BOARD MEETING DATE: July 7, 2006
AGENDA NO.34

PROPOSAL:

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

SYNOPSIS:

Board consideration of subdivision (q) of Proposed Amended Rule 219 was previously continued to the July 7, 2006 meeting along with relevant Board Resolutions to allow time for additional public review of this section pertaining to permits for agricultural equipment at small agricultural operations.

COMMITTEE:

Stationary Source Committee, May 26, 2006, June 23, 2006

RECOMMENDED ACTION:

1. Adopt revised resolution;
2. Certify the Notice of Exemption for Proposed Amended Rule 219 - Equipment Not Requiring a Written Permit Pursuant to Regulation II; and
3. Amend Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II, subdivision (q).

Barry R. Wallerstein, D.Env.
Executive Officer

Background

Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II, is an administrative rule that was first adopted in 1976.  It exempts equipment emitting small amounts of air contaminants from District permit requirements.

At the May 5, 2006 meeting, the Board adopted Proposed Amended Rule 219 as proposed but continued consideration of subdivision (q), paragraphs (1) and a portion of paragraph (2) to June 2, 2006.  At the June 2, 2006 Board meeting, PAR 219 subdivision (q) and a portion of paragraph (q)(2) was then continued to the July 7, 2006 meeting.  These continuations were to allow staff and the agricultural community to continue their efforts toward resolving certain issues related to proposed permitting of new and modified Internal Combustion Engines (ICEs) and gasoline storage and dispensing equipment operated by small agricultural operations.  Several meetings and teleconferences were held with the SB 700 Agricultural Working Group in May and June 2006.  In these meetings, staff and representatives of the Farm Bureaus discussed ways to bring equipment into the permitting program and compliance with specific rule requirements (e.g. Rule 1110.2).

The staff report dated May 2006 is attached as a reference with respect to the proposal for modifying the agricultural exemption (see Appendix E, page A-8 to A-13).

Background on the Specific Proposal under Subdivision (q)

• Proposed amended Rule 219 exempts from permits the emergency engines (new or existing), existing non-emergency engines, and existing gasoline storage and dispensing equipment.  Staff is proposing to bring this equipment under an alternative permitting program as part of a future amendment.
• Staff is proposing to permit new or modified natural-gas or LPG fueled engines under the Streamlined Standard Permit (SSP) Program.

Staff has prepared a draft Streamlined Standard Permit with standardized permit conditions for new or modified ICEs that will be available to the agricultural operators as well as non-ag businesses at a significant reduced fee compared to the regular permits (see Attachment C).

Staff has also prepared new resolution language that clarifies that the findings relative to the proposed permitting of agricultural equipment reflecting the state of air quality of the South Coast region.  Staff has prepared additional resolution language to develop a future alternative permitting process for existing non-emergency ICEs, existing or new emergency ICEs; and existing gasoline storage and dispensing equipment that are currently not subject to permitting.  In addition, a new resolution is added directing staff to establish streamlined standard permit conditions for farm engines pursuant to Rule 1110.2(h)(12) exemption when such engines are made available.  In Attachment B, the two (2) continued resolutions are shown in italics and the five (5) new resolutions are underlined.

The remaining issues center on permit fees and annual emission reporting (AER) fees for the farmers.  These are as follows:

Key Issues

• Comment:  Provide a reduced fee for farm engines (new/modified), for engines 250 hp and less than 800 hours operation, $300 for application/permit processing and $150 for annual operating fee.

Response: Staff does not recommend a reduction of fees.  The SSP processing fee is already discounted by almost 70% and the annual operating fee is consistent with other equipment under the SSP Program (and consistent with Rule 312).  Any further fee discounts would create an inequity with similar sources.

• Comment: For other non-emergency engines (> 250 hp), regardless of permit application category (regular or SSP), apply the same fee as SSP fee.

Response:  Staff does not recommend this.  If an applicant chooses the regular permitting process instead of the SSP Program, then the regular permitting fee applies.  Again, a fee discount would create an inequity.

• Comment:  Exemption from Annual Emission Reporting (AER) and associated fees to significantly reduce the time for preparation of the necessary paperwork.

Response:  Staff does not believe that the Annual Emission Reporting will cause any significant burden in terms of time and paper work on low-emitting farmers.  Staff also believes that a majority of the small farms will be exempt from AER and will only be subject to a flat fee of $90.08 per year if they are in the permit system.  Staff is available to help them prepare AER forms and to assist in the emission calculations, if requested.  Staff does not recommend exemption from AER and emission fees.  

Update on Future Rule 219 Issues:

Ultra Violet (UV) and Electron Beam (EB) Issue:

At the May, 2006 Public Hearing on PAR 219, the Board directed staff to report back by the July 7, 2006 Board meeting with a timeline for addressing the following concerns raised during public testimony.  First, and as background, Rad-Tech, an association of equipment manufacturers, proposed to exempt spray systems with a high transfer efficiency that uses low VOC ultraviolet (UV) and electron beam (EB) materials. Because some of the automatic spray machines emit greater amounts of emissions, staff would not agree to the broad exemption as proposed by RadTech.  At the Board’s request, staff presented this proposed exemption to the Permit Streamlining Task Force which expressed support for staff’s current position on the proposed exemption.

Staff has also met with representatives of Wavefront Technology, Inc. to obtain more information on another proposed exemption for a roll-to-roll manufacturing process that uses very low VOC materials.

Staff is preparing to hold a public workshop later this year and will determine whether to propose amendments to Rule 219 during the first 6 months of next year to consider the issues raised concerning these processes.

At the Stationary Source Committee meeting on June 23, 2006, a representative of RadTech reiterated the request that the Board consider an amendment to PAR 219 to immediately exempt automated spray enclosures using low-VOC UV/EB materials.  Staff will study the proposed exemption within the context of other small emitting sources in the timeframe outlined above. 

Attachments (EXE 335 KB)
A. Notice of Exemption
B. Board Resolution with Continued and New Resolutions
C. Standard Streamlined Permit
D. Proposed Amended Rule 219 – Equipment Not Requiring a Written Permit Pursuant to
    Regulation II
E. May 2006 Staff Report, PAR 219 - Equipment Not Requiring a Written Permit Pursuant to
    Regulation II