[Federal Register Volume 88, Number 130 (Monday, July 10, 2023)]
[Rules and Regulations]
[Pages 43434-43440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14132]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2022-0420; FRL-9970-02-R9]


Air Plan Revisions; California; San Joaquin Valley Air Pollution 
Control District; Stationary Source Permits

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking final 
action on a permitting rule submitted as a revision to the San Joaquin 
Valley Air Pollution Control District (SJVAPCD or ``District'') portion 
of the California state implementation plan (SIP). We are finalizing a 
limited approval and limited disapproval of the rule. This revision 
concerns the District's new source review (NSR) permitting program for 
new and modified sources of air pollution under section 110(a)(2)(C) 
and part D of title I of the Clean Air Act (CAA or ``Act'').

DATES: This rule is effective on August 9, 2023.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-R09-OAR-2022-0420. All documents in the docket are 
listed on the https://www.regulations.gov website. Although listed in 
the index, some information is not publicly

[[Page 43435]]

available, e.g., confidential business information (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 through https://www.regulations.gov, or please contact the person identified in the FOR 
FURTHER INFORMATION CONTACT section for additional availability 
information. If you need assistance in a language other than English or 
if you are a person with a disability who needs a reasonable 
accommodation at no cost to you, please contact the person identified 
in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Laura Yannayon, EPA Region IX, Air-3-
2, 75 Hawthorne St., San Francisco, CA 94105. By phone: (415) 972-3534 
or by email at [email protected].

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

Table of Contents

I. Proposed Action
II. Public Comments and EPA Responses
III. EPA Action
IV. Incorporation by Reference
V. Statutory and Executive Order Reviews

I. Proposed Action

    On July 29, 2022, the EPA proposed a limited approval and limited 
disapproval of the following SJVAPCD rule into the California SIP.\1\
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    \1\ 87 FR 45730.

                                             Table 1--Submitted Rule
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                  Rule No.                                Rule title               Amended date   Submitted date
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2201.......................................  New and Modified Stationary Source         08/15/19        11/20/19
                                              Review Rule.
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    In our July 29, 2022 action, we proposed a limited approval of Rule 
2201 because we determined that it generally satisfies the applicable 
CAA and regulatory requirements for sources subject to nonattainment 
NSR permit program requirements for Extreme ozone nonattainment areas 
and Serious PM2.5 nonattainment areas.\2\ However, we also 
determined that Rule 2201 does not fully satisfy all these 
requirements, and identified the following deficiencies in the rule:
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    \2\ The District submitted the revised Rule 2201 to address 
requirements applicable following the EPA's reclassifications of the 
San Joaquin Valley to Serious nonattainment for the 1997, 2006, and 
2012 PM2.5 NAAQS. The submittal also generally satisfies 
applicable requirements for the 2015 ozone NAAQS.
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    1. Missing definitions related to the definition of the term 
``major modification,'' and deficiencies in the definitions for the 
terms: Major Source; Routine Maintenance, Repair and Replacement; 
PM10 Emissions; Secondary Emissions; and Volatile Organic 
Compounds.
    2. Provisions allowing the use of interprecursor trading (IPT) of 
ozone precursors to satisfy emission offset requirements, which are no 
longer permissible due to a 2021 D.C. Circuit Court of Appeals 
decision.
    3. Exemptions from otherwise applicable offset requirements for the 
relocation of emission units or stationary sources, if certain 
conditions are met, and for the installation or modification of 
required control equipment.
    4. The lack of public notice requirements for minor source permits 
addressing emissions of ozone precursors.
    5. Failure of the federal offset equivalency tracking system to 
ensure equivalency with federal offset requirements.
    6. Missing provisions for Temporary Replacement Units and Routine 
Replacement Emission Units.
    7. Other minor deficiencies, including issues relating to stack 
height requirements at 40 CFR 51.164; enforceable procedures as 
provided at 40 CFR 51.165(a)(5)(i) and (ii); and permit issuance 
restrictions based on inadequate SIP implementation at CAA section 
173(a)(4).
    These deficiencies are the basis for the EPA's final limited 
approval and limited disapproval of Rule 2201. Our proposed action and 
the associated technical support document (TSD) contain more 
information on the basis for this rulemaking and on our evaluation of 
the submittal, including a detailed discussion of each deficiency.

II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period. 
During this period, we received two comment letters, both of which are 
included in the docket for this action. The first is from an 
individual; it appears to be generally supportive of the action and 
does not raise any discernable issues that are adverse to our action as 
proposed. The second comment letter was submitted by the Central Valley 
Air Quality Coalition, Medical Advocates for Healthy Air, and Little 
Manila Rising. Issues raised in this comment are summarized with 
responses below.
    Comment 1: The commenters express support for the EPA's proposed 
disapproval of the District's offset equivalency system, and for 
strengthening Rule 2201's automatic remedies for equivalency failure 
that would require the District to quantify and restore negative 
balances in the offset equivalency system. The commenters include 
information regarding the severity of ozone and PM2.5 
pollution in the San Joaquin Valley, the sources and conditions 
contributing to this pollution, and the health effects associated with 
exposure to these pollutants. The commenters also describe their 
previous work to raise concerns associated with the District's ERC 
system and offset equivalency demonstration tracking system.
    Response: The EPA appreciates the commenters' interest and 
involvement in issues surrounding the District's use of ERCs and 
offsets in its equivalency demonstration tracking system, and their 
support for this action. As explained elsewhere in this notice, we are 
finalizing our proposed limited approval and limited disapproval of 
Rule 2201 for the reasons articulated in our proposed rule.
    Comment 2: Notwithstanding their general support for the EPA's 
proposed action, including disapproval of the equivalency system, the 
commenters disagree with a statement in the EPA's proposed action that 
the Rule 2201 remedies do not provide a mechanism to require the 
District to quantify or restore a negative balance in the equivalency 
system, and therefore fail to ensure full federal offset equivalency in 
the event of a shortfall. The commenters state that the EPA has 
neglected to recognize the automatic remedies for a

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failure to submit annual reports meeting the Rule 2201 requirements, 
which they say can correct historical equivalency system failures.
    Citing Rule 2201 and statements from the preamble to the EPA's 2004 
approval of the rule, the commenters argue that sections 7.4.1.3 and 
7.4.2.3 of the rule provide an enforceable mechanism to require the 
District to quantify and correct negative balances in the equivalency 
system. These provisions apply when the District fails to submit a 
report meeting the annual demonstration requirements of sections 7.2.1 
or 7.2.2 (respectively), and require the District to apply specified 
federal offset requirements until it submits a report that meets the 
applicable requirements. According to the commenters, ``[u]pon 
submission of corrected reports, automatic remedies for the period the 
system failed equivalency--the negative balance--would apply and those 
permits in that period would have to meet federal standards, thus 
correcting the negative balance.''
    The commenters request that the EPA clarify that this remedial 
scheme applies and not foreclose potential action to enforce the 
existing SIP-approved rule to remedy asserted violations of Rule 2201.
    Response: While we agree that Rule 2201 provides automatic 
enforceable remedies if the District fails to submit a required annual 
report containing the required information, we cannot provide the 
clarification requested by the commenters because we do not agree that 
these remedies are adequate to correct historical offset equivalency 
system failures as described by the commenter. As stated in our 
proposed action and cited by the commenters, even when the Rule 2201 
remedies are fully implemented in response to an equivalency failure, 
the equivalency system will retain a historic deficit relative to the 
federal program, which is not made whole under the rule.\3\ As the 
commenters note, the rule also applies federal offset requirement 
remedies when the District fails to submit a compliant annual 
equivalency report. In that case, the District would be required to 
adopt federal offset requirements as prescribed by section 7.4.1.3 or 
7.4.2.3 (as applicable), which would remain in place until the District 
submits a report complying with the applicable requirements in section 
7.2.1 or 7.2.2. Critically, however, the rule contains no requirement 
for the District to submit a corrected report or to restore any 
negative balance in the equivalency system. Should the District 
subsequently submit corrected reports showing an equivalency shortfall, 
the applicable federal offset requirements would remain in place, but 
the rule would not require the District to restore the negative 
balance.
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    \3\ 87 FR 45730, 45734/2 (July 29, 2022).
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    As we explained in our proposed action, the Rule 2201 remedies are 
inadequate to ensure equivalency once available carryover offsets and 
additional creditable emission reductions are exhausted.\4\ Our 2004 
approval of the rule acknowledged that a deficit could remain even 
after all available emission reductions were exhausted, in which case 
the District would be required to implement federal offsetting 
requirements:
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    \4\ Id. at 45734/1.

    Should the District allow too many non-surplus emission 
reductions to be used as offsets, the remedy is outlined in section 
7.4. The District will retire additional creditable reductions that 
have not been used as offsets and have been banked or generated as a 
result of enforceable permitting actions. If a deficit remains, the 
District must implement the requirements specified in the federal 
rules.\5\ (Emphasis added.)
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    \5\ 69 FR 27837, 27839 (May 17, 2004).

    These federal offsetting requirements do not apply retroactively. 
Rule 2201 clearly establishes that the remedy shall be implemented 
prospectively through subsequent permitting actions, specifying that 
``all ATCs issued after the report deadline for that year shall 
comply'' with the federal offsetting requirements.\6\ Similar language 
appears in the rule's other federal offset remedy provisions.\7\ Once 
the District has exhausted all creditable offsets and additional 
creditable emissions reductions under section 7.4.1.1 and implemented 
the federal offset remedies for new permitting actions under section 
7.4.1.2, the rule provides no further corrective mechanisms to restore 
a prior shortfall. Specifically, there is no requirement for the 
District to collect any additional offsets from a source that was 
previously issued a permit under the rule.\8\ Accordingly, as noted in 
our proposed action, the equivalency system may retain a historical 
deficit relative to the federal program even after all applicable 
remedies are fully implemented.
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    \6\ Rule 2201, section 7.4.1.2.
    \7\ See id. at section 7.4.1.3; 7.4.2.1; 7.4.2.3 (implementing 
remedies through conditions of subsequent ATCs).
    \8\ See 69 FR at 27839 (specifying that ``a source that complies 
with the applicable District SIP-approved NSR rule would be in 
compliance with the provisions of the Clean Air Act that the 
District SIP rule implements,'' and that the District would not be 
required ``to withdraw a permit issued in reliance on an emission 
reduction credit that is of lesser surplus value at the time of use 
under federal criteria'').
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    In reviewing the Rule 2201 text, we fail to see any provisions that 
would provide a mechanism to require the District to quantify and 
correct any negative balance in the equivalency system, as claimed by 
the commentors. In particular, we see nothing in the rule that would 
require the District to submit a corrected report once the remedies 
from sections 7.4.1.3 and 7.4.2.3 of the rule are imposed, as the 
commenters appear to suggest. As noted above, these remedies apply 
``until'' the District submits a report that complies with the 
applicable requirements. But if the District does not submit any such 
correction, the federal offset remedy remains in place, and the 
District is not otherwise compelled to take any further action.
    Comment 3: The commenters recount concerns associated with the 
creditability of emissions reductions from agricultural engine 
electrification (``Ag-ICE'') projects and orphan shutdowns, and argue 
that the District's provisional withdrawal of these reductions from the 
equivalency system means that all reports that relied on these 
reductions to show equivalency (beginning with the 2007-2008 report) 
violate sections 7.2.1 and 7.2.2 of the rule. Therefore, according to 
the commenters, the automatic remedies in sections 7.4.1.3 and 7.4.2.3 
should apply until the District submits corrected annual reports for 
these periods. If the District corrects these reports and quantifies 
the equivalency system deficit, the commenters state, the corrected 
reports will indicate when the District first had negative balances in 
its equivalency system, and the automatic remedies for equivalency 
failure would take effect upon the due date for the first corrected 
annual report to show system failure, meaning that all permits issued 
from that date forward would need to meet the appropriate federal 
offset requirements.
    Response: As explained in our response to the prior comment, we 
disagree that the Rule 2201 remedies would require the District to 
submit corrected reports or to retroactively apply federal offset 
requirements to permitting actions completed in prior reporting years. 
Further, while we acknowledge the commenters' concerns about the 
creditability of emissions reductions from Ag-ICE projects and orphan 
shutdowns, a determination of whether prior annual equivalency reports 
complied with the applicable requirements of the SIP-approved version 
of Rule 2201 is outside the scope of this rulemaking action.

[[Page 43437]]

    Comment 4: The commenters state that the EPA should revisit the 
technical basis for our proposed approval of the District's 
nonattainment area NSR precursor demonstration for ammonia. The 
commenters assert that the EPA has failed to consider two significant 
issues related to the 2025 NOX inventory used to assess the 
contribution of major sources of ammonia on ambient air quality. In 
particular, the commenters say that the 50% reduction in NOX 
emissions between 2013 and 2025 cited in the TSD may be overstated 
because the EPA has not yet approved several of the strategies to 
achieve over 33 tons per day (tpd) of reductions in CARB's ``aggregate 
commitment'' in the 2018 San Joaquin Valley PM2.5 Plan. In 
addition, the commenters say that the NOX emissions 
inventory used in the modeling fails to fully account for 
NOX emissions from soil. The commenters cite Almarez et al. 
(2018) and Sha et al. (2021), which they say show that including 
NOX emissions from soil could increase total NOX 
in the emissions inventory by 50%.
    The commenters request that the EPA require the District to perform 
a precursor demonstration without the 2025 NOX inventory 
which relies on reductions from the aggregate commitments, suggesting 
that it would be more appropriate to use the current year inventory 
adjusted to conservatively account for soil NOX data.
    Response: The EPA does not agree that the technical basis for the 
NSR precursor demonstration is improper for the reasons suggested by 
the commenter. The projected 50% emissions reduction between 2013 and 
2025, cited in the TSD \9\ and precursor demonstration,\10\ comes from 
the 2018 San Joaquin Valley PM2.5 Plan.\11\ Table B-2 of the 
Plan's Appendix B shows the baseline emissions inventory for 
NOX, which projects emissions reductions expected due to 
existing control measures. This baseline inventory does not include 
additional reductions from new control measures or aggregate 
commitments in the Plan. During the 2013 to 2025 period, baseline 
annual average NOX emissions are projected to decrease from 
317.2 tons per day (tpd) to 143.7 tpd, a decrease of 54.7%. Similarly, 
for the same time period, baseline winter season emissions are 
projected to decrease from 300.5 tpd to 134.5 tpd, a decrease of 55.2%. 
Over 90% of the decrease is due to NOX emissions reductions 
from the existing motor vehicle control program.\12\ Thus, 
NOX emissions are projected to decrease by over 50%, 
independent of any NOX reductions required for District's 
attainment plan for the 2012 annual PM2.5 NAAQS.
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    \9\ TSD Attachment 2, ``Evaluation of NNSR Precursor 
Demonstration for NH3 for the San Joaquin Valley Unified 
Air Pollution Control District,'' Memorandum from Scott Bohning, EPA 
Region 9, to Docket EPA-R09-OAR-2022-0420, San Joaquin Valley NSR 
Rule 2201, p. 9.
    \10\ SJVAPCD, ``Final Draft Staff Report: Rules 2201, 2301, and 
2520'' July 15, 2019, Appendix E, ``Demonstration of Contribution of 
Hypothetical Increased Ammonia Emissions to PM2.5 
Concentrations in the San Joaquin Valley,'' p. 59.
    \11\ SJVAPCD, ``2018 Plan for the 1997, 2006, and 2012 p.m.2.5 
Standards,'' November 15, 2018, Appendix B, Table B-2 (``2018 San 
Joaquin Valley PM2.5 Plan'').
    \12\ Id. Baseline motor vehicle program NOX emissions 
decrease from 270.5 tpd to 108.6, a reduction of 161.9, which is 
93.3% of the total NOX decrease of 317.2 - 143.7 = 173.5 
tpd.
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    The precursor demonstration's 2025 modeling includes reductions 
from the aggregate commitments, and therefore shows lower 
NOX emissions than the 2025 baseline. With these lower 
NOX emissions, modeling of PM2.5 formation would 
tend to be more NOX-limited and less ammonia-limited than 
the higher baseline inventories, and therefore less responsive to the 
addition of hypothetical new ammonia point sources. With or without the 
aggregate commitment reductions, the model response to adding 
hypothetical new ammonia sources is small enough to sustain the 
conclusion that these sources would not contribute significantly to 
PM2.5 levels exceeding the NAAQS. As we noted in our 
evaluation of the precursor demonstration:

    For the 24-hour average, the maximum modeled contribution is 
0.394 [micro]g/m\3\, well below the recommended contribution 
threshold of 1.5 [micro]g/m3. For the annual average, the maximum 
impact of 0.038 [micro]g/m\3\ is also well below the threshold of 
0.2 [micro]g/m\3\. The District notes that the contributions are 26% 
and 20%, respectively, of the 24-hour and annual thresholds, despite 
the very conservative assumptions used for the hypothetical sources 
and the source modifications.\13\
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    \13\ TSD Attachment 2, p.12.

    Thus, without the aggregate commitment NOX reductions, 
the atmosphere would have to be nearly four times as sensitive to 
ammonia increases for the model responses to exceed the contribution 
thresholds. The EPA does not believe that is credible. As an 
approximate check, the EPA estimated the effect of including the 
aggregate commitments; that is, the effect of increasing the model 
emissions input by 33.88 tpd of NOX.\14\ The aggregate 
commitments represent a reduction of 23.6% from 2025 baseline emissions 
of 143.7 tpd. For comparison, baseline annual NOX emissions 
decreased by 26.8% between 2020 and 2024 (203.3 tpd down to 148.9 
tpd).\15\ The comprehensive ammonia precursor demonstration in the 2018 
San Joaquin Valley PM2.5 Plan \16\ estimates the effect of a 
30% reduction in ammonia emissions for both 2020 and 2024 baseline 
emissions, using the same underlying 2013 base case as the NSR 
precursor demonstration. In going from the 2024 to the 2020 results, 
the response increased by 100%, a factor of two, for the Bakersfield-
Planz site (0.12 up to 0.24 [micro]g/m\3\), which is the most 
responsive site, and by an average of 62% over all sites. This shows 
that a NOX emissions increase comparable to that from the 
aggregate commitments increased the sensitivity to ammonia by at most a 
factor of two. That is far less than the factor of four increase that 
would be needed for hypothetical new ammonia sources to exceed the 
contribution threshold. Therefore, the NSR precursor demonstration 
results support the conclusion that new major sources and major 
modifications would not contribute significantly to PM2.5 
levels exceeding the NAAQS even when NOX reductions from the 
aggregate commitments are included.
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    \14\ These aggregate commitments are described and summed in the 
EPA's proposed action on the 2018 San Joaquin Valley 
PM2.5 Plan at 86 FR 74310, 74331 (December 29, 2021).
    \15\ 2018 San Joaquin Valley PM2.5 Plan at Appendix 
B, Table B-2.
    \16\ Id. at Appendix G. The EPA approved this precursor 
demonstration with its accompanying modeling for the 2006 24-hour 
PM2.5 NAAQS, 85 FR 44192, July 22, 2020.
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    With respect to the amount of NOX emitted by soil in the 
San Joaquin Valley, there is conflicting research. The commenters cite 
conclusions of Almaraz et al. (2018) and Sha et al. (2021) that soil 
NOX emissions are underestimated in the CARB emissions 
inventory system,\17\ and that they comprise 30-40% of total 
NOX emissions in California. While higher levels of soil 
NOX (or NOX more generally) would tend to 
increase the modeled sensitivity of ambient PM2.5 to 
ammonia, we maintain that there is not a sufficient basis to conclude 
that higher soil NOX emissions should be used in the air 
quality modeling for the San Joaquin Valley.\18\ In contrast to the 
studies cited

[[Page 43438]]

by the commenters, Guo et al. (2020) \19\ does not find such a 
discrepancy in emissions estimates, concluding that soil NOX 
is about 1% of anthropogenic NOX emissions. Almaraz et al. 
estimates the fraction of nitrogen applied as fertilizer and released 
as NOX to the atmosphere to be 15%, while seven other 
studies reviewed by Guo et al. estimate it to be 2% or less. Almaraz et 
al., Sha et al., and Guo et al. all report high agreement between their 
modeled and observed soil NOX emissions. Almaraz et al. 
acknowledges the limited number of surface measurements that were 
available for purposes of comparing the model results and the 
difficulty in comparing the model results to the observations and notes 
the need for more field measurements. Guo et al. states that obtaining 
an emission factor correlating NOX emissions to fertilizer 
application from the data available in various studies (including 
Almaraz et al.) would be ``difficult or impossible'' due to the 
sparsity of data collected in terms of sampling length, sampling 
frequency, and the episodic nature of nitrogen gas emissions from soil.
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    \17\ Almarez et al. discuss a comparison to NOX in 
the California Emissions Projection Analysis Model (CEPAM), the 
basis for CARB planning and modeling.
    \18\ See EPA Region IX, ``Response to Comments Document for the 
EPA's Final Action on the San Joaquin Valley Serious Area Plan for 
the 2006 PM2.5 NAAQS,'' June 2020, pp. 148 and 158. This 
document accompanies the EPA's final rule published at 85 FR 44192 
(July 22, 2022).
    \19\ Guo et al. (2020), ``Assessment of Nitrogen Oxide Emissions 
and San Joaquin Valley PM2.5 Impacts From Soils in 
California,'' Journal of Geophysical Research: Atmospheres, 125(24), 
doi:10.1029/2020JD033304; available at https://doi.org/10.1029/2020JD033304.
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    In light of the uncertainties and disagreements among studies, at 
this time the EPA does not believe that available research provides 
sufficient certainty about the magnitude and proportion of soil 
NOX emissions attributable to agricultural fertilizer 
application to require substantial revisions in either the 
NOX emissions inventory or the PM2.5 modeling at 
this time.
    In summary, the EPA disagrees with the commenters that the 
District's ammonia precursor demonstration is insufficient. The EPA 
believes that the modeling in the precursor demonstration adequately 
shows that new and modified major sources of ammonia would not 
contribute significantly to PM2.5 levels above the NAAQS. 
The EPA therefore affirms our approval of the District's nonattainment 
area NSR precursor demonstration for ammonia, and our approval of Rule 
2201 without including ammonia as a PM2.5 precursor.\20\
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    \20\ For the 2012 PM2.5 NAAQS, the EPA recently 
proposed to disapprove the comprehensive precursor demonstration for 
ammonia in the 2018 Plan for the 1997, 2006, and 2012 
PM2.5 Standards. 87 FR 60494 (October 5, 2022). That 
demonstration modeled ammonia emissions reductions of 30%-70% of the 
total inventory and compared the response at monitor locations, as 
recommended in EPA's ``PM2.5 Precursor Demonstration 
Guidance,'' EPA-454/R-19-004, US EPA OAQPS, May 2019, available at 
https://www.epa.gov/pm-pollution/pm25-precursor-demonstration-guidance. The proposed disapproval focused on some responses above 
the recommended contribution threshold, and the reliance on 
reduction of no more than 30%. in the plan's precursor 
demonstration. In contrast, for the nonattainment area new source 
review precursor demonstration considered here the same guidance 
recommends modeling ammonia emissions increases, from a variety of 
hypothetical new sources. The two precursor demonstrations have 
different requirements and follow different procedures for assessing 
ammonia's contribution to PM2.5. This is appropriate for 
the different regulatory requirements and source types covered by 
the two types of demonstrations, and the EPA's conclusion on the two 
may also be different.
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III. EPA Action

    No comments were submitted that change our assessment of Rule 2201 
as described in our proposed action. Therefore, as authorized in 
sections 110(k)(3) and 301(a) of the Act, the EPA is finalizing a 
limited approval and limited disapproval of Rule 2201. This action 
incorporates the submitted rule into the California SIP, including 
those provisions identified as deficient.
    This approval is limited because the EPA is simultaneously 
finalizing a limited disapproval of the rule under section 110(k)(3). 
Our limited disapproval action triggers an obligation for the EPA to 
promulgate a federal implementation plan (FIP) unless we approve 
subsequent SIP revisions that correct the rule deficiencies within 24 
months of this final action. Additionally, because the deficiency 
relates to nonattainment NSR requirements under part D of title I of 
the Act, the offset sanction in CAA section 179(b)(2) will be imposed 
in the San Joaquin Valley nonattainment area 18 months after the 
effective date of this action, and the highway funding sanction in CAA 
section 179(b)(1) will be imposed in the area six months after the 
offset sanction is imposed, unless the EPA approves subsequent SIP 
revisions that correct the rule deficiencies prior to the 
implementation of the sanctions. The EPA intends to work with the 
District to correct the deficiencies in a timely manner.
    Note that Rule 2201 has been adopted by the SJVAPCD, and the EPA's 
final limited disapproval does not prevent the local agency from 
enforcing it. The limited disapproval would also not prevent any 
portion of the rule from being incorporated by reference into the 
federally enforceable SIP.\21\
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    \21\ Memorandum dated July 9, 1992, from John Calcagni, 
Director, Air Quality Management Division, Office of Air Quality 
Planning and Standards, U.S. EPA, to EPA Regional Air Directors, 
Regions I-X, Subject: ``Processing of State Implementation Plan 
(SIP) Submittals.''
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IV. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes 
incorporation by reference. In accordance with requirements of 1 CFR 
51.5, the EPA is finalizing the incorporation by reference of SJVAPCD 
Rule 2201, ``New and Modified Stationary Source Review Rule,'' amended 
on August 15, 2019, which implements the District's NSR permitting 
program for new and modified sources of air pollution under section 
110(a)(2)(C) and part D of title I of the CAA. The EPA has made, and 
will continue to make, these materials available through 
www.regulations.gov and at the EPA Region IX Office (please contact the 
person identified in the FOR FURTHER INFORMATION CONTACT section of 
this preamble for more information).

V. Statutory and Executive Order Reviews

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

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

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

B. Paperwork Reduction Act (PRA)

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

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. This 
action will not impose any requirements on small entities beyond those 
imposed by state law.

D. Unfunded Mandates Reform Act (UMRA)

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

[[Page 43439]]

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175, because the SIP is not approved to apply on any 
Indian reservation land or in any other area where the EPA or an Indian 
tribe has demonstrated that a tribe has jurisdiction, and will not 
impose substantial direct costs on tribal governments or preempt tribal 
law. Thus, Executive Order 13175 does not apply to this action.

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

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

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

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

I. National Technology Transfer and Advancement Act (NTTAA)

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

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

    Executive Order 12898 (Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations, 59 FR 7629, 
Feb. 16, 1994) directs Federal agencies to identify and address 
``disproportionately high and adverse human health or environmental 
effects'' of their actions on minority populations and low-income 
populations to the greatest extent practicable and permitted by law. 
The EPA defines environmental justice (EJ) as ``the fair treatment and 
meaningful involvement of all people regardless of race, color, 
national origin, or income with respect to the development, 
implementation, and enforcement of environmental laws, regulations, and 
policies.'' The EPA further defines the term fair treatment to mean 
that ``no group of people should bear a disproportionate burden of 
environmental harms and risks, including those resulting from the 
negative environmental consequences of industrial, governmental, and 
commercial operations or programs and policies.''
    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, the EPA's role is to review state choices, 
and approve those choices if they meet the minimum criteria of the Act. 
Accordingly, this action is finalizing a limited approval and limited 
disapproval of Rule 2201 as meeting federal requirements and does not 
impose additional requirements beyond those imposed by state law.
    The State did not evaluate environmental justice considerations as 
part of its SIP submittal; the CAA and applicable implementing 
regulations neither prohibit nor require such an evaluation. The EPA 
did not perform an EJ analysis and did not consider EJ in this action. 
Due to the nature of the action being taken here, this action is 
expected to have a neutral to positive impact on the air quality of the 
affected area. Consideration of EJ is not required as part of this 
action, and there is no information in the record inconsistent with the 
stated goal of E.O. 12898 of achieving environmental justice for people 
of color, low-income populations, and Indigenous peoples.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by September 8, 2023. 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, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen 
dioxide, Ozone, Particulate matter, Reporting and recordkeeping 
requirements, Sulfur dioxide, Volatile organic compounds.

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

    Dated: June 28, 2023.
Martha Guzman Aceves,
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 52.220 is amended by adding paragraphs (c)(400)(i)(A)(2) and 
(c)(598) to read as follows:


Sec.  52.220  Identification of plan-in part.

* * * * *
    (c) * * *
    (400) * * *
    (i) * * *
    (A) * * *
    (2) Previously approved on September 17, 2014, in paragraph 
(c)(400)(i)(A)(1) of this section and now deleted with replacement in 
(c)(598)(i)(A)(1), Rule 2201, ``New and Modified Stationary Source 
Review Rule,'' amended on April 21, 2011.
* * * * *
    (598) The following regulations were submitted on November 20, 
2019, by the Governor's designee as an attachment to a letter dated 
November 15, 2019.

[[Page 43440]]

    (i) Incorporation by reference. (A) San Joaquin Valley Unified Air 
Pollution Control District.
    (1) Rule 2201, ``New and Modified Stationary Source Review Rule,'' 
amended on August 15, 2019.
    (2) [Reserved]
    (B) [Reserved]
    (ii) [Reserved]
* * * * *
[FR Doc. 2023-14132 Filed 7-7-23; 8:45 am]
BILLING CODE 6560-50-P