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Regulatory Impact Statement 6 NYCRR Parts 200 and 201

The New York State Department of Environmental Conservation (Department) is proposing to update its Operating Permit Program found in Title 6 of Official Compilation of Codes, Rules and Regulation of the State of New York (6 NYCRR) Parts 200, General Provisions; and 201, Permits and Registrations (Part 201). The last substantial overhaul of Part 201 occurred in 1996. At that time, the Department was required to revise Part 201 to incorporate the federal Title V permitting program mandated by the Clean Air Act Amendments of 1990 (Act). Many of the requirements in Part 201 have since become outdated and/or in need of substantial revision. While the Department has over the years made several minor changes to particular definitions and exempt activities, a comprehensive review and revision has not been proposed. This rulemaking will revise several components of the existing Part 201 to further clarify their requirements and simplify their implementation. This proposal applies to any entity that operates one or more stationary air emission sources in the State of New York, and does not create a mandate on local governments. The scope of the existing Part 201 will not be changed as a result of this proposal.

To begin with, several minor changes are being proposed as part of this process. First, the outdated transition plan requirements will be removed. These requirements were originally developed as part of the 1996 revisions to help the Department phase-in the new air permitting program requirements and have since lapsed. In addition, facility owners or operators still holding certificates to operate, pre-1996 permits that were extended indefinitely as part of the 1996 revisions to Part 201, will be required to submit a permit or registration application to the Department in an effort to update their facility information and ensure their continued compliance with current applicable requirements. This requirement will be phased-in to help mitigate any potential impacts on facility owners and operators.

The Department is also proposing to modify the existing provisions of Part 201 for emission sources operating on a temporary basis. Temporary emission sources are currently addressed only in the major facility section of Part 201, effectively precluding smaller facilities from utilizing these provisions. As part of this proposal, the Department intends to extend the benefits of these provisions to all facilities regardless of size, thus reducing the amount of unnecessary permitting actions for temporary operations at non-major facilities. Finally, the Department is proposing several minor changes to the cap-by-rule provisions in an effort to make them more efficient and easier for facility owners and operators to implement.

Several more substantial changes are also being proposed as a part of this rulemaking. First, the permit and registration application requirements will be revised to require additional information. This additional information has historically been requested through an extended exchange of multiple correspondences during the permit review process. It is expected that by asking for this information to be included within the application itself, it will speed up the permit review process while still continuing to allow the Department to protect public health and the environment. Second, the Department is proposing term limitations be established for both new and modified air facility registrations and state facility permits. This change will ensure that the air permits and registrations issued by the Department contain the most up to date information possible. In addition, this change will provide the Department with up to date facility information for use in modeling exercises. Third, the proposed rulemaking will establish emission thresholds and corresponding permitting requirements for facilities emitting one of the 62 listed persistent, bioaccumulative or toxic compounds. The Department has concluded that these 62 compounds, which are highly toxic to humans and animals and have high rates of persistence in the environment, need to be more closely monitored and where necessary controlled. A list of the affected compounds and their associated emission thresholds will be established and used to determine whether a facility needs to apply for and obtain either a state facility permit or registration. This change will not significantly impact existing permitted facilities as they are already monitoring and reporting to the Department on many of these compounds. Some existing registered facilities may however be required to upgrade to a state facility permit if they emit one of the listed compounds in excess of the listed threshold.

1. Statutory Authority

The statutory authority for these regulations is found in Sections 1-0101, 3-0301, 3-0303, 19-0103, 19-0105, 19-0301, 19-0302, 19-0303, 19-0305, 19-0306, 19-0311, 70-0109, 71-2103, and 71-2105 of the Environmental Conservation Law (ECL), 40 CFR 70, Section 7661[b] of the United States Code (USC), and Sections 160-169 and 171-193 of the Federal Clean Air Act (Act) (42 USC Sections 7470-7479;7501-7515).

Section 1-0101. This section outlines the policy declaration for the Department as it relates to the protection of New York State's environment and natural resources including the control of "air pollution, in order to enhance the health, safety and welfare of the people of the State and their overall economic and social well being." Section 1-0101 further states that it is the policy of the State to coordinate its environmental plans, functions, powers, and programs with those of the federal government and other regions to manage air resources such that the State may fulfill its responsibility as trustee of the environment for present and future generations. This section also provides that it is the policy of the State to foster, promote, create, and maintain an environment where man and nature thrive in harmony by providing that care is taken with air resources shared between states.

Section 3-0301. This section states that it is the responsibility of the Department to carry out the environmental policy of the State. In order to carry out that mandate, Section 3-0301(1)(a) gives the Commissioner the authority to "[c]oordinate and develop policies, planning and programs related to the environment of the State and regions thereof..." Section 3-0301(1)(b) instructs the Commissioner to promote and coordinate management of, among other things, air resources "to assure their protection, enhancement, provision, allocation and balanced utilization consistent with the environmental policy of the State and take into account the cumulative impact upon all such resources in making any determination in connection with any license, order, permit, certification or other similar action or promulgating any rule or regulation, standard or criterion." ECL Section 3-0301(1)(i) charges the Commissioner with promoting and protecting the air resources of New York State, including providing for the prevention and abatement of air pollution.

Section 3-0301(2)(a) gives the Commissioner the authority to adopt rules and regulations in order to implement the provisions of the ECL. Section 3-0301(2)(g) allows the Commissioner to enter and inspect air pollution sources and verify compliance. Section 3-0301(2)(m) grants the Commissioner the authority to "adopt such rules, regulations, and procedures as may be necessary, convenient, or desirable to effectuate the purposes of this chapter."

Section 3-0303. This section requires that the Department formulate, and periodically revise, a statewide environmental plan for the management and protection of the environment and natural resources of the State. The Department must conduct public hearings, cooperate with other departments, agencies and government officials, and any other interested parties, and obtain any necessary assistance and data from any department, division, board, bureau, commission or other agency of a state or political subdivision or any public authority when formulating or modifying the statewide environmental plan.

Section 19-0103. This section provides a declaration of the State's policy regarding air pollution. "It is declared to be the policy of the State of New York to maintain a reasonable degree of purity of the air resources of the State...and to that end to require the use of all available practical and reasonable methods to prevent and control air pollution."

Section 19-0105. This section defines the purpose of Article 19 of the ECL, "to safeguard resources of the State from pollution" consistent with the policy stated in Section 19-0103 and in accordance with other provisions of Article 19.

Section 19-0301(1)(a). This section states that the Department has the power to "[f]ormulate, adopt and promulgate, amend and repeal codes and rules and regulations for preventing, controlling or prohibiting air pollution in such areas of the State as shall or may be affected by air pollution..." Section 19-0301(1)(b) further states that the Department has the power to "[i]nclude in any such codes and rules and regulations provisions establishing areas of the State and prescribing for such areas (1) the degree of air pollution or air contamination that may be permitted therein, (2) the extent to which air contaminants may be emitted to the air by any air contamination source..."

Section 19-0301(2)(a) states that it is the duty and responsibility of the Department to prepare and develop a comprehensive plan for the control or abatement of existing air pollution and for the control or prevention of any new air pollution that recognizes various requirements for different areas of the State.

Section 19-0302. This section states that permit applications, renewals, modifications, suspensions and revocations are governed by rules and regulations adopted by the Department, and that permits issued may not include performance, emission or control standards more stringent than any standard established by the Act or EPA unless such standards are authorized by rules or regulations.

Section 19-0303. This section states that a code, rule or regulation or any amendments or repeal thereof will not be adopted until after a public hearing is held and may not become effective until filed with the Secretary of State. The Department may also recognize differences between the State's air quality areas in its rulemaking activities. In addition, this section outlines procedures for adopting any code, rule or regulation that contains a requirement that is more stringent than the Act or regulations issued pursuant to the Act by the EPA.

Section 19-0305. This section authorizes the Department to enforce codes, rules and regulations promulgated in accordance with Article 19 of the ECL. In addition, Section 19-0305(2)(j) authorizes the Department to consider the approval or disproval of permit applications for the installation of air contamination sources and air emission control equipment. Section 19-0305(2)(j) further authorizes the Department to inspect such installations for compliance with the submitted plans and specifications.

Section 19-0311(1). This section requires that the Department "establish an operating permit program for sources subject to Title V of the Act." This section also outlines the various requirements that the permit program must satisfy, including the specific emission sources that are subject to the program.

Section 19-0311(2)(a). This section states that the Department shall "review and revise, as necessary to be consistent with the Act and other applicable federal and state laws, existing regulations to provide for adequate, streamlined and reasonable procedures for processing permit applications, for public notice and participation, including offering an opportunity for public comment and hearing, and for expeditious review of permit actions, including applications, renewals and revisions."

Section 70-0109. This section outlines acceptable time periods for Department action on permit applications.

Section 71-2103. This section outlines the penalties for violating any section of the ECL or any code, rule, or regulation promulgated pursuant thereto. This section also discusses the methods that the State may use to collect such penalties.

Section 71-2105. This section describes the penalties associated with any criminal violations of the ECL or any code, rule, or regulation promulgated pursuant thereto.

2. Legislative Objectives

Title V of the 1990 amendments to the Act established federal standards that states must satisfy with their air permitting programs in order to fulfill the environmental protection goals expressed therein. Such a program is required to address both large and small sources of air pollution, and provide a strong basis for implementing and enforcing various federal and state rules and regulations. The Department completed a rule making in 1996 that modified Part 201, and the Department's existing air permitting program, to be consistent with the new requirements of the Act. The knowledge and experience gained by the Department since that time has highlighted certain areas of the State air permitting program that need to be updated and revised. The changes being proposed through the present rulemaking are intended to increase the effectiveness of the program, streamline the permitting process, and make the program itself more efficient and responsive.

The development of a clear, concise and effective air permitting program will allow the Department to better fulfill its obligations to the citizens of the State while simultaneously meeting its responsibilities under the Act. This goal is consistent with the objectives set forth in both the Act and the ECL. The proposed revisions will also simplify the process for facility owners and operators by making the requirements for permitting or registering a facility more clear, consistent and concise. Finally, the revisions will make the program more efficient by reducing the amount of back and forth correspondence between the applicant, their consultants, and Department staff during the application review process.

The Federal Clean Air Act

In 1990, Congress amended the Act to curb three major threats to national air quality and the health of citizens: acid rain, urban air pollution and toxic air emissions. These amendments also called for the establishment of a national permitting program for major sources of air pollution and for an improved enforcement program. Title V of the 1990 amendments established standard requirements for state permit programs in an effort to ensure that major sources of air pollution complied with the requirements of the Act, along with any current and future federal standards promulgated by EPA to further protect air quality. Title V requires states to establish a permit program that implements the requirements of the Act, and requires EPA to review and approve the program (see 40 CFR 70.1(a) ["The regulations in this part provide for the establishment of comprehensive State air quality permitting systems consistent with Title V of the Clean Air Act"]). Further, emission sources subject to the requirements of Title V are required to obtain a permit and operate in a manner consistent with the requirements of that permit (see 40 CFR 70.1(b) ["All sources subject to these regulations shall have a permit to operate that assures compliance by the source with all applicable requirements."]).

Environmental Conservation Law

Articles 1 and 3 of the ECL define the overall State policy objective of reducing air pollution and providing clean air for the citizens of New York, and provide the general authority for the Department to adopt and enforce methods for doing so. In addition, Article 19 of the ECL, New York State's air pollution control law, was specifically enacted to safeguard the air quality of New York State from pollution. In order to facilitate this process, the Legislature granted specific powers and duties to the Department, including the ability to formulate, adopt, promulgate, amend and repeal regulations for preventing, prohibiting and controlling air pollution. This authority specifically includes promulgating rules and regulations that require sources of air pollution to obtain permits and registrations from the Department. In addition, this authority includes provisions for the preparation of a general comprehensive plan for the control and abatement of existing air pollution, and for the control and/or prevention of any new air pollution that recognizes various requirements for different areas of the State. The ECL also grants the Department the authority to require sources of air emissions to obtain permits for their operation, and to issue and enforce those permits as necessary.

3. Needs and Benefits

Need for Revisions to New York State's Air Permitting Program

The 1990 amendments to the Act required states to adopt the Title V permitting program in order to better protect public health and the environment. Accordingly, the Department revised its existing air permitting program in 1996 to include the newly promulgated federal requirements. Since that time, the program has remained largely unchanged. The subsequent 15 years of experience with the existing program has highlighted several areas in need of update and revision. Accordingly, the Department is proposing to amend Part 201 to comprehensively address these issues and improve the air permitting program by streamlining certain portions of the permitting process, making it easier and more efficient for facility owners and operators to implement.

This rulemaking will also address inconsistencies caused by the promulgation of several federal regulations since Part 201 was last revised. It is necessary to correct these inconsistencies in order to avoid further confusion and simplify program implementation for facility owners, operators, and the Department. For example, the current version of Part 201 contains references to "severe ozone nonattainment areas". This term refers to the nonattainment designation for the New York City and Lower Orange County metropolitan areas for the 1990 1-hour ozone National Ambient Air Quality Standard (NAAQS). This 1-hour NAAQS was officially revoked by EPA on June 15, 2005. Because this standard is no longer in effect, the Department is planning to remove references to the severe ozone nonattainment area from its air quality regulations. The emission thresholds which currently apply to these metropolitan areas must be retained in Part 201 and elsewhere, however, pursuant to the anti-backsliding provisions of Section 193 of the Act.

Finally, this rulemaking will correct a deficiency in the current program that results in the issuance of unnecessary permits and registrations for temporary sources and exempt activities. This effort will improve the air permitting process for facility owners, operators, and for the Department by increasing efficiency and decreasing costs.

Benefits of Air Permitting Program Revisions

Adopting the proposed revisions to the air permitting program will have several benefits. Outdated and lapsed requirements will be removed from Part 201, eliminating potential confusion and unnecessary language from the rule. As a result, the Department will be better able to focus its assets on regulating sources of air pollution, improving the environmental and public health benefits of the permitting program and the overall air quality of the State. This will also allow the Department to be better able to implement various state and federal rules and regulations, and ensure that regulated facilities are operated in compliance with existing standards. The Department will also gain the ability to obtain more information from permit and registration applicants, condensing the review process while at the same time ensuring that the public health and environment of the State continue to be protected from the impacts of air pollution. Under the current process, this information is often requested after a permit or registration application is submitted. By requiring the information to be in the application, the amount of correspondence between the applicant, its consultants and attorneys, and the Department will be reduced, and the time it takes the Department to complete the application review process will decrease, thus speeding up the overall permitting process. Lastly, extending the provisions for temporary source operation to non-major facilities will allow the Department to focus its attention and resources on those sources of air pollution with the greatest potential impacts, while reducing the number of sources and approvals needing to be reviewed and processed by the Department's permitting staff.

Proposed Amendments to Part 200

The proposed Part 200 amendments will update a reference to the National Toxicology Program's 'Report on Carcinogens' that is used in Subpart 201-3. This will update the referenced version from the 1994 version to the 2011 version, ensuring that the most up to date information is used in Part 201.

Proposed Amendments to Part 201

'Removal of Outdated Requirements'

The 1996 revisions to Part 201 included transition plan requirements to help the Department phase-in the new obligations under the Act. Many of these requirements have since lapsed and no longer apply to any existing or new sources of air pollution in the State. Accordingly, the Department will remove these outdated requirements as part of this proposal. Any transition requirements that are still applicable will be retained and relocated within other more appropriate sections of Part 201 as necessary.

'Temporary Emission Sources'

The provisions for emission sources that operate on a temporary basis will also be revised as part of this rulemaking. In the current version of the rule, temporary operations are only addressed in the portion of Part 201 that applies to major facilities subject to Title V permitting requirements. While temporary operations at Title V facilities are an important part of many industrial operations, they are also frequently used at smaller facilities not subject to Title V permitting. As part of this rulemaking, the Department is proposing to extend those same provisions to all facilities, regardless of size or Title V applicability. In addition, the Department is proposing to clarify the provisions that define how an emission source must be operated to be considered temporary.

More specifically, the Department has identified two distinct scenarios where a facility owner or operator may decide to utilize a temporary emission source. The first scenario occurs when a facility owner or operator wishes to conduct a short term trial operation or other temporary activity using existing permitted or registered stationary equipment. The second scenario occurs when a facility owner or operator chooses to operate a non-stationary emission source (i.e. an emission source that is not permanently located at the facility) on a one-time basis. In either scenario, the temporary activity is not included in the facility's permit, and will be discontinued after a short operating period. Accordingly, the Department is proposing to revise the current definition of temporary operation to address these two scenarios. In addition, a set of criteria that facility owners or operators must comply with should they choose to operate a temporary emission source will be established. These criteria include necessary emission thresholds and other operating practices (i.e. recordkeeping requirements, notification prior to operation) that the temporary emission source must meet in order to be considered a temporary operation.

'Phasing Out Certificates to Operate'

The Department also proposes to require all emission sources at a facility to be operated under a single permit. Prior to 1996, the Department issued individual source permits, permits to construct, and certificates to operate (COs) to all applicable air emission sources at a facility. This practice changed in 1996 when the Department was required to revise its Part 201 to begin phasing-out the individual source permitting program and phasing-in the current program designed to permit an entire facility under a single permit or registration. Although existing COs were extended to mitigate some of the burden associated with the changes to the permitting program, the extension was never intended to be permanent. The Department estimates that approximately 350 COs are still outstanding statewide. Facility owners and operators holding a current permit or registration are not affected by this change. The proposed revisions to Part 201 will require the owners or operators of these facilities to submit a facility permit or registration application to the Department within 90 days of receiving written notification from the Department. These applications will then be subject to the same procedures as permit renewals for existing permitted facilities, as described in the Department's Uniform Procedures Act, 6 NYCRR Part 621. The terms of the currently issued COs will remain in effect until the new permit or registration is issued. This approach will allow the Department's regional staff to manage the flow of applications for permits and registrations resulting from this change.

Phasing out these COs will have a positive impact on the air pollution control program as a whole. The Department will also be better able to track and monitor affected facilities and fulfill its mission under the Act and ECL. Regulated facilities will also benefit from the application review process by ensuring that they are in compliance with all applicable regulations, while serving to minimize emissions and protect the environment to the greatest extent practicable. Further, determining compliance will be more efficient for regulated facilities and the Department because each requirement will be specified in a single permit associated with the facility instead of spread across multiple COs associated with the facility. This will also help to reduce confusion and the amount of paperwork that facility owners are required to create and maintain.

'Cap-by-Rule Changes'

The cap-by-rule requirements for facilities that choose to maintain annual actual emissions below fifty percent of the major facility thresholds, as defined and set forth in Subpart 201-7.3, will also be revised as part of this proposal. The current language includes a list of fuel usage limits intended to restrict emissions at combustion facilities to a level below the capping thresholds. Technological development over the last fifteen years has resulted in increasingly efficient combustion equipment, allowing facilities to combust more fuel while maintaining the same emission level. In addition, more stringent fuel composition regulations have been promulgated since the thresholds were calculated in 1996. For example, recent state regulations have reduced the maximum allowable concentration of sulfur in diesel fuel, effectively allowing combustion sources to combust more fuel and still maintain the same sulfur dioxide emission levels. Accordingly, as part of this rulemaking, the Department is proposing to eliminate these values, and allow facility owners or operators to demonstrate compliance through recordkeeping. This change will encourage facility owners and operators to utilize more efficient combustion equipment and cleaner fuels, instead of holding them to the current outdated usage limits. In addition, the cap-by-rule provisions for other types of facilities will be revised to increase their clarity and ease of implementation. This change will also help to reduce confusion for facility owners and operators by simplifying the language describing the necessary procedures for capping by rule.

'Exempt and Trivial Activities'

The Department is further proposing to revise the list of activities that are exempt from permitting requirements. The Department has determined that the activities on this list represent emission sources that have minimal impact on overall air quality. The proposed revisions will update several of the listed activities in order to make them consistent with federal and state requirements that have been promulgated since the list was first implemented in 1996. In addition, six new activities will be added. These new activities address emission sources and technologies that were not widely used when Part 201 was last revised in 1996.

'Additional Application Information'

The Department is proposing as part of this rulemaking to add new items to the required information that must be submitted with air facility registration and permit applications. The proposed changes will require applicants to submit more detailed emissions calculations, as well as the physical parameters of each emission point at the facility. By adding this requirement to the rule, the Department is codifying its long-standing practice of mandating the submittal of this information and supporting documentation during the permit review process. This change is intended to decrease the number of requests for additional information made by the Department during the permit application review process, making the process itself less cumbersome and time consuming, and more efficient. In addition, it will give the Department access to more facility specific data which can be used to conduct better air quality analyses and modeling, enabling the development of stronger, more focused programmatic requirements, targets and goals.

'Permit Terms for Air Facility Registrations and Air State Facility Permits'

Air facility registrations and state facility permits are currently issued for an indefinite period of time. While this approach has worked well in the past, particularly during the transition to the 1996 amendment requirements, recent increases in the number of new federal standards and regulations, as well as in proposed modifications to existing registered and permitted minor facilities, has highlighted the need for a more regular review of registered and permitted minor facilities. Accordingly, the Department is proposing a term limit on registrations and state facility permits. Specifically, the Department is proposing to establish a maximum term limit of 10 years. The 10 year limit was chosen to avoid confusion with the statutory deadlines for Title V permit renewal and mitigate any burden this change may impose on both the regulated community and Department staff. New and modified registrations and state facility permits will be issued with the appropriate term limit. In addition, owners and operators of facilities holding existing registrations or state facility permits will be required to submit renewal applications within 90 days of receiving written notification from the Department. As with the COs, this process will provide the Department's staff with control over the flow of renewal applications for state facility permits and registrations, and the existing permits and registrations will remain in effect until the new permit or registration has been issued.

'Requirement to Commence Construction'

In addition to the proposed term limits for registrations and state facility permits, the Department is also proposing to limit the amount of time a facility owner or operator has to commence construction once receiving a permit or registration from the Department. Accordingly, Facility owners and operators will have 18 months from the date of permit or registration issuance to commence construction. Should the facility owner or operator fail to meet this deadline or apply for an extension, the Department may revoke or modify their permit or registration as necessary. Such modifications or revocations will occur in instances where new permit conditions are necessary due to changes in the applicable rules and regulations during the time period prior to the commencement of construction. In addition, this provision will ensure that facilities constructed in New York State are designed and constructed in compliance with the environmental regulations that are in effect.

'Permitting Thresholds for Facilities Emitting Persistent, Bioaccumulative, and Toxic Compounds'

The Department is also proposing to establish permitting thresholds for facilities that emit one or more Persistent, Bioaccumulative, and/or Toxic compounds. To do so, the proposed revisions would add a new subpart to the rule introducing a list of 62 toxic air contaminants that have been found to pose the greatest threat to public health, safety, and the environment. This list is made up of 51 individual compounds and 11 compound families. Many of these compounds were selected because they appear on the Department's high toxicity list. The high toxicity list includes compounds in three categories: human carcinogens, probable human carcinogens and other compounds posing a significant health risk. In addition, several compounds were selected for this proposed list because they are considered to be persistent or bioaccumulative by EPA. By monitoring, controlling and potentially eliminating emissions of these compounds, the Department will be able to better fulfill its obligation to protect the health of the citizens and environment of New York State.

Some of these compounds are accounted for in several ways under the current permitting program. Facility owners and operators can apply for a registration if the facility has the annual potential to emit less than 10 tons of any single Hazardous Air Pollutant (HAP) or 25 tons of any combination of HAPs. Facility owners and operators may also choose to accept a cap that restricts actual emissions of any single HAP to only five tons per year and 12.5 tons per year of any combination of HAPs to qualify for a registration. A similar approach is used to regulate total volatile organic compounds (VOC) when the compounds emitted are not considered to be HAPs. Facilities with annual actual emissions of VOC less than one-half of the major facility or VOC RACT applicability thresholds are able to cap-by-rule and register with the Department. This approach is used only to determine what type of permit is required for a given facility, and does not establish any monitoring, reporting, or control strategies for affected facilities. Experience gained by the Department over the past 15 years has demonstrated that the current approach can lead to the issuance of registrations without appropriate consideration to off-site impacts of HAP emissions, necessitating additional reviews and reapplication expenses for affected facility owners and operators. Further, past emphasis has been on the control of total VOC emissions for ozone reduction purposes while the review of offsite concentrations of individual VOC components, emitted from facilities, may not have been given appropriate consideration. As part of this rulemaking, the Department is proposing that owners and operators of facilities with annual actual emissions less than the specified emission threshold of one of the listed 62 compounds apply for and received registrations from the Department. Owners and operators of facilities with annual actual emissions of one of these air contaminants in excess of the emission thresholds will be required to apply for a state facility permit.

The new list of air pollutants will establish emission thresholds for Persistent, Bioaccumulative and/or Toxic (PBT) air contaminants. PBT air contaminants are chemical substances that are persistent (P) in the environment, accumulate in biological organisms (bioaccumulative (B)), and toxic (T), making them priority pollutants and potential risks to both humans and ecosystems. The list contains 26 compounds determined to be carcinogens by the National Toxicology Program of the US Department of Health and Human Services (NTP) , 12 of which are listed as known human carcinogens. Five families of compounds on the list are targeted for reduction by the Great Lakes Commission due to their long term persistence. Finally, the Emergency Planning and Community Right-to-Know Act has identified all but three of the listed PBT contaminants as significant compounds that should be evaluated. The three extra compounds were included because emissions of those compounds have been problematic in New York State. For example, polytetrafluroethylene (PTFE - more commonly known as Teflon) is a compound used in industry to coat metals and fabrics. The vapors created by the decomposition of PTFE under high heat can cause flu-like symptoms in humans and are lethal to birds in certain concentrations. In order to avoid generating these vapors, industries using PTFE must carefully monitor the temperature during the coating process to ensure that it does not exceed a safe level. In the past, the Department has had to address these issues by initiating facility specific enforcement actions and establishing appropriate permit conditions for facilities that use PTFE.

The Department has used Appendix C of its DAR-1 guidance document to identify air contaminants with high toxicity since 1991. DAR-1 is then used to determine the degree of control necessary for facilities emitting toxic air contaminants. Each of the 62 proposed emission thresholds were calculated using the Department's Annual Guideline Concentration (AGC) tables contained in DAR-1. (The AGC values are updated every three years, with the latest update occurring in October 2010.) The data used to determine the proposed thresholds for the listed compounds is well studied and the corresponding AGC values have rarely changed.

The mass emission thresholds for each of the 62 compounds included as part of this proposal are based on an emission rate that could cause maximum ambient air quality impacts equal to one-half of the contaminant specific AGC emitted under worst case conditions. The Department chose to use one-half contaminant specific values in order to account for any background concentrations already present at the facility and/or any neighboring facilities that may be emitting the same compound. This will ensure that the listed thresholds represent conservative limits that will protect the public health and the environment, even when multiple facilities emit the same compounds in close proximity to each other. Worst case conditions were calculated using the Department's Air Guide-1 software and EPA's annual screening air dispersion model (Screen3). The Department used conservative modeling parameters in its analysis too. The parameters evaluated included a hypothetical facility with a stack height of 10 meters (33 feet), stack diameter of one meter (three feet), ambient temperature of 68 degrees Fahrenheit, and an exhaust flow rate of 0.01 meters per second. Using these parameters results in a maximum potential impact at a distance of 100 feet from the stack, which was chosen to satisfy the risk management approach outlined below.

In the March 1999 Residual Risk Report to Congress, EPA describes the methodology used to develop their risk management approach for air toxics. The report references a DC Circuit court decision made in Natural Resources Defense Council (NRDC) v. EPA (824 F.2d at 1146 (1987)). In that case, NRDC alleged that EPA improperly used cost when developing regulations for vinyl chloride, a HAP. The U.S. Court of Appeals for the DC Circuit agreed with NRDC, and in its decision presented a two-step framework for EPA to apply an "ample margin of safety": (1) first determine a "safe" or "acceptable risk" level, considering only public health factors, and (2) then set an emission standard that provides an "ample margin of safety" to protect the public health, considering relevant factors in addition to health, such as costs, economic impacts, technical feasibility, uncertainties, and other factors (Id. 1164-1165).

EPA presented the following risk management framework using the two-step approach suggested by the court in the case discussed above when analyzing cancer risk during the development of the 1989 National Emission Standards for Hazardous Air Pollutants (NESHAP) for benzene. In the preamble of that rule, EPA states that in determining acceptable risk: "The Administrator believes that an MIR [maximum individual risk] of approximately one in ten thousand should ordinarily be the upper-end of the range of acceptability. As risks increase above this benchmark, they become presumptively less acceptable under section 112 of the Act, and would be weighed with the other health risk measures and information in making an overall judgment on acceptability". The preamble also states that in the second step, where the standard is set with an ample margin of safety: "EPA strives to provide protection to the greatest number of persons possible to an individual lifetime risk level no higher than approximately one in one million. In the ample margin decision, the Agency again considers all of the health risk and other health information considered in the first step".

The Department utilized this approach during the development of the proposed PBT thresholds. Since the maximum impacts from a 10 meter stack occur at a distance of 100 feet, the Department chose to use a one in one hundred thousand excess risk level as the starting point. At a distance of 500 feet from the stack, the concentration of each listed compound decreases to one in one million risk levels, satisfying the risk management policy to protect "the greatest number of persons possible to an individual lifetime risk level no higher than approximately one in one million". If the Department instead used the one in one million emission rate to calculate this impact, the resulting emission thresholds would have been overly restrictive to affected facilities. Further, the resulting emission thresholds would have exceeded the second part of the two-step approach due to their potentially burdensome costs for facility owners and operators.

Each threshold was calculated by assuming the example facility operated for 8,760 hours per year (24 hours per day, seven days per week), allowing the Department to analyze each compound at maximum potential emissions. While this operating scenario may not represent all potentially affected facilities, maximum potential emissions are used for most other permitting and rule applicability determinations. As an example of this process, consider the proposed threshold for formaldehyde. The AGC for formaldehyde is 0.06 micrograms per cubic meter. In order to account for any background concentrations and/or other nearby facilities also emitting formaldehyde, the AGC was divided in half, and a value of 0.03 micrograms per cubic meter was used. The Department then calculated that a mass emission rate of 13.07 pounds per year from a stack identical to the one described above would produce an off-site concentration equal to 0.03 micrograms per cubic meter at a distance of 100 feet from the stack. This concentration equates to a one in one million excess cancer risk; or, in other words, a person living within 100 feet of the stack would have a one in one million increased risk of health effects as a result of formaldehyde emissions at this level. In order to be consistent with the decision to use one in one hundred thousand excess cancer risk, the resulting emission rate was multiplied by 10, giving 130.7 pounds per year at the maximum potential emission rate. Finally, the Department grouped each threshold into easy to understand tiers that allow facility owners and operators to quickly determine whether or not they apply to their operation. In this case, the threshold was set at 100 pounds per year. Each of the 62 thresholds was calculated using these same procedures before being incorporated into similar tiers. Accordingly, the resulting threshold values represent conservative emission rates that protect the public health and the environment from these dangerous compounds.

The proposed changes to Part 201 will ensure that PBT air contaminants are appropriately identified in permit and registration applications so that they can be properly monitored and potentially controlled. In addition, by establishing mass emission thresholds for potentially hazardous compounds, the compliance process for regulating facilities will be simplified. A facility emitting one of these listed PBT air contaminants will be able to avoid conducting potentially costly emissions modeling and analysis since the modeling was already included in the development of the applicable threshold values. Further, this increased reporting on permit and registration applications will provide the Department with new data that can be used in future modeling exercises and/or to meet current and future air program goals.

It is important to note that this proposed change does not apply to facilities that operate only emission sources that are considered to be exempt or trivial pursuant to Subpart 201-3. The activities listed as exempt and trivial are not expected to result in emissions in excess of the proposed PBT thresholds. Further, combustion sources (i.e. boilers, stationary engines) are excluded from these requirements. Potential HAP and VOC emissions from these facilities are addressed through the federal National Emission Standards for Hazardous Air Pollutants (NESHAP) regulations. The Department has no intention of duplicating that federal effort with this rulemaking.

4. Costs

Overall cost increases at currently regulated facilities are expected to be minimal if Part 201 is amended as proposed. In most cases, the affected facilities are already required to pay emission fees, monitor their emission sources and complete permit applications. In addition, many of these facilities already employ the necessary staff to complete and file any permit or renewal applications, and monitor their facility for compliance with any applicable environmental regulations.

The Department analyzed the expected compliance and permit application costs for affected facilities during the 1996 rulemaking that established the current Part 201. Cost estimates were calculated at that time based on an EPA document entitled Regulatory Impact Analysis and Regulatory Flexibility Act Screening for Operating Permit Regulations (EPA-450/2-91-001, June 1992), and an informal survey of owners and operators of facilities operating throughout the state conducted in 1996 by the Environmental Facilities Corporation (EFC). The cost figures presented below represent the figures described in the 1996 rulemaking documents, adjusted from 1996 dollars to 2011 dollars to account for changes in the Consumer Price Index over time.

Costs for complying with the permitting program will vary depending on the size and nature of the facility, and the types and amounts of pollutants it emits. While there are costs associated with compliance incurred by major facilities, the Department does not anticipate any change in those costs as a result of this rulemaking. Accordingly, compliance costs for major facilities are not discussed in this document.

Annualized costs associated with obtaining and complying with a state facility permit or registration are estimated to be approximately $300/yr. These costs represent activities such as recordkeeping and filing annual reports with the Department. In addition, annual permit program fees based on the type, size and number of emission sources operated at the facility must be paid to the Department. Permit program fees are controlled by Section 72-0302 of the ECL, and are currently set at: $100 for a small combustion or incineration source, $160 for a small process source, and $2000 for a large combustion, incineration or process source. The total program fee for any particular facility is calculated by tallying the number of each type of source operated at the facility and adding the respective fees. For example, a facility operating one small combustion source (i.e. a stationary internal combustion engine) and a small process source (i.e. a rock crusher) would be responsible for an annual permit fee of $260. Facility owners and operators operating air emission sources in New York State are currently required to pay these costs by the existing Part 201. The Department does not anticipate an increase in compliance costs as a result of this proposal.

In addition to the annual compliance costs and permit fees, there are also costs associated with preparing state facility permit and registration applications. An informal survey of facility owners and operators conducted in 1996 by EFC determined the average cost of applying for a minor facility permit in two different regions of the state: downstate and upstate. When updated to 2011 dollars, the costs for state facility permit and registration applications in the downstate region ranged from $1,500 to $7,200 per emission point. In the upstate region, these costs are estimated at $1,800 to $4,000. Some facilities may choose to hire a consulting firm to assist with the permit application process. The Department estimates that the cost of hiring a consulting firm is approximately $6,000.

The Department is sensitive to the costs of permitting for small businesses. The Small Business Environmental Assistance Program (SBEAP) is a component of EFC that provides free and confidential application preparation services for small businesses that own or operate minor facilities. This service mitigates a large portion of the costs of preparing permit applications, and helps to ensure facility owners and operators are in compliance with all applicable regulations.

The cost of adding a permit term limit to air facility registrations and state facility permits is expected to be in line with the application preparation costs outlined above. However, the phase-in approach of this requirement, as presented in this rulemaking, will allow current facility owners, operators, and Department staff time to plan for permit or registration renewal well in advance, thereby offsetting the impact of these costs. In addition, facility owners and operators will only incur these costs once every 10 years, allowing enough time to properly plan for them. In most cases, the affected facilities are already responsible for applying for permit modifications to accommodate changes made to the facility and to incorporate any newly promulgated requirements into their permit or registration. Further, the affected facility will be given access to their current permit or registration to use as a starting point for their renewal application. This will allow facility owners and operators to more easily determine which requirements apply to the existing emission sources at the facility, streamlining the renewal process and reducing the overall cost of the renewal application.

In this proposed rulemaking, registered facilities that emit PBT compounds in excess of the listed thresholds will need to apply for a state facility permit. The costs associated with this activity are expected to remain within the ranges discussed above. Other potential expenses at these facilities could involve additional monitoring activities such as stack testing or emissions monitoring in order to demonstrate compliance with the terms and conditions of their new state facility permit. In many cases, affected facilities already employ the staff necessary to comply with any increased monitoring requirements, however the magnitude of these costs is difficult to quantify due to the variability in facility operations across the state.

Facility owners or operators that are required to convert their existing COs to facility permits have avoided the cost of filing a new permit or registration application since their COs were extended indefinitely in 1996. While it is difficult to quantify the magnitude of these savings given the variability between facilities, it is estimated that facility owners and operators saved between $1,500 and $7,200 total in permit application costs. The cost for updating these COs is anticipated to be similar to the permit application and annualized compliance costs described above. Facility owners and operators may choose to seek outside assistance in order to gather the required information to support a new application. While most facilities should be able to use in-house staff to complete this task, additional application preparation costs of approximately $6,000 may be incurred at facilities that choose to use an outside consultant to gather and compile this information. Other potential expenses at these facilities could involve additional monitoring activities such as stack testing or emissions monitoring necessary to demonstrate compliance with the new facility permit. Annualized compliance costs may increase to levels comparable to other similar registered or permitted facilities after this consolidation is completed.

The proposed revisions to Part 201 are not anticipated to increase costs to local governments. Part 201 does not impose any mandates on local governments that would require financial expenditure. However, local governments are still required to obtain and comply with permits and registrations for any sources of air emissions. Any costs associated with this requirement will be the same as privately owned or operated facilities utilizing similar equipment and conducting similar operations. Further, local governments currently holding a state facility permit or air facility registration will incur similar costs to the rest of the regulated community when required to submit a renewal application.

It is not expected that the Department will incur any significant additional costs as a result of these proposed revisions. Any increased workload that may arise will be phased-in and managed at the discretion of each regional air pollution control engineer.

5. Paperwork

The proposed changes to Part 201 are not expected to create any significant increase in the amount of required paperwork. Affected facilities are already required to submit permit applications, maintain necessary records to demonstrate compliance, and submit reports to the Department at regular intervals. The addition of a term limit for registrations and state facility permits will create more renewal applications overall. In many cases, facility owners and operators are already required to submit a revised permit application when they modify the facility. The new permit term limit will allow for modifications and permit renewals to be processed simultaneously in certain cases, limiting the amount of additional paperwork created. In addition, the new requirements for sources of PBT compounds are not expected to result in a significant amount of new paperwork.

Facility owners or operators that are required to update their existing COs may incur some additional paperwork in the form of recordkeeping and/or reporting requirements that they were not previously required to satisfy. Any additional paperwork will be consistent with other similar facilities already holding an appropriate permit or registration.

6. Local Government Mandates

The proposed revisions to Part 201 do not create any local government mandates beyond the need for local governments operating sources of air pollution to apply for and comply with a permit or registration as necessary. This requirement has existed since the inception of the first air permitting program more than 30 years ago. It has always been the policy of the Department to review all sources of air emissions, regardless of ownership. This policy does not represent or create any additional or disproportionate burden for local governments.

The Department estimates that approximately 825 state facility permits and registrations are currently issued to local governments. The majority of these permits and registrations are issued to municipalities in the New York City metropolitan area due to the lower emission thresholds that have been established to protect air quality and the public health in that region. The Department does not expect any changes in these permits and registrations as a result of this rulemaking.

The Department is aware of a few local governments that issue their own air pollution control permits in addition to those issued by the Department. This action is not mandated by Part 201 and is conducted solely at the discretion of local agencies.

7. Duplication

The proposal is not intended to duplicate any state or federal regulations or statutes. The final rule will conform to the requirements of the Act and the ECL.

8. Alternatives

An alternative to these proposed revisions is to take no action. Taking no action will have several negative consequences. First, outdated transition plan requirements and other confusing language will continue to remain in the rule. Second, sources of PBT compound emissions will continue to operate without increased scrutiny from the Department, potentially resulting in excess emissions. Third, facilities operating under existing COs will continue to operate indefinitely under their outdated permits, potentially resulting in excess emissions and non-compliance with newly promulgated state and federal regulations. The Department will not be able to properly address temporary emission sources, resulting in time consuming permit reviews for short-term actions with little environmental impact. Facility owners and operators will be required to respond to requests from the Department for more information, delaying the review of their permit applications and lengthening the overall permit issuance process.

An alternative to the proposed addition of a fixed duration for registrations and state facility permits was proposed during the stakeholder process. A commenter suggested that the proposed 10 year term was too long, and that it would be easily forgotten by affected facility owners and operators. The commenter proposed that the Department consider a shorter timeframe, citing five or seven years as an example. The Department did not consider this alternative because a shorter effective life for registrations and state facility permits would conflict with the five year term required by the Act for Title V permits. Department staff would receive a significant number of renewal applications in five year increments, increasing the time it takes to review and update each permit.

Another alternative to this rulemaking is to continue to revise Part 201 in small pieces instead of as one comprehensive update as proposed in this rulemaking. This would result in significant additional costs to the Department with each separate rulemaking activity. In addition, facility owners and operators would be required to keep track of a continually changing permitting process, increasing confusion, permit application costs and the amount of time it takes to get a permit issued.

After analyzing these alternatives, the Department believes that a comprehensive rulemaking to address the necessary revisions is the most efficient and cost effective solution. Accordingly, this proposal contains all the necessary components of that action.

9. Federal Standards

The proposed revisions to Part 201 are consistent with all federal standards and fulfill the Department's obligations under the Act.

10. Compliance Schedule

The proposed revisions do not result in the establishment of any compliance schedules. The regulation will take effect 30 days after publication in the State register, anticipated to be in November 2012. Current permit renewal schedules for regulated industries will remain, and any new requirements will be added during the permit renewal process. Facility owners or operators required to update their existing COs or submit a state facility permit or registration renewal application will be notified by the Department prior to their required filing date.

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