U.S. EPA FACT SHEET

San Joaquin Valley Unified Air Pollution Control District
Proposed Approval of Rule 3170 "Federally Mandated Ozone Nonattainment Fee" and

Interim Final Rule to Defer Sanctions

July 19, 2011

Summary

•	Today, the U.S. Environmental Protection Agency (EPA) is proposing to approve San
Joaquin Valley Unified Air Pollution Control District (SJV) Rule 3170, "Federally
Mandated Ozone Nonattainment Fee" and its alternative equivalent program as meeting
the Clean Air Act (CAA) Section 185 fee program requirements for the 1-hour ozone
standard.

•	EPA is also issuing an Interim Final Rule to defer imposing offset and highway sanctions
in SJV.

Background

•	CAA Sections 182 and 185 require that states with severe and extreme 1-hour ozone
nonattainment areas submit a revision to the State Implementation Plan (SIP) that assesses
fees on certain major stationary sources. Under Section 185, the SIPs must require these
sources to pay fees if the area has failed to attain the 1-hour ozone standard by the
applicable attainment date.

•	Although the 1-hour ozone standard was revoked in 2004, the requirements of Section 185
with respect to that standard continue to apply in order to ensure continued progress
toward bringing the air quality into attainment with the National Ambient Air Quality
Standard.

•	Because SJV is classified as an extreme 1-hour ozone nonattainment area, a SIP providing
for a section 185 fee program was required to be developed and submitted for the area.

•	EPA took final action on a previous version of Rule 3170 on January 13, 2010. In that
action, EPA determined that while Rule 3170 strengthened the SIP, it did not fully
conform to Section 185. Without a deferral, this limited disapproval would require EPA to
impose offset sanctions on August 12, 2011 and highway sanctions on February 12, 2012.

•	On May 19, 2011, SJV adopted a revised version of SJV Rule 3170, an alternative 185 fee
program. Under this version of Rule 3170 and the alternative equivalent 185 program,
which is the subject of today's action, SJV will collect fees from major stationary sources
but exempt clean units. SJV will make up the amount of revenue from clean unit
exemptions with mobile source fees. The new version of Rule 3170 also requires SJV to
demonstrate to EPA that the combined annual fees collected from major stationary sources

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and mobile sources are at least equal to the fees that would have been collected under
Section 185. SJV will use these funds for projects that reduce emissions and improve air
quality in the SJV.

•	EPA believes that an alternative program may be acceptable if EPA determines, through
notice-and-comment rulemaking, that it is consistent with the principles of section 172(e)
of the CAA. This reasoning was included in EPA's 185 guidance that was vacated by the
D.C. Circuit Court of Appeals on July 1, 2011 on the ground that it was final agency action
in which EPA did not follow notice-and-comment rulemaking procedures (NRDC v. EPA,
No. 10-1056, 2011 WL 2601560, C.A.D.C. 2011). Today, EPA is following the court's
directive to follow the notice-and-comment rulemaking procedures and inviting the public
to comment on whether it is appropriate for EPA to consider an alternative program and, if
so, whether SJVUAPCD's program would constitute an approvable alternative program
under the CAA.

•	Today's proposed approval is based on EPA's preliminary finding that amended SJV Rule
3170 imposes control measures that, consistent with the principles of CAA Section 172(e),
are at least as stringent as those under CAA Section 185, and therefore approvable.

Next Steps

•	EPA is providing a 30-day public comment period on the proposed approval of Rule 3170.

•	While the Interim Final Rule to defer sanctions is effective upon publication, EPA is also
providing a 30-day public comment period on this action. If comments submitted change
our assessment, we intend to take a subsequent final action to reimpose the sanctions
clocks. If no comments are submitted that change our current assessment, all sanctions
and sanction clocks will be permanently terminated on the effective date of the final
approval of Rule 3170.

How to Comment

•	EPA will accept comment on the proposal for 30 days after publication in the Federal
Register. Comments, identified bydocket number EPA-R09-OAR-2011-0571,may be
submitted by one of the following methods:

o www.reaulations.gov: Follow the on-line instructions for submitting comments,
o E-mail: steckel.andrew@epa.gov.

o Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental Protection Agency
Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.

For More Information:

•	To view the proposed approval and the interim final rule from EPA's Web site, go to "San
Joaquin Valley" at http://www.epa.gov/region9/air/actions/ca.html

•	For further information about these actions, contact Ms. Lily Wong of EPA Region 9,
Rules Office, at (415) 947-4114 or by e-mail at wong.lily@epa.gov.

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