                                       
                 United States Environmental Protection Agency
                                       
                            Region IX Air Division
                                       
                                       
                                       
                                       
                                       
                                       
                          Technical Support Document 
                                      for
                     EPA's Notice of Proposed Rulemaking
                                    for the
                     California State Implementation Plan
              as submitted by the California Air Resources Board
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                              EPA's Analysis of
              Imperial County Air Pollution Control District's
                          Rule 201, Permits Required
                             Rule 202, Exemptions
                                       
                                       
                                       
                                       
                                       
                                       
                                 January 2011
                                       
                           Prepared by Joanne Wells
                                       
                           Approved by Gerardo Rios
                                       
                                       

Imperial County Air Pollution Control District (ICAPCD)

Submitted Rules
   * Rule 201, Permits Required, was originally adopted prior to October 15, 1979.  The current rule revision was adopted on October 10, 2006 and was submitted on August 24, 2007.  This submittal was determined to be complete on September 17, 2007.  There are no more recent submittals of this rule on which EPA has not acted.
   * Rule 202, Exemptions, was originally adopted June 1, 1977, and revised September 7, 1993 and September 14, 1999.  Both of these revisions were submitted to EPA; however, EPA has not taken action on either of these submittals.  Rule 202 was revised again on October 10, 2006 and submitted on August 24, 2007.  This submittal was determined complete on September 17, 2007.  There are no more recent submittals of this rule.
      
Applicable SIP Rules
   * Rule 201, Permits Required - The SIP version of this rule was revised on September 14, 1999, submitted on May 26, 2000 and approved into the SIP on January 3, 2007 (72 FR 9). 
   * Rule 202, Exemptions - There is no SIP version of Rule 202; however, SIP Rule 103 also contains permit exemptions.  Rule 103 was submitted to EPA on February 21, 1972 and approved into the SIP on May 31, 1972 (37 FR 10842).
      
Background
Imperial County is currently classified as a moderate non-attainment area for federal 8 hour ozone, a serious non-attainment area for PM10 and a non-attainment area for PM2.5. 

Agricultural operations are a significant source of air pollution throughout the state of California, including Imperial County.  Historically, agricultural operations had been exempted from many regulatory requirements, including the need for air pollution permits.  On September 22, 2003, California Senate Bill 700 (SB 700) became law and removed the blanket permitting exemption for agricultural sources provided under California Health & Safety Code (CH&SC) section 42310(e) and subjected large agricultural sources to various permit requirements.

ICAPCD was required to amend and adopt a number of rules to comply with the requirements of SB 700, including revisions to Rules 201 and 202.  The state law also requires permits and emission mitigation for Large Confined Animal Facilities (LCAF) as defined by the California Air Resources Board (CARB).  LCAF are addressed in ICAPCD Rules 217  -  Large Confined Animal Facilities Permits Required and 420  -  Beef Feedlots, which are referenced in Rule 201.  However, Rules 217 and 420 are not evaluated by this Technical Support Document (TSD). 

Purposes of Rule and Rule Amendments
These rules were originally developed as part of the local agency's New Source Review (NSR) permitting program.  The following is a summary of changes from the current SIP versions of these rules.  

Rule 201  -  Permits Required, identifies when and what permits a source must obtain prior to construction and operation.  In paragraph C, references are provided for other types of permits required by ICAPCD rules, other than NSR permits.  The only change made to the SIP approved rule is: 

   * Section 201.C, Other Permits, was revised to replace "Feedlot certificates" with a reference to the "Large Confined Animal Facilities" permit found in Imperial County Rules 217 and 420. 

Rule 202  -  Exemptions, identifies processes, articles, machines, equipment, or other contrivances for which an Authority to Construct (ATC) or Permit to Operate (PTO) is not required.  Rule 202 also requires recordkeeping to verify and maintain any exemption.

The SIP approved version of this rule is Rule 103  -  Exemptions, which was approved into the SIP on May 31, 1972.  This rule was replaced locally on June 1, 1977, when the District adopted Rule 202 for the first time.  The rule was also revised on September 7, 1993 and September 14, 1999.  All previous changes to the SIP rule including the current submitted revisions are being considered as part of this action.  

Rule 103 was updated when it was replaced with Rule 202 in 1977.  The following is a list of changes made to Rule 103 as approved into the SIP compared with the current version of Rule 202 submitted for SIP approval.  

1. Existing Rule 103 exemptions were revised as follows:
   * Exemption A is now listed in Rule 202 sections E.2.a and E.2.b and has been expanded from "vehicles as defined by the Vehicle Code of the State of California and air craft" (e.g., mobile sources) to also include locomotives and water craft used to transport passengers or freight.  Section E.2.b also excludes from exemption equipment used for dredging of waterways or used in pile driving adjacent to or in waterways.
   * Exemption B which pertains to equipment utilized exclusively in residential structures is now listed in Rule 202 Section E.3.a and has been changed from "equipment" exclusively used in connection with residential structures to the residential structure and any incinerator used exclusively in connection with such a structure.
   * Exemption C - Comfort Air Conditioning is no longer included in the exemptions (Section E) in Rule 202.
   * Exemption D - Equipment used exclusively for space heating, other than boilers is no longer included in the list of exemptions (Section E) in Rule 202. 
   * Exemption E - Equipment used for the purpose of preparing food for immediate human consumption is now included in Rule 202 Section E.6.a.  This exemption has been expanded to more specifically describe food processing that is exempt, including mixers and blenders used in small bakeries (E.6.b), equipment to grind, blend, or package tea, cocoa, spices or roasted coffee (E.6.c), smokehouses with maximum horizontal inside cross-section less than 20 square feet (E.6.d) and barbeque equipment (E.6.e).

2. The following general provisions were added to the rule: 
   * Section A specifies that an Authority to Construct or Permit to Operate shall not be required for any process, article, machine, equipment, or other contrivance listed in Section E, unless it is subject to New Source Performance Standards (NSPS), National Emission Standards for Hazardous Air Pollutants (NESHAPS), a source specific prohibitory rule or emits Toxic Air Contaminants, or if the APCO determines that the equipment may not operate in compliance with all APCD rules and regulations. 
   * Section B exempts any process, article, machine, equipment, or other contrivance with uncontrolled emissions of affected pollutants less than or equal to two pounds in any 24 hour period. 
   * Section C requires a permit for equipment if it is part of a process that requires a permit. 
   * Section D requires appropriate recordkeeping to verify and maintain any exemption.
   * Section E lists equipment not required to have an Authority to Construct or Permit to Operate unless otherwise specified in sections A or B.
 
3. The following new exemptions were added to Section E in Rule 202.  They are grouped together according to the justifications for providing the new exemptions. 
   
      A.       Equipment or processes that are not subject to a corresponding ICAPCD prohibitory rule.  
         *          E.1.a - Gas Turbines with max heat input rate of 3 million Btu per hour or less.
         *          E.1.c - Steam Generators, steam super heaters, water boilers, water heaters, steam cleaners, and closed indirect heat transfer systems which have a maximum input heat rating of 5 million Btu per hour or less and are exclusively fired with natural gas, liquefied petroleum gas or any combination thereof.
         *          E.5.a - Printing and related coating or laminating equipment not using more than 2 gallons of graphic arts material per day.
         *          E.8.a - Unheated solvent dispensing containers with capacity of not more than 250 gallons.
         *          E.8.c - Equipment used exclusively for storage of unheated organic material with an initial boiling point of 150°C or greater, or with a vapor pressure of 0.1 psia or less at 21.1°C. 
         *          E.9.b - Unheated non-conveyorized cleaning equipment with open surface area of 1.0 sq. meter or less and an internal volume of 92.5 gallons or less, using organic solvents with initial boiling point of 160°C or greater and less than 25 gallons of solvent loss per year.
         *          E.9.c - Surface coating equipment using a combined total of one gallon per day or less of coating material and solvent. 
         *          E.9.d - Surface coating using un-refillable aerosol spray cans. 
         
      B.       Sources with insignificant emissions. 
         *          E.4.a - Cooling Towers that have a circulation rate of less than 10,000 gallons per minute, which are not used for cooling of process water, water from barometric jets or water from barometric condensers.
         *          E.7.a - Plastic /Rubber Processing including foam manufacturing or application, fiberglass reinforced plastic fabrication, and plastics manufacturing using material contain Reactive Organic Compounds (ROCs), when aggregated emissions of ROCs from the equipment or process do not exceed 5 pounds in any one day.
         *          E.7.b - Presses used exclusively for extruding rubber products or plastic where no plasticizer or blowing agent is present or for pelletizing polystyrene foam scraps, except equipment used to extrude or pelletize acrylics, polyvinyl chloride, polystyrene, or their copolymers. 
         *          E.7.c - Ovens used exclusively for curing, softening, or annealing of plastics.  Does not apply to ovens used to cure fiberglass reinforced plastics.
         *          E8.d - Equipment used exclusively for unheated underground storage of 6,077 gallons or less of organic liquids with a vapor pressure of 1.5 psia or less at actual storage conditions and equipment used for transfer to and from such storage of organic liquids. 
   
      C.       Equipment or operations which are not subject to overall NSR program requirements
         *          E.1.d - Portable Equipment registered under the Statewide Portable Equipment Registration Program.
         *          E.8.b  -  Mobile Transport Tanks or delivery tanks or cargo tanks on vehicles for delivery of VOCs except asphalt tankers used to transport and transfer hot asphalt for roofing applications. 
         *          E.9.a - Application equipment for architectural surface coatings.
         *          E.11.  -  Routine repairs or maintenance not involving any structural changes to any equipment for which a permit has been granted. 
               
D.	Agricultural source exemptions as allowed by SB 700 and CARB definition of LCAF (CH&SC Section 86500). 
            *          E.10.a - Stationary combustion agricultural sources with combined emissions of less than one half of any applicable emissions threshold for a major source. 
            *          E10.b. - Any confined animal facility that maintains in any one day:
                  o                Less than 1,000 milk producing cows, 
                  o                less than 3,500 beef cattle, calves, heifers, or other cattle, 
                  o                less than 100,000 turkeys, 
                  o                less than 650,000 chickens other than laying hens, 
                  o                less than 650,000 laying hens, 
                  o                less than 3,000 swine, 
                  o                less than 15,000 sheep, lambs, goats, 
                  o                less than 2,500 horses, 
                  o                less than 650,000 ducks, or
                  o                less than 30,000 rabbits or other animals. 

Rule Evaluation 
EPA is primarily using the following three criteria to evaluate Rules 201 and 202.

   1. Enforceability  -  CAA §110(a)(2)(A) requires that regulations submitted to EPA for SIP approval must be clear and legally enforceable. 

   2. Anti-Backsliding - CAA §110(l) restricts certain SIP revisions that would relax existing SIP-approved requirements if they would interfere with the district's ability to attain or maintain attainment of a NAAQS.

   3. New Source Review Program Requirements- 40 CFR part 51, Subpart I  - Review of New Sources and Modifications.

The Clean Air Act requires states (Districts in California) to establish a program for preconstruction review of new or modified major stationary sources (New Source Review  -  NSR) and to issue Authorities to Construct (ATC) and Permits to Operate (PTO) in nonattainment areas.  

Rules 201  -  Permits Required, 202  -  Exemptions, and 207  -  New & Modified Stationary Source Review are the major components of ICAPCD's NSR program.  Rule 201 identifies the types of permits required for construction and operation of sources as part of NSR as well as permits required by other District rules such as Rule 217  -  Large Confined Animal Facilities (LCAF) Permits Required.  Rule 202 identifies what sources are not required to obtain ATC or PTO.  Rule 207 establishes the requirements for new and modified stationary sources to ensure that the operation of such sources does not interfere with the attainment or maintenance of Ambient Air Quality Standards.  Under the federal NSR program, all major stationary sources (ones with potential emissions over specified thresholds) are required to obtain an ATC prior to construction.  For minor sources (non-major), a District has flexibility to determine which types and sizes of sources are required to obtain a permit, as needed to ensure that all sources are subject to regulation as necessary to ensure attainment and maintenance of the NAAQS in accordance with their SIP approved attainment plan.  This technical support document discusses only Rules 201 and 202 which we are evaluating for approval into the California SIP.

Rule 201 - Permits Required  -  The single revision to this rule is administrative and only serves to update the rule to identify new District permit requirements for Large Confined Animal Facilities found in Rules 217 and 420.  This revision was necessary to comply with new state requirements for controlling emissions from agricultural sources as set out by SB700.  This revision does not make any substantive changes that effect emissions and therefore does not merit further evaluation. 

Rule 202  -  Exemptions (Rule 103)  - Changes have been made to the original Rule 103, which are outlined above in the section titled "Purposes of Rule and Rule Amendments".  These changes include not only administrative changes to the rule such as re-numbering and updating the format, but also the addition of general provisions and a number of revisions and additions to the types of equipment exempted from permit requirements by the rule.  The administrative changes to the rule provide additional clarity to the rule and do not affect the stringency of the District's NSR program and therefore do not require further evaluation.  The addition of new general provisions, and changes and additions to the exemptions found in Rule 103, which is the current SIP-approved rule, are evaluated below. 

1. Revision of Existing Rule 103 Exemptions
   * The revisions to Exemption A, now listed in section E2.a and E.2.b, clarify what types of mobile sources are exempt by including locomotives and water craft, which are not considered stationary sources under the NSR program.  It also strengthens the SIP by excluding from exemption equipment used for dredging of waterways or used in pile driving.
   * The revisions to Exemption B, now listed in Section E.3.a, do not significantly change this exemption.  The exemption now specifically identifies "any incinerator" in place of the more general term "equipment utilized" with a residential structure. 
   * Exemptions C & D exempted equipment for comfort air conditioning and space heating and are no longer included in Rule 202. 
   * The revisions to Exemption E, now in section E.6.a. through E.6.e. includes two changes.  First, the wording has been changed slightly to clarify that it applies to equipment used in eating establishments or other retail establishments used to prepare food for human consumption.  Second, the exemption has been revised to include several specific types of food processing operations (see Sections E.6.b to E.6.e) and to specify limitations on the size of some of the specified equipment.  These new exemptions are more specific and more clearly identify the types of food processing equipment exempted from permit requirements. This improves the clarity and enforceability of this provision. 

2. Addition of New General Provisions
   ICAPCD added a number of new general provisions that were not found in Rule 103.  These new general provisions are described above in the "Purposes of Rule and Rule Amendments" section of this document. 

   * Sections A. and C. identify when an otherwise listed piece of equipment would not be exempt from permit requirements, for example when the equipment is subject to a NSPS or NESHAP.  In general, these two sections place additional restrictions on the exemptions listed in Section E.  Since this narrows the scope of the exemptions listed in Rule 103, this revision provides a strengthening of the SIP.
   * Section B. exempts de minimus emission units with uncontrolled emissions of less than or equal to two pounds in any 24-hour period.  EPA believes that this threshold can be considered de minimus in that any one source of this size would not affect the ability of the District to attain or maintain a NAAQS. 
   * Section D. adds the requirement for recordkeeping to verify and maintain any exemption.  This new requirement greatly strengthens enforceability of Rule 202 as required by CAA §110(a)(2)(A).
   * Section E. states that unless otherwise specified in section A or B, an Authority to construct or Permit to Operate shall not be required for the equipment and processes listed in Sections E.1 to E.11. The specific exemptions provided in Section E are discussed elsewhere in this evaluation.  The reference to section A simply reiterates the language of section A, in that the equipment listed in Section E is exempt from permit requirements, unless section A says otherwise.  The reference to section B is different, since it provides an exemption for any equipment which emits less than 2 lbs in any 24-hour period.  EPA reads this to mean that equipment listed in Section E is exempted from permit requirements, as well as any equipment that meets the stated requirements listed in section B.

3. Addition of New Exemptions not included in Rule 103

The discussion below applies to the exemptions that were grouped together according to the justifications for providing the new exemption as described above in the "Purposes of Rule and Rule Amendments" section of this document.

   A. Equipment or processes that are not subject to a corresponding ICAPCD prohibitory rule to control emissions. 
These types equipment or processes are typically exempted from prohibitory rule requirements due to output, size, low emissions or type of fuel used.  These exemptions are provided in such rules so that sources for which it is not reasonable to control are not subject to control requirements.  EPA believes the District's choice to establish permitting thresholds in these rules that mirror prohibitory rule applicability or exemption thresholds, is reasonable since emission units under these thresholds are not subject to any emission control requirements for which a permit is needed to ensure compliance and no additional reductions will occur if a permit was otherwise required.  

   B. Sources that have insignificant or de minimus emissions 
EPA believes that the sources listed in this group have very low levels of emissions due to type of process (e.g. mechanical or physical processes) that can be classified as insignificant emissions and/or they are equipment or activities that have been identified by EPA as trivial in the "EPA White Paper for Streamlined Development of Part 70 Permit Applications" (See Attachment #7).  For example, cooling towers with a circulation rate of less than 10,000 gallons per minute are estimated to have a maximum daily PM10 emission rate of less than 1.5 lbs per day and unheated underground organic liquid storage tanks of 6,077 gallons or less are estimated to have a maximum daily VOC emission rate of less than 1.0 lbs per day.  In both cases, exempting these types of sources is consistent with the flexibility allowed states to exempt sources that are not likely to interfere with their ability to attain and maintain the NAAQS.

   C. Equipment or operations which are not subject to NSR per 40 CFR part 51, Subpart I.
40 CFR part 51.165 defines the types of sources that are subject to NSR.  NSR requirements apply to stationary sources only (buildings, structures, facilities) and do not apply to mobile sources (portable equipment) or other activities that have been specifically excluded such as routine repairs or maintenance.  Emissions from architectural coatings are controlled when they are manufactured, by setting volatile organic compound standards for each type of coating.  Accordingly, it is not necessary to regulate them as part of the NSR program. 

   D. Agricultural source exemptions as allowed by SB 700.
Before SB700 was adopted in 2003, air districts in California were prohibited from requiring permits for agricultural sources of air emissions.  Because this prohibition existed in state law (CH&SC 42310(e)) most Districts did not provide specific exemptions for agricultural sources from the requirement to obtain an Authority to Construct or Permit to Operate in their local exemption rule.  As part of this rule revision, the District is implementing state law by adding specific exemption thresholds for agricultural sources to Rule 202, which are as follows:

         *          Exemption E.10.a specifically exempts stationary combustion engines located at agricultural sources, if the combined actual emissions are less than one half of any applicable major source emission threshold.  For federal purposes, this would equate to a threshold of 50 tpy for VOCs and NOx and 35 tpy for PM10.  While these thresholds are higher than most emission based exemption thresholds contained in Rule 202, EPA notes these thresholds apply to the aggregate of engines at the agricultural stationary source and not individual emission units.  
   
         *          Exemption E.10.b provides an exemption for confined animal facilities that maintain less than the listed number of specified animals.  These thresholds are based on the CH&SC definition developed by CARB as to what constitutes a Large Confined Animal Facility (LCAF).  Only facilities which are not classified as a LCAF are exempt from permit requirements.  CARB based the definition of LCAF on the number of animals housed daily at the facility and mainly focused their determination on air emission impacts from these sources in the San Joaquin Valley and South Coast (Los Angeles region) which are both extreme nonattainment areas for ozone.  These thresholds take into consideration potential emissions from these sources and allow the most animals to be subject to permit requirements, while minimizing the number of facilities affected. Please see the attached CARB Staff Report for detailed information on the development of the definition of LCAF.  By using emissions factors developed by San Joaquin Valley APCD for dairies (19.3 lbs/head-year) and beef feedlots (11 lbs/head-year), the VOC emissions resulting from 1000 milking cows is estimated to be 9.7 tpy and 19.7 tpy from beef feed lots (3500 head of cattle). 
      
There are two aspects of these revisions to examine:  the effect on air quality and stringency compared to the existing SIP rule.  Since the current SIP approved regulation providing exemptions from permit requirements (Rule 103) does not explicitly exempt agricultural sources, these revisions could be viewed as SIP relaxations.  In reality, however, California state law prohibited Districts from issuing permits for to agricultural sources until enactment of SB 700 in September 2003 required air districts to adopt rules to regulate them.  Therefore, until recently, the SIP has not achieved emission reductions from agricultural sources.  With EPA's approval of Rules 201 and 202, permits will be required to enforce the emission reductions for new and existing agricultural sources achieved through the implementation of Rule 217 and Rule 420.  We also note that these changes will bring many engines at agricultural sources into the permitting system for the first time.  See Attachment # 4, ICAPCD Staff Report dated October, 10, 2006, for ICAPCD's estimates for reduction of emissions from agricultural sources. Accordingly, EPA believes that overall these changes actually provide a strengthening of the SIP and are therefore approvable under 110(l) of the Act.  


Rule Deficiencies
No deficiencies were found that would prevent EPA from recommending full approval of ICAPCD Rules 201 and 202 into the SIP.

EPA Action
EPA has reviewed the submitted rules in accordance with the Rule Evaluation criteria described earlier in this document.  Consistent with the requirements of 40 CFR Subpart I, all major stationary sources are required to obtain an ATC permit prior to construction.  For minor sources, EPA believes that the emissions from types and sizes of equipment and operations exempted from NSR permit requirements are consistent with the flexibility afforded to states to regulate only those sources as necessary to assure attainment and maintenance of the NAAQS.  While several new provisions have been added to Rule 202 that could be seen as a relaxation of the SIP because more sources are specifically exempted from Rule 207 permit requirements, in practice most of these sources have never been required to obtain a NSR ATC permit due to their small size or state law prohibitions.  Because these rules will not worsen air quality, and will in fact require agricultural sources to obtain permits and be subject to control requirements for the first time, EPA believes that these revisions are a long overdue update to the SIP which will provide an overall strengthening of the SIP without interfering with the District's ability to attain and maintain the NAAQS, and is therefore approvable under 110(l) of the CAA.

EPA recommends full approval of the following ICAPCD rules for incorporation into the California Applicable SIP, pursuant to section 110(k)(3) of the CAA as amended in 1990: 
   * Rule 201  -  Permits Required (amended on October 10, 2006, submitted on August 24, 2007).
   * Rule 202  -  Exemptions (amended on October 10, 2006, submitted on August 24, 2007), replacing Rule 103, Exemptions, approved into the SIP on May 31, 1972 (37 FR 10842). 

EPA Recommendations 
The following revisions are not currently the basis for rule disapproval, but are recommended as improvements when this rule is amended.

   * Rule 201: Correct typographical error in Section C  -  Rule 421 not Rule 421.7.
   * Rule 201 and 202: A general provision should be added to identify where the terms applicable to the rule are defined, i.e. Rule 101, Definitions. For example, see new ICAPCD Rule 217  -  Large Confined Animal Facilities (LCAF) Permits Required, Section B Definitions, which identifies where specific definitions can be found. 
   * Rule 202 Section E.10.a: for clarity and enforcement the term "stationary combustion agricultural sources" should be defined in Rule 202 or the term should be changed to use the term already defined in Rule 101  -  Definitions, Agricultural Source.  The Rule 101 definition of this term includes an exclusion for engines  used to propel implements of husbandry, which is not clearly identified as part of the exemption for stationary combustion agricultural sources (E.10.a), since this term is not defined.   

Guidance and Policy Documents
Guidance and policy documents that we used to help evaluate rules and RACT requirements consistently include the following:

   1. Review of New Sources and Modifications, U.S. EPA, 40 CFR part 51, subpart I. Requirements for Preparation, Adoption, and Submittal of Implementation Plans, U.S. EPA, 40 CFR part 51.
   2. Addendum to the General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990, 59 FR 41998 (August 16, 1994).

Attachments
   1. ICAPCD Rule 201, Permits Required, and Rule 202, Exemptions, as submitted on August 24, 2007.
   2. ICAPCD SIP Approved Rule 201, approved January 3, 2007
   3. ICAPCD SIP Approved Rule 103, Exemptions, approved May 31, 1972.
   4. ICAPCD Staff Report (Rules 201, 202, 206, 217, 301, 307, and 420) dated October 10, 2006.
   5. California Senate Bill 700, dated September 22, 2003.
   6. CARB Staff Report: Initial Statement of Reasons for Rulemaking, Public Hearing to Consider the Large Confined Animal Facility Definition, May 6, 2005. (Cover Only)
   7. U.S. EPA, "EPA White Paper for Streamlined Development of Part 70 Permit Applications" dated July 10, 1995.

