### [exists;] If 

### the Kentucky 

### SIP 

### does not contain 

### an emissions limitation 

### for 

### a 

### source or

source category, the emissions 

### offset baseline involving the source shall 

### be 

### actual emissions determined under actual operating conditions for the 

### previous 

### two (2) 

### year period.(5) 

### Calculating offsetsfor existingfuel combustion sources. 

### (a) The emissions 

### for determining emissions offset credit 

### involving 

### an existing fuel combustion source shall 

### be the allowable 

### emissions 

### under the emissions limitation requirements 

### of the cabinetfor 

### thetype 

### of fuel being burned

### when 

### [cMbMmeJ the 

### new majorsource 

### or 

### major modification 

### applicationis

### filed. 

### (b) If

### the existing 

### source has switched 

### to a different type 

### of fuel at 

### some eartier date, a resulting 

### emissions reduction, either actual 

### or allowable, shall not be 

### used for emissions offset credit. 

### (c) If the existing 

### source 

### commitsto 

### switch to a 

### cleaner fuel at 

## somefuture 

### date, emissions offset credit based 

### on the allowable emissionsfor 

### the fuels involvedshall not be 

### allowed unless 

### the permit 

### is conditioned to 

### requirethe 

### use of 

### a specfled 

### alternative 

### control measurethat will achleve the 

### same 

### degree of emissions 

### reduction ifthe 

### source switches bad 

### to a 

### dirtierfuel 

### at 

### some laterdate. 

### (6) Calculating

### offsetsfor 

### operating hours 

### and 

### source shutdowns. 

### (a) 

### A source may 

### be credited with 

### emissions teduct'i)ns achieved by shutting 

### down 

### an existing 

### source or 

### permanently curtailing production

### or operating hours below baseline 

### levels if 

### the work 

### force to 

### be affected has 

### been notified in writing 

### of 

### the proposed 

### shutdown orcurtailment. 

### (b) 

### Soum shutdowns 

### and curtailments in production 

### or opemting 

### hoursoccurring prior to the 

### date the new 

### source application 

### is filed shall not 

### be used for emissionsoffset credit. (c) If an applicant 

### can establish that it shut 

### down or 

### curtailed production after August 7, 1977, or less than 

### one (1) year prior to the date 

### of pernit application, whihever is earlier, and the proposed 

### new 

### source is

### a replacementfor the shutdown

### or curtailment, credit for 

## the [SOtGk] shutdown or curtailment may 

### be applied to offset emissionsfrom 

### the new source. (7) Calculating offsets for hydrocarbon substitution. An emissions offset credit 

### shall be 

### allowed for replacing one volatile organic compound with another of lesser photochemical 

### reactivity, unless the replacement 

### compound is methane, ethane, 1.1.1- trichloroethane. or 

## 1-1 trichIoTOfluomethane. (8) Bankingof emissions offset 

### credit. (a) 

### New sources obtaining permits 

### by applying offsets 

### after the effective date of 

### this administrative regulation

### may bank offsets that 

### exceed 

### the requirementsof 

### Section 5(3) of this administrative regulation. 

### (b) An owner or operator of an existing 

### source that 

### reduces 

### its 

### own emisdons 

### may bank 

### a resulting reduction beyond 

### those required by negulationfor use underthis 

### administrative regulation, even if 

### the 

### offsets are applied immediately to 

### a 

### new source permit. (c) 

### Banked 

### emissions offsets may be 

### used under 

### the preconstmdion review 

### program required 

### in 42 

### U.S.C. 7401 to 7626, 

### as long as 

### these banked emissions 

### are identffiedand accounted

### for in Kentucky's control

### strategy. (9) Offset Mi for 

### meeting NSPSor 

### NESHAPS.(b) An internal emissions 

### offset shall be included and 

### made enforceable 

### as a conditionof 

### the source's permit. 

### (c) An external emissions offset shall only 

### be accepted if the cabinet requiresthe affected 

### sourceto comply 

### with a new emissions limitation to ensure that its emissions shatl 

### be reduced 

### by a specified 

### amount in 

### a specified time; and the new emissions limitationshall be enforceable bythe cabinet and 

### the U.S. EPA. (3) Cabinet initiated emissions offsets. (a) 

### The cabinet may commit 

### to reducing emissions fmm mobile sources and other existing sources to provide a net air quality benefit in the impact area of a proposed 

### newsource to accommodatethe proposed new 

### source. (b) This emissions reduction commitment shall be reflected in the emissions fitnitation

### requirementsfor 

### the new and existing 

### sources 

### as requimd bythis section. Section 

### 7. 

### Source Obligation. (1) An owner or 

### operator of a 

### source or modification subject to 

### this administrative regulation shali 

### construct and opefate the



### source or modification 

### in accordance

### withthe application submittedto the cabinet under this administrative regulation and 401 

### KAR 52:020 or under

### the terms 

### of an approval to construct. 

### (2Xa)Appmval to constructshall 

### become invalid if construction: 1. Is 

### not commenced within eighteen (18) 

### months after receiptof the approval; 

### 2. Isdiscontinuedfor 

### a periodof eighteen(1 8) monthsor more; or 

### 3. 

### Is not completedwithin a reasonabletime. 

### (b) 

### The 

### cabinet may 

### extend the 

### elghteen (18) month 

### period upon a 

### satisfactory demonstration[ekwkg] that 

### an extension isjustified.

### I.An extension shall not apply to 

### the time period between construction of the approved phasesof 

### a phased construction project; and 

### 2. Each 

### phase shall commence oonstruction within eighteen (18) months of 

### the projected and approved 

### commencement date. (3) 

### Approval to construct shall not relieve an owner or operator of the responsibilityto comply fully with applicable provisions of 401 KAR 

### Chapters 50 

### to 

## [a] and 

# [w] other awlicable 

### requirementsunder local, state, orfederal law. (4) 

### If 

### a particular source or modification becomes a 

### major stationary source or 

### major modification solely by virtue of 

### a relaxation in an enforceable limitationwhich 

### was established after 

### August 7, 1980, 

### on the capaclty 

### of the source or 

### modification 11 

### otherwise to 

### emit a pollutant, 

### the requirements of this 

### administrative regulation shall 12 

### apply to 

### the source or modification as 

### though construction had 

### not yet commenced on 13 the source 

### or modification. 14 

### @)(a) The pmvisions of this subsection shall apply 

### to projects at existing 15 

### emissions units at a 

### major stationary source other than projects at a 16 sourcewiihaPAL,if: 17 1. 

### There 

### is 

### a reasonable possibility that 

### a project 

### that is not part of a 

### major 18 

### modificationmay 

### result ina signitimnt

### emissions increase; and 19 2. The 

### owneror operator 

### uses the method 

### specified in 

### 401 KAR 51

### :001, Section 20 If199 WbH@W++)] 

### to calculate projected 

### actual emissions. 21 (b) Before 

### beginningactual 

### constructionof 

### a project 

### specified in paragraph (a) 

### of 22 

### this subsection, 

### the owner 

### or operator shall 

### document and maintain 

### a 

### record of 

### the 23 following information:

### 1.A description of the 

### project; 2. Identification of the emissions units for 

### whiemissions of a regulated 

### MSR pollutant may be affected bythe project; and 3. A description of the applicability

### test 

### used to determine that the project is not a major modificationfor any regulated NSR pollutant, including:

a. Baselineactual emissions; b. Pmjected actual emissions;

c. Amount of emissions excluded in calculating projected actual emissions and



### an explanationfor why that 

### amountwas excluded;and d. Any applicable netting calculations. (c) For a project specified in paragraph 

### (a) of this subsection, the owner or operatorshall: 1. Monitorthe emissions of any regulated NSR pollutantthat could increaseas a 

### result of the project 

### and that 

### are emitted by an emissions 

### unit identified 

### in paragraph (a)2 ofthis subsection; and 2. Calculate and maintain a record of the annual emissions, 

### in tons peryear 

### on a calendaryear basis, for:



### a. Five (5)yearsfollowing resumptionof regularoperations

### afterthe change; or 

### b. Ten (10) 

### years if the project 

### increases the design capacity of 

### or potential to 

### emit

### for that regulated 

### NSR pollutantat 

### the emissions 

### unit. (d) If 

### the unit is 

### an existing 

### EUSGU, before begtnning actual oonstmdion, 

### the

owneror operator. 1. Shail provide 

### a oopy of the infodin

### in paragraph 

### (b) of this 

### subsectinn 

### tothe 

### cabinet; and 2. 

### Shall not 

### be required to obtain a 

### determination 

### from the cabinet 

### before 

### beginning actual construction; and 3. 

### Shall 

### submit a reportto 

### the cabinet

### within sixty (60) 

### days after

### the end of each year during 

### which records are required to 

### be generated 

### under paragraph (b) of this 

### subdon that contains 

### the unit's annual emissions during the 

### calendaryear 

### preceding report 

### submittal. (e)l. For an 

### existing unit other than 

### an EUSGU, the 

### owner or operator shall submit 

### a reportto the 

### cabinet if:

a. The 

### annual emissions, in tons per year, from a project 

### identifiied in paragraph (a) of this subsectinn 

### exceed the 

### baseline actual emissions, as documented and 

### maintained pursuant to paragraph 

### (b)3 of this subsection, by 

### a significant amount for that regulated NSR 

### pollutant; and b. The emissions 

### differfrom 

### the preconstrudion projection as documented and maintained pursuant

### to paragraph(b)3 of 

### this subsection. 2. The report

### shall be 

### submitted to the cabinet

### within sixty (60) 

### days 

### after

### the end of 

### the year during 

### which records are required 

### to be 

### generated 

### under paragraph (b) of 

### this 

### subsedlan and shall 

### contain

### the following:

a. 

### The name, address, 

### and telephone 

### numberof the 

### major

### statinary

### source; 

### b. The annual 

### emissions as calculated 

### pursuant to paragraph 

### (c) of this subsection; and

c. Any 

### other information 

### that 

### the owner or operator 

### wishes 

### to include in the report.1 

### (f) The owner or operator of the 

### source shall make 

### the 

### information requiredto 

### be 2 

### documented 

### and maintained under

### this subsection available for 

### review upon 

### requestfor 

### 3 inspection

### bythe cabinet

### orthe general public 

### pursuantto 401 

### KAR 52:100. 4 Section 8. Permit Condition Rescission. 

### (7) 

### An owr

### or operator holding a 5 

### permit 

### for a stationary source 

### or modification that 

### [W] was issued pursuant to 401 6 

### KAR 51:050 or [4@WAR]51:051E 

### may request that 

### the cabinet rescind the applicable 7 conditions. 8 

### (2)The cabinet shall rescind a permitmnditiin 

### if

### the owner or owrator. 9 

### la) Requests 

### and ri] 

### demonstrates to the 10 satisfaction 

### of the cabinet 

### that this administrative regulation does not apply 

### to the 11 source 

### or modifcation 

### or to a portion of 

### the source or mod'ication if construction 

### will 12 

### havecommenced after September 22,1982; and 

### 13 fb) Demonstrates 

## [[I that the 

### rescissionwill not violatethe requirements

### of Sections 

### 4(3)and 7 of 

### this administrative regulation. Section 9. Class I Areas. (I) The following 

### areas&

### [weas]which were 

### in existenceonAugust 7,1977, shall be Class Iareas and shall 

### not be redesignated: (a) International parks; 

### (b) National wilderness 

### areas 

### and national 

### memorial parks 

### which exceed 5,000

acres in

### size; and 

### (c) National parksthat 

### exceed 6,000 am 

### in size. 

### (2) 

### Any 

### otherarea, unlessotherwise

### specifii in 

### the legislationcreating the area, 

### isdesignated 

### Class 

### I/ but may 

### be redesignated 

### as 

### provided in

### 40 

### C.F.R 51.166(g).

### (3) 

### The visibility pmtection requirements 

### of this administrative regulation shall apply only to 

### sourcesthat may impad

### a mandatory Class I

### federal area. (4) 

### The following areas 

### may be 

### redesignatedonly as 

### Class Ior 

### II: 

### (a) An 

### area which as of 

### August 7,1977, 

### exceeded 10,000 

### acres in size and 

### was

a 

### national monument, a 

### national primitive area, a 

### national preserve, a 

### national recreational area, a 

### national wild and 

### scenic river, a 

### national wildlife refuge, 

### a national lakeshoreor seashore; 

### and (b) 

### A national park or 

### nationalwilderness 

### area established 

### afterAugust 7, 

### 1977, which exceeds 

### 10,000 acres in size. Section 

### 10. Protection

### of Visibility. (1) New 

### source review; 

### [twbw-] applicability and exemptions. (a) A stationary source or 

### modification to 

### which this section 

### applies shall not begin 

### actual consbudion without a 

### permit that 

### states 

### the stationary source 

### or modification

### shall meetthe 

### requirements ofthis 

### section. (b) 

### This section 

### shall apply 

### to construction of a 

### new major stationary 

### source or major 

### modification that will be constructed 

### in an area designated as nonattainment under42 U.S.C. 

### 7407(d)(l KAXi) and potentially have an impact

### on visibility in 

### a Class I



### area. (c) 

### This section shall applyto 

### a major stationary source or major modification

### for each poljutant subject to regulation under 42 U.S.C. 7401 

### to 7626 

### that it 

### will 

### emit, except as provided inparagraphs

### (d)and 

### (e) of 

### this subsection. 

### (d) This 

### section 

### shalt not apply to 

### a particular major stationary 

### source or major 

### modificationif:1. The 

### source or modification is 

### a nonprofit health or 

### nonprofit educational institution, 

### or a 

### major modification will occur at the institution, and the Governor of 

### the Commonwealth requeststhat 

### it be 

### exempt

### from the requirements ofthis section; 

### and 2. The source is 

### a portable stationary 

### source that has previously received 

### a permit underthis section and will betemporarilyr€?kmted: and:



### a. 

### I-] The emissions 

### fmm 

### the source will not 

### exceed the allowable emissions; 

### b.The 

### emissionsfrom 

### the source will not

### impact a 

### Class 1 area or an area where an applicable increment is knownto 

### be violated; and

c. Reasonable notice is given 

### to the cabinet 

### priorto 

### the 

### relocation, identifying the 

### proposed 

### new location and the probable duration of operation at the 

### new location. 

### The notice shall 

### be given to the 

### cabinet not less than ten (10) days 

### in advance of the proposed relocation unless a different 

### time duration is previously approved by the cabinet Pursuanttothis section. [6abkek] 

### (ejThis section shall 

### not applyto 

### a major

### stationarysource or major rnodit"icati0n with respectto a particularpotlutant, if

### the altowable emissionsof that pollutantfrom the source, or

### the net emissions increase

### of that pollutantfrom

### the modification: 1. Wilf 

### not impact

### a Class 

### Iarea; 2. Will not

### impact an area 

### where an applicable incrementis 

### known to 

### be violated; and 

### 3.Will betemporary. (2) 

### Visibilii impactanalyses. 

### The owner

### oroperator of 

### a source shall pmvide an analysis 

### of the impairment

### to visibility 

### that 

### will occur in

### a Class 

### I

### area as a result 

### of 

### the

### source or modification 

### and general cornmetcia!, 

### residential, industrial, and 

### fWw#fbl 

### -1 other growth assodatedwith the 

### soumor modification. (3) Federal 

### land managernotification. (a) 

### The federal land manager and 

### the federal official charged 

### with direct responsibility for managementof Class I

### areas have 

### an affirmative responsibilityto 

### proted 

### the visibility 

### and other air 

### quality 

### related values of 

### the Class I 

### Iands and to consider, in consultation with the cabinet, if a proposed 

### source or modificationwill have



### an adverse impact 

### on these values. (b) 

### The cabinet shall provide 

### written notiition to 

### all affected 

### federal land managers and 

### to the federal official charged with direct responsibility for 

### management affands within the Class 

### I areaof a permitapplication 

### or an 

### advanced 

### notiiof a permit applmtion

### for 

### a proposed

### new major 

### statiinary source or major modification that may 

### affect visibility ina 

### Class 

### Iarea. The notifion

### shall:



### 1. Include

### a copy of 

### all information relevant

### to the permit 

### application; 2. 

### l3e submitted pursuant to 

## this paragraph 

### 1-1 within thirty (30) days 

### of receipt of 

### the permit application or advanced 

### notick of 

### permit application and at least 

### sixty (60) 

### days prior to a public 

### hearing on the application 

### for a permit 

### to oonstrud; 

### and 

### 3. Include [idde]

### an analysis of the 

### proposed source's anticipated impacts on visibility 

### in a 

### Class I

### area. (c)l. 

### The cabinet 

### shall consider an analysis by 

### the 

### federal land manager, pcovided

### within thirty (30) days of 

### the notifitionand analysis required by 

### paragraph(b) of 

### this subsection, that the proposed 

### new 

### major stationary 

### souroe or 

### major modifition

### 1 may have 

### an adverse impact onvisibility in

### a Class I

### area. 

### 2 2. If the cabinet 

### finds that 

### the analysis 

### does not demonstrate, to the satisfaction of the cabinet, that 

### an adverse 

### impact on visibility will result in the Class 

### I

### area, the cabinet shall, in 

### the public hearing notice required 

### in 401 KAR 52:100, either explain that decisionorgive noticeas

### to where the explanation can 

### beobtained. (d) Adverse impact on visibility as it applies to paragraph (c) 

### of this subsection shall bedetermined on 

### a case-by-case basis, taking into account the geographicextent, intensity, duration, frequency, and time of visibility impairments, and howthese factors correlate

### with 

### the times of visitor use of the Class I area, 

### and the frequency 

### and time of natural

### conditionsthat reduce visibility. (4) Public participation. The cabinet shall follow the applicable procedures of 401 

### KAR 52:100 in processing applications under this 

### section and 

### 1-1 shall follow the procedures 

### at 40 C.F.R. 52.21h1, 

### effective 

## [-I July 1,2003, to the extentthat 

### the proceduresof 401 KAR 52:100 do not apply. (5) National visibility goal. (a)

### The cabinet shall only issue permitsto those 

### sources for which emissions

### will be consistent with 

### making reasonable progress toward 

### the national goal of preventing 

### krture, 

### and remedying existing, impaiment

### of visibility 

### in Class 

### Iareas

### which impairment resuttsfrom manmade

### air pollutian. (b) In making the decision to 

### issue a permit, the cabinet may take into 

### account the overriding factors 

### of: I.

The cost of compliance; 23 

### 2. Thetime 

### necessaryfor compliance;3. The energy and non-air 

### [rwak]quality environmental impacts of compliance; and 4. The useful Ilfe ofthe 

### source. (6) Monitoring. 

### (a) The cabinet may require 

### monitoring of visibility in a Class 

### I area 

### near the proposed new stationary 

### source 

### or major modification using human observations, teleradiometers, photographic cameras, nephelometers, 

### fine particulate monitors, 

### or other appmpriate methodsas specified by 

### the U.S. €PA. (b)The 

### monitoring method selected shall be determined 

### on 

### a case-by-case basis bythe cabinet. 

### (c) The cabinet shall 

### not undertakevisibility monitoring in a 

### Class t 

### area without the approval ofthe federal land manager. (d) Data obtainedfrom visibility monitoringshall 

### be madeavailable to 

### thecabinet, the

### federal land manager, and the 

### U.S. €PA,

### upon request.

## CI Section



### ll.J14;1 Plant-wide 

### Applicability Limit Provisions. The cabinet 

### may approve the 

### use 

### of 

### an actuals PAL (PAL) 

### for an existing major 

### stationary source ifthe 

### PAL

### meetsthe requirementsofthis 

### section.(1) 

### General provisions. (a) 

### An owner or operator 

### may execute a project

### without triggering 

### major NSR, if 

### the source maintains its total source-wide emissions below the PAL level, meets the requirements 

### in this section, 

### and complies with 

### the PAL permit. 

### Ifthese conditions 

### are met, 

### a project: 1. 

### Shall not be 

### considered a major modification

### for the PAL 

### pollutarrt; 2. 

### Shall not 

### have to 

### be approved through Kentucky's major NSR 

### program; and 3. 

### Shall not 

### be subject to the 

### provisions of Section 7(4) 

### of this administrative regulation concerning restrictions on relaxing enforceable emissions limitationsthat the 

### major stationarysource usedto 

### avoid applicability ofthe 

### major NSR 

### program. (b) 

### Except as 

### provided under subparagraph 

### (I)(a)3 of this section, the 

### major stationary source shall continue 

### to comply with all applicable federal or 

### state requirements, 

### emissions limitations, and 

### work practice 

### requirements that 

### were established prior

### to 

### theeffectivedateof 

### the PAL. (c) The 

### cabinet shall not allow a PAL 

### for VOC 

### or NOx for 

### any 

### major stationary



### source 

### located inanextreme ozone 

### nonattainment

### area. (2) 

### Permit application 

### requirements. The owner 

### or operatorof a major 

### stationary



### source shall 

### submit the following information to 

### the cabinet 

### for appmval 

### as part of 

### an applicationfor a permit

### or permit 

### revision requesting

### a PAL: (a) 

### A list 

### of ail emissions 

### units at the 

### source 

### designated as small, significant or major, 

### based

### on their potentialto 

### emit; (b) Identification 

### of the federal 

### and state applicable requirements, emissions limitations, 

### and work 

### practice requirementsthat applyto 

### each emissions unit;

### (c) Calculations of the baseline actual emissions for 

### the emissions units with 

### supportingdocumentation; and 

### (d) 

### The calculation procedures

### the owner or 

### operator proposesto 

### use to convert the monitoring 

### system data 

### to monthly emissions and annual 

### emissions based on 

### a twelve (12) 

### month rolling total for 

### each month as 

### required by subsection (12)(a) 

### of this 

### section. (3) Establishing a PAL. The cabinet shall establish a 

### PAL at 

### a major stationary



### source ina

### federally enforceable

### permit pursuantto 

### the requirements

### of 

### this section. (a) The 

### PAL shall impose an annual emissions limitation 

### in tons per year that 

### is enforceable 

### as a 

### practical matter for the entire 

### major stationary 

### source, in which:

w9=+3 1. 

### For each 

### month during 

### the PAL effective period 

### after the fimt 

### twelve (12) 

### months 

### of establishing 

### a PAL, 

### the owner or 

### operator shall demonstrate jskevr] 

### that the



### sum of the 

### monthly emissions

### from 

### each emissions 

### unit underthe PAL for the 

### previous twelve (12) 

### consecutive months is less than 

### the PAL 

### as a twelve (12) 

### month average, rolled monthly; 

### and 2. 

### For each month during the first eleven (11) months 

### from the 

### PAL effective 

### date, the 

### owner or operator shall demonstrate 

### [skew] that 

### the 

### sum of the preceding monthly emissions from the PAL

### effective date 

### for each emissions

### unit underthe 

### PAL is lessthan 

### the PAL; (b) 

### The PAL shall be 

### established in

### a PAL 

### permitthat: 1. 

### Meets 

### tl?e public 

### parkipation 

### requirements in 

### subsection (4) 

### of this 

### section; and

### 2. Containsall 

### the requirementsof subsection 

### (6) of this sedion; (c) 

### A PAL shall include fugitive emissions, to the 

### extent 

### quantifiable, from all emissions 

### units that 

### emit or have 

### the potential to emit the 

### PAL pollutant 

### at the major stationarysource; (d) Each PAL shall regulate emissionsof only one (1) pollutant; (e) Each PAL shall havea PAL effective period often (10) years; (f) The owner or operator of 

### a major 

### stationary source with a PAL shall comply 

### with the monitoring, recordkaeping, and 

### reporting requirements of subsections 

# ill) to (13) of this section for each 

### emissions unit under the PAL through the PAL 

### effective period;

### and (g) 

### Emissions reductions of 

### a PAL pollutant that occur during the 

### PAL effective 

### period shall 

### not 

### be creditable 

### as decreases

### for offsets under 

### 40 C.F.R. 

### 51.165(aX3XiI), unless: 2. The level of the 

### PAL 

### is reduced by 

### the 

### amount of [&] emissions reductions; and 

### 2.' The redudionswould be creditable inthe absence 

### of the PAL. (4) 

### Public participation 

### requirements. PALSfor 

### existing major stationary sources shall be established, renewed, or increased pursuant to this subsection and the applicable procedures 

### of 4.01 KAR 52:lOO for issuing permits or permit 

### revisions. The 

### cabinet shall: 

### (a) Pmvidethe public

### with 

### notice 

### of the 

### pmposed 

### approval 

### of a PAL permit with 

### 22 

### at least

### athirty 

### (30) day 

### periodfor 

### submittal of public

### comment; and 

### 23 (b) 

### Address all material 

### comments 

### before taking final 

### action 

### on a PAL permkorpermit revision. (5) 

### Settingtheten (10)year 

### PAL level. (a) 

### The PAL 

### levelfor 

### a mapr statiinary source shall 

### be the 

### sum of the baseline actual emissions of 

### the PAL pollutant for 

### each emissions unit at 

### the source during the chosen twenty-four (24) month 

### period plus 

### the applicable 

### significant level for the 

### PAL pollutant 

### under the definition 

### for "significant" in 

### 401 

### KAR 51:001, Section I 

# [w] or under42 U.S.C. 7401 -7871q,

### [tbeA&] whichever is lower. (b) In establishing a 

### PAL level for 

### a PAL pollutant, only one 

### (1) consecutive twenty-four (24) month period shall 

### be used to determine the baseline actual emissions for all existing emissions units. (c) A different consecutivetwenty-four (24) month period may be 

### used for each different PAL pollutant. (d) Emissions associated 

### with units that 

### were permanently shutdown 

### after the chosen

### twenty-four(24) month period shall 

### be subtracted

### fmm the PAL level. (0) Emissionsfrom unitsfor 

### which actual oonstNCf'in 

### began afterthe twenty-four (24) month period shall be 

### added 

### to the PAL level 

### in 

### an amount 

### equalto 

### the potentialto emit of the units. (f) The cabinet shall 

### spec@ a reduced 

### PAL level 

### in 

### the PAL permit 

### to become effectii 

### on 

### the future 

### compliance date 

### of any applicable federal 

### or state 

### regulatory requirement

### thatthe cabinet is aware 

### of priorto issuance

### of the PAL permit. (6) 

### Contents 

### of 

### the PAL permit. The PAL 

### permit shall contain 

### the following information: - (a) 

### The PAL pollutantand 

### the applicable source-wide 

### emissions limitation intonsPeryear; 

### (b) The 

### PAL permit effective date and the expiration date of the 

### PAL or 

### Pa effective period; (c) Specification in 

### the PAL permit that if a major stationary source owner or operator applles to renew 

### a PAL under 

### subsection (9) of this section 

### beforethe end of 

### the PAL effective 

### periiid, 

### the PAL shall remain in effect until a revised 

### PAL 

### permit 

### is issued bythe cabinet; (d) A requirement that emissions calculations for compliance purposes indude emissions

### from stamps, shutdowns, 

### and [- malfunctions; (e)A requirementthat, once the PAL expires, the major stationary source &g@ be [is]subject to the requirements of subsedin (8) of this section; 

# - (f) The calculation proceduresthat the majorstationarysource 

### owner or operator shall use to convert the monitoring system data to monthly emissions and annual 14 emissions 

### based on 

### a twelve (12) month 

### rolling total for 

### each month as required 

### by 1

5 subsection (1 2Xa) of this section; 16 (g) A requirement 

### that the major 

### stationary sourn owner or operator 

### shall 17 monitor 

### all emissions 

### units 

### in accordance 

### with the 

### provisions in subsection 

### (12) of 

### this 18 section; 19 (h) A requirement that the owner or operator shall retain the records required 20 under subsection (12) of this section on site. 

### Records may be retained in an electronic C 

### 21 format or another acceptableformat 

### approved bythe cabinet; 

### 22

. 

### (1) A 

### requirement for 

### the owner 

### or operator to submit,' 

### by the reports 

### required 

### 23 undersubsection (1

### 3)of this 

### section by

### the 

### required deadlines; 

### and

51(j)

### Any 

### [Q#wJ requirements necessary

### to implement

### and enforcethe 

### PAL. (7)PALeffective 

### period and 

### reopening of 

### a PAL permit. (a) A 

### PALeffective period shall be ten (10) 

### years. (b) The cabinet 

### shall reopen 

### a PAL 

### permitto: 1. Correcttypographical 

### or calculation errors 

### made 

### in setting the PAL; 2. Reflect a 

### more accurate 

### determinationof emissions usedto 

### establishthe 

### PAL; 

### 3. Reduce the PAL 

### if the owner 

### or operator of 

### the 

### major stationary 

### source creates creditable 

### emissions reductions for 

### use as 

### offsets under 4.0 

### C.F.R. 51.165(a#3)(ii);or 4. Revise the PAL to reflect

### an increase in the PAL according to 

### subsection (10) of

### this section. (c) The cabinet may

### reopen the PAL permit,duringthe PAL effective period, to: 1. Reduce the PAL to reflect newly applicable 

### federal requirements with 

### compliance datesafterthe PAL effedie date; 

### 2. Reduce

### the PALconsistentwith 

### any other requirement:

a.That is

### enforceableas a practical matter, and b. That may be imposedon 

### the majorstationary 

### source

### underthe 

### SIP; and 

### 3. Reduce the PAL if the 

### cabinet determines that a 

### reduction is necessary 

### to avoid 

### cawing

### orcontributingto:



### a. A 

### NationalAmbient Air Quality 

### Standard (NAAQS) 

### or PSD increment

### violation;

or 

### b. 

### An adverse impact on visibility 

### or another air 

### quality 

### related value that has 

### been identifled 

### for a 

### federal Class 1 

### area by a 

### federal 

### land manager and 

### for whichinformation

### isavailabletothe general public. 

### (d) All permit reopenings shall 

### be carried out under the public participation requirements 

### of subsection 

### (4) of this section except for permit reopenings to 

### correct typographicalor calculation of errors that 

### do not increasethe 

### PAL level. 

### (8) Expiration of 

### a PAL. 

### A PAL that is 

### not renewed shall expire at 

### the 

### end of the 

### PAL effective period 

### and the requirementsof this subsdonshall then apply. 

### (a) Each emissions unit, 

### or each group 

### of emissions units, that existed underthe PAL shall comply with an allowable emissions limitation under 

### a revised 

### permit established as follows: 1. An owner or operatar of a major statbnarysource 

### using 

### a PAL shall submit 

### a proposed allowable emissions limitation for 

### each emissions unit, or each group of emissions units, 

### by distributing the 

### PAL allowable emissions for 

### the major stationary



### source among each of the emissions unitsthat existed under

### the PAL.

a. This proposal shall be submitted to the cabinet at least six (6) 

### months before the expirationof 

### the 

### PAL permit but not sooner

### than 

### eighteen (18) months 

### before permit expiration. b. Ifthe 

### PAL has not yet been adjusted for an applicable requirement that 

### became effective duringthe 

### PALeffective period, as required under subsection 

### (QHe) of this section, 

### distribution of allowable emissions shall be 

### made as if the 

### PAL has been adjusted. 

### 2. 

# me cabinet shall pmvide [BgdBe] 

### the date 

### and procedure 

### the owner 

### or operator shall 

### useto distributethe 

### PAL 

### allowable emisdons. 3. 

### The cabinet 

### shall issue 

### a revised pemit incorporating allowable limitsfor each

### emissions 

### unit, or 

### each group of emissions units, as 

### the cabinet 

### determines is appropriate. (b) 

### Each' emissions unit shall 

### comply with 

### the allowable emissions limitationon 

### a twelve (12) 

### monthtolling 

### basis. The cabinet may approvethe 

### use of monitoringsystems other than 

### CEMS, CERMS, 

### PEMS. or 

### [FGMS-w] CPMS 

### to demonstrate compliance with the 

### allowable emissions limitation. (c) The source 

### shall continue to comply 

### with a 

### source-wide, muhiunit emissions cap 

### equivalent to the level of the PAL 

### emissions limitation until the cabinet issues the 

### revised permit incorporating allowable limits for each emissions unit 

### or each group of emissions units. 

### (d) A major modification at 

### the major stationary source 

### shall be subject 

### to major NSR 

### requirements. (e) 

### The major stationary

### source 

### owner or operator shall 

### continueto comply with any state 

### or 

### federal applicable requirements eliminated by 

### the PAL 

### that applied during

or 

### before the PAL 

### effective period, 

### except for 

### those emissions limitations established pursuantto Section 7(4) 

### of this 

### administrative regulation. (9) 

### Renewal of a PAL. 

### (a) Publicparticipationrequirements. 1. 

### The cabinet shalt follow the public participation procedures specified 

### in 

### subsection (4) 

### of this section in approving 

### a request to 

### renew a PAL 

### for 

### a major 

### stationary

### source. 2. 

### The cabinet shall provide 

### a written rationafe

### for the 

### proposed PAL level 

### for public 

### review

### and comment.3. Any person 

### may propose 

### a PAL level

### for 

### the source for 

### consideration by the cabinet during

### the public 

### reviewperiod. (b) Application deadline. I. A major stationary source owner 

### or operator shall submit 

### an application for renewal of a PAL at 

### least six (6) months before the date of permit expiration but not earlier than eighteen (18) months before permit expiration. 2. The deadline for application submittal shalt ensure 

### that the permit shall not expire beforethe permit is renewed. 3. If a complete application for renewal is 

### submitted within the timeframe specified in subparagraph 1 

### of this paragraph, the 

### PAL shall continue to 

### be effective untilthe revised pernitwith the renewed 

### PAL is issued. 

### (c) Application requirements. 

### The application 

### to renew 

### a PAL permit shall contain: 1. The information required insubsection (2) of this din; 2. 

### A proposed PAL level; 3. The sum of 

### the potential to emit of all emissions units under 

### the PAL with supportingdocumentation; and 4. Any other informationthe 

### owner or operator wishes the cabinet to consider 

### in determining

### the appropriate levelto renew

### the PAL. 

### (d) PALadjustment. 1.A 

### PAL shall not 

### exceed 

### the 

### source's potentialto 

### emit The 

### cabinet shall 

### adjust the 

### PAL 

### downward 

### to a level 

### [w]greater 

### than 

### the potentialto emit if

### a soufcek potentiatto 

### emit has

### declined below

### the

### PAL level.2. The cabinet 

### may renew'the

### PAL at the same level 

### as the current 

### PAL wlthout considering

### the factors 

### specified in subparagraph 3

### of this section, ifthe emissions level calculated according to 

### subsection (5) 

### of this section is 

### equal to or 

### greater than eighty (80) percent of the PAL level; or 

### 3. Thecabinet

### may set the PAL at a 

### Ievel that isdetermined to be:

a. More 

### representativeof the 

### source's baseline

### actual emissions; or b. Apprupriate consideringthe followingfactors: (i) Air quality needs; (ii)Advances in controltechnology; (iii)Anticipated 

### economic growth in

### the area 

### of the 

### source; (iv) The cabinet's goal of promotingvoluntary emissions reductions; and 

### (v) Other

### factors as specifically identified bythe cabinet in its written rationalefor setting the PAL level. 4. The cabinet shall not approve a renewed PAL 

### level higher than 

### the current PAL, unless the major stationary 

### source has complied with the pmvisions 

### of subsection (10)of this 

### section. (e) The PAL shall be adjusted in coniunctin

### with the [- PAL permit 

### renewal or Tile

### V permit 

### renewal,whichever

### comesfirst, 

### t 1. 

### The compliance date for a state 

### or federal applicable requirement

### that applies to the PAL 

### source occurs during 

### the PAL effective 

### period; and 

### 2.The 

### cabinet has not

### already 

### adjusted for 

### [a&] requirement. (10) 

### increasing a 

### PAL during the 

### PAL effective 

### period. The 

### cabinet 

### may increase



### a PAL emissions limitationduring 

### the PAL

### effective period ifthe majorstationary

### source

### complieswith

### the provisionsof this subsection. (a) Application procedures. 

### To request an increase in the PAL limit for a 

### PAL major modffication,the 

### owner 

### or operator of 

### the major stationary 

### source shall submit a complete application, which shall include: 1. Identificationof the emissions 

### units contributing 

### to the increase 

### in emissions for the 

### PAL major modification; 2. Demonstration that increased PAL, as 

### calculated in paragraph 

### (c) of this subsection exceeds the PAL, and:

a. The level of control that results 

### from BACT equivalent controls on each significant or major emissions unit shall be determined by conducting a new BACT analysis 

### when [aHb-the] the application is submitted, 

### unless the 

### emissions unit 

### is currentfyrequired to comply with a BACT 

### or LAER requirement that was established 

### within 

### the precedingten (10) years. 

### b. If an emissions 

### unit currently complies with BACT or LAER, the assumed control level for that emissions unit 

### shall be equal to the 

### current level of BACT or LAER for that emissions 

### unit; and 3. 

### A statement that the increased 

### PAL level shad be effective on the day 

### any emissions 

### unit that 

### is part 

### of 

### the PAL major 

### modification becomes operational 

### and beginsto 

### emit

### the PAL pollutant. (b) NSR 

### permit 

### and compliance requirement. 

### The owner 

### or operator shall 

### obtain



### a major NSR permit for 

### all emissions 

### units contribMng

### to 

### the increase 

### in emissionsfor 

### the PAL 

### major modification. I.



### A significant 

### level shall not apply 

### in deciding

### for which 

### emissions units a dor

### NSR permitshall be obtained; and 

### 2. 

### Emissions units 

### that obtain 

### a major 

### NSR permit shall comply 

### with any emissions requirements resulting 

### from the major 

### NSR process, even though the units shall also 

### becomesubject to the 

### PAL or shall 

### continueto 

### be subjectto the 

### PAL. (c) Calculationof increased PAL. The cablnet shall calculate the 

### new PAL as 

### the

sum of the allowable emissions for 

### each or new emissions unit, 

### plus the sum of the baseline 

### actual emissions of the significant and major emissions units assuming applicationof BACT equivalent controls, plus 

### the sum of the 

### baseline actual emissions of

### the small emissions units. 

### (d) Public notice requirement.The public notice requirementsof subsectin (4) of 

### this sediion shall 

### be followed during PAL pemlt revisionfor 

### an increased PAL level. (I

1) Monitoring requirementsfor PALS. (a) General requirements. I.Each PAL permit shall 

### contain 

### enforceable requirements 

### for the chosen monitoring system that accurately determines plant-wide emissions 

### of the 

### PAL pollutant interms of 

### mass per

### unit of time; 2. A monitoringsystem 

### authorizedfor 

### use 

### inthe 

### PAL permit shall be:

a. 

### Approved bythe cabinet 

### pursuantto this 

### subsection; 

### [abhet+] and b. Based 

### on sound science 

### and meet generally-acceptable 

### scientific procedures for data 

### qualityand manipulation; 3. The data 

### generated 

### by a 

### monitoring system shall 

### meet minimum legal requirements for admissibilityina judicial 

### proceedingto 

### enforcethe 

### PAL permit; 4. 

### The PAL 

### monitoring system shall 

### employ 

### one (1) or 

### more of the four 

### (4)general 

### monitoring approaches meeting the 

### minimum requirements set 

### forth in paragraph (b) 

### of this subsection; 5. The 

### cabinet may approve 

### an alternative monitoring approach that meets the requirementsof subparagraphs 1

### to 3 

### of this paragraph; and 6. Failure

### to use 

### a monitoring

### system that meets

### the requirementsof this 

### sedin shall renderthe 

### PAL invalid. (b) 

### Minimum performance requirements

### for approved 

### monitoring approaches. 

### If conducted in accordance with the minimum requirements 

### in paragraphs (c) 

### to (i) of this 

### subsection,the following shall be 

### acceptable monitoringapproaches: I.



### Mass balance

### calculations for activities using 

### coatings or solvents; 2. CEMS; 3. CPMS 

### or PEMS; 

### and 4. Emissionsfactors. 

### (c) Mass balance calculations. An owner or operator using 

### mass balance calculations 

### to monitor PAL 

### pollutant emissions 

### from activities using 

### coatings or solvents 

### shafl: 1. 

### Provide 

### a demonstrated means of validating the published content of the PAL pollutant 

### [W] contained in 

### or 

### created by 

### all materials 

### used in or at 

### the emissions unit: 2. 

### If it 

### cannot be 

### accounted for in the process, 

### assume that the 

### emissbns unit 

### emits 

### all of the 

### PAL pollutant 

### [tbMs]contained in or 

### created

### by any 

### raw material

### or fuel 

### used in or 

### at the 

### emissions unit; and 3. 

### ff the 

### vendor of 

### the material 

### or fuel 

### from which 

### the pollutant originates

### publishes 

### a range, use the highest value of the published 

### range of pollutant content to calculate the 

### PAL pollutant emissions, unless the cabinet determines there is site

### specificdata or a site-specific 

### monitoring program 

### to support another pollutant content withinthe range. (d) CEMS. 

### An owner or operator using CEMS to monitor 

### PAL pollutant emissions shall meetthe following requirements: 1. CEMS 

### shall comply 

### with applicable Performance Specifications found in 40 C.F.R. Part 60, 

### A~oendix A; [Appw&&] 

### and 2. CEMS 

### shall sample, 

### analyze, and 

### record data 

### at least every 

### fifteen (15) 

### minutes while 

### the emissions unit 

### is operating. (e) CPMS 

### or PEMS. An 

### owner or operator using CPMS 

### or PEMS

### to monitor PAL 

### pollutantemissions shall meetthe

### following requirements: I. 

### The 

### CPMS or 

### the PEWIS shall be based 

### on current sitespecific data demonstrating a 

### cornlation between the monitored parameter and 

### the PAL pollutant 

### emissionsacross the range

### of operationof the emissions unit; 

### and 

### 2. 

### While the unit is operating, 

### each CPMS or 

### PEMS shall sample, analyze, and record data 

### at least every fifteen (15) 

### minutes, or at 

### another less frequent 

### interval 

### approved by

### thecabinet. 

## (9 Emissions 

### factors. An 

### owner 

### or operator using emissions factors to monitor PAL 

### pollutantemissions shall meetthe following requirements: 

### 1. All emissions 

### factors shall 

### be adjusted, if appropriate, to account 

### for 

### the degree of uncertaintyor 

### limitations inthe 

### fadorss development; 

### 2. 

### The emissions unit shall operate 

### within the 

### designated range of use 

### for theemissionsfactor, ifapplicable; and 

### 3. If technically practicable,

### the owner or operator of 

### a significant emissions unit that relies on an emissions factor to calculate PAL pollutant emissions shall conduct validation testing to determine 

### a site-specific emissions factor 

### within six (6) months of PAL permit issuance, unlessthe cabinet determines that testing is not required. (g) 

### A source owner or operator 

### shall record and report maximum potential emissions without considering enforceable emissions limitations or operational restrictionsfor 

### an emissions unit during any period of 

### time there is no monitoring data, unless 

### another method for determining emissions during the periods is 

### specified in 

### the PAL permit. 

### (h) If an owner or operator of an emissions unit cannot demonstrate

### a correlation betweenthe monitored parameters and the PAL pollutant

### emissions rateat all operating points of the emissions unit, 

### as an 

### alternative to the 

### requirements in paragraphs 

### (c) to 

### (g) of this subsection, in 

### coniunction with [- permit issuance 

### the cabinet shall: 1. Establishdefault values for determiningcompliancewith the PAL basedonthe highest potential emissions 

### reasonabv estimated at operating points if

### a correlation cannot be demonstrated; or 2. If there is 

### not a codation between monitored parameters 

### and the PAL pollutant emisdons, 

### determine that operation 

### of 

### the 

### emissions unit 

### during operaping conditiins

### is aviolation 

### of the 

### PAL. (i) 

### Revalidatin. All 

### data 

### used to establish

### the PAL pollutant shall 

### be revalidated through 

### performancetesting 

### or other scientifiilly-valid 

### meansapproved by

### the cabinet.

61Validation testing shall 

### occur at least 

### once every 

### five (5) 

### years after issuance of the PAL. (12) Recordkeeping requirements. 

### (a) The PAL permit shall require 

### an 

### owner or operator to retain 

### a copy 

### of all records necessary

### to determine compliance with any requirement of this section and 

### of the 

### PAL, induding 

### a determination of each emissions unit's twelve (12) month rolling total emissions

### forfive 

### (5) years from the date 

### of 

### the determination. (b) The PAL permit shall require an owner or operator to retain a copy of the following recordsfor the durationof 

### the PALeffective period plus

### five (5) years: 4. 

### A copy of the 

### PAL permit application and any applications 

### for revisions to the PAL; and 2. Each annual certificationof compliance pursuant to fileV and 

### the data used to certifythe compliance. (1

3) Reporling and notification requirements. The owner or operator shall submit semi-annual monitoring reports and prompt deviation 

### reports to the cabinet in 

### accordancewith 401 KAR Chapter 52 that meetthe following requirements: (a) Semiannual report. The semiannual report shall be submitted to the cabinet within thirty (30) 

### days 

### of 

### the end of 

### each reporting period and shall contain: 1. The identification

### of owner and operator and 

### the pertnit number; 2. Total annual emissions, 

### in tpy, 

### based on a twelve (12) month rolling total for 

### each month 

### in the 

### reporting 

### period recorded pursuant to 

### subsection (12)(a) 

### of this section; 

### 3. All 

### data used 

### in calculating 

### the monthly and annual 

### PAL pollutant emissions,including any quality assurance or qualitycontrol data; 4. A iist of any emissions units modified 

### or added to the major stationary source duringthe preceding six (6) month period; 5. The number, duratiin, and 

### cause of any deviationsor monitoring matfunctions, other than 

### the time associated 

### with 

### zero and span calibration 

### checks, and any 

### corrective adionfollowing a deviation; 6. A notificatiinof permanent or temporary shutdown of any monitoring system including:

a. The reasonfor the shutdown; b. 

### The anticipated date that the monitoring system shall 

### be fully operational 

### or shall be replacedwith another monitoringsystem;

c. If applicable, a statement that 

### the emissions 

### unit monitored by the monitoring system continuedto operatewithout the monitoring 

### system;and 

### d. 

### The calculation of 

### the emissions 

### of the pollutant 

### or 

### the number determined accordingto subsection (11 Xg) ofthis sectionthat is included inthe permit; and 7. A signed 

### statement bythe responsible official, as defined by 401 

### KAR 51:001, Section l(2101, 

# [m] certifying the truth, 

### accuracyI and completeness of the information provided 

### inthe semiannual 

### report. (b) 

### Deviation report. The major stationary source 

### owner or operator 

### shall submit reports 

### of any deviation or 

### exceedance 

### of the PAL requirements, 

### including periods monitoring is unavailable. 

### 1..

### A report submitted pursuant to 

### 40 C.F.R 70.6(@O()(iii)(B) shall 

### satisfy 

### this deviation reporting requirement;

### 2. The 

### deviation report 

### shall be 

### submitted

### within the 

### time hits

### prescribed by

### the applicable program 

### implementing

### 4-0 C.F.R. 70.6(a)(3)(iii)(B); 3. The deviation reportshall contain

### the following information:

a. 

### The identification of the owner, the omrator, and 

### 1-1 the permit number; b. The PAL requirementthat experiencedthe deviation

### orthat

### was exceeded;

c. Emissions resultingfrom the deviation

### or the exceedance; and 

### d. A signed statement by

### the responsible official, as defined by 

### 401 KAR 

### 51:001, Section 

### l(2101 [€&€I&] 

### cetiing the truth, 

### accuracy, and completeness 

### of the informationprovkled 

### inthe report. 

### (c) Revalidation results. 

### The owner or operator 

### shall submit 

### to the cabinet 

### the resultsof any revalidationtest 

### or method within three (3) months after completionof

### the test 

### or method. (14) Transition requirements. 

### (a) After 

### the U.S. EPA approves the Kentucky SIP revisions for the PAL provisions published at 67

### Fed. Reg. 801

### 86, 

### December31,2002, the cabinet shall only issue 

### a PALthat complieswiththe 

### requirementsof this section. (b) The 

### cabinet 

### may supersede a PAL that was established before 

### Auaust 10, 

### 2006, 

## I-= 

## .-.

. . -1 with 

### a PAL that complies

### with 

### the requirementsof this administrative

### requlation. 

### [se&ie%]Date Leonard K. Peters, Secretary Energyand EnvironmentCabinet

### PUBLIC HEARING 

### AND PUBLIC COMMENT PERIOD: 

### A public hearing 

### on this administrative regulation shall be held on 

### October

### 28, 2009, at 10:OO a.m. 

### (localtime) in Conference 

### Room201 

### Bon thefirst 

### Roor of 

### the Division

### forAir Quality 

### at 

### 200 FairOaks Lane, Frankfort, Kentucky. Individuals interested 

### in being 

### heard at this hearing shall notify 

### this agency five 

### (5) workdays 

### prior to the 

### hearing 

### of their 

### intent to attend. 

### tf no notification of intent 

### to attend the hearing is 

### received by that date, 

### tl?e hearing

### may be canceled. 

### This hearing isopen to the 

### public. Any person

### who wishesto be heard shall be given 

### an opportunityto comment 

### on the proposed administrative regulation. Ifyou do notwish to be heard at the 

### pubtic hearing, you may submit written comments on the proposed administrative regulation. 

### Written commentsshall

### be accepted 

### untildoseof business

### on November 2, 2009. Send written notification

### of intent 

### to be heard 

### at 

### the public hearing 

### or written comments 

### on the proposed administrative regulation to the contact person listed below. The hearing faciiity is accessible to persons with disabilities. Requests 

### for reasonable accommodations, including auxiliary aids and services necessary to participate 

### in the hearing, 

### may be made 

### to the contact person at feast five 

### (5) workdays prior to the hearing. CONTACT 

### PERSON: Laura Lund, 

### Environmental Technologist 11, Division 

### for Air Quality, 1" Floor, 200 Fair Oaks Lane, Frankfort, Kentucky40601, teiephone (502) 584- 

### 3999,ext. 4428,fax (502) 564-4666, and electronic mail Laura_Lund@ky.gov.

### REGULATORY IMPACT

### ANALYSIS 

### AND TIERING 

### STATEMENT Administrative Regulation#: 401 KAR 51:052 Contact pewon: 

### Laura Lund, Environmental Technologist 

### If (I) Provide

### a brief

### summary of: (a) What this administrative

### regulationdoes: This administrative regulation 

### provides for the nonattainment new 

### source review (NSR) 

### and applies to 

### new construction or modification of major stationary sources 

### in areas designated nonattainmentfor a specifred pollutant. 

### (b) The necessity 

### of this 

### administrative regulation: 

### This administrative regulation is necessary in order 

### to continue to receive full delegation of authorityfor the federal NSR program in Kentucky. 

### (c) How this administrative regulation conforms to the content of the authorizing statutes: KRS 224.10-100 authorizes the Cabinet 

### to promulgate administrative 

### regulations for 

### the prevention, abatement, and control of 

### air pollution, KRS 224.10-100(26) mandates 

### the 

### preservation of clean air resources while ensuring economic growth. This regulation conforms to the statutes because it is no more stringent than the federal mandate. (d) How this administrative regulation 

### currently assists or wlll assist In the effective administration of the 

### statutes: This administrative regulation is 

### no 

### more stringent than 

### the federal mandate, codified 

### in 40 C.F.R. 51.I65 (2) 

### If this is

### an amendment to an 

### existing adminislathre regulation, 

### provide a briefsummary of: (a) 

### How the amendment will change 

### this existing administrative regulation: This amendment revises

### the list of exempted majorstationary sources codified 

### in 40 C.F.R 

### Part 51, and 

### the list of major 

### sources codified in 40 

### C.F.R. Part 70, as they 

### relate to 

### PSD, NSR, and Title V applicability. 

### The amendment removes 

### the existing 

### standards and requirementsfor clean units (CU) 

### and pollution control projects (PCP) 

### that have been vacated at the federal 

### level 

### in 

### a D.C. 

### Court of Appeals decision. This amendment indudes nitrogenoxides (NOx) 

### as a precursor for ozone. (b) The necessityof 

### the amendmenttothis administrathe regulation: 

### These regulatory 

### revisions are necessary in order 

### to 

### implement changes 

### in the )(Y State Implementation Plan 

### (SIP)in response 

### to changes in the federal rules 

### (c) 

### How the amendment conforms 

### to the content 

### of 

### the authorizing statutes: Kentucky'sfederally-appmved NSR SIP 

### providesthe permitting and 

### enforcement authority delegated 

### from 

### the U.S. 

### EPA to 

### the Commonwealth.

### (d) How the amendment will 

### assist in 

### the effective 

### administration 

### of sautes: This administrative regulation amendment 

### is modeled 

### after the federal regulations. 

### (3) List

### thetype and number of individuals, businesses, organizations, 

### or state and local governments Mected by 

### this administrative regulation. 

### The amendment revises the applicability of major sources by specifically excluding "chemical process plants" that 

### produce ethanol through a 

### natural fermentation process. In addition, sources meeting 

### standards and requirements for CU and PCP, and sources emitting NOx in 

### an area designated 

### as nonattainment for 

### ozone, are affected bythis administrative regulation. (4) Provide 

### an assessment 

### of how 

### the entities identified 

### in 

### question (3) will 

### be impacted by either 

### the implementation

### of this administrative regulation, 

### if new, or 

### by the change if it is an amendment: (a) Ust the actions that each 

### of the 

### regulated entities identifmd 

### in question (3) will have to take to comply with this administrative regulation 

### or amendment: Regulated entities shall continue to comply with this administrative regulation. This amendment affects existing or proposed facilities that produce ethanol 

### through a natural fermentation process as it specifically excludes them, under the component term 'chemical process plants," 

### from having to comply with the PSDINSR requirements. 

### Sources will no longer be 

### required to meet standards and requirements for 

### CU and PCP. In addition, 

### sources emitting NOx in an area designated as nonattainment for 

### ozone will be subject to permitting as volatileorganic compounds have been. (b) 

### In complying

### with this admlnisttative regulation 

### or amendment, 

### how much will it cost each 

### of the 

### entlties identified in question (3): There 

### are no additionalcosts involved in compliancewith this regulation. (c) As a result of compliance, what benefits will accrue to the entities identified 

### in question 

### (3): Ethanol facilities, as 

### defined in C.F.R. 51.166 and this administrative 

### regulation 

### are no longer included under the 100 tons per 

### year PTE 

### limit for 

### major 

### source categories under the PSDNSR 

### rules. As 

### a result of not having 

### to apply additional emission controls, growth of the ethanol industrywill inwease. 

### (5) Provide an 

### estimate of 

### how much It 

### will cost 

### the administrative body to implementthis administrativeregulation: (a) Initially: The Cabinet will 

### not incur any additional costs for the implementationof this regulation. (b) 

### On a continuing basis: 

### There will not 

### be any additional continuing 

### costs for the implementationof this regulation. 

### (6) What 

### is 

### the source 

### of 

### the funding to be 

### used for 

### the implementationand enforcement of this administrative 

### regulatim: The Cabinet's current operating budget will be used 

### for 

### the implementation 

### and enforcement 

### of thisregulation. 

### (7) Provide an 

### assessment 

### of whether an increase in 

### fees 

### or fundlng 

### will be necessary to implement this 

### administrative regulation, if new, or by the change if it is an amendment. No increase in fees 

### or funding is necessaryto implement

### this regulation. (8) State whether or not this administrative regulation established any fees or 

### direct& 

### or indirectly increased any fees. This regulation does not establish, nordoes it directly or indirectly increase anyfees. (9) TIERING: is tiering applied? 

### Yes. The applicability and compliance requirements that are tiered in this administrative regulation 

### are modeled after the

### federal PSD and NSR rules.

### FEDERAL 

### MANDATEANALYSIS COMPARISON 1. 

### Federal 

### statute or regulation

### contiiuting

### the federal mandate. 42 

### U.S.C. 7401

# - 7671q; 42 

### U.S.C. 7401-7626, 7407(dXI)(AXi), 

### (ii), and (iii), 7410, provides the statutory mandate codified in 40 C.F.R. Part 52.21, 

### as amended 

### in 72 Fed. Reg. 24077, May 1,2007,and in 72 Fed. Reg. 

### 32528, June 13,2007. 

### 2. State compliance standards. The state compliance standards 

### are found in 

### KRS 224.10-1OO(5). 3. 

### Minimum or uniform standards contained in the federal 

### mandate. 

### The federal NSR mandate requires 

### sources described in Section I 

### of this administrativs regulationto demonstrate that any constructiin

### or modificationof the 

### source wilt not use a net increase in pollution; 

### neitherwill the source create a delay in attainment 

### of the NAAQS; and that the source will install and use control technology that achievesthe lowest achievable emissions 

### rate (LAER). 

### The amendment to this administrative regulation excludes "chemical process plantsu that produce ethanol by a natural fermentation process in 

### the revised definition 

### of major stationary source. Further revisions include the removal of dean unit (CU) and pollution control project (PCP) requirements becausethey have been vacated at the federal level by a decision from the D.C. Court of Appeals. This amendment requies sources emitting NOx in 

### an area designated 

### as nonattainmentfor ozone to be subjectto permitting 

### as volatile organic compounds have been. 4. Will this administrative regulation impose stricter'requirements, or additional or 

### dWferent responsiMliesor requirements,than 

### those required by

### the federal mandate? No. This regulation is modeled after federal regulations. 5. 

### Justification for the imposition of the 

### stricter standard, or additional or dCQferent 

### responsibilities or requirements. Stricter standards and requirements are not imposed.FISCAL 

### NOTE ON 

### STATE 

### OR LOCAL GOVERNMENT Administrative Regulation

### #: 401 

### KAR 51:052 Contact person: Laura 

### Lund, EnvironmkntalTechnologist I! 

### Does this administrative regulation relate to 

### any program, service, or 

### mquimmentsof a 

### state or local government (including 

### cities, counties, fire departments, or school districts)? Yes. 

### What units, 

### parts 

### or divisions of state or localgovernment (includingcities, counties, 

### fire departments, or school districts) will be impacted by this administrative regulation? The Division for Air Quality will continue to implement and enforce 

### the 

### New 

### Source Review (NSR) program 

### in the Cornmonwealth. Identify 

### each state or federal statutg or federal regulation

### that requires or authorizes the action taken by 

### the administrative regulation. 

### KRS 224.10- 100(5),42 U.S.C. 7401-7671q. Estimate 

### the 

### effect of 

### this administrative regulation on the expenditures and revenues of 

### a 

### state or local 

### government agency (including cities, counties, fire departments, or school districts) for the first full year the administrative regulation isto be inefkt. How much 

### revenuewill this administrative regulationgenerate for the 

### state or iocal government (Includingcities;, counties, fire 

### departments, 

### or school 

### districts)for the 

### firstyear? This regulationgenerates 

### no revenues. How much revenue

### willthis administratsve regulation generatefor the 

### state or local 

### government (including cities, counties, fire departments, or 

### school districts) for subsequent

### years? This 

### regulation generates no revenues. 

### How much will it cost to administer 

### this program for 

### the first year? 

### The Cabinet's existing operating budget continues as the 

### source of funding 

### for 

### the implementation of this program. 

### How much will it 

### cost to administer this program 

### for 

### subsequent years? There 

### will 

### be no additional 

### costs for administering the program 

### in subsequent 

### years. Note: if 

### specifk dollar 

### estimates cannot 

### be determined, 

### provide 

### a brief narrativeto explain

### thefiscal impactofthe administrative regulation. Revenues (+I-):There 

### is no 

### known effect 

### on cumnt 

### revenues. Expenditures (+I.): There 

### is no knowneffect 

### on 

### current expenditures. 

### Other Explanation: 

### There 

### is nofurther explanation.