Rule Number and Title

OAR 340-011, Proposed Orders in Contested Cases

Objective of Rulemaking

The objective is to improve the clarity and legal sufficiency of proposed orders in contested cases.

Changes Proposed

The rule will allow parties in a contested case proceeding (including the Department) to file a “Motion for Clarification” requesting that the administrative law judge revise the proposed order to evaluate important evidence, make the necessary findings, and fully explain all conclusions. This mechanism is not currently provided for in the rules. Another rule (OAR 340-011-0575) will need to be amended to be consistent and read clearly with the new rule.

The rulemaking will also make two “housekeeping” changes which would:

1.  Correct a typographical error in OAR 340-011-0515. That rule contains a reference to rule “OAR 340-003-0555” [sic] which should be “OAR 137-003-0555”.

2.  Clarify that environmental law specialists may provide lay representation in contested case proceedings involving license or permit revocations as specified in OAR 340-011-0510.

Need for this Rulemaking

What is the need for the proposed rules or amendments? Address each of the following that applies:

•  Do the rule changes address a known environmental problem or a problem we speculate will occur? If the latter, how likely or serious is the problem? What are the consequences of not addressing it?

Indirectly. When a proposed order is unclear, does not fully explain the parties’ positions, or does not articulate the legal basis for a finding, the proposed order can change the manner in which the rule can or must be interpreted by the Department and regulated public. To the extent the new interpretation changes or eliminates legal obligations of the regulated public, a faulty proposed order can reduce the effectiveness of the rules designed to protect the environment. The draft proposed rule is designed to improve the quality of proposed orders and to ensure that the Environmental Quality Commission (EQC) has the best proposed order and record available on review. Consequences of not addressing the issue are continuing difficulties in obtaining clear and complete proposed orders, and continuing difficulties and dissatisfaction for the EQC in reviewing proposed orders.

Will the changes make it easier for the regulated community to do business? Have we consulted w/affected groups to confirm this?

Yes. The rule will make it easier for the regulated community to clarify the ALJ’s position in the proposed order, which may eliminate the need for appeal or would at least inform the parties what the issues are on appeal. Furthermore, clearer proposed orders will lead to clarity in the way rules must be interpreted. Representatives of the regulated community have been consulted and will continue to have input throughout the rulemaking process.

•  Will the changes make it easier for DEQ to do business? What resource savings will be achieved?

Yes. The rules will streamline the appeals process and result in an overall savings of agency resources. A Motion for Clarification under the draft proposed rules will require staff time in drafting, Department staff and management time in reviewing, and possible additional hourly costs of ALJ time in drafting an Amended Proposed Order. However, it will replace or eliminate some work normally done during the appeals of these cases and also will likely eliminate the need for some appeals altogether which will reduce the time necessary for Department staff and management to draft, approve, and submit the numerous briefs and presentations necessary for review by the EQC. It will also eliminate the need for the EQC to read, prepare, and hear some contested case proceedings. Clearer orders will help the regulated community know what its duties are and may prevent some violations of environmental regulations, thereby eliminating the need for some formal enforcement actions.

•  Will the changes further one or more of our strategic directions?

Yes. The rule enhances the EQC’s efforts to make informed and well-reasoned decisions in enforcement actions, which helps achieve DEQ’s goal of excellence. The rule improves the ability of parties to contested cases to ensure the proposed order fully explains its conclusions and thus gives the enforcement process more integrity. The rule ensures that changes in interpretation of rules are clearly and fully explained and therefore indirectly improves environmental results for air, land, and water quality.

•  Do the rules achieve or maintain consistency with federal requirements or delegation of federal programs? If so, explain why that is necessary or important.

Not material to this rulemaking. The draft proposed rule is a procedural detail of Department enforcement processes and is not proposed to achieve or maintain federal delegation. To the extent it is related at all, the draft proposed rule improves the Department’s ability to ensure that state interpretation and implementation of federal laws are consistent with federal interpretation.

•  Is there another compelling reason?

Yes. Under current rules, the Department has a limited ability to seek clarification of a proposed order in a contested case proceeding, but other parties do not. The draft proposed rule will allow all parties sufficient and equal time to seek clarification and would therefore put all parties on an equal footing to present their cases. Furthermore, the EQC has requested the proposed rule change.

•  Can the need be met through policy, guidance, or another alternative to rulemaking? If not, briefly explain.

No. The contested case hearing and appeal process is dictated by Division 11 and the Attorney General’s Model Rules, and no current mechanism for a Motion for Clarification exists. Other options have been discussed with the Office of Administrative Hearings (OAH) and the EQC, and the consensus is that this rulemaking is necessary.

Measurement of Objective

The draft proposed rule should improve the clarity and completeness of the proposed orders, eliminate the need for some appeals to the Environmental Quality Commission, reduce the time necessary to reach final orders, and improve the quality of the record on review to the EQC. These improvements should assist the EQC in reaching fully-informed and well reasoned decisions. There are not likely to be clearly measurable results but the EQC should be able to provide the Department with input as to whether the draft proposed rules are effective in reaching the stated objectives.

Relevant History

June 22, 2006 EQC Meeting:

The EQC requested that the Department propose alternatives to the current process of EQC review of ALJ rulings. After a discussion of possible alternatives, the EQC agreed to continue with the existing process for contested cases, but wanted to explore ways to improve the clarity and completeness of contested case files coming before the EQC. The EQC directed the Department to explore authority to require ALJs to reconsider decisions.

October 6, 2006 EQC Meeting:

OCE and the Oregon Department of Justice (DOJ) proposed that the EQC adopt a mechanism to allow both DEQ and a respondent in a contested case to make a “Motion for Clarification” to an ALJ if either party feels that the Proposed Order does not contain all of the information required by OAR 137-003-0645(3). Administrative Law Judge Tegger represented OAH at this meeting, and proposed an alternative to the rulemaking, which was ultimately determined not to meet the goals of the EQC. The EQC authorized the Department to proceed with drafting proposed rule language.

December 14, 2006 EQC Meeting:

OCE and DOJ presented draft proposed rule language to the EQC, and the EQC approved proceeding with the rulemaking as presented. OCE apprised Judge Tegger of the EQC meeting and proposed language, and met with him after the meeting to discuss going forward. At least one Commissioner and the DEQ Director expressed concern that the proposed rule only allows and does not require any response from ALJs. This issue will be further analyzed during the rulemaking process. At this point, OCE believes that the currently proposed rule is the most appropriate balance of Respondent, EQC, DEQ, DOJ, and OAH concerns.

Deadlines

No deadlines exist. Because it has been requested by the EQC, we would like to promulgate this rule as soon as possible, in accordance with the target dates below.

Technical or Environmental Issues

n/a

Cross Media Issues

n/a

Policy or Political Issues

There may be some objection from ALJs and the OAH. (See Relevant History discussion above and Stakeholders discussion below.)

Compliance & Enf. Issues

See Implementation Issues below.

Implementation Issues

Will we be able to implement the rules? Can we effectively enforce the rules? If not, have we considered another approach to compliance? If the rules will not be accompanied by new resources, what other work will not get done? Are we prepared to drop that work? Have we communicated internally and externally with stakeholders? Is there an internal and external communication strategy to ensure that both DEQ staff and the regulated community are prepared for the effects of the rules? Is this strategy for both rulemaking and rule implementation?

The rule will allow, but not require, respondents and DEQ to make a Motion for Clarification. The rules will also allow, but not require, ALJs to clarify a Proposed Order. DEQ will not be directly “enforcing” the rules, but the DEQ and respondents would remain able to appeal the ALJ’s Proposed Order if the ALJ did not respond to the Motion for Clarification. The rule should result in streamlining and work reduction so no additional resources are necessary. We have communicated informally with external stakeholders and will engage them during the rulemaking process.

5-Year Review

The adoption of OAR 340-011-0573 must be reviewed within five years, as required by ORS 183.405.

Upon review, DEQ will determine whether the rulemaking has accomplished its objective by consulting with OCE staff and with the EQC.

Stakeholders

The Department of Justice (DOJ) promulgates the procedural rules applicable to contested case hearings. One of the DOJ rules specifies that an ALJ may only make corrections within three days or on request of the EQC. Because this rule will allow the ALJ to make changes after three days, this rule could be interpreted to create a minor exception to the DOJ rules. In discussions with DOJ attorneys Larry Knudsen and Christine Chute, they appeared amenable to the DEQ moving forward with this rule. However, before the rule can be implemented, we will need final DOJ approval.

The Office of Administrative Hearings (OAH) typically opposes agency-specific procedural rules that take away its discretion. This rule is designed to allow DEQ to move that an ALJ clarify a Proposed Order, but, as currently proposed, it will not require the ALJ to make any clarification or even to respond to the Motion. The OAH has been informed of the rulemaking, and has participated in discussions with OCE and the EQC. OAH, through one of its Presiding Judges, Steve Tegger, presented concerns and alternative options to OCE and the EQC, but has not indicated that it opposes the rulemaking.

The EQC reviews proposed orders on appeal. The rule should ensure that Proposed Orders are sufficiently clear and complete, which will have two effects for the EQC. First, the parties to a contested case will have less incentive to appeal so there will likely be fewer appeals to the EQC. Second, improved clarity of the Proposed Orders will provide the EQC with a better record to understand the issues and evidence, and thereby assist the EQC in making more informed and reasoned decisions. The EQC requested this rulemaking, has been consulted about the proposed language, and is supportive of it, with the exception of one Commissioner expressing concern that the rule will not require the ALJ to take any action.

Respondents in contested-case proceedings will have an additional low-cost opportunity to ensure that the Proposed Orders accurately reflect the evidence and arguments they believe to be important. The Proposed Order will better explain the ALJ’s decision, and better state the issues for appeal. OCE has had initial informal consultations with representatives of the regulated community, and believes that potential respondents would be supportive of the rulemaking.

Effects on Small Business, Individuals

Do the rules affect individuals, small businesses or small communities? If so, what alternatives have been or will be explored to minimize costs, including different requirements for these entities? Have we evaluated the cumulative effect of DEQ requirements and considered existing requirements that could be repealed or modified as these new requirements are adopted?

This proposed rule does not create additional costs or burdens for the regulated community. Rather, the proposed rule may eliminate the need for additional legal costs to pursue unnecessary appeals.

Rulemaking Process

Rulemaking Team

Advisory Process

No advisory committee is proposed due to the limited procedural nature of the rulemaking. Anticipated stakeholders (OAH, DOJ, and representatives of potential respondents) have been informed of the proposed rulemaking, have informally provided input, and will continue to do so throughout the rulemaking process.

Public Involvement

This rulemaking will involve the public through the required notice and comment process, and direct communication with anticipated stakeholders as discussed above.

EQC Involvement

This rulemaking is being proposed at the EQC’s request and with the EQC’s input. The EQC has previously been involved as discussed above (see Relevant History), and will be involved again after the publication and public comment period, when the Commissioners will have the opportunity to review and adopt the rules.

Rulemaking Target Dates

Milestone

Target Dates

Advisory Process (e.g., committees; workgroups)

n/a

EMT review

February 13, 2007

DOJ review and approval

Estimated March 2007

Publication in SOS Bulletin

May 1, 2007

EQC rule adoption

October 18-19, 2007

DOJ formal approval

November 2007