Document ID: EPA-R09-OAR-2022-0427-0001
Agency: epa
Document Type: Proposed Rule
Title: Air Quality State Implementation Plans; Approvals and Promulgations: California; Antelope Valley Air Quality Management District; Stationary Source Permits; New Source Review
Posted Date: 2023-01-30T05:00Z

[Federal Register Volume 88, Number 19 (Monday, January 30, 2023)]
[Proposed Rules]
[Pages 5826-5833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-01500]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2022-0427; FRL-10165-01-R9]

Air Plan Approval and Limited Approval-Limited Disapproval; 
California; Antelope Valley Air Quality Management District; Stationary 
Source Permits; New Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing 
approval, and a limited approval and limited disapproval of a revision 
to the Antelope Valley Air Quality Management District (AVAQMD or 
``District'') portion of the California State Implementation Plan 
(SIP). The EPA is proposing to take action on nine rules submitted on 
August 3, 2021. We are proposing approval of three rules, and limited 
approval and limited disapproval of six rules. These revisions concern 
the District's New Source Review (NSR) permitting program for new and 
modified sources of air pollution under part D of title I of the Clean 
Air Act (CAA or ``Act''). If finalized, this action will update the 
AVAQMD's current SIP with nine revised rules. We are taking comments on 
this proposal and plan to follow with a final action.

DATES: Comments must be received on or before March 1, 2023.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2022-0427 at https://www.regulations.gov. For comments submitted at 
Regulations.gov, follow the online instructions for submitting 
comments. Once submitted, comments cannot be edited or removed from 
Regulations.gov. The EPA may publish any comment received to its public 
docket. Do not submit electronically any information you consider to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Multimedia submissions (audio, 
video, etc.) must be accompanied by a written comment. The written 
comment is considered the official comment and should include 
discussion of all points you wish to make. The EPA will generally not 
consider comments or comment contents located outside of the primary 
submission (i.e., on the web, cloud, or other file sharing system). For 
additional submission methods, please contact the person identified in 
the FOR FURTHER INFORMATION CONTACT section. For the full EPA public 
comment policy, information about CBI or multimedia submissions, and 
general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets. If you need assistance in a 
language other than English or if you are a person with disabilities 
who needs a reasonable accommodation at no cost to you, please contact 
the person identified in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Shaheerah Kelly, Permits Office (Air-
3-1), U.S. Environmental Protection Agency, Region IX, (415) 947-4156, 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us,'' 
and ``our'' refer to the EPA.

[[Page 5827]]

Table of Contents

I. The State's Submittal
    A. What rules are in the current SIP?
    B. What rules did the State submit?
    C. What is the purpose of the submitted rule revisions?
II. The EPA's Evaluation
    A. What is the background for this proposal?
    B. How is the EPA evaluating the rules?
    C. Do the rules meet the evaluation criteria?
    D. What are the rule deficiencies?
III. Proposed Action and Public Comment
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

Definitions

    For the purpose of this document, we are giving meaning to certain 
words or initials as follows:

    (i) The word or initials AVAQMD or District mean or refer to the 
Antelope Valley Air Quality Management District.
    (ii) The word or initials CAA or Act mean or refer to the Clean 
Air Act, unless the context indicates otherwise.
    (iii) The word or initials CARB mean or refer to the California 
Air Resources Board.
    (iv) The initials CFR mean or refer to Code of Federal 
Regulations.
    (v) The initials or words EPA, we, us or our mean or refer to 
the United States Environmental Protection Agency.
    (vi) The initials NA mean or refer to nonattainment.
    (vii) The initials NAAQS mean or refer to the National Ambient 
Air Quality Standards.
    (viii) The initials NSR mean or refer to New Source Review.
    (ix) The initials NNSR mean or refer to nonattainment New Source 
Review.
    (x) The initials SIP mean or refer to State Implementation Plan.
    (xi) The word State means or refers to the State of California.
    (xii) The word TSD means or refers to the Technical Support 
Document.

I. The State's Submittal

A. What rules are in the current SIP?

    Table 1 lists the rules in the current SIP with the dates they were 
adopted or amended by AVAQMD, submitted by the California Air Resources 
Board (CARB), the governor's designee for California SIP submittals, 
and approved by the EPA.

                                           Table 1--Current SIP Rules
----------------------------------------------------------------------------------------------------------------
                                                 Amendment or                     EPA action
             Rule                 Rule title     adoption date  Submittal date       date          FR citation
----------------------------------------------------------------------------------------------------------------
                                             Regulation II (Permits)
----------------------------------------------------------------------------------------------------------------
Rule 206.....................  Posting of            2/21/1976       4/21/1976       11/9/1978  43 FR 52237.
                                Permit to
                                Operate.
Rule 219.....................  Equipment Not          9/4/1981      10/23/1981        7/6/1982  47 FR 29231.
                                Requiring a
                                Written Permit
                                Pursuant to
                                Regulation II.
----------------------------------------------------------------------------------------------------------------
                                       Regulation XIII (New Source Review)
----------------------------------------------------------------------------------------------------------------
Rule 1301....................  General........       12/7/1995       8/28/1996       12/4/1996  61 FR 64291.
Rule 1302....................  Definitions....       12/7/1995       8/28/1996       12/4/1996  61 FR 64291.
Rule 1303....................  Requirements...       5/10/1996       8/28/1996       12/4/1996  61 FR 64291.
Rule 1304....................  Exemptions.....       6/14/1996       8/28/1996       12/4/1996  61 FR 64291.
Rule 1306....................  Emission              6/14/1996       8/28/1996       12/4/1996  61 FR 64291.
                                Calculations.
Rule 1309....................  Emission              12/7/1995       8/28/1996       12/4/1996  61 FR 64291.
                                reduction
                                Credits.
Rule 1309.1..................  Priority              12/7/1995       8/28/1996       12/4/1996  61 FR 64291.
                                Reserve.
Rule 1310....................  Analysis and          12/7/1995       8/28/1996       12/4/1996  61 FR 64291.
                                Reporting.
Rule 1311....................  Power Plants...       2/25/1980        4/3/1980       1/21/1981  46 FR 5965.
Rule 1313....................  Permits to            12/7/1995       8/28/1996       12/4/1996  61 FR 64291.
                                Operate.
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B. What rules did the State submit?

    The CARB provided submittals to the EPA on October 30, 2001, April 
22, 2020, and August 3, 2021 (hereafter referred to as the ``2001 
Submittal,'' ``2020 Submittal,'' and ``2021 Submittal,'' respectively), 
for revisions to the AVAQMD's NSR permitting program in the California 
SIP.
    The CARB's 2021 Submittal provided the amended NSR permitting 
program rules listed in Table 2 that were adopted by the AVAQMD and 
submitted by the CARB for inclusion in the SIP. The submitted rules 
listed in Table 2 would replace the current EPA-approved SIP rules that 
are listed in Table 1. The rule subsections 1302(C)(5) and 
1302(C)(7)(c) are not submitted for inclusion in the California SIP 
because they are requirements for regulating toxic air contaminants 
(TAC) and hazardous air pollutants (HAP) under the AVAQMD Rule 1401 
(New Source Review for Toxic Air Contaminants).\1\
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    \1\ Subsections 1302(C)(5)(d) and 1302(C)(7)(c)(iii) of Rule 
1302 specifically state that subsections 1302(C)(5) and 
1302(C)(7)(c) are not submitted to the EPA and are not intended to 
be included as part of the California SIP.

[[Page 5828]]

                                            Table 2--Submitted Rules
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                                                                                    Adoption or   Submittal date
                    Rule                                  Rule title              amendment date        \a\
----------------------------------------------------------------------------------------------------------------
                                             Regulation II (Permits)
----------------------------------------------------------------------------------------------------------------
Rule 219...................................  Equipment not Requiring a Permit...       6/15/2021        8/3/2021
----------------------------------------------------------------------------------------------------------------
                                       Regulation XIII (New Source Review)
----------------------------------------------------------------------------------------------------------------
Rule 1300..................................  New Source Review General..........       7/20/2021        8/3/2021
Rule 1301..................................  New Source Review Definitions......       7/20/2021        8/3/2021
Rule 1302 (except 1302(C)(5) and             New Source Review Procedure........       7/20/2021        8/3/2021
 1302(C)(7)(c)).
Rule 1303..................................  New Source Review Requirements.....       7/20/2021        8/3/2021
Rule 1304..................................  New Source Review Emissions               7/20/2021        8/3/2021
                                              Calculations.
Rule 1305..................................  New Source Review Emissions Offsets       7/20/2021        8/3/2021
Rule 1306..................................  New Source Review for Electric            7/20/2021        8/3/2021
                                              Energy Generating Facilities.
Rule 1309..................................  Emission Reduction Credit Banking..       7/20/2021        8/3/2021
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\a\ The submittal for Rules 219, 1300, 1301, 1302, 1303, 1304, 1305, 1306, 1309, and 1700 was transmitted to the
  EPA via a letter from CARB dated August 3, 2021.

    The CARB's 2001 and 2020 Submittals requested removal of the rules 
listed in Table 3 from the District's portion of the California SIP 
because they were locally rescinded.

                                            Table 3--Rescinded Rules
----------------------------------------------------------------------------------------------------------------
                                                           EPA approval date (FR    Rescission
               Rule                       Rule title             citation)             date       Submittal date
----------------------------------------------------------------------------------------------------------------
                                             Regulation II (Permits)
----------------------------------------------------------------------------------------------------------------
Rule 206..........................  Posting of Permit to   11/9/1978 (43 FR            1/21/2020       4/22/2020
                                     Operate.               52237).
----------------------------------------------------------------------------------------------------------------
                                       Regulation XIII (New Source Review)
----------------------------------------------------------------------------------------------------------------
Rule 1309.1.......................  Priority Reserve.....  12/4/1996 (61 FR            3/20/2001      10/30/2001
                                                            64291).
Rule 1310.........................  Analysis and           12/4/1996 (61 FR            3/20/2001      10/30/2001
                                     Reporting.             64291).
Rule 1311 \a\.....................  Power Plants.........  1/21/1981 (46 FR            3/20/2001      10/30/2001
                                                            5965).
Rule 1313.........................  Permits to Operate...  12/4/1996 (61 FR            3/20/2001      10/30/2001
                                                            64291).
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\a\ Rule 1311 was rescinded by South Coast AQMD on June 28, 1990 and submitted to the EPA for removal from the
  SIP on January 28, 1992 (see 64 FR 71660, December 22, 1999). Rule 1311 was rescinded by AVAQMD on March 20,
  2001 and submitted to the EPA for removal from the SIP on October 30, 2001.

    The CARB's 2021 Submittal also requested that all previous versions 
of Rule 219 and the rules under Regulation XIII codified in 40 CFR 
52.220 prior to July 1, 1997, as listed in Table 4, which are in effect 
within the jurisdiction of the AVAQMD be removed from the California 
SIP. These rules will be superseded by the submitted versions of Rule 
219 as amended on June 15, 2021, and Rules 1300 through 1306, and 1309 
as amended on July 20, 2021, upon the EPA's approval of these rules 
into the California SIP.
    The District was officially formed on July 1, 1997, as the agency 
with jurisdiction over the Los Angeles County portion of the Mojave 
Desert Air Basin. Prior to that time, the jurisdiction of the Antelope 
Valley area was part of the Los Angeles County Air Pollution Control 
District (APCD), the Southern California APCD, and the South Coast 
AQMD.

                         Table 4--Codified Rules in 40 CFR 52.220 Prior to July 1, 1997
----------------------------------------------------------------------------------------------------------------
                                                                                         EPA approval date (FR
                  Rule                         Submittal agency       Submittal date           citation)
----------------------------------------------------------------------------------------------------------------
                                             Regulation II (Permits)
----------------------------------------------------------------------------------------------------------------
Rule 11 (Exemptions)....................  Los Angeles County APCD...       6/30/1972  9/22/1972 (37 FR 19812).
Rule 219................................  Southern California APCD..       4/21/1976  11/9/1978 (43 FR 52237).
Rule 219................................  Southern California APCD..        8/2/1976  11/9/1978 (43 FR 52237).
Rule 219................................  Los Angeles County APCD...        6/6/1977  11/9/1978 (43 FR 52237).
Rule 219................................  South Coast AQMD..........      10/23/1981  7/6/1982 (47 FR 29231).
----------------------------------------------------------------------------------------------------------------

[[Page 5829]]

 
                                       Regulation XIII (New Source Review)
----------------------------------------------------------------------------------------------------------------
Rules 1301, 1303, 1304, 1305, 1306,       South Coast AQMD..........        4/3/1980  1/21/1981 (46 FR 5965).
 1307, 1310, 1311, and 1313.
Rules 1302 and 1308.....................  South Coast AQMD..........       8/15/1980  1/21/1981 (46 FR 5965).
Rules 1301, 1302, 1303, 1304, 1305,       Los Angeles County APCD...        9/5/1980  6/9/1982 (47 FR 25013).
 1306, 1307, 1308, 1310, 1311, and 1313.
Rules 1301, 1302, 1309, 1309.1, 1310,     South Coast AQMD..........       8/28/1996  12/4/1996 (61 FR 64291).
 and 1313, adopted on 12/7/1995; Rule
 1303 adopted on 5/10/1996; and Rules
 1304 and 1306 adopted on 6/14/1996.
----------------------------------------------------------------------------------------------------------------

    On February 3, 2021, the amended Rules 219, 1300, 1301, 1302 
(except 1302(C)(5) and 1302(C)(7)(c)), 1303, 1304, 1305, 1306, and 1309 
were deemed complete by operation of law to meet the completeness 
criteria in 40 CFR part 51, appendix V, which must be met before formal 
EPA review. Additionally, on October 22, 2020, rescinded Rule 206 was 
deemed complete by operation of law, and on April 30, 2002, rescinded 
Rules 1309.1, 1310, 1311, and 1313 were deemed complete by operation of 
law to meet the completeness criteria in 40 CFR part 51, appendix V.

C. What is the purpose of the submitted rule revisions?

    The rules listed in Table 2 are intended to replace the rules 
currently in the SIP as listed in Table 1. The submitted rules are also 
intended to satisfy the minor NSR and nonattainment NSR (NNSR) 
requirements of section 110(a)(2)(C) and part D of title I of the Act, 
and the EPA's implementing regulations at title 40 of the Code of 
Federal Regulations (CFR) part 51.\2\ Minor NSR requirements are 
generally applicable for SIPs in all areas, while NNSR requirements 
apply only in areas designated as nonattainment for one or more 
National Ambient Air Quality Standards (NAAQS). The AVAQMD is currently 
designated Severe nonattainment for the 2015 ozone NAAQS. See 40 CFR 
81.305. Therefore, the designation of AVAQMD as a federal ozone 
nonattainment area triggered the requirement for the District to 
develop and submit an NNSR program to the EPA for approval into the 
California SIP.
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    \2\ The CARB also submitted a PSD rule for SIP inclusion (AVAQMD 
Rule 1700, `Prevention of Significant Deterioration (PSD)'). We 
intend to take action on the District's PSD rule in a subsequent 
rulemaking.
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II. The EPA's Evaluation

A. What is the background for this proposal?

    Section 110(a) of the CAA requires states to submit regulations 
that include a pre-construction permit program for new or modified 
stationary sources of pollutants, including a permit program as 
required by part D of title I of the CAA.
    On October 26, 2015, the EPA finalized a revised 8-hour NAAQS for 
ozone, which was lowered from 0.75 parts per billion (ppb) to 0.70 
ppb.\3\ On June 4, 2018, the Los Angeles County portion of the Mojave 
Desert Air Basin, under the jurisdiction of the AVAQMD, was designated 
as nonattainment for 2015 8-hour ozone NAAQS and classified Severe-
15.4 5 (40 CFR 81.305.) This designation became effective on 
August 3, 2018. On December 6, 2018, the EPA finalized the 
implementation rule for the 2015 ozone NAAQS, which required the AVAQMD 
to submit an NSR certification to the EPA by August 3, 2021 (83 FR 
62998). On August 3, 2021, the CARB submitted to the EPA the amended 
NSR rules listed in Table 2 and requested to remove the rescinded rules 
listed in Table 3 and the rules listed in Table 4. The 2021 Submittal 
from the CARB is intended to satisfy this NSR requirement.
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    \3\ 80 FR 65291 (October 26, 2015).
    \4\ 83 FR 25776 (June 4, 2018). A classification of Severe-15 
under the 2015 ozone NAAQS is an area with a design value of 0.105 
ppm up to but not including 0.111 ppm.
    \5\ 40 CFR 51.1105 provides anti-backsliding requirements for 
areas that were nonattainment for standards that were revoked. The 
AVAQMD has the same designation of Severe for the 1997 8-hour, 2008 
8-hour, and the 2015 8-hour ozone NAAQS. Therefore, the 
nonattainment NSR requirements are the same, and have not changed.
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    The NSR rules contain the District's preconstruction permit program 
for new and modified major stationary sources for areas designated 
nonattainment for at least one NAAQS. They also include the District's 
minor NSR permit program. We provide a more detailed analysis in our 
technical support document (TSD), which is available in the docket for 
this proposed action.

B. How is the EPA evaluating the rules?

    The EPA has reviewed the AVAQMD rules listed in Table 2 for 
compliance with the CAA requirements as follows: (1) the general SIP 
requirements as set forth in CAA section 110(a)(2), including 
110(a)(2)(A) and 110(a)(2)(E)(i); (2) the stationary source 
preconstruction permitting program requirements as set forth in CAA 
part D of title I, including CAA sections 172(c)(5), 173, and 182; (3) 
the requirements for the review and modification of major sources in 
accordance with 40 CFR 51.160-51.165 as applicable in Severe ozone 
nonattainment areas; (4) the requirements for the review of new major 
stationary sources or major modifications in a designated nonattainment 
area that may have an impact on visibility in any mandatory Class I 
federal area in accordance with 40 CFR 51.307; (5) the SIP revision 
requirements as set forth in CAA sections 110(l) and 193; and (6) the 
provisions of CAA section 302(z).
    Sections 110(a)(2) and 110(l) of the Act require that each SIP or 
revision to a SIP submitted by the State must be adopted after 
reasonable notice and public hearing. In addition, section 110 of the 
Act requires that SIP rules be enforceable. Section 110(a)(2)(C) of the 
Act requires each SIP to include a program to regulate the modification 
and construction of any stationary source within the areas covered by 
the SIP as necessary to assure attainment and maintenance of the NAAQS. 
Section 110(a)(2)(E)(i) of the Act requires that each SIP provide 
necessary assurances that the state will have

[[Page 5830]]

adequate personnel, funding, and authority under state (and, as 
appropriate, local) law to carry out such implementation plan.
    Part D of title I of the Act contains the general requirements for 
areas designated nonattainment for a NAAQS (section 172), referred to 
as nonattainment NSR (NNSR), including preconstruction permit 
requirements for new major sources and major modifications proposing to 
construct in nonattainment areas (section 173) and the de minimis SIP 
requirements for Severe nonattainment areas (sections 182(c)(6) and 
182(d)).
    The EPA's regulations at 40 CFR 51.160-51.164 provide general 
programmatic requirements to implement the statutory mandate under 
section 110(a)(2)(C) of the Act that is commonly referred to as the 
``general'' or ``minor'' NSR program. These NSR program regulations 
impose requirements for approval of state and local programs that are 
more general in nature as compared to the specific statutory and 
regulatory requirements for NSR permitting programs under part D of 
title I of the Act.
    The EPA's regulations at 40 CFR 51.165 set forth the EPA's 
regulatory requirements for SIP-approval of a nonattainment NSR permit 
program. Our review also evaluated the submittal for compliance with 
the NNSR requirements applicable to Severe ozone nonattainment areas 
and ensured that the submittal addressed the NNSR requirements for the 
2015 ozone NAAQS.
    The EPA's regulations at 40 CFR 51.307 set forth the protection of 
visibility requirements that apply to NSR programs. This provision 
requires that certain actions be taken in consultation with the local 
Federal Land Manager if a new major source or major modification may 
have an impact on visibility in any mandatory Federal Class I Area.
    Section 110(l) of the Act prohibits the EPA from approving any SIP 
revisions that would interfere with any applicable requirement 
concerning attainment and reasonable further progress (RFP) or any 
other applicable requirement of the CAA.
    Section 193 of the Act, which only applies in nonattainment areas, 
prohibits the modification of a SIP-approved control requirement in 
effect before November 15, 1990, in any manner unless the modification 
insures equivalent or greater emission reductions of such air 
pollutant.
    Section 302(z) of the Act defines the term ``Stationary Source'' as 
generally any source of an air pollutant except those emissions 
resulting directly from an internal combustion engine for 
transportation purposes or from a nonroad engine or nonroad vehicle as 
defined in title II of the Act.
    Our TSD, which can be found in the docket for this rule, contains a 
more detailed discussion of the approval criteria.

C. Do the rules meet the evaluation criteria?

    The EPA has reviewed the submitted rules listed in Table 2 in 
accordance with the rule evaluation criteria described in Section II.B 
of this notice.
    With respect to procedural requirements, CAA sections 110(a)(2) and 
110(l) require SIP revisions to be adopted by the state after 
reasonable notice and public hearing. Based on our review of the public 
process documentation included in the 2021 Submittal for the amended 
rules listed in Table 2 and included in the 2001 and 2020 Submittals 
for the rescinded rules listed in Tables 3 and 4, we find that the 
AVAQMD has provided sufficient evidence of public notice, opportunity 
for comment, and a public hearing prior to the adoption, rescission, 
and submittal of these rules to the EPA.
    We have determined that while the submitted rules mostly satisfy 
the statutory and regulatory requirements in parts C and D of the Act 
(including sections 172, 173, 182(c)(6) and 182(d)), section 110(a)(2) 
(including 110(a)(2)(A) and 110(a)(2)(E)(i)) and 302(z) of the Act, and 
40 CFR 51.160-51.165 and 51.307, and strengthen the SIP, they also 
contain deficiencies that prevent full approval. We describe these 
identified deficiencies in Section II.D of this notice. Our TSD 
contains a more detailed evaluation of the deficiencies, as well as 
recommendations for program improvements.

D. What are the rule deficiencies?

    The EPA identified the following deficiencies in the rules proposed 
for inclusion in the SIP. Our TSD, which can be found in the docket for 
this proposed action, contains a more detailed discussion for our 
proposed action.
1. Simultaneous Emission Reductions (SERs) Calculation Methodology
    SERs, as defined in 1301(UUU), are a ``Federally Enforceable 
reduction in the emissions of an existing Emissions Unit(s), calculated 
pursuant to the provisions of District Rule 1304(C).'' As the name 
suggests, these are emission reductions that are proposed to occur in 
conjunction with emission increases from a proposed project. SERs 
calculated pursuant to 1304(C)(2)(d) are required to be based on real 
emissions reductions pursuant to 1301(A), 1301(LLL), and 1304(C)(1).\6\ 
SERs are used for the following purposes under the District's NSR 
rules: (1) as Offsets pursuant to 1301(AAA) and 1305(C)(2),\7\ (2) to 
determine the Net Emission Increase (NEI) for determining whether a 
project at a Modified Major Facility is a Major Modification pursuant 
to 1301(UU) and the related provisions in 1301(MM), 1301(RR), 
1301(TTT), and 1304(B)(2); \8\ and (3) to determine the amount of 
Offsets required at a new or Modified Facility pursuant to 1302(C)(3) 
and 1303(B)(1).\9\
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    \6\ Rule 1301(A) is the definition for Actual Emissions, 
1301(LLL) is the definition for Real, and 1304(C)(1) states that 
``SERs as defined in District Rule 1301(UUU) may result from the 
Modification or shut down of Existing Emission Unit(s) so long as 
the resulting reductions are Federally Enforceable, Real, Surplus, 
Permanent, Quantifiable and Enforceable, and are reductions in of 
the Emissions Unit(s).''
    \7\ Rule 1301(AAA) is the definition of Offset Emission 
Reductions (Offsets), and 1305(C)(2) provides the eligibility 
requirements for SERs used as offsets.
    \8\ Rule 1301(MM) is the definition for Major Modification, 
1301(RR) is the definition for Modification (Modified), 1301(TTT) is 
the definition for Significant, and 1304(B)(2) provides the NEI 
calculation procedures.
    \9\ Rule 1302(C)(3) provides the District's procedures for the 
determination of offsets, and Rule 1303(B)(1) states the District's 
procedures for determining the amount of offsets required.
---------------------------------------------------------------------------

    The EPA has identified deficiencies in how the District calculates 
and applies SERs. Rule 1304(C)(2)(d) allows SERs to be calculated using 
a potential-to-emit (PTE)-to-PTE calculation method rather than an 
actuals-to-PTE calculation method. Specifically, 1304(C)(2)(d) states 
that, in the case of a Modified Major Facility, the historic actual 
emissions (HAE) for a specific Emission Unit may in some circumstances 
be equal to the Potential to Emit for that Emission Unit if the 
particular Emission Unit has been previously offset in a documented 
prior permitting action.
    CAA section 173(c)(1) requires that the SIP must contain provisions 
to assure that emission increases from new or modified major stationary 
sources are offset by real reductions in actual emissions. In addition, 
40 CFR 51.165(a)(3)(i) specifies that the baseline for determining 
credit for emissions reductions shall be the ``actual'' emissions of 
the source from which the offset credit is obtained where the 
demonstration of reasonable further progress (RFP) and attainment of 
the NAAQS is based upon the actual emissions of sources located within 
the nonattainment area. The District's attainment plan and 
demonstration of RFP are based on actual emissions. SERs

[[Page 5831]]

calculated pursuant to 1304(C)(2)(d) and used as offsets pursuant to 
1301(AAA) and 1305(C)(2) may not be real reductions in actual emissions 
as required by CAA section 173(c)(1) because the provision allows an 
Emission Unit's potential to emit, rather than historic actual 
emissions to be used as the baseline for the calculations. Calculating 
emissions decreases using a potential emissions baseline allows 
reductions ``on paper'' that do not represent real emissions 
reductions. Under the CAA, such paper reductions cannot be used to 
offset actual emission increases. Moreover, since SERs calculated using 
a potential to emit baseline are not based on real reductions in actual 
emissions as required in CAA section 173(c)(1), it makes offsets that 
rely on the use of such SERs deficient.
    As discussed in the preceding paragraph, SERs calculated pursuant 
to 1304(C)(2)(d) may not represent real reductions in actual emissions 
because the provision allows an Emission Unit's potential to emit, 
rather than historic actual emissions, to be used as the baseline for 
calculating emission decreases. This provision is inconsistent with the 
plain language of the definition of ``net emissions increase'' (NEI) 
found in 40 CFR 51.165(a)(1)(vi)(E)(1), which states that: ``A decrease 
in actual emissions is creditable only to the extent that the old level 
of actual emission or the old level of allowable emissions whichever is 
lower, exceeds the new level of actual emissions.'' Therefore, we find 
the definition of NEI in 1301(UU) and all related provisions in 
1301(MM), 1301(RR), 1301(TTT), and 1304(B)(2) are deficient.
    40 CFR 51.165(a)(3)(ii)(J) requires that the increased emissions, 
in tons per year, resulting from a major modification that must be 
offset in accordance with section 173(c)(1) of the Act shall be 
determined by summing the difference between the allowable emissions 
after the modification and the actual emissions before the modification 
for each emissions unit. SERs calculated pursuant to 1304(C)(2)(d) and 
used to determine the quantity of offsets required at a new or Modified 
Facility pursuant to 1303(B)(1) may not be based on the difference 
between the allowable emissions after the modification and the actual 
emissions before the modification for each emissions unit as required 
by 40 CFR 51.165(a)(3)(ii)(J). Therefore, because 1303(B)(1) allows 
SERs to be used to calculate the quantity of offsets required, we find 
this provision to be deficient, as well as 1302(C)(3).
    These three deficiencies identified in the preceding paragraphs 
make portions of Rules 1301, 1302, 1303, 1304, and 1305 not fully 
approvable. Deviations from federal definitions and requirements are 
generally approvable only if a state specifically demonstrates that the 
submitted provisions are more stringent, or at least as stringent, in 
all respects as the corresponding federal provisions and definitions. 
See 40 CFR 51.165(a)(1) and 51.165(a)(2)(ii). These deficiencies may be 
corrected by revising 1304(C)(2)(d) to require HAE or actual emissions, 
rather than PTE, to always be used when calculating SERs, regardless of 
whether ``the particular Emissions Unit ha[s] been previously offset'' 
in a past NSR permit action. The District may also correct the 
deficiencies by providing a revised calculation method that meets or is 
at least as stringent as the requirements in CAA section 173(c)(1), 40 
CFR 51.165(a)(3)(i), 40 CFR 51.165(a)(1)(vi)(E)(1), and 40 CFR 
51.165(a)(3)(ii)(J).
2. Calculation Method for Determining HAE
    Rule 1304(E)(2) defines the calculation method for determining the 
HAE as it relates to emission changes at a Facility pursuant to 1304. 
Rule 1304(E)(2) states that HAE, in pounds per year, is the actual 
emissions of an emission unit, ``(i) . . . averaged from the 2-year 
period which immediately proceeds the date of application and which is 
representative of Facility operations; or (ii) averaged for any 2 years 
of the 5-year period which immediately precedes the date of application 
which the APCO has determined is more representative of Facility 
operations. . . .''
    The provision contains a typographical error making the provision 
deficient. The actual emissions must be based on emissions emitted 
preceding the date of application. This deficiency may be corrected by 
replacing the word ``proceeds'' with ``precedes'' in Rule 
1304(E)(2)(i).
3. Use of Contracts
    The District rule provisions 1302(D)(6)(a)(iii), 1304(C)(4)(c), 
1309(D)(3)(c), and 1309(E)(6) are used to meet requirements in CAA 
section 173(c)(1), and 40 CFR 51.165(a)(3)(ii)(G) and 40 CFR 
51.165(a)(3)(ii)(J). The provisions allow an owner and/or operator to 
obtain a valid District permit or ``contract'' enforceable by the 
District. The terms ``Authority to Construct (ATC)'' and ``Permit to 
Operate (PTO)'' are defined in Rule 1301(H) and 1301(CCC), 
respectively. SIP-approved Rules 201, 203, and 204 provide additional 
requirements for ATCs and PTOs. However, neither the NSR rules 
submitted for approval nor any other SIP-approved NSR rules define the 
term ``contract'' or provide requirements for how a contract is an 
enforceable mechanism that may be used in the same way as an ATC or 
PTO. For this reason, rule sections 1302(D)(6)(a)(iii), 1304(C)(4)(c), 
1309(D)(3)(c), and 1309(E)(6) are deficient and therefore are not fully 
approvable. This deficiency may be corrected by either removing the 
term ``contract'' or adding provisions that define and delineate how a 
contract is a federally enforceable mechanism that may be used in the 
same way as an ATC or a PTO.
4. Interprecursor Trading
    Rule 1305(C)(6) allows interprecursor trading (IPT) between 
nonattainment pollutants and their precursors on a case-by-case basis. 
A footnote to this section states: ``Use of this subsection [is] 
subject to the Ruling in Sierra Club v. EPA, 985 F.3d 1055 (D.C. Cir. 
2021) and subsequent guidance as issued by USEPA.'' This footnote 
appears to reference the D.C. Circuit Court of Appeals decision issued 
on January 29, 2021,\10\ vacating the provisions of the 2018 
Implementation Rule that allowed IPT for the ozone precursors volatile 
organic compounds (VOCs) and nitrogen oxides (NOX).\11\ On 
July 19, 2021, the EPA issued a final rulemaking that removed the IPT 
provisions found in 40 CFR 51.165(a)(11) pertaining to ozone 
precursors, consistent with the D.C. Circuit Court decision.\12\ 
Therefore, the provision in Rule 1305(C)(6) allowing IPT for ozone 
precursors is no longer permissible under EPA regulations. Accordingly, 
we find Rule 1305 deficient in this regard. We acknowledge the 
District's attempt to address the D.C. Circuit Court decision, but with 
the EPA's revisions to the NSR regulations, the District must revise 
Rule 1305(C)(6) to make clear that IPT is not permissible for ozone 
precursors.
---------------------------------------------------------------------------

    \10\ Sierra Club v. EPA, 21 F.4th 815 (D.C. Cir. 2021). This is 
the same D.C. Circuit Court decision cited in Rule 1305; the Court 
simply updated the citation.
    \11\ 83 FR 62998 (December 6, 2018).
    \12\ 86 FR 37918 (July 19, 2021).
---------------------------------------------------------------------------

5. De Minimis Rule
    Pursuant to section 182(c) and (d) of the CAA, the SIP requirements 
for Severe nonattainment areas must include all the provisions under 
section 182(c) for Serious nonattainment areas as well as the SIP 
requirements in section 182(d) for Severe ozone nonattainment areas. 
CAA section 182(c)(6) requires that the NSR provisions in the SIP 
``shall ensure

[[Page 5832]]

increased emissions of volatile organic compounds resulting from any 
physical change in, or change in the method of operation of, a 
stationary source located in the area shall not be considered de 
minimis for purposes of determining the applicability of the permit 
requirements established by this Act unless the increase in net 
emissions of such air pollutant from such source does not exceed 25 
tons when aggregated with all other net increases in emissions from the 
source over any period of 5 consecutive calendar years which includes 
the calendar year in which such increase occurred.'' The de minimis SIP 
requirements in CAA section 182(c)(6) are not provided in AVAQMD's 
submitted nonattainment NSR rules. Therefore, the District rules are 
deficient and not fully approvable with respect to CAA section 
182(c)(6) or purposes of determining the applicability of the NSR 
permit requirements. This deficiency may be corrected by incorporating 
the de minimis SIP requirements in CAA section 182(c)(6) in the 
Regulation XIII nonattainment NSR rules.
    Our TSD, which can be found in the docket for this proposed action, 
contains a more detailed discussion of the rule deficiencies as well as 
a complete analysis of the District's submitted rules that form the 
basis for our proposed action.

III. Proposed Action and Public Comment

    The EPA is proposing approval of AVAQMD Rules 219, 1300, and 1306 
as authorized in section 110(k)(3) of the Act. If a portion of a plan 
revision meets all the applicable CAA requirements, CAA sections 
110(k)(3) and 301(a) authorize the EPA to approve the plan revision in 
part and disapprove the plan revision in part. The EPA is proposing a 
limited approval and limited disapproval of Rules 1301, 1302, 1303, 
1304, 1305, and 1309 as authorized in sections 110(k)(3) and 301(a) of 
the Act because although they fulfill most of the relevant CAA 
requirements and strengthen the SIP, they also contain six deficiencies 
as discussed in Section II.D of this notice.
    Regarding the additional substantive requirements of CAA sections 
110(l) and 193, our proposed action will result in a more stringent 
SIP, while not relaxing any existing provision contained in the SIP. We 
have concluded that our action would comply with section 110(l) because 
it will not interfere with any applicable requirement concerning 
attainment and reasonable further progress, or any other applicable CAA 
requirement. In addition, our proposed action will not relax any pre-
November 15, 1990 requirement in the SIP, therefore changes to the SIP 
resulting from this action ensure greater or equivalent emission 
reductions of ozone and its precursors in the District. Accordingly, we 
have concluded that our action is consistent with the requirements of 
CAA section 193.
    If we finalize this action as proposed, our action will be codified 
through revisions to 40 CFR 52.220 (Identification of plan--in part). 
This action would incorporate the submitted rules into the SIP, 
including those provisions identified as deficient. This approval is 
limited because the EPA is simultaneously proposing a limited 
disapproval of Rules 1301, 1302, 1303, 1304, 1305, and 1309 under CAA 
sections 110(k)(3) and 301(a).
    In conjunction with our SIP approval of the District's visibility 
provisions for major sources subject to review under the NNSR program, 
we also propose to revise 40 CFR 52.281(d) regarding applicability of 
the visibility Federal Implementation Plan (FIP) at 40 CFR 52.28 as it 
pertains to California. Approval of the District's visibility 
provisions under 40 CFR 51.307 would mean that this FIP is not needed 
to satisfy the CAA visibility requirements at 40 CFR 51.307 for sources 
subject to the District's NNSR program. This revision will clarify the 
application of this FIP in California following our final action.
    If finalized as proposed, our limited disapproval action would 
trigger an obligation on the EPA to promulgate a FIP unless the State 
corrects the deficiencies, and the EPA approves the related plan 
revisions, within two years of the final action. Additionally, because 
the deficiencies relate to NNSR requirements under part D of title I of 
the Act, the offset sanction in CAA section 179(b)(2) would apply in 
the AVAQMD's jurisdiction 18 months after the effective date of a final 
limited disapproval, and the highway funding sanctions in CAA section 
179(b)(1) would apply in the area six months after the offset sanction 
is imposed. Section 179 sanctions will not be imposed under the CAA if 
the State submits, and we approve, prior to the implementation of the 
sanctions, a SIP revision that corrects the deficiencies that we 
identify in our final action. The EPA intends to work with the District 
to correct the deficiencies in a timely manner.
    We will accept comments from the public on this proposal until 
March 1, 2023.

IV. Incorporation by Reference

    In this rule, the EPA is proposing to include in a final EPA rule 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by 
reference the AVAQMD rules listed in Table 2 of this preamble, which 
contain the District's NSR permitting program for new and modified 
sources of air pollution under part D of title I of the CAA. The EPA 
has made, and will continue to make, these materials available through 
https://www.regulations.gov and in hard copy at the EPA Region IX 
Office (please contact the person identified in the FOR FURTHER 
INFORMATION CONTACT section of this preamble for more information).

V. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at https://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under 
the PRA because this action does not impose additional requirements 
beyond those imposed by state law.

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 will not impose any requirements on small entities beyond those 
imposed by state law.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. This action does not impose additional requirements 
beyond those imposed by state law. Accordingly, no additional costs to 
state, local, or tribal governments, or to the private sector, will 
result from this action.

[[Page 5833]]

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: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175, because the SIP is not approved to apply on any 
Indian reservation land or in any other area where the EPA or an Indian 
tribe has demonstrated that a tribe has jurisdiction, and 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

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it does not impose additional 
requirements beyond those imposed by state law.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211, because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the NTTAA directs the EPA to use voluntary 
consensus standards in its regulatory activities unless to do so would 
be inconsistent with applicable law or otherwise impractical. The EPA 
believes that this action is not subject to the requirements of section 
12(d) of the NTTAA because application of those requirements would be 
inconsistent with the CAA.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Population

    The State did not evaluate environmental justice considerations as 
part of its SIP submittal. There is no information in the record 
inconsistent with the stated goals of E.O. 12898 of achieving 
environmental justice for people of color, low-income populations, and 
indigenous peoples.

List of Subjects in 40 CFR Part 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon oxides, Incorporation by reference, 
Intergovernmental relations, Lead, Nitrogen oxides, Ozone, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides, 
Volatile organic compounds.

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

    Dated: January 19, 2023.
Martha Guzman Aceves,
Regional Administrator, Region IX.
[FR Doc. 2023-01500 Filed 1-27-23; 8:45 am]
BILLING CODE 6560-50-P