Rule Making Activities NYS Register/September 26, 2007

adverse economic impact on them. Because it is evident from the nature of

the proposed amendment that it will not affect small businesses, no further

steps were needed to ascertain that fact and none were taken. Accordingly,

a regulatory flexibility analysis for small businesses is not required and one

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 revises and clarifies various

requirements, including those conceming replacing paper records with

microforms or digital images, the retention and preservation ofelectronic

records, and the use of altemative records disposition schedules.

COMPLIANCE REQUIREMENTS:

Local govemments in New York are currently required to comply with

records management requirements of the Commissioner of Education. The

amendments to Part 185 impose no new compliance requirements but

instead modernize and claify those requirements now in place.

PROFESSIONAL SERVICES:

The proposed amendment proposes no 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 standards for 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

records management requirements of the Commissioner of Education. The

proposed amendments to Part 185 impose no new compliance requirements or additional costs but instead modernize 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, and the use of altemative records disposition schedules.

LOCAL GOVERNMENT PARTICIPATION:

The proposed amendment was reviewed and approved by the Local

Government Records Advisory Council, established by State law to advise

the Commissioner of Education on records management matters.

Rural Area Flexibility Analysis

TYPES AND ESTIMATED NUMBER OF RURAL AREAS:

The proposed amendment will 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 I 50 per square mile or less.

REPORTING, RECORDKEEPING AND OTHER COMPLIANCE

REQUIREMENTS AND PROFESSIONAL SERVICES:

The proposed amendment revises and clarifies the records management

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

proposed amendment proposes no 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 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 amendment will have no adverse impact on municipalities and miscellaneous local govemments in rural areas or elsewhere in

New York State. Local govemments in New York are currently required to

comply with records management requirements of the Commissioner of

Education. The proposed amendments to 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 use ofalternative records disposition

schedules.

8

RURAL AREA PARTICIPATION:

The proposed amendment was reviewed and approved by the Local

Government Records Advisory Council, established by State law to advise

the Commissioner of Education on records management matters, and

which includes members from rural areas.

Job Impact Statement

The proposed amendment relates solely to local government records management and will not have an adverse impact on jobs or employment

opportunities. Because it is evident from the nature ofthe proposed amendment that it will have no impact on jobs or employment opportunities, no

further measures were needed to ascertain that fact and none were taken.

Accordingly, a job impact statement is 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 State Administrative Procedure Act, 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 -0 I 0 l, 3-030 I,

3-0303, l9-0103, 19-0105, l9-0107, l9-0301, 19-0302, l9-0303 and l9-

0305; and Federal Clean Air Act, sections 160-169 and l7l -193 (42 U.S.C.

7470-7479;7501 -75 I 5)

Subject: Requirements for proposed new 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 Federal NSR 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 State Implementation Plan (SIP) approved NSR programs to revise their regulations in

accordance with 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 State PSD 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 ensure enforceability 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 Department of

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 Island City, NY.

Accessibility: All public hearings have been scheduled at places reasonably acce;sible to persons with a mobility impairment.

Interpreter Service: Interpreter services will 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 representative designated in the paragraph below.

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 Parts 200,201 and 231 of Title 6 of the

Official Compilation of Codes, Rules, and Regulations of the State of 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 amendments will add a definition for Routine Maintenance, Repair, or Replacement (RMRR), codi$ing current Department

practice of reviewing RMRR activities on a case by case basis, taking into

account the nature and extent of the activity and its frequency and cost. In

addition, the Department is revising Part 200 (Sections 200.9 and 200.10).

Section 200.9 is being amended to include all federal materials referenced

in the proposed amendments to Part 231. Section 200.10(a) is being

amended to reflect that the Department is no longer delegated responsibility for implementation ofthe Federal Prevention of Significant Deterioration (PSD) Program.

The proposed amendments to Part 201 revise the definition for "maior

stationary ioorce or major source" at 6 NYCRR 201-2.1O)(21). The

definition will now encompass the term "major facility" and incorporate

major facility and significant project thresholds for facilities emitting

particulate matter or particles with an aerodynamic diameter less than or

equal to a nominal 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.

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 requirements are also based largely on the December

3l ,2002 Federal NSR reform rule as codified at 40 CFR 52.21 .

The proposed revisions to Part23l will change the 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 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 separate baseline period for electric utility steam generating 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 Subpart 23 I -2, "Requirements for emission units subject to the regulation on or after November 15,1992". These regulations 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 date ofrevised

Part 231 will be processed according to the provisions of Subparts 23 l -3

through 231-13, as applicable.

New Subparts 23 l -3 through 23 l - I 3 have been added to 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 updated and incorporated into these new subparts. The

Department is also adopting a State PSD progam which is based largely

on the Federal PSD rule and included in Subparts 231-7,231-8, and 231-

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, general permit requirements, general

prohibitions, exemptions, and circumvention.

Subpart 23 I -4 defines the terms used throughout Part 23 I and incorporates terms from both the existing Subpart 23 1-2 and the Federal PSD rule,

40 CFR 52.21 . Tlte Department has made minor revisions to terms used in

existing Subpart 23 l -2 and 40 CFR 52.2 I so that 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) depending on 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 as they 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 contemporaneous activities at the facility, would exceed

applicable emissions thresholds.

Subpan 23 I -7 applies to 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 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 231-8 applies to modifications at existing major facilities in

attainment areas of the State. The subpart implements the requirements for

determination of air quality impacts through modeling and the application

of BACT in the case of facilities which undertake a NSR major modification. These requirements address Federal 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 exceed emissions thresholds.

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 undertake modifications without being subject to NSR review as

long as the facility does not exceed its PAL emission limit. Subpart 23 I -9

is based on 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 has made a few revisions to the federal regulatory language to take into account Subpart 201-6, New York's approved

Title V regulation and to ensure that reduced emissions and improved air

quality will result. PALs are established in Title V permits and are subject

to Title V permit application and processing procedures for creation,

modification, or renewal. PALs are created for an initial period of l0 years,

less if established during the middle of a Title V permit term, and can be

renewed for 10 years, subject to certain restrictions. The proposed regulation requires that the PAL shall be reduced to 75 percent ofthe 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 seek an altemative reduced PAL by demonstrating that the application of BACT and/or LAER, as applicable, on all

major PAL emission sources at 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 sources are operated at full capacity after complying

with BACT and/or LAER, as applicable.

Subpart 23 I -10 defines emission offset and Emission Reduction Credit

(ERC) creation and use. The provisions for ERC creation and use are

substantially the same as existing Subpart 23 l-2.

Subpart 231-ll sets forth specific permit, monitoring, reporting and

recordkeeping requirements that apply to new major facilities, NSR major

modifications and minor modifications. These requirements are in addition

to any Part 201 requirements that 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 includes several tables which list applicable emission

thresholds for proposed new and modified facilities, emission offset ratios,

federal Class I variance maximum allowable increase concentrations, and

maximum allowable increase in S02 concentrations for 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

natural fermentation (included in NAICS codes 325193 or 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 I nsr@gw.dec. state.ny.us

Dat4 views or arguments may be submitted fo.' Same as above.

Public comment will be received until: fle days after the last scheduled

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 assessment form have been

prepared and 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 Conservation Law (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 160-169 and l7l-193 of the Federal Clean 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 measures to do so,

including the regulation of mobile sources of 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 adopted fior the purpose ofsafeguarding the air '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, amend and repeal regulations for preventing, controlling and prohibiting air pollution.

The Clean Air Act (Act) requires states to 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 statute directed

EPA to adopt National Ambient Air Quality Standards (NAAQS) and

required states to develop implementation plans known as State Implementation Plans (SIPs) which prescribed the measures needed to attain the

NAAQS. The 1970 Act amendments mandated that SIPs contain "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 safeguards to protect the

nation's air quality. The 1977 amendments required states to identi$ areas

that did not meet the NAAQS which were then designated as "nonattainment" areas. In particular, the 1977 amendments strengthened the Act by

(l) expressly creating a preconstruction review program for new or modified major sources located in "nonattainment" areas (i.e., areas which

failed to meetNAAQS) ('see generally'42 USC Sections 7501-7515); and

(2) expressly providing a parallel preconstruction review program for new

or modified sources located in "attainment" areas (i.e., areas which met

NAAQS or where there was insufficient information to evaluate whether

NAAQS were met) ('see generally id.' Sections 7470-7492).

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 changes were "intended to reduce costs and 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

383 l9). On December 31, 2002, the EPA published a final rule revising the

regulations that implement the PSD and NNSR provisions of the Act ('see'

67 Fed Reg 80185 [2002 Federal NSR Rule]). EPA stated that the rule was

1 0

designed to "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 and NNSR programs to 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 as a delegated State

but objected to several aspects of 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 intended to adopt a State PSD program that would 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 regards to 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 51.165 and 52.21, respectively, and

requires states with State Implementation Plan (SIP) approved NSR programs to revise their regulations in accordance with the 2002 Federal NSR

Rule and submit the revisions to EPA for approval into the SIP. The

Department's existing NNSR program at Part 231 is subject to this requirement. Another purpose of the rule making is to adopt a State PSD 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 areas of the state that 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 areas that are designated nonattainment for ozone, PM-10,

and particulate matter or particles with an aerodynamic diameter less than

or equal to 2.5 micro-meiers (PM-2.5). As a result, the Department must

have a NNSR program that meets the requirements of Part D of Title I of

the Act to adopt permit programs for the construction, modification, and

operation of major stationary sources in non-attainment areas.

The proposed regulation is one in a series ofprograms intended to track

pollution, ensure that sources are meeting 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 proposed regulation is being organized to facilitate its implementation. The organization of the new regulation strives to make a more

coherent series ofrequirements and obligations. The existing subparts 23 I -

I and23l-2 are being retained with only modifications of the applicability

dates. The initial subparts, Subpart 23 l-3 General Provisions and Subpart

231-4 Definitions, specify those provisions and definitions applicable

throughout the regulation. The next four subparts address new and modified facilities in nonattainment and attainment areas. These specific subparts are intended to clearly indicate which provisions apply to facilities in

different areas ofthe state. Subpart 23 I -5 provisions apply to new facilities

and existing non-major facilities in nonattainment areas and Subpart2Sl-6

applies to modifications to existing major facilities in nonattainment areas.

Subpart 23 l -7 applies to new facilities and to existing non-major facilities

in attainment areas and Subpart 23 l -8 applies to existing major facilities in

attainment areas of the State. The remaining five subparts specifu how

various major provisions apply to the four scenarios in Subparts 5 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

231-12 embodies the Ambient Air Quality Impact Analysis requirements

for facilities in attainment areas. Subpart 23 1-13 compiles tables and lists

emission thresholds applicable throughout the proposed regulation.
NYS Register/September 26, 2007 Rule Making Activities

The proposed revisions to Part 23 I will change the 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 requirements ofTitle V. The revisions are expected to make

the regulations less burdensome to the business community without compromising air quality. The revisions are not expected to have any measurable impact on employment opportunities in the State. The proposed regulations will make revisions to the current Part 231 to address deficiencies

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 discuss the major NSR reform provisions. The Department has also provided outreach through Part 231 rule making presentations at the NYS Business Council's 2005 Annual Industry-Environmental

Conference held on October 13 &.14,2005 in Saratoga Springs, NY, and at

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 ofcompliance with either thp Federal NSR rules or the proposed Part 211 revisions

will be very facility specific. Under proposed Part 23 I, the following types

of costs may be incurred by a facility located in a rural area. 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 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 caps will have the costs ofpreparing 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 amendments to Part 231, in general, add provisions for increased regulatory

flexibility and provide for a coordinated review process for 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 amendments to Part 231. While some aspects of

the regulatory applicability determination will be more restrictive for nonattainment NSR than current Part 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 23 I

requires facilities to use the most recent 24 consecutive month period

unless they can demonstrate that another period is more representative. lt is

possible that the proposed revisions to Part 23 I will result in more facilities

being subject to nonattainment NSR review than under current Part 231

since the Department is eliminating the maximum annual potential (MAP)

applicability concept. It is also possible that more facilities will be subject

to NSR under revised Part 23 I than under the Federal regulations since the

Department is proposing to determine baseline actual emissions based on 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 does not have definitive data to

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

proposed major facilities and major modifications, annual compliance and

administrative costs would remain consistent with those cunently incurred

to comply with the Department's 6 NYCRR Part 201 Title V requirements.

The proposed regulation requires that for any facility seeking the establishment ofa PAL, that the PAL shall be reduced to 75 percent ofthe 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 seek an alternative reduced PAL by

demonstrating that the application of BACT and/or LAER, as applicable,

on all major PAL emission sources at the facility would not result in a 25

percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associated with the acceptance of a PAL, if

any, will vary on a case-by-case basis. The requirement to reduce the PAL

may cause an increase in cost to the facility that chooses to use a PAL, if a

facility chooses a capital-intensive means ofachieving the emission reductions. However, some facilities may meet the 25 percent reduction without

incurring any additional costs, such as when a facility akeady plans to

reduce the usage of a less efficient source within the facility, or implements

efficiency improvements that reduce emissions and the cost ofoperation.

Since PALs are a new compliance option, no specific cost estimates are

available to determine if the PAL provisions will cause a monetary burden

on any facility that chooses to use a PAL.

The proposed amendments to 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 modifications for PM

2.5, located in a PM 2.5 nonattainmeni 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 proposed rule requires the application of BACT and preparation of an ambient air quality impact analysis.

Facilities which meet the 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

increase will be for new facilities and modifications that need to obtain PM

2.5 emission offsets. These costs will, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the

availability ofapproved reductions to be used as PM 2.5 offsets.

5. PAPERWORK:

Most of the proposed amendments to Part 231 are not expected to 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 Part 23 1, and federal

40 CFR 52.21. Also, while Part 231 may include more specific recordkeeping requirements than the Federal NSR rule, as discussed above, EPA

appears to be changing its approach. Another area where revised Part 231

may entail additional paperwork is with the initial PAL review, which is a

voluntary program. Applicants that seek to justify a reduction of less than

25 percent in the PAL will have to conduct control technology assessments

that will increase the amount of paperwork beyond that required if the

applicant chose not to avail itselfofthe option to agree to a PAL.

6. STATE AND LOCAL GOVERNMENT MANDATES:

The adoption ofthe proposed amendments to Part 23 I are not expected

to result in any additional burdens on 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, some duplication may occur.

Currently, EPA Region 2 implements the PSD program for new and

modified major facilities in attainment areas of 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 letter to 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 issues cited by the USEPA and the regulated community, while incorporating the EPA NSR Reform provisions, in modified

form. The amendments will 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 believes that no viable alternatives to this rule making are

available.

The following is a discussion of the available altematives:

Take no action. - This option is not a legitimate option. The State is

required to either incorporate the Federal NSR 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 consistent with the policy objectives

ofthe State as articulated in the ECL and therefore has determined that this

is not a viable option.

Adoption a State-specific NSR program - Because neither option

discussed above 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 needs and objectives.

9. FEDERAL STANDARDS:

The proposed amendments are incorporating federal regulatory language, and will align the state regulation with federal standards for the

most part, and exceed minimum federal standards for 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 use ofonly

one baseline period for all NSR regulated pollutants for determining

whether a project is subject to the regulation; modifications that would

otherwise not be subject to the regulation according to the EPA Rule due to

their insignificance are required to keep records of such a modification

under the Department regulation; certified emission reduction credits are

being required for netting analyses for 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 regardless ofpermit 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 Parts 5 I,

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 consistent with 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 (included in NAICS codes 325193 or 312140) from chemical process 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 State Register.

Regu I atory F lexi h i lity An aly s is

EFFECTS ON SMALL BUSINESS AND LOCAL GOVERN.

MENTS:

Small businesses are those that are independently owned, located

within New York State, and that employ 100 or fewer persons.

The New York State Department of Environmental Conservation (Department) proposes to revise 6 NYCRR Parts 200,201, 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 enough that it is unlikely any small business or local government that

owns or operates a facility would be subject to the applicability requirements of Part 231. For New York City, Long Island, and Lower Orange,

Rockland and Westchester Counties, the Part 23 I applicability threshold is

very small, thus it is likely that some small businesses and local govemments would be subject to the proposed revisions.

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 regards to 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 51.165 and 52.21, respectively, and

requires states with State Implementation Plan (SIP) approved NSR programs to revise their regulations in accordance with the 2002 Federal NSR

Rule and submit the revisions to EPA for approval into the SIP. The

Department's existing NNSR program at Part 23 I is subject to this requirement. Another purpose of the rule making is to adopt a State PSD program

.for proposed new major facilities and major modifications to existing

facilities located in attainment areas. The proposed Parr2Sl 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.

1 2

The revisions to Part23l do not substantially alter the requirements for

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

proposed revisions will provide clarification ofexisting NSR requirements

and require more comprehensive monitoring, recordkeeping, and reporting

in a manner consistent with New York's Title V operating permit program.

Specific recordkeeping and monitoring requirements have been included

in the proposed amendments to 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) 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 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 has added under Part 200 a regulatory definition

for Routine Maintenance, Repair, or Replacement (RMRR), which codifies the cunent Department practice of reviewing RMRR activities on a

case by case basis, 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 source or major source" at 6 NYCRR

201-2.1(bX2l). The definition will now encompass the term "major facility" and incorporate major facility and significant project thresholds for

facilities emitting particulate matter or particles with an aerodynamic

diameter less than 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 those which undertake major modifications. Many of the significant requirements are not changing: new or

modifred major facilities will still have to undertake applicability reviews

and in appropriate cases submit permit applications and undertake control

technology reviews.

COMPLIANCE REQUIREMENTS:

As described above, the revisions to Part 23 I do not substantially alter

the requirements for 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 proposed revisions will provide clarification of existing NSR

requirements and require more comprehensive monitoring, recordkeeping,

and reporting in a manner consistent with New York's Title V operating

permit program. The proposed amendments to Part 231 requile facilities

which undertake modifications with a project emission potential which

does not exceed the 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

demand growth 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 standard must be adopted as a figger 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 uses a more objective standard to improve enforceability. The

Department believes these requirements are necessary to ensure that facilities take into account the emissions fiom such projects in any future Part

231 applicability determination or netting analysis and comply with the

proposed amendments to Part 23 l. Because facilities 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

associated with maintaining the records. In the case ofnetting at existing
NYS Register/September 26, 2007 Rule Making 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 consistent with 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 requirements that may be applicable, including Part 201

permitting requirements. While proposed Part 231 recordkeeping, monitoring, and reporting requirements may be more extensive than the 2002

Federal NSR Rule, fiom the perspective ofNew York State's implementation of NSR, the requirements are not significantly changing. Accordingly,

these requirements are not anticipated to place any undue burden of compliance on small businesses and local governments.

PROFESSIONAL SERVICES:

The professional services for any small business or local govemment

that is subject to Part 23 I are not anticipated to significantly change from

the type of services which are currently required to comply with NNSR

and PSD requirements. The need for consulting engineers to address NSR

applicability and permitting requirements for any new major facility or

major modif,rcation proposed by a small business or local govemment will

continue to exist.

COMPLIANCE COSTS:

NSR reviews are done on a case-by-case basis so the costs ofcompliance with either the Federal NSR rules or the proposed Part231 revisions

will be very facility specific. Under proposed Part 23 l, the following types

of costs may 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

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 caps will have the costs ofpreparing 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

amendments to Part 231, in general, add provisions for increased regulatory 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 amendments to 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 unless they can demonstrate that another period

is more representative. It is possible that the proposed revisions to Part23l

will result in more facilities being subject to nonattainment NSR review

than under current Part 231 since the 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

baseline actual emissions based on 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 does not have definitive data to 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 proposed major facilities and

major modifications, annual compliance and administrative costs would

remain consistent with those currently incurred to comply with the Department's 6 NYCRR Part 201 Title V requirements.

The proposed regulation requires that for any facility seeking the establishment ofa PAL, that the PAL shall be reduced to 75 percent ofthe 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 seek an alternative reduced PAL by

demonstrating that the application of BACT and/or LAER, as applicable,

on all major PAL emission sources at the facility would not result tn a 25

percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associated with the acceptance ofa PAL, if

any, will vary on a case-by-case basis. The requirement to reduce the PAL

may cause an increase in cost to the facility that chooses to use a PAL, ifa

facility chooses a capital-intensive means ofachieving 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

reduce the usage ofa less efficient source within the facility, or implements

efliciency improvements that reduce emissions and the cost ofoperation.

Since PALs are a new compliance option, no specific cost estimates are

available to determine if the PAL provisions will cause a monetary burden

on any facility that chooses to use a PAL.

The proposed amendments to 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 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 proposed rule requires the application of BACT and preparation of an ambient air quality impact analysis.

Facilities which meet the 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

increase will be for new facilities and modifications that need to obtain PM

2.5 emission offsets. These costs will, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the

availability ofapproved reductions to be used as PM 2.5 offsets.

MINIMIZING ADVERSE IMPACT:

The proposed rule making revisions as described above are not expected to create significant adverse impacts on any small business or local

government. The proposed revisions to Part 231 involve a major restnrcturing of the rule which will make it less burdensome 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 accept a l0 year facility-wide emission cap for a particular pollutant and

then make changes at 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 State Office of the Attomey General

(NYSOAG); and the Governor's Office of Regulatory Reform (GORR).

The Department held four meetings in the summer and fall of 2004 to

discuss the 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 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; and the PAL provision.

13
Rule Making Activities NYS Register/September 26, 2007

The workgroup reconvened on February 16,2006 to discuss proposed

amendments to Part 231. The Department presented an overview ofthe

proposed amendments to Part 231 and discussed the differences between

the proposed amendments to Part23l, EPA's 2002 Federal NSR 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 regulations which might impact NSR review. The Department requested wr-itten comments and revised the proposed amendments to

Part 23 l, as appropriate, taking into account comments that were received.

On September 6,2006, the Departrnent publicly noticed for hearings and

comment proposed amendments to Part 231. Following this proposal and

receipt ofcomments, the workgroup reconvened once again on March 28,

2007 to discuss further changes that the Department planned to make to its

proposed amendmenls to Part 231. The workgroup attendees were interested in the Department's proposed changes to baseline emissions, exemptions, PALs, and monitoring/reporting/recordkeeping requirements particularly as they relate'to minor modifications and demand growth emissions.

The Department once again requested written 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 from these

presentations were also considered during development of the proposed

amendments to Part 231. Furthermore, public notice and hearings will be

held to obtain additional comments on the Department's proposed revisions to Parts 200, 201 and 231 . Participation by every affected party will

be actively sought through these hearings.

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 issues to be addressed by 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 areas are defined as rural counties in New York State that 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 those towns.

The New York State Department of Environmental Conservation (Department) proposes to revise 6 NYCRR Parts 200,201, and 231. The

proposed rule making will apply statewide and all rural areas of New York

State will 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 regards to 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 51.165 and 52.21, respectively, and

requires states with State Implementation Plan (SIP) approved NSR programs to revise their regulations in accordance with the 2002 Federal NSR

Rule and submit the revisions to EPA for approval into the SIP. The

Department's existing NNSR program at Part 231 is subject to this requirement. Another pdlpose of the rule making is to adopt a State PSD 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 requirements for

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

proposed revisions will provide clarification ofexisting NSR requirements

and require more comprehensive monitoring, recordkeeping, and reporting

1 4

in a manner consistent with New York's Title V operating permit program.

Specific recordkeeping.and monitoring requirements have been included

in the proposed amendments to 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) 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 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 has added under Part 200 a regulatory definition

for routine maintenance, repair, or replacement (RMRR), which codifies

the current Department practice of reviewing RMRR activities on a case by

case basis, 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 source or major source" at 6 NYCRR 201-

2.lOX2l). The definition will now encompass the term "major facility"

and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter

less than 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 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 cases submit permit applications and undertake control technology reviews.

COMPLIANCE REQUIREMENTS:

As described above, the revisions to Part 23 I do not substantially alter

the requirements for the permitting of new and modified major stationary

sources which are currently in effect in New York State and under 40 CFR

52.2 I . As such, the professional services that will be needed by any facility

located in a rural area are not anticipated to significantly change from the

type of services which 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, and reporting in a manner consistent with 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 exceed the applicable significant project threshold (with or without demand growth emissions) to maintain records which

support their emissions calculations and provide them to the Department

upon request. T\e2002 Federal NSR Rule does not contain such a requirement. In addition, facilities that undertake modifications that would exceed

the applicable significant project threshold if demand growth emissions

were considered or would equal or exceed fifty (50) percent ofthe applicable significant project threshold will be required to maintain records of

their demand gowth determinations, monitor post-modification emissions, and submit an annual report 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 "reasonable possibility" of causing a significant emissions

increase. The Department believes that, in order for the regulations to be

enforceable, that a more objective standard must be adopted as a trigger 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 uses a more objective standard to improve enforceability. The

Department believes these requirements are necessary to ensure that facilities take into account the emissions from such projects in any future Part

231 applicability determination or netting analysis and comply with the

proposed amendments toPart2ll. Because facilities 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

associated with maintaining the records. In the case ofnetting 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 Rule Making Activities

included in the 2002 Federal NSR Rule. For netting, the proposed regulation is consistent with 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 requirements that may be applicable, including Part 201

permitting requirements. While proposed Pan 231 recordkeeping, monitoring, and repofting requirements may be more extensive than the 2002

Federal NSR Rule, from the perspective of New York State's implementation ofNSR, the requirements are not significantly changing. Accordingly,

these requirements are not anticipated to place any undue burden ofcompliance on businesses in rural areas.

COSTS:

NSR reviews are done on a case-by-case basis so the costs ofcompliance with either the Federal NSR rules or the proposed Part23l revisions

will be very facility specific. Under proposed Part23l, the following types

of costs may be incurred by a facility located in a rural area. 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 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 caps will have the costs ofpreparing 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 amendments to Paft 231, in general, add provisions for increased regulatory

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 Part 231, remain unchanged in the

Department's proposed amendments to Part 231. While some aspects of

the regulatory applicability determination will be more restrictive for nonattainment NSR than current Part 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 23 I

requires facilities to use the most recent 24 consecutive month period

unless they can demonstrate that another period is more representative. It is

possible that the proposed revisions to Part 23 I will result in more facilities

being subject to nonattainment NSR review than under current Part 231

since the Department is eliminating the maximum annual potential (MAP)

applicability concept. It is also possible that more facilities will be subject

to NSR under revised Part 23 I than under the Federal regulations since the

Department is proposing to determine baseline actual emissions based on a

five-year look back period rather than a 1 0-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 does not have definitive data to

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 costs would remain consistent with those currently incurred

to comply with the Department's 6 NYCRR Part 201 Title V requirements.

The proposed regulation requires that for any facility seeking the establishment of a PAL, that the PAL shall be reduced to 75 percent of 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 seek an alternative reduced PAL by

demonstrating that the application of BACT and./or LAER, as applicable,

on all major PAL emission sources at the facility would not result in a 25

percent reduction in the initial PAL. The capital, operation and maintenance, and monitoring costs associated with the acceptance ofa PAL, if

any, will vary on a case-by-case basis. The requirement to reduce the PAL

may cause an increase in cost to the facility that chooses to use a PAL, if a

facility chooses a capital-intensive means ofachieving 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

reduce the usage ofa less efficient source within the facility, or implements

efficiency improvements that reduce emissions and the cost of operation.

Since PALs are a new compliance option, no specific cost estimates are

available to determine if the PAL provisions will cause a monetary burden

on any facility that chooses to use a PAL.

The proposed amendments to 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 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 proposed rule requires the application ofBACT and preparation ofan ambient air quality impact analysis.

Facilities which meet the 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 52.2 I (PSD). The most significant cost

increase will be for new facilities and modifications that need to obtain PM

2.5 emission offsets. These costs will, however, vary greatly being dependent on the amount (tons per year) of emission offsets needed and the

availability ofapproved reductions to be used as PM 2.5 offsets.

MINIMIZING ADVERSE IMPACT:

The proposed rulemaking revisions as described above are not expected to create significant adverse impacts on rural areas. The proposed

revisions to Part 231 involve a major restructuring of the rule which will

make it less burdensome 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 accept a l0 year facilitywide emission cap for a particular pollutant and then make changes at 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

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 State Office of the Attomey General

(NYSOAG); and the Govemor's Oflice of Regulatory Reform (GORR).

The Department held four meetings in the summer and fall of 2004 to

discuss the 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; and the PAL provision.

The workgroup reconvened on February 16,2006 to discuss proposed

amendments to Part 23 I . The Department presented an overview of the

proposed amendments to Part 231 and discussed the differences between

the proposed amendments to 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 maintenance repair and replacement). The attendees were

also interested in the timing of the regulation and other pending and

anticipated EPA regulations which might impact NSR review. The Department requested written comments and revised the proposed amendments to

Part2ll, as appropriate, taking into account comments that were received.

On September 6, 2006, the Department publicly noticed for hearings and

1 5
Rule Making Activities NYS Register/September 26, 2007

comment proposed amendments to Part 231. Following this proposal and

receipt ofcomments, the workgroup reconvened once again on March 28,

2007 to discuss further changes that the Department planned to make to its

proposed amendments to Part 231. The workgroup attendees were interested in the Department's proposed changes to baseline emissions, exemptions, PALs, and monitoring/reporting/recordkeeping requirements particularly as they relate to minor modifications and demand growth emissions.

The Department once again requested written 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

amendments to Parl231 . Furthermore, public notice and hearings will be

held to obtain additional comments on the Department's proposed revisions to Parts 200,201 and 23 l. Participation by every affected party will

be actively sought through these hearings.

Job Impact Statement

NATUREOF IMPACT:

The New York State Department of Environmental Conservation

@epartment) proposes to 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 regards to 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 51.165 and 52.21, respectively, and

requires states with State Implementation Plan (SIP) approved NSR programs to revise their regulations in accordance with the 2002 Federal NSR

Rule and submit the revisions to EPA for approval into the SIP. The

Department's existing NNSR progam at Part 231 is subject to this requirement. Another purpose of the rule making is to adopt a State PSD 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 requirernents for

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

proposed revisions will provide clarification of existing NSR requirements

and require more comprehensive monitoring, recordkeeping, and reporting

in a manner consistent with New York's Title V operating permit program.

Specific recordkeeping and mgnitoring requirements have been included

in the proposed amendments to 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) 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 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 has added under Part 200 a regulatory definition

for routine maintenance, repair, or replacement (RMRR), which codifies

the current Department practice of reviewing RMRR activities on a case by

case basis, 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 source or major source" at 6 NYCRR 201-

2.lOX2l). The definition will now encompass the term "major facility"

and incorporate major facility and significant project thresholds for facilities emitting particulate matter or particles with an aerodynamic diameter

less than or equal to 2.5 micro-meten (PM-2.5). EPA desigaated the New

York City metropolitan area as nonattainment for the PM 2.5 standard (70

Fed Reg 9rl4). 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 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 cases submit permit applications and undertake control technology reviews. The Department does not anticipate that any of the proposed rule revisions would adversely affectjobs or employment opportunities in the State.

CATEGORIES AND NUMBERS OF JOBS OR EMPLOYMENT OPPORTUNITIES AFFECTED.

Due to the nature ofthe proposed amendments to Part 23 1, as discussed

above, no measurable effect on the categories or numbers of jobs, or

employment opportunities in any specific category is anticipated. There

may be some job 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 State where the proposed revisions would

have a disproportionate adverse impact on jobs or employment opportunities. The existing NSR requirements are not being substantially changed

from those that currently exist.

MINIMIZING ADVERSE IMPACT:

The proposed rule making revisions as described above are not expected to create significant adverse impacts on existingjobs or promote the

development ofany significant new employment opportunities. The proposed revisions to Part 231 involve a major restructuring of the rule which

will make it less burdensome 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 accept a l0 year facilitywide emission cap for a particular pollutant and then make changes at 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 changes are larger

operations than what would typically be found in a self-employment situar

tion. There may be an opportunity for self-employed consultants to advise

facilities on how best to comply with the revised requirements. The proposed revisions are not expected to have any measurable negative impact

on opportunities for self-employment.

Department of Health

EMERGENCY

RULE MAKING

Payment for FQHC Psychotherapy and Offsite Services

I.D. No. HLT-39-07-00007-E

Filing No. 979

Filing date: Sept. 10,2007

Effective date: Sept. 10,2007

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:

Action taken: Amendment of section 86-4.9 of Title l0 NYCRR.

Statutory authorify: Public Health Law, section 201. l(v)

Finding of necessity for emergency rule.' Preservation of general welfare.

Specitic reasons underlying the finding of necessify: The amendmento

l0 NYCRR 86-4.9 will permit Medicaid billing for individual psychotherapy services provided by certifred social workers in Article 28 Federally

Qualified Health Centers (FQHCs). In conjunction with this change, DOH

is also amending regulations to prohibit Article 28 clinics from billing for

group visits and to prohibit such services from being provided by part-time

clinics.

Based upon the Department's interpretation of 10 NYCRR 86-a.9(c),

social work services have not been considered billable threshold visits in

Article 28 clinic settings despite the fact that certified social workers have

been an integral part of the mental health delivery system in community