Proposal:

Amend Rule 219 - Equipment Not Requiring a Written Permit Pursuant to Regulation II

Synopsis:

Rule 219 identifies equipment and processes which are exempt from AQMD written permits. The proposed amendments focus on implementing the first tier of the 1996 AQMD Regulatory Reform Initiative to "eliminate permits for small businesses" by removing approximately 10,000 permits from the system and reducing the number of expected new applications by 1,000/year. The proposal also would require permits for all equipment subject to state Air Toxic Control Measures and federal NESHAP.

Committee:

Stationary Source, September 20, 1996, reviewed. Administrative, October 18, 1996, reviewed fiscal impact.

Recommended Action:

1. Approve the Notice of Exemption for the proposed amendments to Rule 219 - Equipment Not Requiring a Written Permit Pursuant to Regulation II, in accordance with the attached Resolution.

2. Amend Rule 219 - Equipment Not Requiring a Written Permit Pursuant to Regulation II, in accordance with the attached Resolution.

James M. Lents, Ph.D.
Executive Officer

Background

Rule 219 is an administrative rule which identifies certain equipment categories for exemption from AQMD written permit. This rule has been amended several times, the last on August 12, 1994. This rule amendment was prompted by the adoption of the 1996 AQMD Regulatory Reform Initiative, as well as various changes to state law. For this rule amendment, emphasis was based on achieving the following objectives:

• Implement the first tier of the 1996 AQMD Regulatory Reform Initiative by exempting certain equipment categories with negligible emission potential and those chlorinated fluorinated carbon (CFC) recovery or recycling systems currently subject to EPA’s Refrigerant Certification Program requirements.

• Provide consistency with California Health and Safety Code (H&SC) Section 41753, which preempts local air districts from imposing permitting requirements on portable internal combustion engines (ICEs) participating in the Statewide Registration Program (H&SC 41750~41755).

• Address implementation of state Air Toxic Control Measure (ATCM) and federal NESHAP requirements.

Proposal

Revise Rule 219 to:

• Eliminate written permits for approximately 4,400 CFC recovery and recycling systems and approximately 4,400 portable ICEs. Through reevaluation of other equipment categories, staff has identified an additional 2,000 permit units that represent a negligible emission potential and propose that these units also be eliminated from the AQMD’s permit system.

• Exclude from exemption any equipment subject to ATCMs or NESHAPs, resulting in the addition of approximately 500 new permits to the system. Due to the nature of the equipment subject to these requirements, and the mandates to ensure compliance with applicable state and federal requirements, a written permit requirement is deemed appropriate for this equipment.

Policy Issues

Staff received various requests from industry to add specific equipment exemptions to the proposed rule, and has worked with various industry representatives to determine the viability of exempting these equipment categories. A public workshop was held on September 5, 1996, where staff received additional comments on the proposed amendments to Rule 219.

Staff has addressed the concerns raised by industry and the public in Appendix A - Response to Comments of the Final Staff Report for Proposed Amended Rule 219. Remaining unresolved comments dealt with the exemption of additional equipment categories. Staff will continue to work on these requests for possible consideration in a subsequent amendment of this rule scheduled for late 1997. These comments and the responses made by staff are also included in Appendix A of the Final Staff Report.

AQMP & Legal Mandates

Equipment categories which would be exempt from written permit as a result of this proposed amended rule are either not subject to BACT, or will participate in the Statewide Registration Program. In either instance, no emission impacts are anticipated as a result of this proposed rule. Proposed Rule 219 is not an AQMP measure. This amendment makes Rule 219 consistent with California Health and Safety Code (H&SC) Sections 41750~41755 (portable internal combustion engines).

CEQA & Socioeconomic Analysis

Staff has reviewed the proposed amendments to Rule 219 and has determined that they are exempt from the requirements of CEQA. The amendments are administrative in nature and will not significantly impact the emission levels currently associated with the existing rule. Therefore, a Notice of Exemption has been prepared pursuant to state CEQA Guidelines Section 15002 (k)(1). The Notice of Exemption will be filed with the county clerks immediately following the adoption of the proposed amendments.

The proposed amendments to Rule 219 are not expected to result in cost impacts, overall. The detailed assessment is attached.

Implementation Plan

Due to the substantial number of permits to be eliminated as a result of this rule amendment, affected sources will be contacted by mail and directed to appropriate AQMD personnel for assistance in making the necessary permit changes.

Resource Impact

Implementation of the proposed amended rule will result in an estimated net reduction in fee revenues of approximately $1.47 million per year comprised of the following:

Equipment with negligible emissions	$465,000 reduction
Equipment regulated by other governmental entities	$409,000 reduction
Equipment exempt pursuant to state law	$754,000 reduction
Equipment subject to NESHAP/ATCM requirements	($157,000) increase.
	$1,471,000

This information is summarized in the table below. A more detailed breakdown is provided in Appendix B - Emission Inventory and Fee Revenue Data of the Final Staff Report. The removal of approximately 10,000 permits from the permit system will involve additional work on behalf of AQMD staff in the first year. During this time, existing resources will be utilized to conduct outreach and appropriate permit and billing revisions for those sources affected by the proposed amendments. In addition, it is estimated that the removal of these equipment categories from the permit system will eliminate compliance inspections for those facilities exclusively operating these types of equipment. For those facilities operating permitted equipment in addition to the categories proposed for exemption, it is estimated that the total time to complete a compliance inspection will be reduced by an average of 10 to 15 minutes. Any compliance resources saved as a result of this amendment will be reallocated to complaint response or other targeted inspection programs.

The proposed amendments will also reduce the number of new applications received by approximately 1,000 per year. This will result in the reallocation of approximately 4,000 administrative and engineering hours to other permitting activities. In the first year, these resources will be reallocated to process the estimated 500 new applications resulting from the new small halogenated degreaser NESHAP permit requirements. In subsequent years, these resources will be used to process any new applications resulting from NESHAP promulgation, as well as meeting other permit streamlining goals .

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Permit and Fee Revenue Summary

Equipment/Process Description	Active Permits	Projected New Appl. Rec’d Annually �	Total Filing & Renewal Fee Savings ‚
Equipment to be removed from the permit system
:
Equipment with negligible emissions
Emergency Ventilation System	45	6	$9,771
Non-Ammonia Etching, Small H2SO4 Anodizing	105	20	$25,014
Batch Ovens - Powder Coating	13	3	$3,291
Small Spray Booths	50	4	$9,872
Wastewater-Chromium	50	4	$9,872
Wastewater Evaporators	65	4	$12,390
Fuel Oil Storage(<40K gal)	1,490	50	$368,981 „
Crankcase Drainage Oil Storage	144	10	$25,632
Equipment regulated by other governmental entity
CFC Recovery/Recycling	4,370 ƒ	500	$408,618
Equipment exempt pursuant to state law
Portable ICE - Statewide Registration	4,420	408	$753,535
Equipment to be added to the permit system
Equipment subject to NESHAP/ATCM requirements
Small degreasers	500	500 …	<$156,650>
		Total	$1,470,326

 Projected number of applications received annually based on 1994 and 1995 figures.

‚ Based on 96/97 annual operating fees and new construction filing fees for small business.

ƒ 147 CFC recovery/recycling permits are in Title V facilities.

„ Includes $111,540 from an estimated 3,300 gasoline retail service station and consumer account permits which have diesel dispensing.

… Based the estimated total inventory of unpermitted equipment. The annual number of applications received will be much less.

Attachments

Summary of Proposed Amendments
Rule Development Process
Key Contacts
Resolution
Rule Language
Staff Report