Oregon Department of Environmental Quality

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Oregon Environmental Quality Commission Meeting

Rulemaking Action Item: #

Updates to OAR Chapter 340, Divisions 011, 012 and 200

DEQ recommends that the Environmental Quality Commission:               

Adopt the proposed PERMANENT rules in Attachment A as part of chapter 340 of the Oregon Administrative Rules. Approve incorporating these rule amendments into the Oregon Clean Air Act State Implementation Plan under OAR 340-200-0040.   

What DEQ says in the staff report is important. This report becomes part of the administrative history of the rule and the court may look at it for guidance when deciding how to interpret an ambiguous rule section. Be thorough and accurate when discussing the potential scope of the rule.

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•  Rules affected, authorities, supporting documents – modify as needed

•  Statement of fiscal and economic impact – do not modify

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•  Land use – do not modify

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Short summary 

DEQ proposes the following changes to chapter 340 of the Oregon Administrative Rules.

1.  Division 011 amendments would:

1.  align with the Oregon Attorney General Model Rules under OAR 340-003-0501 through 0690. The Model Rules that apply to Environmental Quality Commission proceedings became effective Jan. 31, 2012.

2.  address procedures for filing and service of documents in contested cases and other general contested case proceedings.

3.  establish a new fee for onsite septic system program public records requests. This would allow DEQ to recover the costs of fulfilling such requests.

4.  repeal OAR 340-011-0605 that became obsolete in 2007 with the passage of Measure 49. Measure 49 substantially reduced the impact of Measure 37 and the required director’s review.

5.  make minor housekeeping changes.

1.  Division 012 amendments would implement 2009 Oregon legislation that increased DEQ’s civil penalty statutory maximums, many last updated in 1973. To implement the enhanced penalty authority, DEQ must amend Division 012 rules. Other proposed changes include aligning violation classification and magnitudes with DEQ program priorities, providing greater mitigating credit for correcting violations, and housekeeping that includes eliminating duplicative text.

2.  Division 200 amendments would update the Oregon Clean Air Act State Implementation Plan. Section 110 of the Clean Air Act, 42 U.S.C. §7410, requires state and local air pollution control agencies to adopt federally approved control strategies to minimize air pollution. The resulting body of regulations is a State Implementation Plan or “SIP”. By incorporating updated civil penalties and violations, these proposed rules would be a revision to Oregon’s SIP. DEQ must submit rule changes to EPA and EPA must approve the rules as meeting the requirements of the Clean Air Act. After the Oregon Environmental Quality Commission amends the proposed rule, DEQ will submit SIP revisions to EPA for approval.

Key Proposed Amendments

   If approved, this proposal would:

Civil penalty matrices (OAR 340-012-0140)

1.  Increase the top base penalty in the current $8,000 per day penalty matrix to $12,000 per day

2.  Increase the top base penalty in the current $6,000 per day penalty matrix to $8,000 per day

3.  Increase the top base penalty in the current $2,500 per day penalty matrix to $3,000 per day

4.  Make no changes to the current $1,000 per day penalty matrix

Change to factors in the civil penalty formula (OAR 340-012-0145) by:

1.  Increasing credit for the “C” factor to apply mitigating credit for a violator’s efforts to correct violations

2.  Expanding the use of the “M” factor to assign a broader range of penalty aggravation when considering the mental state of the violator

Increase additional or alternate penalties for violations that pose an extreme hazard to public health or cause extensive environmental damage (OAR 340-012-0155)

Base penalties in this category would increase from $50,000 per day to $100,000 per day to a new range of $100,000 per day to $250,000 per day depending on whether violations are caused intentionally, recklessly or flagrantly.

Increase administrative penalty maximums to $100,000 for certain spill violations of oil or hazardous materials

Penalties for intentionally or negligently spilling hazardous materials into waters of the state, or intentionally or negligently failing to clean up spills of oil or hazardous materials would increase from a maximum of $10,000 per day to a maximum of $100,000 per day. Penalties for intentionally or negligently spilling oil into waters of the state would increase from a maximum of $20,000 per day to a maximum of $100,000 per day. Final penalties would be determined according to a new formula and additional factors not in the current rule.

Establish a base fee for onsite septic system program public records requests

Currently, DEQ may only charge for public records requests if they require more than 15 minutes of staff time. DEQ estimates that public records requests in the onsite septic system program require 50 to 75 hours of staff time per month. Few requests exceed the 15-minute threshold; therefore, DEQ receives little revenue to cover the costs for this work. This amendment would allow DEQ to recover the costs for fulfilling these public records requests.

Regulated parties

The proposed changes do not impose any new requirements upon regulated entities.

Division 011 includes rules that supplement the Oregon Attorney General Model Rule for administrative procedures. Division 011 applies to any person involved in a contested case proceeding in front of the Environmental Quality Commission. The rules outline the contested case hearings processes. Division 012 outlines the processes DEQ must follow in assessing penalties or issuing other formal enforcement actions. These rules do not contain any requirements for regulated entities.

Statement of need

1.  Division 011

What problem is DEQ trying to solve?

Division 011 no longer aligns with the Oregon Attorney General Model Rules. The affected rules address procedures for filing and service of documents for contested cases and other general contested case proceedings. OAR 340-011-0009 incorporates the Model Rules.

The costs of fulfilling public records requests in the onsite septic system program cannot be sustained within the existing budget.

How would the proposed rule solve the problem?  

Aligning Division 011 to the Oregon Attorney General Model Rules would eliminate confusion and provide clear direction to DEQ staff and the public for filing and service of documents and other contested case proceedings.

The fee would enable DEQ to recover the costs for fulfilling public records requests in the onsite septic system program.

How will DEQ know the problem has been solved?  

DEQ is required to use the Attorney General Model rules, and the Division 011 changes adopt those required rules. Adopting the changes should reduce possible confusion over having two sets of rules with different requirements.

The onsite septic system program tracks the time spent to fulfill public records requests and the revenue received for the various services that are provided. DEQ will be able to track the time and cost of the work and compare it to the revenue received from the new fee to determine if the costs are being covered.

2.  Division 012

What problem is DEQ trying to solve?

Division 012 does not reflect DEQ’s current civil penalty statutory maximums established by Oregon Senate Bill 105A (2009).

How would the proposed rule solve the problem?  

The rules would implement the increased civil penalty maximums.

How will DEQ know the problem has been solved?  

Depending on the factual circumstances of each case, DEQ will use the new penalty rules that are likely to increase some penalties consistent with the new statutory maximums.

Request for other options

During the public comment period, DEQ requested public comment on whether to consider other options for achieving the rule's substantive goals while reducing negative economic impact of the rule on business.

Rules affected, authorities, supporting documents

Lead division            Program or activity

 Office of the Director  Office of Compliance and Enforcement

OAR Chapter 340 action – Division 011, 012 and 200

Repeal  340-011-0605

Statutory authority

ORS 183.335, 183.341, 183.452, 192.410-505, 195.305, 454, 454.050, 454.625, 459.045, 459.376, 459.995, 459A.585, 459A.590, 465.280, 465.400-410, 466, 466.070-080, 466.625, 466.720, 466.746, 466.882, 466.858-994, 467, 467.030, 468.020, 468.065, 468.090-140, 468.996, 468A , 468A.025, 468A.045, 468A.327, 468B, 468B.015, 468B.035, 468B.350, and 783.620-992

Statutes implemented

ORS 183.025, 183.090, 183.335, 183.341, 183.390, 183.410, 183,413, 183.415, 183.425, 183.440, 183.450, 183.452, 183.457, 183.460, 183.464, 183.470, 183.480, 183.482, 183.484, 183.745, 183.090, 192.410-440, 192.501, 192.502, 197.352, 454, 454.635, 454.645, 459, 459.205, 459.376, 459.705-790, 459.992, 459.995, 459A.580-585, 459A.590, 459A.665, 459A.660, 459A.685, 465, 465.021, 465.210, 465.900, 465.992, 466, 466.210, 466.255, 466.265-270, 466.530, 466.635-680, 466.706-835, 466.858-895, 466.990-994, 467.050, 467.990, 468, 468.020, 468.035, 468.070, 468.090-140, 468.996, 468A, 468A.020, 468A.025, 468A.060, 468A.990, 468A.992, 468B, 468B.025, 468B.220, 468B.305, 468B.450, 783.620, and 783.992

Documents relied on for rulemaking  ORS 183.335(2)(b)(C)

The Oregon Environmental Quality Commission approval of this rule proposal would establish new fees. EQC authority to act on the proposed fees is ORS 192.410 - ORS 192.505 & ORS 468.020.

Brief description of proposed fees

Establish a $7.50 base fee for onsite program public record request.

Reasons

The proposed fees would address 12 counties where DEQ operates the onsite program. DEQ maintains records in Warrenton, Coos Bay, Medford, and Pendleton field offices. DEQ estimates it takes 50 – 75 hours of staff time per month to respond to public requests for septic system records. Establishing a $7.50 base fee for record requests is needed to maintain staff to provide these records. Currently, DEQ may only charge for public records if they require more than 15 minutes of staff time, but few requests exceed that timeframe.

Fee proposal alternatives considered

Alternative considered to establishing a $7.50 base fee was to maintain the status quo, with reduced support staff to respond to onsite septic system public record requests.

Fee payer

The fee payer would be any member of the public seeking septic system records, including homeowners, pumpers, installers and realtors.

Affected party involvement in fee-setting process

The proposed fee went through the legislative process.

Summary of impacts

The impact of establishing this fee may reduce the number of records sought. It may be an incentive to find other sources of the records such as asking the septic system installer to provide the record.

Fee payer agreement with fee proposal

There was no opposition testimony to establishing the base fee presented during the legislative hearing.

Links to supporting documents for proposed fees

2013-2015 DEQ Agency Budget Request

How long will the proposed fee sustain the program?

The current fee proposal is expected to sustain the program for the 2013-2015 biennium.

Transactions and revenue

Fiscal and Economic Impact

This proposal would not have an economic impact on businesses, individuals or government entities unless they violate Oregon’s environmental regulations. There would be a minimal economic impact on individuals or entities that request onsite septic system public records.

The proposal would raise most penalties; and entities penalized under these rules would likely experience an economic impact. The amount of impact would depend on the type of entity, the type of violation, and surrounding circumstances, as specified in OAR 340-012-0140. Penalties:

1.  Would likely increase by 50 percent for the following entities:

1.  The largest businesses (e.g., business with a Tier 1 industrial National Pollutant Discharge Elimination System wastewater discharge permit, owner of more than ten underground storage tank facilities, large quantity generator of hazardous waste,)

2.  The largest municipalities (e.g., municipal sewage treatment facility with a flow of more than five million gallons per day,) and

3.  State agencies.

4.  Would likely increase by 25 percent to 33 percent for smaller businesses and smaller municipalities.

5.  Would not increase for individuals in the general public and specified small businesses (e.g., homeowner open burning, homeowner asbestos, homeowner onsite sewage, owner of one underground storage tank, owner of a heating oil tank, drycleaning business.)

Applying the maximum 50 percent increase to the 382 violations assessed penalties in 2011 and 2012 under the Division 12 matrices, the proposal would increase the average penalty from $4,250 to $6,375. Penalties that DEQ assesses outside the Division 12 assessment process (i.e., expedited enforcement offers, field citations, some mutual agreement and orders) are lower than penalties calculated under Division 12 and, if included, would significantly lower the above averages.

There would also be an economic impact to any entity penalized for an intentional, reckless, or flagrant violation that results in or creates the imminent likelihood for an extreme hazard to the public health or that causes extensive damage to the environment. Amendment to OAR 340-012-0155(1)(a) would increase such penalties by 100 percent to a maximum of $200,000. Few such penalties are assessed and none were assessed in 2011 or 2012.

The proposal increase penalties to entities penalized for specified spill violations would increase the economic impact to these entities. The maximum penalty for negligent or intentional discharge of hazardous materials into waters of the state and the maximum penalty for negligent or intentional failure to clean up spills of oil or hazardous materials spilled into waters of the state would increase from $10,000 to $100,000. The maximum penalty for negligent or intentional discharge of oil into waters of the state would increase from $20,000 to $100,000. No penalties for these types of violations were assessed penalties during 2011 or 2012.

There would be payment of a $7.50 base fee for each onsite septic system program public records request. This fee is the minimum amount that would be paid for each public records request. The total amount could exceed $7.50 if substantial support staff time is needed to fulfill the request or if there is a large number of documents that are being copied. Existing fees in Division 011 would apply in these cases, but these cases are rare for onsite septic system program public records requests.

Statement of Cost of Compliance  

   Impacts on general public

There would be minimal fiscal or economic impact to the general public in the form of payment of a $7.50 base fee for each onsite septic system program public records request. These records requests are typically submitted when a prospective buyer of property is looking for information about the property including building, planning and sanitation records. These requests are not required, but are submitted at the will of the prospective buyer or their real estate agent. The other rule amendments do not impose regulatory requirements, obligations or restrictions upon the general public, individuals, government or businesses. The rules define DEQ’s civil penalty process and determine DEQ’s civil penalty calculations for violations of Oregon’s environmental regulations.

Impact on other government entities other than DEQ

1.  Local governments: In most cases, there would be no fiscal or economic impact. The rules do not impose regulatory requirements, obligations or restrictions upon local governments. The exception would be for a government entity that violates Oregon’s environmental regulations where the proposed rules could result in a larger penalty depending on the specific facts of the case. If a local government is requesting onsite septic system program records, they might have to pay the $7.50 base fee.

2.  State agencies: In most cases, there would be no fiscal or economic impact. The rules do not impose regulatory requirements, obligations or restrictions upon state agencies. The exception would be for a state agency that violates Oregon’s environmental regulations where the proposed rules could result in a larger penalty depending on the specific facts of the case. If a state agency is requesting onsite septic system program records, they might have to pay the $7.50 base fee.

3.  Impact on DEQ: The fiscal or economic impact to DEQ is unknown at this time for the majority of the proposed rule amendments, but likely there would be no fiscal or economic impact. There is a possibility of a slight increase in DEQ resources if increased penalty calculations result in a greater number of civil penalty appeals that proceed to a formal contested case hearing. There would be a positive fiscal impact on DEQ with regards to the $7.50 base fee for onsite septic system program public records requests, as DEQ receives little compensation for the majority of these requests. DEQ would be better able to cover the costs associated with fulfilling these requests.

a.  

4.  Impact on large businesses (all businesses that are not small businesses below):

In most cases, there would be no fiscal or economic impact. The rules do not impose regulatory requirements, obligations or restrictions. The exception would be for a business that violates Oregon’s environmental regulations where the proposed rules could result in a larger penalty depending on the specific facts of the case. If a large business is requesting onsite septic system program records, they would pay the $7.50 base fee.

Impact on small businesses (those with 50 or fewer employees) ORS 183.336

In most cases, there would be no fiscal or economic impact. The rules do not impose regulatory requirements, obligations or restrictions. The exception would be for a small business that violates Oregon environmental regulations where the proposed rules could result in a larger penalty depending on the specific facts of the case. If a small business is requesting onsite septic system program records, they would pay the $7.50 base fee.

Documents relied on for fiscal and economic impact

Advisory committee

DEQ appointed an advisory committee for Division 012 and considered the committee’s recommendations on this fiscal and economic impact statement. In compliance with ORS 183.333, DEQ asked for the committee’s recommendations on:

•  Whether the proposed rules would have a fiscal impact,

•  The extent of the impact, and

•  Whether the proposed rules would have a significant impact on small businesses and complies with ORS 183.540.

The committee reviewed the fiscal impact statement and documented its recommendation in the approved minutes dated April 5, 2013.

The committee agreed with the fiscal impact statement and had no further comments or suggestions. In compliance with ORS 183.540, the committee considered how to reduce the economic impact on small business and determined that Division 012 already accounts for costs to small business by placing smaller, less sophisticated violators on lower penalty matrices. The Division 012 rules only apply to businesses and individuals that violate Oregon’s environmental regulations and are subject to subsequent civil penalties. The rules impose no new regulatory obligations or fees.

DEQ did not appoint an advisory committee for Division 011. Proposed changes to this rule reflect changes to align with the current Oregon Attorney General Model Rules, and the Water Quality Policy Option Package #120 that was approved by the 2013 Legislature.

Housing cost

To comply with ORS 183.534, DEQ determined the proposed rules would have minimal effect on the development cost of a 6,000-square-foot parcel and construction of a 1,200-square-foot detached, single-family dwelling on that parcel. The rules impose no new regulatory obligations but do require payment of a $7.50 base fee if development of the property includes submittal of an onsite septic system program public records request.

Federal relationship

"It is the policy of this state that agencies shall seek to retain and promote the unique identity of Oregon by considering local conditions when an agency adopts policies and rules. However, since there are many federal laws and regulations that apply to activities that are also regulated by the state, it is also the policy of this state that agencies attempt to adopt rules that correspond with equivalent federal laws and rules..."

Relationship to federal requirements

DEQ determined this rule proposal is “in addition to federal requirements” as required under ORS 468A.327(1)(a) and OAR 340-011-0029(1)(a).

The proposed amendments to Division 011 implement changes to the DOJ’s Oregon Attorney General Model Rules.

The proposed amendments to Division 012 implement the increased civil penalty maximums authorized by Senate Bill 105A and Oregon statutes, and define DEQ’s civil penalty process and penalty calculations.

What alternatives did DEQ consider if any?

Division 011: DEQ did not consider other alternatives since the Division 011 rules must align with the Oregon Attorney General Model Rules, and because the onsite program is a fee-supported program with a “fee for service” design.

Division 012: DEQ developed the proposed amendments through advice from the rulemaking committees. During that process, many alternatives were considered regarding whether and how to implement the statutory penalty maximums increased by Senate Bill 105A (2009).  Other alternatives considered include not modifying the penalties at all, modifying the base penalties in the penalty formula by different amounts, and changing penalty formula factors in different ways.

Land use

“It is the Commission's policy to coordinate the Department's programs, rules and actions that affect land use with local acknowledged plans to the fullest degree possible.”  

                              ORS 197.180, OAR 660-030

Land-use considerations

To determine whether the proposed rules involve programs or actions that are considered a land-use action, DEQ considered:

▪  Statewide planning goals for specific references. Section III, subsection 2 of the DEQ State Agency Coordination Program} document identifies the following statewide goal relating to DEQ's authority:

 Goal  Title

 5    Open Spaces, Scenic and Historic Areas, and Natural Resources

 6    Air, Water and Land Resources Quality

 11    Public Facilities and Services

 16    Estuarial resources

 19    Ocean Resources

•  OAR 340-018-0030 for EQC rules on land-use coordination. Division 18 requires DEQ to determine whether proposed rules will significantly affect land use. If yes, how will DEQ:

◦  Comply with statewide land-use goals, and

◦  Ensure compatibility with acknowledged comprehensive plans, which DEQ most commonly achieves by requiring a Land Use Compatibility Statement.

•  DEQ’s mandate to protect public health and safety and the environment.

•  Whether DEQ is the primary authority that is responsible for land-use programs or actions in the proposed rules.

•  Present or future land uses identified in acknowledged comprehensive plans.

Determination

DEQ determined that the proposed rules listed under the Chapter 340 Action section above do not affect existing rules, programs or activities that are considered land-use programs and actions in OAR 340-018-0030 or in the DEQ State Agency Coordination Program.

Stakeholder and public involvement

Public hearings and comment

DEQ held one public hearing. The comment period closed on September 20, 2013 at 5:00 p.m. DEQ received nine public comments. The Summary of comments and DEQ responses section below addresses each public comment. The Commenter section below lists all people who provided comments on this proposal.

Advisory committees

DEQ convened two advisory committees for this rulemaking. One committee focused on implementation of the statutory penalty increases related to spills of oil or hazardous materials. The other advised DEQ on all the potential amendments to Division 012 including the recommendations from the spill advisory committee. An advisory committee was not established for the Division 011 or 200 portions of this rulemaking.

The Spill Advisory Committee met on October 12, 2010 and January 22, 2013 and also reviewed a final draft of the proposed rules. Members attending at least one of the meetings included:

1.  Jess Brown, Hazardous Materials Transportation Specialist, Oregon Department of Transportation

2.  Eliza Dozono, attorney, Miller Nash LLP, representing Western States Petroleum Association

3.  Brian Doherty, attorney, Miller Nash LLP, representing the Western States Petroleum Association

4.  Debra Dunn, President, Oregon Trucking Associations

5.  Jeff Fishel, Spill Enforcement Coordinator, Washington Department of Ecology

6.  Miles Johnson, attorney, Columbia Riverkeeper

7.  Tim Parker, owner, Northwest Green Products/BioBlend

8.  C. Kent Roberts, attorney, Schwabe, Williamson & Wyatt, representing the maritime industry

9.  Bob Salinger, Conservation Director, Audubon Society of Portland

10.  Kate Spaulding, Compliance Officer, Environmental Protection Agency

11.  Michael Titone, Executive Director in 2013, Columbia River Steamship Operators Association

12.  Captain Jim Townley, Executive Director in 2010, Columbia River Steamship Operators Association

13.  Richard Vincent, Vice President, Port of Portland

14.  Derek White, Emergency Management Coordinator, Columbia County (2010); Hydro Emergency Services Manager, PacifiCorp (2013).

The Division 12 Advisory Committee met on Nov. 28, 2012, and April 5, 2013 and also reviewed a final draft of the proposed rules. Attendees included:

1.  Aubrey Baldwin, attorney, Earthrise Law Center

2.  Matthew Criblez, Environmental Compliance Manager, Portland Bureau of Environmental Services

3.  Don Haagensen, attorney, Cable Huston, Benedict, Haagensen & Lloyd LLP, representing Associated Oregon Industries

4.  Merlyn Hough, Agency Director, Lane Regional Air Protection Agency

5.  Phil Houk, Mayor, Pendleton

6.  Courtney Johnson, attorney, Crag Law Center

7.  Paul Koprowski, Air Program Coordinator, Oregon Operations, US Environmental Protection Agency

8.  Gerald P. Linder, attorney, Clean Water Services, representing Oregon Association of Clean Water Agencies,

9.  David Misel, representing Rejuvenation, Inc.

10.  Mike O’Connor, owner, Continental Cleaners

11.  Christopher Rich, attorney, Perkins Coie law firm

 EQC prior involvement

DEQ shares general rulemaking information with EQC through the annual DEQ Rulemaking Plan review and monthly status reports. DEQ shared information about this rulemaking with the EQC in the Director's Dialogue on June 20, 2013. At EQC’s request, DEQ presented an informational item to the commission about the rulemaking on October 17, 2013. DEQ shared information about the 2013 legislative session that included Water Quality Policy Option Package #120 during the December 7, 2013 EQC meeting. Rulemaking to implement Package #120 commenced after legislative approval on June 26, 2013. The $7.50 base fee for onsite septic system public records requests was included in Package #120.

Public notice

The Secretary of State published the Notice of Proposed Rulemaking with Hearing for this rulemaking in the September 2013 Oregon Bulletin. DEQ also:

•  Posted notice on DEQ’s webpage http://www.deq.state.or.us/regulations/proposedrules.htm on Aug. 15, 2013.

•  E-mailed notice on Aug. 15, 2013 to:

•  Interested parties through GovDelivery

•  Interested parties on file with DEQ that are not on GovDelivery lists

•  The following key legislators required under ORS 183.335:

◦  Jackie Dingfelder, Chair, Environment and Natural Resources Committee

◦  Alan Olsen, Vice-Chair, Environment and Natural Resources Committee

◦  Jules Bailey, Chair, Energy and Environment Committee

◦  Deborah Boone, Vice-Chair, Energy and Environment Committee

◦  Mark Johnson, Vice-Chair, Energy and Environment Committee

◦  Chris Edwards, Co-Chair, Ways & Means, Subcommittee on Natural Resources

◦  Ben Unger, Co-Chair, Ways & Means, Subcommittee on Natural Resources

•  Members of the advisory committee

•  Hard copies of notices were posted through the U.S. Mail on Aug. 15, 2013 to those interested parties for whom DEQ had no email address

•  Emailed notice to the US. Environmental Protection Agency on Aug. 1, 2013

•  Published notice in The Oregonian on Aug. 15, 2013

Presiding Officers’ Record

At the beginning of the hearing, the presiding officer summarized procedures for the hearing including notification that DEQ was recording the hearing. The presiding officer asked that anyone wanting to present verbal comments to complete, sign and submit a registration form. The presiding officer adjourned the hearing 20 minutes after it was convened because no members of the public attended the hearing.

According to Oregon Administrative Rule 137-001-0030, the presiding officer summarized the content of the notice given under Oregon Revised Statute 183.335. Because no members of the public attended the hearing, there were no questions from attendees about it.

Because there were no attendees at the hearing, there is no attendees list to add to DEQ’S interested parties list for this rule or to the commenter section of this staff report.

The following table organizes the public comments received by the close of the public comment period into nine categories with cross references to the commenter number. DEQ’s response follows the summary. Original comments are on file with DEQ.

1  Comment  Approval of the rulemaking process and general agreement with proposed rule changes.

Commenters numbers: 1, 3 and 4 listed in the Commenter section below

Response  DEQ appreciates the collegial atmosphere that the members of the advisory committees brought to the meetings and the thoughtful and objective discussions about how DEQ should implement the statutory penalty increases through the proposed rules.

2  Comment  The rules should not specify that “The EB [economic benefit] will be determined using the U.S. Environmental Protection Agency's BEN computer model” (emphasis applied) because there are circumstances where BEN does not capture economic benefit. In those cases, other tools should be used.

   Commenter number: 2 listed in the Commenter section below

Response  The rule would allow alternative means of estimating economic benefit when appropriate. First, the term “will” indicates a future intent to use BEN but does not create a mandate for the use. Second, the rule does not specify that DEQ’s intent is to use only BEN, so DEQ could use BEN for the avoided and delayed costs and use other calculations and experts to calculate indirect benefits like advantage-of-risk, competitive advantages, or illegal profits. However, because those indirect benefits are speculative and difficult to estimate, DEQ would rarely, if ever, assess them. We believe clarifying our intent to use BEN improves certainty in the penalty-assessment and hearing process.

3  Comment  Proposed rule OAR 340-012-0160(4) states “Regardless of any other penalty amount listed in this division, the director has the discretion to increase the penalty to $25,000 per violation per day of violation based upon the facts and circumstances of the individual case.” EPA relies on that rule in finding that the penalty provisions in Division 12 are consistent with EPA requirements for authorized programs.

Commenter number:   2 listed in the Commenter section below

Response  DEQ understands that retaining flexibility for the director to issue the maximum penalty in any given situation is important to EPA’s determination that Oregon meets minimum requirements of the federally delegated programs. The only proposed changes to this rule are (i) to reflect that the current statutory maximum penalty is $25,000 and (ii) a renumbering of the paragraph.

4  Comment  DEQ’s penalty rules should adequately address potential spills of coal, liquefied natural gas and crude oil near the Columbia River.

Commenter numbers:   3 and 4 listed in the Commenter section below

Response  Oregon Senate Bill 105A (2009) increased the statutory penalty maximums for negligent or intentional spills of oil or hazardous materials into state waters and for negligent or intentional failures to clean up such spills. The new maximum penalty was designed to address larger more-damaging spills, which could include the types of spills to which the commenters refer. Under the proposed penalty rules related to these spills, a penalty could be as much as $100,000 per violation per day, depending on a variety of factors and circumstances set forth in proposed rule OAR 340-012-0155(b). In addition, if the circumstances of the spill met the criteria set forth in proposed rule OAR 340-012-0155(1)(a), DEQ could assess a penalty of up to $250,000.

5  Comment  Proposed OAR 340-012-0140(3)(a)(K) places spills “occurring during a commercial activity” in the $8,000 penalty matrix. The rule may be unclear that spills from derelict commercial vessels are also in that matrix because they might not occur “during” a commercial activity.

Commenter numbers:   3 and 4 listed in the Commenter section below

Response  DEQ agrees that spills from derelict commercial vessels should be in the $8,000 penalty matrix regardless of whether the spill occurred “during” a commercial activity. DEQ believes the most appropriate way to address this concern is by amending the proposed classification to specifically include all derelict vessels over 35 feet in length, regardless of whether there is proof that the vessel is currently or was involved in a commercial activity. DEQ recommends the threshold for this category because derelict vessels greater than 35 feet in length:

1.  are more likely to have been used for commercial purposes than for personal or recreational purposes;

2.  are less easily hauled out of the water and cannot be pulled with a regular boat trailer, making cleanup more difficult;

3.  are more likely made of metal than wood or fiberglass and more likely to be scrapped, which leads to releases of oil and hazardous materials;

4.  carry more fuel than smaller boats;

5.  are the focus of the Oregon State Marine Board Derelict Vessel Task Force.

DEQ recommends the following redline modification of proposed rule OAR 340-012-0140(3)(a)(K) to implement the commenters’ suggestion:

“Any violation of an oil and hazardous material spill and release statute, rule, or related order committed by a person other than a person listed in OAR 340-012-0140(2)(a)(N) occurring during a commercial activity or involving a derelict vessel over 35 feet in length.”

 Derelict vessels 35 feet and under would be in the lower $3,000 penalty matrix.

6  Comment  The “H” factor (history of correcting prior violations cited in formal enforcement actions) in the penalty formula rules at proposed rule OAR 340-012-0145(3)(a) should not reduce a current penalty just because the person merely complied with a previous order. Penalty reduction under the “H” factor should only be given when the person took action substantially beyond the previous order.

   Commenter numbers:   3 and 4 listed in the Commenter section below

Response  There are two related penalty factors at issue with this comment. The “P” factor is related to the number of violations previously cited in recent formal enforcement actions and the “H” factor is related to whether the person corrected those prior violations. The “H” factor reduces the effect of the “P” factor when assessing a penalty for a current violation, only if the person corrected the prior violations. Pursuant to 340-012-0145(3)(d), the combination of the “P” and “H” factors cannot reduce the base penalty. If the person showed extraordinary efforts to correct the prior violations, the combination of the “P” and “H” factors will be zero, but will not reduce the base penalty.

7  Comment  The “H” factor (history of correcting prior violations cited in formal enforcement actions) in the penalty formula rules at proposed rule OAR 340-012-0145(3)(a) should increase a penalty if the person did not respond to the previous order – otherwise the “H” factor creates a windfall and no disincentive for not following orders.

Commenter numbers:  3 and 4 listed in the Commenter section below

Response  As discussed in comment 5 above, if a person has previous violations cited in a formal enforcement action, the combined effect of the “P” and “H” factors will generally be to increase a penalty for a current violation. If the person has not complied with a past order, there will be little or no mitigation of the “P” factor with the effect that the current penalty will be increased. In addition, outstanding compliance issues from a past order are typically addressed with additional penalties for the ongoing or repeated violation of the statute, rule or permit. The current enforcement action may also or instead include a penalty for violation of the previous order. These subsequent penalties for continuing violations likely would be higher than the original penalty because the “P” factor, the “M” factor (mental state), “O” factor (occurrences or duration), “C” (efforts to correct), and EB (economic benefit) would all likely be higher.

8  Comment  The “C” factor (efforts to correct or mitigate the violation) in OAR 340-012-0145(6) should not be used to mitigate a current penalty based on the person merely doing what they are required to do. Mitigation for “extraordinary” efforts is warranted, but the value of the mitigation should be lower than in proposed rule OAR 340-012-0145(6)(a) and (b).

Commenter numbers:  3 and 4 listed in the Commenter section below

Response  DEQ believes that the proposed changes to the mitigation and aggravation effects of the “C” factor improve the existing penalty formula. Of the factors in the penalty formula, only the “C” factor can reduce the penalty below the base penalty. The proposed rule offers a smaller reduction for smaller efforts and larger reductions for increasingly larger efforts, and it increases the penalty if appropriate efforts are not taken. We believe this approach creates an incentive for quicker corrective action, creates an incentive for sharing information about the violation and corrective action, helps rebuild DEQ’s relationship with the regulated party, and better addresses the total circumstances of the situation. It also aids in settlement, when appropriate, which conserves state resources.

9  Comment  OAR 340-012-0160(2), which allows mitigation of the penalty for violations that are “voluntarily disclosed,” lacks sufficient detail. For example, it doesn’t specify whether penalties would be reduced for voluntary disclosure when the party was already required to disclose and it doesn’t specify the amount of the penalty reduction. In addition, there should be a way to increase a penalty for violations that are not reported or are covered up.

Commenter numbers: 3 and 4 listed in the Commenter section below

Response  OAR 340-012-0160(2) supplements the Director’s discretion in choosing which violations will receive penalty and determining the appropriateness of any penalty. The rule lists the factors that the director will consider in deciding whether a violation was voluntarily disclosed. Based on a similar EPA policy, the Director has directed staff on how to apply that discretion. A document describing the Director’s general intent for implementing this rule is entitled “The Department of Environmental Quality’s Internal Management Directive on Self-policing, Disclosure and Penalty Mitigation,” and is available at http://www.deq.state.or.us/programs/enforcement/SelfPolDisPen.pdf. Notably, the director will not consider mitigation for most voluntary reporting if the self-reporting was otherwise required.

Several processes escalate enforcement of violations that are not reported or are covered up. First, in cases where there was a requirement to report the violation, the failure to report is subject to possible penalty in addition to the violation itself. Second, evidence that a person has withheld required information or not corrected violations will generally increase the “O” (ongoing or repeated), “M” (mental state), and “C” (efforts to correct) factors and therefore increase the size of the penalty. Last, while DEQ is not a criminal law enforcement agency, falsifying required reports, intentional omissions from required reports, and covering up violations can subject the person to possible criminal investigation by the Oregon State Police, EPA’s Criminal Investigation Division, or other criminal investigatory agency.

10  Comment  OAR 340-012-0145(4) (the Occurrences “O” factor) impermissibly allows DEQ to treat violations occurring on different days as a single violation because ORS 468.140(2) states “Each day of violation under [these penalty statutes] constitutes a separate offense.

Commenter numbers:   3 and 4 listed in the Commenter section below

Response  ORS 468.140(1 and 2) and OAR 340-012-0145(4) specify that each day of violation is a separate offense for which a separate penalty may be assessed. However, neither the statutes nor rules require DEQ to issue a separate penalty for each separate day of violation. Instead, ORS 468.130(2)(e) specifies that the penalty rules must consider “whether the violation was repeated or continuous.” OAR 340-012-0145(4) implements that statute, giving DEQ the ability, in its discretion, to determine whether separate penalties should be assessed for each occurrence or whether a penalty assessed for one occurrence should be aggravated when the violation was repeated or continuous. Eliminating the “O” factor would be inconsistent with the statutory directions and take away a useful penalty factor.

Comments received by close of public comment period

The table below lists four people and organizations that submitted comments on the proposed rules by the deadline for submitting public comment. Original comments are on file with DEQ.

1  Commenter  Gerald P. Linder, attorney for Clean Water Services and ACWA representative;

 and Janet A. Gillaspie, Executive Director  

Affiliation  Oregon Association of Clean Water Agencies

This commenter submitted comments under category 1 in the Summary of comments and DEQ responses section above.

2  Commenter  Paul Koprowski, Air Program Coordinator

Affiliation  Oregon Operations, US Environmental Protection Agency

This commenter submitted comments under categories 2 and 3 in the Summary of comments and DEQ responses section above.

3  Commenter  Miles Johnson, Clean Water Attorney  

Affiliation  Columbia Riverkeeper

This commenter submitted comments under categories 1, 4, 5, 6, 7, 8, 9 and 10 in the Summary of comments and DEQ responses section above.

4  Commenter  Marla Nelson, Legal Fellow  

Affiliation  Northwest Environmental Defense Center

This commenter submitted comments under categories 1, 4, 5, 6, 7, 8, 9 and 10 in the Summary of comments and DEQ responses section above.

Notification

The proposed rules would become effective on mmm, dd, yyyy. DEQ will notify affected parties by [DESCRIBE NOTIFICATION] Enter text here.

Include information about the application of the rule. Be thorough and accurate. Without speculation, describe the implementation elements that have already been decided. Use the example elements below as an example of how to develop elements that apply to this proposal. Remember, this staff report becomes part of the administrative history of the rules and the court may look to it for guidance on deciding how to interpret an ambiguous section of the rule.

•  Affected parties – ?? press release?

•  DEQ staff –The Office of Compliance and Enforcement will be working with each of DEQ’s environmental programs to update its internal enforcement guidance to implement changes to Division 012. As part of that process, DEQ program staff will be notified of updates to divisions 011 and 012 rules including classifications and penalty matrices. (conduct training?) The Office of Compliance and Enforcment will begin using the updated Division 012 rules upon their effective date for the purposes of calculating and assessing civil penalties and other formal enforcement actions. OCE staff will be working with each of DEQ’s environmental programs to update its internal enforcement guidance to implement changes to Division 012. As part of that process, DEQ program staff will be notified of updates to division 012 rules including classifications and penalty matrices. (conduct training?)

Requirement  ORS 183.405

The state Administrative Procedures Act requires DEQ to review new rules within five years of the date the EQC adopts the proposed rules. Though the review will align with any changes to the law in the intervening years, DEQ based its analysis on current law.

Exemption

[OPTION 1] The following APA exemptions from the five-year rule review apply to Choose an item. of the proposed rules:

•  Choose an item.  

•  Choose an item.

•  Choose an item.  

[OPTION 2] The APA exemptions from the five-year rule review under ORS 183.405(4) and 183.450(5) do not apply to the proposed rules.

Five-year rule review required

No later than June 26, 2017, DEQ will review the newly adopted rules required under ORS 183.405 (1) to determine whether:

•  The rule has had the intended effect.

•  The anticipated fiscal impact of the rule was underestimated or overestimated.

•  Subsequent changes in the law require that the rule be repealed or amended.

•  There is continued need for the rule.

DEQ will use “available information” to comply with the review requirement allowed under ORS 183.450 (2).

DEQ will provide the five-year rule review report to the advisory committee to comply with ORS 183.450 (3).

LCarlou, 2013-10-28T16:04:00Z
Did we? How should this be reworded?

LCarlou, 2013-10-28T16:04:00Z
Let’s double-check these one more time. It’ll take us 5 min to do together.

LCarlou, 2013-10-28T16:04:00Z
Why “might”?

LCarlou, 2013-10-28T16:04:00Z
Might?

LCarlou, 2013-10-28T16:04:00Z
I think we’re supposed to delete this column because it’s brown text. I don’t know.

LCarlou, 2013-10-28T16:04:00Z
These can’t be the citation for that quote. What are these for?

LCarlou, 2013-10-28T16:04:00Z
This needs a bunch of editing for clarity. What was the bill # approved. When was the legislative update really?

LCarlou, 2013-10-28T16:04:00Z
Correct?

LCarlou, 2013-10-28T16:04:00Z
Email or hard copy.

LCarlou, 2013-10-28T16:04:00Z
Do we really need to provide link or any information about this blank hearing tape? Seems at most we’d just say that the recording is part of the rulemaking file and available as a public record.

mvandeh, 2013-10-28T16:04:00Z
This link is not available outside DEQ

LCarlou, 2013-10-28T16:04:00Z
We still need to do this section

LCarlou, 2013-10-28T16:04:00Z
I believe we are subject to the5-year review because I’ve previously done 5-year reviews for Diiv 12.