal or greater 

reduction, as applicable, in the actual 

emissions of such air pollutant from the 

same or other sources in the area.’’ 


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34 In New York v. EPA, a case regarding the 

applicability of NSR requirements, the U.S. Court 

of Appeals for the District of Columbia held that 

‘‘the plain language of the CAA indicates that 

Congress intended to apply NSR to changes that 

increase actual emissions instead of potential or 

allowable emissions,’’ when describing the 

definition of the term ‘‘modification’’ in CAA 

section 111(a)(4). 413 F.3d 3, 40 (D.C. Cir. 2005). 

CAA section 173(c)(1) is at least as clear as CAA 

section 111(a)(4) regarding the import of using 

actual emissions for baseline purposes—it 

specifically uses the term ‘‘actual emissions,’’ and 

it omits terms like ‘‘potential to emit,’’ ‘‘emission 

limitations,’’ or similar references when addressing 

the baseline. Although the D.C. Circuit did not 

construe the Act’s offset requirement at section 

173(c)(1), its interpretation of a similar statutory 

provision bearing on when a proposed source’s 

emissions increases trigger the need for an NSR 

permit, CAA section 111(a)(4), is instructive. 

35See 86 FR 24809, 24813 (May 10, 2021), ‘‘The 

2018 SIP Update explains that 2012 ‘stationary 

source emissions reflect actual emissions reported 

from industrial point sources’ and include 

stationary aggregate sources, such as gasoline 

dispensing facilities . . . MDAQMD Rule 107, 

‘Certification of Submissions and Emission 

Statements,’ require[s] all stationary sources within 

the nonattainment area that emit more than 25 tons 

per year (tpy) or more of VOC or NOX to report and 

certify annual emissions.’’ The MDAQMD does not 

assert or document use of allowables for RFP or 

attainment. 

36Furthermore, Commenter 01 states the 

presumption incorrectly—40 CFR 

51.165(a)(1)(xii)(C) allows the permitting authority 

to presume that allowable emissions are equivalent 

to the actual emissions, it does not say that the 

permitting authority may presume that the actual 

emissions are equivalent to the allowable 

emissions. This is important because a source’s 

actual emissions will almost always be lower than 

its allowable emissions since an exceedance of the 

allowable emissions could constitute a violation of 

the permit. 

37MDAQMD’s 2008 and 2015 ozone NAAQS 

attainment plans are based on actual emissions. The 

2008 ozone NAAQS plan is available at: https://

ww2.arb.ca.gov/sites/default/files/classic/planning/ 

sip/planarea/wmdaqmp/2016sip_mdplan.pdf, pp. 

7, 34 (EPA approved this plan, see 86 FR 53223 

(September 27, 2021).) The 2015 ozone NAAQS is 

available at: https://www.mdaqmd.ca.gov/home/ 

showpublisheddocument/9693/ 

638131029372000000, pp. 4–5, 24, 80. 

38Commenter 01 letter, p. 4, footnote 30. 

39MDAQMD’s 2008 and 2015 ozone NAAQS 

attainment plans are based on actual emissions. The 

2008 ozone NAAQS plan is available at: https://

ww2.arb.ca.gov/sites/default/files/classic/planning/ 

sip/planarea/wmdaqmp/2016sip_mdplan.pdf, pp. 

7, 34 (EPA approved this plan, see 86 FR 53223 

(September 27, 2021).) The 2015 ozone NAAQS is 

available at: https://www.mdaqmd.ca.gov/home/ 

showpublisheddocument/9693/ 

638131029372000000, pp. 4–5, 24, 80. 

40See e.g., CAA sections 173(a)(1)(A), 173(c)(1) 

and 40 CFR 51.165(a)(3)(i), 40 CFR 

51.165(a)(3)(ii)(G), and 40 CFR 51.165(a)(3)(ii)(J). 

(Emphasis added.) 34 Rule 1304(C)(2)(d) 

is inconsistent with section 173(c)(1) 

because it allows sources that have 

offset their allowable emissions at any 

point in time to avoid the CAA 

obligation to offset future increases in 

actual emissions from future major 

modifications. The EPA also disagrees 

with Commenter 01’s assertion that Rule 

1304(C)(2)(d) is consistent with CAA 

section 173(c)(2). In addition to the 

phrase referenced by the commenter, 

CAA section 173(c)(2) also states that 

‘‘[i]ncidental emission reductions which 

are not otherwise required by this 

chapter shall be creditable as emission 

reductions for such purposes if such 

emission reductions meet the 

requirements of [CAA section 

173(c)(1)].’’ 

The regulations at 40 CFR 51.165 

require the District to use actual 

emissions as the baseline for 

determining the total tonnage of offsets 

that must be obtained by an owner or 

operator of a stationary source 

undergoing NNSR permitting. 40 CFR 

51.165(a)(3)(i) requires: 

[T]hat the offset baseline shall be the 

actual emissions of the source from 

which offset credit is obtained where 

. . . [t]he 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. (Emphasis added.) 

Moreover, under 40 CFR 

51.165(a)(3)(ii)(J), which the EPA 

codified in 2002, SIPs ‘‘shall . . . 

provide that’’ ‘‘[t]he total tonnage of 

increased emissions . . . that must be 

offset . . . shall be determined by 

summing the difference between the 

allowable emissions after the 

modification (as defined by paragraph 

(a)(1)(xi) of this section) and the actual 

emissions before the modification (as 

defined in paragraph (a)(1)(xii) of this 

section)[.]’’ (Emphasis added.) 

Although Commenters 01 and 06 cite 

40 CFR 51.165(a)(1)(xii) as authority to 

assert that MDAQMD is allowed to 

presume that the source-specific 

allowable emissions for a unit are 

equivalent to the actual emissions of the 

unit, any flexibility allowed under that 

provision is limited by section 40 CFR 

51.165(a)(3)(i), which requires states or 

air districts that base reasonable further 

progress (RFP) and attainment planning 

on actual emissions 35 to use actual 

emissions as the baseline for all offset 

purposes.36 The MDAQMD’s RFP and 

attainment demonstrations are based on 

actual emissions, not allowable 

emissions.37

The EPA also disagrees with 

Commenter 01’s suggestion that the EPA 

erroneously relied on 40 CFR 

51.165(a)(3)(ii)(J) in its disapproval of 

Rule 1304(C)(2)(d) because that 

paragraph ‘‘addresses calculating 

emission increases[,] not creditable 

emission reductions.’’ 38 Both 

provisions require the use of actual 

emissions as a baseline to calculate 

either the offset obligation (emission 

increase) or the satisfaction of that 

obligation (credit for emissions 

reductions), and the commenter does 

not dispute that 40 CFR 51.165(a)(3)(i) 

requires that emissions reductions for 

offset credits must use actual emissions 

as a baseline if actual emissions are 

used to demonstrate reasonable further 

progress and attainment. The 

MDAQMD’s RFP and attainment 

demonstrations are based on actual 

emissions—not allowable emissions.39

Based on the requirements of the CAA 

and its implementing regulations 

regarding offsets,40 Rule 1304(C)(2)(d) 

does not ensure that the required 

quantity of emissions associated with a 

major modification in the MDAQMD 

will be offset and the provision is 

therefore not approvable in the SIP. 

Accordingly, the EPA must promulgate 

a FIP that contains the requirements 

stated in the CAA and its implementing 

regulations. The MDAQMD regulates an 

area that is classified as a Severe ozone 

nonattainment area and a ‘‘Moderate’’ 

PM10 nonattainment area. It is important 

that sources in the nonattainment area 

make real reductions in emissions to 

offset emissions increases consistent 

with the goal of bringing the area into 

attainment for these air pollutants. 

Comment A.2.2: Commenter 01 states 

that although 1304(C)(2)(d) Offsets 

result from reductions in allowable 

emissions, ‘‘they produce real 

reductions in actual emissions.’’ The 

commenter states that to ‘‘originally 

secure the allowable emissions, the 

facility had to previously effect 

permanent actual emission reductions’’ 

either by curtailing its own emissions or 

by purchasing emission reduction 

credits. The commenter states that if the 

facility agrees to permanently reduce 

those offset allowable emissions, the 

permanent emission reductions 

continue to exist. Commenter 01 then 

states that where those emission 

reductions ‘‘exceed the volume of 

reductions required to sufficiently offset 

historical actual emissions (i.e., the 

facility was able to curtail the source’s 

emissions below the now eliminated 

allowable emission levels), those 

reductions exceed the obligation to 

assure that the total tonnage of 

increased emissions of an air pollutant 

from the new or modified source is 

offset by a reduction of actual emissions 

of that air pollutant in accordance with 

42 U.S.C. 7503(c)(1) and in the 

quantities required by 42 U.S.C. 7511a.’’ 

Commenter 01 further states that Rule 

1304(C)(2)(d) complies with 42 U.S.C. 


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41Rule 1304(C)(2)(d)(ii) requires that ‘‘the 

resulting Emissions Change from a calculation 

using this provision is a decrease in emissions from 

the Emissions Unit(s),’’ hence why a source must 

demonstrate a reduction in allowable emissions 

from the subsequent modification. 

42The example presented here is similar to a 

recent MDAQMD permitting action that the EPA 

described in the 2023 LA/LD. 88 FR 42258, 42263 

(MDAQMD, ‘‘Preliminary Determination/ 

Decision—Statement of Basis for Minor 

Modification to and Renewal of FOP Number: 

104701849 For: High Desert Power Project, LLC.’’ 

December 21, 2022, p. 7.) 

43These required offset quantities do not reflect 

the adjustment based on the area’s nonattainment, 

which would require an even greater quantity of 

offsets for higher levels of nonattainment. CAA 

182(d)(2), 40 CFR 51.165(a)(9). 

44Citing Ass’n of Irritated Residents v. U.S. Env’t 

Prot. Agency, 10 F.4th 937, 945 (9th Cir. 2021). 45Memorandum, Mojave Desert Air Quality 

Management District v. United States 

Environmental Protection Agency, 9th Circuit Court 

of Appeals No. 23–1411, September 5, 2024, p. 5. 

7503(c)(2) by identifying excess 

emission reductions and credits that 

exceeds the law’s requirements as an 

available offset. 

Moreover, Commenter 05 believes 

that emissions that were previously 

offset under the MDAQMD’s rules 

represent actual emission reductions as 

required by CAA section 173(c)(1) and 

can be used for calculating emission 

reductions pursuant to Rule 

1304(C)(2)(d). Commenter 05 asserts 

that fully offset emissions are not 

‘‘paper reductions’’ because they 

represent actual emission reductions 

that are banked and used following 

approved regulatory procedures. 

Response to Comment A.2.2: The EPA 

does not agree with the comment that 

1304(C)(2)(d) Offsets result in real 

reductions in actual emissions, as 

required by the Act. Rule 1302(C)(2)(d) 

requires that (i) a federally enforceable 

emission limitation specify the PTE for 

the specific Emissions Unit; (ii) the 

resulting emissions change result in a 

decrease in emissions from the 

emissions unit; and (iii) any excess 

Simultaneous Emissions Reductions 

(SERs) generated from a calculation 

using the Rule are not eligible for 

banking. For emissions units that have 

allowable emissions limits that were 

fully offset at some point in the past, 

Rule 1304(C)(2)(d) allows any reduction 

in a facility’s allowable emissions to be 

used to avoid CAA requirements to 

offset actual emissions increases.41 As a 

hypothetical example, under MDAQMD 

Rule 1304(C)(2)(d), a facility might at 

the time of its original construction, 

‘‘secure the allowable emissions,’’ 

(using the commenter’s phrasing) in the 

amount of 200 tons per year (tpy) 

through ‘‘permanent actual emission 

reductions’’ in that amount. If the 

facility subsequently submits a permit 

application to construct a project that 

would increase its actual emissions by 

40 tpy, Rule 1304(C)(2)(d) allows the 

facility to decrease its allowable 

emissions limit of 200 tpy by a nominal 

amount, even just 1 tpy or less, to 

establish that the project would result in 

an ‘‘emissions decrease,’’ rather than the 

actual emissions increase of 40 tpy that 

would actually occur and that would be 

subject to a requirement to offset the 

increase in actual emissions.42 Rule 

1304(C)(2)(d) is contrary to the CAA 

because it allows increases in actual 

emissions without any offsetting 

reductions in actual emissions. In other 

words, Rule 1304(C)(2)(d) allows real 

increases in emissions to be added to 

the air without requiring any offsetting 

decrease in real emissions. 

It should also be noted that, in the 

hypothetical example presented in the 

previous paragraph, although the 

facility would have offset 200 tpy of 

emissions at the time of its initial 

construction by obtaining or 

surrendering 200 tpy of emissions 

reduction credits (‘‘ERCs’’), it used those 

ERCs to obtain a 200 tpy allowable 

emissions limit in that project.43

Therefore, those ERCs are no longer 

available to offset subsequent increases 

in actual emissions resulting from future 

construction and modification projects. 

According to Commenter 01, Rule 

1304(C)(2)(d) allows NNSR permit 

applicants to obtain permits by relying 

on previously relied upon emission 

reductions or previously surrendered 

emission reduction credits; however, 

because those emission reductions were 

used in a prior permitting action, they 

are not ‘‘surplus’’ under 40 CFR 

51.165(a)(3)(ii)(G). 40 CFR 

51.165(a)(3)(ii)(G) states: [The SIP] 

‘‘shall further provide that . . . [c]redit 

for an emissions reduction can be 

claimed to the extent that the reviewing 

authority has not relied on it in issuing 

any [NNSR] permit . . . or the State has 

not relied on it in demonstrat[ing] 

attainment or reasonable further 

progress.’’ Thus, 40 CFR 

51.165(a)(3)(ii)(G) prevents facilities 

from re-using credits to obtain a permit 

for a major modification. 

3. Comments Regarding EPA’s 1996 

Approval of 1304(C)(2)(d) Offsets 

Comment A.3.1: Commenter 01 states 

that in 1996, EPA approved 

1304(C)(2)(d) Offsets and that the 

associated 1995 technical support 

document explained that 1304(C)(2)(d) 

Offsets constitute real reductions in 

actual emissions, are not otherwise 

required by the CAA (once adjusted) 

and comply with CAA section 173. The 

commenter also states that since 1996 

neither the relevant law nor the 

1304(C)(2)(d) Offsets have materially 

changed. 

Commenter 01 further states that the 

proposed FIP is arbitrary and capricious 

because the EPA fails to explain the 

reversal of its 1996 position in 

approving the District’s Rule 

1304(C)(2)(d) Offsets. The commenter 

states that EPA’s contention that 

1304(C)(2)(d) Offsets allow reductions 

on paper that do not represent real 

emissions reductions and that sources 

must reduce actual emissions to below 

historic actual emission levels to 

generate offset credit are complete 

reversals of the positions the EPA took 

in 1996 when it determined that SERs, 

including 1304(C)(2)(d) Offsets, 

constitute real reductions in actual 

emissions that are not otherwise 

required by the CAA and offset credit 

could be lawfully generated from 

reductions of surplus, fully-offset 

allowable emissions. The commenter 

states that, while the Administrative 

Procedure Act (APA) allows the EPA to 

reverse its policy on the 1304(C)(2)(d) 

Offsets, the EPA must ‘‘display 

awareness that it is changing position 

and show that there are good reasons for 

the new policy.’’ 44

Response to Comment A.3.1: The 

EPA’s response to this comment serves 

as both our response to this comment in 

the context of the proposed FIP, the 

rulemaking for which the comment was 

submitted, and as the Agency’s new 

final action to disapprove Rule 

1304(C)(2)(d) in response to the Court of 

Appeals’ ruling in the case Mojave 

Desert Air Quality Management District 

v. EPA, in which the Ninth Circuit 

granted petitioner MDAQMD’s petition 

for review and remanded to the EPA 

‘‘for further proceedings before the 

agency on an open record consistent 

with this decision.’’ 45 The MDAQMD, 

in its comments on the EPA’s proposal 

of the 2023 LA/LD, criticized the EPA’s 

proposed rulemaking for failing to 

explain why the EPA approved similar 

provisions into the SIP in 1996 that it 

now finds deficient. The MDAQMD 

sought review of EPA’s 2023 LA/LD 

action in the Ninth Circuit. The court 

agreed that the EPA failed to provide 

sufficient explanation in that action for 

the change in direction after 1996 and 

therefore directed the EPA to address 

the issue through further proceedings. 

Commenter 01—the MDAQMD—makes 

the comment again in the context of the 

FIP. Since both matters address the 

same subject, the EPA has determined 

that it is appropriate to use one notice 


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46For example, the California Clean Air Act uses 

different offsets thresholds than the federal 

regulations. See California Health and Safety Code 

sections 40918, 40919, 40920, and 40920.5; 

compare to 40 CFR 51.165. California air districts 

must implement State requirements under 

California law and satisfy the federal requirements 

under the CAA and its implementing regulations. 

Any provision that conflicts with the CAA and its 

implementing regulations is not approvable. 

47 67 FR 80186, 80205 (December 31, 2002). 

48 1995 TSD accompanying the EPA’s proposed 

rule (60 FR 55355 (October 31, 1995)) (‘‘1995 

TSD’’), p. 17. 

49 45 FR 52676 (August 7, 1980). 

50 Id. at 52745. 

51 Id. at 52728. 

52 51 FR 40656, 40672 (November 7, 1986); 40 

CFR 51.165(a)(3)(i) (1996) (a copy of the CFR as of 

July 1, 1996 is in the docket for this rulemaking). 

See also, 57 FR 13498, 13552 (April 16, 1992) (‘‘The 

EPA interprets section 173(a)(1)(A) to ratify current 

EPA regulations requiring that the emissions 

baseline for offset purposes be calculated in a 

manner consistent with the emissions baseline used 

to demonstrate RFP.’’) 

53 45 FR 52746. 

54 51 FR 40672; 40 CFR 51.165(a)(3)(ii)(G) (1996). 

55 57 FR 13498, 13553 (April 16, 1992). The EPA 

further stated that if RFP and attainment plans ‘‘are 

based on allowable emissions, offset credit for 

reductions in allowable emissions . . . is 

appropriate, but will be deemed inadequate if there 

is not a real reduction in actual emissions that 

equals or exceeds, as applicable, the increase in 

emissions resulting from the operation of the major 

new or modified source.’’ Id. 

56Although EPA has not been able to locate a 

copy of the NSR rules as adopted by the MDAQMD 

in October 1993, we are able to determine the 

adoption date from the MDAQMD’s headings on 

later versions of the rules that provide a chronology 

of adoption dates. The 1995 TSD and proposed 

rulemaking reference the submittal date. 1995 TSD 

at 2; 60 FR 55356. 

57 61 FR 58133 (November 13, 1996). In the 

proposed rulemaking, the EPA proposed ‘‘to 

approve with a contingency, and disapprove in the 

alternative.’’ 60 FR 55355 (October 31, 1995). 

58 60 FR 55355. 

59 Id. (‘‘The submitted rules contain a number of 

deficiencies that prevent EPA from approving them 

as revisions to the SIP. However, MDAQMD has 

agreed to correct these deficiencies, and has sent 

draft rules . . . to EPA which contain acceptable 

language. This proposed approval is therefore 

contingent upon MDAQMD adopting and 

submitting to EPA revised rules which correct the 

deficiencies identified in this document before EPA 

promulgates a final rulemaking on the submitted 

rules.’’) 

to both respond to the MDAQMD’s 

comments in the context of the FIP and 

to respond to the court’s remand 

regarding the 2023 LA/LD disapproval 

of Rule 1304(C)(2)(d). 

First, we note that significant 

regulatory changes occurred or were 

proposed in the 1990s, federally and in 

California, where the State and local air 

districts were implementing State 

legislation that was passed in 1988 to 

address air quality issues.46 Later in this 

action, we discuss the CAA and 

regulatory requirements at the time of 

the EPA’s October 1995 proposed 

approval and November 1996 final 

approval of the MDAQMD’s NNSR 

rules. We then describe the Agency’s 

contemporaneous consideration of 

options for regulatory flexibility during 

the 1990’s. These documents, taken 

together, provide context for the 

regulatory landscape that existed during 

the EPA’s review and approval of the 

MDAQMD’s rules in 1995–1996. We 

also analyze our 1996 approval of 

MDAQMD’s offset rules in light of the 

EPA’s 2002 final rulemaking revising 

significant aspects of the NSR program 

(‘‘2002 NSR Reform Rule).47 In sum, this 

analysis is sufficient for the EPA, now, 

to conclude that the EPA’s 1996 

approval of the MDAQMD’s offset rules 

was inconsistent with the CAA and its 

implementing regulations. Based on the 

documents discussed in this response, 

the EPA apparently believed in 1996 

that the District’s rules, which required 

the application of Best Available 

Control Technology (BACT) and offsets 

for a modification on the PTE of the 

entire facility rather than the 

modification alone, were sufficiently 

stringent to satisfy federal 

requirements.48 As we explain in this 

response and in our responses to 

comments A.2.1 and A.2.2, however, 

our justification in 1996 for approving 

MDAQMD rule provisions that were 

similar to Rule 1304(C)(2)(d) is 

deficient, the EPA’s 2002 NSR Reform 

Rule did not include revisions that 

would ratify or authorize MDAQMD’s 

approach, and therefore our 2023 

disapproval of Rule 1304(C)(2)(d) is 

correct. 

Federal Regulatory Scheme Regarding 

Offsets in Effect in 1996 

On August 7, 1980, the EPA 

promulgated NSR rules for attainment 

and nonattainment areas.49 The 1980 

NSR rulemaking codified 40 CFR 

51.18(j)(3)(i), requiring an offset baseline 

to be based on actual emissions of the 

source from which offset credit is 

obtained where demonstrations of 

reasonable further progress and 

attainment are based on actual 

emissions.50 As stated in the rule’s 

preamble, the EPA’s rationale was, ‘‘to 

be consistent with RFP, sources must 

reduce their actual, rather than their 

allowable, emissions. Otherwise, 

sources could claim credit for offsets in 

situations where the offset would 

actually interfere with RFP.’’ 51 On 

November 7, 1986, the EPA 

promulgated NSR rules specifically for 

nonattainment areas at 40 CFR 51.165 

and codified the text at 40 CFR 

51.18(j)(3)(i) into 40 CFR 51.165(a)(3)(i), 

where it was in 1996, in 2023 (at the 

time of our LA/LD rulemaking), and 

today.52

The EPA’s 1980 NSR rulemaking also 

codified 40 CFR 51.18(j)(3)(g), allowing 

credit for emissions reductions only ‘‘to 

the extent that the reviewing authority 

has not relied on [the reductions] in 

issuing any permit under regulations 

approved pursuant to 40 CFR 51.18 or 

the state has not relied on [the 

reductions] in demonstrating attainment 

or reasonable further progress.’’ 53 The 

EPA’s 1986 NNSR rulemaking codified 

the text at 40 CFR 51.165(a)(3)(ii)(G), 

where it was in 1996, in 2023 (at the 

time of our LA/LD rulemaking) and 

today.54

Likewise, EPA guidance issued during 

the 1990s addressed the quantity of 

emissions to be offset. Specifically, in 

the proposed rulemaking action titled, 

‘‘General Preamble for the 

Implementation of Title I of the Clean 

Air Act Amendments of 1990,’’ the EPA 

clarified that CAA section 173(c)(1) 

‘‘provides that emissions increases from 

the new or modified source must be 

offset by real reductions in actual 

emissions.’’ 55

The EPA’s 1995–1996 Rulemaking for 

the MDAQMD’s 1993 and 1996 Adopted 

Versions of Rule 1304(C)(2)(d) 

On October 27, 1993, the MDAQMD 

adopted a series of NSR rules, which 

CARB submitted to the EPA as a SIP 

revision on March 29, 1994.56 On 

October 31, 1995, the EPA published a 

proposed action in the Federal Register 

to approve the rules contingent upon 

the MDAQMD’s adoption and submittal, 

as a SIP revision, of revised rules that 

would correct a number of deficiencies 

that EPA had identified.57 The EPA 

based its proposed ‘‘approval with a 

contingency and disapproval in the 

alternative’’ on a set of draft rules that 

the MDAQMD transmitted to the EPA 

on October 11, 1995 (‘‘October 11, 1995 

draft rules’’) that MDAQMD had not yet 

adopted or submitted to CARB.58 The 

EPA’s proposed action explained that 

the 1993 adopted version of the rules 

contained numerous deficiencies that 

precluded full approval but that the 

October 11, 1995 draft rules were 

intended to address those deficiencies 

and that the EPA’s proposed approval 

was conditioned upon MDAQMD’s 

adoption and submission of the revised 

rules.59 Thus, the EPA’s proposed rule 

and technical support document (TSD) 

summarized the rules as adopted on 

March 29, 1993, including bases for 

findings of rule deficiencies, as well as 

statements regarding the October 11, 

1995 draft rules that the MDAQMD had 


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60 Id. at 55356 (‘‘This section uses a source’s premodification potential to emit (PTE), rather than its 

pre-modification actual emissions, as the baseline 

for calculating the offset requirement for major 

modifications in nonattainment areas. This method 

is not acceptable unless the source has already 

offset its entire pre-modification PTE. The District 

must amend the rule to calculate the offset 

requirement in this case as the source’s new PTE 

minus the source’s pre-modification actual 

emissions.’’) 

61 1995 TSD, p. 17. 62 Id. at 17. In March 1996, the MDAQMD 

adopted Rule 1305(A)(2)(b)(iii), which the EPA 

approved into the California SIP in November 1996, 

and is the equivalent of current Rule 1304(C)(2)(d). 

Rule 1305(A)(2)(b)(iii) stated: ‘‘For emissions 

increases from a Modification to a Major Facility 

the base quantity of Offsets shall be determined as 

follows: (a) When the Modification is a Major 

Modification to a Major Facility within a 

nonattainment area, the base quantity of Offsets 

shall be the amount equal to the difference between 

the Facility’s Proposed Emissions and the HAE 

[historic actual emissions] unless the Facility’s HPE 

[Historic Potential Emissions] has been completely 

offset in prior permitting actions pursuant to this 

Regulation; or (b) The amount equal to the 

difference between the Facility’s Proposed 

Emissions, as modified, and the HPE.’’ 

63 61 FR 58133. 

64 Id. at 58134. 

65As noted elsewhere, the provision is also 

inconsistent with 40 CFR 51.165(a)(3)(ii)(J), which 

the EPA promulgated in 2002. 

66We provide a hypothetical example in our 

response to comment A.2.2 and reference the realworld example that we described in our 2023 LA/ 

LD, wherein a facility that should have been 

required to obtain offsets under the federal 

requirements was exempted from doing so under 

MDAQMD Rule 1304(C)(2)(d). 

67CARB Letter to MDAQMD, dated September 8, 

1993. 

committed to adopt and submit to EPA 

before EPA finalized its rulemaking. 

In the EPA’s proposed action on this 

submission, the EPA concluded that 

MDAQMD’s Rule 1306 ‘‘Calculating 

Emissions Changes’’ as adopted in 

March 1993 was deficient because the 

rule uses a source’s pre-modification 

PTE rather than pre-modification actual 

emissions, as the baseline to calculate 

the offset requirement and that the 

method is not acceptable unless the 

source has already offset its entire premodification PTE.60

In the 1995 TSD accompanying the 

EPA’s proposed rule, the EPA further 

explained that Rule 1306 as adopted in 

March 1993 ‘‘has several deficiencies 

that prevent its full approvability by 

EPA’’ and provided a list of 

deficiencies, ‘‘along with the changes 

which would make the rule 

approvable.’’ As stated in the 1995 TSD: 

The rule uses a source’s potential to emit 

as a baseline for calculating emissions 

changes, rather than its actual emissions. In 

general, use of potential to emit in this 

calculation is unacceptable, however, for 

most purposes in this rule it is acceptable. 

For example, the submitted rules require the 

application of BACT and offset for a 

modification if the PTE of the entire source 

(not just the increase caused by the 

modification) would exceed the applicable 

threshold after the modification. Thus, 

applicability is determined by the total PTE 

of the source, not the size of the calculated 

emissions change resulting from the 

modification. However, this method is not 

acceptable for calculating the amount of 

offsets required as the result of an increase, 

unless the source has already offset its entire 

PTE.61

Section 1305(A)(2)(b)(iii) of the proposed 

revision of the District’s rules contains the 

necessary changes to these provisions.62

(Emphasis in original.) 

The statements in the EPA’s proposed 

rule and TSD are brief. It appears, 

however, that we concluded that the 

MDAQMD’s approach—using PTE (i.e., 

allowable emissions) rather than actual 

emissions as a baseline to evaluate 

NNSR applicability for modifications— 

would be acceptable because it would 

require the MDAQMD to impose BACT 

and offsets requirements for any 

modification at a major source, 

regardless of whether the modification 

qualified as ‘‘significant,’’ whereas the 

EPA’s regulations apply BACT and 

Lowest Achievable Emission Rate 

(LAER) to facility modifications only if 

the source is already major and the 

emissions increase from the 

modification itself is ‘‘significant,’’ or if 

the modification is itself above the 

applicable major source threshold. 

Therefore, it appears that applying this 

rationale, the EPA found that the 

MDAQMD’s approach to determining 

NNSR applicability for modifications 

was at least as stringent as the federal 

approach and therefore was approvable. 

As described in the EPA’s final 

rulemaking, the MDAQMD adopted 

revised NSR rules on March 25, 1996, 

that CARB submitted as a SIP revision 

to the EPA on July 23, 1996.63 The 

EPA’s final rulemaking contains no 

additional analysis, but it simply states: 

‘‘The submitted rules contain the 

changes necessary for approval, in a 

manner that is identical to that 

described in the TSD for the proposed 

approval.’’ 64 As part of this final action, 

the EPA approved MDAQMD rules, 

such as 1304(C)(1)(b), that allow SERs to 

be based on reductions in PTE 

(allowable emissions) and that allow 

such SERs to satisfy federal offset 

obligations. 

Thus, we have been unable to discern 

in the EPA’s 1995–1996 rulemaking 

documents any legal rationale or 

support for the MDAQMD’s use of a PTE 

baseline to determine that the amount of 

offsets is acceptable if a ‘‘source has 

already offset its entire PTE.’’ The 

statement is inconsistent with statutory 

and regulatory requirements that existed 

at the time (and are still in effect), such 

as CAA section 173, 40 CFR 

51.165(a)(3)(i) and 40 CFR 

51.165(a)(3)(ii)(G).65 Furthermore, the 

EPA appears to have mistakenly 

concluded in 1995–1996 that the 

MDAQMD’s approach for applicability 

would be sufficient to consistently 

ensure issuance of NNSR permits that 

would be at least as stringent as 

required by federal law. First, as we 

have explained in our response to 

comment A.2.2, MDAQMD Rule 

1304(C)(2)(d) allows facilities that are 

‘‘fully offset’’ at any time in the past to 

increase actual emissions without 

having to offset those actual emission 

increases. These increases would be 

impermissible if MDAQMD applied the 

federal requirements.66 Second, we note 

that the EPA’s regulations at 40 CFR 

51.165(a)(2)(ii) allow states to use 

different calculation methodologies to 

determine applicability upon the state’s 

demonstration that its approach is at 

least as stringent as the EPA’s approach. 

The EPA’s regulations do not contain a 

similar provision that would allow 

states to apply an alternative 

methodology to calculate the quantity of 

required offsets based on a 

demonstration that the alternative is 

more stringent. 

The 80 Percent Compromise for 

Calculating Emissions Increases 

In a letter dated October 30, 1995, 

from the EPA to the MDAQMD, 

transmitting the 1995 TSD that provided 

the EPA’s analysis of the MDAQMD’s 

October 1993 NSR rules, the EPA 

referenced an NSR flexibility option that 

the EPA, the MDAQMD, and CARB had 

discussed since at least 1993. The 

flexibility option pertains to how an 

applicant could calculate emissions 

changes at its facility, and it is therefore 

relevant to the offset generation and 

quantification issues in 1304(C)(2)(d). 

This portion of the EPA’s response to 

comment A.3.1 focuses on that 

flexibility option, beginning with the 

earliest document EPA staff were able to 

locate on the subject. 

A letter dated September 8, 1993, 

from CARB to MDAQMD documents 

that the EPA had provided a comment 

regarding the MDAQMD’s calculation 

procedures during MDAQMD’s process 

of amending its NSR rules.67

Specifically, the letter documents that 

the EPA had identified a conflict in 

determining ‘‘historic emissions’’ (i.e., 

emissions that could be used as a 

baseline in evaluating emissions 

changes resulting from facility 

modifications) between federal 

requirements requiring the use of actual 


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68 Id. 

69 1995 TSD, Transmittal Letter. 

70CARB Memo, November 14, 1995. The 

November 14, 1995, CARB Memo appears 

substantially similar to an October 20, 1995, CARB 

Memo, apparently transmitted by CARB to the EPA, 

that reflects CARB’s comments regarding the 

MDAQMD’s draft rules, specifically Rule 1304 

‘‘Emissions Calculations’’ and Rule 1305 

‘‘Emissions Offsets.’’ The October 20, 1995, CARB 

memo also references communications between the 

EPA, CARB, and the MDAQMD regarding 

MDAQMD Rules 1304, ‘‘Emissions Calculations’’ 

and 1305, ‘‘Emissions Offsets.’’ 

71November 14, 1995, CARB staff comments on 

1995 MDAQMD draft Regulation XIII. 

72See 1995 TSD, p. 17 (regarding MDAQMD Rule 

1306 (as adopted in March 1993). 

73Letter from the MDAQMD to CARB, dated 

January 26, 1996. 

emissions and California guidelines that 

allowed PTE. In an apparent attempt to 

resolve this conflict, the letter references 

a ‘‘compromise’’ that ‘‘will allow 

potential to emit to be used in some 

instances but actual emissions in 

others.’’ 68 The letter included an 

enclosure with text for the MDAQMD to 

include in its Rule 1306 stating that the 

EPA had ‘‘tentatively’’ agreed to the 

draft text. Included in the draft text are 

definitions for the terms ‘‘historic 

emissions’’ and ‘‘normal operations’’ as 

follows: 

Historic Emissions: The potential to emit of 

an existing emissions unit prior to 

modification. In determining the potential to 

emit, daily emission limitations shall be 

treated as part of an emission unit’s design 

only if the limitations are representative of 

normal operations, or, if the facility has 

provided offsets for previous permitting 

actions . . . 

Normal Operations: Usual or typical daily 

operating of an emissions unit resulting in 

actual emissions which are at least 80% of 

the specific limits contained in the unit’s 

authority to construct or permit to operate. 

Based on this letter, it appears that the 

EPA agreed to allow emissions changes 

from facility modifications to be 

calculated using a baseline of 80 percent 

of a facility’s allowable emissions, 

rather than actual emissions, which, as 

the letter acknowledges, was the federal 

requirements for such calculations. The 

letter does not provide sufficient detail 

to determine whether the calculations in 

question were for the purpose of 

determining emissions changes for 

applicability or for determining the 

offset obligation or both. The letter also 

does not provide any legal analysis or 

support to justify the use of allowable 

emissions as a baseline in situations in 

which actual emissions are at least 80 

percent of allowable emissions, in 

contrast to the EPA’s statutory and 

regulatory requirements to use actual 

emissions to calculate emissions 

changes when the air district uses actual 

emissions for reasonable further 

progress and attainment planning 

purposes. 

Later, in the 1995 TSD transmittal 

letter, the EPA wrote: 

The proposed rules contain one provision 

that should be removed prior to adoption and 

submittal of the rules. This provision, located 

at 1304(C)(3)(a) and 1305(B)(2)(b)(i), allows 

for reductions in a facility’s potential to emit 

to be used as simultaneous emission offsets 

if the facility’s actual emissions were equal 

to or greater than 80% of its potential 

emissions. EPA has discussed this provision 

with the California Air Resources Board and 

both agencies agree that it should not be 

included in the District’s rules.69

As explained earlier in this response, 

the EPA’s 1995 TSD (transmitted with 

this letter) also discussed the use of PTE 

as a baseline to calculate offset 

obligations, but it allowed that approach 

if a source had already offset its entire 

PTE. There is no explanation in the 

October 30, 1995 letter or the 1995 TSD 

to reconcile the EPA’s apparent position 

that PTE could not be used to calculate 

the offset requirement if actual 

emissions were equal to or greater than 

80 percent of PTE (as expressed in the 

October 30, 1995 letter) with the EPA’s 

stated position that PTE could be used 

to calculate the offset requirement if the 

source’s PTE had been fully offset in a 

previous permitting decision (as stated 

in the 1995 TSD). 

A subsequent document with the 

handwritten notation ‘‘Mojave 

Compromise,’’ is possibly relevant. This 

document appears to have been sent by 

CARB to the MDAQMD on November 

14, 1995, and reflects discussions 

between EPA and the MDAQMD 

(‘‘November 14, 1995 Memo’’).70 The 

document states: 

General: Rule 1304, Section (C)(3)(a), states 

that ‘‘actual emissions reductions may be 

calculated using a facility’s ‘‘historic 

potential to emit’’ if the ‘‘historic actual 

emissions’’ of the emissions unit(s) prior to 

modification is greater than or equal to 80 

percent of the ‘‘historic potential to emit’’ for 

that emission unit. 

The ARB and the U.S. Environmental 

Protection Agency have agreed that in one 

specific case a facility may use an emission 

unit’s ‘‘historic potential to emit’’ in lieu of 

the emission unit’s ‘‘historic actual 

emissions.’’ Both agencies agreed that 

districts could use this ‘‘compromise’’ when 

determining the applicability of federal New 

Source Review. The intention of this 

‘‘compromise’’ was to give a facility more 

flexibility when making this determination. It 

was not intended to be used when 

calculating the quantity of offsets required for 

mitigation by a facility. The use of ‘‘historic 

potential to emit’’ in lieu of ‘‘historic actual 

emissions’’ should only be used in the 

‘‘federal netting process,’’ and it only applies 

to quantifying emissions increases. 

As you know, 40 CFR 51.165 (a)(1)(vi), 

which defines ‘‘net emissions increase,’’ in 

general stipulates that all increases/decreases 

must be actual emissions. This compromise 

allowed a facility to reduce the increase in 

emissions by a factor no greater than 20 

percent. Unfortunately, the District has also 

applied the ‘‘compromise’’ provision when 

calculating emission decreases in the netting 

process. 

The District has included the above 

provision in both Rules 1304 and 1305. The 

net effect of using the ‘‘compromise’’ when 

calculating emission decreases is that it 

generates ‘‘paper credits.’’ Further, Rule 

1305, Section (B)(2)(b) proposes to allow the 

use of these credits to offset ‘‘actual’’ 

emission increases. 

We strongly recommend that the District 

delete Subsection (C)(3)(a) from Rule 1304, 

and Subsection (B)(2)(b)(i) from Rule 1305. In 

addition, we recommend that definitions (V) 

‘‘Historic Potential Emissions’’ and (DD) 

‘‘Normal Operation’’ in your current Rule 

1302 (Amended 10/27/93) be added to your 

proposed Rule 1301. Once these changes 

have been made, the District should apply 

the ‘‘compromise’’ provision as intended by 

the ARB and U.S. EPA.71

Based on the November 14, 1995 

Memo, it appears that the EPA generally 

objected to the MDAQMD’s use of PTE 

as a baseline when calculating 

emissions decreases, either in the 

context of determining NSR 

applicability or calculating an offset 

obligation, but would allow the use of 

PTE as a baseline when calculating 

emissions increases if PTE was within 

80 percent of actual emissions. 

However, these documents (CARB’s 

September 8, 1993 letter to the 

MDAQMD, the EPA’s October 30, 1995 

TSD transmittal letter, and the 

November 14, 1995 Memo) contain no 

explanation to reconcile (i) the objection 

by CARB and the EPA to use of PTE to 

calculate emissions decreases because 

such an approach would ‘‘generate 

‘paper credits,’ ’’ which could then be 

used to offset actual emission increases’’ 

(as stated in the November 14, 1995 

Memo) with (ii) the acceptance by 

CARB and the EPA of the MDAQMD’s 

use of PTE to calculate simultaneous 

emission reductions if an emissions 

unit’s PTE had been fully offset in a 

previous permit action (as stated in the 

1995 TSD).72

In a letter dated January 26, 1996 from 

the MDAQMD to CARB, with a courtesy 

copy to the EPA, the MDAQMD 

proposes an alternative to the 

compromise that had previously been 

discussed among the three agencies.73

The letter references the MDAQMD’s 

new text for Rules 1303 and 1304 as 

‘‘attached,’’ but the EPA has not been 


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74 61 FR 38250, 38251 (July 23, 1996). 

75 Id. 

76 Id. at 38268. 

77 Id. at 38268–69. 

78 Id. at 38269. The EPA also acknowledged, 

however, that the ‘‘magnitude of the environmental 

impact of Exhibit B, if promulgated, is difficult to 

predict.’’ Id. at 38270. 

79 Id. at 38270. 

80 Id. at 38269, footnote 31. 

81 Id. at 38270. 

82 67 FR 80186, 80205. 

83 Id. 

84 Id. 

85 ‘‘Technical Support Document for the 

Prevention of Significant Deterioration and 

Nonattainment Area New Source Review 

Regulations,’’ November 2002, page I–6–11. 

86See 67 FR 80186, 80249. 

87 ‘‘Technical Support Document for the 

Prevention of Significant Deterioration and 

Nonattainment Area New Source Review 

Regulations,’’ November 2002, page I–6–11. The 

need to establish a regulatory requirement for 

calculating offsets was perhaps necessary in light of 

the numerous changes to NSR applicability 

promulgated throughout the 2002 NSR Reform 

Rule. See, e.g., 67 FR 80186, 80189–91; see also, 67 

Continued 

able to locate these attachments. The 

EPA is also unable to locate copies of 

the October 11, 1995 draft rules; 

therefore, the EPA is unable to track 

revisions to the rules MDAQMD 

adopted in October 1993 to the rules 

MDAQMD adopted in March 1996, 

which the EPA approved in November 

1996. Although it is apparent from the 

correspondence among the EPA, CARB 

and the MDAQMD that the agencies 

were involved in multi-year discussions 

over the calculation of emissions 

increases and decreases and the 

application of emissions decreases to 

new projects, it is not clear why the EPA 

and CARB objected to the use of PTE to 

calculate offsets (as well as emissions 

decreases related to the applicability 

analysis) but allowed the use of PTE to 

calculate offsets if emissions units had 

been fully offset as part of previous 

permitting action. 

1996 Proposal To Revise the Federal 

NSR Rules and 2002 NSR Reform Rule 

While EPA Region 9 was reviewing 

the MDAQMD’s proposed revisions to 

its NSR program in 1993–1996, the EPA 

was also in the process of revising its 

nationally applicable NSR regulations 

for major stationary sources in both 

attainment and nonattainment areas 

based on input from stakeholders from 

industry, state and local agencies, and 

environmental organizations. Towards 

this end, in July 1996, the EPA 

published in the Federal Register a 

proposed rulemaking to 

comprehensively overhaul the federal 

NSR program for the first time in 15 

years.74 The proposal provides a 

roughly contemporaneous insight to 

concepts that the EPA was exploring to 

provide states greater flexibility to 

customize their own NSR programs.75

One such concept was a revision to the 

NSR regulations to allow the use of the 

PTE-to-PTE test for NSR applicability as 

well as for calculating offsets, netting 

credits, and other emissions reductions 

credits.76 This proposal, referred to as 

the ‘‘Exhibit B approach,’’ would 

provide sources with the alternative of 

using their hourly potential emissions to 

determine baselines for NSR 

applicability and other NSR purposes.77

The EPA acknowledged in the proposed 

rulemaking that the Exhibit B approach 

would provide flexibility requested by 

industry, but we expressed concern for 

environmental consequences, providing 

examples of how the proposal could 

lead to increases in actual emissions 

that would escape NSR review.78 The 

EPA’s analysis of potential 

environmental impacts of the proposal 

revealed that, in the two states studied, 

actual emissions comprised 30 to 86 

percent of allowable emissions, 

depending on source category and 

pollutant.79 Because the analysis 

showed actual emissions were 

substantially below allowable emissions 

levels, the use of an emissions baseline 

based on actual or allowable emissions 

could significantly impact whether a 

source would need to comply with NSR 

requirements. 

The EPA’s 1996 proposed rulemaking 

included the following analysis of a 

PTE-to-PTE test for calculation of 

offsets: 

[Exhibit B’s] proposal on offsets may 

conflict with the 1990 Amendments. That is, 

section 173(c) of the Act requires that a 

source secure sufficient emissions reductions 

to assure that ‘‘the total tonnage of increased 

emissions of the air pollutant from the new 

or modified source shall be offset by an equal 

or greater reduction . . . in the actual 

emissions of such air pollutants.’’ Thus, 

offsetting emissions reductions (including 

emissions reduction credits used for offsets) 

must be calculated in terms of actual 

emissions.80

(Emphasis in original.) 

The EPA sought comment in the 1996 

proposed rulemaking as to whether the 

Exhibit B proposal ‘‘is consistent with 

the air quality planning goals of the NSR 

program. That is, while Exhibit B could 

allow significant increases in actual 

emissions to be unreviewed, section 173 

of the Act required offsets to be based 

on actual emissions.’’ 81

After seeking comment on the Exhibit 

B proposal in 1996, the EPA ultimately 

decided not to adopt it for reasons 

explained in the 2002 NSR Reform Rule 

(which also added 40 CFR 

51.165(a)(3)(ii)(J)). The EPA reiterated 

that the Exhibit B proposal would allow 

sources to ‘‘use this potential-topotential test for NSR applicability, as 

well as for calculating offsets, netting 

credits, and other ERCs.’’ 82 While 

acknowledging the ‘‘maximum 

flexibility’’ the PTE-to-PTE test would 

provide to existing sources, the EPA 

also re-stated concerns associated with 

the calculation methodology for 

calculating emission reductions to be 

used for netting or ERCs, stating that 

Exhibit B would allow facilities to 

generate netting credits and ERCs for 

offsets based on potential hourly 

emissions, even if never actually 

emitted, which could allow greater 

actual emissions increases without any 

preconstruction review.83

In the 2002 NSR Reform Rule, the 

EPA acknowledged that it was unable to 

determine the specific environmental 

impact from using a PTE-to-PTE test, 

but we observed that its analysis 

showed that typical source operation 

frequently results in actual emissions 

that are below allowable emission 

levels.84 This observation reinforces 

concerns that a calculation methodology 

that relies on allowable emissions will 

fail to regulate actual emissions 

increases. Regarding the offsets 

implications of Exhibit B specifically, 

the EPA wrote in the response to 

comments that: 

[The Exhibit B] methodology would also be 

problematic for generating ERCs, particularly 

for use as offsets. The use of potential 

emissions for offset credits is in direct 

conflict with the Act. Under section 172(c) of 

the Clean Air Act, emissions offsets must be 

based on reductions in actual emissions. 

Allowing sources to get credit for reductions 

in potential emissions would result in 

‘‘paper’’ credits, and could allow sources to 

receive credit for reducing emissions that 

never actually occurred. Thus, our rules have 

not changed with regard to the calculation of 

reductions in actual emissions for offsetting 

purposes.85

It is important to note that, along with 

rejecting Exhibit B, the 2002 NSR 

Reform Rule also codified at 40 CFR 

51.165(a)(3)(ii)(J) a specific requirement 

that, for each major modification, a 

source must offset the difference 

between the allowable emissions after 

the modification and the actual 

emissions before the modification for 

each emissions unit.86 The EPA’s 

statement in the response to comments 

that it was not changing regulatory 

requirements for offset calculations 

establishes that the addition of new 

section 40 CFR 51.165(a)(3)(ii)(J) was 

merely a codification of an existing 

requirement for calculating offsets.87


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FR 80241 (‘‘Our decision is based primarily on our 

belief that the NSR program will work better as a 

practical matter and will produce better 

environmental results if all five of the new 

applicability provisions are adopted and 

implemented.’’) 

88 ‘‘Technical Support Document for the 

Prevention of Significant Deterioration and 

Nonattainment Area New Source Review 

Regulations,’’ November 2002, page I–6–11. 

89MDAQMD 1994 ROP Plan, October 5, 1994. 

MDAQMD’s 2008 and 2015 ozone NAAQS 

attainment plans are based on actual emissions. 

MDAQMD’s 2008 and 2015 ozone NAAQS 

attainment plans are based on actual emissions. The 

2008 ozone NAAQS plan is available at: https://

ww2.arb.ca.gov/sites/default/files/classic/planning/ 

sip/planarea/wmdaqmp/2016sip_mdplan.pdf, pp. 

7, 34 (EPA approved this plan, see 86 FR 53223 

(September 27, 2021).) The 2015 ozone NAAQS is 

available at: https://www.mdaqmd.ca.gov/home/ 

showpublisheddocument/9693/ 

638131029372000000, pp. 4–5, 24, 80. 

90Citing Dep’t of Homeland Sec. v. Regents of the 

Univ. of California, 591 U.S. 1, 30, 33 (2020). 

91 591 U.S. 1, 30, 33 (2020). 

Conclusion: The EPA’s 1996 SIP Action 

Was Inconsistent With the Act and 

Regulations 

For the reasons we articulate today, 

and that we articulated in the 2023 LA/ 

LD, the MDAQMD’s program that we 

approved in 1996 is not consistent with 

the requirements of the Act and its 

implementing regulations. The EPA 

acknowledges that its 2023 disapproval 

of Rule 1304(C)(2)(d) is at odds with its 

1996 approval of the MDAQMD’s rules 

that allowed facilities to use emissions 

reductions that were previously relied 

upon as a basis for using a PTE-to-PTE 

test to not require a project to obtain 

offsets. The EPA’s 1995 TSD and 1995– 

1996 rulemaking approving the 

MDAQMD’s NNSR program do not 

explain how the EPA reconciled the 

MDAQMD’s program’s departure from 

the requirements that existed at the time 

(and continue to exist) in CAA section 

173(c)(1), 40 CFR 51.165(a)(3)(i), 40 CFR 

51.165(a)(3)(ii)(G), and the not-yetcodified 40 CFR 51.165(a)(3)(ii)(J), 

which the EPA promulgated in 2002. 

The EPA’s 2023 LA/LD, however, does 

explain our disapproval of Rule 

1304(C)(2)(d) in light of applicable 

statutory and regulatory requirements. 

The preceding paragraphs describe 

the EPA’s interest in exploring options 

for flexibility contemporaneously with 

our 1995–1996 rulemaking to approve 

MDAQMD’s NNSR program. For 

example, from at least 1993 to 1996, the 

EPA, CARB, and the MDAQMD 

discussed how to calculate emissions 

changes for applicability, netting, and 

ERC purposes. The changes to the 

MDAQMD program, and the EPA’s 

approval of them, occurred during the 

years following the passage of the 

California Clean Air Act (1988), the 

Federal Clean Air Act Amendments of 

1990, and the numerous associated 

statutory deadlines for the EPA to act on 

revised NSR programs in the 1990s 

(similar to today, there were nearly 

three dozen air districts in California in 

the 1990s). In July 1996, between the 

EPA’s proposed contingent approval of 

the MDAQMD’s NNSR rules in October 

1995 and its final approval of those 

rules in November 1996, the EPA 

proposed changes to the federal NSR 

program that contemplated a PTE–PTE 

test for NSR applicability and offsets. 

The timing of the many regulatory 

changes and proposals that occurred 

around the same time as the EPA’s 

approval of the MDAQMD’s NNSR 

program is thus helpful context for 

understanding the EPA’s unexplained 

approval of MDAQMD’s provisions that 

conflict with CAA requirements. 

However, the EPA did not approve any 

regulatory revisions during the 1990s or 

thereafter that would allow the 

MDAQMD’s program, as it existed in 

1996 or 2023, to be approved. In 2002, 

the EPA clarified in its rejection of the 

1996 Exhibit B proposal that we were 

not revising our rules regarding the 

calculation of reductions in actual 

emissions for offsetting purposes.88

Furthermore, in 2002, the EPA codified 

40 CFR 51.165(a)(3)(ii)(J) to make 

explicit in its regulations a requirement 

for major stationary sources to calculate 

their offset obligation using a premodification baseline of actual 

emissions (at least when the air district 

uses actual emissions for reasonable 

further progress and attainment 

planning purposes). 

The MDAQMD’s 1994, 2008, and 

2015 attainment plans demonstrate RFP 

and attainment based on actual 

emissions, not allowable emissions.89

Under 40 CFR 51.165(a)(3)(i), which 

was promulgated by the EPA in 1980, 

substantially predating the EPA’s 1996 

approval of the MDAQMD’s NNSR 

rules, the offset baseline must be the 

actual emissions of the source from 

which the credit is obtained. Likewise, 

40 CFR 51.165(a)(3)(ii)(G) prevents 

sources in the MDAQMD from relying 

on emissions reductions that were 

utilized in a prior permitting action. The 

EPA’s 1996 approval of the MDAQMD’s 

rules does not provide a justification for 

its conclusions that the MDAQMD’s 

rules satisfied the offsetting 

requirements of the CAA or its 

implementing regulations. The EPA 

recognizes that we are changing our 

position as stated in our 1995–1996 

rulemaking on the MDAQMD’s rules on 

the specific question of whether Rule 

1304(C)(2)(d) is consistent with the Act 

and the NSR regulations. This change in 

position is because the provisions that 

we approved in 1996 (which, as noted 

above, are substantially similar to Rule 

1304(C)(2)(d)) were not consistent with 

the CAA or our regulations at that time. 

As we wrote in the 1996 and 2002 NSR 

Reform rules, we are concerned about 

the potential environmental impacts of 

an NNSR program such as MDAQMD’s 

that would use the PTE–PTE test along 

with or because of a unique offset 

generating scheme. The codification of 

51.165(a)(3)(ii)(J) in 2002 meant that, 

when the EPA analyzed the MDAQMD’s 

NNSR program for approvability in the 

context of the 2008 ozone NAAQS 

implementation rule, the program’s 

inconsistency was apparent. MDAQMD 

Rule 1304(C)(2)(d) is not approvable, 

even though the EPA approved similar 

text in 1996. 

4. Comments Regarding Reliance 

Comment A.4.1: Commenter 01 states 

that while the EPA may reverse its 

policy on 1304(C)(2)(d) Offsets, the APA 

requires the EPA ‘‘ ‘to assess whether 

there were reliance interests, determine 

whether they were significant, and 

weigh any such interests against 

competing policy concerns,’ considering 

alternatives to accommodate such 

interests.’’ 90 The commenter states that 

the EPA is effectively nullifying 

valuable 1304(C)(2)(d) Offsets that were 

purchased with costly reductions in 

actual emissions on the EPA’s promise 

that they could later be used to offset 

certain emission increases. The 

commenter also states that the proposed 

FIP does not consider these reliance 

interests or alternatives to the 

immediate invalidation of the 

1304(C)(2)(d) Offsets that have existed 

with EPA’s blessing for over 25 years. 

Response to Comment A.4.1: The EPA 

has provided a comprehensive 

explanation in our response to comment 

A.3.1 regarding our changed position on 

the approvability of MDAQMD Rule 

1304(C)(2)(d). Moreover, the EPA 

disagrees with the comment to the 

extent it is asserting that this action 

invalidates significant reliance interests. 

Commenter 01 cites Dep’t of Homeland 

Sec. v. Regents of the Univ. of California 

as support for its assertion that there are 

reliance interests stemming from Rule 

1304(C)(2)(d) and that the EPA failed to 

consider them in disapproving the 

provision.91 In Regents, the Supreme 

Court ruled against the government, 

finding that the government’s decision 

to rescind the Deferred Action on 

Childhood Arrivals (‘‘DACA’’) program 

was arbitrary and capricious under the 


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92 Id. at 33. 

93 Id. at 2. 

94 Id. at 35. 

95 Id. at 28. 

96 Id. 

97MDAQMD has made similar assertions in the 

past. See, e.g., MDAQMD Regulation XIII Final Staff 

Report, March 22, 2021, page 44, footnote 188: ‘‘If 

the amount of offsets needed is calculated using the 

HAE of the emissions unit(s) involved many 

Facilities view this as a taking of property (namely 

the previously allowed PTE that was fully offset) 

without just compensation.’’ 

98See, e.g., Letter from John S. Seitz, Director, 

EPA Office of Air Quality Planning and Standards 

to Peter F. Hess, President, California Air Pollution 

Control Officers Association Joint Commission of 

Regulators & Business, July 8, 1996 (‘‘Finally, your 

letter states that it is unfair for owners of banked 

ERC’s not to be able to sell or use them. However, 

please note that although ERCs are a limited 

authorization to emit, they are not and never have 

been an absolute property right.’’); EPA, Office of 

Air and Radiation, ‘‘Improving Air Quality with 

Economic Incentive Programs,’’ January 2001, p. 80 

(‘‘Emission reductions and emission allowances 

generated, traded, and used in emission trading 

EIPs do not have property rights associated with 

them. They simply represent a limited 

authorization to emit for the entity holding the 

tradable reduction or allowance.’’); see also South 

Coast Air Quality Management District (SCAQMD) 

Rule 2007, ‘‘Trading Requirements,’’ most recently 

approved into the California SIP at 73 FR 38122 

(July 3, 2008), which states, in relevant part, at 

subsection (b)(3) that a RECLAIM Trading Credit 

‘‘shall not constitute a security or other form of 

property . . .’’ 

APA.92 DACA recipients (as well as 

their parents, under the related ‘‘DAPA’’ 

program) ‘‘enjoy[ed] . . . forbearance, 

work eligibility, and other benefits’’ 

under the programs.93 The Supreme 

Court held that the government failed to 

provide a ‘‘reasoned explanation for its 

action’’ because it ‘‘failed to consider 

the conspicuous issues of whether to 

retain forbearance and what if anything 

to do about the hardship to DACA 

recipients.’’ 94

Regents, however, is materially 

distinguishable from the EPA’s 

disapproval of Rule 1304(C)(2)(d); the 

case does not support the MDAQMD’s 

assertions regarding reliance interests. 

In Regents, while the Attorney General 

had determined that the workauthorization aspect of the DACA 

program was illegal following an 

adverse judicial decision about the 

DAPA program, the Attorney General’s 

opinion was not comprehensive; i.e., the 

Attorney General had ‘‘neither 

addressed the [deportation] forbearance 

policy at the heart of DACA nor 

compelled [the government] to abandon 

that policy.’’ 95 Further, as the Supreme 

Court found, the government had 

offered ‘‘no reason for terminating 

forbearance.’’ 96

In contrast, the EPA, in disapproving 

Rule 1304(C)(2)(d), proposed and 

finalized a comprehensive, outcomecontrolling legal determination that 

Rule 1304(C)(2)(d) fails to comply with 

federal law. Regents does not stand for 

the proposition that agencies must 

consider reliance interests when federal 

law compels the outcome. Also, unlike 

the situation in Regents, the EPA 

provided an opportunity for public 

comment and has provided reasoned 

responses to all comments received. 

Thus, EPA fulfilled its obligations under 

the APA. 

Furthermore, the commenter’s 

characterization of 1304(C)(2)(d) Offsets 

as ‘‘valuable’’ and as ‘‘purchased with 

costly reductions in actual emissions’’ is 

fundamentally a claim that sources hold 

compensable property rights in 

1304(C)(2)(d) Offsets.97 The EPA has 

repeatedly rejected similar assertions in 

the past and has never recognized a 

property right associated with emission 

reductions to be used as offsets.98 Also, 

it is unclear to what extent 1304(C)(2)(d) 

Offsets were, in fact, ‘‘purchased.’’ In 

the MDAQMD, as in all nonattainment 

areas, construction of a new major 

stationary source requires the facility 

owner to obtain emission reduction 

credits to offset the emissions from the 

new construction. Nonattainment NSR 

permits issued by the MDAQMD to such 

sources are contingent on the surrender 

of credits to offset emissions up to the 

allowable limits in the permits. The 

EPA acknowledges that facility owners 

purchase emission reduction credits and 

surrender them to obtain permits with 

allowable emissions limits to allow 

them to proceed with construction. The 

MDAQMD, however, claims that its 

rules should additionally allow those 

same emission reduction credits, which 

facility owners have already 

surrendered to obtain allowable 

emissions limits that authorized the 

facility to emit up to those levels, to be 

re-used to offset emissions increases 

associated with future construction 

projects. This system is inconsistent 

with federal NNSR requirements in 

multiple respects and therefore further 

delegitimizes any claim that 

1304(C)(2)(d) Offsets are a property right 

with a compensable value. 

First, as explained our response to 

comment A.2.2, the EPA’s regulations at 

40 CFR 51.165(a)(3)(G) do not allow 

emission reduction credits to be re-used 

in subsequent permitting actions of, for 

example, facility modifications. The 

MDAQMD’s rules allow emission 

reduction credits that have already been 

applied to initial construction of a new 

facility to be used to offset emissions 

increases in the future and are therefore 

inconsistent with NNSR requirements. 

Second, as also explained in our 

response to comment A.2.1, the EPA’s 

regulations at 40 CFR 51.165(a)(3)(i) 

allow the use of allowable emissions to 

be used as a baseline to calculate 

emission reductions that will be used as 

offsets only if demonstrations of RFP 

and attainment are also based on 

allowable emissions. MDAQMD’s RFP 

and attainment demonstrations are 

based on actual emissions; therefore, 

MDAQMD’s calculation of reductions to 

be used as offsets must also be based on 

actual emissions. Third, since 2002, the 

EPA’s regulations have clearly specified 

that emissions increases resulting from 

major modifications must be offset 

through a calculation that uses actual 

emissions before the modification. In 

fact, as explained above in our response 

to comment A.3.1, as part of the 2002 

NSR Reform Rule, the EPA explicitly 

rejected a calculation that would use 

potential emissions as a baseline in this 

calculation. MDAQMD’s provision for 

1304(C)(2)(d) Offsets clearly allow 

sources to offset emissions increases 

through reductions in allowable 

emissions and therefore fail to ensure 

compliance with the requirement that 

sources offset emissions increases 

through reductions in actual emissions. 

The fact that 1304(C)(2)(d) Offsets are 

inconsistent with federal law 

invalidates any claim of property right 

or compensable value. 

Comment A.4.2: Commenter 05 states 

that the removal of Rule 1304(C)(2)(d) 

would ‘‘create a discriminatory 

situation, where a facility that has 

previously provided offsets for emission 

sources/processes is not differentiated 

from one that has received a permit 

without providing offsets.’’ 

Response to Comment A.4.2: As 

explained in the response to comment 

A.4.1, Rule 1304(C)(2)(d) Offsets do not 

comply with CAA 173 and federal 

NNSR requirements for offsetting 

emissions increases at major stationary 

sources. The permit application process 

should be sufficient to enable the 

reviewing authority to determine the 

quantity and status of offset credits and 

reductions; diligent implementation of 

the federal requirements will avoid 

confusion and unfair outcomes. Rule 

1304(C)(2)(d) Offsets are not valid under 

the CAA or the federal NNSR 

regulations. The FIP will bring the 

MDAQMD’s offset regulations into 

compliance with the CAA and federal 

regulations. The EPA disagrees that the 

removal of Rule 1304(C)(2)(d) would 

create a discriminatory situation. 

Comment A.4.3: Commenter 08 states 

that MDAQMD Rule 1304(C)(2)(d) has 

developed a provision for major 

facilities to utilize existing allowable 

emissions as a mechanism to generate 

simultaneous emissions reductions 

during another permitting action and 


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99Rule 1304(C)(2)(d) is also inconsistent with the 

federal regulations promulgated in 1980. 

100Memorandum, Lisa Beckham, EPA Region IX, 

to Brad Poiriez, MDAQMD, ‘‘Re: Mojave Desert Air 

Quality Management District New Source Review 

Program,’’ December 19, 2019. A copy of the letter 

is available in the docket for this rulemaking action. 

101 67 FR 80186, 80205. 

102 61 FR 38250, 38270. 

103 Id. 

104U.S. EPA Office of Air Quality Planning and 

Standards, Technical Support Document for the 

Prevention of Significant Deterioration and 

Nonattainment Area New Source Review 

Regulations (November 2002) at page I–6–11, 

available at https://www.epa.gov/sites/default/files/ 

2015-12/documents/nsr-tsd_11-22-02.pdf. 

that this provision has been in effect 

since the 1990s. Commenter 08 urges 

the EPA to consider how the sudden 

change of a provision in effect for years 

will impact regulated facilities. 

Response to Comment A.4.3: As 

explained above in the responses to 

comments A.2.1 and A.2.2, the 

MDAQMD’s Rule 1304(C)(2)(d) is not 

consistent with the CAA or the EPA’s 

NNSR regulations. The EPA disagrees 

with the commenter’s suggestion that 

the FIP represents a ‘‘sudden change,’’ 

because the calculation method in Rule 

1304(C)(2)(d) was specifically 

prohibited in the EPA’s 2002 NSR 

Reform rule, which included 40 CFR 

51.165(a)(3)(ii)(J).99 Moreover, the 

MDAQMD and regulated entities in its 

jurisdiction have been aware of the 

EPA’s position regarding Rule 

1304(C)(2)(d) and the MDAQMD’s 

practices regarding its emissions offset 

calculations since at least March 2021, 

when the MDAQMD responded to the 

EPA’s concerns about Rule 1304(C)(2)(d) 

in the ‘‘Appendix G to Staff Report’’ 

document (an appendix to its 2021 final 

staff report and rules that the MDAQMD 

adopted), which is a public document. 

In December 2019, prior to the release 

of that document, the EPA wrote to the 

MDAQMD to inform the MDAQMD of 

its concern regarding the offset 

calculation method allowed under what 

is currently Rule 1304(C)(2)(d).100 The 

EPA, the District, and CARB then 

committed significant resources to 

meeting, on a bi-weekly basis from 

approximately March 2020 to June 2021, 

for detailed discussions to address the 

deficiencies in the MDAQMD’s NSR 

program. The EPA’s obligation to 

promulgate a FIP is a consequence of a 

finding of failure to submit published in 

the Federal Register in February 2017; 

the subject of a lawsuit filed in the U.S. 

District Court for the Northern District 

of California in June 2022; and a courtordered obligation as the result of a 

consent decree that was subject to a 30- 

day comment period as announced in 

the Federal Register on April 5, 2023. 

Finally, the EPA notes that the FIP 

will apply prospectively, that is, to new 

major stationary sources and major 

modifications at existing major sources 

that commence construction after the 

effective date of the FIP. 

5. Comments on Potential Impacts and 

Implementation of the FIP 

Comment A.5.1: Commenter 01 states 

that the proposed FIP is arbitrary and 

capricious because the EPA fails to 

consider important aspects of the 

problem before the Agency, including 

the impacts of the proposed FIP on air 

quality. The commenter states that the 

EPA fails to substantiate its claim that 

the proposed FIP will result in greater 

emission reductions. The commenter 

states that this claim is false because 

Rule 1304(C)(2)(d) Offsets incentivize 

operators to voluntarily lower actual 

emissions to ensure the greatest volume 

of creditable emissions reductions for 

future projects. The commenter states 

that the EPA’s disapproval of offset 

calculations allowed under Rule 

1304(C)(2)(d) encourages source 

operators to retain older, dirty units and 

to replace those old and dirty units with 

comparably dirty units when the units 

fail. The commenter states that, under 

the proposed FIP, operators are 

particularly incentivized to run 

equipment to produce the maximum 

amount of emissions for the two years 

prior to applying for a modification to 

secure creditable emissions reductions. 

Similarly, commenters 07, 08, and 09 

state that MDAQMD Rule 1304(C)(2)(d) 

enables permit holders to plan for 

equipment upgrades and 

modernizations that will ultimately 

reduce actual major source emissions in 

the ozone nonattainment area. These 

commenters state that that removal of 

these offset provisions will hinder 

emission reduction projects and burden 

facilities with significant increased 

costs. Commenter 05 adds that the loss 

of previous offsets would create a 

disincentive for facilities to be upgraded 

to new technology. Commenter 09 states 

that regulated facilities may elect to 

cancel business expansions, facility 

improvements, or other major capital 

investments that would modernize 

equipment or otherwise benefit air 

quality. 

Response to Comment A.5.1: The EPA 

disagrees with the comments. 

Preliminarily, we note that the 

commenters do not provide any analysis 

or support for their assertions that Rule 

1304(C)(2)(d)’s approach to calculating 

offsets results in greater emission 

reductions than the federal 

requirements for offsets. We also note 

that in the 2002 NSR Reform Rule, we 

rejected an option similar to Rule 

1304(C)(2)(d) that would have allowed 

sources ‘‘to generate netting credits and 

ERCs for offsets based on potential 

hourly emissions, even if never actually 

emitted,’’ because we had determined 

that such an approach ‘‘could sanction 

greater actual emission increases to the 

environment, often from older facilities, 

without any preconstruction 

review.’’ 101 In the 1996 NSR proposal, 

the EPA stated that its analysis of actual 

and allowable emissions in two states 

showed that ‘‘typical source operation 

frequently does result in actual 

emissions that are substantially below 

allowable emissions levels.’’ 102 In other 

words, the difference between actual 

and potential emissions may be up to 70 

percent, depending on source category 

and pollutant.103 Using actual emissions 

as a baseline to calculate emissions will 

reflect emissions increases and require 

offsets that would not be captured or 

regulated if allowable emissions were 

used as a baseline. As the EPA also 

stated in response to comments in the 

rulemaking for the 2002 NSR Reform 

Rule, ‘‘The use of potential emissions 

for offset credits is in direct conflict 

with the Act. Under section 172(c) of 

the Clean Air Act, emissions offsets 

must be based on reductions in actual 

emissions. Allowing sources to get 

credit for reductions in potential 

emissions would result in ‘paper’ 

credits, and could allow sources to 

receive credit for reducing emissions 

that never actually occurred.’’ 104

Similarly, the MDAQMD Rule 

1304(C)(2)(d) would allow sources to 

receive credit for ‘‘reductions’’ in 

emissions that do not actually occur and 

use them to offset actual emissions 

increases. 

Moreover, we note that the federal 

regulations, such as 40 CFR 

51.165(a)(3)(ii)(J) and 40 CFR 

51.165(a)(3)(ii)(G), are more protective 

than Rule 1304(C)(2)(d). For example, 

40 CFR 51.165(a)(3)(ii)(J) requires 

facilities to offset the difference between 

pre-project actual emissions and postproject allowable emissions that are 

associated with each major 

modification, and 40 CFR 

51.165(a)(3)(ii)(G) requires those actual 

emissions reductions to be reductions 

that the facility has not relied upon in 

a prior permitting action. 

The EPA also disagrees with 

comments claiming that the EPA’s 

disapproval of Rule 1304(C)(2)(d) will 

encourage retention of older greateremitting units and incentivize sources 


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Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 106347 

105 89 FR 56237, 56247; 40 CFR 52.285(c)(1)(i)–(ii) 

(as proposed). 

106Appendix S, section II.A.4(i)(c). 107CAA section 165(c) (42 U.S.C. 7465(c)). 

to operate and emit more. Rather, the 

FIP encourages sources to take 

enforceable limits that reflect the 

source’s actual emissions. We note in 

addition that the CAA does not require 

sources to offset emissions that they do 

not emit or intend to emit. Regarding 

commenters’ concern that the FIP would 

discourage emissions-reduction 

projects, we note that a project that 

reduces actual emissions would not be 

subject to NSR requirements to offset 

and install pollution controls. 

Installation of cleaner equipment is 

therefore not in jeopardy under the FIP. 

Only projects at major stationary 

sources that would increase emissions 

will be required to undergo review to 

determine if emissions increases will 

trigger requirements to install emissions 

controls and to offset emissions 

increases. It is therefore unclear how 

sources would be incentivized to retain 

older, dirtier equipment if the 

installation of newer, cleaner equipment 

would result in emissions decreases. 

Finally, we disagree that Commenter 

01’s quotations from the 2002 NSR 

Reform Rule support its claims that Rule 

1304(C)(2)(d) Offsets ‘‘incentivize 

operators to voluntarily lower actual 

emissions to ensure the greatest volume 

of creditable emissions reductions for 

future projects.’’ The statements quoted 

by Commenter 01 are irrelevant to this 

action, because they do not involve 

offsets. 

Comment A.5.2: Commenter 01 states 

that the EPA fails to address the 

practical impacts the proposed FIP will 

have on facilities. More specifically, the 

commenter states that it is unclear what 

a new minor facility, existing minor 

facility remaining under the 

applicability threshold, or a synthetic 

minor facility retaining its permitted 

limitation on PTE would need to submit 

to the EPA to show that it is not subject 

to the FIP requirements. The commenter 

requests that the EPA clarify whether all 

new or modified facilities would need 

to submit applications to the EPA and 

that it appears every permit application 

would be required to be duplicated in 

EPA Region 9’s electronic permit 

application system to ensure that a 

minor facility has not become subject to 

the FIP. The commenter also states that 

while the MDAQMD has the staffing 

and expertise to properly analyze and 

process applications under the current 

SIP, it has neither the time nor the 

resources to devote to analyzing each 

application for FIP applicability 

purposes. 

Response to Comment A.5.2: As 

explained in the EPA’s proposed action, 

the FIP will apply ‘‘(i) If you propose to 

construct a new major stationary source 

and your source is a major source of 

nonattainment pollutant(s)’’ or ‘‘(ii) If 

you own or operate a major stationary 

source and propose to construct a major 

modification, where your source is a 

major source of nonattainment 

pollutant(s) and the proposed 

modification is a major modification for 

the nonattainment pollutant.’’ 105 The 

relevant terms in the quoted provisions 

are defined in the definitions section of 

the FIP, in section 40 CFR 52.285(b). If 

the applicant believes that its proposed 

project would constitute a new major 

source or a major modification under 

the FIP, it is required to submit an 

application to the EPA or the designated 

reviewing authority (if not the EPA) to 

obtain a permit under the FIP. It is the 

permit applicant’s responsibility to 

comply with the FIP provisions. Failure 

to obtain a permit in accordance with 

the FIP prior to construction and 

operation of the new or modified source 

would be a federally enforceable 

violation of the FIP and the CAA. Under 

the FIP, existing minor facilities 

remaining under the applicability 

threshold and synthetic minor facilities 

retaining the permitted limitation on 

PTE would not need to apply for a 

permit under the FIP unless they make 

a modification that would constitute a 

major stationary source by itself.106

Regarding Commenter 01’s concern 

over the MDAQMD’s time and resources 

to devote to analyzing applications, the 

EPA would be responsible for 

implementation of the FIP unless and 

until the MDAQMD is delegated 

authority to implement it. The 

MDAQMD would only be delegated 

authority to implement the proposed 

FIP if it requested delegation. Under the 

FIP as implemented by the EPA, 

applicants would need to submit their 

applications to the EPA, not to the 

MDAQMD. 

Comment A.5.3: Commenter 04 states 

that this action is crucial for ensuring 

that regions with air pollutant 

concentrations above the NAAQS are 

protected from further environmental 

degradation. This commenter presents 

information on the detrimental impact 

of air pollution to health and notes that 

these effects are felt mainly by minority 

communities, such as low-income 

families or people of color, who are 

more likely to live in areas with higher 

pollution levels. The commenter 

supports approval of the FIP and states 

that the FIP will provide a necessary 

regulatory framework to manage and 

reduce emissions, enhancing efforts to 

meet and maintain NAAQS in the 

region. 

Response to Comment A.5.3: The EPA 

has noted the commenter’s support of 

this action. 

Comment A.5.4: Commenters 01, 05, 

06, 07, and 08 express concern about the 

permit processing timeline under the 

proposed FIP. Commenter 01 states that 

pursuant to these timelines, 

approximately 90 percent of permit 

applications submitted to the MDAQMD 

are processed and issued within 90 days 

but that no similar timelines are 

proposed in the FIP and that this may 

result in a detrimental impact to 

sources, especially minor facilities, to 

the extent they cannot proceed with 

their modifications due to the necessity 

of awaiting an EPA determination. 

Commenter 05 states that the FIP creates 

the potential for delays in permit 

issuances due to conflicts between 

California law and the FIP on items 

such as the completeness determination, 

BACT determinations, and offsetting 

and the use of SERs, and Commenter 06 

adds that the differences between the 

requirements under the SIP and the FIP 

will add a level of complexity to the 

permit application process and in 

ensuring facilities comply with the 

permits. Commenters 05 and 06 state 

that potential timing issues would have 

an adverse impact on the national 

security mission at Department of 

Defense facilities because a facility 

cannot proceed with construction until 

it receives two permits—one from 

MDAQMD, and one from EPA. 

Commenters 01, 07, and 08 request that 

the EPA provide timeline estimates for 

the proposed permit processing. 

Response to Comment A.5.4: Neither 

the CAA nor the existing NNSR FIP that 

applies in tribal areas, which is very 

similar to the FIP, includes a 

requirement for the reviewing authority 

to render a decision on a permit 

application within a certain period of 

time. Likewise, the EPA has not 

incorporated any temporal requirement 

to the issuance of permits under this 

FIP. Under the CAA, the EPA is 

required to make a permit decision on 

a Prevention of Significant Deterioration 

(PSD) permit application within one 

year after the application is determined 

complete by the EPA.107 While no 

analogous provision exists in Part D of 

Title I of the CAA, which governs Plan 

Requirements for Nonattainment Areas, 

the EPA will endeavor to follow the PSD 

permit application processing timeline 

when we review applications submitted 

under the finalized FIP. Also, should 

the MDAQMD receive delegation as a 


ddrumheller on DSK120RN23PROD with RULES1
106348 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 

108See 40 CFR 52.285(c)(1)(i)–(ii); 89 FR 56237, 

56247. 

109 88 FR 42258 (June 30, 2023). 

110The de minimis requirement at CAA section 

182(c)(6) was a part of the 1990 CAA Amendments. 

111MDAQMD August 8, 2024 comment letter: 

‘‘USEPA and MDAQMD reached resolution of all 

but one of the purported deficiencies and the 

MDAQMD thereafter modified its NNSR rules on 3/ 

25/2024.’’ In the comments Brad Poiriez, on behalf 

of the MDAQMD, provided during the July 24, 2024 

public hearing, Mr. Poiriez mentioned the ‘‘pending 

SIP submission containing revisions to the NNSR 

rules that were agreed upon by the District and US 

EPA.’’ (Transcript page 16). 

reviewing authority of the FIP, it could 

consolidate its review under the FIP 

with its review under the SIP. 

Finally, it is not clear how applicants 

for minor source permits—either new or 

modified sources—would be affected by 

the timing issue because the proposed 

FIP does not affect minor NSR.108

Comment A.5.5: Commenter 01 states 

that the proposed FIP includes ‘‘de 

minimis’’ provisions that allow 

emissions increases of less than 25 tons 

per year aggregated with all other net 

increases from the facility over five 

consecutive calendar years to not 

require BACT or offsets. Commenter 01 

states further that this provision is 

contrary to California law, which 

requires any emission unit that emits or 

has the potential to emit over 25 lbs per 

day to be equipped with BACT. The 

commenter also states that the Protect 

California Air Act of 2003 prohibits 

California air districts, including the 

MDAQMD, from ‘‘backing off’’ their 

NNSR programs to allow the 

implementation of requirements less 

stringent than those in place as of 

December 30, 2002. The commenter 

states that because the MDAQMD’s 

current SIP rules have been in place 

since before 1996, they cannot now be 

avoided, and that the FIP creates the 

potential for massive confusion and 

misunderstanding among regulated 

facilities that are located in the 

MDAQMD. 

Response to Comment A.5.5: If the 

MDAQMD believes that the provisions 

in its current SIP, which EPA acted 

upon in the 2023 LA/LD,109 will result 

in greater emissions reductions than the 

application of the de minimis 

provisions proposed in the FIP, there 

should be no conflict between the FIP 

and the MDAQMD’s SIP. The EPA is not 

required to apply state-level 

requirements even if, in some cases, the 

application of the state-level 

requirements would result in a scenario 

where emissions reductions would be 

greater than under federal requirements. 

Likewise, in the situation described in 

the comment, a permit applicant’s 

compliance with a more stringent 

MDAQMD requirement would enable 

the applicant to satisfy the federal 

requirement. The de minimis 

requirement that the commenter 

references, which is in CAA section 

182(c)(6), states that a source cannot be 

considered ‘‘de minimis’’ for NNSR 

applicability purposes unless its net 

emissions increases over the past five 

consecutive calendar years are less than 

25 tons per year.110 It is not clear how 

the federal requirement is ‘‘directly 

contrary’’ to the California law that, 

according to the commenter, ‘‘requir[es] 

any emissions unit which emits or has 

the potential to emit over 25 LBS per 

day to be equipped with BACT;’’ the 

California requirement sets a threshold 

for BACT, based on potential emissions 

of 25 pounds per day, whereas the 

federal requirement says that the source 

must undergo NNSR (e.g., satisfy BACT 

and offsets requirements) if net 

emissions increases over the last five 

consecutive calendar years exceed 25 

tons per year. It would appear that in 

most, if not all, cases a source’s 

compliance with the California 

requirement would also comply with 

the federal requirement. 

Finally, the EPA finds this comment 

from the MDAQMD confusing given that 

the MDAQMD stated elsewhere in its 

comments that its August 7 SIP 

submittal addresses all but one of the 

deficiencies EPA identified in the 2023 

LA/LD, which the EPA understands to 

be a reference to Rule 1304(C)(2)(d).111

The EPA’s 2023 LA/LD rulemaking also 

found the MDAQMD’s rules as adopted 

in 2021 to be deficient because they did 

not ensure compliance with CAA 

182(c)(6). Based on discussions with the 

MDAQMD after we finalized the 2023 

LA/LD, we had understood that the 

MDAQMD intended that its revised 

rules as adopted on March 25, 2024, and 

submitted to the EPA on August 7, 2024, 

would address the concerns identified 

in our LA/LD, including adding the 

missing de minimis provision. While 

our full review of those rules will be 

attentive to this issue, it is not clear why 

the MDAQMD would object to the 

inclusion of the de minimis provision in 

the FIP. 

Comment A.5.6: Commenters 05, 06, 

07, 08 and 09 state that permit holders 

may also face increased permit fees, 

increased permit processing times, and 

possible inconsistencies between the 

duplicate EPA permits and district 

permits. The commenters state that dual 

permits and their separate requirements 

will increase the complexity and 

potential for conflicting or unclear 

requirements and that this may lead to 

unintended compliance issues and 

conflicts, which could compromise a 

source’s ability to comply as well as 

result in significant penalties. 

Commenters 05, 07, and 08 request that 

the EPA work with the MDAQMD to 

develop a solution that would remove 

the requirement that sources obtain two 

permits. 

Commenter 05 requests that the EPA 

confirm which agency (the MDAQMD or 

the EPA) will be the permitting 

authority under the proposed FIP rule or 

if the intention is for both the 

MDAQMD and the EPA to issue and 

enforce separate permits independently, 

including facility inspections and 

processing fees. 

Response to Comment A.5.6: Unless 

the MDAQMD requests, and the EPA 

approves, delegation to implement the 

FIP or the MDAQMD addresses the 

deficiency in MDAQMD Rule 

1304(C)(2)(d), major stationary sources 

and sources undergoing major 

modifications in areas within the 

jurisdiction of MDAQMD will need to 

obtain two permits—one under the 

EPA’s FIP, and one under the 

MDAQMD’s SIP. The MDAQMD, if 

delegated to implement the FIP, could 

consolidate its review under the FIP and 

its review under its SIP-approved NNSR 

program. The EPA considered options to 

avoid permit applicants having to obtain 

two permits, such as delegating the FIP 

to MDAQMD. However, the MDAQMD 

is not interested in implementing the 

FIP at this time. We also considered 

regulatory approaches that would 

reduce or eliminate the MDAQMD’s role 

in issuing permits to major stationary 

sources, but those options seemed likely 

to have unnecessarily disruptive 

outcomes and uncertain impacts on 

permitting for minor sources. We 

anticipate that applications for projects 

subject to the FIP will require 

essentially the same information as 

applications to be submitted to the 

MDAQMD, which should reduce the 

permitting burden on permit applicants. 

We also anticipate that the most 

significant difference between the two 

permit programs will be evaluation of 

offset obligations and requirements. We 

also hope that the MDAQMD’s newly 

submitted NNSR rules will narrow the 

scope of the FIP once we have approved 

these rules into the SIP, reducing EPA’s 

role in permitting major stationary 

sources within MDAQMD’s jurisdiction. 

In response to Commenter 05’s 

inquiry regarding which agency will be 

the permitting authority, both the EPA 

and MDAQMD will be permitting 

authorities for major stationary sources. 

As explained previously, major sources 

subject to the FIP will need to obtain 


ddrumheller on DSK120RN23PROD with RULES1
Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 106349 

112Center for Biological Diversity et al., v. Regan, 

No. 3:22–cv–03309–RS (N.D. Cal.). This consent 

decree is also available in the docket for this action. 

113 88 FR 42258, 42260; 89 FR 56237, 56240. 

114 88 FR 42258. 

115 82 FR 9158 (February 3, 2017). 

116 Id. 

117Center for Biological Diversity et al., v. Regan, 

No. 3:22–cv–03309–RS (N.D. Cal.). The consent 

decree, as entered by the court on June 15, 2023, 

is available in the docket for this action. 

118 Id. Prior to court’s entry of the 2023 CBD 

Consent Decree, the EPA published a notice in the 

Federal Register announcing the proposed 

settlement and providing an opportunity for 

interested persons to submit comments. 88 FR 

20166 (April 5, 2023). The EPA received no 

comments on the proposed settlement. The parties’ 

joint stipulation to extend the consent decree 

deadline is available in the docket for this action. 

two permits—one under the EPA’s FIP 

and one under the MDAQMD’s SIP. 

Comment A.5.7: Commenters 07 and 

09 state that the proposed FIP will likely 

cause increased demand and prices for 

ERCs of nonattainment area pollutants. 

The commenters state that the proposed 

FIP may have significant impacts on 

local ERC demand and prices for 

emission offsets at a time where there 

are a few private holders of ERCs with 

relatively low quantities of available 

credits within the MDAQMD. 

Commenter 09 provides examples of the 

prices of credits for PM10 and Nitrogen 

Oxides (NOX) in the South Coast Air 

Quality Management District to support 

its assertion that it is unclear how the 

FIP will address such potentially 

restrictive and unsustainable ERC 

market conditions within the 

MDAQMD. Commenter 09 states that 

there has been insufficient study of 

these potential ERC market conditions, 

additional emission offset costs, and 

related concerns on regulated facilities. 

Commenter 04 recommends that the 

EPA work with the MDAQMD to ensure 

that the proposed FIP complements 

existing state and local efforts and states 

that coordination will help avoid any 

errors in the process. This commenter 

states that the NNSR rules should 

provide flexibility to accommodate the 

needs of businesses and economic 

development in the region. 

Response to Comment A.5.7: The EPA 

is promulgating this FIP as required by 

a consent decree because the MDAQMD 

does not have a fully approved NNSR 

SIP, as required by the 2008 ozone 

NAAQS implementation rule.112 The 

requirements that entities would be 

subject to under the FIP, which 

implements Appendix S, are the same 

requirements that regulated entities in 

other jurisdictions across the country 

are currently subject to and have been 

subject to for decades under SIPapproved programs that meet the 

minimum requirements of the CAA. The 

EPA recognizes the scarcity of offsets in 

the nonattainment area that would be 

covered by this FIP. The EPA will 

continue to work with the MDAQMD to 

assist in identifying offsets from sources 

in the nonattainment area that will be 

covered by this FIP. 

Comment A.5.8: Commenter 08 states 

that the proposed FIP puts the time, 

monetary, and compliance burdens on 

facilities. Similarly, Commenter 09 

states that the burdensome conditions 

that the FIP will cause will make it 

difficult for it and other regulated 

facilities to make capital investments, 

equipment purchases, facility 

expansions, new employee hires, and 

other business decisions. 

Response to Comment A.5.8: The EPA 

disagrees with the commenters’ 

characterizations of the impacts of the 

FIP. Facilities in the MDAQMD are 

required to comply with federal NNSR 

requirements, including the 

requirements for offset quantification 

and generation, in the same manner as 

any other facilities in other jurisdictions 

that are located in areas not attaining 

the NAAQS. The FIP applies only when 

new or existing major stationary sources 

undertake facility modifications that 

will increase emissions above the 

applicable thresholds. The FIP is 

necessary to ensure that air quality in 

the MDAQMD, which is currently 

classified as Severe nonattainment for 

the 2008 and 2015 ozone NAAQS, as 

well as Moderate nonattainment for the 

PM10 NAAQS, improves toward 

attainment of the NAAQS over time. At 

present, the MDAQMD’s current rules 

allow for applicants to be excused from 

certain NNSR requirements, as 

described in the proposed FIP 

rulemaking and in the 2023 LA/LD.113

B. Summaries of Oral Comments 

Received During the Public Hearing and 

EPA’s Responses 

1. Comments on the Timing and 

Implementation of the FIP 

Comment B.1.1: Commenter AA states 

that while he understands that the EPA 

is under a consent decree to act on the 

MDAQMD’s NNSR provisions, the 

EPA’s promulgation of a FIP seems to be 

rushed given the pending SIP 

submission that contains revisions to 

the NNSR rules that the MDAQMD, and 

the EPA agreed to during mediation 

following the MDAQMD’s petition for 

review of the EPA’s 2023 LA/LD 

action.114 The commenter states that 

EPA was copied on the submission of 

the MDAQMD’s rules to CARB and thus 

has constructive notice of the 

MDAQMD’s submission. 

Commenter AA states that, to the 

extent that the EPA’s rush to promulgate 

the FIP is spurred by the dispute 

between the MDAQMD the EPA over 

the use of fully offset allowable 

emissions as SERs at an existing major 

facility, the EPA should reconsider its 

disapproval of the MDAQMD’s SER 

provision. The commenter states that 

the EPA has previously approved the 

MDAQMD’s offset provision and that 

there is a reasonable reliance by 

industry and the MDAQMD on this 

approval. 

Response to Comment B.1.1: The EPA 

disagrees with the commenter’s 

characterization that ‘‘the EPA’s 

promulgation of a FIP seems to be 

rushed.’’ In fact, the EPA’s obligation to 

promulgate a FIP is more than five years 

overdue. As explained in our proposed 

rulemaking, on February 3, 2017, the 

EPA found that the State of California 

failed to submit a SIP revision for NNSR 

rules that apply to a Severe 

classification for the 2008 ozone 

NAAQS, as required under subpart 2 of 

part D of title 1 of the CAA and the 2008 

Ozone SIP Requirements Rule.115 In 

addition to establishing deadlines for 

the imposition of sanctions, the EPA’s 

finding of failure to submit triggered an 

obligation under CAA section 110(c) for 

the EPA to promulgate a FIP no later 

than two years from the finding, i.e., by 

March 6, 2019.116 The EPA did not meet 

this deadline and was subsequently 

sued over its failure to do so.117 The 

lawsuit was resolved by a consent 

decree that underwent a 30-day public 

comment period before it was entered 

by the court on June 15, 2023. Under the 

terms of the consent decree, no later 

than November 29, 2024, the EPA must 

sign a notice of final rulemaking to 

approve a revised SIP submission, 

promulgate a FIP, or approve in part a 

revised SIP submission and promulgate 

a partial FIP for the Severe NNSR SIP 

element. On November 8, 2024, the EPA 

and CBD agreed to extend the deadline 

to January 10, 2025.118

As the commenter notes, MDAQMD 

adopted revised rules on March 25, 

2024, and submitted them to CARB for 

transmittal to the EPA. On August 7, 

2024, CARB submitted the revised rules 

to the EPA. The EPA is currently 

reviewing the submission as required 

under section 110(k) of the CAA. The 

EPA has confirmed that the submission 

still contains the deficiency associated 

with MDAQMD Rule 1304(C)(2)(d) that 

EPA has previously identified. For the 

EPA to discharge its obligation to 

promulgate a FIP, it would need to fully 

approve the MDAQMD’s NNSR 


ddrumheller on DSK120RN23PROD with RULES1
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119 89 FR 56237, 56243. 

120 Id. at 56240–56241. 

121Center for Biological Diversity et al., v. Regan, 

No. 3:22–cv–03309–RS (N.D. Cal.). This consent 

decree is also available in the docket for this action. 

122 Id. Prior to court’s entry of the 2023 CBD 

Consent Decree, the EPA published a notice in the 

Federal Register announcing the proposed 

settlement and providing an opportunity for 

interested persons to submit comments. 88 FR 

20166 (April 5, 2023). The EPA received no 

comments on the proposed settlement. The parties’ 

joint stipulation to extend the consent decree 

deadline is available in the docket for this action. 

123MDAQMD’s 2008 and 2015 ozone NAAQS 

attainment plans are based on actual emissions. The 

2008 ozone NAAQS plan is available at: https://

ww2.arb.ca.gov/sites/default/files/classic/planning/ 

sip/planarea/wmdaqmp/2016sip_mdplan.pdf, pp. 

7, 34 (EPA approved this plan, see 86 FR 53223 

(September 27, 2021).) The 2015 ozone NAAQS is 

available at: https://www.mdaqmd.ca.gov/home/ 

showpublisheddocument/9589/ 

638084392297570000, pp. 4–5, 24, 80. 

submission, which is not possible due 

to the deficiency associated with 

MDAQMD Rule 1304(C)(2)(d). The EPA 

provides additional information that is 

relevant to this comment both 

specifically in our response to Comment 

A.1.1 in this Response to Comments and 

generally in our responses to the 

comments summarized in section A.1 of 

this Response to Comments, where we 

address the written comments we 

received that pertain to the EPA’s 

obligation under the applicable consent 

decree. 

As stated in Section III.H of the 

proposed rulemaking action, if the EPA 

approves CARB’s recent SIP submittal, 

the approved MDAQMD rules would 

apply rather than the FIP, except for the 

portion of the FIP that had not been 

replaced by the approved SIP.119

Lastly, for the reasons we explain in 

our responses to comments A.4.1 

through A.4.3 in this Response to 

Comments, we disagree with 

Commenter AA’s assertion that the EPA 

should reconsider the FIP because of 

industry’s reliance upon MDAQMD’s 

Rule 1304(C)(2)(d). 

Comment B.1.2: Commenter BB states 

that the EPA should postpone 

promulgating the FIP until after the EPA 

and the MDAQMD resolve their 

differences. Commenter BB states that 

there is only one pending issue that the 

two agencies need to resolve. Having to 

apply to two jurisdictions for permits 

will cause an undue burden to facilities 

like the one at which Commenter BB 

works. 

Response to Comment B.1.2: It is not 

possible for the EPA to postpone 

finalizing the FIP while we attempt to 

resolve our differences with the 

MDAQMD. Section 110(c) of the CAA 

requires the EPA to promulgate a FIP for 

a deficient NNSR program. As the EPA 

wrote in the proposed action, the 

purpose of this NNSR FIP, which will 

regulate sources within the MDAQMD’s 

jurisdiction, is to fulfill the EPA’s 

statutory duty by the deadline 

established under a consent decree in a 

lawsuit brought against the EPA.120 The 

consent decree compels the EPA to 

promulgate a FIP by November 29, 2024, 

unless the EPA can fully approve the 

MDAQMD’s NNSR SIP program before 

that date.121 On November 8, 2024, the 

EPA and CBD agreed to extend the 

deadline to January 10, 2025.122 We 

provide additional information on this 

issue in our responses to comments 

A.1.2 and A.1.3 in this Notice. 

Regarding the burdens associated 

with compliance with the FIP and the 

MDAQMD’s NNSR program, we direct 

the reader to our response to written 

comment A.5.6, where we respond to 

similar assertions from other 

commenters. Unless the EPA delegates 

authority to implement the FIP to the 

MDAQMD, permit applicants will need 

to apply to the EPA for an NNSR permit 

under the FIP and to the MDAQMD for 

a permit under the SIP. If, however, the 

MDAQMD requests delegation authority 

to implement the FIP, the EPA is willing 

to work with the MDAQMD for 

MDAQMD to obtain this delegation 

authority. 

2. Comments on the 2023 LA/LD of the 

MDAQMD’s NNSR SIP Submission 

Comment B.2.1: Commenter AA states 

that the EPA previously approved the 

use of SERs, as offsets, which it 

subsequently disapproved in the 2023 

LA/LD action. The commenter states 

that neither the 2023 LA/LD action nor 

the proposed FIP fully explain the 

EPA’s policy reversal of MDAQMD Rule 

1304(C)(2)(d), which regulates the use of 

SERs. The commenter states that 

allowable emissions reflected in a 

permit were backed by real reductions 

when the permit was issued and that the 

EPA has not explained why these 

reductions are no longer real, especially 

when the SERs are surplus adjusted and 

adjusted for Reasonably Available 

Control Technology (RACT) upon use. 

The commenter states that any leftover 

SERs created in the permitting action 

would never again be available for use, 

since SERs cannot be put into the ERC 

bank. Finally, the commenter states that 

CAA section 173(c)(2) expressly 

mandates that these SERs are creditable 

emission reductions (i.e., offsets), that 

EPA recognized this in 1996, and that 

there has been no relevant change in the 

CAA or the implementing regulations 

since then. 

Response to Comment B.2.1: Rule 

1304(C)(2)(d) is not approvable under 

the CAA or the requirements for NNSR 

SIPs at 40 CFR 51.160–51.165. As we 

explain in our responses to comments 

A.2.1 and A.2.2, MDAQMD Rule 

1304(C)(2)(d) is not consistent with 

section 173(c)(1) of the CAA, and it is 

not consistent with the requirements at 

40 CFR 51.165(a)(3)(i), 40 CFR 

51.165(a)(3)(ii)(G), or 40 CFR 

51.165(a)(3)(ii)(J) because it allows 

facilities in the MDAQMD’s jurisdiction 

to use reductions in past potential 

emissions, even if actual emissions 

associated with a modification would 

not be reduced at all, to offset emissions 

increases from construction of modified 

emissions units. This arrangement 

creates a loophole in the actual 

emissions accounting system 

established by the CAA and in place in 

the MDAQMD, which uses an 

attainment plan that is based on actual 

emissions.123 The currency of the CAA 

is actual emissions, and that is true at 

each major modification undertaken at 

a facility. 

As we explained in our response to 

comment A.2.1 in this rulemaking, Rule 

1304(C)(2)(d) is inconsistent with CAA 

section 173(c)(1), 40 CFR 51.165(a)(3)(i), 

40 CFR 51.165(a)(3)(ii)(G), and 40 CFR 

51.165(a)(3)(ii)(J) because it allows a 

facility to offset emissions from a major 

modification with previously-relied 

upon offsets associated with a prior, 

distinct, project. Because Rule 

1304(C)(2)(d) is at odds with these 

requirements, it is not approvable. 

3. Comments on the Impact of the FIP 

on Reliance Interests 

Comment B.3.1: Commenter AA is 

concerned that the EPA, in proposing 

the FIP, failed to recognize and assess 

the impact of the FIP on the MDAQMD 

and regulated industry. The commenter 

states that the MDAQMD and sources 

subject to the FIP have a reliance 

interest in the MDAQMD’s Rule 

1304(C)(2)(d) because, for over 25 years, 

the MDAQMD and its constituents have 

operated under the EPA’s previously 

approved Rule 1304(C)(2)(d) 

procedures. The commenter states that 

SERs allowed under Rule 1304(C)(2)(d) 

may not be allowed under the FIP, and 

that this will impede the permitting 

process and the timeline for projects 

that have proceeded based on the 

understanding that MDAQMD’s Rule 

1304(C)(2)(d) was acceptable. Now, the 

commenter states, the EPA is reversing 

its position to eliminate these SERs 

without explanation or consideration of 

readily apparent alternative measures 

that could reduce the severity of its 

impact. The commenter states that the 

EPA’s action does not reflect the 


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124 40 CFR 52.285(c)(2) (incorporating Appendix 

S, section IV.F.). 

125 40 CFR 52.285(b)(referencing the definitions 

in Appendix S including the definition of PTE in 

40 CFR 52.285(e)(2)(ii)(C)). 

126Appendix S section II.A.3. 

127On November 8, 2024, CBD and the EPA filed 

a joint stipulation to extend the original November 

29, 2024 deadline to January 10, 2025. Center for 

Biological Diversity et al., v. Regan, No. 3:22–cv– 

03309–RS (N.D. Cal.). This consent decree and the 

parties’ joint stipulation to extend the consent 

decree deadline is also available in the docket for 

this action. 

128 88 FR 42258. 

129The EPA’s disapproval of Rule 1304(C)(2)(d) 

in this action, as in the 2023 LA/LD, is limited; the 

provision remains a part of the SIP, as justified 

under CAA sections 110(k)(3) and 301(a). 

130 Id. 

131 Id. 

cooperation between agencies that 

should be strived for, nor is it in 

compliance with the EPA’s obligations 

under the APA. 

Response to Comment B.3.1: As 

explained in our response to comment 

A.4.1, the EPA disagrees with the 

commenter’s assertion regarding 

reliance interests. The EPA must 

promulgate a FIP because the MDAQMD 

has not adopted NSR rules that the EPA 

can fully approve. 

Furthermore, it is not clear what the 

commenter means by the statement that 

EPA’s proposed FIP fails to comply with 

EPA’s obligations under the 

Administrative Procedure Act. To the 

extent that this comment is the same as 

comment A.3.1, the EPA’s response is 

already stated in our response to that 

comment. 

4. Comments on Other Potential Impacts 

of the FIP 

Comment B.4.1: Commenter AA states 

that the proposed FIP is primarily silent 

about practical implementation issues, 

elaborating that the only discussion on 

that topic seems to be that two permits 

will be necessary and that the new 

permit for modified major facilities will 

need to use the EPA Region IX’s 

electronic format. 

Response to Comment B.4.1: Section 

40 CFR 52.285(d)(3) of the FIP identifies 

the information that an applicant must 

provide to the EPA (or other reviewing 

authority, if delegated by the EPA) when 

submitting an application under the FIP. 

Comment B.4.2: Commenter AA states 

that the EPA has expressed orally to the 

MDAQMD on a number of different 

occasions that it is concerned about 

various minor sources that will 

somehow escape NNSR. The commenter 

states that the EPA has especially 

expressed this concern for synthetic 

minor sources, where a permit 

limitation is the only thing rendering 

the facility ‘‘minor.’’ The commenter 

states that, given the EPA’s concern, it 

seems to be a bit of an oversight that 

specific provisions regarding review of 

minor sources are not addressed either 

directly or by reference. 

Response to Comment B.4.2: The FIP 

and 40 CFR 51.165 generally apply to 

major stationary sources of air pollution, 

though synthetic minor sources must 

comply with definitions of ‘‘potential to 

emit’’ and provisions relating to the 

relaxation of these limits. At such time 

that a particular source or modification 

becomes a major stationary source or 

major modification solely by virtue of a 

relaxation in any enforceable limitation 

that was established after August 7, 

1980, on the capacity of the source or 

modification otherwise to emit a 

pollutant, such as a restriction on hours 

of operation, then the requirements of 

the FIP shall apply to the source or 

modification as though construction had 

not yet commenced on the source or 

modification.124 The FIP also requires 

sources to identify any emission 

limitations taken by the source.125 The 

FIP incorporates the definitions used in 

Appendix S to Part 51, including the 

definition of ‘‘Potential to Emit.’’ 126

Synthetic minor sources that take a limit 

on their PTE are required to comply 

with this definition and the provisions 

relating to the relaxation of limits. 

Comment B.4.3: Commenter BB states 

that, in contrast to the MDAQMD’s 

requirement for a response or issuance 

of permits within 90 days of 

application, the EPA’s permitting 

process lacks a specific timeline. The 

commenter states that this potential 

delay could significantly impact 

manufacturing facilities applying for 

permits, which could impact facility 

operation and planning. The commenter 

states that facilities want to comply, but 

adding layers to the already-approved 

SIP that is implemented by the 

MDAQMD will cause an added layer of 

undue burden on the facility. 

Response to Comment B.4.3: We refer 

the reader to our response to comment 

A.5.4 for this comment. 

Comment B.4.4: Commenter CC states 

that five out of the six issues the EPA 

identified in the 2023 LA/LD of the 

MDAQMD’s NNSR program have 

apparently been resolved and that after 

CARB takes its action only one issue 

remains. The commenter states that it 

appears that issue is more based on 

interpretation, which does not seem 

resolvable by a FIP as far as the 

implications and impacts it will have on 

industry for submitting dual permits, 

having different permitting timelines, 

additional costs, and impacts on 

projects moving forward that maybe 

benefit clean air. The commenter 

suggests not implementing the FIP and 

instead encourages that it would be 

more beneficial for the EPA and the 

MDAQMD to work through their issues. 

Response to Comment B.4.4: The EPA 

directs the reader to our responses to 

comments A.1.3, A.5.6, and A.5.8. The 

EPA received CARB’s submission of the 

MDAQMD’s most recent NNSR SIP on 

August 7, 2024. The EPA is currently 

reviewing the submittal. Because the 

MDAQMD did not address one of the 

deficiencies that the EPA identified in 

the 2023 LA/LD, even if it did address 

all of the other deficiencies, the EPA 

would still need to promulgate a FIP by 

January 10, 2025, as required under the 

consent decree, because the EPA would 

still not be able to fully approve the 

MDAQMD’s NNSR program into the 

SIP.127

To the extent that the disagreement 

between the EPA and the MDAQMD is 

based upon interpretation of legal 

requirements, the FIP is a gap-filling 

tool that the EPA is required to 

promulgate when states or air districts 

do not implement CAA requirements 

into their permitting requirements. 

Because the MDAQMD refuses to 

implement CAA requirements regarding 

offsets, the EPA must implement a FIP 

that effectuates those requirements. 

IV. Final Action 

In this rulemaking, the EPA is taking 

final action in response to the court 

remand of EPA’s June 30, 2023 LA/LD 

action.128 The EPA is disapproving 

MDAQMD’s Rule 1304(C)(2)(d) because 

this rule continues to be insufficient to 

meet requirements for determining the 

quantity of offsets needed to issue a 

permit for a major modification.129 In 

this rulemaking, the EPA has provided 

additional explanation to support this 

disapproval of Rule 1304(C)(2)(d). This 

includes an analysis of the EPA’s prior 

action in 1996, which shows that the 

EPA did not fully consider applicable 

requirements at that time and that there 

have also since been intervening 

changes to EPA regulations. These 

responses supplement the EPA’s 

rationale provided for the 2023 LA/LD 

action.130 EPA affirms its disapproval of 

Rule 1304(C)(2)(d) in the 2023 LA/LD 

action 131 in this new final action based 

on the additional reasoning provided in 

this rulemaking and the record the EPA 

compiled to support the 2023 LA/LD 

action. 

In addition, in accordance with CAA 

section 110(c), the EPA is finalizing a 

FIP for the NNSR program for the 

MDAQMD portion of the West Mojave 

Desert ozone nonattainment area and 

the San Bernardino County and Trona 


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132See 40 CFR 52.285(d), ‘‘Permit approval 

criteria.’’ 

133Furthermore, the EPA notes that the PAL 

provisions in the FIP are not likely to be utilized 

by any permit applicants because the MDAQMD no 

longer has a PAL program in its NSR rules. 

134 88 FR 42264–42266; See also 87 FR 72434, 

72438 (November 25, 2022). 

Planning Area PM10 nonattainment 

areas. The EPA is finalizing the FIP as 

proposed except for one change to 

address an oversight error that is in the 

proposed rule text: in 40 CFR 

52.285(b)(1)(i), the definition of ‘‘actual 

emissions,’’ the EPA is inserting the text 

‘‘, or for establishing a PAL under 

paragraph IV.K of 40 CFR part 51, 

appendix S’’ to the first sentence of the 

definition. The added text clarifies the 

terms that are to be used in establishing 

a Plantwide Applicability Limit (PAL), 

as described in Appendix S, which the 

FIP incorporates by reference.132 The 

EPA is not requesting public comment 

on the fix to this minor typographical 

error since it merely applies the text that 

is in Appendix S.133

The FIP applies only to construction 

of new major stationary sources and 

major modifications at existing major 

stationary source in these 

nonattainment areas. The FIP 

implements statutory requirements in 

CAA sections 110(c)(1), 172(c)(5), 173, 

179(b), 182(c) and (d), 189(a)(1)(A) and 

(e), 301(a), and 302. 

The FIP will be directly implemented 

and enforced by the EPA. The FIP 

authorizes the EPA to delegate 

implementation of the FIP to the 

MDAQMD if the District requests such 

delegation. The FIP will apply until the 

MDAQMD revises its SIP to address 

deficiencies identified by the EPA and 

the EPA fully approves the MDAQMD’s 

NNSR SIP. 

As we explained in the proposal for 

this action, should the MDAQMD 

submit a SIP revision that corrects some, 

but not all, of the deficiencies identified 

in our June 30, 2023 rulemaking, the 

permit approval criteria for this FIP 

could be limited to the remaining 

deficiencies that the EPA identified.134

As described in the proposal for this 

action, permit applicants would still 

need to comply with any portions of the 

FIP that remain after the EPA approves 

the MDAQMD’s revised rules in the SIP. 

Likewise, if a court invalidates any one 

of these elements of the FIP, the EPA 

intends the remainder of this action to 

remain effective, as the EPA finds each 

portion of it to be appropriate even if 

one or more parts of it have been set 

aside. 

V. Supporting Information 

A. Policy on Children’s Health 

In 2021, the EPA updated its Policy on 

Children’s Health to reflect that 

‘‘children’s environmental health refers 

to the effect of environmental exposure 

during early life: from conception, 

infancy, early childhood and through 

adolescence until 21 years of age.’’ In 

addition, the policy applies to ‘‘effects 

of early life exposures [that] may also 

arise in adulthood or in later 

generations.’’ In this action, the EPA is 

finalizing a program that would 

implement our federal regulations in the 

nonattainment areas under the 

MDAQMD. In so far as there is an 

impact from this action, it will be 

positive since the deficiencies in the 

District’s program it is meant to rectify 

would likely result in increased 

emissions as compared to this FIP and 

our federal NNSR regulations. 

B. Judicial Review 

Under section 307(b)(1) of the Clean 

Air Act, petitions for judicial review of 

this action must be filed in the United 

States Court of Appeals for the 

appropriate circuit by February 28, 

2025. 

Filing a petition for reconsideration 

by the Administrator of this final rule 

does not affect the finality of this rule 

for the purposes of judicial review nor 

does it extend the time within which a 

petition for judicial review may be filed, 

and shall not postpone the effectiveness 

of such rule or action. This action may 

not be challenged later in proceedings to 

enforce its requirements (see section 

307(b)(2)). 

VI. Statutory and Executive Order 

Reviews 

Additional information about these 

statutes and Executive Orders can be 

found at https://www.epa.gov/lawsregulations/laws-and-executive-orders. 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 14094: Modernizing Regulatory 

Review 

This action is not a significant 

regulatory action as defined in 

Executive Order 12866 (58 FR 51735, 

October 1993), as amended by Executive 

Order 14094 (88 FR 21879, April 11, 

2023), and was, therefore, not subject to 

a requirement for Executive Order 

12866 review. 

B. Paperwork Reduction Act 

This action does not impose an 

information collection burden under the 

provisions of the Paperwork Reduction 

Act (44 U.S.C. 3501 et seq.) because this 

final rule implements existing 

requirements under the CAA and 40 

CFR 51.160–165. The Office of 

Management and Budget (OMB) has 

previously approved the information 

collection activities in the existing PSD 

and NNSR regulations under OMB 

control number 2060–0003. The burden 

associated with obtaining an NNSR 

permit for a major stationary source 

undergoing a major modification is 

already accounted for under the 

approved information collection 

requests. Thus, the EPA is not 

conducting an information collection 

request for this action. 

C. Regulatory Flexibility Act (RFA) 

I certify that this action will not have 

a significant economic impact on a 

substantial number of small entities 

under the RFA. This action is unlikely 

to impact small entities because the 

permitting requirements implemented 

through this action are applicable only 

to construction or modification of major 

stationary sources of air pollution. In 

the MDAQMD, major sources are those 

that emit, or have the potential to emit 

25 tons per year or more of NOX, Sulfur 

Oxides, or volatile organic compounds 

(VOCs); or 15 tons per year or more of 

PM10. To the extent that any small 

entities would own or operate sources 

capable of emitting this much air 

pollution, the requirements of this 

action apply only to construction of new 

major sources, or major modifications to 

existing major sources, located in the 

portions of the MDAQMD that are 

subject to the requirements of this 

action. The EPA does not have 

information to suggest that there 

currently are a substantial number of 

major stationary sources located in the 

MDAQMD that are owned or operated 

by small entities. The Agency also does 

not have any information on future 

modifications that any such existing 

major sources may engage in after the 

effective date of this FIP. Further, the 

Agency does not have information that 

suggests one or more small entities will 

seek to construct a new major stationary 

source in the MDAQMD. 

Even if the federal permitting 

requirements established in this FIP 

could be applicable to one or more 

small entities, these requirements would 

not have significant economic impact on 

such a small entity. Furthermore, any 

impact would not affect a substantial 

number of small entities. This FIP 

ensures that such small entities and 

other sources subject to the FIP 

requirements meet CAA requirements to 

which these sources should have 

already been subject. Upon finalization 

of this action, sources applying for a 


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Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 106353 

permit will be required to submit 

application materials to the EPA in 

compliance with the FIP. These sources 

are already subject to NNSR 

requirements under the District’s SIP, 

including the requirements to submit 

applications, to obtain offsets, and to 

install pollution control technology that 

satisfies Federal standards. 

Consequently, the incremental impact 

associated with application of the 

specific requirements of the NNSR 

regulations for certain sources emitting 

nonattainment criteria pollutants or its 

precursors is expected to be de minimis, 

primarily pertaining to the amount of 

offsets needed. 

D. Unfunded Mandates Reform Act 

(UMRA) 

This action does not contain an 

unfunded mandate of $100 million or 

more, as described in UMRA, 2 U.S.C. 

1531–1538, and does not significantly or 

uniquely affect small governments. This 

action imposes no enforceable duty on 

any state, local or tribal governments or 

the private sector. 

E. Executive Order 13132: Federalism 

This action does not have federalism 

implications. It will not have substantial 

direct effects on the states, on the 

relationship between the national 

government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications, as specified in Executive 

Order 13175, because this proposed rule 

would not apply on any Indian 

reservation land or in any other area 

where the EPA or an Indian tribe has 

demonstrated that the tribe has 

jurisdiction, and it will not impose 

substantial direct costs on tribal 

governments or preempt tribal law. 

Thus, Executive Order 13175 does not 

apply to this action. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

Risks and Safety Risks 

Executive Order 13045 directs federal 

agencies to include an evaluation of the 

health and safety effects of the planned 

regulation on children in Federal health 

and safety standards and explain why 

the regulation is preferable to 

potentially effective and reasonably 

feasible alternatives. This action is not 

subject to Executive Order 13045 

because it is not a significant regulatory 

action under section 3(f)(1) of Executive 

Order 12866. The EPA does not believe 

the environmental health or safety risks 

addressed by this action present a 

disproportionate risk to children 

because it implements specific 

standards established by Congress in 

statutes. 

However, EPA’s Policy on Children’s 

Health applies to this action. 

Information on how the Policy was 

applied is available under ‘‘Children’s 

Environmental Health’’ in the 

Supporting Information section of this 

preamble. 

H. Executive Order 13211: Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not subject to Executive 

Order 13211 (66 FR 28355, May 22, 

2001), because it is not a significant 

regulatory action under Executive Order 

12866. 

I. National Technology Transfer and 

Advancement Act (NTTAA) 

This rulemaking does not involve 

technical standards. 

J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations and Executive 

Order 14096: Revitalizing Our Nation’s 

Commitment to Environmental Justice 

for All 

The EPA believes that it is not 

practicable to assess whether the human 

health or environmental conditions that 

exist prior to this action result in 

disproportionate and adverse effects on 

communities with environmental justice 

concerns. The EPA performed an EJ 

analysis, as is described in the proposed 

action, 89 FR 56237, July 9, 2024, in the 

section titled, ‘‘Environmental Justice 

Considerations.’’ The analysis was done 

for the purpose of providing additional 

context and information about this 

rulemaking to the public, not as a basis 

for the action. While the EPA can 

identify the existing major sources in 

the nonattainment areas that would be 

impacted by this action, the EPA cannot 

quantify the number or types of sources 

that will undertake major modifications 

in the future. Additionally, the EPA 

cannot know whether new major 

sources will locate in the nonattainment 

area and what emissions these sources 

may have. The impacts of the action are 

likely to vary greatly depending on the 

source category, number and location of 

facilities, and the pollutants and 

potential controls addressed. Therefore, 

while the EPA cannot quantify the 

precise baseline conditions and impacts, 

to the extent that this action will have 

impacts, it will not result in 

disproportionate and adverse effects on 

communities with EJ concerns as 

compared with baseline human health 

and environmental conditions. 

In finalizing this action, the EPA will 

replace the MDAQMD in 

implementation of the District’s NNSR 

program through the FIP. Therefore, the 

EPA does not anticipate that this action 

will result in any negative impacts to 

human health and the environment 

negative impacts. If this action has any 

impact on human health or the 

environment it will be beneficial in so 

far as the FIP action will address 

deficiencies associated with the 

calculation of emission offsets in the 

NNSR program. As explained in section 

II of the preamble of the proposal of this 

action, this FIP is being promulgated to 

address several deficiencies with the 

MDAQMD’s NNSR program. See 89 FR 

56237, 56239. While the EPA has not 

analyzed the health impacts nor the 

emissions impacts from these 

deficiencies, the deficient provisions are 

less stringent than the Federal NNSR 

requirements that the EPA will be 

applying if this proposed FIP is 

finalized. Therefore, in so far as the EPA 

can qualitatively identify impacts to 

human health and the environment, the 

EPA expects this action will ensure the 

protections provided by the CAA and 

that the EPA’s implementing regulations 

will be fully realized. 

K. Congressional Review Act (CRA) 

This action is subject to the CRA, and 

the EPA will submit a rule report to 

each House of the Congress and to the 

Comptroller General of the United 

States. This action is not a ‘‘major rule’’ 

as defined by 5 U.S.C. 804(2). 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Ammonia, 

Incorporation by reference, 

Intergovernmental relations, Nitrogen 

oxides, Ozone, Particulate matter, 

Reporting and recordkeeping 

requirements, Volatile organic 

compounds. 

Michael Regan, 

Administrator. 

For the reasons stated in the 

preamble, part 52 of title 40 of the Code 

of Federal Regulations is amended as 

follows: 

PART 52—APPROVAL AND 

PROMULGATION OF 

IMPLEMENTATION PLANS 

■ 1. The authority citation for part 52 

continues to read as follows: 


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Authority: 42 U.S.C. 7401 et seq. 

Subpart F—California 

■ 2. Section 52.285 is added to read as 

follows: 

§ 52.285 Review of new sources and 

modifications—Mojave Desert Air Quality 

Management District. 

(a) Plan overview—(1) What is the 

purpose of the Federal Implementation 

Plan (FIP or ‘‘plan’’)? 

(i) The FIP has the following 

purposes: It establishes the Federal 

preconstruction permitting 

requirements for new major sources and 

major modifications located in 

nonattainment areas within the Mojave 

Desert Air Quality Management District 

(MDAQMD or ‘‘District’’) that are major 

for a nonattainment pollutant. 

(ii) The plan serves as the Federal 

nonattainment new source review 

(NNSR or ‘‘nonattainment major NSR’’) 

plan for the area described in paragraph 

(a)(1)(i) of this section, which the EPA 

has determined does not meet all of the 

Clean Air Act (CAA or ‘‘Act’’) title I part 

D requirements for NNSR programs. 

Sources subject to the plan must comply 

with the provisions and requirements of 

40 CFR part 51, appendix S. The FIP 

also sets forth the criteria and 

procedures that the reviewing authority 

(as defined in paragraph (b)(1)(v) of this 

section) must use to issue permits under 

the plan. For the purposes of the plan, 

the term SIP means any EPA-approved 

implementation plan for the area 

administered by the MDAQMD. 

(iii) Paragraph (f)(3) of this section 

sets forth procedures for appealing a 

permit decision issued under the plan. 

(iv) The plan does not apply in Indian 

country, as defined in 18 U.S.C. 1151 

and 40 CFR 49.167, located within the 

MDAQMD. 

(2) Where does the plan apply? (i) The 

provisions of the plan apply to the 

proposed construction of any new major 

stationary source or major modification 

in the MDAQMD that is major for a 

nonattainment pollutant, if the 

stationary source or modification is 

located anywhere in the designated 

nonattainment area. 

(3) What general provisions apply 

under the plan? The following general 

provisions apply to you as an owner or 

operator of a source: 

(i) If you propose to construct a new 

major source or a major modification in 

a nonattainment area in the MDAQMD, 

you must obtain a Federal NNSR permit 

(‘‘permit’’) under the plan before 

beginning actual construction. You may 

not begin actual construction after the 

effective date of the plan without 

applying for and receiving a Federal 

NNSR permit that authorizes 

construction pursuant to the plan. 

(ii) You must construct and operate 

your source or modification in 

accordance with the terms of your 

permit issued under the plan. 

(iii) Issuance of a permit under the 

plan does not relieve you of the 

responsibility to fully comply with 

applicable provisions of any EPAapproved implementation plan or FIP, 

and any other requirements under 

applicable law. This includes 

obligations to comply with any EPAapproved SIP provisions that satisfy 

Federal new source review (NSR) 

requirements. 

(b) Definitions. For the purposes of 

the plan, the definitions in 40 CFR part 

51, appendix S, paragraph II.A, and 40 

CFR 51.100 apply, except for paragraphs 

(b)(1) through (6) of this section, which 

replace the corresponding definitions 

found in part 51, appendix S: 

(1) Actual emissions means the actual 

rate of emissions of a regulated NSR 

pollutant from an emissions unit, as 

determined in accordance with 

paragraphs (b)(1)(i) and (ii) of this 

section, except that this paragraph (b)(1) 

shall not apply for calculating whether 

a significant emissions increase has 

occurred, or for establishing a PAL 

under paragraph IV.K of 40 CFR part 51, 

appendix S. Instead, 40 CFR part 51, 

appendix S, paragraphs II.A.24 and 30, 

shall apply for those purposes. 

(i) In general, actual emissions as of 

a particular date shall equal the average 

rate, in tons per year, at which the unit 

actually emitted the pollutant during a 

consecutive 24-month period that 

precedes the particular date and that is 

representative of normal source 

operation. The reviewing authority shall 

allow the use of a different time period 

upon a determination that it is more 

representative of normal source 

operation. Actual emissions shall be 

calculated using the unit’s actual 

operating hours, production rates, and 

types of materials processed, stored, or 

combusted during the selected time 

period. 

(ii) For any emissions unit that has 

not begun normal operations on the 

particular date, actual emissions shall 

equal the potential to emit of the unit on 

that date. 

(2) Enforceable as a practical matter 

means that an emission limitation or 

other standard is both legally and 

practicably enforceable as follows: 

(i) An emission limitation or other 

standard is legally enforceable if the 

reviewing authority has the legal power 

to enforce it. 

(ii) Practical enforceability for an 

emission limitation or for other 

standards (design standards, equipment 

standards, work practices, operational 

standards, pollution prevention 

techniques) in a permit for a source is 

achieved if the permit’s provisions 

specify: 

(A) A limitation or standard and the 

emissions units or activities at the 

source subject to the limitation or 

standard; 

(B) The time period for the limitation 

or standard (e.g., hourly, daily, monthly 

and/or annual limits such as rolling 

annual limits); and 

(C) The method to determine 

compliance, including appropriate 

monitoring, recordkeeping, reporting, 

and testing. 

(3) Environmental Appeals Board 

means the Board within the EPA 

described in 40 CFR 1.25(e). 

(4) Nonattainment pollutant means 

any regulated NSR pollutant for which 

the MDAQMD, or portion of the 

MDAQMD, has been designated as 

nonattainment, as codified in 40 CFR 

81.305, as well as any precursor of such 

regulated NSR pollutant specified in 40 

CFR part 51, appendix S, paragraph 

II.A.31.(ii)(b). 

(5) Reviewing authority means the 

Administrator of EPA Region IX, but it 

may include the MDAQMD if the 

Administrator delegates the power to 

administer the FIP under paragraph (g) 

of this section. 

(6) Significant means, in reference to 

an emissions increase or a net emissions 

increase, and notwithstanding the 

definition of ‘‘significant’’ in 40 CFR 

part 51, appendix S, paragraph II.A.10, 

any increase in actual emissions of 

volatile organic compounds or oxides of 

nitrogen that would result from any 

physical change in, or change in the 

method of operation of, a major 

stationary source locating in a serious or 

severe ozone nonattainment area if such 

emissions increase of volatile organic 

compounds or oxides of nitrogen 

exceeds 25 tons per year when 

aggregated with all other net emissions 

increases from the source over any 

period of 5 consecutive calendar years 

that includes the calendar year in which 

such increase occurred. 

(c) Does the plan apply to me? (1) In 

any MDAQMD nonattainment area, the 

requirements of the plan apply to you 

under the following circumstances: 

(i) If you propose to construct a new 

major stationary source and your source 

is a major source of nonattainment 

pollutant(s). 

(ii) If you own or operate a major 

stationary source and propose to 

construct a major modification, where 

your source is a major source of 

nonattainment pollutant(s) and the 


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proposed modification is a major 

modification for the nonattainment 

pollutant. 

(2) At such time that a particular 

source or modification becomes a major 

stationary source or major modification 

solely by virtue of a relaxation in any 

enforceable limitation that was 

established after August 7, 1980, on the 

capacity of the source or modification 

otherwise to emit a pollutant, such as a 

restriction on hours of operation, then 

the requirements of the plan shall apply 

to the source or modification as though 

construction had not yet commenced on 

the source or modification. 

(d) Permit approval criteria—(1) What 

are the general criteria for permit 

approval? The criteria for approval of 

applications for permits submitted 

pursuant to the plan are provided in 

part D of title I of the Act and in 40 CFR 

51.160 through 51.165 and 40 CFR part 

51, appendix S. 

(2) What are the plan-specific criteria 

for permit approval? Consistent with the 

requirements in 40 CFR part 51, 

appendix S, the reviewing authority 

shall not approve a permit application 

unless it meets the following criteria: 

(i) The lowest achievable emission 

rate (LAER) requirement for any NSR 

pollutant subject to the plan and 

monitoring, recordkeeping, reporting, 

and testing as necessary to assure 

compliance with LAER. 

(ii) Certification that all existing major 

sources owned or operated by the 

applicant in California are in 

compliance or, on a schedule for 

compliance, with all applicable 

emission limitations and standards 

under the Act. 

(iii) Any source or modification 

subject to the plan must obtain emission 

reductions (offsets) from existing 

sources in the area of the proposed 

source (whether or not under the same 

ownership) such that there will be 

reasonable progress toward attainment 

of the applicable NAAQS. 

Notwithstanding 40 CFR part 51, 

appendix S, paragraph IV.G.5, 

interprecursor offsetting is not 

permitted between precursors of ozone. 

A demonstration of reasonable progress 

toward attainment shall include: 

(A) A demonstration that the emission 

offsets will provide a net air quality 

benefit in the affected area, as required 

under 40 CFR part 51, appendix S, 

paragraph IV.A, Condition 4. 

(B) A demonstration that emissions 

reductions otherwise required by the 

Act are not credited for purposes of 

satisfying the offset requirements in this 

paragraph (d)(2)(iii) and part D of title 

I of the Act. 

(iv) An analysis of alternative sites, 

sizes, production processes and 

environmental control techniques for 

such proposed major source or major 

modification that demonstrates that the 

benefits of the proposed major source or 

major modification significantly 

outweigh the environmental and social 

costs imposed as a result of its location, 

construction, or modification. 

(3) What are the application 

requirements? The owner or operator of 

any proposed new major stationary 

source or major modification shall 

submit a complete application using 

EPA Region IX’s electronic system, 

which is described in paragraph 

(d)(3)(ii) of this section. The application 

must include the information listed in 

this paragraph (d)(3) as well as the 

demonstrations to show compliance 

with paragraphs (d)(2)(i) through (iv) of 

this section. The reviewing authority’s 

designation that an application is 

complete for purposes of permit 

processing does not preclude the 

reviewing authority from requesting or 

accepting any additional information. 

(i) Application content requirements. 

(A) Identification of the permit 

applicant, including contact 

information. 

(B) Address and location of the new 

or modified source. 

(C) Identification and description of 

all emission points, including 

information regarding all nonattainment 

pollutants emitted by all emissions 

units included in the new source or 

modification. 

(D) A process description of all 

activities, including design capacity, 

that may generate emissions of 

nonattainment pollutants, in sufficient 

detail to establish the basis for the 

applicability of standards. 

(E) A projected schedule for 

commencing construction and operation 

for all emissions units included in the 

new source or modification. 

(F) A projected operating schedule for 

each emissions unit included in the new 

source or modification. 

(G) A determination as to whether the 

new source or modification will result 

in any secondary emissions. 

(H) The emission rates of all regulated 

NSR pollutants, including fugitive and 

secondary emission rates, if applicable. 

The emission rates must be described in 

tons per year (tpy). If necessary, shorterterm rates must be described to allow 

for compliance using the applicable 

standard reference test method or other 

methodology specified (i.e., grams/liter, 

parts per million volume (ppmv) or 

parts per million weight (ppmw), lbs/ 

MMBtu). 

(I) The calculations on which the 

emission rate information is based, 

including fuel specifications, if 

applicable, and any other assumptions 

used to determine the emission rates 

(e.g., higher heating value (HHV), sulfur 

content of natural gas, VOC content). 

(J) The calculations, pursuant to 40 

CFR part 51, appendix S, paragraph IV.I 

and IV.J, that are used to determine 

applicability of the plan, including the 

emission calculations (increases or 

decreases) for each project that occurred 

during the contemporaneous period, as 

applicable. 

(K) The calculations, pursuant to 40 

CFR part 51, appendix S, paragraph 

IV.A, used to determine the quantity of 

offsets required for the new source or 

modification. 

(L) Identification of actual emission 

reductions that meet the offset integrity 

criteria of being real, surplus, 

quantifiable, permanent and federally 

enforceable. 

(M) If applicable, a description of how 

performance testing will be conducted, 

including test methods and a general 

description of testing protocols. 

(N) Information necessary to 

determine whether issuance of such 

permit: 

(1) May adversely affect federallylisted threatened or endangered species 

or the designated critical habitat of such 

species; or 

(2) Has the potential to cause adverse 

effects on historic properties. 

(ii) Application process requirements. 

To submit an application required 

under the plan, applicants may submit 

electronically through the Central Data 

Exchange (CDX)/Compliance and 

Emissions Data Reporting Interface 

(CEDRI) or submit by mail. 

(A) CDX/CEDRI is accessed through 

https://cdx.epa.gov. First-time users will 

need to register with CDX. The CDX 

platform will also be used for any 

permit reporting requirements. 

(B) Applicants that do not apply using 

CDX/CEDRI shall mail a signed 

application using certified mail (do not 

request signature) to: Air and Radiation 

Division, Permits Office (Air-3-1), U.S. 

EPA, Region 9, 75 Hawthorne Street, 

San Francisco, CA 94105. 

(C) Applicants that apply using 

certified mail must email a copy of the 

application and the certified mail 

tracking number to provide notification 

of delivery receipt to R9AirPermits@

epa.gov. 

(4) What are the requirements for 

monitoring, recordkeeping, and 

reporting? The reviewing authority shall 

require in the conditions of a permit 

such monitoring, recordkeeping, and 

reporting as necessary to facilitate 


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compliance with the terms of a permit 

and to make them enforceable as a 

practical matter. 

(e) Public participation 

requirements—(1) What permit 

information will be publicly available? 

With the exception of any confidential 

information as defined in 40 CFR part 

2, subpart B, the reviewing authority 

must make available for public 

inspection the documents listed in 

paragraphs (e)(1)(i) through (iv) of this 

section. The reviewing authority must 

make such information available for 

public inspection at the appropriate 

EPA Regional Office and in at least one 

location in the area affected by the 

source, such as the MDAQMD 

headquarters location or a local library. 

(i) All information submitted as part 

of your permit application as required 

under paragraph (d)(3) of this section. 

(ii) Any additional information 

requested by the reviewing authority. 

(iii) The reviewing authority’s 

analysis of the application and any 

additional information submitted by 

you, including the LAER analysis and, 

where applicable, the analysis of your 

emissions reductions (offsets), your 

demonstration of a net air quality 

benefit in the affected area and your 

analysis of alternative sites, sizes, 

production processes and 

environmental control techniques. 

(iv) A copy of the draft permit or the 

draft decision to deny the permit with 

the justification for denial. 

(2) How will the public be notified 

and participate? (i) Before issuing a 

permit under the plan, the reviewing 

authority must prepare a draft permit 

and provide adequate public notice to 

ensure that the affected community and 

the general public have reasonable 

access to the application and draft 

permit information, as set out in this 

paragraph (e)(2)(i) and paragraph 

(e)(2)(ii) of this section. The public 

notice must provide an opportunity for 

public comment and notice of a public 

hearing, if any, on the draft permit. 

(A) The reviewing authority must 

mail a copy of the notice to you (the 

permit applicant), the MDAQMD (or the 

EPA if there is a delegation under 

paragraph (g) of this section), and the 

California Air Resources Board (CARB). 

(B) The reviewing authority must 

comply with the methods listed in 

paragraph (e)(2)(i)(B)(1) or (2) of this 

section: 

(1) The reviewing authority must post 

the notice on its website. 

(2) The reviewing authority must 

publish the notice in a newspaper of 

general circulation in the area affected 

by the source. 

(3) The reviewing authority may also 

include other forms of notice as 

appropriate. This may include posting 

copies of the notice at one or more 

locations in the area affected by the 

source, such as at post offices, libraries, 

community centers or other gathering 

places in the community. 

(ii) The notices required pursuant to 

paragraph (c)(2)(i) of this section must 

include the following information at a 

minimum: 

(A) Identifying information, including 

the name and address of the permit 

applicant (and the plant name and 

address if different); 

(B) The name and address of the 

reviewing authority processing the 

permit application; 

(C) The regulated NSR pollutants to 

be emitted, and identification of the 

emissions unit(s) whose emissions of a 

regulated NSR pollutant could be 

affected by the project, including any 

emission limitations for these emissions 

unit(s); 

(D) The emissions change involved in 

the permit action; 

(E) Instructions for requesting a public 

hearing; 

(F) The name, address and telephone 

number of a contact person in the 

reviewing authority’s office from whom 

additional information may be obtained; 

(G) Locations and times of availability 

of the information, listed in paragraph 

(e)(1) of this section, for public 

inspection; and 

(H) A statement that any person may 

submit written comments, a written 

request for a public hearing or both, on 

the draft permit action. The reviewing 

authority must provide a period of at 

least 30 days from the date of the public 

notice for comments and for requests for 

a public hearing. 

(3) How will the public comment and 

will there be a public hearing? (i) Any 

person may submit written comments 

on the draft permit and may request a 

public hearing. The comments must 

raise any reasonably ascertainable issue 

with supporting arguments by the close 

of the public comment period 

(including any public hearing). The 

reviewing authority must consider all 

comments in making the final decision. 

The reviewing authority must keep a 

record of the commenters and of the 

issues raised during the public 

participation process, and such records 

must be available to the public. 

(ii) The reviewing authority must 

extend the public comment period 

under paragraph (e)(2) of this section to 

the close of any public hearing under 

this section. The hearing officer may 

also extend the comment period by so 

stating at the hearing. 

(iii) A request for a public hearing 

must be in writing and must state the 

nature of the issues proposed to be 

raised at the hearing. 

(iv) If requested, the reviewing 

authority may hold a public hearing at 

its discretion to give interested persons 

an opportunity for the oral presentation 

of data, views, or arguments, in addition 

to an opportunity to make written 

statements. The reviewing authority 

may also hold a public hearing at its 

discretion, whenever, for instance, such 

a hearing might clarify one or more 

issues involved in the permit decision. 

The reviewing authority must provide 

notice of any public hearing at least 30 

days prior to the date of the hearing. 

Public notice of the hearing may be 

concurrent with that of the draft permit, 

and the two notices may be combined. 

Reasonable limits may be set upon the 

time allowed for oral statements at the 

hearing. 

(v) The reviewing authority must 

make the written transcript of any 

hearing available to the public. 

(f) Final permit issuance and 

administrative and judicial review—(1) 

How will final action occur and when 

will my Federal NNSR permit become 

effective? After making a decision on a 

permit application, the reviewing 

authority must notify you, the permit 

applicant, of the decision in writing, 

and, if the permit is denied, provide the 

reasons for such denial and the 

procedures for appeal. If the reviewing 

authority issues a final permit to you, it 

must make a copy of the permit 

available at any location where the draft 

permit was made available. In addition, 

the reviewing authority must provide 

adequate public notice of the final 

permit decision to ensure that the 

affected community, the general public 

and any individuals who commented on 

the draft permit have reasonable access 

to the decision and supporting 

materials. A final permit becomes 

effective 30 days after service of the 

final permit decision, unless: 

(i) A later effective date is specified in 

the permit; 

(ii) Review of the final permit is 

requested under paragraph (f)(3) of this 

section; or 

(iii) No comments requested a change 

in the draft permit or a denial of the 

permit, in which case the reviewing 

authority may make the permit effective 

immediately upon issuance. 

(2) What is the administrative record 

for each final permit? (i) The reviewing 

authority must base final permit 

decisions on an administrative record 

consisting of: 


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(A) All comments received during any 

public comment period, including any 

extension or reopening; 

(B) The tape or transcript of any 

hearing(s) held; 

(C) Any written material submitted at 

such a hearing; 

(D) Any new materials placed in the 

record as a result of the reviewing 

authority’s evaluation of public 

comments; 

(E) Other documents in the 

supporting files for the permit that were 

relied upon in the decision-making; 

(F) The final Federal NNSR permit; 

(G) The application and any 

supporting data furnished by you, the 

permit applicant; 

(H) The draft permit or notice of 

intent to deny the application or to 

terminate the permit; and 

(I) Other documents in the supporting 

files for the draft permit that were relied 

upon in the decision-making. 

(ii) The additional documents 

required under paragraph (f)(2)(i) of this 

section should be added to the record as 

soon as possible after their receipt or 

publication by the reviewing authority. 

The record must be complete on the 

date the final permit is issued. 

(iii) Material readily available or 

published materials that are generally 

available and that are included in the 

administrative record under the 

standards of paragraph (f)(2)(i) of this 

section need not be physically included 

in the same file as the rest of the record 

as long as it is specifically referred to in 

that file. 

(3) Can permit decisions be appealed? 

(i) Permit decisions may be appealed 

under the permit appeal procedures of 

40 CFR 124.19, and the provisions of 

that section applicable to prevention of 

significant deterioration (PSD) permits 

shall apply to permit decisions under 

the FIP. A petition for review must be 

filed with the Clerk of the 

Environmental Appeals Board within 30 

days after the reviewing authority serves 

notice of the issuance of a final permit 

decision under the plan, in accordance 

with 40 CFR 124.19. 

(ii) An appeal under paragraph 

(f)(3)(i) of this section is, under section 

307(b) of the Act, a prerequisite to 

seeking judicial review of the final 

agency action. 

(4) Can my permit be reopened? The 

reviewing authority may reopen an 

existing, currently-in-effect permit for 

cause on its own initiative, such as if it 

contains a material mistake or fails to 

assure compliance with requirements in 

this section. However, except for those 

permit reopenings that do not increase 

the emission limitations in the permit, 

such as permit reopenings that correct 

typographical, calculation and other 

errors, all other permit reopenings shall 

be carried out after the opportunity for 

public notice and comment and in 

accordance with one or more of the 

public participation requirements under 

paragraph (e)(2) of this section. 

(5) Can my permit be rescinded? (i) 

Any permit issued under this section, or 

a prior version of this section, shall 

remain in effect until it is rescinded 

under this paragraph (f)(5). 

(ii) An owner or operator of a 

stationary source or modification who 

holds a permit issued under this section 

for the construction of a new source or 

modification that meets the requirement 

in paragraph (f)(5)(iii) of this section 

may request that the reviewing authority 

rescind the permit or a particular 

portion of the permit. 

(iii) The reviewing authority may 

grant an application for rescission if the 

application shows that the provisions of 

the plan would not apply to the source 

or modification. 

(iv) If the reviewing authority rescinds 

a permit under this paragraph (f), the 

public shall be given adequate notice of 

the rescission determination in 

accordance with paragraph (e)(2)(i)(B) of 

this section. 

(g) Administration and delegation of 

the Federal nonattainment major NSR 

plan in the MDAQMD—(1) Who 

administers the FIP in the MDAQMD? (i) 

The Administrator is the reviewing 

authority and will directly administer 

all aspects of the FIP in the MDAQMD 

under Federal authority. 

(ii) The Administrator may delegate 

Federal authority to administer specific 

portions of the FIP to the MDAQMD 

upon request, in accordance with the 

provisions of paragraph (g)(2) of this 

section. If the MDAQMD has been 

granted such delegation, it will be the 

reviewing authority for purposes of the 

provisions for which it has been granted 

delegation. 

(2) Delegation of administration of the 

FIP to the MDAQMD. This paragraph 

(g)(2) establishes the process by which 

the Administrator may delegate 

authority to the MDAQMD in 

accordance with the provisions in 

paragraphs (g)(2)(i) through (iv) of this 

section. Any Federal requirements 

under the plan that are administered by 

the delegate MDAQMD are enforceable 

by the EPA under Federal law. 

(i) Information to be included in the 

Administrative Delegation Request. To 

be delegated authority to administer the 

FIP or specific portions of it, the 

MDAQMD must submit a request to the 

Administrator. 

(ii) Delegation Agreement. A 

Delegation Agreement will set forth the 

terms and conditions of the delegation, 

will specify the provisions that the 

delegate MDAQMD will be authorized 

to implement on behalf of the EPA and 

will be entered into by the 

Administrator and the MDAQMD. The 

Agreement will become effective upon 

the date that both the Administrator and 

the MDAQMD have signed the 

Agreement or as otherwise stated in the 

Agreement. Once the delegation 

becomes effective, the MDAQMD will 

be responsible, to the extent specified in 

the Agreement, for administration of the 

provisions of the FIP that are subject to 

the Agreement. 

(iii) Publication of notice of the 

Agreement. The Administrator will 

publish a notice in the Federal Register 

informing the public of any Delegation 

Agreement. The Administrator also will 

publish the notice in a newspaper of 

general circulation in the MDAQMD. In 

addition, the Administrator will mail a 

copy of the notice to persons on a 

mailing list developed by the 

Administrator consisting of those 

persons who have requested to be 

placed on such a mailing list. 

(iv) Revision or revocation of an 

Agreement. A Delegation Agreement 

may be modified, amended or revoked, 

in part or in whole, by the 

Administrator after consultation with 

the MDAQMD. 

[FR Doc. 2024–30513 Filed 12–27–24; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 52 and 81 

[EPA–R05–OAR–2023–0498; FRL–12265– 

02–R5] 

Air Plan Approval; Illinois; Alton 

Township 2010 Sulfur Dioxide 

Redesignation and Maintenance Plan 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is approving Illinois’ 

request to redesignate the Alton 

Township nonattainment area in 

Madison County, Illinois to attainment 

for the 2010 sulfur dioxide (SO2) 

National Ambient Air Quality Standard 

(NAAQS). EPA is also approving 

Illinois’ maintenance plan for the area. 

Illinois submitted the request for 

approval on October 2, 2023. 

Additionally, EPA is taking final action 

to determine that the Alton Township 

area attained the 2010 SO2 NAAQS by 

the September 12, 2021, attainment 


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