[Federal Register Volume 59, Number 177 (Wednesday, September 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22721]


[[Page Unknown]]

[Federal Register: September 14, 1994]


-----------------------------------------------------------------------


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.

-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \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 
---------------------------------------------------------------------------
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]
BILLING CODE 6560-50-F