Why this is Important

The proposed amendments to rules within Division 11 will align them with statutory changes made by Senate Bill 107, Section 3 enacted by the 2007 legislature.

Department Recommendation / EQC Motion

The Department of Environmental Quality (Department, DEQ) recommends that the Environmental Quality Commission (Commission, EQC) adopt the proposed amendments to OAR 340-011-0010 and -0029 (as presented in Attachment A).

Background and Need for Rulemaking

This proposed rulemaking will only affect the Department’s rulemaking procedure. Specifically, this rulemaking amends OAR 340-011-0029 to modify the Department’s disclosure procedures and allows stakeholders subject to the Title V permit program an additional opportunity for a hearing before the EQC. OAR 340-011-0010 will be amended to include additional public noticing procedures required by OAR 340-011-0029(3).

The language in Section 3 of Senate Bill 107 affects three aspects of the Department’s rulemaking process. SB 107: 1) modifies procedures for disclosing the relationship of proposed rules to federal requirements; 2) provides an opportunity for stakeholders to request a hearing before the EQC; and 3) requires minor changes related to notifying the public.

The changes required by SB 107 only apply to the Department’s rulemaking related to the Title V air permit program (Title V of the federal Clean Air Act requires that each major industrial source of air pollution obtain and comply with an operating permit). However, given the program-wide nature of the existing disclosure and noticing procedures, the Department recommends that this portion of the new requirements be applied to all Department rulemaking. The proposed changes are intended to both streamline the format of the disclosure process and ensure the regulated community knows what alternatives were considered by the Department when proposing a rule that is “different from or in addition to” federal requirements.

SB 107 changes also afford individuals, associations and businesses the opportunity to request and participate in hearings before the EQC regarding proposed changes within the Department’s Title V permit program. These new hearings would be in addition to our current public comment practice. In this proposed rulemaking, the Department recommends the request for hearing apply only to rules related to the Title V permit program. Limiting this new procedure to rules related to Title V allows the Department to track the costs and benefits before deciding whether to propose expanding this procedure to other rulemaking.

It is important that these rule revisions are completed before the Department next revises Title V permit program rules (scheduled for mid-2008).

Effect of Rule

Disclosure procedure:

Every rulemaking effort by the Department requires disclosing the relationship between the proposed rule and any applicable federal requirements. The intent of this disclosure is to identify and justify when a proposed rule might be more “stringent” than federal regulations.

The Department has satisfied this disclosure requirement for all proposed rules by completing a lengthy form consisting of several questions. Collectively these questions explain why a proposed rule may result in requirements that differ from federal requirements.

The proposed amendments to OAR 340-011-0029(1)(a) (see Attachment A, page 2) remove Table 1 specifying the exact language to be included in the disclosure form and substitute a description of the type of information that the Department must disclose. This allows the Department to make changes to the disclosure form, when appropriate, without changing the rule itself. In addition to currently required information, the new disclosure will explain whether the proposed rule’s intended action imposes requirements “different from, or in addition to” applicable federal requirements. The new rule language requires the Department to disclose:

1) If the intended action imposes requirements different from or in addition to federal requirements;

2) If yes, the reason(s) why the requirements are different from or in addition to federal requirements; and

3) Any alternatives considered and the reasons those alternatives were not pursued.

Most of the questions in the to-be-removed Table 1 are actually examples of reasons for differing from federal requirements and will be used where relevant to respond to question #2 above. The Department anticipates the new disclosure document and process will provide a better understanding of any proposed rule’s relationship with applicable federal requirements without adding to the Department’s workload.

Opportunity for hearing before the EQC:

The proposed revisions to OAR 340-011-0029(3) (see Attachment A, page 3) provide the criteria for granting a hearing before the EQC and only affect sources subject to the Title V permit program.

Such a hearing will be granted if the following criteria are met:

a) the proposed rulemaking applies to a source subject to Title V permits;

b) a request for a hearing is received by the Department within 14 days of public notice from 10 persons or an association with at least 10 members; and

c) the request for a hearing describes how the persons are directly harmed by the proposed rulemaking.

These amendments will require the Department to schedule a hearing before the EQC if requested by stakeholders who feel they will be harmed by rules affecting sources subject to the Title V permit program. The Department or the EQC may schedule hearings before the EQC in other cases, but would not be required to do so by this rule. Once scheduled, a hearing would be open to all parties, whether they are directly harmed or not. This opportunity to request an additional hearing before the EQC is not available if the rulemaking already has a public hearing scheduled before the EQC.

Noticing procedure during rulemaking:

Revisions to OAR 340-011-0010 (see Attachment A, page 1) will modify the Department’s procedure for notifying the public. These minor revisions are necessary to accommodate additional noticing requirements, when necessary, for those requested hearings granted before the EQC under OAR 340-011-0029.

Commission Authority

The Commission has authority to take this action under Oregon Revised Statutes 468.020 and 468A.025.

Stakeholder Involvement

The disclosure and public notice requirements of this rulemaking were developed during the legislative process for Senate Bill 107. Prior to the public comment period, the draft rules and a request for feedback were submitted to Associated Oregon Industries and the Northwest Environmental Defense Center. Neither office commented on the draft rules.

The Department did not solicit input from an Advisory Committee since this rulemaking is in response to legislative action and did not address any substantial policy issues.

Public Comment

A public comment period was open from September 14, 2007 through October 26, 2007. Evening public hearings were held in Bend, Eugene and Portland in mid-October. Two written comments were received from one person. Attachment B provides a summary of those comments and the Department’s response.

Key Issues

OAR 340-011-0029(3)(c), based on SB 107, requires those requesting a hearing to describe how they are being “directly harmed” by the proposed rule. A commenter noted that it would be relatively easy for a facility permitted under the Title V program to describe how a rule will impact its operating costs, but it would be more difficult for the public to define that direct harm.

The Department notes that there are ample opportunities for all parties to comment on proposed rules, and that it is important to limit this new procedure to the conditions required by statute until any workload issues are better understood. Attachment B, page 2 provides a more detailed Department response to this issue.

Next Steps

If the EQC adopts the proposed rules, the Department will submit the rules to the Secretary of State to become effective by the end of February 2008.

Staff will be informed of the necessary changes in both rulemaking documents and procedures, including a review of upcoming Title V rulemaking efforts. The changes in rulemaking procedures will be reflected in the Department’s rulemaking instructions. No additional resources will be needed to implement these changes.

Attachments

A.  Proposed Rule Revisions (redlined version)

B.  Summary of Public Comments and Agency Responses

C.  Presiding Officer’s Report on Public Hearings

D.  Relationship to Federal Requirements document

E.  Statement of Need and Fiscal and Economic Impact

F.  Land Use Evaluation Statement

G.  Section 3, Senate Bill 107

Available Upon Request

1.  New Relationship to Federal Requirements (disclosure) form¹

2.  Proposed Rulemaking Announcement

3.  Legal Notice of Hearing

4.  Written Comment Received