BOARD MEETING DATE: December 11, 1998 AGENDA NO. 27

REPORT:

Permit Streamlining Task Force Status Report

SYNOPSIS:

The Permit Streamlining Task Force, composed of AQMD Board Members, industry and environmental/community group representatives, was formed in April 1998. Since its formation, it has identified and discussed a wide variety of permitting related issues. This report provides a listing and status of various permit-streamlining issues discussed by the Task Force.

COMMITTEE:

Administrative, November 20, 1998, Discussed  Permit Streamlining Task Force, November 6 and December 4, 1998, Discussed

RECOMMENDED ACTION:

Receive & File the Permit Streamlining Task Force Status Report.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

The Permit Streamlining Task Force (Task Force) was formed in April, to help develop specific recommendations that would expedite processing of permits for conventional, Title V and RECLAIM facilities and operations. The Task Force chaired by Vice-Chair Glover, and includes Board Members Mayor Loveridge and Supervisor Silva as well as eight other members, which include industry and environmental/community group representatives. Also, Mohsen Nazemi, the AQMD's Permit Streamlining Ombudsman, has been working with the Task Force to assist in implementation of various streamlining initiatives.

Since its kick-off meeting on April 28, 1998, the Task Force has examined many permit-streamlining issues and discussed potential solutions. A Permit Streamlining Study contract has also been awarded to a consulting firm in order to provide its independent review of the AQMD's permitting programs and recommendations for consideration by the Task Force. The Task Force intends to bring before the Governing Board a set of specific, consolidated permit-streamlining recommendations in the first quarter of 1999.

Key Streamlining Issues and Status Summary

The Permit Streamlining Task Force has reviewed a wide variety of permitting related issues. The resolution of some of the issues is being implemented while others will be incorporated into the final recommendations, which is due to be presented to the Governing Board in early 1999. The following provides a summary and status of key streamlining issues discussed by the Task Force:

PERMIT PROCESSING FEE PAYMENT

Since incorrect permit fee payments were identified as one of the major reasons for rejection or delays in accepting of applications, the Task Force recommended, and the Governing Board approved in June 1998, the establishment of systems for payment of permit-processing fees electronically and by credit cards. These actions are important in that they not only provide convenient ways for applicants to pay permit fees and not having their applications rejected or delayed due to incorrect fees, but also facilitate several permit streamlining proposals including filing of permit applications electronically through the Internet, Modem, or fax. Staff has been working with AQMD’s bank and treasurer (Los Angeles County) to establish a credit card payment system for permit applications. Currently, the treasurer's office is evaluating our unique needs and the changes necessary to implement credit card payments through the treasurer. In addition, the new finance system currently being implemented will have the ability to process electronic payments (Electronic Data Interchange) with vendors as well as applicants. Both of these capabilities are expected to be on-line for implementation in early 1999.

Additionally, the Board also approved another Task Force recommendation, on a six-month trial basis, a program to accept and process applications initially filed with 85% or more of permit processing fees. This action will significantly reduce the number of applications being delayed for processing due to minor fee errors. Implementation of this program is being incorporated into a system designed to better track the application status and is expected to begin in early 1999.

PERMIT STREAMLINING STUDY BY CONSULTANTS

AVES, an Affiliate of ATC Associates, has been retained since September 1998, to provide an independent comprehensive review of the AQMD’s permit system and to recommend specific steps for permit streamlining. The consultant has studied the entire permitting processes, interviewed applicants and AQMD’s permitting staff, as well as surveyed various permitting agencies and non-governmental organizations nationwide for ideas. A compilation of all of the permit streamlining ideas collected as a result of this exercise was presented in an interim report to the Task Force on November 3, 1998. The list of ideas covered potential solutions to problems in all permitting aspects including permit fees, support systems, work flow, tracking, application forms, in-house coordination and management.

AVES also proposed a set of evaluation criteria and a ranking method during the meeting, seeking input from the Task Force members. The evaluation criteria included system efficiency, responsiveness to external customers, effectiveness in meeting air quality mandates, provision of information to other AQMD programs, and ease of implementation. The consulting firm will conclude its study and present a final report with their recommendations to the Task Force in December 1998. In doing so AVES is also coordinating their work with the Fee Structure and Equity Study contractor to ensure that impacts of any recommendation set forth by the fee study contractor is also considered.

STREAMLINED STANDARD PERMITS

The Task Force reviewed and approved this staff proposal in September 1998. As proposed, the streamlined standard permit will provide an accelerated alternative for applicants to receive a permit within a very short time frame. The standard permit may be designed for a given equipment category using either the conventional two-step process (i.e., Permit to Construct followed by Permit to Operate) or the combined one-step Permit to Construct/Operate process, depending on the complexity and potential compliance status of the equipment category. Staff will begin selecting appropriate equipment categories and, for each selected category, develop a specific permit application form and a pre-determined, standardized permit description and conditions. Each set of application forms permit conditions will clearly spell out the criteria for approving such accelerated permits. Examples of these criteria may include limitations on equipment and facility emissions or equipment location so that BACT/LAER, offsets, health risk analysis, and public notice are pre-determined or not required.

The concept of the streamlined standard permit may be applied to many equipment categories. However, staff intends to prioritize the efforts by developing the packages for most frequently permitted categories first. Among the first group of equipment categories being evaluated are boilers, dry cleaning, special spray coating, printing press, and fuel storage and dispensing.

CPP PROGRAM ENHANCEMENT

The Certified Permitting Professional (CPP) program was instituted as part of the AQMD's "New Directions" in 1993, to create a mechanism where trained individuals prepare and submit complete and accurate permit application packages to the AQMD to facilitate the approval process. The Task Force initially identified a need to enhance the program to improve its effectiveness and formed a Subgroup to develop a specific work plan. On November 6, 1998, the Task Force approved the CPP Program Enhancement Work Plan, a copy of which is attached for information.

The CPP Program Enhancement Work Plan was developed with the consideration of the following key elements:

• Complete and accurate CPP applications that comply with permitting requirements are handled in an expeditious manner.
• There is a net reduction of staff time and costs to review applications as a result of the enhancement.
• The enhancement shall not prolong the time required to process other applications.

The work plan basically includes the following enhancements:

1. With proper authorization by the facility owner, CPPs will have a direct access to the facility's records at the AQMD that are necessary to prepare a complete and pre-evaluated permit application package.
2. Staff will establish an Expedited Permit Processing Procedure for CPP applications that are pre-evaluated for compliance demonstration and meet the standards as to format, quality and completeness.
3. Staff will make available to CPPs the information related to permit evaluation, including determination of Equipment Category Code, permitting policies and procedures, permit evaluation templates, and standard permit description and conditions, etc.
4. Expedited CPP applications that contain major deficiencies for not meeting the quality and completeness standards will revert back to the regular procedure with a notification to the corresponding applicants and CPPs.

Staff's best estimate is that it would take approximately three to four months to organize and distribute the minimum amount of information, thus the work plan is expected to be implemented in April 1999.

TITLE V FACILITY PERMIT

One of the issues discussed early on by the Task Force members related to the AQMD's approach in preparation of the Title V facility permits and user-friendliness of the final permits. The Task Force was concerned that:

1. The AQMD staff has spent significant resources in preparation of the first group of Title V facility permits, and, as a result, other non-Title V permitting activities have suffered.
2. The AQMD's approach of converting the previous equipment-based permit into the current facility permit format has increased the time and costs necessary to prepare the facility permits.
3. The format of the facility permit is not user-friendly for industry and AQMD staff, and has resulted in reliance on the old equipment-based permits and possible redundancy in work.

I. FACILITY PERMIT CONCEPT

In order to address these concerns the Task Force formed a Facility Permit Subgroup consisting of some of the Task Force members and AQMD staff. The Subgroup was tasked to identify potential alternatives that would reduce the cost of permit preparation, minimize the need for staff’s resources, and improve user-friendliness of the permit format, while still complying with the Title V federally-mandated requirements. The Subgroup identified and discussed several alternatives. As part of the evaluation of various alternatives, AQMD staff conducted a limited time study to determine the time differences for preparing the initial Title V permits under various options, and identified the pros and cons associated with each option.

During the November 6, 1998, Task Force meeting, the alternatives were discussed and the Task Force recommended to proceed with one of the alternatives for the Title V Groups B and C facilities (i.e., groups for which Title V facility permits have not yet been prepared). The recommended alternative will allow the AQMD to maintain a single conventional equipment-based permitting system for both Title V and non-Title V sources. With this alternative the main body of a facility permit will be the compilation of the photocopies of the original conventional equipment-based permits. Any additional element that is necessary to fulfill Title V requirements can then be built around the conventional equipment-based permits. This approach will avoid having to break up existing equipment-based permits to devices and to reword permit conditions in order to generate a Title V permit. However, by using this approach, the facility permit equipment description and permit conditions will not be in a database structure. Changes to the permits or conditions may require additional time for revisions or re-issuance of the permits.

The limited time study conducted by AQMD staff showed that there may be significant time savings in producing the initial Title V permits using the recommended alternative. However, the difference in time required for subsequent revisions or re-issuance of permits is not clear at this time. Staff is evaluating other means to minimize or eliminate any such additional time requirements. Staff is also in discussion with EPA Region IX regarding the recommended alternative approach for Title V permits.

II. FACILITY PERMIT FEES

During the May 1998 Governing Board meeting, a resolution was passed for adoption of amendments to Regulation III - Fees, which asked staff to report back to the Board, among other things, "future improvements under consideration based on recommendations from the District's Permit Streamlining Task Force," related to Title V permit processing. The resolution further asked for recommendations for any adjustments to Title V permit fees.

The fees for initial Title V permit as specified in Rule 301(p)(3)(B) are based on the minimum time required to prepare the facility permits under the present approach with additional time charged on a time-and-material basis. At this time, since staff has not yet embarked on the implementation of the Task Force's recommended Title V permitting alternative, it is premature to recommend any changes to the fee rule. Nevertheless, based on the preliminary time study, it is anticipated that the Task Force's recommended alternative will most likely reduce the amount of time necessary to produce the initial Title V permits, and thus reduce the overall additional time-and-material fees to industry, without a need to adjust Rule 301(p)(3)(B) at this time. Staff will report back to the Governing Board, upon implementation of the Task Force's recommended alternative, if any fee adjustments are found to be needed.

AQMD WEB PAGES FOR PERMITTING

A prototype permitting web page is to be developed for both internal and external users. The web page will be designed as a central location to provide not only the basic permitting information and application forms for general permit applicants, but also for in-house permitting staff and outside experts (e.g., CPPs) in-depth technical guidelines and references such as permitting policies and procedures, permit evaluation protocols and templates for specific equipment categories, etc. The web page can also be a resource center providing links to programs such as health risk analysis, emission factors, and BACT/LAER determinations, etc.

Attachments
CPP Program Enhancement Work Plan

CPP PROGRAM ENHANCEMENT WORK PLAN

The South Coast AQMD’s Certified Permitting Professional (CPP) program is designed and instituted to create a mechanism where trained individuals prepare and submit complete and accurate permit application packages to the AQMD. The program is intended to expedite processing of applications by avoiding delays in the engineering review process as often experienced with applications that are incomplete or contain insufficient information to determine compliance with permitting requirements. The proposed enhancement of the CPP program should further implement the original intent of the program and conform to the ongoing permit streamlining efforts as well as other general policies. In addition, this draft Work Plan proposes an expedited permit processing procedure for CPP applications (if so identified) at various processing stages. Further priority processing by permit processing teams could also occur if the applications qualify under the "Green Carpet" priority program, the "Optional Express Permit Processing" program, or other designated priorities. Therefore, the key elements necessary for the CPP program enhancement are as follows:

• Complete and accurate CPP applications that comply with permitting requirements are handled in an expeditious manner.
• There is a net reduction of staff time and costs to review applications as a result of the enhancement.
• The enhancement shall not prolong the time required to process other applications.

NEAR TERM IMPROVEMENTS

1. Provide access to the following information:
   - Permitting related policies and procedures
   - Facility records (with proper authorization - see attached Alternative Access to Specific     AQMD Records, Record Access Authorization, and flow charts showing regular and   alternative procedures)
2. Provide generic format for supplemental information filed with a CPP application package to facilitate entry of data into the AQMD permitting programs.
3. Establish an expedited permit processing procedure as follows (see attached flow chart - Expedited Procedure for Handling CPP Applications):
   - To qualify for the expedited processing, a CPP application should be filed in a pre-determined format consistent with AQMD’s internal procedures, including organization of materials (application forms, fee determination sheet, supplemental information, etc.) as well as the organization of evaluation report (background check, process description, determination of emissions, evaluations & compliance analyses of applicable rules and regulations, recommended permit wording & conditions, etc.).
   - With the Equipment Category Code and fee determination form completed by the CPP, the application will bypass prescreening.
   - Expedite data entry and assignment to permit processing teams with the same level of priority as 30-day applications.
   - Assign Engineering Technician(s) to engage in minimal processing of the CPP application in order received, including processing with the AQMD permitting programs (i.e., CAPPS fee, NSR and permit modules or their replacement Windows-based programs), resolving minor deficiencies and listing of major deficiencies (if any).
   - The Senior Engineer/Supervisor of the permit processing team will then review the application and, if appropriate, approve the permit as presented.
   - If the application contains major deficiencies and cannot be approved as is, the Senior Engineer/Supervisor may assign the application to a permit processing engineer for review and deficiency finding. From this point on, the application will be handled following the regular procedure.
   - The permit processing team should inform the CPP and the represented permit applicant in writing, with a copy to the AQMD’s CPP coordinating and tracking team, of the deficiencies as soon as the findings are made so that corrective actions may be taken for further processing. (A standard deficiency finding form may be developed to assist the teams and to maintain consistency between teams.)
   - AQMD, in consultation with the CPP Subgroup, will identify what determines deficiencies that will trigger reprocessing (see attached CPP Application Deficiencies).
   - AQMD will provide training opportunities for CPPs as well as other interested public members on the New Source Review and Rule 1401 requirements, etc. when these types of training classes have been developed for AQMD permitting staff.

LONGER TERM IMPROVEMENTS

(The following proposed improvements are specific to the CPP program. Others that are being evaluated as part of the ongoing permit streamlining activities are not included.)

1. Strengthen CPP program support by providing access to the planned permitting web page for CPPs and other AQMD external users. (As part of the general permit streamlining activities, a web page containing permitting-related information, such as permitting policies & procedures, permit evaluation templates, rule implementation guidelines, BACT analysis, R1401 analysis, CEQA analysis, etc., is to be developed initially only for AQMD internal users. The access to this web page may be extended to external users.)
2. Consider development of interface programs to allow electronic submittal and entry of application data into the AQMD’s permitting programs.
3. Delay consideration of the "Advanced CPP" concept pending outcome of the proposed CPP program enhancement.
4. Enhance and/or revise the CPP training, certification, performance audit, and decertification programs, as required, to maintain consistent quality of applications submitted by the CPPs.
5. Develop and update the CPP certification exam regularly to incorporate additional requirements and information related to permitting.

Attachments

Alternative Access to Specific AQMD Records
Record Access Authorization Form
Existing Procedure for Information Access (flow chart)
Alternative Procedure for Information Access (flow chart)
Expedited Procedure for Handling CPP Applications (flow chart)
CPP Application Deficiencies

Issue:

In order for companies to submit complete applications for permits, and conduct other routine business with the AQMD, company representatives sometimes need specific information about their own facilities. In the past, companies in some cases have been requested to submit a Public Records Act request to obtain such information. As a Public Records Act request, the requested information is supplied by the appropriate AQMD groups, gathered and tracked "cradle-to-grave" by the Public Advisor’s office. This has resulted in delays and excessive paperwork and has been resource intensive. To alleviate this issue, the following proposal has been prepared for consideration by the Permit Streamlining Task Force.

Proposal:

As an alternative to the Public Records Act process, companies could authorize individuals (i.e. company employees or consultants) to have direct access to their own company information at the AQMD. This proposal is intended to streamline access to information, while minimizing administrative burden on the AQMD. The AQMD may provide limited types of information directly to companies, without coordination and tracking by the Public Advisors’ office. The procedure for companies to authorize individuals to access information is as follows:

• Company representatives submit a simple request on company letterhead along with the standard Authorization Form (attached). Authorized individual will provide an official signed copy of the letter and Authorization, which is completely filled out to identify the facility, type of information, and access time limit to the appropriate AQMD group. The appropriate AQMD group will vary, depending on the type of information requested. The appropriate AQMD group will arrange to provide the information to the requester, and forward a copy of the request form to Mohsen Nazemi, Permit Streamlining Ombudsman, for tracking.
• Information beyond the scope of this Standard Authorization Form should be requested through the Public Records Act process.
• If copies of information are requested, arrangements should be made with the appropriate AQMD group. Copies are subject to the same fees as for Public Records Act Requests. Payment (per page, over 10 pages) should be pre-paid to the Cashier in the AQMD lobby.

Access to Application Files

For an open application, the authorized individual will submit a copy of the letter and Authorization form and will make an appointment with the permitting team supervisor for that application to review the hard copy file.

• For archived application files, the authorized individual will submit a copy of the letter and Authorization form to Records in the Technical Information Center. Records will contact the requester to set up a time to review or pick up the information as provided by Records. In general, Records will place the "scanned" files in an electronic folder for the authorized individuals’ review using a designated computer at the AQMD. For "microfiched" files, if the microfiche includes unauthorized information, hard copies will be produced for pick up (with appropriate fees). Permits to Operate issued in 1990 or later have been scanned; those issued earlier are on microfiche.

Access to Permit Database & Other Systems

• For access to database information such as NSR records and Potential to Emit, the authorized individual will submit a copy of the letter and Authorization form and make an appointment with the NSR Administration team.
• For information regarding billing and annual operating fees, the authorized individual will contact Customer Service. To get a copy of the Accounts Receivable, the authorized individual will submit a copy of the letter and Authorization form to Customer Service.
• For annual emissions information, the authorized individual will submit a copy of the letter and Authorization form and will make an appointment with the annual emissions program supervisor.

South Coast Air Quality Management District

Records Access Authorization

*Complete Engineering File includes Application Forms, Permits, Final Engineering Evaluation(s) and related information

*Limited information may be requested and provided verbally. This is not tracked.

CPP APPLICATION DEFICIENCIES

To qualify for the Expedited Permit Processing Procedure, each permit application filed by the Certified Permitting Professional (or CPP application) shall meet the following prerequisite:

• Completed information fields indicated as for AQMD use only on the application form (Form 400A) for Type (basic, control, duel), Equipment Category Code (Bcat/Ccat), Fee Schedule (A through I), and Class (I, III, IV).
• Included a fee assessment sheet showing: application type, Bcat/Ccat, applicable fee discount, applicable fee penalty, and fee amount for each application as well as the same information for all the applications filed with the same batch and the sum of the applicable fees.
• Included the valid CPP ID# or label on Form 400A.
• Submitted the application package in the prescribed method.

A. MAJOR DEFICIENCIES REQUIRING ENGINEERING REVIEW & WRITTEN NOTICE

General

• Wrong Equipment Category Code at the first level (Major Equipment Categories, e.g., 03XXXX – Cogeneration)
• Incorrect fees off by more than 15% of the correct amount
• Incorrect permit unit division that results in the need for an additional application.

Forms & Supplemental Information

• Missing any mandatory application form (e.g., 400A, 400B, 400P, & 400E series, as applicable)
• Missing any of the following information or provided incorrect information: facility location, facility ID# (except for new facility), equipment description, previous permit numbers (if applicable), application type, authorized signature, estimated construction start/completion dates (if applicable), date equipment installed (for existing equipment), CEQA status, and failure to indicate equipment within 1,000 feet of school
• Failure to provide any of the following when required: air quality impact analysis, health risk analysis, emissions offsets, applicable source test data, certified CEQA document, and applicable PSD analysis
• Failure to provide process description and relevant background of the equipment (e.g., permitting history, compliance history, relation to other equipment at the facility, etc.)

A. MAJOR DEFICIENCIES (cont'd)

Emissions, Evaluations & Recommendations

• Failure to provide supporting information or to determine emissions of any criteria pollutant, toxic air contaminant, Ozone Depleting Compound, or ammonia.
• Inaccurate emission determination that results in an erroneous demonstration of compliance with a rule provision.
• Failure to provide supporting information and to demonstrate compliance with any applicable provision of the District’s Rules and Regulations (Regulations II, IV, IX, X, XI, XIII, XIV, XVII, XX, and XXX).
• Failure to determine, or incorrect determination of, applicability of any public notice requirement.
• Failure to determine, or incorrect determination of, applicability of any Reg. XIII (or Rule 2005) requirement, and when applicable, failure to demonstrate compliance with the requirement.
• Failure to determine, or incorrect determination of, applicability of Rule 1401 requirement, and when applicable, failure to demonstrate compliance with the requirement.
• Failure to determine, or incorrect determination of, CEQA applicability, and when applicable, failure to provide information for Initial Study and preparation of the CEQA document.
• Missing any permit condition that is necessary, relevant and appropriate to ensure compliance with an applicable rule or regulation (e.g., standard conditions per the permit evaluation protocol, or emission limits, monitoring, and recordkeeping requirements for Reg. XIII or Rule 1401).

B. MINOR DEFICIENCIES TO BE RESOLVED BY PERMIT SERVICES STAFF AND/OR ENGINEERING TECH

(Deficiencies will be considered major if a CPP application contains more than three of the following minor deficiencies.)

Forms & Supplemental Information

• Incorrect Equipment Category Code at the second or lower levels, e.g., 0012X0 – Electric Arc Metal Melting Furnace, 000207 – Wax Dip Tank
• Incorrect fee off by less than 15% of the correct amount
• Missing any applicable and required non-major field on the mandatory application forms

B. MINOR DEFICIENCIES (cont'd)

Emissions, Evaluations & Recommendations

• Any error in calculations, use of emission factors or equations, assumptions, and calculation approaches that results in an incorrect emission determination. (Multiple independent errors are individually counted even for those occurred in one computational process.)
• Any compliance demonstration that is either in error or unsustainable due to erroneous or lack of supporting arguments (other than NSR, R1401, emissions, and public notice, which are major deficiencies).
• Failure to provide emission data, evaluations, or recommendations in the prescribed format as indicated in the permit evaluation protocol.
• Failure to provide recommended equipment description or permit conditions in the prescribed format.
• Any recommended permit condition that is unenforceable.

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