August 11, 1995
South Coast Air Quality
Management District Board
INTRODUCTION
Regulation XXX - Title V Permits, was adopted by your Board on October 15, 1993. This regulation implements the mandate in the 1990 Clean Air Act Amendments (CAAA) to issue a federally enforceable Title V permit to the owner/operator of a major stationary source or any facility subject to: 1) New Source Performance Standards (NSPS) or a National Emission Standard for Hazardous Air Pollutants (NESHAP) promulgated after July 1992; or, 2) the Acid Rain program (Title IV). Title V is a comprehensive permitting program designed to increase public and Environmental Protection Agency (EPA) involvement in permitting actions, and to consolidate a facility's air quality requirements in one document.
During initial program implementation, approximately 1,400 facilities in South Coast Air Quality Management District (AQMD) jurisdiction will require Title V facility permits, which will be issued in three one-year phases. Approximately 1,000 to 3,000 additional facilities will be required to obtain Title V permits as they become subject to toxic control requirements under Title III of the federal CAAA. The AQMD's Title V program streamlines implementation and reduces administrative workload for facilities and itself to the extent possible.
On June 9, 1995 proposed amendments to Regulation XXX were scheduled before your Board. Staff recommended that your Board continue the hearing until August 11, 1995 so that the staff, the Air Resources Board (ARB), EPA, and industry could strategize on insulating owners/operators of Title V facilities operating under the terms of a variance from the threat of federal and citizen enforcement actions. In response to this recommendation, your Board directed staff to convene the Title V Working Group and seek to resolve a number of questions on the rules, including the issue of federal recognition of variances.
The Title V Working Group met on June 20 to quickly clarify the scope of issues to be resolved during the two-month continuance of the hearing. At that time a smaller Subcommittee on variances was formed. The time provided by the continuance has been very productively used. Between the Working Group and the Subcommittee, five additional meetings were held. In addition, a public workshop was held on August 1, 1995 on the Technical Guidance Document (TGD), which provides detailed implementation instructions to assist facilities in application preparation and compliance. As the TGD is updated, it will be presented to the Board's Stationary Source Committee for review and recommendations.
PROPOSED AMENDMENTS
The majority of the rule revisions included in this Board package are required by EPA in order to obtain interim program approval. In addition, some changes recommended by staff for minor clarification or consistency with other rules are included . Finally, some Regulation XXX rule language has been changed or added in response to issues raised by industry after the public hearing on June 9, 1995.
The substantive changes include:
1.) Adding that after the first three years of implementation, Potential to Emit (instead of actual emissions) will be used to determine whether a facility is a major source and is required to obtain a Title V permit by the end of the fifth year;
2.) Removing variance provisions from Regulation XXX;
3.) Extending the time facilities have to review and supplement facility specific application packages;
4.) Clarifying certain requirements, including additional permit requirements pursuant to EPA direction;
5.) Reducing the level of emissions for group processing of minor permit revisions;
6.)* Enhancing the potential use of general permits;
7.)* Expanding the criteria under which Title V facilities could make changes within a permitted facility without requiring permit revision (Operational Flexibility);
8.)* Restoring the criterion allowing modifications resulting in an emission increase of RECLAIM pollutants below the facility starting Allocations plus nontradeable Allocations to be evaluated under the minor permit revision procedure; and
9.)* Eliminating references to the California Environmental Quality Act (CEQA) in permit revision definitions.
Further information on these changes is provided in Attachment A. Changes resulting from the continuance of the June 9 public hearing are shown by the asterisk (*) notation in the margin of the rule, for further clarification.
As the second item above notes, references to variances in Regulation XXX are being deleted. The District and industry are in harmony in seeking a protection from federal enforcement of District approved variances. EPA has been very open to seeking a reasonable resolution to this concern. Two strategies have been evaluated: 1) use of the EPA existing small business audit policy; and 2) development of a new federally enforceable rule proposal for alternative operating conditions for Title V facilities. Staff is investigating the feasibility of constructing an emission bank for covering any excess emissions caused by the granting of variances to Title V facilities. The Subcommittee has reached a conceptual agreement to focus their effort on the second option outlined above. This proposed rule will establish procedures by which a Title V facility obtaining a variance from the District Hearing Board may obtain approval of an alternative operating condition that would be recognized by EPA. A public workshop on this proposal will be held in September 1995, with an anticipated Board hearing in December 1995.
CEQA COMPLIANCE
Staff has reviewed the proposed amendments to Regulation XXX - Title V Permits and Rule 518 - Variance Procedures for Title V Facilities, and Proposed Rule 518.1 - Permit Appeal Procedures for Title V Facilities, and determined that they are exempt from the requirements of the California Environmental Quality Act (CEQA). The amendments are administrative in nature and propose minor rule language changes identified by EPA. A Notice of Exemption has been prepared pursuant to state CEQA Guidelines Section 15002 (k)(1) - Three Step Process [AQMD CEQA Section 1.2 (k)(1)], and state CEQA Guidelines Section 15061 (b)(3) [AQMD Section 5.1 (b)(3)]. The Notice of Exemption will be filed with the county clerks immediately following the adoption of the proposed amendments.
CONCLUSION
The revised rules represent a reasonable approach to implementing federal permitting requirements and effectively integrating them with AQMD's existing permitting program. EPA has recognized the unique scope of permitting in the South Coast Air Basin, and has agreed to support the two key features of these rules:
These two features will excuse over 30,000 facilities, and over two thirds of the District's annual permitting workload from the Title V process initially. Between now and 1999, the District is aggressively committed to using the concepts of "Registration" and "General Permits" to avoid bringing non-major sources into Title V. For these reasons, with the modifications made since June 1995, and in light of progress made on variances, staff recommends that the Board adopt these regulations. The Board's affirmative action will allow the region to maintain local implementation of the Title V program. Likewise, AQMD has been working intensively with ARB, EPA, and industry to resolve the long-standing issue of federal recognition of variances. A positive solution that will lessen Title V facility owner's/operator's concerns about variances is well underway.
THEREFORE, IT IS RECOMMENDED THAT YOUR BOARD
--Certify the Notice of Exemption for the proposed amended regulation in accordance with the attached Resolution.
--Amend Regulation XXX - Title V Permits and Rule 518 - Hearing Board Procedures for Title V Facilities, and Adopt Rule 518.1 - Permit Appeal Procedures for Title V Facilities.
--Direct staff to continue working with EPA, ARB, and the interested public on the development of a new federally enforceable rule proposal for alternative operating conditions for Title V facilities, and present it before your Board for consideration, as soon as possible.
--Direct staff to revise Regulation XXX - Title V Permits, as required, if EPA adopts revisions to the Federal Operating Permit Program (Title V), and present it before your Board for consideration, as soon as possible.
Respectfully,
James M. Lents, Ph.D.
Executive Officer
Attachments
PL:CC/BB/AG:JW:ADO
(JW:fR30ltr.doc)