

[Federal Register: February 20, 2008 (Volume 73, Number 34)]
[Proposed Rules]               
[Page 9260-9266]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20fe08-32]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2007-0122; FRL-8528-6]

 
Revisions to the California State Implementation Plan, San 
Joaquin Valley Unified Air Pollution Control District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to correct our May 2004 final approval of 
revisions to the San Joaquin Valley Unified Air

[[Page 9261]]

Pollution Control District (SJVUAPCD or ``District'') portion of the 
California State Implementation Plan (SIP). We are also proposing to 
approve two 2006 revisions to these rules that the California Air 
Resources Board submitted to EPA in December 2006. Our correction to 
our May 2004 approval and our proposed approval of the District's 2006 
revisions conform the District's rules to a State law generally known 
as Senate Bill 700 by explicitly limiting the applicability of new 
source permitting requirements to certain minor sources and limiting 
the applicability of offset requirements for all minor agricultural 
sources consistent with criteria identified in state law. We are 
proposing to correct our May 2004 final approval pursuant to section 
110(k)(6) of the Clean Air Act (CAA or ``Act''). We are proposing to 
approve the District's 2006 revisions of the local rules into the SIP 
pursuant to section 110(k)(2) of the Act.

DATES: Any comments must arrive by March 21, 2008.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2007-0122, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. Follow 

the on-line instructions.
     E-mail: R9airpermits@epa.gov.
     Mail or deliver: Gerardo Rios (Air-3), U.S. Environmental 
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 
94105.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at http://www.regulations.gov, 

including any personal information provided, unless the comment 
includes Confidential Business Information (CBI) or other information 
whose disclosure is restricted by statute. Information that you 
consider CBI or otherwise protected should be clearly identified as 
such and should not be submitted through http://www.regulations.gov or e-mail. 

http://www.regulations.gov is an ``anonymous access'' system, and EPA will not 

know your identity or contact information unless you provide it in the 
body of your comment. If you send e-mail directly to EPA, your e-mail 
address will be automatically captured and included as part of the 
public comment. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment.
    Docket: The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at EPA Region 

IX, 75 Hawthorne Street, San Francisco, California. While all documents 
in the docket are listed in the index, some information may be publicly 
available only at the hard copy location (e.g., copyrighted material), 
and some may not be publicly available in either location (e.g., CBI). 
To inspect the hard copy materials, please schedule an appointment 
during normal business hours with the contact listed in the FOR FURTHER 
INFORMATION CONTACT section below.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, Permits Office (AIR-
3), U.S. Environmental Protection Agency, Region IX, (415) 972-3534, 
yannayon.laura@epa.gov.


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

Table of Contents

I. Correction of EPA's May 2004 Final Approval
    A. CAA Legal Authority
    B. Background on California's and SJVUAPCD's SIPs
    C. Correction of Erroneous Final Approval
II. The State's Submittal of Its 2006 Revisions
    A. What revisions did the State submit?
    B. Are there other versions of these rules?
    C. What is the purpose of the submitted rule revisions?
III. EPA's Evaluation and Action on the 2006 Revisions
    A. How is EPA evaluating the rules?
    B. Do the rules meet the evaluation criteria?
    1. Compliance With EPA Minor Source Permitting Requirements
    2. CAA Section 110(l)
    C. Public Comment and Final Action
IV. Statutory and Executive Order Reviews

I. Correction of EPA's May 2004 Final Approval

A. CAA Legal Authority

    Section 110(k)(6) of the Clean Air Act, as amended in 1990, 
provides: ``Whenever the Administrator determines that the 
Administrator's action approving, disapproving, or promulgating any 
plan or plan revision (or part thereof), area designation, 
redesignation, classification or reclassification was in error, the 
Administrator may in the same manner as the approval, disapproval, or 
promulgation revise such action as appropriate without requiring any 
further submission from the State. Such determination and the basis 
thereof shall be provided to the State and the public.''
    We interpret this provision to authorize the Agency to make 
corrections to a promulgated regulation when it is shown to our 
satisfaction (or we discover) that (1) we clearly erred by failing to 
consider or by inappropriately considering information made available 
to EPA at the time of the promulgation, or the information made 
available at the time of promulgation is subsequently demonstrated to 
have been clearly inadequate, and (2) other information persuasively 
supports a change in the regulation. See 71 FR 75690, at 75693 
(December 18, 2006); 57 FR 56762, at 56763 (November 30, 1992).

B. Background on California's and SJVUAPCD's SIPs

    The regulatory history of permitting agricultural sources in 
California is relevant to our evaluation of the error we made in our 
May 2004 final approval of the District's new source review (NSR) 
permitting rules. In 1970, the California legislature enacted a law 
that was codified as California Health & Safety Code (CH&SC) section 
24265(e). CH&SC section 24265(e) exempted all agricultural sources from 
District permitting requirements. Specifically, CH&SC section 24265(e) 
provided that a District permit shall not be required for equipment 
used in agricultural operations in the growing of crops or raising of 
fowls or animals except for certain orchard or citrus grove heaters in 
Southern California.\1\
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    \1\ In this instance, Southern California is defined as 
including all counties, any part of which lie south of the Sixth 
Standard Parallel South, Mount Diablo Base and Meridian. Within the 
SJVUAPCD, only Kern County lies south of the Sixth Standard Parallel 
South.
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    On February 21, 1972, pursuant to the Clean Air Amendments of 1970, 
Governor Ronald Reagan submitted the original California State 
Implementation Plan (SIP) to EPA. The original SIP included ``Chapter 
7--Legal Considerations'' to demonstrate adequate legal authority to 
implement and enforce SIP requirements. Chapter 7 of the original SIP 
discusses the respective authorities of the California Air Resources 
Board and the local air districts. Specifically, the narrative included 
as Chapter 7 cites CH&SC section 24263 as a basis for the authority of 
local air districts to operate permit systems but does not specifically 
cite the permitting exemptions found in CH&SC section 24265. California 
submitted many provisions of the CH&SC including specific provisions 
cited in the narrative, such as section 24263, as well as provisions 
that were not specifically cited, such as section 24265, as appendix II 
to the original SIP. Later that same year, and with certain exceptions 
not relevant here, EPA took action to approve the original SIP. See 37 
FR 10842 (May 31, 1972).
    The California SIP has been revised many times, and on March 16, 
1979, the

[[Page 9262]]

Governor's designee, the California Air Resources Board (CARB), 
submitted a revision to the SIP referred to as ``Chapter 3--Legal 
Authority, Revision to State of California Implementation Plan for the 
Attainment and Maintenance of Ambient Air Quality Standards (December 
1978).'' By 1979, CH&SC section 24265(e) had been re-codified as CH&SC 
section 42310(e). Similar to the 1972 original SIP, CARB's 1979 
submittal includes a narrative that generally describes, among many 
other topics, the authority of local air districts to issue permits to 
stationary sources but that does not specifically cite exemptions to 
District permitting (then codified under CH&SC section 42310). The 1979 
submittal incorporates CH&SC provisions as appendix 3-A to chapter 3, 
but, unlike the 1972 SIP, California did not physically include the 
actual CH&SC provisions with the 1979 submittal, but indicated that the 
code was available separately from the ARB Public Information Office. 
We described CARB's 1979 submittal of ``Chapter 3--Legal Authority'' as 
an updating and clarification of the 1972 SIP. See 44 FR 38912 (July 3, 
1979). The following year, we finalized our proposed approval of the 
March 16, 1979 submittal of ``Legal Authority.'' See 45 FR 53136 
(August 11, 1980).
    In addition, individual California air pollution control districts 
subsequently submitted (through CARB) local permitting rules for EPA to 
approve into the SIP. Some district permitting rules, such as those 
submitted by SJVUAPCD, explicitly exempted agricultural sources from 
the NSR permitting rules, consistent with and generally citing to CH&SC 
section 42310(e). Prior to the late 1990's, EPA had approved such 
exemptions into SIP NSR permitting rules, including the SIP NSR rules 
for the county APCDs that now comprise the region-wide SJVUAPCD.
    CARB submitted a revised version of SJVUAPCD NSR permitting rules, 
Rules 2020 and 2201, to EPA for SIP approval in 1998. On July 19, 2001, 
EPA finalized a limited approval and limited disapproval of revised 
SJVUAPCD Rules 2020 and 2201. See 66 FR 37587 (July 19, 2001). EPA's 
limited disapproval was based, in part, on Rule 2020's exemption of 
agricultural sources, which was identical to and referenced CH&SC 
section 42310(e). Our limited disapproval stated that SJVUAPCD could 
not exempt major stationary sources or major modifications at existing 
major sources from NSR requirements.\2\
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    \2\ SJVUAPCD NSR permitting rules do not adopt the distinction 
between minor sources and major sources as set forth under the CAA. 
SJVUAPCD Rules 2201 and 2020 generally apply to both federal minor 
and major stationary sources. Our limited approval specified that 
the rule deficiency was exempting major agricultural sources and 
major modifications. See 65 FR 58252, at 58254 (September 28, 2000).
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    To correct the deficiency in Rule 2020 leading to EPA's July 2001 
limited disapproval, SJVUAPCD adopted and submitted a revision to Rule 
2020 which eliminated the agricultural exemption in its entirety from 
the District rules. SJVUAPCD submitted the revised Rule 2020 to EPA on 
December 23, 2002.
    On February 13, 2003, EPA proposed several actions regarding the 
exemption of agricultural sources from major source NSR permitting 
requirements. First, EPA proposed approval of revised Rule 2020 
completely deleting the permit exemption for agricultural sources from 
the District rules. See 68 FR 7330 (February 13, 2003).\3\ In that 
notice, EPA specifically noted that ``California Health & Safety Code 
42310(e) continues to preclude the District, as well as all other 
districts in California, from permitting agricultural sources under 
either title I or title V of the CAA.'' See 68 FR 7330, at 7335. To 
address this issue, EPA published a proposal finding that California's 
statutory exemption of agricultural sources in CH&SC section 42310(e) 
from major source NSR permitting rules violated the requirements of CAA 
section 110(a)(2)(E). See 68 FR 7327 (February 13, 2003). This action, 
titled ``Finding of Substantial Inadequacy of Implementation Plan; Call 
for California State Implementation Plan Revision'' (hereinafter ``SIP 
Call''), determined that California lacked adequate legal authority to 
carry out its NSR permitting requirements because CH&SC section 
42310(e) exempted major agricultural sources. EPA finalized the SIP 
Call on June 25, 2003, and thereby required California to submit the 
necessary assurances of authority by November 23, 2003 to support an 
affirmative finding by EPA under CAA section 110(a)(2)(E). If the State 
failed to submit the necessary assurances, then EPA indicated that the 
sanctions clock under CAA section 179 would be triggered.\4\ See 68 FR 
37746 (June 25, 2003).
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    \3\ EPA also published an Interim Final Determination that 
SJVUAPCD had corrected the July 2001 limited approval deficiencies 
and EPA stayed or deferred the imposition of CAA sanctions on the 
District. See 68 FR 7321.
    \4\ On May 22, 2002, EPA issued a Notice of Deficiency for 
California's Title V program based on the exemption of agricultural 
sources from Title V permitting. See 67 FR 35990 (May 22, 2002). 
EPA's decision was upheld. See California Farm Bureau Fed'n v. EPA, 
No. 02-73371 (9th Cir. July 15, 2003) (memorandum opinion).
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    Later that summer, the California legislature enacted Senate Bill 
(SB) 700, which the Governor of California signed on September 22, 
2003. SB 700 removed the wholesale exemption from permitting for 
agricultural sources provided under CH&SC section 42310(e) and 
subjected major agricultural sources to permitting requirements. SB 
700, however, retained exemptions for new source permitting for certain 
minor agricultural sources, and limited the ability to require minor 
agricultural sources to obtain federal offsets.\5\ California notified 
EPA of the legislature's action by letter dated November 3, 2003 
thereby avoiding the triggering of a sanctions clock. California 
enclosed a copy of SB 700 with the November 3, 2003 letter.\6\
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    \5\ As explained in Section II.C below, sources with emissions 
below 50 percent of the major source threshold are exempt from 
permitting unless the District makes certain findings, while sources 
at or above 50 percent of the major source threshold are subject to 
permitting unless the District makes certain findings. See CH&SC 
section 42301.16 (b) and (c). In addition, offsets may not be 
required unless they meet the criteria for real, permanent, 
quantifiable, and enforceable emission reductions. See CH&SC section 
42301.18(c).
    It is worth noting that EPA and California interpret CH&SC 
section 42301.16(a) to require all sources that emit or have the 
potential to emit at or above the major source threshold to be 
subject to new source permitting and offset requirements, as 
required by the Clean Air Act, without regard to the provisions of 
sections 42301.16(c) or 42301.18(c). Thus, an agricultural source 
with actual emissions less than 50 percent of the major source 
threshold but potential emissions above the major source threshold 
is subject to new source permitting and offset requirements.
    \6\ See Letter from Bill Lockyer, Attorney General, California 
Office of the Attorney General, to Marianne Horinko, Acting 
Administrator, EPA, dated November 3, 2003.
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    On May 17, 2004, EPA took final action approving SJVUAPCD's 
permitting rules, Rule 2020 and 2201, as proposed in February 2003. See 
69 FR 27837 (May 17, 2004). These rules, as approved by EPA, did not on 
their face exempt any agricultural sources from permitting or limit the 
applicability of offset requirements. EPA's final approval stated that 
the District had removed its exemption for agricultural sources and 
that the state had also ``removed a similar blanket exemption, thereby 
providing the District with authority to require air permits for 
agricultural sources, including federally required NSR permits.'' See 
69 FR 27837, at 27838. EPA's final approval cited SB 700 in a footnote, 
but did not note the limited scope of authority for permitting and 
offset requirements under SB 700, which allowed permitting of only 
certain minor agricultural sources. Whether or not EPA's SIP actions in 
1972 or 1979 approved the statutory provision

[[Page 9263]]

exempting agricultural sources from permitting (i.e., CH&SC section 
24265(e), recodified as CH&SC section 42310(e)) as part of the 
California SIP, it is clear that as of the promulgation of our May 2004 
final rule there is no exemption from permitting for agricultural 
sources derived from the statutory provision within the SJVUAPCD 
portion of the SIP.

C. Correction of Erroneous Final Approval

    In this instance, we believe that our May 2004 final full approval 
of Rules 2020 and 2201 was erroneous. For all SIP revisions, States 
must provide evidence that the State has the necessary legal authority 
under State law to adopt and implement the plan. See CAA section 
110(a)(2)(E); 40 CFR part 51, appendix V, section 2.1(c). Thus, to 
support the approval CARB was required in December 2002 to provide 
evidence that SJVUAPCD had the necessary legal authority under State 
law to implement Rules 2020 and 2201, which purported to require 
permits and offsets for all agricultural sources. CARB could not have 
done so because CH&SC section 42310(e), applicable at that time, 
continued to preclude such authority under State law with respect to 
all agricultural sources.
    Nonetheless, we proposed to fully approve Rules 2020 and 2201 on 
February 13, 2003, with the expectation that the California legislature 
would act to remove CH&SC section 42310(e)'s exemption for agricultural 
sources thereby aligning Rule 2020 with District authority under State 
law. 68 FR 7330 (Feb. 13, 2003). While the legislature did act shortly 
thereafter to remove the exemption for major agricultural sources and 
major modifications at existing major agricultural sources, the 
legislature also retained the exemption from permitting for certain 
minor agricultural sources, leaving the words of Rule 2020 broader than 
the District's authority under State law. The legislature also exempted 
minor agricultural sources from obtaining offsets pending a 
determination that emissions reductions from such sources meet certain 
criteria, leaving Rule 2201, on its face, also at odds with State law.
    We now understand that our final approval action on Rules 2020 and 
2201 should have ensured that the authority in those rules was 
consistent with the authority granted by SB 700. In other words, we 
should have limited our approval of Rule 2020 to exclude applicability 
to agricultural sources exempt from new source permitting under SB 700 
(i.e., minor sources with emissions less than 50 percent of the major 
source threshold absent findings, or minor sources over 50 percent of 
that threshold with findings). Our approval of Rule 2201 should have 
been limited to provisions requiring offsets for major agricultural 
sources and for minor sources when the listed criteria were satisfied. 
Given that California submitted a copy of SB 700 in November 2003, we 
had information indicating that the District did not have the authority 
to implement Rules 2020 and 2201 to the extent that the language of the 
rule appeared to allow (i.e., to require permits and offsets from all 
new or modified agricultural sources, including those exempt under SB 
700) prior to the time we took final action. We should have limited our 
approval of Rules 2020 and 2201 to conform with SB 700, and promulgated 
language in 40 CFR part 52 codifying that limitation on our approval.
    We note that recent enforcement actions have been brought pursuant 
to the CAA's citizen suit provisions against minor agricultural sources 
in SJVUAPCD that have emissions less than 50 percent of the major 
source threshold for failure to apply for and receive a new or modified 
source permit. SJVUAPCD, however, does not have the authority under 
State law to issue such permits. The fact that such cases are being 
brought (and one case has been brought successfully (see Assoc. of 
Irritated Residents v. C & R. Vanderham Dairies, 2007 U.S. Dist. 70890 
(E.D. Cal., Sept. 24, 2007)) persuasively supports the need to correct 
our error in approving Rules 2020 and 2201 in 2004.
    Therefore, pursuant to CAA section 110(k)(6), we are proposing to 
correct our error by limiting our approval of Rules 2020 and 2201 to 
apply only to the extent the District has authority under state law to 
require permits and offsets. Specifically, with respect to agricultural 
sources, we are approving Rule 2020 only to the extent it applies to 
agricultural sources subject to permitting under SB 700. Also and again 
with respect to agricultural sources, we are approving Rule 2201 only 
to the extent it requires offsets for new major sources and major 
modifications until certain criteria set forth in State law are met. To 
codify this proposed error correction, we are proposing the following 
language to be added as a new section, 52.245, of 40 CFR part 52, 
subpart F (``California''):

52.245 New Source Review Rules

    (a) Approval of the New Source Review rules for the San Joaquin 
Valley Unified Air Pollution Control District Rules 2020 and 2201 as 
approved May 17, 2004, is limited, as it relates to agricultural 
sources, to apply the permit requirement only (1) to agricultural 
sources with actual or potential emissions at or above a major 
source applicability threshold and (2) to agricultural sources with 
actual emissions at or above 50 percent of a major source 
applicability threshold. The District has the authority to permit or 
exempt from permitting minor agricultural sources upon making the 
findings prescribed in CH&SC 42301.16 (b) and (c). The offset 
requirement, as it relates to agricultural sources, does not apply 
to new minor agricultural sources and minor modifications to such 
sources if emissions reductions from that source would not meet the 
criteria for real, permanent, quantifiable, and enforceable emission 
reductions.

    This document simultaneously proposes to approve revised language 
into Rules 2020 and 2201 that conforms the rules to the authority 
provided in SB 700. If we take final action to approve the revised 
rules at the same time as we take final action on our proposed 
correction, then the draft regulatory language set forth above will not 
be codified because it will be superceded by the revised language 
submitted by the District.

II. The State's Submittal of Its 2006 Revisions

A. What revisions did the State submit?

    Table 1 lists the rules we are proposing to approve with the dates 
that they were revised by SJVUAPCD and submitted to EPA by the 
California Air Resources Board (CARB).

                              Table 1.--Submitted Rules Proposed for Full Approval
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          Local agency                    Rule No.                   Rule title           Amended     Submitted
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SJVUAPCD.......................  2020 paragraph 6.20 only..  Exemptions...............     09/21/06     12/29/06
SJVUAPCD.......................  2201, paragraph 4.6.9 only  New and Modified              09/21/06     12/29/06
                                                              Stationary Source Review
                                                              Rule.
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[[Page 9264]]

    On June 29, 2007, the submittal of Rule 2020, paragraph 6.20, and 
Rule 2201, paragraph 4.6.9, was deemed by operation of law to have met 
the completeness criteria in 40 CFR part 51 appendix V, which must be 
met before formal EPA review.

B. Are there other versions of these rules?

    As discussed above, we approved a version of Rule 2020 into the SIP 
on May 17, 2004 (69 FR 27837). In today's action, we have determined 
that the approval was erroneous to the extent it required sources 
exempted from permitting under SB 700 (i.e. sources less than 50 
percent of the major source threshold) to obtain permits. We also 
approved a version of Rule 2201 into the SIP on May 17, 2004 (69 FR 
27837), although we have determined the approval was erroneous to the 
extent it required offsets barred by SB 700. The versions of Rules 2020 
and 2201 that we approved in 2004 did not include provisions equivalent 
to those now included in paragraph 6.20 of Rule 2020 or paragraph 4.6.9 
of Rule 2201.
    Prior to our 2004 approval of Rules 2020 and 2201, the SJVUAPCD 
portion of the California SIP included a broad exemption from 
permitting for all agricultural sources, citing CH&SC section 42310(e). 
See section 4.0 of SJVUAPCD rule 2020, as amended on September 17, 
1998, submitted on October 27, 1998, and approved on July 19, 2001 at 
66 FR 37587.

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

    Section 110(a) of the CAA requires states to submit regulations 
that control volatile organic compounds, nitrogen oxides, particulate 
matter, and other air pollutants which harm human health and the 
environment. Permitting rules were developed as part of the local air 
district's programs to control these pollutants.
    The purpose of the addition of paragraph 6.20 to SIP Rule 2020 is 
as follows:
     This paragraph conforms District permit requirements to 
State law by explicitly exempting agricultural sources to the extent 
such sources are exempt pursuant to CH&SC section 42301.16. Section 
42301.16(a) requires local air permitting authorities to require 
permits for agricultural sources subject to the requirements of title I 
or title V of the federal Clean Air Act. Section 42301.16(b) similarly 
requires permits for all agricultural sources unless specified findings 
are made at a public hearing or except as provided in section 
42301.16(c). Section 42301.16(c) requires the District to make 
specified findings at a public hearing prior to requiring permits for 
agricultural sources with emissions that are less than one-half of any 
major source threshold. The net effect of this section is that all 
agricultural sources with actual emissions or a potential to emit at or 
above a major source applicability threshold are required to obtain a 
District permit pursuant to CH&SC section 42301.16(a). Agricultural 
sources with actual emissions at or above 50 percent of a major source 
applicability threshold are required to obtain a District permit, 
unless the District makes the findings specified by subsection (b). No 
permits are required for agricultural sources with actual emissions of 
less than 50 percent of the major source applicability thresholds, 
unless the District makes the findings specified in subsection (c), 
subject to the limitation in CH&SC section 42301(a).
    The purpose of the addition of paragraph 4.6.9 to SIP Rule 2201 is 
as follows:
     This paragraph exempts new or modified agricultural 
sources from offset requirements to the extent provided by CH&SC 
section 42301.18(c), unless the offsets are required by federal CAA 
requirements (see CH&SC section 42301(a)). Section 42301.18(c) 
prohibits districts from requiring agricultural sources to obtain 
offsets if emissions reductions from such sources would not meet the 
criteria for real, permanent, quantifiable, and enforceable emissions 
reductions.

III. EPA's Evaluation and Action on the 2006 Revisions

A. How is EPA evaluating the rules?

    Generally, SIP rules must be enforceable and must not interfere 
with an area's progress towards attainment or any other requirement of 
the Act. See CAA sections 110(a), 110(l); see also CAA section 193 
(antibacksliding requirements for pre-1990 control measures). Specific 
EPA requirements for SIPs with respect to review of new or modified 
minor stationary sources are set forth in 40 CFR 51.160 through 51.164. 
CAA section 110(l) directs EPA to disapprove any SIP revision that 
would interfere with any applicable requirement concerning attainment 
or reasonable further progress or any other applicable requirement of 
the Act. Assuming that CAA section 193 applies to NSR, section 193 does 
not apply to this action because as of November 15, 1990, all 
agricultural sources were entirely exempt from permitting and offset 
requirements. Thus, the proposed revisions, specifying limits on the 
permit and offset requirements for minor agricultural sources, do not 
modify a control requirement in effect before passage of the Clean Air 
Act Amendments of 1990.

B. Do the rules meet the evaluation criteria?

1. Compliance With EPA Enforceability and Minor Source Permitting 
Requirements
    The limited exemptions from permitting and offsets provided in 
paragraphs 6.20 (Rule 2020) and 4.6.9 (Rule 2201) for minor 
agricultural sources are consistent with EPA requirements for 
enforceability. The limited exemptions are also consistent with the 
requirements promulgated in 40 CFR 51.160--51.164 for stationary 
sources that do not exceed the major source or major modification 
thresholds. EPA is proposing to approve paragraphs 6.20 and 4.6.9 into 
Rules 2020 and 2201, respectively, because SJVUAPCD has discretion in 
conducting its minor source permitting program to exempt certain small 
sources and, under federal law, minor sources are not required to 
obtain offsets. Congress directed the States to exercise the primary 
responsibility under the CAA to tailor air quality control measures, 
including minor source permitting programs, to the State's needs. See 
Train v. NRDC, 421 U.S. 60, 79 (1975) (States make the primary 
decisions over how to achieve CAA requirements); Union Electric Co. v. 
EPA, 427 U.S. 246 (1976); Greenbaum v. EPA, 370 F.3d 527 (6th Cir. 
2006). Specifically, paragraph 6.20 of Rule 2020 complies with the 
requirements for minor sources established in 40 CFR 51.160(b)(2). That 
regulation requires the permitting authority to retain the legal 
ability to prevent construction or modification of a minor source if 
``[i]t will interfere with the attainment or maintenance of a national 
standard.'' Paragraph 6.20, by incorporating CH&SC section 42301.16(c), 
continues to allow the District to require permits for agricultural 
sources with emissions that are less than one-half of any major source 
threshold upon making specified findings at a public hearing. One such 
finding is that emissions from the construction or modification of the 
source will adversely impact air quality. Thus, since the exemptions in 
paragraphs 6.20 and 4.6.9 do not apply to any major stationary sources 
or major modifications at existing major stationary sources, and the 
exemptions comply with federal regulations, we believe these revisions 
are fully approvable under section 110(k)(2) of the CAA.

[[Page 9265]]

2. CAA Section 110(l)
    The only remaining issue is whether this SIP revision would 
interfere with requirements concerning attainment and reasonable 
further progress (or any other applicable CAA requirement) as set forth 
in CAA section 110(l). CAA section 110(l) provides: ``Each revision to 
an implementation plan submitted by a State under this chapter shall be 
adopted by such State after reasonable notice and public hearing. The 
administrator shall not approve a revision of a plan if the revision 
would interfere with any applicable requirement concerning attainment 
and reasonable further progress (as defined in section 7501 of this 
title) or any other applicable requirement of this chapter.''
    The San Joaquin Valley is currently designated nonattainment for 
PM2.5, PM10, and the eight-hour ozone standard. 
The area is formally designated attainment for the remaining criteria 
pollutants. The District's attainment plan for PM2.5 is due 
April 8, 2008, it has submitted a plan for attaining the ozone 
standard, and EPA has published a Finding of Attainment for 
PM10, 71 FR 63462 (Oct. 30, 2006).
    Prior to the time that attainment demonstrations are due for a 
standard, it is unknown what suite of control measures are needed for a 
given area to attain the standard. During this period, to demonstrate 
no interference with any applicable NAAQS or requirement of the Clean 
Air Act under section 110(l), EPA's view is that it is appropriate to 
allow states to substitute equivalent emission reductions to compensate 
for the control measure being removed from the active SIP. This 
approach has been adopted after notice and comment rulemaking in other 
SIP revisions. See, e.g., 70 FR 57750 (October 4, 2005); 70 FR 53 
(January 3, 2005).
    EPA also believes there are other means to demonstrate that a SIP 
revision would not interfere with attainment or maintenance of the 
NAAQS, such as modeling to show noninterference with attainment, or a 
full attainment demonstration.\7\ In this case, after considering the 
District's attainment status and attainment plans for nonattainment 
pollutants, we believe that the adoption of the proposed revisions in 
place of the SIP as proposed to be corrected would not result in any 
change in emissions, any change in air quality, or any change in the 
area's ability to attain or maintain the NAAQS.
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    \7\ We note that no approved or submitted San Joaquin Valley 
attainment plan for any nonattainment pollutant has relied upon NSR 
for agricultural sources less than 50 percent of the major source 
threshold. Further, for attainment planning purposes, growth in 
emissions from agricultural sources has been established by CARB's 
area source inventory growth methodologies, and no mitigation of 
that growth, such as through an offset requirement, has been 
considered when determining the impact of the growth on the 
District's ability to achieve attainment with the standards. See the 
District's Clean Air Act 110(l) Analysis entitled ``San Joaquin 
Valley Unified Air Pollution Control District Rules 2020 and 2201, 
as amended September 21, 2006, District's Clean Air Act 110(l) 
Analysis'' dated November 20, 2007.
---------------------------------------------------------------------------

    Accordingly, we conclude that this SIP revision, if approved, will 
not interfere with any applicable requirements for attainment and 
reasonable further progress or any other applicable requirement of the 
CAA and is approvable under section 110(l).

C. Public Comment and Final Action

    Under section 110(k)(6) of the Clean Air Act, we are proposing to 
correct our May 2004 final approval of revisions to District NSR 
permitting Rules 2020 and 2201 because, by virtue of information 
submitted by California to us in November 2003, we should have limited 
our approval consistent with the legal authority provided in State law 
to air districts to permit, and require offsets for, new or modified 
agricultural sources. To correct our error, we are proposing regulatory 
language to so limit our May 2004 approval.
    Under section 110(k)(2) of the Clean Air Act, we are proposing to 
approve the District's 2006 revisions to Rules 2020 and 2201 to conform 
the rules to State law by explicitly exempting certain small or minor 
agricultural sources from permitting requirements and by exempting all 
minor agricultural sources from offset requirements until certain 
criteria are met. We will accept comments from the public on this 
proposal for the next 30 days. If, after consideration of public 
comments, we decide to publish a final error correction and final 
approval of the revised rules in the same document, then we intend that 
the language of the revised rules will supercede the error correction 
and we do not intend to codify the proposed regulatory language 
limiting our May 2004 approval of the previous versions of District 
Rules 2020 and 2201.

IV. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
proposed action is not a ``significant regulatory action'' and 
therefore is not subject to review by the Office of Management and 
Budget. For this reason, this proposed action is also not subject to 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001). This action merely proposes to correct an error 
and to approve state law as meeting Federal requirements and imposes no 
additional requirements beyond those imposed by state law. Accordingly, 
the Administrator certifies that this proposed rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because 
this rule proposes to correct an error and approve pre-existing 
requirements under state law and does not impose any additional 
enforceable duty beyond that required by state law, it does not contain 
any unfunded mandate or significantly or uniquely affect small 
governments, as described in the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4).
    This proposed rule also does not have tribal implications because 
it will not have a substantial direct effect on one or more Indian 
tribes, on the relationship between the Federal Government and Indian 
tribes, or on the distribution of power and responsibilities between 
the Federal Government and Indian tribes, as specified by Executive 
Order 13175 (65 FR 67249, November 9, 2000). This proposed action also 
does not have Federalism implications because it does 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, as 
specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This 
action merely proposes to correct an error and approve a state rule 
implementing a Federal standard, and does not alter the relationship or 
the distribution of power and responsibilities established in the Clean 
Air Act. This proposed rule also is not subject to Executive Order 
13045 ``Protection of Children from Environmental Health Risks and 
Safety Risks'' (62 FR 19885, April 23, 1997), because it is not 
economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. In 
this context, in the absence of a prior existing requirement for the 
State to use voluntary consensus standards (VCS), EPA has no authority 
to disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply. This proposed

[[Page 9266]]

rule does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Ozone, Particulate matter, Reporting and recordkeeping 
requirements.

    Dated: January 31, 2008.
Wayne Nastri,
Regional Administrator, Region IX.
 [FR Doc. E8-3113 Filed 2-19-08; 8:45 am]

BILLING CODE 6560-50-P
