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Revised Regulatory Flexibility Analysis for Small Businesses and Local Governments - 6 NYCRR Parts 613, 370, and 374-2

Repeal of:

6 NYCRR Part 612, Registration of Petroleum Storage Facilities
6 NYCRR Part 613, Handling and Storage of Petroleum
6 NYCRR Part 614, Standards for New and Substantially Modified Petroleum Storage Facilities

Addition of:

6 NYCRR Part 613, Petroleum Bulk Storage

Amendments to:

6 NYCRR section 370.1(e)(2), Hazardous Waste Management System - General
6 NYCRR Subpart 374-2, Standards for the Management of Used Oil

1. Effect of Rule

The proposed rules would apply statewide in all 62 counties of New York State (State). Proposed Part 613 represents a consolidation of existing State and federal requirements. None of the revisions to the proposed rules include any substantive changes to existing requirements concerning petroleum bulk storage (PBS) or used oil.

The New York State Department of Environmental Conservation (Department) does not collect data with respect to the number of the persons employed by the owner or operator of any subject facility. The Department does not presently collect data on the industrial classification of a registered facility. The Department does not have data on the corporate structures that may exist for a particular facility owner or operator which may have a bearing on determining how many persons are employed by the owner or operator. The Department only collects information regarding the name, address, and contact information for the owner and operator of each registered facility. Due to this lack of data, the Department is unable to make an estimate of how many small businesses comply with the existing PBS rules (6 NYCRR Parts 612 through 614) or would be required to comply with proposed Part 613.

The most common types of subject facilities are apartment/office buildings, retail gasoline sales, vehicle repair shops, schools, trucking or fleet operations, and municipalities. There are approximately 38,500 registered facilities in the Department's PBS database. The Department believes that the great majority of the owners and operators of these facilities would likely be properly categorized as small businesses.

The Department does collect data on whether registered facilities are owned by local governments. There are approximately 4,435 PBS facilities identified as registered by local governments. The Department believes that the types of facilities registered by local governments tend to be vehicle fleet fueling locations for municipal vehicle pools and school district transportation departments.

2. Compliance Requirements

The proposed rules contain no substantive changes to requirements that are imposed on subject facilities under existing statutory and regulatory authorities.

3. Professional Services

No new or additional professional services are likely to be needed by facilities owned by small businesses or local governments to comply with the proposed rules.

4. Compliance Costs

Under proposed Part 613, operators and tank system owners must designate operators for every underground storage tank (UST) system or group of UST systems that is subject to the requirements of Subpart 613-2. There would be three operator classes (A, B and C) to enable training to be focused on the particular level of knowledge required.

Consistent with federal requirements, there would be three key components of the operator training program: training, assessment of knowledge, and verification. Under proposed section 613-2.5, training could be accomplished by any method selected by the operator (self-study, online, or in-person classes). The New York State Department of Environmental Conservation will develop training materials and an examination to allow for operators to demonstrate their understanding of the equipment and practices necessary for the safe operation of UST systems. It is anticipated that the exam would primarily be administered online. The Department recognizes that online testing may not be a viable option for some operators and therefore proposes to provide in-person exam options.

There would be costs incurred by facilities subject to the operator training requirements of proposed section 613-2.5. Within 30 days of being designated, every Class A and B operator must adequately perform on an assessment of knowledge of regulatory requirements applicable to the relevant operator class. Before being designated, every Class C operator must be trained and tested by the Class A or B operator. Operators of heating oil tank systems (and other tank systems that are not regulated under 40 CFR Part 280) are exempt from this requirement. Self-study can be conducted at no cost and training courses are optional. The Department will develop tests for Class A and B operators. The Department will also develop training materials and make them publicly available. There will be no charge for the training materials or for an operator to take the test. Costs for Class A and B operators would be limited to costs associated with the time to prepare and take the test. Retesting or new operator designation would be required within 30 days of a Department determination that the relevant UST system is significantly out of compliance.

The proposed rule would eliminate or reduce costs that are incurred under the existing rules by certain facilities. These cost reductions are attributable to the following features of the proposed rule: (1) the elimination of the requirement to perform inventory monitoring for tank systems which store motor fuel or kerosene that will not be sold; (2) the introduction of a uniform records retention schedule with three time periods (three years, five years, or the life of the facility) depending upon the record type; and (3) the elimination of periodic tank testing for UST systems that were upgraded in accordance with 40 CFR Part 280.

Small businesses and local governments would not incur any additional costs, either initial capital costs or annual compliance costs, to comply with the changes to section 370.1(e)(2) or Subpart 374-2 affecting used oil management. Some changes would make the State regulations consistent with federal regulations.

5. Economic And Technological Feasibility

The proposed rules contain no substantive changes to requirements that are imposed on subject facilities under existing statutory and regulatory authorities. Implementation of the proposed rules would be economically and technologically feasible for small businesses and local governments.

6. Minimizing Adverse Impact

Because proposed Part 613 represents a harmonization of existing State and federal requirements involving PBS, the Department does not believe that the proposed rule would have an adverse economic impact on small businesses or local governments. Since changes to section 370.1(e)(2) or Subpart 374-2 pertaining to used oil management would make State regulations consistent with federal regulations, this proposed rule would also not have an adverse economic impact on small businesses or local governments.

7. Small Business And Local Government Participation

The Department continues to provide statewide outreach to regulated parties and interested persons, including small businesses and local governments. In 2011, 2012, and 2013, the Department made presentations to various petroleum associations (for example, Empire State Petroleum Association, New York State Conference of Mayors and Municipal Officials (NYCOM), and New York State Automobile Dealers Association) at conference venues. The Department also continues to post relevant information on its website to assist the owners and operators of subject facilities with understanding and implementing the requirements of the PBS Program. And, the Department maintains listservs to which persons may subscribe so that they can receive information about new developments regarding the PBS, hazardous waste and used oil management programs.

Pursuant to ECL section 17-1013, a State Petroleum Bulk Storage Advisory Council (Council) was created within the Department to advise the Department on the proposal, preparation, and revision of the regulations written to implement necessary requirements for PBS facilities. Included in the Council's membership are small business owners and local governments (through NYCOM). Council members have professional training or experience to analyze and interpret content of the PBS regulations. As drafts of proposed Part 613 were prepared, the Department shared the drafts with the Council and convened meetings or conference calls to discuss the Council's comments and answer any questions.

The Department has an ongoing education program for vehicle maintenance shops subject to the requirements of Subpart 374-2. As part of this program, workshops are conducted with trade associations throughout the State upon request. In addition, the Department has a guidance manual available that explains the regulatory requirements for vehicle maintenance shops and an accompanying self-audit checklist. The Department also maintains information on its website.

8. Cure Period Or Other Opportunity For Ameliorative Action

State Administrative Procedure Act (SAPA) section 202-b(1-a) provides as follows:

In developing a rule for which a regulatory flexibility analysis is required and which involves the establishment or modification of a violation or of penalties associated with a violation, the agency shall: (a) include a cure period or other opportunity for ameliorative action, the successful completion of which will prevent the imposition of penalties on the party or parties subject to enforcement; or (b) include in the regulatory flexibility analysis an explanation of why no such cure period was included in the rule.

Proposed Subpart 613-5 would provide for the possible imposition of a delivery prohibition on any tank system for which the Department finds a Tier 1 or Tier 2 condition exists. The statutory basis for imposition of a delivery prohibition is found in ECL section 17-1007(4) as amended during 2008. The Department considers a delivery prohibition to be a penalty within the meaning of SAPA section 202-b(1-a).

The delivery prohibition would only be imposed without prior notice and opportunity for hearing when the Department finds that a Tier 1 condition exists with respect to a tank system. Tier 1 conditions would be regulatory violations that constitute imminent and serious threats to public health and the environment. Tier 1 conditions would include: (1) a tank system is known to be releasing petroleum, and (2) a UST system covered under section 613-2.1(a), 613-3.1(a)(2), or 613-3.1(a)(4) lacks infrastructure or equipment needed to meet secondary containment, spill and overfill prevention, corrosion protection, or leak detection requirements. The severity of the threat generally posed by Tier 1 conditions militates against the provision of any cure period that would allow the threat to continue.

The designation of a tank system that is releasing petroleum as a Tier 1 condition is supported by the existing prohibition on the operation of any leaking tank system. ECL section 17-1007(3) (enacted during 1983) provides that the operation of any leaking tank system and associated equipment is unlawful and the contents of any leaking tank system must be promptly removed. To allow for the continued operation of a tank system that is releasing petroleum during a cure period would be in direct contravention of ECL section 17-1007(3).

With respect to the other Tier 1 conditions involving equipment deficiencies at a UST system, the violations are generally of a kind that is not quickly ameliorated. The absence of required equipment, such as corrosion protection, usually requires substantial installation work that involves the excavation of soil around the UST system.

When the Department finds that a Tier 2 condition exists, imposition of a delivery prohibition would not occur until after a cure period occurs. The cure period that follows a Department finding of a Tier 2 condition would last either ten or 30 days depending on the circumstances. See section 613-5.1(b)(4).

There is some similarity between the circumstances described as a Tier 1 condition at section 613-5.1(a)(3)(ii) (regarding tank systems covered under sections 613-2.1(a), 613-3.1(a)(2), or 613-3.1(a)(4)) and the Tier 2 condition described at section 613-5.1(b)(4)(iii)(regarding tank systems covered under sections 613-3.1(a)(1) or 613-3.1(a)(3)). Both circumstances include the lack of essential infrastructure or equipment needed to meet secondary containment, spill and overfill prevention, corrosion protection, and leak detection requirements for UST systems. However, the Department determined that only the circumstances described at section 613-5.1(a)(3)(ii) warrant the allowance of a cure period before the delivery prohibition is imposed. The reason for the different treatment of USTs under these provisions is due to the different characteristics of the facilities being covered. The facilities subject to section 613-5.1(b)(4)(iii) are generally critical to public health and safety. These facilities include heating oil used for on-premises consumption (most often apartment buildings) and emergency generators at nuclear power plants. If these facilities were invariably ordered to cease operating while equipment is put in place, apartment dwellers may lose all heat during the winter or nuclear facilities could lose essential backup power capacity.

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