BOARD MEETING DATE: March 4, 2005 AGENDA NO. 32

Rule 1401 – New Source Review of Toxic Air Contaminants was adopted in June 1990 and establishes permitting requirements for new, relocated and modified sources that emit one or more of the identified Toxic Air Contaminants (TACs). Rule 1402 – Control of Toxic Air Contaminants from Existing Sources was adopted in April 1994 and establishes risk levels for existing facilities.

Exposure to toxic air contaminants can increase the risk of contracting cancer or result in other health impacts. Non-cancer health risks may include birth defects and other reproductive damage, neurological, respiratory, and other adverse health effects. The Office of Environmental Health Hazard Assessment (OEHHA) establishes risk exposure levels for TACs. The Scientific Review Panel (SRP) reviews and approves the methodologies used to develop these risk values, thereby finalizing these values for use by state and local agencies in assessing risk from exposures to TACs. This approval is considered final action by the state.

Proposed amendments to Rule 1401 will implement an approved cancer risk value for naphthalene, new chronic and cancer risk values for speciated polychlorinated biphenyls (PCBs), and updated chronic and cancer risk values for 2 polychlorinated dibenzo-p-dioxins (PCDDs), and 1 polychlorinated dibenzofuran (PCDF) under the AQMD’s toxics New Source Review program. In addition, staff is proposing a clarification to the emission calculation methodology for new control equipment added to existing equipment in Rule 1401 for consistency with New Source Review calculations for criteria air pollutants. The proposal also includes updating the definition for Maximum Individual Cancer Risk (MICR) in Rules 1401 and 1402 for consistency with new OEHHA risk assessment guidelines.

This Board letter also fulfills a requirement in Rule 1402 for an impact assessment before new or revised values are used for facility-wide assessments. Staff conducted an analysis of the impacts associated with the new risk values. No impacts have been identified from the new risk value for sources subject to Rules 1401 or 1402.

Rule 1402 - Control of Toxic Air Contaminants from Existing Sources requires facilities with risk assessments over specified levels to prepare and implement risk reduction plans. Rule 1402 requires that staff notify the Board and affected facilities after OEHHA finalizes changes to risk values. Staff provided this notification at the Board meeting on December 3, 2004.

Rule 1402 also requires a report to the Board within 150 days of final action by OEHHA on the potential impacts of the changes before new or updated risk factors are used for risk assessments in Rule 1402. Although the updated risk values for PCBs, PCDDs, and PCDFs were finalized in August 2003, additional time was needed since the updated risk values could only be used with OEHHA’s new risk assessment guidelines which had not yet been implemented.

The AQMD staff is revising its Risk Assessment Procedures to reflect OEHHA’s new guidelines. The AQMD staff will begin using the revised Risk Assessment Procedures in spring 2005.

Table I of Rule 1401 defines the effective date for toxic New Source Review for chemicals with cancer, chronic, and acute effects. Rule 1401 paragraphs (e)(2) and (e)(3) require an analysis and report to the Board before new and updated risk factors, respectively, are used for toxics New Source Review. OEHHA has approved a new cancer risk value for naphthalene, new chronic and cancer risk values for speciated PCBs, and updated chronic and cancer risk values for 2 PCDDs, and 1 PCDF.

Table I of Rule 1401 lists those chemicals which have finalized risk values to be used in processing permits for new, relocated or modified sources. The proposed amendment would specify an effective date for analyzing cancer risk for naphthalene and speciated PCBs based on the date of Board approval. The effective date for the new values will be the date of adoption of the rule amendments or the date of implementation of AQMD’s revised Risk Assessment Procedures for Rules 1401 and 1402 (Version 7.0), whichever is later. In the interim, the Unit Risk Factors and Reference Exposure Levels in the current AQMD Risk Assessment Procedures should be used to calculate risk for these compounds. Since the PCDD and PCDF values are updates, the original date of listing will remain in the rule.

In addition, the proposed amendments would update the definition for Maximum Individual Cancer Risk (MICR) in both rules. The change would delete the 46-year worker exposure time and reference the Risk Assessment Procedures. The revised Risk Assessment Procedures use a 40-year worker exposure time. This change is proposed in order to be consistent with OEHHA’s new risk guidelines. An additional amendment is proposed in Rule 1401 to clarify the emission calculations for new control equipment added to existing equipment to be consistent with the methodology used in New Source Review for criteria pollutants.

Staff conducted an assessment using the AQMD permit database to identify impacts on new permits. No new sources were found that emitted PCBs, PCDDs, or PCDFs over the past 5 years using historical permitting data. Several new sources of naphthalene were identified per year, primarily from fuel combustion. Because the emission factor for naphthalene is very small for fuel combustion, naphthalene’s risk contribution is minimal, resulting in only a small change (less than 3 percent) to the overall risk for these sources. Therefore, no permitting impacts are expected from the proposed rule amendments.

Using the AB2588 database, AQMD staff evaluated whether any additional facilities would be subject to Rule 1402 or if facilities currently subject to this rule may now need to install control equipment as a result of the new cancer risk value. No facilities were found to be affected by the changes. Several facilities have naphthalene emissions; however, since naphthalene’s contribution to overall risk is small, impacts to these facilities’ overall risk assessment are not expected. Therefore, staff recommends that the finalized risk values become effective for Rule 1402 purposes, one year after date of adoption for the proposed amendments.

Pursuant to the California Environmental Quality Act (CEQA) Guidelines §15164, the SCAQMD has prepared an Addendum to the July 1998 Final Environmental Assessment (EA) for Rule 1401 – New Source Review for Toxic Air Contaminants, and March 2000 Final Environmental Assessment (EA) for Rule 1402 – Control of Toxic Air Contaminants from Existing Sources, to address the new cancer potency values and chronic RELs for certain toxic air contaminants. An addendum is the appropriate CEQA document for the proposed project because the proposed project constitutes a change to these previously approved projects and the changes do not trigger any conditions identified in CEQA Guidelines §15162. The Addendum to the Final EA concluded that the proposed cancer and chronic risk factors would not create any new significant adverse impacts or make substantially worse any existing significant adverse impacts generated by the original project. The proposed modification will not change the environmental analysis or conclusions in the previously certified Final EAs. Pursuant to CEQA Guidelines §15164 (c), an addendum need not be circulated for public review. Previously released CEQA documents can be obtained from the SCAQMD’s Public Information Center by calling (909) 396-2309.

No socioeconomic impacts are expected from the proposed amendments to Rules 1401 and 1402. Twelve facilities could potentially be affected by the proposed amendments to Rule 1402, and no facilities would be affected by the proposed amendments to Rule 1401. After further analysis, it is found that these 12 facilities are either below the priority score where a health risk assessment is required or have already been required to perform a health risk assessment under AB 2588. No permitting impacts are expected based on a review of five years of historical permitting data. No facility impacts are expected since the contribution of naphthalene to the overall risk is so small, particularly for combustion sources.

Rule 1401 is in part mandated by state and federal requirements. The proposed changes to Rule 1401 are consistent with CARB guidelines for toxic New Source Review, as required by Health & Safety Code section 39666(e).

A public workshop was held on January 13, 2005. Approximately 20 people attended. All comments have been responded to in the staff report. A question was raised as to whether the new naphthalene cancer risk value would impact new sources or existing facilities. Data analysis did not indicate significant impacts due to the small contribution of naphthalene emissions to overall risk.

Existing AQMD resources will be used to implement Proposed Amended Rules 1401 and 1402. The Risk Assessment Procedures for Rules 1401 and 212 (guidance document) have been updated for use in analyzing permit applications for new, modified or relocated equipment and Rule 1402 existing facilities emitting the affected compounds and will be implemented in spring 2005.

Proposed Amended Rules 1401 – New Source Review of Toxic Air Contaminants and
1402 – Control of Toxic Air Contaminants from Existing Sources
and
Report on Impacts Relative to Sources Subject to Rule 1402

Establish an effective date for Rule 1401 of date of adoption or date of implementation of applicable Risk Assessment Procedures for naphthalene, speciated PCBs, 2 PCDDs, and 1 PCDF which are listed in Table I of Rule 1401, and for which finalized cancer and chronic risk values have been established by OEHHA.
Establish an effective date for Rule 1402 analyses which is one year from the date of adoption of amended Rule 1401.
Change the definition of MICR in Rules 1401 and 1402 by deleting the 46-year exposure time for worker receptors and adding a reference to the Risk Assessment Procedures for consistency with OEHHA’s new risk assessment guidelines.
Clarify the calculation methodology for adding new air pollution controls to existing equipment for consistency with New Source Review for criteria pollutants.
No impacts are anticipated in conjunction with these actions for new permits subject to Rule 1401 or existing facilities subject to Rule 1402.

There were no key issues identified relative to proposed changes to Rules 1401 and 1402 or the report on potential impacts for facilities subject to Rule 1402.

Proposed Amended Rules 1401 - New Source Review of Toxic Air Contaminants and 1402 - Control of Toxic Air Contaminants from Existing Sources

A Resolution of the Governing Board of the South Coast Air Quality Management District (AQMD) certifying the Addendum to the June 1998 Final Environmental Assessment for Rule 1401 (certified at the July 1998 Governing Board meeting) and the March 2000 Final Environmental Assessment for Rules 1402 and 1401 (certified at the March 2000 Governing Board meeting).

A Resolution of the AQMD Governing Board to Amend Rule 1401 - New Source Review of Toxic Air Contaminants and Rule 1402 – Control of Toxic Air Contaminants from Existing Sources to Receive and File a Report on Potential Impacts Relative to Sources Subject to Rule 1402 – Control of Toxic Air Contaminants from Existing Sources.

WHEREAS, a need exists to amend current Rules 1401 and 1402 to accomplish the following:

WHEREAS, a need exists to amend current Rule 1402 to preserve the original intent of the rule, as stated upon its adoption, by changing the definition of Maximum Individual Cancer Risk to be consistent with new OEHHA risk assessment guidelines; and

WHEREAS, the SRP has approved cancer and chronic risk values developed by OEHHA for 12 speciated polychlorinated biphenyls (PCBs), 2 polychlorinated dibenzo-p-dioxins (PCDDs), and 1 polychlorinated dibenzofuran (PCDF) on August 29, 2003, and for a cancer risk value for naphthalene on August 2, 2004; and

WHEREAS, Rule 1401 requires that within 150 days of new or updated risk values being finalized by the SRP and the OEHHA, staff will bring forth proposed rule amendments and conduct an assessment, including socioeconomic effects, of the impacts associated with the newly approved risk factors; however, inclusion of PCBs, PCDDs, and PCDF in Rule 1401 was not possible within that timeframe because the risk values were calculated based on new OEHHA risk guidelines which had not yet been implemented by the AQMD, and is now being done in conjunction with implementation of AQMD’s revised risk assessment procedures; and

WHEREAS, Rule 1402 and the adoption resolution in March 2000 require staff to promptly notify the Governing Board and affected facilities after OEHHA finalizes the identification of a new Toxic Air Contaminant (TAC) or revises a risk value for an existing TAC; and

WHEREAS, consistent with Rule 1402 and the March 2000 adoption resolution, staff provided notification to the Governing Board on December 3, 2004 for the speciated PCBs, PCDDs, PCDF, and naphthalene ; and

WHEREAS, Rule 1402 and its resolution require that within 150 days of new chemicals being identified or changes in risk values being finalized by OEHHA, staff will provide a report to the Governing Board regarding a preliminary estimate of Rule 1402 program impacts that are associated with the new risk value; however, inclusion of PCBs, PCDDs, and PCDF in Rule 1401 and the Rule 1402 impact analysis was not possible within that timeframe because the risk values were calculated based on new OEHHA risk guidelines which had not yet been implemented by the AQMD, and is now being done in conjunction with implementation of AQMD’s revised risk assessment procedures; and

WHEREAS, Rule 1402 and its resolution require that use of any new TAC or a more stringent risk value in health risk assessments for Rule 1402 shall take effect 12 months after the Governing Board receives and files the report containing the initial notification, unless the Board approves a different implementation schedule; and

WHEREAS, consistent with Rule 1402 and its adopting resolution, use of new TACs and more stringent risk values for Rule 1402 will be 12 months after date of adoption; and

WHEREAS, the AQMD staff conducted a public workshop regarding the proposed amendments to Rules 1401 and 1402 and potential impacts relative to sources subject to Rule 1402; and

WHEREAS, the AQMD has had its regulatory program certified pursuant to Public Resources Code Section 21080.5 and has conducted CEQA review and analysis pursuant to such program (Rule 110); and

WHEREAS, the AQMD staff has prepared, pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15164, an Addendum to the June 1998 Final Environmental Assessment for Rule 1401 (certified at the July 1998 Governing Board meeting) and the March 2000 Final Environmental Assessment for Rules 1402 and 1401 (certified at the March 2000 Governing Board meeting) to address the addition of a cancer risk value for Rules 1401 and 1402; and

WHEREAS, the AQMD staff conducted an assessment pursuant to paragraph (e)(3) of Rule 1401 and found that the new cancer risk value will not result in adverse environmental impacts; and

WHEREAS, the AQMD Governing Board has determined that the requirements for a subsequent environmental assessment have not been triggered pursuant to CEQA Guidelines Section 15162 and that an addendum to the previously certified EAs to Rules 1401 and 1402 is appropriate; and

WHEREAS, pursuant to CEQA Guidelines Section 15164(c) an addendum need not be circulated for public review; and

WHEREAS, it is necessary that the adequacy of the environmental document be determined by the AQMD Governing Board prior to its certification; and

WHEREAS, the Board package includes the June 1998 Final Environmental Assessment for Rule 1401 (certified at the July 1998 Governing Board meeting) and the March 2000 Final Environmental Assessment for Rules 1402 and 1401 (certified at the March 2000 Governing Board meeting), as well as the addendum to these certified Final EAs and other supporting documentation, and this information was presented to the AQMD Governing Board and that the Board has reviewed and considered the entirety of this information before approving the staff recommendations; and

WHEREAS, the AQMD is not required to prepare a Statement of Findings, a Statement of Overriding Considerations, or a Mitigation Monitoring Plan because the proposed project is not expected to generate significant adverse environmental impacts; and

WHEREAS, the AQMD Governing Board obtains its authority to adopt, amend, or repeal rules and regulations from Sections 39002, 39650 et seq., 40000, 40001, 40440, 40441, 40463, 40702, 40725 through 40728, 41508, 41700, 41706, 42300, and 44390 through 44394 of the California Health and Safety Code; and

WHEREAS, the AQMD Governing Board has determined that a need exists to amend Rules 1401 and 1402 to further protect the public from cancer and non-cancer effects of TACs; and

WHEREAS, the AQMD Governing Board has determined that the proposed amendments to Rules 1401 and 1402 are written and displayed so that the meaning can be easily understood by persons directly affected by them; and

WHEREAS, the AQMD Governing Board has determined that Rules 1401 and 1402, as proposed to be amended, are in harmony with, and not in conflict with, or contradictory to, existing statutes, court decisions, or state or federal regulations; and

WHEREAS, the AQMD Governing Board has determined that Rules 1401 and 1402, as proposed to be amended, do not impose the same requirement as any existing state or federal regulation, and the proposed amended rules are necessary and proper to execute the powers and duties granted to, and imposed upon, the AQMD; and

WHEREAS, an analysis as required by Health & Safety Code Section 40727.2 has been prepared for Rule 1401 and is incorporated in the staff report for proposed amended Rules 1401 and 1402; and

WHEREAS, the proposed amendment to Rule 1402, a definition change, is administrative in nature and, therefore, no analysis is required by Health & Safety Code Section 40727.2; and

WHEREAS, the AQMD Governing Board in amending the regulations, references the following statutes which the AQMD hereby implements, interprets or makes specific: Health and Safety Code Sections 39666 (District New Source Review rules for toxics), 41700 (nuisance), 44391 (risk reduction plans), and Federal Clean Air Act Section 112 (Hazardous Air Pollutants); and

WHEREAS, Proposed Amended Rules 1401 and 1402 are not control measures in the 2003 Air Quality Management Plan (AQMP) and thus, were not ranked by cost-effectiveness relative to other AQMP control measures in the 2003 AQMP and further, that cost-effectiveness in terms of dollars per ton of pollutant reduced is not applicable to rules regulating toxic air contaminants; and

WHEREAS, the AQMD Governing Board has determined that the Socioeconomic Impact Assessment of Rules 1401 and 1402 contained within the staff report as proposed to be amended, is consistent with the March 17, 1989 and October 14, 1994 Board Socioeconomic Resolutions for rule adoption; and

WHEREAS, the AQMD Governing Board has determined that the Socioeconomic Impact Assessment contained within the staff report complies with the provisions of Health and Safety Code Sections 40440.8 and 40728.5, and that Section 40920.6 is not applicable to rules regulating toxic air contaminants; and

WHEREAS, the AQMD Governing Board has actively considered the Socioeconomic Impact Assessment contained within the staff report and has made a good faith effort to minimize such impacts; and

WHEREAS, the AQMD specifies the Manager of Rules 1401 and 1402 as the custodian of the documents or other materials which constitute the record of proceedings upon which the adoption of this proposed amendment is based, which are located at the South Coast Air Quality Management District, 21865 Copley Drive, Diamond Bar, California; and

WHEREAS, a public hearing has been properly noticed in accordance with all provisions of Health and Safety Code Section 40725; and

WHEREAS, the AQMD Governing Board has held a public hearing in accordance with all provisions of law; and

WHEREAS, the AQMD Governing Board voting to adopt proposed amended Rules 1401 and 1402 and to receive and file the report on potential impacts relative to sources subject to Rule 1402 has reviewed and considered the information contained in the Final Environmental Assessment for proposed amended Rules 1401 and 1402 and potential impacts relative to sources subject to Rule 1402, and has determined that the document has been completed in compliance with CEQA.

NOW, THEREFORE BE IT RESOLVED, that the AQMD Governing Board certifies the Addendum to the July 1998 Final Environmental Assessment for Rule 1401, and March 2000 Final Environmental Assessment for Rules 1401 and 1402; and

BE IT FURTHER RESOLVED that the AQMD Governing Board does hereby amend, pursuant to the authority granted by law, Rules 1401 and 1402, as set forth in the attached, and incorporated herein by reference.

BE IT FURTHER RESOLVED that the AQMD Governing Board does hereby receive and file the report on potential impacts relative to sources subject to Rule 1402.

BE IT FURTHER RESOLVED that the AQMD Governing Board establishes the effective date of March 4, 2006 to use the new cancer and chronic risk values for naphthalene, speciated PCBs, 2 PCDDs, and 1 PCDF in health risk assessments for Rule 1402.