To: From: Date: RE: Dave Heineman Governor 

### STATE OF NEBRASKA DEPARTMENT OF ENVIRONMENTAL QUALITY Michael J. Linder Director Suite 400, The Atrium
. 1200 'N' Street P.O. Box 98922 Lincoln, Nebraska 68509-8922 Phone (402) 471-2186

FAX (402) 471-2909 website: www.deq.state:ne.us 

# MEMORANDUM
Jon**Bru~** Attorney General Shelley kadt:Air Quality Division Administrator December 10, 2007 Title 129

- Nebraska Air Quality Regulations, Concise Explanatory Statement for Rules Adopted at the December 2007 EQC Hearing
SHORT DESCRIPTION: Thepurpose ofthis memorandum is to provide an explanation ofadditions and revisions to Title 129 that were adopted bythe Environmental Quality Council (EQc) on December 7,2007
. The changes were adopted bythe EQC as proposed, without amendment. No comments were received in response to the public notice ofthis proposal, and no one other than NDEQ stafftestified at the public hearing. The adopted changes are all in section 003.02 of"Chapter 5-0peratingPermits-When Required." They clarify theprocess for issuing operating permits to major sources comprised ofdifferent regulated entities or "persons", as defined in Chapter 1. Chapter 1 defines "person" as any individual partnership; limited liability company; association; public or private corporation; trustee; receiver; assignee; agent; municipality or other governmental subdivision; public agency; other legal entity; or any officer or governing ormanagingbody ofanypublic orprivate corporation, municipality, governmental subdivision, public agency, or other legal entity. The current language ofsection 003 .02 has only two options for permitting such sources: (1) obtain Qne permit fQJ th

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### entire source; or (2) obtain a generalpermit for those emission units able to be covered by a general permit and obtain an individual permit for the remaining emissions units. Ifa general permit is not available, then thereis only one option. The revised language would allow each "person" (regulated entity) to apply for its ownpermit and allow the Department to issue permits in that manner. In addition, the language is worded such that sources permitted in this manner will not avoid other major source obligations.

An Equal OpportunitwA!!irmatiue Action Empl oyer @ Printed with soy ink on recycled paper**~** 

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.RATIONALE: The Class I operatingpermit program requires major sources ofair pollution to obtain operating permits. Therequirements for controlling hazardous air pollutants (HAPs) are different than those for other air pollution control programs. Under the federal HAP program, $ources that are adjacent to one another and are under common control must aggregate their HAP emissions for applicability purposes, regardless of whether their operations are similar; that is, whether they fit within the same two
-digit Standard Industrial Code. These adjacent operations are currently required to be permitted under one single operatingpermit. This practice allows for stringent control of HAPs at each HAP emission unit, but it creates certain problems for the Department, such as
• To which regulated entity (person) does the Department issue the permit?
• Ifthe permit is issued to one entity (person) and another one has a violation, how does the Department take enforcement action?
• Who does the Department designate as the responsible official?
• What happens when controlling interest is sold to another partner or ifthe original ownership arrangement changes? Inaddition, the current rules create difficulties for the sources permitted in this manner. For example,
• Only one responsible official can certify compliance with a permit, so the current regulations could potentially require someone to certify compliance for a source over which he or she has little, ifany, control.
• The pelmitted entity would have to make sure that all other businesses with which it has partnerships have the informationneeded to comply with the permit.
• Businesses are often sold or otherpartnerships are formed. Ifthe ownership arrangement changes, further complications and confusion as to how to divide up responsibilities under the permit result. ANALYSIS OF IMPACT: These changes are needed to address current permitting issues. In Blair, the Cargill Corporation has partnership arrangements with satellite operations around its wet-milling ethanol plant. Without making this change, the Department will need to issue asingle operating permit for Cargill, Car

_ gill Polyols, Natureworks and PGLA. Another examplemaybe found in Hastings at the Ag Processing Corn and Soy facilities. These operations are under the same corporate structure, but have very different operations. There is the potential for more such situations to develop in other communities as companies partner with one another, innovate to develop new products, and build operations adjacent to one another. The adopted changes will resolve this issue by allowing each entity to obtain its own Class I

.operating permit.

2The federal operating permitprogram allows for more than one operating permit to be issued in such situations. The changes to Chapter 5, section 003.02 would make Title 129 consistent with the federal program. However, the language clearly states that the regulated entity cannot avoid any requirements it would have been subject to had it been permitted under a single permit. SECTION-BY-SECTION DESCRIPTION: Section 003.02A: This section continues to allow an entire source to bepermitted under a single operatingpermit. The term "points" is changed to "units" to reflect language that is defined in Chapter 1.
. Section 003.02B: This added section allows a source to obtain more than one operating permit ifthe source is comprised ofdifferent "persons", as defined in Chapter 1, even if the "persons" are under the same two-digit Standard Industrial Code. The source may obtain a separate permit for each "person". Each "person" must obtain a Class I operating permit, regardless ofsize. No "person", under these circumstances, may avoid any major source requirements, such as payment ofemission fees or compliance with MACT standards
. Section 003.02C: This section continues to allow certain emissions units to bepermitted under a general permit. The term "points" is changed to "units" as in section 003.02A. The added wording is to assure that sources may not avoid major source requirements unless the**source~wide** potential is limited to less than the major source thresholds. Ifthe source-wide potential is major, then emission fees are paid on all emission units, including those covered by general permits.



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### FISCAL IMPACT STATEMENT Agency: Title: Chapter Title Name: Environmental Quality 129 5 Title 129 

### Prepared by: Date Prepared: Phone: Statement Status: Nebraska Air Quality Regulations 

### Type ofFiscal Impact:
State Agency No Fiscal Impact Increase Costs Decrease Costs ( x) 

### ( ) ( ) 

### Estimated Quantification ofImpact: Political Subdivision (x) 

### ( ) ( ) Shelley Kaderly October 18, 2007 471-4.299 ( ) Draft (X) Final

Regulated Public (x) ( ) ( ).

No measurable fiscal impact anticipated even though it should be less complicated for the Agency to process certain operating permit applications. Operating permits will still be required to beprocessed.

Page 4 of4 I ·NEBRASKA ADMINISTRATIVE CODE Title 129

- Department ofEnvironmental Quality Chapter 5 - OPERATING PERMITS

- WHEN REQUIRED
001 Applicability and Scope. The following sources are required to obtain operating pennits unless exempted under 002: 001 .01 Class I (major source) pelmits shall be required to operate any of the following: OOl.OlA Any major source as defined in Chapter 2; OOl.OlB Any source, including an area source, subject to a standard, limitation, or other requirement under Chapter 18; OOl.OlC Any source, including an area source, subject to a standard or other requirement under Chapters 23, 27 or 28; OOl.OlD Any affected source; OOl.OlE Any source in a source category designated by the Director orrequired to do so by any other applicable requirement under Title 129 orunder the Act. 00l.02 Unless a Class I pennit is required, Class II (minor source) pennits shall be required to operate any ofthe following, unless covered under the provisions ofChapter 42: 001.02A Any source or emissions unit with actual emissions above the following: 001.02A1. [rescinded] 001.02A2. Fifty (50) tons/year ormore ofPMIO emissions. Changes for December 2007 EQC are on pages 5-2, 5-5, and 5

-6. 5-1Title 129 Chapter 5

5-2 001.02A3. Fifty (50) tons/year or more ofS02 or S03, or any combination ofthe two. 001.02A4
. Fifty (50) tons/year or more ofoxides ofnitrogen (calculated as N02). 001
.02A5
. Fifty (50) tons/year or more ofvolatile organic compounds (VOC). 001.02A6. Fifty (50) tons/year or more ofcarbon monoxide. 001.02A7. Two and one-half(2.5) tons/year or more oflead. 001.02A8. Five (5) tons/year or more ofany hazardous air pollutant or an aggregate oftwelve and one-half(12.5) tons/year or more ofany hazardous air pollutants. 001.02B All incinerators used for refuse disposal or for the processing ofsalvageable materials except refuse incinerators located on residential premises containing five or less dwelling units used only for disposal ofresidential waste generated on the said property. 001.03 Any source or emissions unit required to obtain a Class I permit based on potential emissions mayrequest that potential to emit be limited to below the major source threshold, as provided in Chapter 42 or in section 001.03A and 001.03B below
. 001.03A Any source or emissions unit with actual emissions between the levels specified in section 001.02A above and the major source levels may apply for a Class II permit, as a synthetic minor source, which provides enforceable limits to potential emissions, as provided in Chapters 7 through 15.

Changes for December 2007 EQC are on pages 5-2, 5-5, and 5-6.Title 129
. Chapter 5 001.03B Any source or emissions unit with actual emissi011S below the levels specified in section 001.02A above shall be exempt from the duty to obtain an operating pennit under the following conditions, known as the Low Emitter Rule, unless required to do so in sections 001.02B. 001.03B1 The source is not otherwise required to obtain an operating permit; 001.03B2 The source has submitted a demonstration and maintains records on site, updated at least monthly, for at least five years that actual emissions for each regulated pollutant do not exceed the levels specified in section 001.02A above; 001.03B3 Credit for controls which are not required under the provisions ofthis title will only be allowed ifdocumentation is maintained that demonstrates that controls were continuously maintained and operated as specified by the manufacturer to achieve the level ofefficiency for which credit is sought; 001.03B4 Additional infonnation, such as an annual emissions inventory or infonnation necessary to detennine applicability or to detennine that emissions from the source in conjunction with all other emissions will not prevent attainment or maintenance ofthe ambient air quality standards specified in Chapter 4, must be provided upon Department request; and 001.03B5 Compliance with the provisions ofthis section do not shield the owner or operator from the duty to comply with any other applicable requirement under Title 129, nor shield the owner or operator from enforcement action for the violation of any other applicable requirement under Title 129. 002 Source Category Exemptions. Changes for December 2007 EQC are on pages 5-2, 5

-5, and 5

-6
. 5-3Title 129 Chapter 5

5-4 . 002.01 All sources listed in 001.01 above that are not major, or affected sources, are exempt from the obligation to obtain a Class I permit unless required to do so under another applicable requirement under Title 129 or under the Act. Any such exempt source may opt to apply for a permit under these regulations and shall be issued a pennit ifthe applicant otherwise satisfies all ofthe requirements ofthese regulations. 002.02 The following sources are exempt from applying for and having a Class 

### I or 

### II operating permit: 002.02A All sources and source categories that would be required to obtain a pennit solelybecause they are subject to 40 CFR Part 60, Subpart AAA

- Standards ofPerfonnance for New Residential Wood Heaters; and 002
.02B All sources and source categories that would be required to obtain a pe1111it solely because they are subject to 40 CFR Part 61 , Subpali M

- National Emission Standard for Hazardous Air Pollutants for Asbestos, §61.145, Standard for Demolition and Renovation. 002.02C All sources and source categories subject only to regulations or requirements under Section 112(r) ofthe Act. 002
.02D All sources and source categories that would be required to obtain a pelmit solelybecause ofthe presence ofa generator whose sole function is to provide back-up power when electrical power from the local utility is interrupted
. This exemption is unavailable to peaking units at electric utilities and any other generator which is used during time periods when power is available from the utility. Exempted units must submit an annual report ofhours ofoperation to the Department bythe end ofthe month following the month in which 500 hours peryear are exceeded, or upon request.

Changes f or December 2007 EQC are on pages 5-2, 5-5, and 5-6
.Title 129 Chapter 5 003 Emissions Units Covered. 003.01 Sources required to obtain an operating pennit under this title shall identify all relevant emission units in the pennit application unless the emission unit is specifically exempted pursuant to sections 006
.03 and 006
.04 ofChapter 7. 003.02 A source required to obtain an operating pennit under this title may comply through one ofthe following methods: 003.02A +he A source may obtain a single pel111it for all relevant emission 

### pBffits units located within a contiguous area under common control, whether or not falling under the same two-digit Standard Industry Code (SIC) code; or 003.02B A major source, as defined in Chapter 2, section 001 or section 008, comprised ofdifferent business entities (each defined as a "person" in Chapter 1, section 107), whether or not they are under the same two-digit SIC code, may obtain a separate pennit for each business entity ("person"). All business entities ("persons") must obtain a Class I pennit regardless ofsize. Sources may not avoid major source requirements, including, but not limited to, emissions fees (see Chapter 29) orNational Emissions Standards for Hazardous Air Pollutants requirements (see Chapters 27 and 28), bybeing pennitted in this manner; or 003.02BC +he A source mayrequest and obtain coverage for one or more emission 

### pBffits units eligible for coverage under a general pennit issued bythe Department and obtain a separate pennit for emission 

### pBffits units not eligible for such coverage. Sources may not avoid major source requirements, including, but not limited to, emissions fees (see Chapter 29) or National Emissions Standards for Hazardous Air Pollutants requirements (see Chapters 27 and 28), by beingpennitted in this manner, unless the source-wide potential emissions are limited to less than the major source thresholds by Changes for December 2007 EQC are on pages 5-2, 5-5, and 5-6. 5-5Title 129 Chapter 5 these pennits. This would include paying emissions fees for emissions from the unites) covered by a general pennit.. Note: Section 003.03, as shown below, has been adopted by the EQC but not yet approved by the Governor. 003.03 A source required to obtain a mercury budget permit under rules incorporated in Chapter 18, section 005, must obtain, in addition to any other required permits, a mercury budget permit which covers every mercury budget unit at the source, contains all applicable mercury budget program requirements, and is a complete and separable portion ofthe operating permit. 004 Fugitive Emissions. Fugitive emissions from a source shall be included in the pennit application and covered in the operating pelmit in the same manner as stack emissions, regardless ofwhether the source category in question is included in the list ofsources contained in the definition ofmajor source. 005 Except as provided in Chapter 12, section 003, no source may operate after the time that it is required to submit a timely and complete application, except in compliance with a pennit issued under an approved operating permit program. If an operating source submits a timely and complete application for pennit issuance, or for renewal, the source's failure to have a pennit is not a violation of the State Act or Act until the Department takes final action on the pennit application, provided that the failure to have a pennit is through no fault ofthe source. This protection shall cease to apply if , subsequent to the completeness detennination made pursuant to Chapter 7, section 003, the applicant fails to submit any additional infonnation necessary to process the application within the deadline specified in writing bythe Department. 006 The submittal ofa complete Class I or II operating pennit application shall not affect the requirement that any source have a pre-construction pelmit as may be required bythese regulations.
5-6 Changes for December 2007 EQC are on pages 5-2, 5-5, and 5-6.Title 129 Chapter 5 Enabling Legislation: Neb. Rev. Stat. §§81-1S04(1)(2); 81-1505(12)(16)' Legal Citation: Title 129, Ch. 5, Nebraska Department ofEnvironmental Quality

Changes for December 2007 EQC are on pages 5-2, 5-5, and 5-6. 5-7