Acknowledgement Checklist

As of September 8, 2025, the Kentucky Division for Air Quality (KDAQ) has distributed the Air Emission Fee Acknowledgement Checklists for the 2024 calendar year (CY) to facilities subject to an air emission fee across Kentucky. KDAQ provides this checklist to facilities to either AGREE or DISAGREE with the actual emission totals reported in the KDAQ Web Survey earlier this year.

New this year, this checklist includes a certification box related to Kentucky House Bill 346. As discussed in the subsequent sections, this box is intended to be checked only for facilities that should be exempt from emission fees because they are only subject to the air emissions fee due to emergency engine usage.

Restructuring the Fee Cap – Who’s Affected

Kentucky House Bill 346 (HB346) updates Kentucky Revised Statute (KRS) 224.20-050, the exceptions for administration of Kentucky’s air emission fee structure implemented by 401 KAR 50:038, by removing the long-standing 4,000-tons per pollutant per year cap on emissions that are subject to emission fees. As such, actual emissions (fugitive or non-fugitive) that exceed this threshold will now be included in the emissions fee calculation as the cabinet can no longer create an upper limit on the amount of emissions that may be assessed for emission fees.

Based on 2022 emissions data, approximately 22,000 tons of emissions from approximately five facilities were not billed because those emissions were over the 4,000-ton cap. As such, this change will reduce the emissions fees on a per pound basis (estimated $30 per ton) and is intended to incentivize facilities whose emissions are over 4,000 tons per year to reduce emissions. Facilities that already emit less than 4,000 tons per year per pollutant will see a decrease in the total emissions invoice. HB346 does not change the annual fee of $150 for sources that are subject to emissions fees but emit less than 25 tons of total subject emissions per year [401 KAR 50:038 Section 3(5)(b)].

Emergency Engine Fee Updates

Previously as documented in the annual Acknowledgement Checklist cover letter, no fee was assessed “for plants that have been approved as ‘Conditional Major’, ‘Minor’, or ‘Registration’, if the source is not subject to a federal requirement”. As such, emergency engines could pull these sources into the air emissions fee assessment on the basis of federal NSPS and NESHAP applicability. However, HB346 states that an emergency stationary internal combustion engine shall no longer be considered when determining whether a facility shall be assessed emission fees.

As it pertains to HB346, an emergency stationary internal combustion engine is an engine that:

• Has no time limits on use in emergency situations;
• Operates for less than 100 hours per calendar year for nonemergency situations (i.e., maintenance checks, readiness testing);
• Operates for less than 50 hours per calendar year for nonemergency situations excluding maintenance checks and readiness testing

Retroactive Refunds

HB346 includes retroactive provisions to correct fee assessments from calendar year 2023 (and 2024 for the recent KyEIS submittal) as well as protection from assessing or reassessing any new fees for calendar year 2023 emissions.

Within 90 days of the effective date of HB346, KDAQ is required to refund CY2023 emission fees assessed for any facilities that were subject to emissions fees solely on the basis of having an emergency engine. KDAQ is directly contacting affected facilities and as discussed in the previous section, a checkbox on the CY2024 Acknowledgement Checklist has been provided for HB346-affected sources so that facilities may report their applicability and receive refunded fees accordingly.

Notably, HB346 will not affect who submits the Air Emissions Survey, it only impacts whether certain facilities are assessed for a fee for the reported emissions.

What Should My Facility Do?

Facilities can do the following to be prepared for the changes associated with HB346:

1. Review 2023 fee invoices and contact KDAQ if you believe you have been assessed emissions fees based on the outdated emergency engine applicability
2. Review the CY2024 Acknowledgement Checklist as this form will have a checkbox to flag eligibility for HB346 retroactive refunds
3. Evaluate future changes in your facilities emissions profile as HB346 changes the fee structure and subsequent expected costs.

Please see the following example cases:

Company A – a major source that emits 75 tons of PM₁₀, SO₂, NO_X, and VOC per year through general process equipment

• Company A is subject to emission fees because this facility is a major source. However, this facility can expect a fee decrease of about $30 per ton per pollutant ($9,000 total) due to the fee restructuring.

Company B – a minor source that emits 3 tons of NO_X (and corresponding other pollutants) through the use of emergency engines and has no other equipment subject to a federal standard

• In this example, Company B was previously subject to emissions fees based on the federal applicability of the emergency engines and paid a $150 emissions fee as this facility was under the total subject emissions 25 ton per year threshold. However, after HB346, Company B will no longer be subject to fees on this basis; as such, this facility should flag eligibility on the CY2024 Acknowledgement Checklist and receive a retroactive refund.

Company C – a major source that emits 8,000 tons of NO_X per year through a series of combustion turbines

• Company C is subject to emission fees because this facility is a major source. This facility can expect a fee increase as all 8,000 tons of NO_X are now subject to fees.

Expected Transition to SLEIS for Emissions Reporting

Based on recent information shared at recent conference and industry meetings, the KDAQ indicated that emissions inventory reporting for CY2025 will not transition from the ePortal Web Survey to the State and Local Inventory System (SLEIS) but is expected for CY2026. SLEIS infrastructure is used for emissions reporting for numerous other environmental agencies, including the Louisville Metro Air Pollution Control District (LMAPCD), the South Carolina Department of Environmental Services (SC DES), among others. The transition to SLEIS aims to modernize the air emission reporting system, align air emissions reporting with LMAPCD and ideally, will alleviate challenges with the current ePortal Web Survey, including the following:

• Time consuming throughput data entry
• Requirement to update back-calculated emission factors based on throughput and emissions data for the reporting period
• Character limit on comments

Trinity has previously assisted in the reporting and certification of the Kentucky Emissions Inventory Survey for numerous industries and has experience developing and submitting emission inventory data via SLEIS in Louisville and other states. As additional information is available about the timeline of the KDAQ’s transition to this system, Trinity will share lessons learned about navigating the system and tips and tricks for completing reporting efficiently.

If your company needs support in emissions fee determination and reporting as it pertains to HB346 or the SLEIS transition, please reach out to the Trinity Covington office at 859.341.8100 for assistance.