BOARD MEETING DATE: June 6, 2003
AGENDA NO. 37

Amend Rule 1131 – Food Product Manufacturing and Processing Operations

SYNOPSIS:

The proposed amendment will correct a SIP deficiency identified by the U.S. EPA by removing the alternative compliance plan option for food product manufacturing and processing operations. The compliance date for existing sources was October 2, 2002 and no source selected the alternative compliance plan option. The proposal also clarifies that tablet or capsule form food supplement manufacturing and processing operations are not subject to Rule 1131.

COMMITTEE:

Stationary Source, April 25, 2003, Reviewed

RECOMMENDED ACTION:

Adopt the attached resolution:

1. Certifying the CEQA Notice of Exemption (NOE) for the proposed amendments.
2. Amending Rule 1131 – Food Product Manufacturing and Processing Operations.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

On September 15, 2000, the Board adopted Rule 1131 – Food Product Manufacturing and Processing Operations to reduce emissions of isopropyl alcohol and hexane from food manufacturing and processing operations such as extraction, blending, separation, crystallization, and drying. The current rule sets volatile organic compound (VOC) concentration limits on both manufacturing processes and sterilization of the equipment used to manufacture and process food products, or allows the use of add-on control equipment to capture and destroy VOC emissions at a minimum of 85.5%. In an effort to allow other innovative technology, or process changes that result in equivalent emission reductions to add-on control or low-VOC content, alternative compliance is currently allowed for food processing and manufacturing operations except sterilization, provided that existing sources submitted a plan subsequent to the adoption of the rule, and it was approved by the Executive Officer to achieve equivalent emission reductions. These emission limits became effective October 1, 2002. To date, no plans have been received by the AQMD for processing under this alternative compliance option.

On February 25, 2002, U.S. EPA proposed, and subsequently included in the Federal Register, a limited approval and limited disapproval of Rule 1131 for State Implementation Plan (SIP) inclusion (67 FR 8493). The U.S. EPA cites Rule 1131 as largely consistent with the relevant Clean Air Act (CAA) requirements. However, subsection (c)(1)(C), without further specificity of criteria and emission estimation protocols for determining compliance, was deemed inconsistent with the CAA Section 110(a) requirement that rules be federally enforceable.

To correct this deficiency, the AQMD proposes to delete subsection (c)(1)(C) from the requirements of the rule. Removal of this option would allow Rule 1131 to be incorporated into the SIP without any air quality impacts or socioeconomic impacts. However, the U.S. EPA must approve this SIP correction by August 26, 2003, for the AQMD to avoid sanctions authorized by the Federal Clean Air Act.

Furthermore, the applicability of Rule 1131 will be clarified to exclude the manufacturing and processing of food supplements in tablet or capsule form, which is consistent with current practices. These operations are subject to Rule 1103 – Pharmaceuticals and Cosmetic Manufacturing Operations. All other food supplements fall within the scope of Rule 1131. This Board Letter is the staff report.

Discussion

Existing food manufacturing companies using VOC solvents during processing operations may opt to, since the date of adoption of Rule 1131 (September 15, 2000), submit alternative compliance plans to the AQMD for approval prior to October 1, 2002. To date, no such alternative compliance plans have been received and approved by the AQMD that demonstrate the required equivalent emission reductions to low-VOC solvent or to add-on control. Since existing food manufacturers have not used the alternative compliance option for demonstrating compliance, they will not be affected by the deletion of this option.

The only impact of deleting the alternative compliance option is how it may affect new sources. Rule 1131 currently allows new sources to demonstrate compliance at the time of start up and operation of the new source. In addition to the requirements of Rule 1131, Regulation XIII requires new major sources to construct using federal LAER (Lowest Achievable Emission Rate) and new minor sources are to be constructed using BACT (Best Available Control Technology). Both LAER and BACT impose the most stringent emissions limitation or control technique achieved in practice for the newly constructed source. This would, at a minimum, be the low-VOC or add-on control requirements of Rule 1131. The difference between LAER and BACT is that LAER does not consider cost-effectiveness and BACT does.

Presently, MCP Foods is the only food manufacturer that has been identified as a major source in the AQMD and they have installed control equipment to comply with Rule 1131. Through their operation of the control equipment, they establish federal LAER as at least 95 percent destruction efficiency and at least 90 percent capture efficiency (85.5 percent overall control), which is equivalent to 120 gm VOC per liter for isopropyl alcohol. If they demonstrate better than 85.5 percent overall, then this demonstrated level or equivalent VOC content becomes LAER or BACT. Any new source must select an alternative compliance that would be at least as efficient as the control system at MPC Foods. Therefore, removal of the alternative compliance option in Rule 1131 has no impact on the environment or to businesses, since existing sources have not selected that option and new emission sources are subject to LAER or BACT for the newly constructed or modified equipment, which is at least as stringent as the emission limit or control requirements of Rule 1131.

With regard to the applicability of Rule 1103 – Pharmaceuticals and Cosmetics Manufacturing Operations or Rule 1131 to the manufacturing of food supplements. On February 14, 2003, the AQMD District Counsel’s Office issued a Rule interpretation stating that based on current understanding and prior implementation, the manufacture of food supplements in tablet or capsule form are subject to Rule 1103 - Pharmaceuticals and Cosmetic Manufacturing Operations and are to be excluded from Rule 1131 applicability. For clarity, staff is recommending amendments to reflect the differences in the applicability of Rule 1131 to food supplements in different forms.

A small business representative believes that excluding capsule and tablet form food supplements has the unintended effect of bringing small food processing equipment into the permit system because of the use of ethanol or isopropyl alcohol during manufacturing procedures. Staff disagrees that Rule 1131 places new permit requirements on small food supplement manufacturers since Rule 219(i)(9) already requires that permits be issued for food manufacturing equipment where organic solvents are used. Furthermore, staff is in the process of developing an amendment to Rule 219 and intends to clarify in Rule 219 any recommended exemption.

Legislative Authority

The California legislature created the AQMD in 1977 (Lewis-Presley Air Quality Management Act, Health and Safety Code Section 40400 et seq.) as the agency responsible for developing and enforcing air pollution control rules and regulations in the South Coast Basin (Basin). By statute, the AQMD is required to adopt an AQMP demonstrating compliance with all state and federal ambient air quality standards for the Basin [California Health and Safety Code Section 40460(a)]. Furthermore, the AQMD must adopt rules and regulations that carry out the AQMP [California Health and Safety Code Section 40440(a)].

Proposal

Staff is proposing to delete subsection (c)(1)(C) from Rule 1131 to correct a SIP deficiency on this matter, and to clarify that tablet and capsule form food supplement manufacturing and processing operations are excluded from this rule and subject to Rule 1103.

Public Process

Health and Safety Code §40440.7(a) requires that a formal public workshop be held whenever a proposed rule will significantly affect air quality or emissions limitations. The proposed amendment to Rule 1131 does not have any significant effect on air quality or emissions limitations; therefore, no formal public workshop was held for this rule amendment. In addition to the public notice, all the contacts listed in the September 2000 Board Letter were notified of the public hearing.

Comparative Analysis

The Board finds pursuant to California Health and Safety Code §40727.2 that Rule 1131 does not impose a new emission limit or standard, make an existing emission limit or standard more stringent, or impose new or more stringent monitoring, reporting or recordkeeping requirements.

California Environmental Quality Act (CEQA) Analysis

Pursuant to CEQA and the AQMD’s Certified Regulatory Program (Rule 110), staff has prepared a Notice of Exemption (NOE) for Proposed Amended Rule 1131 – Food Product Manufacturing and Processing Operations. The NOE concluded that the proposed amendments to Rule 1131 could not have any significant adverse effect on the environment. The NOE will be included as part of the attached package for the public hearing on the proposed amendments.

Socioeconomic Assessment

The proposed amendment to Rule 1131 will not result in increased costs to the affected industries and, therefore, will have no socioeconomic impact. Accordingly, a socioeconomic analysis is not included with this proposal.

AQMP and Legal Mandates

The California Health and Safety Code require the AQMD to adopt an AQMP to meet state and federal ambient air quality standards in the Basin. In addition, the California Health and Safety Code requires that the AQMD adopt rules and regulations that carry out the objectives of the AQMP. The proposed amendment to Rule 1131 does not have a significant impact on air quality or emissions limitations and, therefore, will not affect the attainment strategies outlined in the AQMP.

Implementation Plan

Current implementation programs are adequate to implement the proposed amendments.

Resource Impact

Adoption of Proposed Amended Rule 1131 will have no budgetary impacts.

Findings
Necessity - The Board has determined that a need exists to amend Rule 1131 – Food Product Manufacturing and Processing Operations, to clarify the application of this rule to manufacturing and processing of food supplements in tablet and capsule form, as per existing policy and interpretation, and to delete the alternative compliance option in Rule 1131 subsection (c)(1)(C) to address a SIP deficiency identified by U.S. EPA in order to make the rule federally enforceable.

Authority -The Board obtains its authority to adopt, amend, or repeal rules and regulations from Sections 39002, 39650 et seq., 40000, 40001, 40440, 40441, 40702, 41508, and 41700 of the California Health and Safety Code.

Clarity - The Board has determined that Proposed Amended Rule 1131 as proposed to be amended is written or displayed so that its meaning can easily be understood by the persons directly affected by it.

Consistency - The Board has determined that Proposed Amended Rule 1131 – Food Product Manufacturing and Processing Operations as proposed to be amended is in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, federal or state regulations.

Non-Duplication - The AQMD Governing Board has determined that Rule 1131– Food Product Manufacturing and Processing Operations as proposed to be amended does not impose the same requirements as any existing state or federal regulations, and the proposed amended rule is necessary and proper to execute the powers and duties granted to, and imposed upon, the AQMD.

Reference - In amending this regulation, the Board references the following statutes which the AQMD hereby implements, interprets or makes specific: California Health and Safety Code Sections 40001 (rules to achieve ambient air quality standards), and Federal Clean Air Act Section 172(c)(1) (RACT).

Problem - The Board finds and determines that there is a problem that Proposed Amended Rule 1131 will alleviate, such as clarifying that tablet or capsule form food supplement manufacturing and processing operations are not subject to the requirements of this rule, and to delete alternative compliance to low-VOC concentration or add-on control, to allow U.S. EPA approval of the rule into the SIP.

Attachments

1. Summary of Proposal
2. Resolutions
3. Proposed Rule Language
4. Notice of Exemption

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