# RuleMaking Activities NYS Register/September 26,2007

adverseeconomic impact on them. Becauseit is evident from the natureof the proposedamendmentthat it will not affect small businesses, no further stepswere neededto ascertainthat fact and nonewere taken. Accordingly,

a regulatory flexibility analysisfor small businesses is not required andone

was not prepared. (b) Local Govemment: EFFECT OF RULE: The proposed amendment will affect all local govemments in New York that are subject to the records management requirements of the Commissioner of Education. The amendment revisesand clarifies various requirements, including those conceming replacing paper records with microforms or digital images,the retention and preservation ofelectronic records, andthe useof altemative records disposition schedules. COMPLIANCE REQUIREMENTS: Local govemments in New York are currently required to comply with recordsmanagementrequirementsof the Commissioner of Education.The amendments to Part 185 impose no new compliance requirements but insteadmodernize and claify those requirementsnow in place. PROFESSIONAL SERVICES: The proposedamendmentproposesno additional professional services requirements on local governments other than those already required by law. COMPLIANCE COSTS: The proposed amendments to Part 185 will modemize and clarifr various requirements, but will not impose any compliance costs on local govemments other than those inherent in Article 57-A of the Arts and Cultural Affairs Law. ECONOMIC AND TECHNOLOGICAL FEASIBILITY: The proposed amendment includes revisions to standardsfor replacing original records with microforms or digital images and for retaining and preserving electronic records and is technologically feasible. Economic feasibility is addressed under the Compliance Costs section set forth above. MINIMIZING ADVERSE IMPACT: Local governments in New York are currently required to comply with recordsmanagementrequirementsof the Commissioner of Education.The proposed amendments to Part 185 impose no new compliance requirements or additional costsbut insteadmodernize and clarifo those requirements now in place, including those conceming replacing paper records with microforms or digital images,the retention and preservation of electronic records, andthe useof altemative recordsdisposition schedules. LOCAL GOVERNMENT PARTICIPATION: The proposed amendment was reviewed and approved by the Local Government RecordsAdvisory Council, establishedby Statelaw to advise the Commissioner of Education on records managementmatters. Rural Area Flexibility Analysis TYPES AND ESTIMATED NUMBER OF RURAL AREAS: The proposed amendmentwill apply to all municipalities and miscellaneous local governments in New York State,including the 44 rural counties with less than 200,000 inhabitants and the urban counties with a population density of I50 per squaremile or less. REPORTING, RECORDKEEPING AND OTHER COMPLIANCE REQUIREMENTS AND PROFESSIONAL SERVICES: The proposedamendmentrevisesandclarifies the recordsmanagement requirements of the Commissioner'of Education. These compliance requirements are already in place and affected local govemments are now required to follow the current requirements of the Commissioner. The proposedamendmentproposesno additional professional servicesrequirements on local governments, other than thosealready required by law. COMPLIANCE COSTS: The proposed amendments to Part 185 will modemize and clarify various requirements, but will not impose any compliance costs on local govemments other than those inherent in Article 57-A of the Arts and Cultural Affairs Law. MINIMIZING ADVERSE IMPACT: The proposed amendmentwill have no adverseimpact on municipalities and miscellaneous local govemments in rural areasor elsewhere in New York State.Local govemments in New York arecurrently required to comply with records management requirements of the Commissioner of Education. The proposed amendmentsto Part 185 impose no new compliance requirements or additional costs but instead modemize and clarifu those requirements now in place, including those conceming replacing paper records with microforms or digital images,the retention and preservation ofelectronic records, and the useofalternative records disposition schedules. 

## 8 RURAL AREA PARTICIPATION: The proposed amendment was reviewed and approved by the Local Government RecordsAdvisory Council, establishedby Statelaw to advise the Commissioner of Education on records management matters, and which includes members from rural areas. Job Impact Statement The proposedamendment relatessolely to local government records management and will not have an adverse impact on jobs or employment opportunities. Becauseit is evident from the natureofthe proposedamendment that it will have no impact onjobs or employment opportunities, no further measureswere neededto ascertainthat fact and none were taken. Accordingly, ajob impact statementis not required and one has not been prepared.



# Department

of Bnvironmental Conservation

PROPOSED RULE MAKING HEARING(S) SCHEDULED

New Major Facilities and Major Modifications to Existing Facilities

I.D.No. ENV-39-07-00006-P

PURSUANT TO THE PROVISIONS OF THE StateAdministrative ProcedureAct, NOTICE is hereby given of the following proposed rule: Proposed acfion,'Amendment of Parts 200, 201 and 231 of Title 6 NYCRR. Statutory authorify,' Environmental Conservation Law, I -0I0l, 3-030I, 3-0303,l9-0103, 19-0105, l9-0107,l9-0301, 19-0302, l9-0303and l9- 0305;andFederal

CleanAir Act, sections 160-169 and l7l -193(42 U.S.C. 7470-7479;7501

-75I5) Subject: Requirementsfor proposednew major facilities and major modifications to existing facilities located in attainment and nonattainment

areas ofthe State. Purpose: To comply with the 2002 Federal New Source Review (NSR) Rule EPA promulgated and correct deficiencies that EPA identified in regards to New York's existing Nonattainment New Source Review (NNSR) regulation. The 2002 FederalNSR Rule modified both the NNSR and Prevention of Significant Deterioration (PSD) regulations at 40 CFR 5l .165 and 52.21,respectively, and requires states with StateImplementation Plan (SIP) approved NSR programs to revise their regulations in accordancewith the 2002 Federal NSR Rule and submit the revisions to EPA for approval into the SIP. The department's existing NNSR program at Parl 231 ip subject to this requirement. Another purpose of the rule making is to adopt a StatePSD program for proposed new major facilities and major modifications to existing facilities located in attainment areas. The proposed Part23l rule incorporates provisions from the Federal PSD regulations in significant part with additional provisions to ensureenforceability of the rule and effective monitoring, recordkeeping and reporting. Public hearing(s) will be held at: 2:00 p.m., Nov. 13,2007 at Department of Environmental Conservation, Region 8, Conference kn.,6274 E. Avon-Lima Rd., Avon, NY; 2:00 p.m., Nov. 15,2007 at Departmentof Environmental Conservation, Public Assembly Rm. 129, 625 Broadway, Albany, NY; and 2:00 p.m., Nov. 16,2007 at Department of Environmental Conservation,

Region 2 Annex, Hearing Rm. 106, ll-15 47th Ave., Long IslandCity, NY. Accessibility: All public hearingshave beenscheduledat places reasonably acce;sibleto personswith a mobility impairment. Interpreter Service: Interpreter serviceswill be made available to deaf persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed

to the agency representativedesignatedin the paragraphbelow. Substance of proposed rule (Full text is posted at the following State website: www.dec,ny.gov).' The Department of Environmental Conservation (DEC) proposes to amend Parts200,201 and 231 of Title 6 of the Official Compilation of Codes,Rules, and Regulations of the Stateof New York, entitled "General Provisions," "Permits and Registrations" and

# NYS Register/September 26,2007 Rule Making Activities

"New Source Review in Nonattainment Areas and Ozone Transport Regions." The Part 200 amendmentswill add a definition for Routine Maintenance, Repair, or Replacement (RMRR), codi$ing current Department practice of reviewing RMRR activities on a caseby casebasis,taking into account the nature and extent of the activity and its frequency and cost. In addition, the Department is revising Part 200 (Sections200.9 and 200.10). Section 200.9 is being amendedto include all federal materials referenced in the proposed amendments to Part 231. Section 200.10(a) is being amendedto reflect that the Department is no longer delegatedresponsibility for implementation ofthe Federal Prevention of Significant Deterioration (PSD) Program. The proposed amendmentsto Part 201 revise the definition for "maior stationary ioorce or major source" at 6 NYCRR 201-2.1O)(21). The definition will now encompassthe term "major facility" and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter lessthan or equal to a nominal 2.5 micro-meters (PM-2.5). EPA designatedthe New York City metropolitan areaas nonattainment for the PM 2.5 standard(70 Fed. Reg. 944). Nonattainment new source review (NNSR) is now required for new major facilities and major modifications to existing facilities that emit PM 2.5 in significant amounts in the PM2.5 nonattainment

area. The existing nonattainment New Source Review program at Pafi 231 will be re+itled 'New Source Review for New and Modified Facilities" and will include new Subparts 231-3 through 231-13. The new subparts will implement nonattainment New Source Review (NNSR) and attainment New Source Review (PSD). The NNSR requirements are based on New York's existing NNSR program Subpart 231-2, with revisions to include selected provisions from the December 31,2002 Federal NSR reform rule. The PSD requirementsarealsobasedlargely on the December 3l ,2002 FederalNSR reform rule ascodifiedat40 CFR 52.21

. The proposed revisions to Part23l will changethe basis ofapplicability for modifications and emission reduction credits (ERCs) from an "Emission Unit" basisto an "Emission Source" basis,incorporate various federal requirements, provide clarification of existing requirements, and require comprehensive reporting, monitoring, and recordkeeping that will conform to the requirements of Title V. Through this rulemaking, the Department will also establish a new method for determining baseline actual emissions. Baseline actual emissions will be determined by using any 24 consecutive month period ofemissions in the previous five years. All facilities (no separatebaselineperiod for electric utility steamgenerating units) will be required to determine their baseline actual emissions using this method. The Department will retain existing Subpart 231-l "Requirements for emission sources subject to the regulation prior to November 15, 1992" and Subpart23 I -2, "Requirements for emission units subjectto the regulation on or after November 15,1992". Theseregulations are currently cited in many air permits issued throughout the State and retaining them will facilitate implementation and enforcement of the NSR program. Existing Subpart 231-2 will be revised only to indicate that the Subpart will not apply after the date the proposed revisions to Part23l become effective. Thus, permit applications received on or after the effective dateofrevised Part 231 will be processedaccording to the provisions of Subparts23l -3 through231-13,asapplicable. New Subparts23l -3 through 23l - I 3 have beenaddedto include provisions from the EPA December 31,2002 NSR Rule, and incorporate the Federal PSD program. The NNSR provisions currently specified in Subpart23l-2 arebeing updatedand incorporated into thesenew subparts.The Department is also adopting a State PSD progam which is based largely

on the FederalPSD rule andincludedin Subparts 231-7,231-8, and231- 12. The subparts ofthe proposed regulation are being organized to ease determinations of applicability, to collect common requirements into groups, and to streamline the regulation. The organization of the new regulation strives to make a more coherent series of requirements and obligations. Subpart 231-3 General Provisions specifies provisions which apply generally including a transition plan, generalpermit requirements, general prohibitions, exemptions, and circumvention. Subpart23I -4 definesthe terms usedthroughout Part23 I and incorporatesterms from both the existing Subpart231-2 andthe FederalPSD rule, 40 CFR 52.21

. Tlte Department has made minor revisions to terms usedin existing Subpart23l -2 and 40 CFR 52.2I sothat definitions are consistent for both nonattainment and attainment NSR and with New York's resulatlons. To facilitate the implementation and administration of Part 231, the Department has included the requirements for new and modified facilities in four main subparts(23 I -5 to 23 1 -8) dependingon the facility's location in an attainment or nonattainment area. Subpart 231-5 is applicable to new facilities and to modifications at existing non-major facilities in nonattainment areas.hoposed new major facilities will continue to be subject to the rcquirements to install Lowest Achievable Emission Rate (LAER) and obtain emission offsets asthey are under existing Subpart 231-2. The subpart also specifies that non-major facilities undertaking projects which are major by themselves,or increase the emissions of the facility above major thresholds must obtain permits which limit emissions. Subpart 231-6 applies to modifications at existing major facilities in nonattainment areas.The subpart continues the requirements for LAER technology and emission offsets that exist in the Deparfinent's current nonattainment NSR program. The subpart also specifies that facilities can perform a netting exercise to determine whether the modification, when considering other contemporaneousactivities at the facility, would exceed applicable emissionsthresholds. Subpan 23 I-7 appliesto new facilities and to modifications at existing non-major facilities in attainment areas.The subpart implements the requirements for determination of air quality impacts through modeling, and the application of Best Available Control Technology (BACT). The subpart also specifiesthat non-major facilities undertaking projects which are major by themselves,or increasethe emissionsof the facility above major thresholdsmust obtain permits which limit emissions. Subpart 231-8 applies to modifications at existing major facilities in attainment areasof the State.The subpartimplements the requirementsfor determination of air quality impacts through modeling and the application of BACT in the caseof facilities which undertakea NSR major modification. These requirements addressFederal PSD requirements. The subpart also specifies that facilities can perform a netting exercise to determine whether the modification, when combined with other contemporaneous activities at the facility, would exceedemissionsthresholds. The remaining five subparts include general provisions that apply to both new and modified subject facilities. Subpart 231-9 sets forth the requirements for establishing Plantwide Applicability Limitations (PAL) at Title V facilities. A PAL allows a facility to undertakemodifications without being subjectto NSR review as long asthe facility doesnot exceedits PAL emission limit. Subpart 23 I -9 is basedon the PAL provisions from the December 31,2002 Federal NSR rule (67 Fed Reg at 80278), which speciff PAL creation, duration, and expiration. The Department hasmade a few revisions to the federal regulatory languageto take into account Subpart 201-6, New York's approved Title V regulation and to ensurethat reduced emissions and improved air quality will result. PALs are establishedin Title V permits and are subject to Title V permit application and processing procedures for creation, modification, or renewal. PALs arecreatedfor an initial period of l0 years, less if establishedduring the middle of a Title V permit term, and can be renewed for 10 years,subjectto certain restrictions. The proposed regulation requiresthatthe PAL shall be reducedto 75 percentofthe initial PAL, commencing with the first day of the sixth year of the PAL, unless the

owner or operator demonstrates that a lesserlevel of reduction isjustified. The owner or operator may seek an altemative reduced PAL by demonstrating that the application of BACT and/or LAER, as applicable, on all major PAL emission sourcesat the facility would not result in a 25 percent reduction in the initial PAL. The Department may authorize a reduction in the PAL to a level that would reflect the emissions from the facility if all major PAL emission sourcesare operatedat full capacity after complying with BACT and/or LAER, asapplicable. Subpart23 I -10 defines emission offset and Emission Reduction Credit (ERC) creation and use. The provisions for ERC creation and use are substantially the sameas existing Subpart23l-2. Subpart 231-ll sets forth specific permit, monitoring, reporting and recordkeeping requirementsthat apply to new major facilities, NSR major modifications and minor modifications. Theserequirementsare in addition to any Part 201 requirementsthat may apply. Subpart 231-12 specifies the ambient air quality impact analysis requirements for facilities in attainment areas.These requirements emanate from the Federal PSD rule which is codified at 40 CFR 52.21

. Subpart 231-13 includesseveral tableswhich list applicableemission thresholdsfor proposednew and modified facilities, emission offset ratios, federal Class I variance maximum allowable increaseconcentrations, and maximum allowable increasein S02 concentrationsfor gubematorial variances.Table 9-Source Category List includes the new chemical process 

## I

# Rule Making Activities NYS Register/September 26,2007

plant exclusion for ethanol production facilities that produce ethanol by naturalfermentation(includedin NAICS codes325193or 31J140).This exclusion was promulgated in the EPA May lst, 2007 Final Rulg for 40 CFR Parts 51, 52,70, and 71 Prevention of Significant Deterioration, Nonattainment New Source Review, and Title V: Treatment of Certain Ethanol Production Facilities Under the Major Emitting Facility" definition. Text of proposed rule and any required statements and analyses may be obtained from: Ricky Leone, Department of Environmental Conservation, Division of Air Resources, 625 Broadway, Albany, NY 12233- 3254, (5 I 8) 402-8403, e-mail : 23 Insr@gw.dec. state.ny.us Dat4 views or arguments may be submitted fo.' Sameasabove. Public comment will be received until: fle daysafter the lastscheduled public hearing. Additional malter required by statute: Pursuant to art. 8 of the State Environmental Quality Review Act, a short environmental assessment form, a negative declaration and a coastal assessmentform have been preparedand are on file. This rule must be approved by the Environmental Board. This action was not under consideration at the time this agency's regulatory agenda was submitted. Summary of Regulatory Impact Statement I. STATUTORY AUTHORITY: The statutory authority for these regulations is found in the Environmental ConservationLaw (ECL) Sections l-0101, 3-0301, 3-0303, 19- 0103, 19-0105,19-0107,l9-0301, 19-0302,l9-0303 and 19-0305, and in Sections 160-169and l7l-193 of the FederalClean Air Act (42 USC Sections

7470-7479;7501-7515) (Act or CAA). 2. LEGISLATIVE OBJECTIVES: Articles I and 3, ofthe ECL, set out the overall State polict goal of reducing air pollution and providing clean air for the citizens ofNew York. They provide general authority to adopt and enforce measuresto do so, including the regulation of mobile sourcesof air pollution. In addition to the general powers and duties of the New York State Department of Environmental Conservation (Department) and Commissioner to prevent and control air pollution found in Articles I and 3, Article 19 ofthe ECL

was specifically adoptedfiorthe purposeofsafeguarding theair 'quality' of New York from pollution. To facilitate this purpose, the Legislature bestowed specific powers and duties on the Department, including the power to formulate, adopt, promulgate, amendand repealregulations for preventing, controlling and prohibiting air pollution. The Clean Air Act (Act) requires statesto have a preconstruction and operating permit program for new and modified major stationary sources. In 1970, Congress amended the Act "to provide for a more effective pro$am to improve the quality of the Nation's air." The statutedirected EPA to adopt National Ambient Air Quality Standards (NAAQS) and required states

to develop implementation plans known asStateImplementation Plans (SIPs) which prescribed the measures needed to attain the NAAQS. The 1970Act amendmentsmandatedthat SIPscontain "a procedure for review (prior to construction or modification) of the location of any new or modified air pollution source." When it became clear that the goals of the 1970 Act amendments would not be achieved, Congress amended the Act in 1977 to provide additional safeguardsto protect the nation's air quality. The 1977amendmentsrequired states to identi$ areas that did not meet the NAAQS which were then designatedas "nonattainment" areas.In particular, the 1977 amendmentsstrengthenedthe Act by (l) expressly creating a preconstruction review program for new or modified major sources located in "nonattainment" areas (i.e., areas which failedto meetNAAQS) ('seegenerally'42 USC Sections 7501-7515);

and (2) expresslyproviding a parallel preconstruction review program for new

or modified sources located in "attainment" areas (i.e., areaswhich met NAAQS or where there was insufficient information to evaluatewhether NAAQS were met) ('see generally id.' Sections7470-7492). In 1978,EPA promulgated a NSR regulation, followed by multiple sets ofregulations including regulations applying to PSD and NNSR in states with and without approved SIPs. In 1996, EPA proposed a NSR rule revision that it described as "the first comprehensive overhaul of the program in 15 years" (61 Fed Reg 38250 [July 23, 1996] [996 Draft Rule]). The proposed changeswere "intended to reduce costsand regulatory burdens for permit applicants" without sacrificing air quality ('id.' at 38251) EPA estimated that the changes,if finalized, would result in approximately 50 percent fewer Sources being subject to NSR ('see id.' at 383l9). On December 31,2002,theEPA published afinal rulerevisingthe regulationsthat implement the PSD and NNSR provisions of the Act ('see' 67 Fed Reg 80185 [2002 FederalNSR Rule]). EPA statedthat the rule was 

## 1 0 designedto "reduce burden, maximize operating flexibility, improve environmental quality, provide additional certainty, and promote administrative efficiency" ('id.' at 80189). The 2002 Federal NSR Rule required States with approved PSD andNNSR programsto submit a SIP revision by January 2006. The Department NNSR regulation at 6 NYCRR Part 231 is subject to this SIP submittal requirement. The Department implemented the PSD program on.behalf of EPA pursuant to a delegation agreement with EPA that had been in effect since the mid 1980s.The Department could have continued to implement the PSD program asa delegatedState but objected to several aspectsof EPA's 2002 Federal NSR Rule and determined that it could not implement the 2002 Federal NSR Rule in its entirety and EPA declined to have the Department implement the PSD program on a partial agreement. On May 24, 2004, the Department retumed delegation ofthe PSD progam to EPA after failing to reach agreement on a partial implementation of the program. The Department advised EPA that it intendedto adopt a StatePSD program thatwould be protective of the State's air resources and submit the regulations to EPA for SIP approval. 3. NEEDS AND BENEFITS: The Department is undertaking this rule making to comply with the 2002 Federal New Source Review (NSR) Rule EPA promulgated and correct deficiencies that EPA identihed in regardsto New York's existing Nonattainment New SourceReview (NNSR) regulation. The 2002 Federal NSR Rule modified both the NNSR and Prevention of Significant Deterioration (PSD) regulationsat 40 CFR 51.165and 52.21,respectively, and requires stateswith State Implementation Plan (SIP) approved NSR programsto revisetheir regulations in accordancewith the 2002 FederalNSR Rule and submit the revisions to EPA for approval into the SIP. The Department's existing NNSR program at Part231 is subjectto this requirement. Another purposeof the rule making is to adopt a StatePSD program for proposed new major facilities and major modifications to existing facilities located in attainment areas.The proposed Par|23l rule incorporates provisions from the federal PSD regulations in significant part with additional provisions to ensure enforceability of the rule and effective monitoring, recordkeeping and reporting. From the State's perspective, major NSR is a critical tool in meeting the Legislature's air quality objectives. The program ensures that air quality is preserved in areasof the statethat meet the NAAQS and does not further degrade, but actually improves, in areas of the State which currently are not in attainment of the NAAQS. The State of New York currently has areasthat are designated nonattainment for ozone, PM-10, and particulate matter or particles with an aerodynamic diameter lessthan

or equal to 2.5 micro-meiers (PM-2.5). As a result, the Department must have a NNSR program that meetsthe requirements of Part D of Title I of the Act to adopt permit programs for the construction, modification, and operation of major stationary sourcesin non-attainment areas. The proposedregulation is one in a seriesofprograms intendedto track pollution, ensurethat sourcesaremeeting their regulatory obligations, and maintain permis. These permits contain provisions to limit emissions of

ozone precursors (volatile organic compounds and nitrogen oxides), fine particulate matter, sulfur dioxide, carbon monoxide, and lead. The proposedregulation is being organizedto facilitate its implementation. The organization of the new regulation strives to make a more coherentseriesofrequirements andobligations. The existing subparts23 I - I and23l-2 arebeing retainedwith only modifications of the applicability dates.The initial subparts,Subpart23l-3 General Provisions and Subpart 231-4 Definitions, specify those provisions and definitions applicable throughout the regulation. The next four subpartsaddressnew and modified facilities in nonattainment and attainment areas.These specific subparts areintendedto clearly indicate which provisions apply to facilities in different areasofthe state.Subpart23 I -5 provisions apply to new facilities and existing non-major facilities in nonattainment areasand Subpart2Sl-6 appliesto modifications to existing major facilities in nonattainment areas. Subpart23l -7 applies to new facilities and to existing non-major facilities in attainment areasand Subpart23l -8 appliesto existing major facilities in attainment areas of the State. The remaining five subparts specifu how various major provisions apply to the four scenariosin Subparts5 through 8. Subpart 231-9 defines how Plantwide Applicability Limitations can be applied to facilities that choose to undertake them. Subpart 231-10 sets forth requirements for Emission Reduction Credit (ERC) creation and use

as emission offsets and for netting. Subpart 231-ll provides specific permit, monitoring, reporting, and recordkeeping requirements. Subpart 231-12embodies

the Ambient Air Quality ImpactAnalysis requirements for facilities in attainment areas.Subpart 23 1-13 compiles tables and lists emission thresholdsapplicable throughout the proposed regulation.

# NYS Register/September 26,2007 Rule Making Activities

The proposed revisions to Part 23I will changethe basis ofapplicability for modifications and emission reduction credits (ERCs) from an "Emission Unit" basis to an "Emission Source" basis, incorporate various federal requirements, provide clarification of existing requirements, and require comprehensive reporting, monitoring, and recordkeeping that will conform to the requirementsofTitle V. The revisions areexpectedto make the regulations lessburdensometo the businesscommunity without compromising air quality. The revisions arenot expectedto haveany measurable impact on employment opportunities in the State.The proposedregulations will make revisions to the current Part 231 to addressdeficiencies previously identified by the EPA.
In May 2004, the Department convened a workgroup to discuss the development and adoption of a State NSR rule. Participants included members of the regulated community, State and Federal agencies, and environmental organizations. The Department held meetings in 2004, 2006, and 2007 to discussthe major NSR reform provisions. The Department has also provided outreach through Part 231 rule making presentations at the NYS BusinessCouncil's 2005 Annual Industry-Environmental Conferenceheld on October 13&.14,2005 in SaratogaSprings,NY, andat the Air & Waste Management's Ninth Annual Environmental, Health & Safety Seminar held in Rochester,NY on February 15,2006.

4. COSTS: NSR reviews are done on a case-by-case basis so the costs ofcompliancewith either thp Federal NSR rules or the proposed Part 211 revisions will bevery facility specific. Under proposed Part23 I, the following types of costsmay be incurred by a facility located in a rural area.New facilities

or facilities that undertake modifications will have costs associatedwith determining regulatory applicability in the first instance. Some facilities that undertake minor modifications will only incur the costs associated with maintaining.records while others may be also subject to some emissidn monitoring depending on the other activities at the facility. Facilities that require emission capswill have the costsofpreparing permit applications and emissions monitoring, recordkeeping and reporting. Facilities that are subject to NSR in its entirety will have costs associatedwith preparing permit applications, including control technology and environmental impact assessments, emission offsets for nonattainment areas,and emissionsmonitoring, recordkeeping,and reporting. The proposedamendments to Part 231, in general, add provisions for increased regulatory flexibility and provide for a coordinated review processfor NSR affected projects. The technology assessment requirements of LAER, for facilities subject to the Department's existing Parl23l, remain unchanged in the Department's proposed amendmentsto Part 231. While some aspectsof the regulatory applicability determination will be more restrictive for nonattainment NSR than current Part 231, i.e. the baselineactual emissionsto projected actual emissions methodology will replacethe maximum annual potential (MAP) methodology calculation, other aspectsof the proposed regulation will be more flexible than the current regulation. For example, for baselinedeterminations facilities will have the option to chooseany 24 consecutive month period in the past five yearswhile the current Part 23I requires facilities to use the most recent 24 consecutive month period unlessthey candemonstratethat anotherperiod is more representative.lt is possiblethatthe proposedrevisions to Part23 I will result in more facilities being subject to nonattainment NSR review than under current Part 231 sincethe Department is eliminating the maximum annual potential (MAP) applicability concept. It is also possible that more facilities will be subject to NSR under revised Part23 I than underthe Federalregulations sincethe Department is proposing to determinebaselineactual emissionsbasedon a five-year look back period ratherthan a l0-year look back asin the Federal NSR rule. Although the Department anticipatesthat more facilities will be subjectthan under the federal NSR rule sincetherewill be lessopportunity for an emission look back, the Department doesnot havedefinitive datato determine for certain that this will be the case. As far as the costs of compliance are concemed the Department does not envision significant increased costs. Since the proposed amendments to Part 231 apply to proposedmajor facilities and major modifications, annual compliance and administrative costswould remain consistentwith thosecunently incurred to comply with the Department's 6 NYCRR Part201 Title V requirements. The proposedregulation requiresthat for any facility seekingthe establishment ofa PAL, that the PAL shall be reducedto 75 percentofthe initial PAL, commencing with the first day of the sixth year of the PAL, unless the owner or operator demonstrates that a lesser level of reduction is justified. The owner or operator may seekan alternative reduced PAL by demonstrating that the application of BACT and/or LAER, as applicable,

on all major PAL emission sourcesat the facility would not result in a 25 percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associatedwith the acceptanceof a PAL, if any, will vary on a case-by-case basis.The requirement to reducethe PAL may causean increasein costto the facility that choosesto usea PAL, if a facility choosesa capital-intensive meansofachieving the emission reductions. However, some facilities may meetthe 25 percent reduction without incurring any additional costs, such as when a facility akeady plans to reducethe usageof a lessefficient sourcewithin the facility, or implements efficiency improvements that reduce emissions and the cost ofoperation. Since PALs are a new compliance option, no specific cost estimatesare available to determine if the PAL provisions will causea monetary burden

on any facility that choosesto usea PAL. The proposed amendmentsto Part 231 set forth PM 2.5 applicability requirements for new major facilities and NSR major modifications consistent with new federal PM 2.5 requirements. The Department must include PM 2.5 in its proposed amendmentsto Part 231 to receive SIP approval. For new major facilities and NSR major modifications for PM 2.5, located in a PM 2.5 nonattainmeni area,the proposed rule requiresthe application of LAER and emission offsets of PM 2.5 at a ratio of one to

one. For new major facilities and NSR major modifications for.PM 2.5, located in a PM 2.5 attainment area,the proposedrule requiresthe application of BACT and preparation of an ambient air quality impact analysis. Facilities which meetthe PM 2.5 applicability criteria will incur additional costs above those in existing Part 231 since PM 2.5 is not a regulated contaminant under existing Part 231 and was not previously a regulated contaminant under federal 40 CFR 52.21 (PSD). The most significant cost increasewill be for new facilities andmodifications that needto obtain PM 2.5 emission offsets. Thesecostswill, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the availability ofapproved reductionsto be usedas PM 2.5 offsets. 5. PAPERWORK: Most of the proposedamendments to Part231 arenot expectedto entail any significant additional paperwork for the Department, industry, or state and local govemments beyond that which is already required to comply with the Department's existing permitting program under 6 NYCRR Part 201-6 and existing NSR regulations under 6 NYCRR Part23 1,andfederal 40 CFR 52.21. Also, while Part 231 may include more specific recordkeeping requirementsthan the FederalNSR rule, asdiscussedabove, EPA appearsto be changing its approach.Another areawhere revised Part 231 may entail additional paperwork is with the initial PAL review, which is a voluntary program. Applicants that seektojustify a reduction of lessthan 25 percentin the PAL will haveto conduct control technology assessments that will increase the amount of paperwork beyond that required if the applicant chosenot to avail itselfofthe option to agreeto a PAL. 6. STATE AND LOCAL GOVERNMENT MANDATES: The adoption ofthe proposedamendmentsto Part 23 I arenot expected to result in any additional burdenson industry, state,or local govemments beyond those currently incurred to comply with the requirements of the existing NSR process under 6 NYCRR 201-6, 6 NYCRR 231-2, and 40 cFR 52.21. 7. DUPLICATION: This proposal is not intended to duplicate any other Federal or State regulations or statutes.The proposed amendments to Part 231 will ultimately conform to the Act. In the short term, someduplication may occur. Currently, EPA Region 2 implements the PSD program for new and modified major facilities in attainment areasof New York State.Once the proposed revisions are in effect, and approved by EPA into the SIP, the Department will have sole responsibility for the PSD provisions, and no duplication will occur. 8. ALTERNATIVES: Adoption of the proposed amendments to Part 231 is necessary to conform to federal requirements. The Department returned delegation of the PSD rules in a letterto EPA datedMay 24,2004, retroactively effective March 3,2003. As a result, the Department must develop its own regulations in order to implement the PSD program. The Department is taking the opportunity to resolve issuescited by the USEPA and the regulated community, while incorporating the EPA NSR Reform provisions, in modified form. The amendmentswill provide further clarification of existing rules, coordinate review and requirements in both attainment and nonattainment areas,and make Part 231 less burdensome to the regulated community. The Department believesthat no viable alternativesto this rule making are available. The following is a discussionof the available altematives: Take no action. - This option is not a legitimate option. The State is required to either incorporate the FederalNSR regulations into the SIP or adopt its own program. 

## 1 1

# Rule Making Activities NYS Register/September 26,2007

Adopt the federal NSR Rule - The Department does not believe that adoption ofthe Federal NSR Rule is consistentwith the policy objectives ofthe Stateasarticulated in the ECL andtherefore hasdeterminedthatthis is not a viable option. Adoption a State-specific NSR program - Because neither option discussedabove is acceptable,the.Department proposes to adopt a State specific NSR program. The program will consist of modifications to the Department's existing Part 231 NNSR program and adoption of a State PSD program. The rule making will incorporate some of the provisions of the 2002 Federal NSR Rule as well as other provisions tailored to New York's air quality needsand objectives. 9. FEDERAL STANDARDS: The proposed amendments are incorporating federal regulatory language, and will align the state regulation with federal standardsfor the most part, and exceedminimum federal standardsfor other items. Provisions of the regulation which exceed federal standards include:

use of a uniform baseline period (any consecutive 24 month period over the previous five years)for all facilities; limiting projects to the useofonly

one baseline period for all NSR regulated pollutants for determining whether a project is subject to the regulation; modifications that would otherwise not be subjectto the regulation according to the EPA Rule dueto their insignificance are required to keep records of such a modification under the Department regulation; certified emission reduction credits are being required for netting analysesfor PSD areas that would not otherwise be required by the EPA Rule; the PAL allowance is being limited to l0 years or less depending on the renewal ofthe applicable Title V permit, whereas EPA would allow l0 years regardlessofpermit duration, and the PAL will be required to be reduced up to 25 percent by year six of its duration. On May l, 2007 EPA promulgated rule revisions to 40 CFR Parts5I, 52, "10, and 7l Prevention of Significant Deterioration, Nonattainment New Source Review, and Title V: Treatment of Certain Ethanol Production Facilities Under the Major Emitting Facility" definition; Final Rulewith an effective date of July 2, 2OO7

. To remain consistentwith this rule making, the Department proposes to modifu the definition of "Major stationary sowce or major source or major facility" under Part 201, and Table 9-Source Category List under Subpart 231-13 to exclude ethanol production facilities that produce ethanol by natural fermentation (includedin NAICS codes325193or 312140)from chemicalprocess plants. IO.COMPLIANCE SCHEDULE: The proposed amendments do not involve the establishment of any compliance schedules.The regulation will take effect 30 days after publication in the StateRegister. ReguIatory Flexi hility An aly sis EFFECTS ON SMALL BUSINESS AND LOCAL GOVERN. MENTS: Small businesses are those that are independently owned, located within New York State,andthat employ 100or fewer persons. The New York State Department of Environmental Conservation (Department) proposesto revise 6 NYCRR Parts200,201, and 231. The proposed rule making will apply statewide. The Part 231 applicability thresholds for facilities in New York State (excluding New York City, Long Island, and Lower Orange, Rockland and Westchester Counties) is large enoughthat it is unlikely any small businessor local government that

owns or operatesa facility would be subject to the applicability requirements of Part 231. For New York City, Long Island, and Lower Orange, Rockland andWestchesterCounties,the Part23I applicability threshold is very small, thus it is likely that some small businessesand local govemments would be subjectto the proposedrevisions. The Department is undertaking this rule making to comply with the 2002 Federal New Source Review (NSR) Rule EPA promulgated and correct deficiencies that EPA identified in regardsto New York's existing Nonattainment New Source Review (NNSR) regulation. The 2002 Federal NSR Rule modified both the NNSR and Prevention of Significant Deterioration (PSD) regulations at 40 CFR 51.165and 52.21,respectively, and requires stateswith State Implementation Plan (SIP) approved NSR programsto revise their regulations in accordancewith the 2002 Federal NSR Rule and submit the revisions to EPA for approval into the SIP. The Department's existing NNSR program at Part23 I is subjectto this requirement. Another purposeof the rule making is to adopt a StatePSD program .for proposed new major facilities and major modifications to existing facilities located in attainment areas.The proposed Parr2Sl rule incorporatesprovisions from the federal PSD regulations in significant part with additional provisions to ensure enforceability of the rule and effective monitoring,recordkeeping andreporting.



## 1 2 The revisions to Part23l do not substantially alter the requirementsfor the permitting of new and modified major stationary sources which are currently in effect in New York State and under 40 CFR 52.21. The proposedrevisions will provide clarification ofexisting NSR requirements andrequire more comprehensivemonitoring, recordkeeping, and reporting in a mannerconsistentwith New York's Title V operating permit program. Specific recordkeeping and monitoring requirements have been included in the proposedamendmentsto address minor modifications. The revisions leave in-tact the major NSR requirements for application of Lowest Achievable Emission Rate (LAER) or Best Available Control Technology (BACT) asappropriate, modeling, and emission offsets. New York is also requiring facilities which obtain Plant-wide Applicability Limits (PAL) to reduce emissions or make a demonstration that they operatewith current pollution control technology. This additional PAL requirement, however, is only applicable to facilities which choose to obtain a PAL, not all facilities. The Department hasaddedunder Part200 a regulatory definition for Routine Maintenance, Repair, or Replacement (RMRR), which codifies the cunent Department practice of reviewing RMRR activities on a

caseby casebasis,taking into accountthe nature and extent ofthe activity and its frequency and cost. The proposed amendmentsto Part 201 revise the definition for "major stationary sourceor major source" at 6 NYCRR 201-2.1(bX2l). The definition will now encompassthe term "major facility" and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter lessthan or equal to 2.5 micro-meters (PM-2.5). EPA designated the New York City metropolitan area as nonattainment for the PM 2.5 standard(70 Fed Reg 944). Nonattainment new source review (NNSR) is

now required for new major facilities and major modifications to existing facilities that emit PM 2.5 in significant amounts in the PM2.5 nonattainment area. Collectively, these additional requirements will not affect all major facilities, only new facilities or thosewhich undertakemajor modifications. Many of the significant requirements are not changing: new or modifred major facilities will still have to undertake applicability reviews and in appropriatecasessubmit permit applications and undertake control technology reviews.

COMPLIANCE REQUIREMENTS:

As describedabove,the revisions to Part 23 I do not substantially alter the requirements for the permitting of new and modified major stationary

sourceswhich arecurrently in effect in New York Stateand under 40 CFR 52.21. The proposed revisions will provide clarification of existing NSR requirementsand require more comprehensivemonitoring, recordkeeping, and reporting in a manner consistent with New York's Title V operating permit program. The proposed amendmentsto Part 231 requile facilities which undertake modifications with a project emission potential which doesnot exceedthe applicable significant project threshold (with or without demand growth emissions) to maintain records which support their emissions calculations and provide them to the Deparfrnent upon request. The 2002 Federal NSR Rule does not contain such a requirement. In addition, facilities that undertake modifications that would exceed the applicable significant project threshold ifdemand growth emissions were considered or would equal or exceed fifty (50) percent of the applicable significant project threshold will be required to maintain records of their demandgrowth determinations, monitor post-modification emissions,and submit an annual report to the Department to verify the accuracy of their emission calculations. The federal regulations require the same recordkeeping, monitoring, and reporting for modifications that the facility believes have a "reasonable possibility" of causing a significant emissions increase.The Department believes that, in order for the regulations to be enforceable,that a more objective standardmust be adoptedasafigger for recordkeeping, monitoring, and reporting. The amendments to Part 231 instead use two approaches; l) whether demand growth emissions, if considered, would result in post-modification emissions exceeding the significance threshold, or 2) the project emission potential would equal or exceed fifty (50) percent of the applicable significant project threshold. Given the diffrculty of separating post-modification emission increases attributable to demand growth versus those attributable to the modification, the Department's approach is faithful to the "reasonable possibility" concept but usesa more objective standardto improve enforceability. The Department believestheserequirementsare necessary to ensurethat facilities take into account the emissions fiom such projects in any future Part 231 applicability determination or netting analysis and comply with the proposedamendmentsto Part 23l. Becausefacilities will have to generate this information to determine whether they are subject to the proposed amendments to Part 231, there should be little if any additional cost associatedwith maintaining the records. In the caseofnetting at existing

# NYS Register/September 26,2007 RuleMaking Activities

major facilities, and for minor modifications, the proposed recordkeeping, monitoring, and reporting requirements are more extensive than those included in the 2002 Federal NSR Rule. For netting, the proposed regulation is consistentwith current Department practice which requires permits to include enforceable emission limits and appropriate recordkeeping, monitoring, and reporting. For minor modifications, the proposed regulation requires that facilities maintain records of the modification and comply with any other requirementsthat may be applicable, including Part201 permitting requirements. While proposed Part 231 recordkeeping, monitoring, and reporting requirements may be more extensive than the 2002 FederalNSR Rule, fiom the perspectiveofNew York State's implementation of NSR, the requirementsarenot significantly changing. Accordingly, theserequirements are not anticipated to place any undue burden of compliance on small businesses and local governments. PROFESSIONAL SERVICES: The professional services for any small businessor local govemment that is subject to Part 23I are not anticipated to significantly changefrom the type of services which are currently required to comply with NNSR and PSD requirements.The need for consulting engineersto addressNSR applicability and permitting requirements for any new major facility or major modif,rcationproposed by a small businessor local govemment will continue to exist. COMPLIANCE COSTS: NSR reviews are done on a case-by-case basis so the costs ofcompliancewith either the Federal NSR rules or the proposed Part231 revisions will be very facility specific. Under proposedPart23l, the following types of costsmay be incurred by small businesses and local govemments. New facilities or facilities that undertake modifications will have costs associated with determining regulatory applicability in the first instance. Some facilities that undertake minor modifications will only incur the costs associatedwith maintaining records while others may be also subject to

some emission monitoring dependingon the other activities at the facility. Facilities that require emission capswill havethe costsofpreparing permit applications and emissions monitoring, recordkeeping and reporting. Facilities that are subject to NSR in its entirety will have costs associated with preparing permit applications, including control technology and environmental impact assessments, emission offsets for nonattainment areas, and emissions monitoring, recordkeeping, and reporting. The proposed amendmentsto Part 231, in general, add provisions for increasedregulatory flexibility and provide for a coordinated review process for NSR affected projects. The technology assessment requirements ofLAER, for facilities subject to the Department's existing Paft 231, remain unchanged in the Department's proposed amendmentsto Part 231. While some aspects of the regulatory applicability determination will be more restrictive for non-attainment NSR than current Par" 231, i.e., the baseline actual emissions to projected actual emissions methodology will replace the maximum annual potential (MAP) methodology calculation, other aspects of the proposed regulation will be more flexible than the current regulation. For example, for baseline determinations facilities will have the option to choose any 24 consecutive month period in the past five years while the current Part 231 requires facilities to use the most recent 24 consecutive month period unlessthey can demonstratethat anotherperiod is more representative.It is possiblethat the proposedrevisions to Part23l will result in more facilities being subject to nonattainment NSR review than under current Part 231 sincethe Department is eliminating the maximum annual potential (MAP) applicabilii concept. It is also possible that

more facilities will be subject to NSR under revised Part 231 than under the Federal regulations since the Department is proposing to determine baselineactual emissionsbasedon a five-year look back period rather than

a l0-year look back as in the Federal NSR rule. Although the Department anticipates that more facilities will be subject than under the federal NSR rule since there will be less opportunity for an emission look back, the Department doesnot have definitive datato determine for certain that this will be the case. As far as the costs of compliance are concemed the Department does not envision significant increasedcosts. Since the proposed amendments to Part 231 apply to proposed major facilities and major modifications, annual compliance and administrative costs would remain consistentwith thosecurrently incurred to comply with the Department's 6 NYCRR Part 201 Title V requirements. The proposedregulation requiresthat for any facility seekingthe establishment ofa PAL, thatthe PAL shall be reducedto 75 percentofthe initial PAL, commencing with the first day of the sixth year of the PAL, unless the owner or operator demonstrates that a lesser level of reduction is justified. The owner or operator may seekan alternative reduced PAL by demonstrating that the application of BACT and/or LAER, as applicable, on all major PAL emission sourcesat the facility would not result tn a 25 percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associatedwith the acceptanceofa PAL, if any, will vary on a case-by-case basis.The requirement to reducethe PAL may causean increasein cost to the facility that choosesto usea PAL, ifa facility choosesa capital-intensive meansofachieving the emission reductions. However, somefacilities may meetthe 25 percent reduction without incurring any additional costs, such as when a facility already plans to reducethe usageofa lessefficient sourcewithin the facility, or implements efliciency improvements that reduce emissions and the cost ofoperation. Since PALs are a new compliance option, no specific cost estimatesare available to determine if the PAL provisions will causea monetary burden

on any facility that choosesto usea PAL.

The proposed amendmentsto Part 231 set forth PM 2.5 applicability requirements for new major facilities and NSR major modifications consistent with new federal PM 2.5 requirements. The Department must include PM 2.5 in its proposed amendmentsto Part 231 to receive SIP approval. For new major facilities and NSR major modifications for PM 2.5, located in a PM 2.5 nonattainment area,the proposed rule requires the application of LAER and emission offsets of PM 2.5 at a ratio of one to

one. For new major facilities and NSR major modifications for PM 2.5, located in a PM 2.5 attainment area,the proposedrule requires the application of BACT and preparation of an ambient air quality impact analysis. Facilities which meetthe PM 2.5 applicability criteria will incur additional costs above those in existing Parl 231 since PM 2.5 is not a regulated contaminant under existing Part 231 and was not previously a regulated contaminant under federal 40 CFR 52.21 (PSD). The most significant cost increasewill be for new facilities and modifications that needto obtain PM 2.5 emission offsets.These costswill, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the availability ofapproved reductions to be usedas PM 2.5 offsets.

MINIMIZING ADVERSE IMPACT:

The proposed rule making revisions as described above are not expectedto createsignificant adverseimpacts on any small businessor local government. The proposed revisions to Part 231 involve a major restnrcturing of the rule which will make it lessburdensomefor the Department to implement and easier for the regulated community to comprehend. The Department has provided a more flexible approach for determining the baseline period (any 24 consecutive month period in the previous five years) than under the current Part 231 (immediate 24 consecutive month period in the previous five years). NNSR and PSD review requirements will now be included in one regulation rather than in separateState and Federalrules.The rule also includes PAL provisions which allow a facility to accepta l0 year facility-wide emissioncap for a particular pollutant and then make changesat the facility avoiding NSR applicability provided the facility remains in compliance with its PAL.
SMALL BUSINESS AND LOCAL GOVERNMENT PARTICIPATION:

In May 2004, the Department convened a workgroup to discuss the development and adoption o[a State NSR regulation (revised Part 231). Participants included members of the regulated community, State and Federal agencies,and environmental organizations: American Lung Association; the Business Council of New York State, Inc. (BCNYS); the Chemical Alliance; the National Federation of Independent Businesses; Consolidated Edison Company of New York; the Energy Association of New York State; EPA Region II; Independent Power Producers ofNew York; the Natural Resources Defense Council (NRDC); the New York Public Interest Research Group (NYPIRG); New York Department of Public Service(NYSDPS); New York StateOffice of the Attomey General (NYSOAG); andthe Governor's Office of Regulatory Reform (GORR).

The Department held four meetings in the summer and fall of 2004 to discussthe major reform provisions included in EPA's 2002 Federal NSR Rule and Equipment Replacement Provision (ERP). The following issues

were discussed:the Clean Unit and Pollution Control Project exemptions; whether the 2002 Federal NSR Rule adequately addressed compliance monitoring, reporting and recordkeeping; the methodology for determining baselineactual emissions, including the appropriate look-back period (five years versus l0 years); the "reasonable possibility" test; the method for determining whether a significant emission increase occurred - the baseline actual emission to projected actual emissions test; whether "demand growth" should be excluded fiom the projection ofpost-modification actual emissions; routine maintenance, repair, and replacement, including the ERP rule, and the practice of conducting case-by-case determinations;

andthe PAL provision. 

# 13

# Rule Making Activities NYS Register/September 26,2007

The workgroup reconvened on February 16,2006 to discussproposed amendments to Part 231. The Department presentedan overview ofthe proposed amendmentsto Part 231 and discussedthe differences between the proposed amendmentsto Part23l, EPA's 2002 FederalNSR Rule and the Deparfrnent's existing NNSR Regulation (6 NYCRR Subpart 231-2). The workgroup commented on provisions which might be too broadly (e.g.,permit modifrcation triggers) or too narrowly construed (e.g., definition for routine maintenance repair and replacement).The attendees were also interested in the timing of the regulation and other pending and anticipated EPA regulationswhich might impact NSR review. The Department requested

wr-ittencommentsand revisedthe proposedamendmentsto Part23l, asappropriate,taking into account comments thatwere received. On September6,2006, the Departrnent publicly noticed for hearings and comment proposed amendmentsto Part 231. Following this proposal and receipt ofcomments, the workgroup reconvenedonce again on March 28, 2007 to discussfurther changesthat the Department planned to make to its proposed amendmenls to Part 231. The workgroup attendeeswere interestedin the Department's proposedchangesto baselineemissions,exemptions, PALs, and monitoring/reporting/recordkeeping requirements particularly asthey relate'to minor modifications anddemandgrowth emissions. The Department once again requestedwritten comments and revised the proposed amendments to Part 231, as appropriate, taking into account comments

thatwere received. The Department has also provided outreach through Part 231 rule making presentations at the New York State Business Council's 2005 Annual Industry-Environmental Conference held on October 13 & 14, 2005 in Saratoga Springs, New York, and at the Air & Waste Management's Ninth Annual Environmental, Health & Safety Seminar held in Rochester, New York on February 15, 2006. Comments from these presentationswere also considered during development of the proposed amendmentsto Part 231. Furthermore, public notice and hearings will be held to obtain additional comments on the Department's proposed revisions to Parts 200, 201 and231

. Participation by every affected party will be actively soughtthrough thesehearings. ECONOMIC AND TECHNOLOGICAL FEASIBILITY: The proposed revisions do not substantially alter the requirements for subject facilities as compared to those that currently exist. The revisions leave in-tact the major NSR requirements for application of Lowest Achievable Emission Rate (LAER) or Best Available Control Technology (BACT) as appropriate, modeling, and emission offsets. Therefore, the Department believes there are no additional economic or technological feasibility issuesto be addressedby any small business or local govemment that may be subject to the proposed rule making. Rutal Area Flexibility Analysis TYPES AND ESTIMATED NUMBERS OF RURAL AREAS AF. FECTED: Rural areasare defined as rural counties in New York Statethat have populations less than 200,000 people, towns in non-rural counties where the population densities are less than 150 people per square mile and villages within thosetowns. The New York StateDepartment of Environmental Conservation (Department) proposesto revise 6 NYCRR Parts200,201, and 231. The proposedrule making will apply statewideand all rural areasof New York Statewill be affected. The Department is undertaking this rule making to comply with the 2002 Federal New Source Review (NSR) Rule EPA promulgated and correct deficiencies that EPA identified in regardsto New York's existing Nonattainment New Source Review (NNSR) regulation. The 2002 Federal NSR Rule modified both the NNSR and Prevention of Significant Deterioration (PSD) regulationsat 40 CFR 51.165and 52.21,respectively, and requires stateswith State Implementation Plan (SIP) approved NSR programsto revise their regulations in accordancewith the 2002 FederalNSR Rule and submit the revisions to EPA for approval into the SIP. The Department's existing NNSR program at Part231 is subjectto this requirement. Another pdlpose of the rule making is to adopt a StatePSD program for proposed new major facilities and major modifications to existing facilities located in attainment areas.The proposed Part2Sl rule incorporates provisions from the federal PSD regulations in significant part with additional provisions to ensure enforceability of the rule and effective monitoring, recordkeeping and reporting. The revisions to Part 23 I do not substantially alter the requirementsfor the permitting of new and modified major stationary sources which are currently in effect in New York State and under 40 CFR 52.21. The proposedrevisions will provide clarification ofexisting NSR requirements and require more comprehensivemonitoring, recordkeeping,and reporting



## 1 4 in a mannerconsistentwith New York's Title V operating permit program. Specific recordkeeping.and monitoring requirements have been included in the proposedamendments to addressminor modifications. The revisions leave in-tact the major NSR requirements for application of Lowest Achievable Emission Rate (LAER) or Best Available Control Technology (BACT) asappropriate, modeling, and emission offsets. New York is also requiring facilities which obtain Plant-wide Applicability Limits (PAL) to reduce emissions or make a demonstration that they operate with current pollution control technology. This additional PAL requirement, however, is only applicable to facilities which choose to obtain a PAL, not all facilities. The Department hasaddedunder Part200 a regulatory definition for routine maintenance, repair, or replacement (RMRR), which codifies the current Departmentpractice of reviewing RMRR activities on a caseby

casebasis,taking into account the nature and extent of the activity and its frequency and cost. The proposed amendments to Part 201 revise the definition for "major stationary sourceor major source" at 6 NYCRR 201- 2.lOX2l). The definition will now encompassthe term "major facility" and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter lessthan or equal to 2.5 micro-meters (PM-2.5). EPA designatedthe New York City metropolitan areaas nonattainment for the PM 2.5 standard(70 Fed Reg 944). Nonattainment new sourcereview (NNSR) is now required for new major facilities and major modifications to existing facilities that emit PM 2.5 in significant amounts in the PM2.5 nonattainment area. Collectively, theseadditional requirements will not affect all major facilities, only new facilities or those which undertake major modifications. Many of the significant requirements are not changing: new or modified major facilities will still have to undertake applicability reviews and in appropriate casessubmit permit applications and undertake control technology reviews.

COMPLIANCE REQUIREMENTS:

As describedabove,the revisions to Part23 I do not substantially alter the requirements for the permitting of new and modified major stationary

sourceswhich arecurrently in effect in New York Stateand under 40 CFR 52.2I

.As such,the professionalservicesthatwill be neededby any facility located in a rural areaare not anticipated to significantly changefrom the type of serviceswhich are currently required to comply with NNSR and PSD requirements. The proposed revisions will provide clarification of existing NSR requirements and require mbre comprehensive monitoring, recordkeeping,andreporting in a mannerconsistentwith New York's Title V operating permit program. The proposed amendments to Part 231 require facilities which undertake modifications with a project emission potential which does not exceedthe applicable significant project threshold (with or without demandgrowth emissions)to maintain recordswhich support their emissions calculations and provide them to the Department upon request.T\e2002 FederalNSR Rule doesnot contain sucha requirement. In addition, facilities that undertakemodifications thatwould exceed the applicable significant project threshold if demand growth emissions

were consideredor would equalor exceedfifty (50) percentofthe applicable significant project threshold will be required to maintain records of their demand gowth determinations, monitor post-modification emissions,and submit anannualreport to the Department to verifo the accuracy of their emission calculations. The federal regulations require the same recordkeeping, monitoring, and reporting for modifications that the facility believes have a "reasonablepossibility" of causinga significant emissions increase.The Department believes that, in order for the regulations to be enforceable,that a more objective standardmust be adoptedasatrigger for recordkeeping, monitoring, and reporting. The amendments to Part 231 instead use two approaches; l) whether demand growth emissions, if considered, would result in post-modification emissions exceeding the significance threshold, or 2) the project emission potential wou{d equal or exceed fifty (50) percent of the applicable significant project threshold. Given the difliculty of separating post-modification emission increases attributable to demand growth versus those attributable to the modification, the Department's apptoach is faithful to the "reasonable possibility" concept but usesa more objective standardto improve enforceability. The Department believestheserequirementsarenecessary to ensurethat facilities take into account the emissions from such projects in any future Part 231 applicability determination or netting analysis and comply with the proposedamendmentstoPart2ll. Becausefacilities will have to generate this information to determine whether they are subject to the proposed amendments to Parl 231, there should be little if any additional cost associatedwith maintaining the records. In the caseofnetting at existing major facilities, and for minor modifications, the proposed recordkeeping, monitoring, and reporting requirements are more extensive than those

# NYS Register/September 26,2007 RuleMaking Activities

included in the 2002 Federal NSR Rule. For netting, the proposed regulation is consistentwith current Department practice which requires permits to include enforceable emission limits and appropriate recordkeeping, monitoring, and reporting. For minor modifications, the proposed regulation requires that facilities maintain records of the modification and comply with any other requirementsthat may be applicable, including Part201 permitting requirements. While proposed Pan 231 recordkeeping, monitoring, and repofting requirements may be more extensive than the 2002 FederalNSR Rule, from the perspective of New York State's implementation ofNSR, the requirementsarenot significantly changing. Accordingly, theserequirements are not anticipated to place any undue burden ofcompliance on businessesin rural areas. COSTS:
NSR reviews are done on a case-by-case basis so the costs ofcompliancewith either the Federal NSR rules or the proposed Part23l revisions will bevery facility specific. Under proposed Part23l, the following types of costsmay be incurred by a facility located in a rural area.New facilities

or facilities that undertake modifications will have costs associatedwith determining regulatory applicability in the first instance. Some facilities that undertake minor modifications will only incur the costs associated with maintaining records while others may be also subject to some emission monitoring depending on the other activities at the facility. Facilities that require emission capswill have the costsofpreparing permit applications and emissions monitoring, recordkeeping and reporting. Facilities that are subject to NSR in its entirety will have costs associated with preparing permit applications, including control technology and environmental impact assessments, emission offsets for nonattainment areas,and emissionsmonitoring, recordkeeping, and reporting. The proposedamendments to Paft 231, in general, add provisions for increased regulatory flexibility and provide for a coordinated review processfor NSR affected projects. The technology assessment requirements ofLAER, for facilities subject to the Department's existing Part 231, remain unchanged in the Department's proposed amendments to Part 231. While some aspectsof the regulatory applicability determination will be more restrictive for nonattainment NSR than current Part 231. i.e. the baselineactual emissionsto projected actual emissionsmethodology will replacethe maximum annual potential (MAP) methodology calculation, other aspectsof the proposed regulation will be more flexible than the current regulation. For example, for baselinedeterminations facilities will have the option to chooseany 24 consecutive month period in the past five yearswhile the current Part 23I requires facilities to use the most recent 24 consecutive month period unlessthey can demonstratethat anotherperiod is more representative.It is possiblethat the proposedrevisions to Part23 I will result in more facilities being subject to nonattainment NSR review than under current Part 231 sincethe Department is eliminating the maximum annual potential (MAP) applicability concept. It is also possible that more facilities will be subject to NSR under revised Part23 I than underthe Federalregulations sincethe Department is proposing to determine baselineactualemissionsbasedon a five-year look back period rather than a 1 0-year look back asin the Federal NSR rule. Although the Department anticipatesthat more facilities will be subjectthan underthe federal NSR rule sincetherewill be lessopportunity for an emission look back, the Department doesnot have definitive datato determine for certain that this will be the case. As far as the costs of compliance are concerned the Department does not envision significant increased costs. Since the proposed amendments to Part 231 apply to proposed major facilities and major modifications, annual compliance and administrative costswould remain consistentwith thosecurrently incurred to comply with the Department's 6 NYCRR Part201 Title V requirements.

The proposedregulation requiresthat for any facility seekingthe establishment of a PAL, thatthe PAL shall be reducedto 75 percentof the initial PAL, commencing with the first day of the sixth year of the PAL, unless the owner or operator demonstrates that a lesser level of reduction is justified. The owner or operator may seekan alternative reduced PAL by demonstrating that the application of BACT and./orLAER, as applicable,

on all major PAL emission sourcesat the facility would not result in a 25 percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associatedwith the acceptanceofa PAL, if any, will vary on a case-by-case basis.The requirement to reducethe PAL may causean increasein costto the facility that chooses to usea PAL, if a facility choosesa capital-intensive meansofachieving the emission reductions. However, some facilities may meet the 25 percent reduction without incurring any additional costs, such as when a facility already plans to reducethe usageofa lessefficient sourcewithin the facility, or implements efficiency improvements that reduce emissions and the cost of operation. Since PALs are a new compliance option, no specific cost estimatesare available to determine if the PAL provisions will causea monetary burden

on any facility that choosesto use a PAL. The proposed amendmentsto Part 231 set forth PM 2.5 applicability requirements for new major facilities and NSR major modifications consistent with new federal PM 2.5 requirements. The Department must include PM 2.5 in its proposed amendments to Part 231 to receive SIP approval. For new major facilities and NSR major modifrcations for PM 2.5, located in a PM 2.5 nonattainment area,the proposedrule requires the application of LAER and emission offsets of PM 2.5 at a ratio of one to

one. For new major facilities and NSR major modifications for PM 2.5, located in a PM 2.5 attainment area,the proposedrule requires the application ofBACT and preparation ofan ambient air quality impact analysis. Facilities which meetthe PM 2.5 applicability criteria will incur additional costs above those in existing Part 231 since PM 2.5 is not a regulated contaminant under existing Part 231 and was not previously a regulated contaminant under federal 40 CFR 52.2I (PSD). The most significant cost increasewill be for new facilities and modifications that needto obtain PM 2.5 emission offsets.Thesecostswill, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the availability ofapproved reductions to be usedas PM 2.5 offsets. MINIMIZING ADVERSE IMPACT: The proposed rulemaking revisions as described above are not expected to createsignificant adverse impacts on rural areas.The proposed revisions to Part 231 involve a major restructuring of the rule which will make it lessburdensome for the Department to implement and easier for the regulated community to comprehend. The Department has provided a

more flexible approach for determining the baseline period (any 24 consecutive month period in the previous five years) than under the current Part 231 (immediate 24 consecutive month period in the previous five years). NNSR and PSD review requirements will now be included in one regulation rather than in separate State and Federal rules. The rule also includes PAL provisions which allow a facility to accepta l0 year facilitywide emission cap for a particular pollutant and then make changesat the facility avoiding NSR applicability provided the facility remains in compliance with its PAL. RURAL AREA PARTICIPATION: In May 2004, the Department convened a workgtoup to discuss the development and adoption ofa State NSR regulation (revised Part 231). Participants included members of the regulated community, State and Federalagencies,and environmental organizations: American Lung Association; the Business Council of New York State, Inc. (BCNYS); the Chemical Alliance; the National Federation of Independent Businesses; Consolidated Edison Company of New York; the Energy Association of New York State; EPA Region II; Independent Power Producers ofNew York; the Natural Resources Defense Council (NRDC); the New York Public Interest Research Group (NYPIRG); New York Department of Public Service(NYSDPS); New York StateOffice of the Attomey General (NYSOAG); andthe Govemor's Oflice of Regulatory Reform (GORR). The Department held four meetings in the summer and fall of 2004 to discussthe major reform provisions included in EPA's 2002 Federal NSR Rule and Equipment Replacement Provision (ERP). The following issues

were discussed:the Clean Unit and Pollution Control Project exemptions; whether the 2002 Federal NSR Rule adequately addressed compliance monitoring, reporting and recordkeeping; the methodology for determining baseline actual emissions, including the appropriate look-back period (five years versus l0 years); the "reasonable possibility" test; the method for determining whether a significant emission increase occurred - the baseline actual emission to projected actual emissions test; whether "demand growth" should be excluded from the projection ofpost-modification actual emissions; routine maintenance, repair, and replacement, including the ERP rule, and the practice of conducting case-by-case determinations;

andthe PAL provision. The workgroup reconvenedon February 16,2006 to discussproposed amendmentsto Part 23I

. The Department presented an overview of the proposed amendmentsto Part 231 and discussedthe differences between the proposedamendmentsto Part 231, EPA's 2002 Federal NSR Rule and the Department's existing NNSR Regulation (6 NYCRR Subpart 231-2). The workgroup commented on provisions which might be too broadly (e.9.,permit modification triggers) or too narowly construed (e.g., definition for routine maintenancerepair and replacement).The attendees were also interested in the timing of the regulation and other pending and anticipated EPA regulationswhich might impact NSR review. The Department requested

written commentsand revisedthe proposedamendmentsto Part2ll, asappropriate,taking into account comments that were received. On September6, 2006, the Department publicly noticed for hearings and 

## 1 5

# Rule Making Activities NYS Register/September 26,2007

comment proposed amendmentsto Part 231. Following this proposal and receipt ofcomments, the workgroup reconvened once againon March 28, 2007 to discussfurther changesthat the Department plannedto make to its proposed amendments to Part 231. The workgroup attendeeswere interestedin the Department's proposedchangesto baselineemissions,exemptions, PALs, and monitoring/reporting/recordkeeping requirements particularly asthey relateto minor modifications and demandgrowth emissions. The Department once again requestedwritten comments and revised the proposed amendments to Part 231, as appropriate, taking into account comments that were received The Department has also provided outreach through Part 231 rule making presentations at the New York State Business Council's 2005 Annual Industry-Environmental Conference held on October 13 & 14, 2005 in Saratoga Springs, New York, and at the Air & Waste Management's Ninth Annual Environmental, Health & Safety Seminar held in Rochester, New York on February 15, 2006. Comments fiom these presentations were also considered during development of the proposed amendmentsto Parl231

. Furthermore, public notice and hearings will be held to obtain additional comments on the Department's proposed revisionsto Parts 200,201 and 23l. Participation by every affected party will be actively soughtthrough thesehearings.
Job Impact Statement NATUREOF IMPACT: The New York State Department of Environmental Conservation @epartment) proposesto revise 6 NYCRR Parts 200,201, and 231. The proposed rule making will apply statewide The Department is wrdertaking this rule making to comply with the 2002 Federal New Source Review (NSR) Rule EPA promulgated and conect deficiencies that EPA identified in regardsto New York's existing Nonattainment New Source Review (NNSR) regulation. The 2002 Federal NSR Rule modified both the NNSR and Prevention of Significant Deterioration (PSD) regulationsat 40 CFR 51.165and 52.21,respectively, and requires stateswith State Implementation Plan (SIP) approved NSR programsto revisetheir regulations in accordancewith the 2002 Federal NSR Rule and submit the revisions to EPA for approval into the SIP. The Department's existing NNSR progam at Part231 is subjectto this requirement. Another purposeof the rule making is to adopt a StatePSD program for proposed new major facilities and major modifications to existing facilities located in attainment areas.The proposed Part2Sl rule incorporatesprovisions from the federal PSD regulations in significant part with additional provisions to ensure enforceability of the rule and effective monitoring, recordkeeping and reporting. The revisions to Part 23 I do not substantially alterthe requirernentsfor the permitting of new and modified major stationary sourceswhich are currently in effect in New York State and under 40 CFR 52.21. The proposedrevisions will provide clarification of existing NSR requirements and require more comprehensivemonitoring, recordkeeping,and reporting in a manner consistentwith New York's Title V operatingpermit program. Specific recordkeeping and mgnitoring requirements have been included in the proposedamendmentsto addressminor modifications. The revisions leave in-tact the major NSR requirements for application of Lowest Achievable Emission Rate (LAER) or Best Available Control Technology (BACT) as appropriate, modeling, and emission offsets. New York is also requiring facilities which obtain Plant-wide Applicability Limits (PAL) to reduce emissions or make a demonstration that they operatewith current pollution control technology. This additional PAL requirement, however, is only applicable to facilities which choose to obtain a PAL, not all facilities. The Department hasaddedunder Part200 a regulatory definition for routine maintenance, repair, or replacement (RMRR), which codifies thecurrent Department practice of reviewing RMRR activities on acaseby

casebasis,taking into account the nature and extent ofthe activity and its frequency and cost. The proposed amendments to Part 201 revise the definition for "major stationary sourceor major source" at 6 NYCRR 201- 2.lOX2l). The definition will now encompassthe term "major facility" and incorporate major facility and significant project thresholdsfor facilities emitting particulate matter or particles with an aerodynamic diameter lessthan or equal to 2.5 micro-meten (PM-2.5). EPA desigaatedthe New York City metropolitan areaas nonattainment for the PM 2.5 standard(70 Fed Reg 9rl4). Nonattainment new sourcereview (NNSR) is now required for new major facilities and major modifications to existing facilities that emit PM 2.5 in significant amounts in the PM2.5 nonattainment area. Collectively, theseadditional requirementswill not affect all major facilities, only new facilities or those which undertake major modifications. Many of the significant requirements are not changing: new or modified major facilities will still have to undertake applicability reviews and in 

## 1 6 appropriate casessubmit permit applications and undertake control technology reviews. The Department does not anticipate that any of the proposedrule revisions would adverselyaffectjobs or employment opportunities in the State. CATEGORIES AND NUMBERS OF JOBS OR EMPLOYMENT OPPORTUNITIES AFFECTED. Due to the natureofthe proposedamendmentsto Part23 1,asdiscussed above, no measurable effect on the categories or numbers of jobs, or employment opportunities in any specific category is anticipated. There may be somejob opportunities for persons providing consulting services and./or manufacturen ofpollution control technology in relation to the new requirements. REGIONS OF ADVERSE IMPACT: There are no regions ofthe Statewhere the proposed revisions would have a disproportionate adverseimpact onjobs or employment opportunities. The existing NSR requirements are not being substantially changed from thosethat currently exist. MINIMIZING ADVERSE IMPACT: The proposed rule making revisions as described above are not expectedto createsignificant adverseimpacts on existingjobs or promote the development ofany significant new employment opportunities. The proposedrevisions to Part 231 involve a major restructuring of the rule which will make it lessburdensomefor the Department to implement and easier for the regulatedcommunity to comprehend.The Department hasprovided

a more flexible approach for determining the baseline period (any 24 consecutivemonth period in the previous five years)than underthe current Part 231 (immediate 24 consecutive month period in the previous five years). NNSR and PSD review requirements will now be included in one regulation rather than in separateState and Federal rules. The rule also includes PAL provisions which allow a facility to accepta l0 year facilitywide emission cap for a particular pollutant and then make changesat the facility avoiding NSR applicability provided the facility remains in compliance with its PAL. SELF.EMPLOYMENT OPPORTUNITIES : The types of facilities affected by these regulatory changesare larger operationsthanwhat would typically be found in a self-employment situar tion. There may be an opportunity for self-employed consultantsto advise facilities on how best to comply with the revised requirements. The proposed revisions are not expectedto have any measurablenegative impact

on opportunities for self-employment.



# Department

of Health

EMERGENCY RULE MAKING Payment for FQHC Psychotherapyand Offsite Services I.D.No. HLT-39-07-00007-E FilingNo. 979 Filingdate: Sept.

10,2007 Effective

date: Sept.

10,2007

PURSUANT

TO THE PROVISIONS OFTHE State

Administrative

Procedure Act,NOTICEishereby

givenof thefollowingaction: Action taken: Amendment of section

86-4.9 ofTitle l0 NYCRR. Statutoryauthorify: PublicHealth Law,section

201. l(v) Finding of necessity

for emergency

rule.' Preservation

of general

welfare. Speciticreasons

underlying thefinding of necessify: Theamendment o l0 NYCRR86-4.9

will permitMedicaid

billing for individual

psychotherapyservices

provided by certifred

social workersin Article 28 Federally Qualified

Health Centers (FQHCs).

In conjunction

withthischange,

DOH is alsoamending

regulations

to prohibitArticle28clinicsfrombilling for group visitsand

toprohibit

such services frombeing

provided by part-time clinics. Based upontheDepartment's

interpretation

of 10NYCRR 86-a.9(c), social work services

have notbeen considered

billablethreshold

visitsin Article28clinicsettings despite thefactthatcertified

social workers have been an integral

partof themental

healthdeliverysystem

in community