BOARD MEETING DATE: May 5, 2006
AGENDA NO. 33

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

SYNOPSIS:

This proposal adds new exemptions, simplifies or clarifies certain existing exemptions and removes some existing exemptions applicable to certain agricultural equipment and hydrogen fluoride, LPG and anhydrous ammonia storage and transfer equipment above certain size.

COMMITTEE:

Stationary Source, March 30, 2006, and April 28, 2006 Reviewed

RECOMMENDED ACTIONS:

Adopt the attached resolution:

1. Certifying the Notice of Exemption for Proposed Amended Rule 219-Equipment Not Requiring a Written Permit Pursuant to Regulation II
2. Amending Rule 219 – Equipment Not Requiring a Written Permit Pursuant to Regulation II.

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.

With this amendment, staff is proposing to exempt certain small emission sources, remove exemptions for certain sources and further clarify existing exemptions.  In particular, the proposed amendments include a modification to the agricultural exemption to require permits for small non-emergency agricultural internal combustion engines and gasoline storage and transfer equipment.

To fulfill the permitting requirements of SB 700, the District amended Rule 219 in December, 2004 to require written permits for large agricultural operations only.  As part of the District’s steps to further implement this state law, on June 3, 2005, the Governing Board adopted amendments to Rule 461, Gasoline Transfer and Dispensing and Rule 1110.2, Gaseous and Liquid-Fueled Engines (ICEs) to remove the exemptions for agricultural sources.  In amending these rules, the Board adopted a resolution that directed staff to prepare an amendment to Rule 219 that will require all agricultural fuel dispensing tanks and (non-emergency) engines subject to these rules to have an AQMD permit and bring it to a public hearing for Board consideration.

Proposal

Proposal to Exempt Equipment from Permitting

Staff proposes to exempt 14 categories of equipment with very small potential for emissions including control equipment to the basic equipment exempt under Rule 219, hand applications of certain materials and water based fluorosilicic acid storage and transfer equipment (see Attachment A for details).

Agricultural Sources to be Permitted

The proposed amendments to Rule 219 are intended to implement the Board’s direction to require written permits for this equipment operated by agricultural operations with emissions less than 50 percent of the Title V thresholds and make the necessary findings under SB 700 of (1) necessity and (2) that the requirement to obtain a permit from such sources is not significantly more burdensome compared to other similar sources within our jurisdiction.

For gasoline storage tanks, staff is proposing that permits be required for those tanks with a capacity of greater than 251 gallons that are purchased or modified after June 3, 2005.  For stationary non-emergency internal combustion engines, staff is proposing that permits be required for agricultural ICEs with more than 50 brake horsepower.  For both types of equipment, these provisions will apply only to engines that are purchased or modified after May 5, 2006.  Permits are necessary to allow AQMD staff to identify the location of sources, impose conditions necessary to ensure compliance with Rule 1110.2 and recover costs necessary for effective enforcement.  The permit requirements and associated fees are the same as those imposed on all other retail and non-retail operators subject to the requirements of Rules 461 and 1110.2.

Other Proposals

In addition to agricultural equipment mentioned above, staff proposes to establish thresholds, above which permits will be triggered, for hydrogen fluoride, LPG and anhydrous ammonia storage and transfer equipment.

In response to the comments received since the release of the set hearing package in April 2006, staff is proposing a few minor amendments to its original proposal.  Specifically, staff is proposing to withdraw the proposed exemption for passive venting systems used for preventing sub-slab methane accumulation for further review.  Roller to roller coating systems used to create 3-dimensional images and use very low-VOC material and drying equipment such as flash-off drying or curing oven, servicing low emitting equipment are proposed for exemption.

Key Issues

Representatives of the California Farm Bureau expressed concern that the process of obtaining a standard district permit may require consultant assistance and may delay the installation of needed equipment, instead, they recommended a more simplified process such as equipment registration and/or filings.  District staff’s evaluation of the standard permitting procedures and fees for these kind of equipment indicates that they are not too labor-intensive or burdensome.  Nevertheless, staff agreed to evaluate a simplified permitting process such as standard streamlined permits provided equipment vendors cooperate.  Standard streamlined permits are subject to BACT and other District requirements but are significantly less costly compared to regular permits.  Equipment registrations and filings on the other hand, are not subject to BACT and may not provide an equitable treatment among similar permitted sources.  It will be necessary for staff to consider equity among similar permitted sources and possible precedents that this decision may set.

All other remaining key issues have been resolved.

California Environmental Quality Act (CEQA) Analysis

Staff has reviewed the proposed rule pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15002(k)(1) and has concluded that the proposed project is administrative in nature and does not have a significant impact on the environment.  Therefore, it can be seen with certainty that there is no possibility that the proposed project may have a significant effect on the environment and, therefore, is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3).  Upon approval of the proposed project, a notice of exemption will be prepared pursuant to CEQA Guidelines Section 15062 and sent for posting to the county clerks in the four counties within the jurisdiction of the SCAQMD.

Socioeconomic Assessment

The primary socioeconomic impact of the proposed amendments to Rule 219 will be in removing the exemption from permitting for non-emergency internal combustion engines and equipment used in gasoline storage and/or transfer equipment purchased or modified after May 5, 2006 by agricultural sources.  The analysis in Appendix B concludes that there are no significant economic impacts on these sources and that the requirements do not impose more burdensome requirements than those for similar sources within this jurisdiction.

Implementation Plan

Staff will outreach to inform the general public and industry associations of the changes to Rule 219.  Notices will be sent to the operators of equipment affected by these changes.

Resource Impact

The District will lose some revenue due to the increase in exemptions; however, for most equipment proposed for exemption, there is no financial impact because there are no permits issued to such equipment.  Gains in revenue for categories proposed for permitting cannot be estimated precisely since the number of equipment involved in each category is unknown.

Attachments (EXE 288kb)
Summary of Proposal
Key Issues
Rule Development Process
Key Contacts List
Resolution
Proposed Rule Language
Final Staff Report and Socioeconomic Assessment
Notice of Exemption