Act No. 245

Public Acts of 1998

Approved by the Governor

July 7, 1998

Filed with the Secretary of State

July 8, 1998

EFFECTIVE DATE: July 8, 1998

STATE OF MICHIGAN

89TH LEGISLATURE

REGULAR SESSION OF 1998

Introduced by Senator Dingell

ENROLLED SENATE BILL No. 813

AN ACT to amend 1994 PA 451, entitled "An act to protect the environment and natural resources of the state; to codify, revise, consolidate, and classify laws relating to the environment and natural resources of the state; to regulate the discharge of certain substances into the environment; to regulate the use of certain lands, waters, and other natural resources of the state; to prescribe the powers and duties of certain state and local agencies and officials; to provide for certain charges, fees, and assessments; to provide certain appropriations; to prescribe penalties and provide remedies; to repeal certain parts of this act on a specific date; and to repeal certain acts and parts of acts," by amending sections 5501, 5521, 5522, and 5523 (MCL 324.5501, 324.5521, 324.5522, and 324.5523); and to repeal acts and parts of acts.

The People of the State of Michigan enact:

Sec. 5501. As used in this part:

(a) "Air contaminant" means a dust, fume, gas, mist, odor, smoke, vapor, or any combination thereof.

(b) "Air pollution" means the presence in the outdoor atmosphere of air contaminants in quantities, of characteristics, under conditions and circumstances, and of a duration that are or can become injurious to human health or welfare, to animal life, to plant life, or to property, or that interfere with the enjoyment of life and property in this state, and excludes all aspects of employer-employee relationships as to health and safety hazards. With respect to any mode of transportation, nothing in this part or in the rules promulgated under this part shall be inconsistent with the federal regulations, emission limits, standards, or requirements on various modes of transportation. Air pollution does not mean those usual and ordinary odors associated with a farm operation if the person engaged in the farm operation is following generally accepted agricultural and management practices.

(c) "Air pollution control equipment" means any method, process, or equipment that removes, reduces, or renders less noxious air contaminants discharged into the atmosphere.

(d) "Category I facility" means a fee-subject facility that is a major stationary source as defined in section 302 of titleIII of the clean air act, 77 Stat. 400, 42 U.S.C. 7602, an affected source as defined pursuant to section 402 of titleIV of the clean air act, chapter 360, 104 Stat. 2641, 42 U.S.C. 7651a, or a major stationary source as defined in section 169a of subpart 2 of part C of title I of the clean air act, chapter 360, 91 Stat. 742, 42 U.S.C. 7491.

(e) "Category II facility" means a fee-subject facility that is a major source as defined in section 112 of part A of titleI of the clean air act, 84 Stat. 1685, 42 U.S.C. 7412, or a facility subject to requirements of section 111 of part A of titleI of the clean air act, chapter 360, 84 Stat. 1683, 42 U.S.C. 7411, except that a category II facility that also meets the definition of a category I facility is a category I facility.

(f) "Category III facility" means any fee-subject facility that is not a category I or category II facility.

(g) "Clean air act" means chapter 360, 69 Stat. 322, 42 U.S.C. 7401 to 7431, 7470 to 7479, 7491 to 7492, 7501 to 7509a, 7511 to 7515, 7521 to 7525, 7541 to 7545, 7547 to 7550, 7552 to 7554, 7571 to 7574, 7581 to 7590, 7601 to 7612, 7614 to 7617, 7619 to 7622, 7624 to 7627, 7641 to 7642, 7651 to 7651o, 7661 to 7661f, and 7671 to 7671q, and regulations promulgated under the clean air act.

(h) "Emission" means the emission of an air contaminant.

(i) "Farm operation" has the meaning ascribed to it in the Michigan right to farm act, 1981 PA 93, MCL 286.471 to 286.474.

(j) "Fee-subject air pollutant" means particulates, expressed as PM-10 pursuant to 1996 MR 11, R336.1116(k), sulfur dioxide, volatile organic compounds, nitrogen oxides, ozone, lead, and any pollutant regulated under section 111 or 112 of part A of title I of the clean air act, chapter 360, 84 Stat. 1683 and 1685, 42 U.S.C. 7411 and 7412, or title III of the clean air act, chapter 360, 77 Stat. 400, 42 U.S.C. 7601 to 7612, 7614 to 7617, 7619 to 7622, and 7624 to 7627.

(k) "Fee-subject facility" means the following sources:

(i) Any major source as defined in 40 C.F.R. 70.2.

(ii) Any source, including an area source, subject to a standard, limitation, or other requirement under section 111 of part A of title I of the clean air act, chapter 360, 84 Stat. 1683, 42 U.S.C. 7411, when the standard, limitation, or other requirement becomes applicable to that source.

(iii) Any source, including an area source, subject to a standard, limitation, or other requirement under section 112 of part A of title I of the clean air act, 84 Stat. 1685, 42 U.S.C. 7412, when the standard, limitation, or other requirement becomes applicable to that source. However, a source is not a fee-subject facility solely because it is subject to a regulation, limitation, or requirement under section 112(r) of part A of title I of the clean air act, chapter 360, 84 Stat.1685, 42 U.S.C. 7412.

(iv) Any affected source under title IV.

(v) Any other source in a source category designated by the administrator of the United States environmental protection agency as required to obtain an operating permit under title V, when the standard, limitation, or other requirement becomes applicable to that source.

(l) "Fund" means the emissions control fund created in section 5521.

(m) "General permit" means a permit to install, permit to operate authorized pursuant to rules promulgated under section 5505(6), or an operating permit under section 5506, for a category of similar sources, processes, or process equipment. General provisions for issuance of general permits shall be provided for by rule.

(n) "Generally accepted agricultural and management practices" has the meaning ascribed to it in the Michigan right to farm act, 1981 PA 93, MCL 286.471 to 286.474.

(o) "Major emitting facility" means a stationary source that emits 100 tons or more per year of any of the following:

(i) Particulates.

(ii) Sulfur dioxides.

(iii) Volatile organic compounds.

(iv) Oxides of nitrogen.

(p) "Process" means an action, operation, or a series of actions or operations at a source that emits or has the potential to emit an air contaminant.

(q) "Process equipment" means all equipment, devices, and auxiliary components, including air pollution control equipment, stacks, and other emission points, used in a process.

(r) "Responsible official" means for the purposes of signing and certifying as to the truth, accuracy, and completeness of permit applications, monitoring reports, and compliance certifications any of the following:

(i) For a corporation: a president, secretary, treasurer, or vice-president in charge of a principal business function, or any other person who performs similar policy or decision making functions for the corporation, or an authorized representative of that person if the representative is responsible for the overall operation of 1 or more manufacturing, production, or operating facilities applying for or subject to a permit under this part and either the facilities employ more than 250 persons or have annual sales or expenditures exceeding $25,000,000.00, or if the delegation of authority to the representative is approved in advance by the department.

(ii) For a partnership or sole proprietorship: a general partner or the proprietor.

(iii) For a county or municipality or a state, federal, or other public agency: a principal executive officer or ranking elected official. For this purpose, a principal executive officer of a federal agency includes the chief executive officer having responsibility for the overall operations of a principal geographic unit of the agency.

(iv) For sources affected by the acid rain program under title IV: the designated representative insofar as actions, standards, requirements, or prohibitions under that title are concerned.

(s) "Schedule of compliance" means, for a source not in compliance with all applicable requirements of this part, rules promulgated under this part, and the clean air act at the time of issuance of an operating permit, a schedule of remedial measures including an enforceable sequence of actions or operations leading to compliance with an applicable requirement and a schedule for submission of certified progress reports at least every 6 months. Schedule of compliance means, for a source in compliance with all applicable requirements of this part, rules promulgated under this part, and the clean air act at the time of issuance of an operating permit, a statement that the source will continue to comply with these requirements. With respect to any applicable requirement of this part, rules promulgated under this part, and the clean air act effective after the date of issuance of an operating permit, the schedule of compliance shall contain a statement that the source will meet the requirements on a timely basis, unless the underlying applicable requirement requires a more detailed schedule.

(t) "Source" means a stationary source as defined in section 302(z) of title III of the clean air act, 77 Stat. 400, 42U.S.C. 7602, and has the same meaning as stationary source when used in comparable or applicable circumstances under the clean air act. A source includes all the processes and process equipment under common control that are located within a contiguous area, or a smaller group of processes and process equipment as requested by the owner or operator of the source, if in accordance with the clean air act.

(u) "Title IV" means title IV of the clean air act, pertaining to acid deposition control, chapter 360, 104 Stat. 2584, 42 U.S.C. 7651 to 7651o.

(v) "Title V" means title V of the clean air act, chapter 360, 104 Stat. 2635, 42 U.S.C. 7661 to 7661f.

Sec. 5521. (1) The emissions control fund is created within the state treasury. The state treasurer may receive money from any source for deposit into the fund. The state treasurer shall direct the investment of the fund. The state treasurer shall credit to the fund interest and earnings from fund investments.

(2) Money in the fund at the close of the fiscal year shall remain in the fund and shall not lapse to the general fund.

(3) Upon the expenditure or appropriation of funds raised through fees in this part for any purpose other than those specifically listed in this part, authorization to collect fees under this part is suspended until such time as the funds expended or appropriated for purposes other than those listed in this part are returned to the emissions control fund.

(4) Beginning October 1, 1994 and thereafter money shall be expended from the fund, upon appropriation, only for the following purposes as they relate to implementing the operating permit program required by title V:

(a) Preparing generally applicable rules or guidance regarding the operating permit program or its implementation or enforcement.

(b) Reviewing and acting on any application for a permit, permit revision, or permit renewal, the development of an applicable requirement as part of the processing of a permit, or permit revision or renewal.

(c) General administrative costs of running the operating permit program, including the supporting and tracking of permit applications, compliance certification, and related data entry.

(d) Implementing and enforcing the terms of any operating permit, not including any court costs or other costs associated with an enforcement action.

(e) Emissions and ambient monitoring.

(f) Modeling, analysis, or demonstration.

(g) Preparing inventories and tracking emissions.

(h) Providing direct and indirect support to facilities under the small business clean air assistance program created in part 57.

Sec. 5522. (1) For the state fiscal year beginning October 1, 1998, and continuing until September 30, 2001, the owner or operator of each fee-subject facility shall pay air quality fees as required and calculated under this section. The department may levy and collect an annual air quality fee from the owner or operator of each fee-subject facility in this state. The legislature intends that the fees required under this section meet the minimum requirements of the clean air act and that this expressly stated fee system serve as a limitation on the amount of fees imposed under this part on the owners or operators of fee-subject facilities in this state.

(2) The annual air quality fee shall be calculated for each fee-subject facility, according to the following procedure:

(a) For category I facilities, the annual air quality fee shall be the sum of a facility charge and an emissions charge as specified in subdivision (e). The facility charge shall be $3,375.00.

(b) For category II facilities, the annual air quality fee shall be the sum of a facility charge and an emissions charge as specified in subdivision (e). The facility charge shall be $1,350.00.

(c) For category III facilities, the annual air quality fee shall be $200.00.

(d) For municipal electric generating facilities subject to category I which emit less than 18,000 tons, but more than 450 tons of fee-subject air pollutants, the annual air quality fee shall be an operating permit facility charge of $18,675.00 only. This annual air quality fee is based upon the category I facility charges of $3,375.00 plus an emissions charge equal to the product of 450 tons of fee-subject air pollutants and $34.00 per ton of fee-subject air pollutant.

(e) The emissions charge for category I and category II facilities equals the product of the actual tons of fee-subject air pollutants emitted and the emission charge rate. A pollutant that qualifies as a fee-subject air pollutant under more than 1 class shall be charged only once. The charge shall be calculated as follows:

(i) The emissions tonnage shall be calculated for the calendar year 2 years preceding the year of the billing. The actual tons of fee-subject air pollutants emitted is the sum of all fee-subject air pollutants emitted at the fee-subject facility, except that for the purposes of the emissions charge calculation the actual tons charged shall not exceed either of the following:

(A) 4,000 tons.

(B) 1,000 tons per pollutant, if the sum of all fee-subject air pollutants except carbon monoxide emitted at the fee-subject facility is less than 4,000 tons.

(ii) The emission charge rate shall be $34.00 per ton of fee-subject air pollutants.

(3) The auditor general shall conduct a biennial audit of the federally mandated operating permit program required in title V. The audit shall include the auditor general's recommendation regarding the sufficiency of the fees required under subsection (2) to meet the minimum requirements of the clean air act.

(4) After January 1, but before January 15 of each year beginning in 1995, the department shall notify the owner or operator of each fee-subject facility of its assessed annual air quality fee. Payment is due within 90 calendar days of the mailing date of the air quality fee notification. If an assessed fee is challenged as authorized in subsection (6), payment is due within 90 calendar days of the mailing date of the air quality fee notification or within 30 days of receipt of a revised fee or statement supporting the original fee, whichever is later. The department shall deposit all fees collected under this section to the credit of the fund.

(5) If the owner or operator of a fee-subject facility fails to submit the amount due within the time period specified in subsection (4), the department shall assess the owner or operator a penalty of 5% of the amount of the unpaid fee for each month that the payment is overdue up to a maximum penalty of 25% of the total fee owed.

(6) If the owner or operator of a fee-subject facility desires to challenge its assessed fee, the owner or operator shall submit the challenge in writing to the department. The department shall not process the challenge unless it is received by the department within 45 calendar days of the mailing date of the air quality fee notification described in subsection(4). A challenge shall identify the facility and state the grounds upon which the challenge is based. Within 30calendar days of receipt of the challenge, the department shall determine the validity of the challenge and provide the owner with notification of a revised fee or a statement setting forth the reason or reasons why the fee was not revised. Payment of the challenged or revised fee is due within the time frame described in subsection (4). If the owner or operator of a facility desires to further challenge its assessed fee, the owner or operator of the facility has an opportunity for a contested case hearing as provided for under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(7) If requested by the department, by March 15 of each year beginning in 1995, or within 45 days of a request by the department, whichever is later, the owner or operator of each fee-subject facility shall submit information regarding the facility's previous year's emissions to the department. The information shall be sufficient for the department to calculate the facility's emissions for that year and meet the requirements of subpart Q of 40 C.F.R. part 51.

(8) By July 1 of each year beginning in 1995, the department shall provide the owner or operator of each fee-subject facility required to pay an emission charge pursuant to this section with a copy of the department's calculation of the facility emissions for the previous year. Within 60 days of this notification, the owner or operator of the facility may provide corrections to the department. The department shall make a final determination of the emissions by December15 of that year. If the owner or operator disagrees with the determination of the department, the owner or operator may request a contested case hearing as provided for under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(9) The department shall prepare and submit to the governor and the legislature by March 1 an annual report that details the activities of the previous fiscal year funded by the fund for the department. This report shall include, at a minimum, all of the following as it relates to the department:

(a) The number of full-time equated positions performing air quality enforcement, compliance, or permitting activities and the number of hours worked on title V activities in relation to hours worked on other matters.

(b) All of the following information related to the permit to install program authorized under section 5505:

(i) The number of permit to install applications received by the department.

(ii) The number of permit to install applications for which a final action was taken by the department. The number of final actions should be reported as the number of applications approved, the number of applications denied, and the number of applications withdrawn by the applicant.

(iii) The number of permits to install approved that were required to complete public participation under section 5511(3) before final action and the number of permits to install approved that were not required to complete public participation under section 5511(3) prior to final action.

(iv) The average number of final permit actions per permit to install reviewer full-time equivalents.

(v) The percentage and number of permit to install applications which were reviewed for administrative completeness within 10 days of receipt by the department.

(vi) The percentage and number of permit to install applications which were reviewed for technical completeness within 30 days of receipt of an administratively complete application by the department.

(vii) The percentage and number of permit to install applications submitted to the department that were administratively complete as received.

(viii) The percentage and number of permit to install applications for which a final action was taken by the department within 60 days of receipt of a technically complete application for those not required to complete public participation under section 5511(3) prior to final action, or within 120 days of receipt of a technically complete application for those which are required to complete public participation under section 5511(3) prior to final action.

(c) All of the following information for the renewable operating permit program authorized under section 5506:

(i) The number of renewable operating permit applications received by the department.

(ii) The number of renewable operating permit applications for which a final action was taken by the department. The number of final actions should be reported as the number of applications approved, the number of applications denied, and the number of applications withdrawn by the applicant.

(iii) The percentage and number of permit applications initially processed within the required time.

(iv) The percentage and number of permit renewals and modifications processed within the required time.

(v) The number of permit applications reopened by the department.

(vi) The number of general permits issued by the department.

(d) The number of letters of violation sent.

(e) The amount of penalties collected from all consent orders and judgments.

(f) For each enforcement action that includes payment of a penalty, a description of what corrective actions were required by the enforcement action.

(g) The number of inspections done on sources required to obtain a permit under section 5506 and the number of inspections of other sources.

(h) The number of air pollution complaints received, investigated, not resolved, and resolved by the department.

(i) The number of contested case hearings and civil actions initiated and completed, and the number of voluntary consent orders, administrative penalty orders, and emergency orders entered or issued, for sources required to obtain a permit under section 5506.

(10) By August 1, 1999, the department shall convene a task force made up of representatives of fee-subject facilities, environmental groups, the general public, and any state department to which funds are appropriated from the fund. Not later than August 1, 2000, the task force shall provide to the legislature a final report on the adequacy of the fee revenues, the fee structure relative to all sectors of the regulated industry, and the appropriateness of program activities and shall recommend changes to this section, as appropriate, to match fee revenues to program costs.

(11) The attorney general may bring an action for the collection of the fees imposed under this section.

Sec. 5523. (1) A county in which a city with a population of 750,000 or more is located may apply for a delegation from the department to issue state permits and administer and enforce the applicable provisions of this part, rules promulgated under this part, the clean air act, and the state implementation plan. After a public hearing, the department shall grant the delegation if the department finds that the county's application demonstrates all of the following:

(a) That the county program complies with the applicable provisions of this part, the rules promulgated under this part, the clean air act, and the state implementation plan.

(b) That the county has, and will continue to have, the capacity to carry out the applicable provisions of this part, rules promulgated under this part, the clean air act, and the state implementation plan including, but not limited to, adequate and qualified staff to do all of the following:

(i) Monitor ambient air at locations specified by the department using equipment and procedures specified by the department.

(ii) Process and review applications for installation permits, operating permits, tax exemptions, and construction waivers pursuant to sections 5505 and 5506, part 59, and the clean air act, demonstrating a thorough knowledge of permit applicability, procedures, and regulations by developing permits that are free of significant errors and inaccuracies as defined in the performance standards section of the annual contract between the department and participating counties.

(iii) Perform necessary sampling and laboratory analyses.

(iv) Conduct regular and complete inspections and record reviews of all significant sources of air pollution.

(v) Respond to citizen complaints related to air pollution.

(vi) Notify sources of identified violations of applicable provisions of this part, rules promulgated under this part, the clean air act, and the state implementation plan and conduct appropriate enforcement, up to and including administrative, civil, and criminal enforcement.

(vii) Perform dispersion modeling analyses, collect emissions release information, and develop necessary state implementation plan demonstrations.

(viii) Carry out other activities required by this part, rules promulgated under this part, the clean air act, and the state implementation plan.

(c) That the county has adequate funding to carry out the applicable provisions of this part, rules promulgated under this part, the clean air act, and the state implementation plan. This shall include identification of funding from air quality fees and any federal, state, or county funds along with an identification of the activities that are funded by each funding source. The county funding shall be sufficient to provide the required grantee match for any federal air pollution grant.

(d) That the county has performed in accordance with the terms of the most recent contract, if any, between the state and the county that describes the work activities and program to be carried out by the county. This shall be demonstrated through state audit reports and the county's prompt and permanent correction of any deficiencies identified in state audit reports.

(e) That the county program contains provisions for public notice and public participation consistent with this part, the rules promulgated under this part, and the clean air act.

(f) That the county has the capacity to administer the state air quality fee program in the manner prescribed in section 5522 for all fee-subject facilities subject to this part, located within the county, and subject to the delegated program of the county. This shall include an ability to identify fee-subject facilities, calculate and assess fees, implement collections, maintain a dedicated account, and process fee challenges.

(2) A delegation under this section shall be for a term of not more than 5 years and not less than 2 years, and may be renewed by the department. The delegation shall be in the form of a written contract that does all of the following:

(a) Describes the activities the county shall carry out during the term of the delegation.

(b) Provides for the delegated program to be consistent with implementation of the state's air program, using state procedures, forms, databases, and other means.

(c) Provides for ongoing communication between the county and state to assure consistency under subdivision (b).

(3) One hundred eighty days prior to the expiration of the term of delegation, the county may submit an application to the department for renewal of their delegation of authority. The department shall hold a public hearing and following the public hearing make its decision on a renewal of delegation at least 60 days prior to the expiration of the term of the delegation. The department shall deny the renewal of a delegation of authority upon a finding that the county no longer meets the criteria described in subsection (1) or provisions of the delegation contract. The county may appeal a finding under subsection (1) or this subsection to a court of competent jurisdiction.

(4) A county delegated authority under this section annually shall submit a report to the department that documents the county's ability to meet the criteria described in subsection (1) and the delegation contract during the past 12months.

(5) In addition to the report of the county under subsection (4), the auditor general of the state shall annually submit to the governor, the legislature, and the department an independent report regarding whether a county meets the criteria provided in subsection (1) and a review of the fiscal integrity of a county delegated authority under this section. The auditor general's report shall also determine the county's pro rata share of the state's support services for title V programs that are attributable to and payable by a county.

(6) Within 60 days after a county delegated authority under this section submits its annual report as required under subsection (4), the department shall notify the county, in writing, whether the report of the county meets the requirements of this section or states, with particularity, the deficiencies in that report or any findings in the auditor general's report that render the county in noncompliance with the criteria in subsection (1). The county shall have 90days to correct any stated deficiencies. If the department finds that the deficiencies have not been corrected by the county, the department shall notify the county, in writing, within 30 days of the submission of the county's corrections and may terminate a county's delegation. The county shall have 21 days from receipt of the decision of termination in which to appeal the department's decision to a court of competent jurisdiction. If the department fails to notify the county within 60 days, the report shall be considered satisfactory for the purposes of this subsection.

(7) Notwithstanding any other statutory provision, rule, or ordinance, a county delegated authority under this section to administer and enforce this part shall issue state permits and implement its responsibilities only in accordance with its delegation, the delegation contract, this part, rules promulgated under this part, the clean air act, and the applicable provisions of the state implementation plan. State permits issued by a county that is delegated authority under this section have the same force and effect as permits issued by the department, and if such a county issues a state permit pursuant to section 5505 or 5506, no other state or county permit is required pursuant to section 5505 or 5506, respectively.

(8) Upon receipt of a permit application, prior to taking final action to issue a state permit or entering into a consent order, the county shall transmit to the department a copy of each administratively complete permit application, application for a permit modification or renewal, proposed permit, or proposed consent order. The county shall transmit to the department a copy of each state permit issued by the county and consent order entered within 30 days of issuance of the state permit or entry of the consent order.

(9) Notwithstanding a delegation under this part, the department retains the authority to bring any appropriate enforcement action under sections 5515, 5516, 5518, 5526, 5527, 5528, 5529, 5530, 5531, and 5532 as authorized under this part and the rules promulgated under this part to enforce this part and the rules promulgated under this part. The department may bring any appropriate action to enforce a state permit issued or a consent order entered into by a county to which authority is delegated.

(10) Notwithstanding any other provision of this part, in a county that has been delegated authority under this section, that county shall impose and collect fees in the manner prescribed in section 5522 on all fee-subject facilities subject to this part and located within the corporate boundaries and subject to the delegated program of the county. The department shall not levy or collect an annual air quality fee from the owner or operator of a fee-subject facility who pays fees pursuant to this section. A county that is delegated authority under this section shall not assess a fee for a program or service other than as provided for in this part or title V or assess a fee covered by this part or title V greater than the fees set forth in section 5522. A county that is delegated authority under this section shall pay to the state the pro rata share of the state's support services for title V programs attributable to the county.

(11) Fees imposed and collected by a county with delegated authority under this section shall be paid to the county treasury.

(12) The county treasurer of a county delegated authority under this section shall create a clean air implementation account in the county treasury, and the county treasurer shall deposit all fees received pursuant to the delegation authorized under this section in the account. The fees shall be expended only in accordance with section 5521(6), the rules promulgated under this part, and the clean air act.

Enacting section 1. Sections 5519 and 5520 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.5519 and 324.5520, are repealed.

This act is ordered to take immediate effect.

Secretary of the Senate.

Clerk of the House of Representatives.

Approved

Governor.