Proposed Rule2025-13906
Air Plan Revisions; California; Mojave Desert Air Quality Management District; New Source Review; Stationary Source Permits
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 24, 2025
Issuing agencies
Environmental Protection Agency
Abstract
The Environmental Protection Agency (EPA) is proposing conditional approval of five permitting rules as a revision to the Mojave Desert Air Quality Management District (MDAQMD) portion of the California State Implementation Plan (SIP). These are revisions to the District's New Source Review (NSR) air permitting program rules for new and modified sources of air pollution under the Clean Air Act (CAA or "Act"). The submitted rules address deficiencies identified in a previous limited disapproval action and incorporate other revisions related to the NSR permitting requirements. If finalized, this action will update the MDAQMD's current SIP with the revised rules. As a separate action in this Federal Register, we are making an interim final determination that will stay or defer the imposition of CAA sanctions associated with our previous limited disapproval action.
Full Text
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<title>Federal Register, Volume 90 Issue 140 (Thursday, July 24, 2025)</title>
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[Federal Register Volume 90, Number 140 (Thursday, July 24, 2025)]
[Proposed Rules]
[Pages 34785-34790]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13906]
[[Page 34785]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R09-OAR-2025-0625; FRL-12877-02-R9]
Air Plan Revisions; California; Mojave Desert Air Quality
Management District; New Source Review; Stationary Source Permits
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing
conditional approval of five permitting rules as a revision to the
Mojave Desert Air Quality Management District (MDAQMD) portion of the
California State Implementation Plan (SIP). These are revisions to the
District's New Source Review (NSR) air permitting program rules for new
and modified sources of air pollution under the Clean Air Act (CAA or
``Act''). The submitted rules address deficiencies identified in a
previous limited disapproval action and incorporate other revisions
related to the NSR permitting requirements. If finalized, this action
will update the MDAQMD's current SIP with the revised rules. As a
separate action in this Federal Register, we are making an interim
final determination that will stay or defer the imposition of CAA
sanctions associated with our previous limited disapproval action.
DATES: Comments must be received on or before August 25, 2025.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R09-
OAR-2025-0625 at <a href="https://www.regulations.gov">https://www.regulations.gov</a>. For comments submitted at
<a href="http://Regulations.gov">Regulations.gov</a>, follow the online instructions for submitting
comments. Once submitted, comments cannot be edited or removed from
<a href="http://Regulations.gov">Regulations.gov</a>. The EPA may publish any comment received to its public
docket. Do not submit electronically any information you consider to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Multimedia submissions (audio,
video, etc.) must be accompanied by a written comment. The written
comment is considered the official comment and should include
discussion of all points you wish to make. The EPA will generally not
consider comments or comment contents located outside of the primary
submission (i.e., on the web, cloud, or other file sharing system). For
additional submission methods, please contact the person identified in
the FOR FURTHER INFORMATION CONTACT section. For the full EPA public
comment policy, information about CBI or multimedia submissions, and
general guidance on making effective comments, please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a>. If you need assistance in a
language other than English or if you are a person with disabilities
who needs a reasonable accommodation at no cost to you, please contact
the person identified in the FOR FURTHER INFORMATION CONTACT section.
FOR FURTHER INFORMATION CONTACT: Shaheerah Kelly, U.S. Environmental
Protection Agency, Region IX (AIR-3-2), telephone number: (415) 947-
4156, email address: <a href="/cdn-cgi/l/email-protection#48232d242431663b2029202d2d3a2920082d3829662f273e"><span class="__cf_email__" data-cfemail="5a313f3636237429323b323f3f283b321a3f2a3b743d352c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us,''
and ``our'' refer to the EPA.
Table of Contents
I. The State's Submittal
A. What rules are in the current SIP?
B. What rules did the State submit?
C. What is the purpose of the submitted rule revisions?
II. The EPA's Evaluation and Action
A. What is the background for this proposal?
B. How is the EPA evaluating the rules?
C. Do the rules meet the evaluation criteria?
D. How do the rule revisions address the deficiencies?
E. Proposed Action and Public Comment
III. Incorporation by Reference
IV. Statutory and Executive Order Reviews
Definitions
For the purpose of this document, we are giving meaning to
certain words or initials as follows:
(i) The word or initials MDAQMD or District mean or refer to the
Mojave Desert Air Quality Management District.
(ii) The word or initials CAA or Act mean or refer to the Clean
Air Act, unless the context indicates otherwise.
(iii) The word or initials CARB mean or refer to the California
Air Resources Board.
(iv) The initials CFR mean or refer to Code of Federal
Regulations.
(v) The initials or words EPA, we, us, or our mean or refer to
the United States Environmental Protection Agency.
(vi) The initials NA mean or refer to nonattainment.
(vii) The initials NAAQS mean or refer to the National Ambient
Air Quality Standards.
(viii) The initials NSR mean or refer to New Source Review.
(ix) The initials NNSR mean or refer to nonattainment New Source
Review.
(x) The initials SIP mean or refer to State Implementation Plan.
(xi) The word State means or refers to the State of California.
(xii) The word TSD means or refers to the Technical Support
Document.
I. The State's Submittal
A. What rules are in the current SIP?
Table 1 lists the rules in the current SIP with the dates they were
previously amended or revised by MDAQMD, submitted by the California
Air Resources Board (CARB), the governor's designee for California SIP
submittals, and approved by the EPA.
Table 1--Current SIP Rules
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State effective EPA action Federal Register
Rule No. Rule title date date citation
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1301.............................. New Source Review 3/22/2021 6/30/2023 88 FR 42258
Definitions.
1302.............................. New Source Review 3/22/2021 6/30/2023 88 FR 42258
Procedure.
1303.............................. New Source Review 3/22/2021 6/30/2023 88 FR 42258
Requirements.
1304.............................. New Source Review 3/22/2021 6/30/2023 88 FR 42258
Emissions
Calculations.
1305.............................. New Source Review 3/22/2021 6/30/2023 88 FR 42258
Emission Offsets.
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B. What rules did the State submit?
Table 2 lists the rules addressed by this proposal with the dates
they were amended or revised by the MDAQMD and submitted by CARB, the
agency that serves as the governor's designee for California SIP
submittals.
[[Page 34786]]
Table 2--Submitted Rules
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Adoption/
Rule No. Rule title amendment date Submitted date
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1301.......................................... New Source Review Definitions... 3/25/2024 8/7/2024
1302 \1\...................................... New Source Review Procedure..... 3/25/2024 8/7/2024
1303.......................................... New Source Review Requirements.. 3/25/2024 8/7/2024
1304.......................................... New Source Review Emissions 3/25/2024 8/7/2024
Calculations.
1305.......................................... New Source Review Emission 3/25/2024 8/7/2024
Offsets.
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On February 7, 2025, CARB's August 7, 2024 submittal (hereafter
referred to as the ``2024 Submittal'') for the MDAQMD was deemed
complete by operation of law according to 40 CFR part 51, appendix V,
which must be met before formal EPA review.
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\1\ Subsections 1302(C)(5)(d) and 1302(C)(7)(c)(iii) of Rule
1302 specifically state that subsections 1302(C)(5) and
1302(C)(7)(c) are not submitted to the EPA and are not intended to
be included as part of the California SIP.
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C. What is the purpose of the submitted rule revisions?
The 2024 Submittal is intended to address certain deficiencies
identified by the EPA in the MDAQMD Rules 1301, 1302, 1303, 1304, and
1305 listed in table 1. The deficiencies pertain to certain applicable
nonattainment NSR requirements under the CAA, in part D of title I of
the Act, and the implementing regulations under 40 CFR 51.165. The
nonattainment areas under the MDAQMD's jurisdiction are the San
Bernardino County portion of the West Mojave Desert nonattainment area
which is designated as a Severe nonattainment area for the 2008 and
2015 8-hour ozone NAAQS, and the Trona Planning Area in San Bernardino
County which is designated as a Moderate nonattainment area for the
1987 PM<INF>10</INF> NAAQS. 40 CFR 81.305. The rules listed in table 2
are intended to replace the rules currently in the SIP as listed in
table 1.
II. The EPA's Evaluation and Action
A. What is the background for this proposal?
On November 25, 2022, the EPA proposed a limited approval/limited
disapproval action for MDAQMD's Regulation XIII NSR Rules.\2\ On June
30, 2023, the EPA finalized this limited approval/limited disapproval
action (hereafter called the ``2023 NSR Action'').\3\ As authorized in
sections 110(k)(3) and 301(a) of the Act, the EPA finalized a limited
approval and limited disapproval of Rules 1301, 1302, 1303, 1304, and
1305 because although they fulfill most of the relevant CAA
requirements and strengthen the SIP, they also contained six
deficiencies that did not fully satisfy the relevant requirements for
preconstruction review and permitting under section 110 and part D of
title I of the Act. The deficiencies are described in the October 5,
2022 TSD for the action, as well as in the preambles to the November
25, 2022 proposed rule and the 2023 NSR Action. In addition, the EPA
included the description of the six deficiencies in the preambles to
the July 9, 2024 proposed rulemaking to promulgate a Federal
Implementation Plan (``FIP'') in a portion of the MDAQMD to address the
deficiencies identified in the 2023 NSR Action,\4\ and in a December
30, 2024 rule (hereafter the ``2024 NSR Action'') \5\ finalizing the
July 9, 2024 rulemaking and affirming the EPA's disapproval of Rule
1304(C)(2)(d) in response to the Ninth Circuit's remand of the 2023 NSR
Action.\6\ The TSD for this action provides more information on the
MDAQMD's revisions for Rules 1301, 1302, 1303, 1304, and 1305 to
address the deficiencies identified by the EPA. These deficiencies and
the MDAQMD's revisions to address these deficiencies are summarized as
follows.
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\2\ 87 FR 72434.
\3\ 88 FR 42258.
\4\ 89 FR 56237.
\5\ 89 FR 106332.
\6\ Mojave Desert Air Quality Mgmt. Dist. v. U.S. Env't. Prot.
Agency, No. 23-1411 (9th Cir. September 5, 2024), Docket No. EPA-
R09-OAR-2022-0338, available in the docket for this action and at
<a href="https://cdn.ca9.uscourts.gov/datastore/memoranda/2024/09/05/23-1411.pdf">https://cdn.ca9.uscourts.gov/datastore/memoranda/2024/09/05/23-1411.pdf</a>.
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1. Use of the Term ``Contract''
The EPA determined that the use of the term ``contract'' as
interchangeable with the term ``permit'' was deficient. Specifically,
the MDAQMD Rules 1302(D)(6)(a)(iii) and 1304(C)(4)(c) allowed an owner
and/or operator to obtain a valid permit or ``contract'' that would be
enforceable by the District. The MDAQMD's rules define Authority to
Construct Permit (ATC) and Permit to Operate (PTO), but do not define
term ``contract'' as interchangeable with the term ``permit.'' The EPA
found that the term ``contract'' was not an acceptable alternative to
the term ``permit'' and thus the language in MDAQMD Rules
1302(D)(6)(a)(iii) and 1304(C)(4)(c) was not approvable as a SIP
revision.
2. Calculation of the Amount of Offsets Required
The EPA determined that the calculation procedures specified to
determine the amount of offsets required in certain situations was
deficient. Specifically, Rule 1304 allows a potential-to-potential test
under certain circumstances for calculating the quantity of offsets
required in some situations that involve the use of Simultaneous
Emission Reductions (SERs) under 1304(C)(2)(d). This calculation
procedure can also be used for calculation of required offsets for a
``Modified Major Facility.'' The EPA found that calculating emissions
decreases using a potential emissions baseline allows reductions ``on
paper'' that do not represent real emissions reductions and is not
consistent with the requirements of CAA section 173(C)(1), as well as
40 CFR 51.165(a)(3)(i), (a)(3)(ii)(G), (a)(3)(ii)(J), and
(a)(1)(vi)(C), to offset actual emissions increases. The deficiency
identified in Rule 1304, through cross-references, also causes related
deficiencies in Rules 1301, 1302, 1303, and 1305.
3. Definitions of ``Major Modification'' and ``Modification
(Modified)'' in Rule 1301
The EPA found that the definitions for ``Major Modification'' and
``Modification (Modified)'' pursuant to Rule 1301(NN) and 1301(JJ),
respectively, were deficient. This deficiency is also related to Rule
1304(C)(2)(d) pertaining to the calculation of SERs. Specifically, a
``Net Emissions Increase'' pursuant to Rule 1304(B)(2) allows SERs
``calculated and verified pursuant to [1304(C)(2)]'' to be subtracted
from the total of all ``Net Emissions Increase'' at any given facility.
The EPA found that this can allow a permit applicant to avoid certain
NSR requirements entirely (i.e., lowest achievable emissions reduction
[[Page 34787]]
(LAER), offsets, visibility, etc.).\7\ Therefore, the EPA found that
the District's calculation procedures for ``Modification'' and ``Major
Modification'' were not consistent with the federal definition of
``Major Modification'' pursuant to 40 CFR 51.165(a)(1)(v)(A)(1); the
calculation procedures for determining offsets pursuant to 40 CFR
51.165(a)(3)(ii)(J); and the criteria for determining the emission
decreases that are creditable pursuant to 40 CFR
51.165(a)(1)(vi)(E)(1).
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\7\ The District's NSR program uses the term best available
control technology (BACT) instead of LAER for both nonattainment
pollutants. See Rule 1301(J).
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4. Historic Actual Emissions (HAE) Procedures
The EPA found that the definition of Historical Actual Emissions
(HAE) pursuant to Rule 1304(D)(2)(a)(i) was deficient because of a
typographical error that includes the word ``proceeds'' rather than
``precedes.''
5. Interprecursor Trading
The EPA found that Rule 1305 section (C)(6) was deficient because
it allowed the use of interprecursor trading between nonattainment
pollutants and their precursors on a case-by-case basis for ozone,
which is no longer allowed.
6. CAA Sections 182(c)(6) and 182(d)
The EPA found that the District's NSR program was deficient because
it did not satisfy the requirements in CAA sections 182(c)(6) and
182(d) that apply to severe ozone nonattainment areas.
B. How is the EPA evaluating the rules?
The EPA has reviewed the revisions to the MDAQMD rules listed in
table 2 for compliance with the following CAA requirements: (1) the
general SIP requirements as set forth in CAA section 110(a)(2),
including 110(a)(2)(A) and 110(a)(2)(E)(i); (2) the stationary source
preconstruction permitting program requirements as set forth in CAA
part D of title I, including CAA sections 171, 172(c)(5), 173, and 182;
(3) the requirements for the review and modification of major sources
in accordance with 40 CFR 51.160-51.165; (4) the requirements for the
review of new major stationary sources or major modifications in a
designated nonattainment area that may have an impact on visibility in
any mandatory Class I federal area in accordance with 40 CFR 51.307;
(5) the SIP revision requirements as set forth in CAA sections 110(l)
and 193; and (6) the definition of ``Stationary Source'' in CAA section
302(z).
Sections 110(a)(2) and 110(l) of the Act require that each SIP or
revision to a SIP submitted by the State must be adopted after
reasonable notice and public hearing. In addition, section 110 of the
Act requires that SIP rules be enforceable. Section 110(a)(2)(C) of the
Act requires each SIP to include a program to regulate the modification
and construction of any stationary source within the areas covered by
the SIP as necessary to assure attainment and maintenance of the NAAQS.
Section 110(a)(2)(E)(i) of the Act requires that each SIP provide
necessary assurances that the state will have adequate personnel,
funding, and authority under state (and, as appropriate, local) law to
carry out such implementation plan.
Part D of title I of the Act contains certain definitions
applicable to areas designated nonattainment for a NAAQS (section 171);
the general requirements for permits for the construction and operation
of new or modified major stationary sources anywhere in nonattainment
areas referred to as nonattainment NSR (NNSR) (section 172); other
additional preconstruction permit requirements for new or modified
major stationary sources proposing to construct in nonattainment areas
(section 173); and the de minimis SIP requirements in Severe
nonattainment areas (sections 182(c)(6) and 182(d)).
The EPA's regulations at 40 CFR 51.160-51.164 provide general
requirements to implement the statutory mandate under section
110(a)(2)(C) of the Act that is commonly referred to as the ``general''
or ``minor'' NSR program. These NSR program regulations impose
requirements for approval of state and local programs that are more
general in nature as compared to the specific statutory and regulatory
requirements for NSR permitting programs under part D of title I of the
Act.
The EPA's regulations at 40 CFR 51.165 set forth the EPA's
regulatory requirements for SIP-approval of a nonattainment NSR permit
program. Our review also evaluated the submittal for compliance with
the NNSR requirements applicable to Severe ozone nonattainment areas
and ensured that the submittal addressed the NNSR requirements for the
2015 ozone NAAQS.
The EPA's regulations at 40 CFR 51.307 set forth the protection of
visibility requirements that apply to NSR programs. This provision
requires that certain actions be taken in consultation with the local
Federal Land Manager if a new major source or major modification may
have an impact on visibility in any mandatory Federal Class I Area.
Section 110(l) of the Act prohibits the EPA from approving any SIP
revisions that would interfere with any applicable requirement
concerning attainment and reasonable further progress (RFP) or any
other applicable requirement of the CAA.
Section 193 of the Act, which only applies in nonattainment areas,
prohibits the modification of a SIP-approved control requirement in
effect before November 15, 1990, in any manner unless the modification
ensures equivalent or greater emissions reductions of such air
pollutant.
Section 302(z) of the Act defines the term ``Stationary Source'' as
generally any source of an air pollutant except those emissions
resulting directly from an internal combustion engine for
transportation purposes or from a nonroad engine or nonroad vehicle as
defined in title II of the Act.
Our TSD, which can be found in the docket for this rule, contains a
more detailed discussion of the approval criteria.
C. Do the rules meet the evaluation criteria?
The EPA has reviewed the submitted rules in accordance with the
rule evaluation criteria described above. With respect to procedural
requirements, CAA sections 110(a)(2) and 110(l) require that revisions
to a SIP be adopted by the state after reasonable notice and public
hearing. According to the documentation provided in the 2024 Submittal,
the state published public notices for announcing the public comment
periods and public hearings in the Riverside Press Enterprise and in
the San Bernardino Sun on February 22, 2024. Additionally, a public
hearing was held on March 25, 2024. Based on our review of this
information and the information that was provided in the 2024
Submittal, we find that there is sufficient evidence of public notice,
and opportunities for comment and public hearing prior to adoption and
submittal of these rules to the EPA.
With respect to substantive requirements, we have reviewed the
submitted rules in table 1 in accordance with the evaluation criteria
discussed above. We are proposing to conditionally approve the
revisions to the MDAQMD's Rules 1301, 1302, 1303, 1304, and 1305
because, for the most part, they address the substantive statutory and
regulatory requirements for NSR permit programs as contained in section
II.B. of this document for the deficiencies identified by the EPA in
the 2023 NSR Action. Rule 1304, however,
[[Page 34788]]
contains a remaining deficiency; therefore, we are proposing
conditional approval pursuant to CAA section 110(k)(4), on the basis of
a commitment by CARB and the MDAQMD to revise Rule 1304 to correct the
remaining deficiency within one year of the effective date of a final
conditional approval action.
D. How do the rule revisions address the deficiencies?
The following are brief descriptions of the revisions to MDAQMD's
Rules 1301, 1302, 1303, 1304, and 1305 that address the deficiencies
identified by the EPA in the 2023 NSR Action. Our TSD contains a more
detailed discussion of our analysis of the submitted rules that form
the basis for our proposed action.
1. Use of the Term ``Contract''
In the 2023 NSR Action, the EPA determined that the use of the term
``contract'' in 1302(D)(6)(a)(iii) and 1304(C)(4)(c) is deficient
because the term is used interchangeably with a permit (i.e., an
Authority to Construct (ATC) or a Permit to Operate (PTO)). However,
MDAQMD's NSR rules do not define the term ``contract'' or provide
requirements for how a contract is an enforceable mechanism that may be
used in the same way as an ATC or PTO. The MDAQMD clarified in the
comments it submitted on EPA's November 2022 proposed rulemaking action
that the term ``contract'' appears to be superfluous because of
requirements elsewhere in its rules and that the retention of the term
was inadvertent. The MDAQMD stated in that same comment letter that it
would remove the term ``contract'' from the rule provisions the EPA
identified.
In the 2024 Submittal, the MDAQMD revised Rule 1304(C) by removing
the term ``contract'' from Rule 1304(C)(4)(c). The MDAQMD also removed
the reference to Net Emissions Increase from Rule 1304(C)(5).
Therefore, MDAQMD's revision of 1304(C) corrects the deficiency in
1304(C) concerning the term ``contract.'' The MDAQMD neglected to
remove the term ``contract'' from Rule 1302(D)(6)(a)(iii), but given
the explanation it provided in its comments to the EPA's 2022 proposed
rulemaking and the revision it made to Rule 1304(C) indicate MDAQMD's
interpretation of the term ``contract'' is consistent with federal
requirements, the EPA is recategorizing the inclusion of the term
``contract'' in Rule 1302(D)(6)(a)(iii) from a deficiency to a
recommendation for further improvement in future revisions to Rule
1302.
2. Calculation of the Amount of Offsets Required
In the 2023 NNSR Action, the EPA determined that Rule 1304(C)(2)(d)
was deficient because it allows the use of a potential-to-emit (PTE)-
to-PTE calculation procedure for calculating the quantity of
``Simultaneous Emission Reductions'' (SERs) that can be used as offsets
at a ``Modified Major Facility.'' The EPA determined that Rule
1304(C)(2)(d), in certain situations, does not comply with CAA section
173(c)(1), 40 CFR 51.165(a)(3)(i), (a)(3)(ii)(G), (a)(3)(ii)(J), and
(a)(1)(vi)(E). Additionally, because either Rule 1304(C) or Rule
1304(C)(2)(d) is referenced in Rules 1301, 1302, 1303, and 1305, the
EPA also determined that these referenced rules are deficient. In a
letter dated June 12, 2025 (``June 12, 2025 Commitment Letter'') the
MDAQMD committed to revising Rule 1304 to add a provision to rescind
section (C)(2)(d) such that it will no longer be in effect 24 months
after the effective date of the EPA's final approval of the revised
Rule 1304 into the SIP. The June 12, 2025 Commitment Letter also
includes MDAQMD's commitment to transmit its revised rule to CARB in
time for CARB to submit the rule to the EPA within 12 months of the
publication of a final conditional approval by the EPA.\8\ Relatedly,
in a letter from CARB dated June 17, 2025 (``June 17, 2025 Commitment
Letter''), CARB also commits to submit the rule to the EPA within 12
months of the publication of a final conditional approval by EPA.\9\
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\8\ Commitment letter from Brad Poiriez, Executive Officer of
the MDAQMD, to Josh F.W. Cook, EPA Region IX Regional Administrator,
and Dr. Stephen Cliff, CARB Executive Officer, dated June 12, 2025.
\9\ Commitment letter from Vernon Hughes, Assistant Division
Chief, Air Quality Planning and Science Division, CARB, to Josh F.W.
Cook, EPA Region IX Regional Administrator, dated June 17, 2025.
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Section 110(k)(4) of the Act allows the EPA to conditionally
approve a SIP revision based on a commitment from the State to adopt
and submit specific, enforceable measures to correct the identified
deficiency no later than one year after the date of approval of the
plan revision. The MDAQMD has committed to adopt and submit, within the
one-year timeframe specified in section 110(k)(4), a revised rule that
would add a provision to rescind Rule 1304 section (C)(2)(d) 24 months
after the effective date of the EPA's final approval of the revised
rule. Because the inclusion of Rule 1304(C)(2)(d) in the MDAQMD's NNSR
program is the deficiency pertaining to offset requirements identified
in the 2023 NSR Action, rescission of section (C)(2)(d) of Rule 1304
would correct the deficiency concerning offsets identified in the 2023
NSR Action. As explained further below, we find the 24-month sunsetting
period proposed by the MDAQMD to be justified by the particular
circumstances surrounding the MDAQMD's NNSR program and the District's
need for time to reassess its emissions reduction credit (ERC) banking
reserves for compliance with federal offset requirements.\10\ The EPA's
conditional approval, if finalized, would trigger the 1-year timeframe
under CAA section 110(k)(4) for the MDAQMD to revise and submit Rule
1304 consistent with the MDAQMD's commitment. If EPA subsequently
approves the revised Rule 1304 into the SIP, that action would provide
the basis for the EPA to terminate the Federal Implementation Plan
(FIP) that is currently in place in the MDAQMD, under section 110(c)(1)
of the Act.\11\
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\10\ See Alabama Power Co. v. Costle, 636 F.2d 323, 357-60 (DC
Cir. 1979) (discussing considerations of ``administrative
necessity'' that may provide basis for deferred regulation).
\11\ In the 2024 NSR Action, the EPA promulgated a FIP to
address the deficiency related to Rule 1304(C)(2)(d). 89 FR 106332.
Our TSD for that action can be found in the docket for this rule and
contains a more detailed discussion of the FIP.
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The MDAQMD's overhaul of the offsets calculations portion of its
NNSR program, which has been in effect since at least 1995, requires
the District to reconfigure its ERC banking system to conform to
federal requirements, which the MDAQMD has committed to implement. The
MDAQMD has represented that it faces a significant administrative
burden in reconfiguring its ERC bank to comply with federal
requirements.\12\ The 24-month period following the approval of
MDAQMD's revised Rule 1304 and simultaneous termination of the NNSR FIP
that is currently in effect in the MDAQMD is unlikely to interfere with
attainment or reasonable further progress in the MDAQMD.\13\ Thus, the
EPA is proposing to conditionally approve the MDAQMD's 2024 Submittal
based on the MDAQMD's commitment to revise Rule 1304 to add a provision
to rescind section (C)(2)(d) in its entirety, effective
[[Page 34789]]
24 months after the EPA's final approval of the revised Rule 1304 into
the SIP. The June 12, 2025 and June 17, 2025 Commitment Letters detail
revisions that are clear and enforceable, correct the identified
deficiencies, and fulfill CAA requirements for a conditional approval.
If the EPA finalizes the proposed conditional approval and the MDAQMD
and CARB submit a revised Rule 1304 that rescinds section (C)(2)(d) as
described in the June 12, 2025 and June 17, 2025 Commitment Letters,
the EPA will propose to fully approve Rule 1304, as revised, into the
California SIP.
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\12\ Commitment letter from Brad Poiriez, Executive Officer of
the MDAQMD, to Josh F.W. Cook, EPA Region IX Regional Administrator,
and Dr. Stephen Cliff, CARB Executive Officer, dated June 12, 2025.
\13\ The MDAQMD's 2015 ozone NAAQS attainment plan, which is
titled ``MDAQMD Federal 70 ppb Ozone Attainment Plan'' is available
on its website at <a href="https://www.mdaqmd.ca.gov/home/showpublisheddocument/9693/638131029372000000">https://www.mdaqmd.ca.gov/home/showpublisheddocument/9693/638131029372000000</a> and in the docket for
this action. Chapter 2, ``Emission Inventories,'' of the MDAQMD
attainment plan presents the District's emission inventory.
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The EPA's TSD for this action describes how the MDAQMD's revision
to Rule 1304 would correct the related deficiencies in Rules 1301,
1302, 1303, and 1305. The cross references to section (C) in Rule 1304
in those rules render them deficient because of the deficiency in Rule
1304(C)(2)(d), but MDAQMD's revision to rescind section (C)(2)(d) would
immediately correct these deficiencies without the need for revisions
to any other provisions in the other MDAQMD Regulation XIII rules. If
either the MDAQMD or CARB fails to adopt and submit these amendments
within the required timeframe, CAA section 110(k)(4) specifies that the
conditional approval of Rule 1304 shall be treated as a disapproval.
3. Definitions of ``Major Modification'' and ``Modification
(Modified)'' in Rule 1301
In the 2023 NSR Action, the EPA determined that Rule 1301(JJ)
(Definition for ``Major Modification'') and Rule 1301(NN) (Definition
of ``Modification (Modified)'') are deficient because they are
inconsistent with the federal definition for Major Modification
pursuant to 40 CFR 51.165(a)(1)(v)(A)(1),\14\ and the calculation
procedures for determining offsets pursuant to 40 CFR
51.165(a)(3)(ii)(J) and CAA section 173(c)(1) and 40 CFR
51.165(a)(1)(vi)(E)(1). The EPA also determined that the use of
calculation procedures in 1304(B)(2) does not conform to the
calculation procedures for determining offsets pursuant to CAA section
173(c)(1) and 40 CFR 51.165(a)(3)(ii)(J) and the criteria for
determining the emissions decreases that are creditable pursuant to 40
CFR 51.165(a)(1)(vi)(E)(1). The MDAQMD amended Rules 1301(JJ)
(Definition of ``Major Modification''), 1301(NN) (Definition of
``Modification (Modified)''), 1301(NNN) (Definition of
``Significant''), and 1301(QQ) (Definition of ``Net Emissions
Increase'') to remove the references to ``Net Emissions Increase'' to
resolve the deficiencies previously identified by the EPA such that
these requirements are no longer deficient. The MDAQMD also removed the
``Net Emissions Increase'' calculations that were in Rule 1304(B)(2)
and changed the definition of this term in Rule 1301(QQ) to address the
deficiency previously identified by the EPA. These revisions address
the deficiencies previously identified by the EPA concerning NSR
applicability.
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\14\ Note that 40 CFR 51.165(a)(1)(v)(A)(1) refers to Step 1 and
not Step 2 of the NSR applicability test for a Major Modification.
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4. Historic Actual Emissions (HAE) Procedures
In the 2023 NSR Action, the EPA determined that the HAE procedures
in Rule 1304(D)(2) are deficient because of a typographical error in
which the word ``precedes'' is used rather than ``proceeds.'' The
MDAQMD revised Rule 1304 by correcting the typographical error in
(D)(2)(a)(i), changing the word ``proceeds'' to ``precedes.'' This
revision addresses the deficiency previously identified by the EPA.
5. Interprecursor Trading
In the 2023 NSR Action, the EPA determined that Rule 1305(C)(6) is
deficient because it allows interpollutant trading for ozone precursors
on a case-by-case basis, which is no longer allowed under 40 CFR
51.165. The MDAQMD revised Rule 1305(C)(6) by removing the
interprecursor trading provisions. This revision resolves the
deficiency that the EPA previously identified.
6. CAA sections 182(c)(6) and 182(d)
In the 2023 NSR Action, the EPA determined that the MDAQMD's NSR
rules do not contain the de minimis plan requirements for ozone
nonattainment areas contained in CAA sections 182(c)(6) and 182(d) that
apply to areas classified as Severe nonattainment. The MDAQMD amended
Rule 1303 to include the de minimis plan requirements. Specifically,
the MDAQMD's revisions to Rule 1303(A), which are included in the 2024
Submittal, ensure that facilities with PTE above thresholds in Rule
1303(B)(1) must install BACT at any new or modified permit unit.\15\
Rule 1303(B) requires facilities with PTE greater than the threshold
levels stated in Rule 1303(B)(1) to obtain offsets. The MDAQMD's
revision addresses the deficiency previously identified by the EPA.
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\15\ The District's definition of BACT at Rule 1301(J) is
consistent with the definition of LAER in 40 CFR 51.165(a)(1)(xiii).
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E. Proposed Action and Public Comment
The EPA is proposing conditional approval of MDAQMD Rules 1301,
1302, 1303, 1304, and 1305 as authorized in section 110(k)(4) of the
Act. Section 110(k)(4) of the Act states that the Administrator may
approve a plan revision based on a commitment of the State to adopt
specific enforceable measures by a date certain, but not later than one
year after the date of approval of the plan revision. It further states
that any such conditional approval shall be treated as a disapproval if
the State fails to comply with such commitment. The June 12, 2025 and
June 17, 2025 Letters contain commitments by MDAQMD and CARB to correct
the deficiency pertaining to Rule 1304(C)(2)(d) identified in the 2023
NSR Action, as described in this proposed action, and submit the
revised Rule 1304 to EPA within one year of EPA's final conditional
approval, in accordance with section 110(k)(4) of the Act. Therefore,
as authorized in section 110(k)(4) of the CAA, the EPA proposes to
conditionally approve the submitted rules based on the commitment by
the State to adopt and submit revisions to Rule 1304(C)(2)(d) by a date
certain but not later than one year after the effective date of the
conditional approval. If this proposed conditional approval is
finalized as proposed, and the MDAQMD or CARB fails to comply with this
commitment, the conditional approval would be treated as a disapproval.
The EPA is proposing to find that our action, if finalized, would
result in a more stringent SIP and is consistent with the additional
substantive requirements of CAA sections 110(l) and 193, while not
relaxing any existing provision contained in the SIP, and will not
interfere with any applicable attainment and reasonable further
progress requirements or any other applicable CAA requirement. With
specific regard to MDAQMD's commitment to revise Rule 1304 to include a
provision that would rescind section (C)(2)(d) and its consistency with
section 110(l) of the Act, the EPA in this rulemaking action is
proposing to conditionally approve the 2024 Submittal on the basis of
the June 12, 2025 and June 17, 2025 Letters, which commit the MDAQMD
and CARB to adopt and submit revisions to Rule 1304 that would add
provisions to rescind section (C)(2)(d) 24 months after the effective
date of the EPA's full approval of Rule 1304. Rescission of Rule
[[Page 34790]]
1304(C)(2)(d) is SIP strengthening, but the 24-month period between the
EPA's approval of the revised Rule 1304 into the SIP and simultaneous
termination of the FIP means that Rule 1304(C)(2)(d), which is
deficient for the reasons provided in the 2023 NSR Action and 2024 NSR
Action, would be in effect for that 24-month period before the District
implements the revised Rule 1304. For the reasons described in section
II.D.2. of this document, the EPA is proposing to find this short delay
in the District's compliance with federal NNSR offset requirements
justified as a matter of administrative necessity in light of the
MDAQMD's need to reassess and revise the ERC banking reserves
implemented as part of its NNSR program.
For the deficiencies described in this document, which relate to
NNSR requirements under part D of title I of the Act, the offset
sanction in CAA section 179(b)(2) became effective in the nonattainment
areas at issue on January 31, 2024,\16\ and the highway funding
sanctions in CAA section 179(b)(1) will become effective on July 31,
2025.\17\ As a separate action in this Federal Register, we are making
an interim final determination that will stay or defer the imposition
of CAA sanctions associated with our previous limited disapproval
action.
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\16\ 18 months after the effective date of July 31, 2023 of the
2023 NSR Action.
\17\ 6 months after the offset sanction is imposed.
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If we finalize this action as proposed, our action conditionally
approving Rules 1301, 1302, 1303, 1304, and 1305 will be codified
through revisions to 40 CFR 52.220 (Identification of plan--in part)
and 40 CFR 52.248 (Identification of plan--conditional approval). If
CARB or the MDAQMD fail to comply with this commitment, the conditional
approval would convert to a disapproval. We will accept comments from
the public on this proposal until August 25, 2025. If we take final
action to approve the submitted rules, our final action will
incorporate these rules into the federally enforceable SIP.
III. Incorporation by Reference
In this document, the EPA is proposing to include in a final EPA
rule regulatory text that includes incorporation by reference. In
accordance with requirements of 1 CFR 51.5, the EPA is proposing to
incorporate by reference the MDAQMD rules described in table 2 of this
preamble. The EPA has made, and will continue to make, these materials
available through <a href="https://www.regulations.gov">https://www.regulations.gov</a> and in hard copy at the
EPA Region IX Office (please contact the person identified in the FOR
FURTHER INFORMATION CONTACT section of this preamble for more
information).
IV. Statutory and Executive Order Reviews
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 approve state choices,
provided that they meet the criteria of the Act. Accordingly, this
proposed action merely proposes to approve state law as meeting federal
requirements and does not impose additional requirements beyond those
imposed by state law. For that reason, this proposed action:
<bullet> Is not a significant regulatory action subject to review
by the Office of Management and Budget under Executive Order 12866 (58
FR 51735, October 4, 1993);
<bullet> Is not subject to Executive Order 14192 (90 FR 9065,
February 6, 2025) because SIP actions are exempt from review under
Executive Order 12866;
<bullet> Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
<bullet> Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
<bullet> Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
<bullet> Does not have federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
<bullet> Is not subject to Executive Order 13045 (62 FR 19885,
April 23, 1997) because it proposes to approve a state program;
<bullet> Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001); and
<bullet> Is not subject to requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA.
In addition, 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. In those areas of
Indian country, the rule does not have Tribal implications and will not
impose substantial direct costs on Tribal governments or preempt Tribal
law as specified by Executive Order 13175 (65 FR 67249, November 9,
2000).
List of Subjects in 40 CFR Part 52
Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Intergovernmental
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur dioxide, Volatile organic compounds.
Authority: 42 U.S.C. 7401 et seq.
Dated: July 15, 2025.
Joshua F.W. Cook,
Regional Administrator, Region IX.
[FR Doc. 2025-13906 Filed 7-23-25; 8:45 am]
BILLING CODE 6560-50-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.