Oregon Department of Environmental Quality

December 13, 2013

Notice of Proposed Rulemaking

 Incorporate Lane Regional Air Protection Agency Rules

for Permit Streamlining into State Implementation Plan

Short summary 

DEQ proposes to incorporate Lane Regional Air Protection Agency regulations for permit streamlining into Oregon’s State Implementation Plan in Oregon Administrative Rule 340-200-0040. The permit streamlining rules were adopted by the LRAPA Board of Directors in an effort to maximize efficiencies in LRAPA’s permitting program while maintaining the existing level of environmental protection, bring LRAPA in line with state rules and better coordinate with state and federal requirements.

•  The LRAPA rules are identical to the state and federal National Emission Standards for Hazardous Air Pollutants and New Source Performance Standards that were in effect at the time of LRAPA’s rule adoption.

•  The LRAPA rules are identical to the changes in Chapter 340 Oregon Administrative Rules adopted by the Environmental Quality Commission, including:

◦  In 2001 and 2007, EQC adopted DEQ rulemakings titled SPPIT 1 and SPPIT 2, respectively. These rulemakings streamlined and improved permitting processes.

◦  In 2008, EQC adopted DEQ rules to clarify an agriculture exemption from the rules.

•  The LRAPA rules include minor corrections and adjustments adopted by LRAPA’s Board in January 2010 to the regulations previously adopted by LRAPA’s Board in October 2008.

Brief history

LRAPA, in consultation with DEQ and the U.S. Environmental Protection Agency, is responsible for ensuring that Lane County communities comply with federal air quality health standards, including enacting plans to restore healthy air quality in any area violating standards. LRAPA conducts air monitoring, permitting and compliance, inspection and enforcement, and regulates open burning and asbestos abatement throughout Lane County. It also has a woodstove advisory program, an open burning advisory and conducts special projects focused on air quality. The agency is funded from local dues from Lane County and the cities of Lane County, industrial and other permitting fees, and LRAPA coordinates with DEQ to obtain EPA funding and state general funds.

The permit streamlining rules provided at the end of this document were adopted by the LRAPA Board of Directors on October 14, 2008 and January 12, 2010 and have been in effect in Lane County since their adoption. The Environmental Quality Commission and DEQ have oversight authority to ensure LRAPA meets Clean Air Act requirements. The State Implementation Plan is the State of Oregon Clean Air Act Implementation Plan as adopted by EQC under OAR 340-200-0040 and approved by EPA. The EQC’s role is to review LRAPA rules to determine if they are in compliance with state law and the Clean Air Act, approve those rules if they comply, and submit approved rules to EPA for federal approval as State Implementation Plan amendments. Though this is not the case here, an exception to this requirement allows the DEQ to approve any LRAPA rules that are verbatim restatements of rules that the EQC has already approved.

Typically, DEQ submits LRAPA rules to the EQC for incorporation into the State Implementation Plan upon adoption by the LRAPA Board. However, in this case, DEQ determined that the public notice process held jointly by DEQ and LRAPA several years ago did not meet requirements for State Implementation Plan rules, which are above and beyond requirements for normal rulemaking. Performing rulemaking is resource intensive and DEQ was unable to perform the additional public notice requirements until now.

Regulated parties

The regulated parties include businesses in LRAPA’s jurisdiction that hold Air Contaminant Discharge Permits as well as businesses subject to Title V Operating Permit requirements.

Insert PDF of signed letter

What problem is DEQ trying to solve?

The LRAPA rules adopted in 2008 and 2010 have not been incorporated into the State Implementation Plan. LRAPA adopted changes to its rules to maximize efficiencies in LRAPA’s permitting program, bring LRAPA in line with state rules and better coordinate with state and federal requirements. In order for LRAPA and the state to maintain compliance with the Clean Air Act, the EQC must review LRAPA’s rules and, if the EQC concludes that the rules comply with state law and the Clean Air Act, approve the rules and submit them to the EPA for approval and incorporation, as appropriate, into the federally-approved State Implementation Plan.

The primary goal of LRAPA’s rulemaking adopted in 2008 was to streamline permitting and compliance by clarifying, simplifying and updating regulatory requirements. Clarifications occur through consolidating and standardizing definitions, adopting general permits, adopting generic Plant Site Emission Limits, improving the major New Source Review requirements, aligning sulfur dioxide standards with federal requirements, updating the incinerator rules, simplifying emission standards for board product manufacturing, simplifying the Kraft Pulp Mill rules and consolidating the excess emissions requirements for notification, reporting and the emergency defense.

The primary goal of LRAPA’s rulemaking adopted in 2010 was to make typographical corrections in rule citations and references to other rules citations, adding definitions of “Unassigned Emissions” and “Title I modification”, and align the opacity limitation language for crematory units in the general permit with the rules. The rest of the changes allow LRAPA to keep small sources on the lowest cost permits by removing de minimis production and throughput thresholds for several source categories and allowing more expanded criteria for sources to obtain a Simple permit under the low fee category.

How would the proposed rule solve the problem?

The LRAPA rules effectively adopt previously adopted DEQ rules and provide for LRAPA to better coordinate with and meet state and federal requirements.

How will DEQ know the problem has been solved?

If EQC adopts the rules, DEQ will submit the rules to EPA to update the federally-approved State Implementation Plan including a request for federal delegation of certain rule aspects, where appropriate. DEQ will know the goals of this rulemaking have been addressed when EPA reviews and approves the delegation request and changes to the State Implementation Plan.

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.

Lead division            Program or activity

Air Quality Division  State Implementation Plan

Chapter 340 action

Statutory authority

ORS 468.020, 468A.035, 468A.135

Other authority

 LRAPA Title 13 General Duties and Powers of Board and Director

LRAPA Title 14 Rules of Practice and Procedure

Statute implemented  Legislation  

ORS 468 and 468A

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

In proposing changes to align its rules with state and federal requirements, LRAPA relied primarily upon the rules implemented by DEQ as part of the two phases of streamlining, and changes to allow DEQ to implement Clean Air Act requirements for agriculture.

This rulemaking does not establish or revise fees. This rulemaking proposes to incorporate fees already adopted by LRAPA into Oregon’s State Implementation Plan. DEQ, in consultation with LRAPA, evaluated LRAPA’s rules and determined LRAPA’s original fiscal analysis is reasonable and still correct in light of events that have occurred since LRAPA’s rule adoption in 2008 and 2010. The fee revenue and resources described in this section are the amounts used by LRAPA when it adopted the rules.

LRAPA aligned its permit and fee structure for Air Contaminant Discharge Permits with DEQ’s structure. For example, the rules expanded LRAPA’s ability to write permits for categories of businesses. These permits are known as General Air Contaminant Discharge Permits and allow the permitted business to operate as if it had a source-specific permit. Issuing a source-specific permit is a resource intensive process. A business is assigned to the General permit if it meets the criteria for the General permit, whereas, a business that is required to have a permit, but does not fit the criteria of a General permit will still need to obtain an individual, source-specific Air Contaminant Discharge Permit. This change resulted in a fee reduction for those businesses qualifying for General permits, and reduced the amount of time it took LRAPA to issue permits to those businesses. The following examples illustrate the economic impact of this rule change for two source categories:

1.  A stationary asphaltic concrete paving plant was previously subject to Category 34a under LRAPA’s previous fee table. Over a ten-year period, a typical facility paid annual compliance determination fees at $2,870 per year for ten years, two renewal fees at $1,318 each, and a modification fee at$1,318, for a total of $32,654 over the ten year period. Under LRAPA’s adopted rules, this facility is assigned to a General ACDP-High Cost (Fee Class Three). Over a ten year period, the facility pays an assignment fee of $1,200 and annual fees of $1,872 per year for ten years, for a grand total of $19,920 over the ten year period. This is a savings of $12,734 for the facility.

2.  A portable rock crusher was previously subject to Category 42b under LRAPA’s previous fee table. Over a ten-year period, a typical facility paid annual compliance determination fees at $1,525 per year for ten years, two renewal fees at $1,803 each, and a modification fee at$1,803, for a total of $20,659 over the ten year period. Under LRAPA’s adopted rules, this facility is assigned to a General ACDP-Medium Cost (Fee Class Two). Over a ten year period, the facility pays an assignment fee of $1,200 and annual fees of $1,296 per year for ten years, for a grand total of $14,160 over the ten year period. This is a savings of $6,499 for the facility.

The reduction in fee revenue is nearly equivalent to the reduction in LRAPA’s resources spent issuing permits, as follows:

Change in fee revenue: For the 6 years prior to LRAPA’s rule adoption, the annual average ACDP fees collected by LRAPA were $402,191 per year. The Title V operating permit fees collected for emissions generated during the 2007 calendar year were estimated to be approximately $480,833. Nearly all Title V facilities pay on permitted emissions rather than actual emissions, and the emissions assessed fees each calendar year are relatively constant. Total ACDP and Title V fee revenue was about $883,024 per year.

LRAPA’s projected ACDP fees, post-rule streamlining, were estimated to be approximately $370,320 per year. Total ACDP and Title V fee revenue (excluding inflationary increases in Title V fees based on the consumer price index) were projected to be $851,153 per year. The projected difference in revenue was $883,024 – $851,153 = $31,871 per year.

Change in LRAPA resources spent issuing permits: LRAPA’s budget assigned 10.42 full time equivalent staff positions to the ACDP and Title V programs. The savings expected under the streamlining were 8 percent, which LRAPA based on DEQ’s streamlining rules. LRAPA’s savings were therefore approximately 0.83 positions (10.42 positions x 8% = 0.83 positions), which LRAPA rounded down to 0.5 positions. The average cost associated with the ACDP and Title V programs was budgeted at $87,220 per full time equivalent position with an additional 12 percent overhead cost to bring the total cost to $97,690 per position. Therefore the savings for 0.5 of a full time equivalent position is approximately $49,000.

Conclusion: The reduction in fee revenue (about $32,000) is nearly equivalent to the reduction in LRAPA’s resources spent issuing permits ($49,000).

Fiscal and Economic Impact

LRAPA’s rule adoption resulted in simplification and streamlining, and updating and alignment with state and federal requirements, while maintaining equivalent environmental protection and stringency. The rules have been in effect in Lane County since their adoption in 2008 and 2010. DEQ, in consultation with LRAPA, evaluated the rules and determined LRAPA’s original analysis of fiscal and economic impacts is reasonable and still correct in light of events that have occurred since LRAPA’s rule adoption several years ago.

Statement of Cost of Compliance  

   Impacts on general public

LRAPA instituted a tiered public involvement process. LRAPA revised its public notice procedures so that major new sources and major modifications to existing sources can require a preliminary informational meeting before LRAPA begins drafting a permit. This increased the up-front time required for the public to prepare for and participate in public meetings. A benefit from this procedure is better permits that require less time for review and public comment since issues are raised and addressed before LRAPA begins permit drafting. In addition, because LRAPA’s rules allow the agency to issue General permits to more categories of sources, instead of issuing an individual source-specific permit to those sources, comments from the public on one General Permit have the affect of commenting on all of the individual permits that would have been otherwise issued in place of a General Permit. Overall, this tiered public involvement process results in time savings for the public.

Impact on other government entities other than DEQ

a.  Local governments: Local governments that hold air quality permits, such as county–owned cogeneration facilities and school boilers, experienced the same impacts as small and large businesses.

b.  State agencies: State agencies that hold air quality permits, such as university-owned power generators, experienced the same impacts as small and large businesses.

Impact on DEQ ORS 183.335

See “Impacts on general public” above.

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

Reduced Time: LRAPA’s rule adoption eliminated redundant requirements, clarified rule language, and resulted in fewer permit conditions for certain facilities (i.e. kraft pulp mills) in cases where multiple permit conditions set similar limits for the same emission sources and pollutants. This is a benefit to businesses because it reduces the amount of time they spend on understanding and complying with the permit.

LRAPA’s ruled adoption reduced the amount of time required and the cost to maintain a permit by reducing the time it takes to issue and renew permits and the need for permit modifications. This is primarily due to the use of generic Plant Site Emission Limits in place of source-specific ones, and the use of general permits for many source categories. In addition, changing the trigger level for Prevention of Significant Deterioration from the Significant Emission Rate to 100 or 250 tons per year reduced the time required by triggering PSD when modeling indicates that no standards will be violated. Reduced permit processing time enables businesses to better meet market-timing needs.

Permit structure: LRAPA aligned its permit and fee structure with DEQ’s Air Contaminant Discharge Permit structure, including annual fees, initial permitting fees and special activity fees. Some large businesses were switched to a Standard ACDP, which includes an annual fee of $7,680 per year; permits for these businesses included a range of fees in the previous rules (approximately $1000 to $21,000 per year). Some large businesses became subject to General and Simple ACDPs. The adopted fee structure is provided in Title 37 Section 37-0020 Table 2 of this document. The change in the fee structure is summarized in the table below. Overall, the fee changes were nearly revenue neutral for LRAPA, although some individual businesses now pay more or less than the fees they paid before LRAPA’s adoption of the rules in 2008.

Triggering Applicable Requirements: As a result of LRAPA’s rule adoption, some sources can trigger or avoid triggering various applicable requirements. For example, changes to unassigned emissions can cause a few sources to trigger New Source Review sooner, as compared to the previous rules. Also, the proposed process to assess impacts due to ozone precursors potentially can require sources between 30 and 100 kilometers from a nonattainment or maintenance area to evaluate their impact on the area and mitigate the impact if it is significant (there are currently no ozone nonattainment or maintenance areas in Lane County). Procedures for combining and splitting sources can cause some sources to trigger or avoid triggering Title V or New Source Review rules.

Monitoring and Reporting Costs: LRAPA’s rule adoption likely increased and decreased monitoring and reporting costs for some sources. For example the rolling 12-month PSEL in the permits made it necessary to report compliance twelve times in annual reports in place of once for the calendar year. However, elimination of the short term PSEL (hourly or daily) reduced the burden of monitoring and reporting compliance with these short term limits.

LRAPA’s rule adoption requires businesses to submit excess emission reports within fifteen days of their occurrence rather than semi-annually. This imposes a slight additional cost in reporting to permit holders that experience excess emissions. However, the fiscal impact is negligible because excess emissions reported within the required 15 days would no longer need to be included in these facilities’ semi-annual reports.

Emission Reduction Credits: LRAPA’s rule adoption likely increased the value of certain emission reduction credits. For example emission reductions from shutdowns are used just like over control reductions to offset emission increases for sources going through New Source Review. Banking can be used to extend the life of a shutdown credit just the same as other actual emission reductions. Under the previous rules, emission reductions due to shutdowns could only be used as offsets during the two years following the reduction and could not be banked.

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

The type of permit required is based on the amount of emissions and not the numbers of employees. Rule simplification and streamlining created efficiencies and avoided additional permitting costs for small sources. EPA determined that there would be no significant impact on small businesses when it exempted HFE-7300 from the definition of Volatile Organic Compounds. LRAPA’s adoption of this exemption likely benefits businesses by reducing regulatory burden by lifting the requirement to track and limit use of this chemical and allowing expanded use of a commercially valuable compound.

Documents relied on for fiscal and economic impact

Advisory committee

DEQ did not appoint an advisory committee.

Housing cost

To comply with ORS 183.534, DEQ determined the proposed rules would have no 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 overall fee changes are neutral for all permit holders including those that manufacture construction materials for such parcels.

"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..." ORS 183.332

Relationship to federal requirements

This section complies with OAR 340-011-0029 and ORS 468A.327 to clearly identify the relationship between the proposed rules and applicable federal requirements.

The proposed rules are not “different from or in addition to federal requirements” and impose stringency equivalent to federal requirements. LRAPA’s rules include National Emission Standards for Hazardous Air Pollutants and New Source Performance Standards that were effective at the time of rule adoption. LRAPA’s rules also allow regulation of agriculture to the extent necessary to comply with the federal Clean Air Act. If EQC adopts the rules, DEQ would submit the rules to EPA to update the federally-approved State Implementation Plan including a request for federal delegation of certain rule aspects, where appropriate.

What alternatives did DEQ consider if any?

DEQ did not consider any alternatives to the propose rules. In order to be efficient and take advantage of the tremendous work done at the state level to create sensible rules for the unique and well-established stationary source permitting program in Oregon, DEQ and LRAPA chose to be consistent with the revisions specified by DEQ in .

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 following proposed rules listed under the Chapter 340 Action section above are existing rules that affect programs or activities that the DEQ State Agency Coordination Program considers a land-use program.

OAR 340-200-0040  State of Oregon Clean Air Act Implementation Plan

OAR 340-018-0030  State Agency Coordination Program

DEQ’s statewide goal compliance and local plan compatibility procedures adequately cover the proposed rules. 1: 340-018-0040(1) - compliance with statewide planning goals achieved by ensuring compatibility with acknowledged comprehensive plans. 2: 340-018-0050(2)(a) - ensuring compatibility with acknowledged comprehensive plans may be accomplished through a Land Use Compatibility Statement.

Stakeholder and public involvement

 Advisory committee

DEQ did not appoint an advisory committee.

 EQC prior involvement

DEQ shares general rulemaking information with EQC through the annual DEQ Rulemaking Plan review and monthly status report. DEQ did not present additional information specific to this proposed rule revision beyond the annual rulemaking plan and the monthly rulemaking report.

Public notice

The January 2014 Oregon Bulletin will publish the Notice of Proposed Rulemaking with Hearing .

DEQ also:

•  Posted notice on DEQ’s webpage http://www.oregon.gov/deq/RulesandRegulations/Pages/2013/LRAPAOB.aspx on Dec. 13, 2013.

•  E-mailed notice on December 13, 2013 to:

•  Interested parties through GovDelivery

•  Interested parties and stakeholders provided to DEQ by LRAPA

•  The following key legislators required under ORS 183.335:

◦  Enter name, title, committee here.

◦  Enter name, title, committee here.

◦  Enter name, title, committee here.

•  Members of LRAPA’s advisory committee.

•  Mailed the notice by U.S. Postal Service to ## interested parties on December 13, 2013.

•  Sent notice to EPA on mmm dd, yyyy. 

•  Published legal advertisement in the following newspapers on Dec. 13, 2013:

◦  Oregonian

◦  Register Guard

◦  Beacon

◦  Cottage Grove Sentinel

Public hearings

One public hearing will be held. DEQ authorized LRAPA to act as DEQ’s hearings officer on behalf of the Environmental Quality Commission for public comment on the rule amendments. The table below includes information about how to participate in the public hearing. DEQ’s authorization is indicated in the letter to LRAPA in the Stringency Review and Authorization section of this document.

Before taking public comment and according to Oregon Administrative Rule 137-001-0030, the staff presenter will summarize the content of the notice given under Oregon Revised Statute 183.335 and respond to any questions about the rulemaking.

DEQ will add the names, addresses and affiliations of all hearing attendees to the interested parties list for this rule if provided on a registration form or the attendee list. DEQ will consider all oral and written comments received at the hearings listed below before finalizing the proposed rules. All comments will be summarized and DEQ will respond to comments on the Environmental Quality Commission staff report.

Close of public comment period

The comment period will close on January 16, 2014 at 5:00 p.m.

LRAPA Industrial Permitting Rules adopted by the LRAPA Board of Director’s on October 14, 2008 and proposed for incorporation into the Oregon State Implementation Plan

Tentatively insert adopted rules. The rules are 300 pages.

LRAPA Industrial Permitting Rules adopted by the LRAPA Board of Director’s on January 12, 2010 and proposed for incorporation into the Oregon State Implementation Plan

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