Clean Air Act Proposed Interim Approval, or in the Alternative Proposed Disapproval, of Operating Permits Program; Oregon Department of Environmental Quality, Lane Regional Air Pollution Authority

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5070-3]

Clean Air Act Proposed Interim Approval, or in the Alternative

Proposed Disapproval, of Operating Permits Program; Oregon Department

of Environmental Quality, Lane Regional Air Pollution Authority

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: EPA proposes interim approval of the Operating Permits

Programs submitted by the Oregon Department of Environmental Quality

(ODEQ) and Lane Regional Air Pollution Authority (LRAPA) for the

purpose of complying with Federal requirements which mandate that

States develop, and submit to EPA, programs for issuing operating

permits to all major stationary sources, and to certain other sources,

provided certain proposed revisions to Oregon rules are adopted and

submitted to EPA as a program revision prior to EPA's statutory

deadline for acting on the State's submittal. In the alternative, EPA

proposes disapproval of the Oregon programs if the proposed revisions

are not adopted and submitted prior to the statutory deadline.

DATES: Comments on this proposed action must be received in writing by

October 14, 1994.

ADDRESSES: Comments should be addressed to Anne Dalrymple at the Region

10 address indicated.

Copies of the State's submittal and other supporting information

used in developing the proposed action are available for inspection

during normal business hours at the following location: U.S.

Environmental Protection Agency, Region 10, 1200 Sixth Avenue, Seattle,

Washington 98101.

FOR FURTHER INFORMATION CONTACT: Anne Dalrymple, (206) 553-0199.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Background

As required under title V of the Clean Air Act (Act) as amended

(1990), EPA promulgated rules defining the minimum elements of an

approvable State operating permits program and the corresponding

standards and procedures by which the EPA will approve, oversee, and

withdraw approval of State operating permits programs (see 57 FR 32250

(July 21, 1992)). These rules are codified at title 40 Code of Federal

Regulations (CFR) part 70. Title V requires States to develop, and

submit to EPA, programs for issuing these operating permits to all

major stationary sources and to certain other sources.

The Act requires that States develop and submit these programs to

EPA by November 15, 1993, and that EPA approve or disapprove each

program within one year after receiving the submittal. The EPA's

program review occurs pursuant to section 502 of the Act and part 70

which, together, outline criteria for approval or disapproval. Where a

program substantially, but not fully, meets the requirements of part

70, EPA may grant the program interim approval for a period of up to

two years. If EPA has not fully approved a program by two years after

the November 15, 1993 date, or by the end of an interim program, it

must establish and implement a Federal program.

B. Federal Oversight and Sanctions

The EPA must apply sanctions to a State for which 18 months have

passed since EPA disapproved the program. In addition, discretionary

sanctions may be applied any time during the 18-month period following

the date required for program submittal or program revision. If the

State has no approved program 2 years after the date required for

submission of the program, EPA will impose additional sanctions, where

applicable, and EPA must promulgate, administer, and enforce a Federal

permits program for the State. The EPA has the authority to collect

reasonable fees from the permittees to cover the costs of administering

the program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

The program submitted by the State of Oregon includes submissions

by ODEQ, LRAPA and the Oregon Attorney General. Collectively, these

submissions meet the requirements of 40 CFR part 70, Sec. 70.4 for

complete program submittal including a letter of submittal from

Oregon's Governor requesting approval, complete program descriptions,

the legal opinions of the Attorney General and the independent legal

counsel for LRAPA, and fully adopted implementing regulations. An

implementation agreement is currently being developed between the

Oregon agencies and EPA.

The Oregon state operating permit regulations found within the

Oregon Administrative Rules (OAR), Chapter 340, Division 28, including

proposed rule revisions, and the authorizing statutes substantially

meet the requirements of 40 CFR part 70, Sec. Sec. 70.2 and 70.3 for

applicability, Sec. Sec. 70.4, 70.5, and 70.6 for permit content

including operational flexibility, Sec. 70.7 for public participation

and minor permit modifications, Sec. 70.8 for permit review by EPA and

affected States, Sec. 70.5 for criteria which define insignificant

activities, Sec. 70.11 for requirements for enforcement authority, and

Sec. 70.5 for complete application forms. The full program submittal,

the proposed revisions to OAR Chapter 340, Division 28, and the

Technical Support Document are available for review for more detailed

information.

2. Regulations and Program Implementation

a. Program Implementation

The Oregon 1991 Legislature enacted Oregon Revised Statute (ORS)

468A.300-330, which gave ODEQ authority to promulgate regulations

establishing a title V program, to collect interim fees and to develop

a Small Business Assistance Program. The 1993 Legislature also passed

statutes enhancing civil and criminal enforcement authority (Senate

Bill 912) and authorizing collection of emissions fees to fully fund

the title V program (Senate Bill 86). The Oregon Environmental Quality

Commission (EQC) adopted rules implementing the title V program which

are published at OAR Chapter 340, Division 28 (Stationary Source Air

Pollution Control and Permitting Procedures), and OAR Chapter 340,

Division 32 (Hazardous Air Pollutants), and became effective September

24, 1993. On July 11, 1994, ODEQ proposed for public comment revisions

to OAR Chapter 340, Division 28. ODEQ has informed EPA that final rule

revisions will be submitted to the EQC for consideration on October 21,

1994, and if adopted, would be submitted to EPA as a revision to

Oregon's current program prior to EPA's statutory deadline for acting

on Oregon's title V submittal.

b. Scope of the Program

ODEQ will be implementing Oregon's title V program throughout the

State of Oregon, except for Lane County. ODEQ will implement the title

V program under the following authority: ORS 468 et seq. and ORS 468A

et seq., OAR Chapter 340, Division 28 (Stationary Source Air Pollution

Control and Permitting Procedures), and OAR Chapter 340, Division 32

(Hazardous Air Pollutants). OAR Chapter 340, Division 28 contains

regulations pertaining to both title V and non-title V sources.

Therefore, this notice proposes to approve certain regulations within

Division 28 as part of Oregon's title V program. The Technical Support

Document identifies the regulations approved in this rulemaking. The

remainder of Division 28 will be approved or disapproved as part of the

Oregon State Implementation Plan in a separate rulemaking. As explained

more fully below, EPA intends to approve portions of OAR Chapter 340

Division 32 in a separate Federal Register notice under section 112(l)

of the Act.

LRAPA will be the local title V permitting authority with

jurisdiction over title V sources in Lane County, Oregon. ORS 468A.135

gives LRAPA authority to enforce Oregon's title V rules or adopt their

own more stringent rules. LRAPA has not adopted its own title V rules,

so it will enforce OAR 340-28 et seq.

The Oregon permitting authorities have not made an affirmative

showing of legal authority to regulate sources within the exterior

boundaries of Indian Reservations in Oregon under the Clean Air Act.

Therefore, interim approval of the Oregon operating permits programs

will not extend to lands within the exterior boundaries of Indian

Reservations.1 Title V sources located within the exterior

boundaries of Indian Reservations in Oregon will be subject to the

Federal operating permit program, to be promulgated at 40 CFR part 71,

or subject to the operating program of any Tribe delegated such

authority under section 301(d) of the Act.

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\1\This is not a determination that the Oregon permitting

authorities do not have jurisdiction over sources within the

exterior boundaries of Indian Reservations in Oregon. However, no

such showing has been made at the time of this proposed notice.

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c. Variance Provisions

ORS 468A.075 allows the Oregon Environmental Quality Commission

(EQC) discretion to grant relief from compliance with State rules and

regulations under certain conditions. Section 23-005 of LRAPA's rules

contains a variance provision modeled closely after ORS 468A.075. The

EPA regards ORS 468A.075 and LRAPA section 23-005 as wholly external to

the program submitted for approval under part 70, and consequently

proposes to take no action on these provisions of State and local law

in this rulemaking. The EPA does not recognize the ability of a

permitting authority to grant relief from the duty to comply with a

federally enforceable part 70 permit, except where such relief is

granted through procedures allowed by part 70. In other words, a

variance does not affect the title V source until the title V permit is

modified pursuant to the procedures in part 70. EPA reserves the right

the enforce the terms of the part 70 permit where the permitting

authority purports to grant relief from the duty to comply with a part

70 permit in a manner inconsistent with part 70 procedures. A part 70

permit may also incorporate, via part 70 permit issuance or

modification procedures, the schedule of compliance set forth in a

variance. However, EPA reserves the right to pursue enforcement of

applicable requirements notwithstanding the existence of a compliance

schedule in a permit to operate. This is consistent with 40 CFR

70.5(c)(8)(iii)(C), which states that a schedule of compliance ``shall

be supplemental to, and shall not sanction noncompliance with, the

applicable requirements on which it is based.''

d. Environmental Audit Report Privilege

ORS 468.963 contains a limited ``Environmental Audit Report

Privilege,'' which prevents, with certain exceptions, the admission of

voluntary, internal environmental audit reports as evidence in any

civil, criminal or administrative proceeding. It is not clear at this

time what effect, if any, this privilege might have on title V

enforcement actions. EPA is currently establishing a national position

regarding EPA approval of environmental programs in States which adopt

statutes that confer an evidentiary privilege for environmental audit

reports. The EPA regards ORS 468.963 as wholly external to the program

submitted for approval under part 70, and consequently proposes to take

no action on this provision of State law in this rulemaking. If, during

program implementation, EPA determines that this provisions interferes

with Oregon's enforcement responsibilities under part 70, EPA will

consider this grounds for withdrawing program approval in accordance

with 40 CFR 70.10(c).

3. Permit Fee Demonstration

Program costs for ODEQ and LRAPA will be covered through a three-

part fee system composed of an emission fee, a base fee and user fees.

The emission fee is set at $25 per ton, adjusted for inflation by the

percentage, if any, by which the Consumer Price Index (CPI) exceeds the

CPI for the calendar year 1989 if the Oregon EQC determines by rule the

increased fee is necessary to cover all reasonable direct and indirect

costs of implementing the Federal operating permit program. All sources

subject to the title V program will also pay a base fee of $2,500 per

year. User fees will be charged to sources to cover the costs of

specific program activities requested by the source. ODEQ estimates

that the total amount collected will be approximately $50 per ton and

will exceed $4 million per year in the first year of program

implementation. The Oregon submittal includes an adequate demonstration

that the fees collected by each agency will cover the direct and

indirect costs of implementing and enforcing the Federal operating

permit program. Furthermore, each agency has committed in its submittal

to review its fee schedule annually and to increase fees, as necessary,

to reflect actual program implementation costs.

4. Provisions Implementing the Requirements of Other Titles of the Act

a. Authority and Commitments for Section 112 Implementation

Oregon permitting authorities are constitutionally prohibited from

implementing or enforcing Federal applicable regulations, but must

either adopt the Federal requirements as State regulations or include

them in a State-issued permit pursuant to OAR 340-28-640(3). ODEQ and

LRAPA have broad legal authority to adopt regulations necessary to

implement any and all section 112 requirements and have adopted OAR

Chapter 340, Division 32 rules in order to regulate the list of

hazardous air pollutants (HAPs) under section 112(b). Division 32

requires the Environmental Quality Commission to adopt and enforce

Maximum Achievable Control Technology (MACT) standards for major

sources and Generally Achievable Control Technology (GACT) standards

for area sources as they are promulgated by EPA. Division 32 also

establishes a voluntary early reductions program for HAPs and contains

accidental release provisions.

EPA has determined that this broad statutory and regulatory

authority is adequate for the Oregon permitting authorities to

implement all section 112 requirements provided they expeditiously

adopt appropriate implementing regulations as new Federal regulations

are promulgated. EPA regards the commitments of the Oregon permitting

authorities as an acknowledgement of their obligation to adopt

regulations necessary to issue permits that assure compliance with

section 112 applicable requirements. Should an Oregon permitting

authority fail to adopt regulations necessary to maintain adequate

legal authority to issue timely permits, or fail to include in permits

pursuant to OAR 340-28-640(3) Federal applicable requirements that have

not been adopted by ODEQ, EPA will consider this grounds for

withdrawing approval of such permitting authority's program in

accordance with the provisions of 40 CFR 70.10(c). For further

discussion of this determination, please refer to April 13, 1993

guidance memorandum entitled ``Title V Program Approval Criteria for

Section 112 Activities,'' signed by John Seitz.

b. Implementation of Section 112(g) Upon Program Approval

After the effective date of the Oregon operating permit programs,

no new major source or major modification to an existing major source

may be constructed unless it has been subject to a case-by-case

determination of maximum achievable control technology (MACT) or

offsets by a permitting authority pursuant to section 112(g) of the

Federal Clean Air Act. The results of such case-by-case determination

of MACT or offsets must be federally-enforceable by the time

construction begins on the new source or modification. The Oregon

permitting authorities have committed to adopting and submitting

regulations which implement the requirements of section 112(g) of the

Act as expeditiously as possible after EPA promulgates its regulations

to implement section 112(g) of the Act.

However, the EPA regulations, and hence the Oregon regulations, for

implementing section 112(g) will not be adopted until some time after

the effective date of the Oregon operating permits program. In order to

allow the continued construction of new major sources and major

modifications after the effective date of the Oregon title V program,

EPA has established a transition policy for permitting sources in the

interim period between the effective date of a title V operating

permits program and the adoption of State rules implementing EPA's

forthcoming section 112(g) regulations. Because EPA has not yet

promulgated regulations to implement section 112(g) of the Act, EPA has

determined it has authority to approve many existing State air toxics

permitting regulations under section 112(l) of the Act solely for the

purpose of implementing section 112(g) during this interim period.

Oregon administrative rules Chapter 340, Division 32 contain air

toxics permitting regulations which require new and modified major

sources of hazardous air pollutants to obtain a permit prior to

construction. Furthermore, these regulations require such new and

modified major sources to utilize MACT. On August 3, 1994, Oregon

submitted these rules to EPA for approval as an interim permitting

program for implementing section 112(g) of the Act. Approval by EPA of

these rules would provide Oregon permitting authorities with a

mechanism for establishing federally-enforceable emission limitations

and other restrictions to implement section 112(g).

EPA intends to propose approval of the Oregon air toxics permitting

rules in the near future in a separate rulemaking pursuant to section

112(l) of the Act. The scope of the proposed approval of Oregon's air

toxic permitting regulations will be narrowly limited to section 112(g)

and will not confer or imply approval for purposes of any other

provision under the Act. Furthermore, such approval would be for an

interim period only, and would require the Oregon permitting

authorities to expeditiously adopt regulations consistent with

regulations promulgated by EPA to implement section 112(g) of the Act.

c. Program for Delegation of Section 112 Standards

State law prohibits Oregon permitting authorities from adopting

prospective Federal regulations. As such, EPA can only delegate section

112 standards to the State after such standards are either adopted as

State regulations or included in State-issued permits pursuant to OAR

340-28-640(3). As noted above, the Oregon permitting authorities

submitted OAR Chapter 340, Division 32 regulations (including

regulations which adopt all of the current applicable National Emission

Standards for Hazardous Air Pollutants in 40 CFR part 612) to EPA

for approval under section 112(l) of the Act on August 3, 1994. Since

the adopted regulations and the requests for approval include

additional sources to those subject to title V, EPA will be acting on

these requests under separate rulemaking pursuant to the provisions of

40 CFR part 63.

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\2\ The Oregon Environmental Quality Council has adopted subpart

I of the radionuclide NESHAP as applicable only to sources subject

to title V. ODEQ and LRAPA will only implement and enforce this

NESHAP for sources required to have title V permits pursuant to OAR

340-28-2100, et seq.

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d. Commitments for Title IV Implementation

ODEQ and LRAPA each have made commitments to adopt and submit to

EPA by January 1, 1995 a program implementing title IV of the Federal

Clean Air Act. This commitment is supported by adequate legal authority

(see ORS 468.020, ORS 468A.310, and OAR 340-28-2100(2)).

B. Options for Program Approval and Implications

1. Proposed Interim Approval

EPA is proposing to grant interim approval to the operating permits

program submitted by the ODEQ and LRAPA on November 15, 1993. If

promulgated, the ODEQ and LRAPA must make the following changes to

receive full approval:

a. Small Business Assistance Program Provisions

The statute establishing Oregon's Small Business Assistance (SBA)

Program, ORS 468A.330, also addresses enforcement against sources for

violations observed during on-site technical assistance visits. ORS

468A.330(4)(a) provides that ``Onsite technical assistance for the

development and implementation of the Small Business Stationary Source

Technical and Environmental Compliance Assistance Program shall not

result in inspections or enforcement actions.'3' Oregon's statute

appears not simply to give a source an opportunity to correct a

violation observed during a technical assistance visit before being

subject to enforcement action, but rather appears to protect the source

from followup inspections or enforcement activities that result from

observations made during a technical assistance visit. In that respect,

ORS 468A.330(4)(a) appears to be inconsistent with the enforcement

responsibilities of 40 CFR 70.11(a)(3).

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\3\The statute does not prohibit enforcement actions if there is

reasonable cause to believe that violation causes a clear and

immediate danger to public health or safety or the environment.

In order to obtain full approval, Oregon must ensure that no title

V source, whether a major source or a minor source, will be absolutely

immune from inspections and enforcement actions resulting from

technical assistance visits. Interim approval is possible, however,

because ORS 468.140 provides Oregon with general civil penalty

authority that is in all other respects consistent with the

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requirements of 40 CFR 70.11(a)(3) (see 40 CFR 70.4(d)(3)(vii)).

b. Necessary Criminal Authority

i. Upset/Bypass as a Defense to Criminal Liability

ORS 468.959 provides an affirmative defense to criminal liability

for violations that result from an ``upset'' or a ``bypass'' as those

terms are defined in the statute. This affirmative defense appears to

be broader than the affirmative defense under part 70 for emissions in

excess of a technology-based emissions limitation caused by an

``emergency'' (see 40 CFR 70.6(g)). For example, 40 CFR 70.6(g)

requires a source to prove that excess emissions were not caused by

improperly designed control equipment, lack of preventative

maintenance, careless or improper operation or operator error. Under

ORS 468.959, however, a source is not required to make a similar

showing in order to claim the affirmative defense of excess emissions

due to a ``bypass.'' ORS 468.959 also does not provide that the burden

of proving that an upset or bypass occurred is on the violator. Oregon

must ensure that this statute is consistent with 40 CFR 70.6(g).

ii. Criminal Liability of Corporations

ORS 161.170 addresses the extent to which a corporation can be

subject to criminal liability. Under that statute, a corporation is

subject to criminal liability only in one of three circumstances: (1)

The conduct constituting the offense is engaged in by an agent of the

corporation while acting within the scope of employment and on behalf

of the corporation and the offense is a misdemeanor or a violation or

the offense is one defined by a statute that clearly indicates a

legislative intent to impose criminal liability on a corporation; (2)

the conduct constituting the offense consists of an omission to

discharge a specific duty of affirmative performance imposed on

corporations by law; or (3) the conduct constituting the offense is

engaged in, authorized, solicited, requested, commanded, or knowingly

tolerated by the board of directors or by a high managerial agent

acting within the scope of employment and in behalf of the corporation.

The first two circumstances appear to be inapplicable in the case of

statutes which impose criminal liability for knowing air violations,

because these offenses are felonies and do not involve the discharge of

a specific duty of affirmative performance imposed on corporations by

law. A corporation could be subject to criminal liability under the

third category, but only if the board of directors or a high managerial

agent ``engaged in, authorized, solicited, requested, commanded or

knowingly tolerated'' the conduct constituting the offense.

Part 70 requires that the burden of proof and degree of knowledge

or intent required under State law for civil and criminal liability be

no greater than that required for civil and criminal liability under

the Clean Air Act (see 40 CFR 70.11(b)). Under the Clean Air Act, the

government must prove only that the crime was committed by an employee

of the corporation and the employee at that time was performing that

employee's duties for the corporation, even though the acts charged may

not have been specifically authorized by the corporation. See United

States v. Hilton Hotels Corp., 467 F. 2d 1000 (9th Cir. 1973); United

States v. Twentieth Century Fox Film Corp., 882 F. Supp. 656, 660 (2nd

Cir., 1989); United States v. Cadillac Overall Supply Co., 568 F. 2d

1078, 1090 (5th Cir. 1978). By requiring the State to prove that the

board of directors or a high managerial agent ``engaged in, authorized,

solicited, requested, commanded or knowingly tolerated'' the conduct

constituting the offense, Oregon law appears to impose both a higher

degree of knowledge or intent (at a minimum, the State must prove

``knowing toleration'' by the board or a high managerial agent) and a

higher burden of proof (the State must prove the additional element of

participation or knowing toleration by the board or high managerial

agent). Oregon must ensure that the degree of knowledge or intent and

the burden of proof required for imposing criminal liability on a

corporation in Oregon do not exceed that required for imposing criminal

liability under the Clean Air Act.

c. Definition of Title I Modification

OAR 340-28-110(118) defines ``Title I modification'' in such a was

as to only include ``major modifications'' subject to parts C and D of

title I of the Act, changes subject to section 111 of the Act, and

modifications under section 112 of the Act. EPA believes the phrase

``modification under any provision of title I of the Act'' in 40 CFR

70.7(e)(2)(i)(A)(5) is best interpreted to mean any change at a source

that would trigger permitting authority review under regulations

approved or promulgated under title I of the Act. This would include

State preconstruction review programs approved by EPA as part of the

State implementation plan (SIP) under section 110(a)(2)(C) of the Act

and regulations addressing source changes that trigger National

Emission Standards for Hazardous Air Pollutants (NESHAP) established

pursuant to section 112 of the Act prior to the 1990 amendments.

Therefore, EPA proposes that, to receive full approval, Oregon must

revise OAR 340-28-110(118) to include any determination established

through a minor source pre-construction permit as well as changes

reviewed under 40 CFR 61.15. EPA expects to revise its criteria for

interim approval in 40 CFR 70.4(d) prior to final action on this

proposal to grant interim approval to Oregon so that interim approval

may be granted to State programs like Oregon's that include a narrower

definition of ``title I modification.'' As noted, EPA believes the

better interpretation of ``title I modifications'' would preclude

granting full approval to the Oregon program. However, in the proposal

to revise part 70, EPA will be taking comment on whether the criteria

in 40 CFR 70.7(e)(2)(i)(A), including the phrase ``modification under

any provision of title I,'' should be interpreted in a manner that

would allow changes reviewed under programs approved pursuant to

section 110(a)(2)(C) of the Act and changes that trigger the

application of NESHAP established prior to the 1990 Amendments to be

eligible for processing through minor modification procedures. Should

EPA adopt this alternative interpretation, the current definition of

``title I modification'' in the Oregon programs would be fully

consistent with part 70.

2. Proposed Approval or, in the Alternative, Proposed Interim Approval

In reviewing Oregon's title V submittal, EPA found several minor

inconsistencies between the requirements of 40 CFR part 70 and Oregon's

program. EPA also was unable to find in Oregon's program several minor

authorities required by part 70. To rectify these deficiencies Oregon

has proposed revisions to several provisions of OAR 340, Division 28.

These revisions were proposed for public comment on July 11, 1994. ODEQ

has advised EPA that final rule revisions will be submitted to the EQC

for consideration on October 21, 1994, and if adopted, would be

submitted to EPA as a revision to Oregon's current program prior to

EPA's statutory deadline for acting on Oregon's title V submittal.

If adopted without any substantial changes, these provisions of

Oregon's revised rules will meet the requirements of part 70. EPA is

therefore proposing to fully approve the Oregon program with respect to

the provisions discussed in detail below, contingent upon the revisions

being adopted and submitted without substantial changes from the

proposed revisions. However, if any of the revisions are not adopted

and submitted, then these items will also be a basis for interim

approval, (i.e. in addition to the items referred to in section II.B.1

above.) In such event, the required changes must be adopted and

submitted prior to the expiration of the interim approval period. In

accordance with 40 CFR 70.4(e)(2), if the adopted revisions are

substantially different from what has been proposed, EPA will consider

the submittal to represent a material change to the program and shall

extend the review period accordingly in order to repropose action on

the Oregon title V program.

a. Timeframe for Acting on Early Reduction Applications

40 CFR 70.4(b)(11)(iii) requires a permitting authority to act on

any permit application that includes an early reduction application

under section 112(i)(5) of the Act within nine months of receipt of a

complete application. The current Oregon regulations do not contain

such a provision, but rather, would allow the permitting authority the

full 18 months to act on such an application. The proposed revision to

OAR 340-28-2200(1)(d) corrects this deficiency. EPA therefore proposes

to fully approve this provision of the Oregon program contingent upon

the final adoption and submission of the revised OAR 340-28-2200(1)(d).

b. Definition of ``Prompt'' for Reporting of Deviations

40 CFR 70.6(a)(3)(iii)(B) requires the permitting authority to

define ``prompt'' in its permit program regulations for purposes of

reporting deviation from permit requirements. The current Oregon

regulations only require ``prompt'' reporting, but do not define what

would be considered to be ``prompt.'' The proposed revision to OAR 340-

28-2130(3)(c)(B) corrects this deficiency by defining prompt to be

within seven days of the deviation.

c. Criteria for General Permits

40 CFR 70.6(d) allows permitting authorities to issue a ``general

permit'' covering numerous similar sources. The current Oregon

regulations purport to allow the Oregon permitting authorities to issue

general permits covering any and all source categories, but only

include adequate criteria for issuing permits to existing major sources

of hazardous air pollutants. Oregon has indicated that it was the

State's intent to currently limit its program to just such sources. The

proposed revision to OAR 340-28-2170(a) corrects this deficiency by

clarifying that ``general permits'' can only be issued to certain

categories of major sources of hazardous air pollutants.

d. ''Anti-Tampering'' Provisions

State law does not currently demonstrate necessary criminal

authority to recover fines against any person who knowingly renders

inaccurate any required monitoring device or method as required by

under 40 CFR 70.11(a)(3)(iii). However, Oregon has proposed a new

provision at OAR 340-28-2130(3)(a)(E) which, if adopted, would prohibit

any person from rendering inaccurate any required monitoring device or

method. Under ORS 468.936, a knowing violation of any applicable

requirement, including proposed OAR 340-28-2130(3)(a)(E), would be

subject to a criminal fine in the maximum amount of not less that

$10,000 per day per violation.

3. Proposed Approval or, in the Alternative, Proposed Disapproval

In reviewing Oregon's title V submittal, EPA found several

significant inconsistencies between the requirements of 40 CFR part 70

and Oregon's program. To rectify these deficiencies Oregon has proposed

revisions to several provisions of OAR 340, Division 28. These

revisions were proposed for public comment on July 11, 1994. ODEQ has

advised EPA that final rule revisions will be submitted to the EQC for

consideration on October 21, 1994, and if adopted, would be submitted

to EPA as a revision to Oregon's current program prior to EPA's

statutory deadline for acting on Oregon's title V submittal.

If adopted without any substantial changes, these provisions of

Oregon's revised rules will meet the requirements of part 70. EPA is

therefore proposing to fully approve the Oregon program with respect to

the provisions discussed in detail below, contingent upon the revisions

being adopted and submitted without substantial changes from the

proposed revisions. However, if any of the revisions are not adopted

and submitted, EPA proposes to disapprove Oregon's program in the final

action. In accordance with 40 CFR 70.4(e)(2), if the adopted revisions

are substantially different than what has been proposed, EPA will

consider the submittal to represent a material change to the program

and shall extend the review period accordingly in order to repropose

action on the Oregon title V program.

a. Categorically Insignificant Activities

The current Oregon definition of ``categorically insignificant

activities,'' OAR 340-28-110(15), contains broad descriptions of

activities for which complete information need not be included in title

V permit applications. However, many of these activities are subject to

applicable requirements and the effect of the definition would be to

prevent proper incorporation of applicable requirements into title V

permits. EPA, therefore, believes that it would have to disapprove the

Oregon title V program as it currently exists because the State could

not ensure that permits would include all requirements applicable to

emission units at a title V source.

40 CFR 70.5(c) requires permit applications to include sufficient

information to determine the applicability of, or to impose, any

applicable requirement. The title V permit must ensure that the source

complies with all applicable requirements, and, as such, the owner or

operator cannot omit any information from a permit application that is

necessary to determine or impose an applicable requirement. The Oregon

permit application rule, OAR 340-28-2120(3)(c)(E), requires the

application to list all categorically insignificant activities but does

not require the source to provide sufficient information to determine

whether there are requirements applicable to any of the listed

activities. Therefore, the definition of ``categorically insignificant

activities'' must either be changed to insure that the rule does not

apply to any activity for which there are applicable requirements or

the list of ``categorically insignificant activities'' must be revised

so that it does not include an activity which is subject to an

applicable requirement, or the Oregon rules must require the

application to provide sufficient information to determine whether

there are requirements applicable to any of the listed activities and

the permit will specifically include the regulations applicable to

categorically insignificant activities.

In response to EPA's preliminary review and findings with respect

to this issue, Oregon has proposed revisions to its definition of

``categorically insignificant activities'' and to OAR 340-28-2110(7)

and 340-28-2120(3). Proposed OAR 340-28-2110(7) requires that all

emissions from insignificant activities, including categorically

insignificant activities and aggregate insignificant emissions, must be

included in the determination of the applicability of any requirement.

Proposed OAR 340-28-2120(3) clarifies that an application may not omit

information needed to determine the applicability of, or to impose, any

applicable requirement, including those requirements that apply to

categorically insignificant activities. Therefore, under the proposed

revisions, all applicable requirements will be included in the permit,

regardless of whether an activity is classified as a ``categorically

insignificant activity.''

The proposed revision to the definition of ``categorically

insignificant activities,'' plus changes to the provisions for permit

applications and applicability, and the existing permit content

provisions, together meet the requirements of part 70. EPA is therefore

proposing to fully approve the Oregon program with respect to this

issue if the revised definition of ``categorically insignificant

activities'' and proposed revisions to OAR 340-28-2110(7) and OAR 340-

28-2120(3) are adopted and submitted without substantial changes from

the proposed revisions.

The Oregon proposed rule revisions also delete the definitions of

``Exempt Insignificant Mixture Usage,'' OAR 340-28-110(41), ``Non-

exempt Insignificant Mixture Usage,'' OAR 340-28-110(63), and

``Insignificant Mixture,'' OAR 340-28-110(53) and references to these

terms throughout OAR Division 28. Proposed OAR 340-28-2110(3)(c)(E)

revises and replaces the concept of ``insignificant mixtures,'' which

is to be deleted by the proposed revision to OAR Division 28. EPA is

therefore proposing to fully approve the Oregon program if these

proposed revisions are adopted and submitted without substantial

changes.

b. Use of Title I Permits to Modify Title V Permits

Section 502(b)(10) of the Act, 40 CFR 70.4(b)(12), (14) and (15)

and 40 CFR 70.7(a)(1) require that, with certain exceptions, the permit

revision provisions of the approved permitting program be used to

modify or change the provisions of a title V permit. However, current

Oregon regulations allow a permitting authority to effectively change

the provisions of a title V permit using the minor new source review

provisions of the state implementation plan. These new source review

provisions cannot substitute for the title V permit revision process

because they do not provide for adequate public notice, affected State

review, or an opportunity for EPA review and objection as required by

40 CFR 70.7(a)(1). EPA believes that it would have to disapprove the

current Oregon permit program because the Oregon regulations do not

ensure that any new or modified source operates in compliance with its

title V permit until the title V permit is revised in accordance with

the procedures for permit modifications. The proposed revision to the

current OAR 340-28-2110(7) (renumbered to OAR 340-28-2110(8)) corrects

this deficiency.

c. Administrative Permit Amendments

As discussed above, only the permit revision provisions of the

approved permitting program can be used to modify or change the

provisions of a title V permit. However, the current Oregon

regulations, OAR 340-28-2230(1)(j), allow for the use of administrative

amendments to change the applicable requirements included in a permit.

Again, EPA believes that it would have to disapprove the current Oregon

program because it would allow permitting authorities to change the

content of a title V permit without following adequate procedures. The

proposed revision to 340-28-2230(1) deletes subparagraph (j) which

corrects this deficiency.

4. Proposed Approval or, in the Alternative, Proposed Disapproval

Section 502(a) of the Act allows EPA to exempt, by rule, one or

more source categories from the requirements of title V, provided that

EPA may not exempt any major source from such requirements. 40 CFR

70.3(b)(1) allows states to temporarily exempt from the requirements of

title V certain categories of sources which are not major sources. The

current Oregon regulations are consistent with the requirements of 40

CFR 70.3(b)(1) and EPA is proposing to fully approve these provisions

of the Oregon program.

Oregon has proposed to adopt ``prohibitory rules'' for several

source categories which, when approved into the Oregon state

implementation plan, would establish federally-enforceable limits on a

source's potential to emit. Sources which choose to be subject to one

of these ``prohibitory rules'' would no longer qualify as a major

source and would therefore not be subject to the requirements of title

V.

In conjunction with the proposal to adopt these ``prohibitory

rules,'' Oregon has proposed revisions to the applicability provisions

of its permit program (OAR 340-28-2110(4)) to add additional source

category exemptions. These revisions were proposed for public comment

on July 11, 1994. ODEQ has advised EPA that final rule revisions will

be submitted to the EQC for consideration on October 21, 1994, and if

adopted, would be submitted to EPA as a revision to Oregon's current

program prior to EPA's statutory deadline for acting on Oregon's title

V submittal.

EPA believes that, if the proposed revisions are adopted, it would

have to disapprove the Oregon program because it would inappropriately

exempt certain title V sources from the requirements of title V. These

exemptions exceed those allowed by EPA's regulations because they would

exempt four categories of sources from the requirements of title V even

if EPA does not approve the ``prohibitory rules'' so as to make them

federally enforceable. Furthermore, the proposed revisions would exempt

sources within the four categories even if such sources were subject to

standards promulgated pursuant to sections 111 or 112 of the Act.

As discussed above, if these proposed revisions are adopted, the

provisions of Oregon's revised rules will fail to meet the requirements

of part 70. EPA is therefore proposing, as an alternative to full

approval of the current rules, to disapprove the Oregon program with

respect to these provisions if the revisions are adopted and submitted

as proposed. If revisions to the applicability provisions of the Oregon

rules are adopted but are substantially different than what has been

proposed, EPA will consider the submittal to represent a material

change to the program and shall extend the review period accordingly in

order to repropose action on the Oregon title V program.

Interim approval of the Oregon operating permit programs, which may

not be renewed, extends for a period of up to two years. During the

interim approval period, the State is protected from sanctions for

failure to have a program, and EPA is not obligated to promulgate a

Federal permits program in the State. Permits issued under a program

with interim approval have full standing with respect to part 70. In

addition, the one year deadline for submittal of permit applications by

subject sources and the three year time period for processing all

initial permit applications begins upon publication of the final action

on this proposed interim approval.

The EPA is proposing to disapprove in the alternative the operating

permits program submitted by the ODEQ and LRAPA. If promulgated, this

disapproval would constitute a disapproval under section 502(d) of the

Act (see generally 57 FR 32253-54). As provided under section 502(d)(1)

of the Act, Oregon would have up to 180 days from the date of EPA's

notification of disapproval to the Governor of Oregon to revise and

resubmit the program.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

interim approval and, in the alternative, proposed disapproval. Copies

of the State's submittal and other information relied upon for this

action are contained in a docket maintained at the EPA Regional Office.

The docket is a file of information submitted to, or otherwise

considered by, EPA in the development of this proposed rulemaking. The

principal purposes of the docket are: (1) To allow interested parties a

means to identify and locate documents so that they can effectively

participate in the rulemaking process; and (2) to serve as the record

in case of judicial review. The EPA will consider any comments received

by October 14, 1994.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a regulatory flexibility analysisassessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

Operating permit program approvals under section 502(g) of the Act

do not create any new requirements, but simply approve requirements

that the State is already imposing. Therefore, because the Federal

operating permits program approval does not impose any new

requirements, I certify that it does not have a significant impact on

any small entities affected. Moreover, due to the nature of the

Federal-State relationship under the Act, preparation of a regulatory

flexibility analysis would constitute Federal inquiry into the economic

reasonableness of State action. The Act forbids EPA to base its actions

concerning operating permits programs on such grounds. Union Electric

Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C.

7410(a)(2).

If EPA's final action is a disapproval, it will not affect any

existing State requirements applicable to small entities. Federal

disapproval of the State submittal does not affect its State-

enforceability. Moreover, EPA's disapproval of the submittal does not

impose a new Federal requirement. Therefore, EPA certifies that any

proposed disapproval action would not have a significant impact on a

substantial number of small entities because it does not remove

existing State requirements nor does it substitute a new Federal

requirement.

IV. Miscellaneous

A. Proposed Interim Approval

Proposal for interim approval of the program.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

Authority: 42 U.S.C. 7401-7671q.

Dated: September 1, 1994.

Jane S. Moore,

Acting Regional Administrator.

[FR Doc. 94-22721 Filed 9-13-94; 8:45 am]

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