[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Rules and Regulations]
[Pages 46504-46514]
[FR Doc No: 2013-18413]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2010-0062; FRL-9837-5]

Approval and Promulgation of Implementation Plans, State of
California, San Joaquin Valley Unified Air Pollution Control District,
New Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is taking final action to correct the May 2004 approval of
a version of the New Source Review (NSR) rules for the San Joaquin
Valley Unified Air Pollution Control District portion of the California
State Implementation Plan, consistent with the relevant provisions of
state law. Specifically, EPA is taking final action to correct the May
2004 approval by limiting the approval, as it relates to agricultural
sources, to apply the permitting requirements only to such sources with
potential emissions at or above a major source applicability threshold
and to such sources with actual emissions at or above 50 percent of a
major source applicability threshold and to apply the emission offset
requirement only to major agricultural sources and major modifications
of such sources.

DATES: This rule is effective on September 3, 2013.

ADDRESSES: EPA has established docket number EPA-R09-OAR-2010-0062 for
this action. The index to the docket is available electronically at
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.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, Permits Office (AIR-
3), U.S. Environmental Protection Agency, Region IX,<PHONE_NUMBER>,
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to EPA.

Table of Contents

I. Background for Today's Final Action
    A. Actions Proposed in January 29, 2010 Proposed Rule
    B. Background, Authority and Rationale for Proposed Error
Correction
    C. Letters from the California Attorney General's Office
II. Public Comments and EPA's Responses
III. Final Action
IV. Statutory and Executive Order Reviews

I. Background for Today's Final Action

A. Actions Proposed in January 29, 2010 Proposed Rule

    On January 29, 2010 (75 FR 4745), under the Clean Air Act (CAA or
``Act''), we proposed three actions in connection with the permitting
rules for the San Joaquin Valley Unified Air Pollution Control District
(``District'') portion of the California State Implementation Plan
(SIP).\1\ Herein, we refer to our January 29, 2010 proposed rule as the
``proposed rule.'' As discussed further below, we have already
finalized the second and third actions included in our proposed rule,
and are taking action today to finalize the first action.
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    \1\ The San Joaquin Valley includes all of San Joaquin,
Stanislaus, Merced, Madera, Fresno, Kings and Tulare counties, and
the western half of Kern County, in the State of California. The San
Joaquin Valley is designated as a nonattainment area for the 1997
and 2008 8-hour ozone national ambient air quality standards (NAAQS)
and the 1997 (annual) and 2006 (24-hour) fine particulate matter
(PM2.5) NAAQS and is designated as attainment or
unclassifiable for the other NAAQS. See 40 CFR 81.305. The area is
further classified as ``extreme'' for the now-revoked 1-hour ozone
NAAQS, and the 1997 and 2008 8-hour ozone NAAQS.
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    First, in our proposed rule, we proposed to correct an error in our
May 2004 final rule approving Rules 2020 (``Exemptions'') and 2201
(``New and Modified Stationary Source Review Rule''), as amended by the
District in December 2002, that establish the requirements and
exemptions for review of new or modified stationary sources (``new
source review'' or ``NSR''). Herein, we refer to District Rules 2020
and 2201 as the ``District's NSR rules.'' In our proposed rule, we
explained how our error arose from the failure, in light of information
available at the time, to recognize that the District did not have the
authority under state law to implement the District's NSR rules with
respect to permitting of minor agricultural sources with actual
emissions less than 50% of the applicable ``major source'' thresholds
and with respect to the imposition of emissions offset requirements for
minor agricultural sources.
    In addition to the error correction described above, our January
2010 proposed rule also proposed two other actions: (a) a limited
approval and limited disapproval of the District's NSR rules, as
further amended in 2007 and

2008 and a full approval of amended District Rule 2530 (``Federally
Enforceable Potential to Emit''); and (b) rescission of certain
obsolete permitting requirements from the District portion of the
California SIP.
    On May 11, 2010 (75 FR 26102), we finalized the proposed action on
the 2007 and 2008 amendments to the District's NSR rules,\2\ District
Rule 2530, and the proposed rescission of obsolete permitting
requirements, but we deferred final action on the proposed error
correction pending receipt from the California Attorney General of an
interpretation of the District's legal authority with respect to
agricultural sources under state law.
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    \2\ As discussed in more detail in our proposed rule, the
amendments to the NSR rules that were adopted by the District in
2007 and 2008, among other things, aligned the rules explicitly with
the limitations on the District's authority under state law to
permit minor agricultural sources and to require emissions offsets
for such sources. 75 FR 4745, at 4749-4750 (January 29, 2010). Thus,
as of the effective date of EPA approval of the 2007- and 2008-
amended District NSR rules at 75 FR 26102 (May 11, 2010), the SIP
and State law is aligned with respect to permitting of agricultural
sources (and imposition of the emissions offset requirement) in San
Joaquin Valley. Today's final action thus affects the applicable
California plan under 40 CFR part 52, subpart F during the period of
time after the effective date of our May 2004 approval of the 2002-
amended District NSR rules (i.e., June 16, 2004) and the effective
date of our May 2010 approval of the subsequently amended NSR rules
(i.e., June 9, 2010). During this period, a number of CAA
enforcement actions were brought against San Joaquin Valley
agricultural sources for failure to secure permits and/or provide
emissions offsets even though such requirements were beyond the
authority of the District to impose under State law. For additional
background on why EPA is taking today's action, please see our
January 29, 2010 proposed rule at 75 FR 4745, at 4748.
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B. Background, Authority, and Rationale for Proposed Error Correction

    In our proposed rule, we provided a detailed background discussion
regarding the District's NSR rules and related EPA SIP actions. See
pages 4746-4747 of our proposed rule. In the following paragraphs, we
provide a summary of this information. For more details, please see our
proposed rule.
    EPA originally approved the District's NSR rules as part of the
California SIP in 2001.\3\ See 66 FR 37587 (July 19, 2001). EPA's 2001
action was a limited approval and limited disapproval reflecting our
conclusion that the rules could not be fully approved as meeting all
applicable requirements because, among other reasons, District Rule
2020 exempted all agricultural sources from District permitting
requirements. 66 FR at 37590. At that time, District Rule 2020, citing
California Health & Safety Code (CH&SC) section 42310(e), included a
permitting exclusion for ``any equipment used in agricultural
operations in the growing of crops or the raising of fowl or animals,''
except for certain orchard and citrus grove heaters in the southern
portion of the District. Our limited disapproval stated that the
District could not exempt major stationary sources or major
modifications at existing major sources from NSR requirements and be
found to meet applicable CAA requirements.\4\
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    \3\ Rules 2020 and 2201 were adopted by the District to meet NSR
requirements under the Clean Air Act, as amended in 1990, for areas
that have not attained the National Ambient Air Quality Standards
(NAAQS). District Rules 2020 and 2201 replaced existing NSR rules
from the individual county air pollution control districts that were
combined into the San Joaquin Valley Unified Air Pollution Control
District (``District'') in 1991.
    \4\ District NSR permitting rules do not adopt the distinction
between minor sources and major sources as set forth under the CAA.
District Rules 2020 and 2201 generally apply to both federal minor
and major stationary sources. Our limited approval and limited
disapproval 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 this deficiency, in December 2002, the District amended
their NSR rules to eliminate the agricultural permitting exemption in
its entirety, and, later that same month, the California Air Resources
Board (CARB) submitted the District's amended NSR rules to EPA as a
revision to the California SIP. Shortly thereafter, EPA proposed
approval of the amended District NSR rules, see 68 FR 7330 (February
13, 2003), even though we recognized 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. We did
so in light of a proposed ``SIP Call'' that we issued on the same day
as we proposed approval of the amended District NSR rules. See 68 FR
7327 (February 13, 2003). The SIP Call was based on our finding that
the California SIP was substantially inadequate by failing to provide
the necessary assurances under CAA section 110(a)(2)(E) that the State
had the legal authority to carry out its NSR permitting obligations
under the CAA with respect to major agricultural sources. EPA finalized
the SIP Call in mid-2003, and thereby required California to submit the
necessary assurances of authority to support an affirmative finding by
EPA under CAA section 110(a)(2)(E). 68 FR 37746 (June 25, 2003).
    Later in 2003, 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 permit requirements. SB 700, however, retained
a limited exemption for new source permitting at certain minor
agricultural sources, and limited the ability of districts to require
minor agricultural sources to obtain offsets.\5\ California notified
EPA of the legislature's action by letter dated November 3, 2003 and
enclosed a copy of SB 700.\6\
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    \5\ Specifically, under SB 700, minor agricultural sources with
actual 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, a
district may not require an agricultural source to obtain emissions
offsets for criteria pollutants for that source if emissions
reductions from that source would not meet the criteria for real,
permanent, quantifiable, and enforceable emission reductions. See
CH&SC section 42301.18(c).
    \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 the District's NSR
rules, as amended by the District and submitted by CARB in 2002. 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 and continued the exemption for
other minor agricultural sources.
    In our proposed rule, under CAA section 110(k)(6), we found that
(1) our May 2004 final full approval of District's NSR rules was in
error in that our approval of the rules should have ensured that the
authority in those rules was consistent with the authority granted by
SB 700 and that (2) the District did not, as of May 2004, have the
authority under SB 700 to require permits for new or modified minor
agricultural sources with actual emissions less than 50 percent of the

major source threshold or to require new minor agricultural sources or
minor modifications to agricultural sources to obtain emission
reduction offsets, notwithstanding the absence of explicit exemptions
in the District's NSR rules. Moreover, we noted in our proposed rule
that California submitted a copy of SB 700 in November 2003, and thus
we had information indicating that the District did not have the
authority to implement the NSR rules to the extent that the language of
the District's 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. In our
proposed rule, we explained that we should have limited our approval of
the District's NSR rules in May 2004 to conform with SB 700, and
promulgated language in 40 CFR part 52 codifying that limitation on our
approval.
    To correct this error, we proposed to limit our approval of the
District's NSR rules to exclude applicability to agricultural sources
exempt from new source permitting under SB 700 (i.e., minor sources
with actual emissions less than 50 percent of the major source
threshold). We also proposed to limit our approval to require offsets
only for major agricultural sources, because at the time of our 2010
proposed action, we believed that the District had not found emissions
reductions from agricultural sources to meet the criteria for real,
permanent, quantifiable, and enforceable emissions reductions and thus
had not lifted the restriction otherwise provided in SB 700 (and
codified in CH&SC section 42301.18(c)) on the imposition of the
emissions offset requirement on new minor agricultural sources or minor
modifications of agricultural sources.
    For more information about our proposed determination of error and
our proposed correction, please see pages 4747-4748 of our proposed
rule.

C. Letters From the California Attorney General's Office

    In response to our proposed rule, several comments were submitted
that objected to our proposed error correction action and the
interpretation of state law upon which it was based, and raised
significant questions as to the extent of District authority with
respect to agricultural sources under state law. Specifically, the
commenters who objected to our proposed correction cited ``savings''
clauses in state law that they contend ratified the District's NSR
rules that contain no permitting or offsets exemptions for agricultural
sources notwithstanding other provisions in state law that would
otherwise limit District authority over those sources.
    To ensure our final action would be informed by the State's
interpretation of the relevant provisions of state law, we requested
that CARB provide us with a legal interpretation from the California
Attorney General of the extent of District authority with respect to
agricultural sources under state law.\7\ More specifically, we
requested that CARB provide us a legal interpretation from the
California Attorney General of SB 700 as it applies to the District NSR
rules adopted in December 2002 and approved by EPA in May 2004. By
letters dated November 14, 2012 and March 18, 2013, the California
Attorney General's Office has now provided us the requested
interpretation of state law.\8\
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    \7\ See letters from Jared Blumenfeld, Regional Administrator,
EPA Region IX, to Mary D. Nichols, Chairwoman, California Air
Resources Board, dated April 12, 2010 and April 26, 2012.
    \8\ See letters dated November 14, 2012 and March 18, 2013 from
Robert W. Byrne, Senior Assistant Attorney General, to Jared
Blumenfeld, Regional Administrator, EPA Region IX.
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II. Public Comments and EPA's Responses

    Our proposed rule (75 FR 4745) provided for a 30-day comment
period. During that period, we received adverse comments from three
groups: (1) Greenberg-Glusker law firm, on behalf of Dairy Cares, a
coalition of California's dairy producer and processor associations
(referred to herein as ``Dairy Cares''), by letter dated March 1, 2010;
(2) Earthjustice, by letter dated March 1, 2010; and (3) the Center on
Race, Poverty & the Environment, on behalf of the Association of
Irritated Residents and other community and environmental groups
(referred to herein as ``AIR''), by letter dated March 1, 2010. AIR
joins in the comments from Earthjustice, but also adds comments of its
own.
    All three comment letters cited above included comments on one or
more aspects of our proposed rule (e.g., on our proposed limited
approval and limited disapproval of the District's NSR rules, as
further amended in 2007 and 2008) in addition to comments on the
proposed error correction. With respect to the comments germane to the
other aspects of our proposed rule, we provided responses in our final
action published on May 11, 2010 (75 FR 26102) and do not reopen those
issues through today's final action.\9\ Rather, in the following
paragraphs, we summarize the significant comments that relate to the
proposed error correction that we are taking final action on today, and
provide our responses.
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    \9\ In its March 1, 2010 comment letter, AIR also provided
comments germane to a separate EPA rulemaking also proposed on
January 29, 2010 (``Approval and Promulgation of Implementation
Plans: State of California; Legal Authority,'' and published at 75
FR 4742. We responded to AIR's comments germane to that separate
rulemaking in a final rule published at 75 FR 27938 (May 19, 2010)
and do not reopen those issues through today's final action.
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    Earthjustice Comment #1: EPA has incorrectly interpreted State law
in proposing the error correction, and EPA should ask the State to
provide the necessary assurances that the District has the authority
under State law to permit all sources covered by Rule 2201.
    Response to Earthjustice Comment #1: EPA requested that the
California Attorney General provide an interpretation of SB 700 as
applied to the District's NSR rules, as amended by the District in
December 2002, and as noted above, the California Attorney General's
Office has responded to EPA's request in the form of two letters, one
dated November 14, 2012 and one dated March 18, 2013. EPA has taken the
State's interpretation into account in responding to comments on our
proposed error correction and in taking today's final action.
    Earthjustice Comment #2: The District's authority to permit
agricultural sources under the Clean Air Act is not limited to sources
above 50 percent of any applicable major source threshold. EPA reads
CH&SC section 42301.16(a) as only authorizing permits for major
agricultural sources. Nothing in section 42301.16(a) refers to
``major'' sources or limits the CAA provisions referenced to ``major
source'' requirements. To the contrary, the language refers to permits
required for ``any'' source and instead of referring only to part D of
Title I, as EPA suggests, refers to all of Title I beginning with
section 101 of the Act. EPA's interpretation cannot be reconciled with
the plain language of the CH&SC.
    Response to Earthjustice Comment #2: Earthjustice is correct that
our proposed error correction is predicated in part on the
interpretation that CH&SC section 42301.16(a) refers to ``major
sources'' as defined under the CAA, i.e., sources that emit or have the
potential to emit at or above the major source threshold,
notwithstanding the fact that an explicit reference to ``major
sources'' is not found in CH&SC section 42301.16(a). See footnote
7 on page 4747 in the proposed rule.
    CH&SC section 42301.16(a) provides: ``In addition to complying with
the requirements of this chapter, a permit system established by a
district

pursuant to Section 42300 shall ensure that any agricultural source
that is required to obtain a permit pursuant to Title I . . . or Title
V . . . of the federal Clean Air Act is required by district regulation
to obtain a permit in a manner that is consistent with the federal
requirements.'' In proposing the error correction, we interpreted the
reference to permits required under Title I as meaning permits for
major sources covered under parts C or D of Title I, and not minor
sources. This is because, under the relevant SIP content provisions
under Title I [section 110(a)(2)(C)], while SIPs must provide for the
``regulation of the modification and construction of any stationary
source,'' i.e., including minor sources, the only explicit permitting
requirement is for a ``permit program as required in part C and D'' of
Title I. Thus, under Title I, a permit program is only explicitly
required for sources covered under parts C and D, and the sources
covered under parts C and D are major sources.
    Moreover, a State must identify the types and sizes of minor
stationary sources which will be subject to review [see 40 CFR
51.160(e)]. As such, States are authorized to exempt certain minor
stationary sources from such review. No such exemptions are allowed for
review of new or modified major sources. Thus, permits for ``major
sources'' can be considered to be ``required'' in a way that permits
for minor sources are not.
    In addition, our interpretation of CH&SC section 42301.16(a) is
consistent with the fact that the California legislature adopted SB 700
in part in an effort to avoid sanctions that were set in motion by
EPA's final determination that the California SIP was ``substantially
inadequate'' because State law did not provide the legal authority
allowing State and local permitting agencies to meet the permitting
obligations under parts C and D of title I with respect to major
agricultural sources. Lastly, we note that our interpretation of CH&SC
section 42301.16(a) is consistent with California's interpretation. See
the memorandum from James N. Goldstene, Executive Director, CARB, to
Air Pollution Control Officers, dated September 3, 2008; and the letter
from Robert W. Byrne, Acting Senior Assistant Attorney General, to
Jared Blumenfeld, dated November 14, 2012. For the reasons given above,
therefore, we continue to interpret CH&SC section 423016(a) as
referring to major sources under Titles I and V of the CAA.
    Earthjustice Comment #3: Even if one were to accept EPA's
interpretation of CH&SC section 42301.16(a) as being limited to title I
part D requirements, permitting of minor agricultural sources in the
District would still be authorized because Rule 2201 relies on non-
major source permitting to fulfill the requirements of part D. The
District has chosen not to impose Part D requirements on major sources
and has claimed instead (with EPA's approval) that its permitting of
non-major sources can be credited to show that in the aggregate Rule
2201 is ``equivalent'' to the program required under part D for major
sources. By relying on credit from its permitting of non-major sources
to meet federal NSR requirements, the District has eliminated any lines
between what portion of Rule 2201 is meant to comply with major source
permit requirements and what part is not derived from or in
satisfaction of the part D major source provisions. The same is true
for agricultural sources. It is only by permitting both major and minor
sources that the District can claim to satisfy part D. Having allowed
this demonstration of compliance with major source requirements ``in
the aggregate,'' EPA cannot now claim that the permitting of certain
non-major source is not authorized under Title I.
    Response to Earthjustice Comment #3: Earthjustice is correct that
EPA has approved an equivalency tracking system that the District uses
to assess overall equivalency of its NSR program with CAA nonattainment
NSR (i.e., part D) requirements on an annual basis. 69 FR 27837 (May
17, 2004). The requirements for the tracking system are set forth in
District Rule 2201, section 7.0 (``Annual Offset Equivalency
Demonstration and Pre-Baseline ERC Cap Tracking System''). The goal of
the tracking system is to show that, notwithstanding certain
differences between the District and Federal NSR program, the
District's NSR rules would require offsets that are, in the aggregate,
equivalent to offsets required under the Federal program. 68 FR 7330,
at 7332 (February 13, 2003).
    To make the equivalency demonstration, the District can use, among
other sources of emissions reductions, emission reductions used to meet
offset requirements imposed on minor sources. However, the fact that
the District can rely, and has relied, on minor source offsets to
demonstrate equivalency does not mean that permits for new or modified
minor agricultural sources are required under part D of Title I and
therefore subject to District permitting authority under CH&SC section
42301.16(a). The District has demonstrated equivalency each year since
the tracking system was approved and has never relied on offsets from
new minor agricultural sources or minor modifications of agricultural
sources to do so. Thus, we disagree with Earthjustice's contention that
the District's reliance on minor source (non-agricultural source)
offsets to demonstrate equivalency of the District's NSR program with
Federal NSR requirements makes all minor source permits, including
minor source permits for agricultural sources, required under part D of
Title I and thus ``required'' for the purposes of CH&SC section
42301.16(a).
    Earthjustice Comment #4: EPA's interpretation of State law
regarding District permitting authority over agricultural sources fails
to reconcile and give meaning to CH&SC section 39011.5. Under
paragraphs (b) and (c) of CH&SC section 39011.5, the authority to
permit any agricultural source under the terms of Rule 2201 as it was
revised in December 2002 is expressly preserved and made applicable to
agricultural sources. There is no dispute that, under the terms of Rule
2201, the District had jurisdiction over the permitting of all
agricultural sources on January 1, 2003, and there is no dispute that
Rule 2201 was adopted and submitted for EPA approval to satisfy the
requirements of the CAA. Nothing in the language of CH&SC section
39011.5(b) and (c) suggests that the permitting authority conferred by
these preserved regulations is subject to the limitations in CH&SC
section 42301.16(c) \10\ or elsewhere. To the contrary, the CH&SC uses
broad language making ``any'' existing district regulation applicable
to agricultural sources and ensuring that ``nothing'' limits existing
district authority. If the District truly lacked authority to regulate
sources with actual emission less than 50 percent of a major source
threshold, there would be no need for these sections preserving the
authority of existing regulations. State law could have been silent and
allowed the permitting of these sources only to the extent authorized
by SB 700. The only way to reconcile these provisions is to limit the
effect of CH&SC section 42301.16(c) to future regulation (i.e., post
enactment of SB 700) of these sources.
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    \10\ As noted in footnote 5 of this document, under
CH&SC section 42301.16(b) and (c), minor agricultural 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.
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    Response to Earthjustice Comment #4: We disagree with the
contention that, under the terms of Rule 2201, the District had
jurisdiction over the

permitting of all agricultural sources on January 1, 2003. At that
time, State law excluded all agricultural sources from District
permitting authority. The absence of an exemption in Rule 2201 as
adopted by the District in December 2002 did not imbue the District
with authority otherwise denied under State law. In the following
paragraphs, we explain how our interpretation of District permitting
authority over agricultural sources can be reconciled with CH&SC
section 39011.5. We also find further support for our view in the
California Attorney General office's interpretation of the relevant
sections of SB 700.
    CH&SC section 39011.5(a) defines ``agricultural source of
pollution'' and ``agricultural source'' for the purposes of Division 26
(``Air Resources'') of the CH&SC. As noted in our proposed rule (75 FR
at 4752), California law defines ``agricultural source'' as a source of
air pollution or group of sources used in the production of crops or
the raising of fowl or animals located on contiguous property under
common ownership or control that is a confined animal facility (e.g.,
barn, corral, coop); is an internal combustion engine used in the
production of crops or the raising of fowl or animals (e.g., irrigation
pumps, but excluding nonroad vehicles such as tractors); or is a title
V source or is a source that is otherwise subject to regulation by a
district or the federal Clean Air Act. See CH&SC section 39011.5(a). As
such, agricultural sources include both combustion sources (such as,
internal combustion engines and boilers) and non-combustion sources
[e.g., confined animal facilities and on- and off-field vehicular
activity (e.g., tilling and harvesting)]. Among the non-combustion
agricultural sources, some by their nature generate fugitive emissions
such as tilling, harvesting, and vehicle travel over unpaved farm
roads.
    CH&SC section 39011.5(b) provides that: ``Any district rule or
regulation affecting stationary sources on agricultural operations
adopted on or before January 1, 2004, is applicable to an agricultural
source.'' In proposing the error correction, we were aware of CH&SC
section 39011.5(b) but did not interpret that statutory provision as
conferring authority to the District to require permits for all new or
modified agricultural sources on January 1, 2004 (i.e., the effective
date of SB 700).
    Under our interpretation, the savings clause in CH&SC section
39011.5(b) preserves general prohibitory and permitting rules affecting
agricultural sources and adopted prior to the effective date of SB 700
(i.e., January 1, 2004) but does not authorize the application of
District permitting requirements inconsistent with the limited
exemptions set forth in other sections of SB 700 [specifically, CH&SC
section 42301.16(c) and 42301.18(c)]. That is, CH&SC section 39011.5(b)
simply preserves District rules affecting agricultural sources that
were adopted prior to SB 700 and avoids the need to re-adopt such rules
after the effective date of SB 700. Under this view, CH&SC section
39011.5(b) preserved the ability of the District to administer its NSR
rules and apply them to agricultural sources consistent with SB 700
upon the effective date of SB 700 notwithstanding the fact that the NSR
rules were adopted prior to the effective date of SB 700 and thus could
not be applied to agricultural sources (because of the preclusion from
District permitting for agricultural sources in then-current CH&SC
section 42310(e)) at the time the District adopted them.
    The California Attorney General's office shares this view:

    ``. . . . Although California before SB 700's enactment exempted
agricultural sources from New Source Review permitting requirements,
California law did not preclude districts from adopting emissions-
reduction rules of general application (independent of the New
Source Review process) that would apply to agricultural stationary
sources. Some districts had such rules and, following SB 700's
enactment, section 39011.5, subdivision (b) preserved them. For
example, where air pollution control districts had regulated
stationary diesel engines or generators, those regulations were not
limited or diminished by SB 700 merely because the regulated
equipment happened to be located on or involved in what SB 700 now
termed `agricultural sources.' Therefore, section 39011.5,
subdivision (b) has a limited and distinct purpose; it preserves and
validates those existing equipment-governing regulations of general
application, that, without such a savings clause, might be construed
as invalid because the regulated equipment was included as part of
SB 700's `agricultural sources.' Subdivision (b) does not authorize
district New Source Review rules that conflict with the sections of
SB 700 that address the New Source Review permitting process.'' \11\
---------------------------------------------------------------------------

    \11\ See California Attorney General Office's Letter, November
14, 2013, page 4.

Thus, EPA's interpretation of CH&SC section 39011.5(b) is consistent
with that expressed by the California Attorney General's office.
Moreover, in the excerpt provided above, the California Attorney
General's office explains the need for the savings clause.
    CH&SC section 39011.5(c) provides in relevant part: ``Nothing in
this section limits the authority of a district to regulate a source,
including, but not limited to, a stationary source that is an
agricultural source, over which it otherwise has jurisdiction pursuant
to this division, or pursuant to the federal Clean Air Act (42 U.S.C.
Sec. 7401 et seq.) or any rules or regulations adopted pursuant to that
act that were in effect on or before January 1, 2003, or . . . .''
    Similar to CH&SC section 39011.5(b), EPA did not view CH&SC section
39011.5(c) as validating the application of District permitting
requirements to all new or modified agricultural sources inconsistent
with the limited exemptions found in other sections of SB 700
[specifically, CH&SC section 42301.16(c) and 42301.18(c)]. Under our
view, the phrase ``nothing in this section'' limits the reach of CH&SC
section 39011.5(c) to the other provisions in CH&SC section 39011.5,
i.e., the definition of ``agricultural source'' in CH&SC section
39011.5(a) and the savings clause in CH&SC section 39011.5(b),
discussed above. As such, we view CH&SC section 39011.5(c) as ensuring
that the definition of ``agricultural source'' and the savings clause
in paragraph (b) does not inadvertently limit the authority of
districts to regulate sources, including agricultural sources, over
which the districts otherwise have jurisdiction pursuant to rules
adopted before January 1, 2003, and does not inform our interpretation
of other sections of SB 700, such as CH&SC section 42301.16(c) and
42301.18(c). Thus, CH&SC 39011.5(c) in no way undermines our
determination in the proposed rule that the District's authority to
permit agricultural sources and to impose emissions offset requirements
on such sources was limited under State law notwithstanding the absence
of such limiting language in the District's NSR rules as adopted in
December 2002 and approved by EPA in May 2004.
    The California Attorney General's office agrees that CH&SC section
39011.5(c) does not authorize NSR rules that conflict with other
sections of SB 700 that expressly address the NSR permitting process.
The California Attorney General's office explains:

    ``Likewise, [CH&SC section 39011.5(c)] does not authorize
district New Source Review rules that conflict with SB 700's
provisions concerning the New Source Review process. Subdivision (c)
provides that nothing in that section limits a district's authority
to regulate a source over which it otherwise has jurisdiction under
the Clean Air Act or any Clean Air Act rules or regulations that
were in effect on or before January 1, 2003. That is, subdivision
(c) clarifies that section 39011.5 itself does not

limit a district's existing authority, but subdivision (c) does not
concern whether some other provision of SB 700 might limit a
district's authority. Therefore, the only effect of subdivision (c)
is to assure that section 39011.5, by defining the term
`agricultural source,' did not inadvertently limit the validity or
reach of any existing district rules. Subdivision (c) does not grant
authority, and does not authorize New Source Review rules that
conflict with other sections of SB 700 that expressly address the
New Source Review permitting process.'' \12\

    \12\ See California Attorney General Office's Letter, November
14, 2013, pages 4 and 5.
---------------------------------------------------------------------------

    Thus, we continue to read the savings clauses of CH&SC section
39011.5(b) and (c) as not validating the application of District
permitting requirements to all new or modified agricultural sources
inconsistent with the limited exemptions found in other sections of SB
700, and as consistent with our finding in the proposed rule that the
absence of the limited exemptions in SB 700 for agricultural sources in
the District's NSR rules resulted in a mismatch between the SIP and the
District's authority under State law when we approved the District's
NSR rules in May 2004.
    Earthjustice Comment #5: There is no requirement that the District
make specific findings before requiring offsets from agricultural
sources. First, EPA's interpretation of CH&SC section 42301.18(c) has
no basis in the language of that section. There is nothing in CH&SC
section 42301.18(c) that requires some ``finding'' by the District
before imposing offsets. Second, EPA's interpretation is inconsistent
with CARB's explanation that the issue in CH&SC 42301.18(c) is
``whether the emissions reductions meet the generic criteria that the
U.S. EPA and the ARB and air district have, since 1976, required of
sources in order for the reductions to `count' for purposes of
attaining ambient standards'' and ``[t]he existence of a District rule
allowing such offsets to be generated is not germane. . . .'' \13\
---------------------------------------------------------------------------

    \13\ Earthjustice cites a letter from W. Thomas Jennings, Chief
Counsel, CARB, to Brent Newell, Center on Race, Poverty and the
Environment, May 30, 2007.
---------------------------------------------------------------------------

    Response to Earthjustice Comment #5: We start with the words of
CH&SC section 42301.18(c): ``A district may not require an agricultural
source to obtain emissions offsets for criteria pollutants for that
source if emissions reductions from that source would not meet the
criteria for real, permanent, quantifiable, and enforceable emission
reductions.'' Earthjustice is correct that EPA did read CH&SC section
42301.18(c) as exempting new minor agricultural sources or minor
modifications of existing agricultural sources from the emissions
offset requirement pending a determination on the part of the District.
Based on that understanding, EPA proposed to limit the Agency's prior
approval in such a way as to give effect to the absence of such a
determination during the period in which the relevant version of
District's NSR rules were in effect as part of the SIP, i.e., mid-2004
through mid-2010.
    In response to this comment, we reviewed again the language of
CH&SC section 42301.18(c) and acknowledge that it does not specify any
particular process for determining when the criteria, that would
authorize imposition by a District of the emission offset requirement
for a new or modified minor agricultural source, have been met for the
given minor agricultural source. We also reviewed the CARB reference
cited above in Earthjustice Comment 5, and agree that it does
not support EPA's understanding that a determination by the District is
a prerequisite to the District's authority to impose the emissions
offset requirement to new or modified minor agricultural sources under
CH&SC section 42301.18(c), to the extent that the ``determination''
consists of a regulatory protocol or District rule allowing such
offsets to be generated. In the CARB reference cited by Earthjustice,
CARB writes:

    ``With respect to our interpretation of [CH&SC section
42301.18(c)], we believe that section 42301.18(c) does not ask
whether or not the District has a regulatory protocol to verify
whether ERC's offered by agricultural source are creditable, but
rather sets forth the objective, generic criteria that must be
satisfied by an agricultural source seeking credits for its emission
reductions. If the proffered reductions were real (i.e., surplus to
required reductions), quantifiable, and enforceable, then the source
would be able to use (or bank) them as credits and the District may,
therefore, require the source to provide offsets. The use of the
subjective ``would not meet'' is critical in interpreting this
provision; it focuses the inquiry on whether the emissions
reductions meet the generic criteria that the U.S. EPA and the ARB
and air districts have, since 1976, required of sources in order for
the reductions to ``count'' for purposes of attaining ambient
standards and to qualify for use as offsets. The existence of a
District rule allowing offsets to be generated is not germane to
determining whether emission reductions from a given agricultural
source ``would'' meet the criteria for real, permanent,
quantifiable, and enforceable.''

    However, whether emissions reductions from a given agricultural
source meet the relevant criteria is not self-evident or self-
implementing. Some determination is necessary. For instance, the
District is the agency responsible for allowing the emissions
reductions from a given agricultural source to be banked or used for
the purpose of offsetting emissions increases from new or modified
stationary sources that are subject to the offset requirement under an
approved NSR program. If the District allowed emission reductions to be
banked or used for offsetting emission increases, then the District
would thereby be determining that the emissions reductions are ``real,
permanent, quantifiable, and enforceable'' since those are the basic
criteria for judging the creditability of emission reductions for use
as NSR offsets. The District's authority to impose the offset
requirement on new or modified minor agricultural sources would vest as
to those agricultural sources for which it has allowed banking or use
of emission reductions for NSR offset purposes. Thus, while no protocol
or District rule specifically directed at agricultural sources need be
adopted for the offset authority to vest, some determination is
necessary. Because no such determination was made during the relevant
period between the effective date of EPA's 2004 approval of the
previous version of District NSR rules and the effective date of EPA's
2010 approval of District NSR rules that align such rules with SB 700,
EPA continues to believe that limiting its approval to exempt new minor
agricultural sources and minor modifications to existing agricultural
sources from the offset requirement is warranted.
    EPA's position is supported by the California Attorney General's
Office. In its March 2013 letter, the California Attorney General's
Office writes: ``It is our understanding that currently emissions
reductions from minor agricultural sources do not meet the criteria for
real, permanent, quantifiable and enforceable emission reductions. On
these facts, the plain language of [CH&SC section 42301.18(c)] serves
to suspend the duty of a minor agricultural source to offset emissions
from that source.'' \14\ If emission reductions from

minor agricultural sources do not meet the criteria in March 2013, then
they certainly did not meet the criteria during the relevant period
affected by today's error correction action (mid-2004 through mid-
2010).
---------------------------------------------------------------------------

    \14\ See letter from the California Attorney General's office,
dated March 18, 2013. We recognize that the California Attorney
General's Office's November 2012 letter states that CH&SC section
42301.18(c) ``does not create an exemption'' but merely
``disqualifies any offsets that do not meet the offset criteria and
forbids the district from requiring these deficient offsets.'' We
find this statement difficult to reconcile with that Office's March
2013 letter that states that CH&SC section 42301.18(c) serves to
``suspend the duty of a minor agricultural source to offset
emissions from that source.'' We believe that ``exemption'' and
``suspend the duty'' are essentially the same, and thus both
statements cannot be correct, but we place greater weight on the
March 2013 statement because it was prepared specifically to respond
to the relevant issue addressed herein, i.e., the application of
CH&SC section 42301.18(c) to minor agricultural sources.
---------------------------------------------------------------------------

    The California Attorney General's Office, in its March 2013 letter,
maintains that its reading of CH&SC section 42301.18(c) is consistent
with CARB's letter to the California Air Pollution Control Officers,
dated September 3, 2008, which was included as an attachment to the
California Attorney General office's letter, dated March 18, 2013, and
which provides the following guidance with respect to CH&SC section
42301.18(c):

    ``This limited exemption from the offset requirement means that
agricultural sources that are not amenable to District prohibitory
rules or control measures that would qualify for SIP credit--or that
are unable to generate emission reductions that would qualify as
offsets--because they fail to meet one or more of the basic criteria
for a creditable rule or for offset credit cannot be required to
provide offsets.
    We believe this exemption is based upon considerations of
equity. If a source cannot get credit for its emission reductions in
the SIP or cannot quantify its surplus emission reductions for
banking and later use as offsets, it should not be required to
provide offsets. This exemption should be narrowly applied, and in
any event, cannot be used to exempt major federal sources from
offset requirements.'' \15\
---------------------------------------------------------------------------

    \15\ See letter from James N. Goldstene, Executive Officer,
CARB, to ``Air Pollution Control Officers,'' September 3, 2008, page
4. CARB draws a distinction between SIP credit and NSR offset
credit, a distinction that we also draw. Some prohibitory rules or
control measures are credited in the SIP, particularly those related
to mobile sources and non-traditional stationary sources, that do
not necessarily qualify for NSR offset credit. For example, a
programmatic level of documentation may be acceptable to support
quantification of emissions reductions from mobile sources and non-
traditional stationary sources for general SIP attainment
demonstration purposes, but that same documentation may be
insufficient to validate ERCs for owners or operators of individual
mobile sources or individual non-traditional stationary sources for
NSR offset purposes.

    During the relevant time period, EPA approved several District
rules affecting agricultural sources, and several District air quality
plans that reflect emissions reductions from implementation of those
rules. For example, EPA approved District Rule 4550 (``Conservation
Management Practices'') and its associated List of Conservation
Management Practices at 71 FR 7683 (February 14, 2006), District Rule
4570 (``Confined Animal Facilities'') at 75 FR 2079 (January 14, 2010),
the 2003 San Joaquin Valley PM10 Plan at 69 FR 30006 (May
26, 2004), the 2004 San Joaquin Valley Extreme Ozone Attainment
Demonstration Plan at 75 FR 10420 (March 8, 2010), and the 2007 San
Joaquin Valley PM10 Maintenance Plan and Redesignation
Request at 73 FR 66759 (November 12, 2008).
    However, the use of the conjunction ``or'' by CARB in its
discussion of CH&SC section 42301.18(c), quoted above, means that,
under CARB's interpretation, even if SIP credit were approved for
prohibitory rules or control measures, new or modified minor
agricultural sources could not be required to provide emissions offsets
if they are unable to generate emission reductions that would qualify
as offsets. Thus, we find that CARB's interpretation of CH&SC section
42301.18(c) supports EPA's limitation on its May 2004 approval to
exempt new minor agricultural sources and minor modifications of
existing agricultural sources from the emissions offset requirement
because, under that provision of State law, the District did not have
the authority to require such sources to provide emissions offsets
because such sources were unable to generate emissions reductions that
qualify as offsets during the relevant time period.
    Earthjustice Comment #6: EPA's use of section 110(k)(6) to correct
this error is unlawful. EPA cannot use section 110(k)(6) to achieve a
result that EPA could not have achieved if it had acted ``correctly''
at the outset. EPA can point to no authority that allows EPA to adopt
such a limitation when acting on this or any other SIP approval. To the
contrary, such attempts to rewrite the rule submitted to EPA for
approval violate well-established prohibitions against piecemeal
approval of rule submittals. See Bethlehem Steel Corp. v. Gorsuch, 742
F.2d 1028 (7th Cir. 1984).
    Section 110(k)(6) does not allow EPA to revise the rule itself,
only the action used to approve the rule. The ``actions'' on a SIP
submittal are outlined in section 110(k)(3) and include full and
partial approval or disapproval. First, there should be little question
that EPA could not have partially approved the District's NSR rules as
submitted in 2002. The other option theoretically available to EPA at
the time of the 2004 action was the ``limited approval/limited
disapproval,'' but EPA guidance cautions against use of that option to
approve any rule that is unenforceable for all situations.\16\ None of
the options available to EPA when acting on a SIP submittal allow EPA
to do what it is proposing to do here. EPA cannot ``limit'' the
approval by rewriting the applicability of the rule as submitted.
Section 110(k)(6) does not create new options for EPA to act on SIP
submittals and cannot be used to circumvent the limitations on EPA
actions provided by the plain language of section 110(k)(3).
---------------------------------------------------------------------------

    \16\ Earthjustice cites EPA guidance memorandum titled
``Processing of State Implementation Plan (SIP) Submittals,'' dated
July 9, 1992, from John Calcagni, Director, Air Quality Management
Division, EPA Office of Air Quality Planning and Standards.
---------------------------------------------------------------------------

    Response to Earthjustice Comment #6: First of all, we agree that we
cannot use section 110(k)(6) to revise the District's NSR rules that we
previously approved, but we are not doing so in this action. Our action
to limit our approval would in no way change the language of the
District NSR rules that we approved in May 2004. Instead, it would
revise the scope of our approval in such a way as to align our approval
with the limits of District permitting authority under State law at the
time we initially approved the rules and thus does not conflict with
the decision in Bethlehem Steel.
    In doing so, our action amounts to a revision to the approved
California SIP that was applicable between June 2004 and June 2010.\17\
EPA is not changing the District rule component of the SIP. We believe
that our action finalized today is the appropriate revision to make to
the California SIP under CAA section 110(k)(6) to address the error
that we made in our May 2004 final action.
---------------------------------------------------------------------------

    \17\ As discussed in more detail in our proposed rule, the
District amended the NSR rules in 2007 and 2008 to, among other
things, align the rules explicitly with the District's authority to
permit minor agricultural sources and to require emissions offsets
for such sources. 75 FR 4745, at 4749-4750 (January 29, 2010). EPA
approved the amended NSR rules in May 2010, effective June 10, 2010.
75 FR 26102 (May 11, 2010). Thus, our action today need only correct
the mismatch between the District NSR rules and the District's
authority with respect to minor agricultural sources under SB 700
from the effective date of our May 2004 approval of the 2002-amended
District NSR rules (i.e., June 16, 2004) through June 9, 2010.
---------------------------------------------------------------------------

    Second, we agree that there are significant obstacles to correcting
our May 2004 action on the District's NSR rules by revising the action
from a full approval to a ``partial approval/partial disapproval'' or
``limited approval/limited disapproval.'' For instance, a ``partial
approval/partial disapproval'' action is problematic in this instance
because, as a general matter, NSR rules are not separable. Correcting
our action from a full approval action to a ``limited approval/limited
disapproval'' action is problematic in that it would incorporate the
entire rule into the California SIP, and thus would not remedy the
problem of the mismatch between the District

NSR rules in the SIP and the District's authority with respect to
agricultural sources under SB 700.
    We disagree, however, that we could not have limited our approval
in May 2004 under section 110(k)(3) in the same manner as we are doing
today, but in any event, for today's action, we are relying on section
110(k)(6), not on section 110(k)(3). We believe that the action we
proposed to limit our previous approval and that we are finalizing
today is authorized under the broad discretionary language of CAA
section 110(k)(6):

    ``Whenever the Administrator determines that the Administrator's
action approving, disapproving, or promulgating any plan or plan
revision (or part thereof), . . . 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 public.''

The key provisions are that the Administrator has the authority to
``determine[ ]'' when a SIP approval was in ``error,'' and when he does
so, he may then revise the SIP approval ``as appropriate,'' in the same
manner as the approval, and without requiring any further submission
from the state.
    With this action, EPA is determining that its action approving the
District's NSR rules in May 2004 was ``in error'' due to the mismatch
between the facial applicability in the NSR rules of the permitting and
emission offset requirements to minor agricultural sources and the
limits on District authority under State law applicable at the time of
our SIP approval. Given the mismatch between the exclusions and
exemptions apparent from the words of the District NSR rules and the
limits under State law, EPA was in error in fully approving the NSR
rules because the SIP and SIP revisions must be supported by necessary
assurances by the State that, in this context, the District will have
adequate authority under State law to carry out such SIP or SIP
revisions and the State of California could not have provided such
necessary assurances in May 2004 with respect to minor agricultural
sources because of the limits on District authority at the time
manifest in SB 700. See CAA section 110(a)(2)(E) and our January 29,
2010 proposed rule at pages 4747-4748.
    EPA is further determining that the appropriate action EPA can
take--in light of the broad discretion conferred by the phrase,
``revise such action as appropriate,''--is to limit our previous
approval of the District's NSR rules, as it relates to agricultural
sources, (1) to the extent that the permit requirements apply to
agricultural sources with potential emissions at or above a major
source applicability threshold and to agricultural sources with actual
emissions at or above 50 percent of a major source applicability
threshold; and (2) to the extent that the offset requirements apply to
major agricultural sources and major modifications of such sources. We
have also conducted this limiting of our prior approval through notice-
and-comment rulemaking, which is the same manner as EPA conducted the
prior approval.
    In limiting our previous approval in this manner, we are taking an
approach analogous to the one EPA took with respect to the Agency's
previous SIP approvals of certain State programs for the Prevention of
Significant Determination (PSD) to the extent those programs applied
PSD to greenhouse gas (GHG) emitting sources below the thresholds in
the final ``Tailoring Rule'' published at 75 FR 31514 on June 3, 2010.
See our final rule, ``Limitation of Approval of Prevention of
Significant Deterioration Provisions Concerning Greenhouse Gas
Emitting-Sources in State Implementation Plans,'' referred to as the
PSD SIP ``Narrowing Rule,'' at 75 FR 82536 (December 30, 2010). In the
case of the previous approvals of State PSD programs, EPA determined
that its action approving the PSD SIP provisions was ``in error'' due
to the mismatch between the PSD applicability provisions and the
state's ``necessary assurances'' under CAA section 110(a)(2)(E) of
adequate resources and further determined that the ``appropriate
action'' to correct the error was to narrow its approval of the PSD
programs to the extent they applied PSD to GHG-emitting sources below
the Tailoring Rule threshold.
    Here, in this action, EPA is determining that its action approving
the District's NSR rules was ``in error'' due to the mismatch between
the applicability provisions of the District NSR rules and the state's
``necessary assurance'' under CAA section 110(a)(2)(E) of adequate
legal authority and is further determining that the ``appropriate
action'' to correct the error is to limit its previous approval of the
District's NSR rules in May 2004 to align the permitting applicability
and offset requirement in the approved SIP to the authority granted the
District under State law. EPA's PSD SIP ``Narrowing Rule'' contains a
detailed discussion (see pages 82543-82545) justifying the reliance on
CAA section 110(k)(6) to narrow previous SIP approvals and we
incorporate that discussion herein.
    Lastly, Earthjustice would agree that EPA could have disapproved
the District's NSR rules as submitted in December 2002, and thus would
agree that we could now, under section 110(k)(6), change our former
``approval'' to ``disapproval,'' but such an action would have the
deleterious effect of removing the December 2002 version of the NSR
rules from the SIP entirely notwithstanding the significant
strengthening they represented relative to the then-existing SIP
District NSR rules approved in 2001 (66 FR 37587, July 19, 2001) that
included a blanket exemption for agricultural sources. Our action to
limit our approval is narrowly tailored to retain the strengthening
aspects of the December 2002 version of the NSR rules while still
addressing the mismatch between the language of the NSR rules and the
District's authority under State law. Our purpose in doing so is to
align the SIP approved by EPA in May 2004 with the intent of both EPA
and the State of California to address the deficiencies in the
District's NSR rules, including the previous blanket exemption for
agricultural sources as it applied to major agricultural sources. The
mismatch created in the applicable California SIP between the NSR rules
and the authority vested in the District under State law with respect
to minor agricultural sources was inadvertent, and section 110(k)(6)
provides EPA with the broad discretionary authority to take action to
fix the problem caused by the Agency's previous erroneous SIP action.
    CRP&E Comment #1: The proposed rule conflicts with Safe Air for
Everyone v. EPA, 488 F.3d 1088 (9th Cir. 2007) (``Safe Air''). The SIP
means exactly that which the December 2002 version of District's NSR
rules say it means, and EPA made no statement of administrative intent
that would contradict that plain meaning. As such, the purported
exemption in SB 700 cannot, as a matter of law, be part of the EPA-
approved SIP.
    Response to CRP&E Comment #1: We agree that we cannot simply
interpret the California SIP to include statutory limitations not
manifest in the SIP itself nor manifest in EPA's expressed intent or
understanding at the time we conducted rulemaking to approve the
December 2002 version of the District's NSR rules. However, agreement
on this point simply highlights the need for EPA to take the action it
is finalizing today. We have conducted this error correction action
through a notice-and-comment rulemaking and have made our
administrative intent manifest through that process. Also, we want to
make clear that we are not changing the language of the District's NSR
rules that

we approved in May 2004. Instead, our action will revise the scope of
our approval in such a way as to align our approval with the limits of
District permitting authority under State law at the time we approved
the rules. In doing so, our action amounts to a revision to the
California SIP applicable between June 2004 and June 2010. EPA is not
changing the District rule component of the SIP. We believe that our
action finalized today is the appropriate revision to make to the
California SIP under CAA section 110(k)(6) to address the error that we
made in our May 2004 final action.
    CRP&E Comment #2: EPA lacks the power to amend the SIP to conform
to EPA's interpretation of the District's state law permitting
authority. Nothing in the CAA authorizes EPA to substantively amend a
SIP or SIP revision, so EPA cannot accomplish that through a
``correction'' under section 110(k)(6).
    Response to CRP&E Comment #2: Please see EPA's Response to
Earthjustice Comment 6.
    CRP&E Comment #3: Even if EPA could make an end-around Safe Air and
could amend the SIP, SB 700 itself gives the District the authority to
implement and enforce the December 2002 version of the District's NSR
rules. EPA rationalizes its correction on the ground that the District
lacked statutory authority to implement and enforce the December 2002
version of the District's NSR rules. EPA, however, fails to recognize
the authority given to the District by CH&SC sections 39011.5(b) and
(c).
    Response to CRP&E Comment #3: Please see EPA's Response to
Earthjustice Comment 4.
    Dairy Cares Comment #1: Dairy Cares agrees that EPA erred in
failing to expressly acknowledge the limitations imposed on the
District's authority pursuant to SB 700, because the SB 700 exemptions
plainly limited the District's permitting authority over agricultural
sources and agrees that EPA's SIP correction is appropriate under
section 110(k)(6) of the CAA. Dairy Cares, however, believes that
because EPA's 2004 SIP action implicitly and necessarily included all
of the expansion and limitation of District authority contained in SB
700, including the exemptions, the SIP, as it currently exists, should
be read to include the exemptions.
    Response to Dairy Cares Comment #1: EPA notes that the argument
that limitations on authority under State law implicitly and
necessarily determine the applicability of rules and regulations
approved by EPA as part of a SIP, even if those statutory limitations
are not also approved as part of the SIP, is not supported by case law.
In Safe Air for Everyone v. EPA (488 F.3d 1088 (9th Cir. 2007), the
Ninth Circuit held that ``SIPs are interpreted based on their plain
meaning when such a meaning is apparent, not absurd, and not
contradicted by the manifest intent of EPA, as expressed in the
promulgating documents available to the public.'' Id. at 1100. In this
instance, the absence of limited exemptions for minor agricultural
sources with respect to permitting and offsets in the version of the
District's NSR rules approved in 2004 is plain, not absurd, nor
contradicted by EPA in taking the action in 2004 to approve the rules.
Moreover, SB 700 itself is not approved into the California SIP. Thus,
we continue to believe that is appropriate to correct our previous
approval of the District's NSR rules to reconcile that approval with
the limitations on District authority that were established by the
California legislature in SB 700.

III. Final Action

    After due consideration of the comments submitted on our proposed
action, and in light of California's interpretation of SB 700 as it
applies to the District's NSR rules, we are taking final action under
CAA section 110(k)(6) to correct our erroneous approval in May 2004 of
San Joaquin Valley District NSR rules, Rule 2020 (``Exemptions'') and
Rule 2210 (``New and Modified Stationary Source Review Rule''), as
amended by the District in December 2002. In doing so, we are
determining that such previous approval was in error for the purposes
of CAA section 110(k)(6) because we failed to recognize that the State
could not provide the necessary assurances under CAA section
110(a)(2)(E) that the District had the authority to implement its
amended NSR rules as those rules applied to agricultural sources given
that the District's NSR rules, as adopted in 2002, did not reflect the
qualified permitting and emissions offset exemptions provided in SB 700
with respect to minor agricultural sources.
    To correct this error, we are revising our previous action by
limiting our previous approval, as it relates to agricultural sources,
to the extent that the permit requirements apply (1) to agricultural
sources with 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. We are also limiting our previous approval, as it relates to
agricultural sources, to the extent that the emission offset
requirements apply to major agricultural sources and major
modifications of such sources.
    To codify the new limitation on our previous approval, we are
adding a new section to 40 CFR part 52 (``Approval and promulgation of
implementation plans''), subpart F (``California''). The new section is
40 CFR 52.245 (``New Source Review Rules'').

IV. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) has exempted this
regulatory action from Executive Order 12866, entitled ``Regulatory
Planning and Review.''

B. Paperwork Reduction Act

    This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions.
    This rule will not have a significant impact on a substantial
number of small entities because error correction actions under section
110(k)(6) of the Clean Air Act do not create any new requirements but
simply approve requirements that the State is already imposing.
Therefore, because this error correction action does not create any new
requirements, I certify that this action will not have a significant
economic impact on a substantial number of small entities.
    Moreover, due to the nature of the Federal-State relationship under
the Clean Air Act, preparation of flexibility analysis would constitute
Federal inquiry into the economic reasonableness of State action. The
Clean Air Act forbids EPA to base its actions concerning SIPs on such
grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976);
42 U.S.C. 7410(a)(2).

D. Unfunded Mandates Reform Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed

into law on March 22, 1995, EPA must prepare a budgetary impact
statement to accompany any proposed or final rule that includes a
Federal mandate that may result in estimated costs to State, local, or
tribal governments in the aggregate; or to the private sector, of $100
million or more. Under section 205, EPA must select the most cost-
effective and least burdensome alternative that achieves the objectives
of the rule and is consistent with statutory requirements. Section 203
requires EPA to establish a plan for informing and advising any small
governments that may be significantly or uniquely impacted by the rule.
    EPA has determined that the error correction action promulgated
today does not include a Federal mandate that may result in estimated
costs of $100 million or more to either State, local, or tribal
governments in the aggregate, or to the private sector. This Federal
action aligns requirements under Federal law with those under state and
local law, and imposes no new requirements. Accordingly, no additional
costs to State, local, or tribal governments, or to the private sector,
result from this action.

E. Executive Order 13132, Federalism

    Executive Order 13132, Federalism, (64 FR 43255, August 10, 1999)
revokes and replaces Executive Orders 12612 (Federalism) and 12875
(Enhancing the Intergovernmental Partnership). Executive Order 13132
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by State and local officials in the development of
regulatory policies that have federalism implications.'' ``Policies
that have federalism implications'' is defined in the Executive Order
to include regulations that 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.'' Under Executive Order 13132, EPA may
not issue a regulation that has federalism implications, that imposes
substantial direct compliance costs, and that is not required by
statute, unless the Federal government provides the funds necessary to
pay the direct compliance costs incurred by State and local
governments, or EPA consults with State and local officials early in
the process of developing the proposed regulation. EPA also may not
issue a regulation that has federalism implications and that preempts
State law unless the Agency consults with State and local officials
early in the process of developing the proposed regulation.
    This rule 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, as specified in Executive Order 13132, because it
merely corrects an error in a previous EPA rulemaking, and does not
alter the relationship or the distribution of power and
responsibilities established in the Clean Air Act. Thus, the
requirements of section 6 of the Executive Order do not apply to this
rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by tribal officials in the development of regulatory
policies that have tribal implications.'' This rule does not have
tribal implications, as specified in Executive Order 13175. It will not
have substantial direct effects on tribal governments, 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. Thus, Executive Order 13175 does not
apply to this rule.

G. Executive Order 13045, Protection of Children From Environmental
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern health or
safety risks, such that the analysis required under section 5-501 of
the Executive Order has the potential to influence the regulation. This
rule is not subject to Executive Order 13045, because it corrects a
previous EPA approval of a State rule implementing a Federal standard.

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

    This rule is not subject to Executive Order 13211, ``Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act
(NTTAA) of 1995 requires Federal agencies to evaluate existing
technical standards when developing a new regulation. To comply with
NTTAA, EPA must consider and use ``voluntary consensus standards''
(VCS) if available and applicable when developing programs and policies
unless doing so would be inconsistent with applicable law or otherwise
impractical.
    The EPA believes that VCS are inapplicable to this action. Today's
action does not require the public to perform activities conducive to
the use of VCS.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. section 801 et seq., as
added by the Small Business Regulatory Enforcement Fairness Act of
1996, generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States. EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A major rule
cannot take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
section 804(2).

K. Petitions for Review of This Action

    Under section 307(b)(1) of the Clean Air Act, petitions for
judicial review of this action must be filed in the United States Court
of Appeals for the appropriate circuit by September 30, 2013. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not postpone the effectiveness of such
rule or action. This action may not be challenged later in proceedings
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Oxides of nitrogen, Ozone,
Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: July 12, 2013.
Alexis Strauss,
Acting Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart F--California

0
2. Section 52.245 is added to read as follows:

Sec. 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 on May 17, 2004 in Sec.  52.220(c)(311)(i)(B)(1), and in
effect for Federal purposes from June 16, 2004 through June 10, 2010,
is limited, as it relates to agricultural sources, to the extent that
the permit requirements apply:
    (1) To agricultural sources with 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.
    (b) Approval of the New Source Review rules for the San Joaquin
Valley Unified Air Pollution Control District Rules 2020 and 2201 as
approved on May 17, 2004 in Sec.  52.220(c)(311)(i)(B)(1), and in
effect for Federal purposes from June 16, 2004 through June 10, 2010,
is limited, as it relates to agricultural sources, to the extent that
the emission offset requirements apply to major agricultural sources
and major modifications of such sources.

[FR Doc. 2013-18413 Filed 7-31-13; 8:45 am]
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[Federal Register: February 13, 2008 (Volume 73, Number 30)]
[Notices]
[Page 8312-8313]
[DOCID:fr13fe08-68]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2007-1187; FRL-8349-2]

Notice of Filing of a Pesticide Petition for Residues of
Pesticide Chemicals in or on Various Commodities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces the initial filing of a pesticide
petition proposing the establishment or modification of regulations for
residues of pesticide chemicals in or on various commodities.

DATES: Comments must be received on or before March 14, 2008.

ADDRESSES: Submit your comments, identified by docket identification
(ID) number EPA-HQ-OPP-2007-1187 and the pesticide petition number (PP
7F7296), by one of the following methods:
     Federal eRulemaking Portal:  http://www.regulations.gov.

Follow the on-line instructions for submitting comments.
     Mail: Office of Pesticide Programs (OPP) Regulatory Public
Docket (7502P), Environmental Protection Agency, 1200 Pennsylvania
Ave., NW., Washington, DC 20460-0001.
     Delivery: OPP Regulatory Public Docket (7502P),
Environmental Protection Agency, Rm. S-4400, One Potomac Yard (South
Bldg.), 2777 S. Crystal Dr., Arlington, VA. Deliveries are only
accepted during the Docket's normal hours of operation (8:30 a.m. to 4
p.m., Monday through Friday, excluding legal holidays). Special
arrangements should be made for deliveries of boxed information. The
Docket Facility telephone number is<PHONE_NUMBER>.
    Instructions: Direct your comments to docket ID number EPA-HQ-OPP-
2007-1187. EPA's policy is that all comments received will be included
in the docket without change and may be made available on-line at
http://www.regulations.gov, including any personal information

provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through regulations.gov or e-
mail. The regulations.gov website is an ``anonymous access'' system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through regulations.gov,
your e-mail address will be automatically captured and included as part
of the comment that is placed in the docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. 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. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.
    Docket: All documents in the docket are listed in the docket index
available in regulations.gov. To access the electronic docket, go to
http://www.regulations.gov, select ``Advanced Search,'' then ``Docket

Search.'' Insert the docket ID number where indicated and select the
``Submit'' button. Follow the instructions on the regulations.gov
website to view the docket index or access available documents.
Although listed in the index, some information is not publicly
available, e.g., CBI or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either in the electronic docket at http://www.regulations.gov
, or, if only available in hard copy, at the OPP

Regulatory Public Docket in Rm. S-4400, One Potomac Yard (South Bldg.),
2777 S. Crystal Dr., Arlington, VA. The hours of operation of this
Docket Facility are from 8:30 a.m. to 4 p.m., Monday through Friday,
excluding legal holidays. The Docket Facility telephone number is (703)
305-5805.

FOR FURTHER INFORMATION CONTACT: Todd Peterson, Biopesticides and
Pollution Prevention Division (7511P),

Office of Pesticide Programs, Environmental Protection Agency, 1200
Pennsylvania Ave., NW., Washington, DC 20460-0001; telephone number:
703-308-7224; e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    You may be potentially affected by this action if you are an
agricultural producer, food manufacturer, or pesticide manufacturer.
Potentially affected entities may include, but are not limited to:
     Crop production (NAICS code 111).
     Animal production (NAICS code 112).
     Food manufacturing (NAICS code 311).
     Pesticide manufacturing (NAICS code 32532).
    This listing is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be affected by this
action. Other types of entities not listed in this unit could also be
affected. The North American Industrial Classification System (NAICS)
codes have been provided to assist you and others in determining
whether this action might apply to certain entities. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed under FOR FURTHER INFORMATION
CONTACT.

B. What Should I Consider as I Prepare My Comments for EPA?

     1. Submitting CBI. Do not submit this information to EPA through
regulations.gov or e-mail. Clearly mark the part or all of the
information that you claim to be CBI. For CBI information in a disk or
CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as
CBI and then identify electronically within the disk or CD-ROM the
specific information that is claimed as CBI. In addition to one
complete version of the comment that includes information claimed as
CBI, a copy of the comment that does not contain the information
claimed as CBI must be submitted for inclusion in the public docket.
Information so marked will not be disclosed except in accordance with
procedures set forth in 40 CFR part 2.
     2. Tips for preparing your comments. When submitting comments,
remember to:
    i. Identify the document by docket ID number and other identifying
information (subject heading, Federal Register date and page number).
    ii. Follow directions. The Agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
    iii. Explain why you agree or disagree; suggest alternatives and
substitute language for your requested changes.
    iv. Describe any assumptions and provide any technical information
and/or data that you used.
    v. If you estimate potential costs or burdens, explain how you
arrived at your estimate in sufficient detail to allow for it to be
reproduced.
    vi. Provide specific examples to illustrate your concerns and
suggest alternatives.
    vii. Explain your views as clearly as possible, avoiding the use of
profanity or personal threats.
    viii. Make sure to submit your comments by the comment period
deadline identified.

II. What Action is the Agency Taking?

    EPA is printing notice of the filing of a pesticide petition
received under section 408 of the Federal Food, Drug, and Cosmetic Act
(FFDCA), 21 U.S.C. 346a, proposing the establishment or modification of
regulations in 40 CFR part 180 for residues of pesticide chemicals in
or on various food commodities. EPA has determined that the pesticide
petition described in this notice contains data or information
regarding the elements set forth in FFDCA section 408(d)(2); however,
EPA has not fully evaluated the sufficiency of the submitted data at
this time or whether the data supports granting of the pesticide
petition. Additional data may be needed before EPA rules on this
pesticide petition.
    Pursuant to 40 CFR 180.7(f), a summary of the petition included in
this notice, prepared by the petitioner, is included in a docket EPA
has created for this rulemaking. The docket for this petition is
available on-line at http://www.regulations.gov.

New Exemption from Tolerance

    PP 7F7296. Repar Corporation, c/o Mandava Associates, LLC, 1730 M
St., NW., Suite 906, Washington, DC 20036, proposes to establish an
exemption from the requirement of a tolerance for residues of the plant
growth regulator homobrassinolide, in or on food commodities including
all raw agricultural commodities food and non-food crops including
forage crops, and animal feed as well as the residues of
homobrassinolide in meat, milk and eggs. Because this petition is a
request for an exemption from the requirement of a tolerance without
numerical limitations, no analytical method is required.

List of Subjects

    Environmental protection, Agricultural commodities, Feed additives,
Food additives, Pesticides and pests, Reporting and recordkeeping
requirements.

    Dated: February 5, 2008.
W. Michael McDavit,
Acting Director, Biopesticides and Pollution Prevention Division,
Office of Pesticide Programs.
[FR Doc. E8-2712 Filed 2-12-08; 8:45 am]

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