October 13, 1995

South Coast Air Quality

Management District Board

At the September 8, 1995, Board Meeting, the Board adopted Rule 310 -- Amnesty for Unpermitted Equipment. Rule 310 established a 6-month amnesty period during which facilities that voluntarily apply for permits for existing equipment will not be subject to late fees, civil or criminal penalties for not having the required permit. Facilities with reported emissions of 10 tons/yr. or more are not eligible for the amnesty under the current rule language. These facilities account for less than 1,000 of the total of 35,000 facilities in the AQMD permit system.

At the time the rule was adopted, the Board directed staff to develop additional language that could be used to allow 10-ton facilities to be eligible for the amnesty for relatively small pieces of equipment.

BACKGROUND

Staff investigated several options, and found that the most practical method would be to use the fee schedules in the Permit Fee Rule (Rule 301) to define the types of equipment that would be eligible for amnesty at the facilities with reported emissions of 10 tons/yr. or more. Those fee schedules are based on the emissions potential of the equipment and the complexity of engineering review needed to issue the permit.

The lowest three categories (Schedules A, A1, and B) of the total of 11 categories provide a wide range of relatively low-emitting equipment. Those three categories list 181 types of equipment including portable generators, portable compressors, cogeneration engines, small boilers, degreasers, abrasive blasting cabinets, spray equipment, spray booths, and small printing presses. These are the kinds of equipment that earlier commentors had indicated might be unpermitted at their facilities.

PROPOSED AMENDMENT

The proposed amendment to Rule 310 would extend amnesty to facilities that reported 10 tons or more of emissions in 1993 for any equipment identified on Schedules A, A1, and B, in Table I of the Permit Fee Rule (Rule 301).

SCAQMD Board -2- October 13, 1995

CEQA & SOCIOECONOMIC ANALYSIS

AQMD staff has reviewed the proposed amendment to Rule 310 and has determined that it is exempt from the requirements of the California Environmental Quality Act pursuant to the State CEQA Guidelines Section 15061 (b)(3), in that staff has determined with certainty that there is no possibility that proposed Rule 310 may have a significant effect on the environment. In addition, CEQA Guidelines Section 15321 is applicable in that the purpose of proposed Rule 310 is to assist the District in enforcing its requirements that sources be permitted by the District.

The proposed amendment to Rule 310 may result in savings to affected facilities from not having to pay penalties or late permit processing fees. The proposed rule is not expected to result in any additional costs to facilities participating in the amnesty program and is not expected to have any adverse socioeconomic impacts.

AQMP & LEGAL MANDATES

On October 14, 1994, the Governing Board adopted a resolution that requires staff to address whether proposed rules being considered for adoption are being presented in rank order by cost-effectiveness as defined in the 1994 AQMP. The proposed amendment to Rule 310 is not a control measure in the 1994 AQMP. However, the rule is cost effective because it lowers the costs to industry to permit their equipment.

THEREFORE IT IS RECOMMENDED THAT YOUR BOARD

-- Amend Rule 310 -- Amnesty for Unpermitted Equipment.

Respectfully,

James M. Lents, Ph.D.

Executive Officer

Attachments

LVB:LK:DM

(BL310L)

(Adopted September 8, 1995)

PROPOSED AMENDED RULE 310. AMNESTY FOR UNPERMITTED EQUIPMENT

(a) Amnesty

The Executive Officer will not seek civil or criminal penalties for any violations of District Permit Rules 201 (Permit to Construct) or 203(a) (Permit to Operate) if the owner or operator applies for the necessary District permit(s) between October 3, 1995 and April 2, 1996, inclusive.

(b) Exemptions

The amnesty provided by this rule shall not apply to the following:

(1) violations at facilities which reported annual facility emissions pursuant to Rule 301 of 10 tons or more of any single criteria pollutant for 1993, unless the subject equipment qualifies as

Schedule A, A1, or B in Table I, Rule 301- Permit Fees,

(2) violations of Rule 201 and/or 203(a) discovered by the District as the result of an investigation initiated by the District,

(3) violations of Rule 201 caused by construction of equipment for

which an application for a permit to construct has been filed but a permit has not been issued.

(c) Permitting Requirements

This rule shall not exempt any permit application from any applicable District rule (including, but not limited to current New Source Review requirements) or state or federal laws pertaining to the issuance of permits, except that applications filed pursuant to (a) shall be exempt from late permit processing fees established by Rule 301 (c)(1)(D).

(d) Term

This rule shall be in effect between October 3, 1995 and April 2, 1996, inclusive, on which date this rule is hereby repealed.

310-1

(Adopted September 8, 1995)

PROPOSED AMENDED RULE 310. AMNESTY FOR UNPERMITTED EQUIPMENT

(a) Amnesty

The Executive Officer will not seek civil or criminal penalties for any violations of District Permit Rules 201 (Permit to Construct) or 203(a) (Permit to Operate) if the owner or operator applies for the necessary District permit(s) between October 3, 1995 and April 2, 1996, inclusive.

(b) Exemptions

The amnesty provided by this rule shall not apply to the following:

(1) violations at facilities which reported annual facility emissions pursuant to Rule 301 of 10 tons or more of any single criteria pollutant for 1993, unless the subject equipment qualifies as

Schedule A, A1, or B in Table I, Rule 301- Permit Fees,

(2) violations of Rule 201 and/or 203(a) discovered by the District as the result of an investigation initiated by the District,

(3) violations of Rule 201 caused by construction of equipment for

which an application for a permit to construct has been filed but a permit has not been issued.

(c) Permitting Requirements

This rule shall not exempt any permit application from any applicable District rule (including, but not limited to current New Source Review requirements) or state or federal laws pertaining to the issuance of permits, except that applications filed pursuant to (a) shall be exempt from late permit processing fees established by Rule 301 (c)(1)(D).

(d) Term

This rule shall be in effect between October 3, 1995 and April 2, 1996, inclusive, on which date this rule is hereby repealed.

310-1

Summary of Comments & Responses

to Proposed Amendment to

Rule 310 -- Amnesty for Unpermitted Equipment

October 4, 1995

The following organizations have indicated that the equipment in Schedules A and B of the fee rule address most of the relatively small equipment that might be unpermitted at the facilities they represent. They have indicated general support for the proposal, though they may have provided additional comments or concerns which are addressed later in this document.

Sanitation Districts of Los Angeles County

City of Los Angeles

Southern California Edison

Southern California Gas Company (Tentative)

California Aerospace Environmental Association

Printing Industry Association

I.E.S. Consultants

The following additional comments were submitted:

1. Comment: All facilities, including those with 10 tons per year or more of emissions, should be allowed to participate fully in the amnesty without restriction on the size of the equipment. Submitted by Detrich Allen, City of Los Angeles

Response: The Board considered this comment when voting on the original rule and the proposal did not pass. As a result, staff were asked to provide alternative language that would allow 10 ton facilities to participate in the amnesty at least for their low-emitting equipment.

1. Comment: AQMD must address how equipment under the amnesty program will deal with New Source Review. Many older units cannot comply with current BACT requirements. Submitted by Greg Adams, Sanitation Districts of Los Angeles County.

Response: State, federal, and AQMD rules require meeting all New Source Review requirements for equipment that was installed without the required permit to construct. The amnesty rule cannot relax these requirements.

1. Comment: AQMD should use the maximum emission levels specified for the Community Bank in Rule 1309.1 as the cutoff point for amnesty for major facilities. These are 30 lb/day for ROG and PM10, 40lb/day for NOx, 60 lb/day for SOx, and 400 lb/day of CO. Submitted by Millie Yamada, California Aerospace Environmental Association.

Response: Two organizations suggested using the maximum emission levels, specified for the Community Bank (Rule 1309.1) as the thresholds for amnesty. However, one of those organizations changed its mind when it learned those levels would be considerably more restrictive than the AQMD's proposal of using Schedules A, A1, and B.

The Community Bank levels are more restrictive because they are based on the "potential to emit" rather than actual operation. For example, a small portable generator would have to be evaluated as if it were operating 24 hours per day, whether or not it actually does. Because of this, even a relatively small generator would exceed the emission levels listed for the Community Bank and would, therefore, not be eligible for amnesty.

Another problem with setting a specific emissions threshold is that the amount of emissions is not typically provided on the application form. The applicant usually provides basic information about the equipment (horsepower, fuel type, VOC content of coatings, amount of coatings used, etc.) that the review engineer later uses to calculate emissions. In other words, the AQMD would have to conduct a detailed engineering review just to determine if an application is eligible for amnesty. Using Schedules A, A1, and B, staff and the customer can easily determine if the equipment is eligible for amnesty.

1. Comment: Schedules A and B do not seem to address the small pieces of equipment at a refinery that might have been missed on existing permits. Small pieces of equipment in a refinery are not permitted separately, but are aggregated into permits for larger process units. Example: If one pump was missed on a permit for a refinery's "crude oil distillation unit", adding that pump to the permit would come under Schedule E of the permit fee rule because that is where the distillation unit and its related equipment (including pumps) is described. Even though that one pump may be a very small source of VOC emissions, it would not be listed separately in Schedules A or B. It is merged into the equipment included in the much larger distillation unit. The amnesty provisions need to be related to the amount of mass emissions from the equipment. Schedules A and B are related primarily to the estimated level of staff effort required to prepare a permit. Submitted by Ron Wilknis, Western States Petroleum Association.

Response: Taking the last statement first, the schedules used in the AQMD's Permit Fee Rule (Rule 301) are not just based on complexity of review. The schedules are based both on "the emissions potential of the equipment" and the complexity of review. So, schedules A, A1, and B actually do reflect the relatively low-emitting equipment even if there are no specific emission thresholds listed. Specific emission thresholds, as discussed in the previous comment, do not lend themselves to the kind of quick screening process needed to determine if equipment is eligible for amnesty.

In addition, for most of the large facility permits issued since RECLAIM was adopted, the equipment descriptions no longer include a detailed listing of every pump and valve that is part of a larger unit. The AQMD has been moving toward eliminating this level of detail from all large facility permits so that permit revisions would not be needed every time a pump or valve is changed on equipment such as the crude oil distillation unit in the example. To that end, there would be no need to include this scenario in the amnesty program.

We do, however, recognize that some refineries still have the more detailed permits, and that some have requested that we return to putting detailed equipment descriptions in their permits. That issue is presently under consideration and the AQMD is evaluating alternatives to determine whether or not, and to what extent, to list such equipment in the facility permits for refineries.

If the AQMD decides to totally eliminate the detailed listings of things like pumps, amnesty will not be required for the situation described in the comment. However, if the AQMD does decide to include detailed listings of such equipment, all the companies will be invited to provide us with updated inventories of all those small components which we will incorporate into the permits at no expense to the companies. In the interim, no notices of violation are being issued for discrepancies in equipment descriptions involving small component parts like pumps and valves which do not cause an increase in direct emissions from the major equipment of which they are a part.

In summary, refineries would not need amnesty for the situation described in the commentor's example, and they would be eligible for amnesty for any of the 181 types of relatively low-emitting equipment listed in schedules A, A1, and B.