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ENVIRONMENTAL PROTECTION AGENCY

Environmental Protection Agency

CFR Citation: 40 CFR Part 52

OR ID: [OR-01-003; FRL-7429-5]

NOTICE: RULES

ACTION: Air quality implementation plans; approval and promulgation; various States:

DOCUMENT ACTION: Direct final rule.

SUBJECT CATEGORY: Approval and Promulgation of Implementation Plans; Oregon

DATES: This direct final rule will be effective March 24, 2003, unless EPA receives adverse comment by February 21, 2003. If adverse comments are received, EPA will publish a timely withdrawal of the direct final rule in the Federal Register informing the public that the rule will not take effect.

DOCUMENT SUMMARY: The Environmental Protection Agency (EPA) approves numerous revisions to the State of Oregon Implementation Plan submitted to EPA by the Director of the Oregon Department of Environmental Quality (ODEQ) on November 5, 1999, March 7, 2000, June 26, 2001, and November 4, 2002. The revisions were submitted in accordance with the requirements of section 110 and parts C and D of title I of the Clean Air Act (hereinafter CAA or Act).

SUMMARY: Oregon,

SUPPLEMENTAL INFORMATION

Please note that if EPA receives adverse comment on an amendment, paragraph or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. Throughout this document, wherever ``we,'' ``us,'' or ``our'' is used, we mean the EPA. Information is organized as follows: Table of Contents
I. Rule Recodification

A. Description of Submittal

B. Summary of Action
II. Emission Standards for VOC Point SourcesMarine Vapor Loading

A. Description of Submittal

B. Summary of Action
III. Permitting Rules

A. Description of Submittals

B. Background

C. Key Changes to Oregon's SIP

1. Division 200 General Air Pollution Procedures and Definitions

2. Division 204 Designation of Air Quality Areas

3. Division 209 Public Participation

4. Division 210 Stationary Source Notification Requirements

5. Division 212 Stationary Source Testing and Monitoring

6. Division 214 Stationary Source Reporting Requirements

7. Division 216 Air Contaminant Discharge Permits

8. Division 222 Stationary Source Plant Site Emission Limits

9. Division 224 Major New Source Review

10. Division 225 Air Quality Analysis Requirements

11. Division 226 General Emission Standards

12. Division 268 Emission Reduction Credits
IV. Letter Notice ApprovalRepeal of Rule for Parking Offsets in the Portland Central Business District
V. Statutory Authority
VI. Scope of EPA Approval
VII. Summary of Action
VIII. Regulatory Assessment Requirements
I. Rule Recodification

A. Description of Submittal

On November 5, 1999, ODEQ submitted a complete rule renumbering to EPA for approval into the SIP. The rules are renumbered and relabeled to more accurately describe their content, and nonapplicable and duplicative rules are repealed to eliminate conflicts and purge outdated requirements. These rule changes are nonsubstantive. The following Divisions were submitted as part of the rule renumbering, with an effective date under State law of October 14, 1999: 200 (General Air Pollution Procedures and Definitions), 202 (Ambient Air Quality Standards and PSD Increments), 204 (Designation of Air Quality Areas), 206 (Air Pollution Emergencies), 208 (Visible Emissions and Nuisance Requirements), 210 (Stationary Source Notification Requirements), 212 (Stationary Source Testing and Monitoring), 214 [[Page 2892]]
(Stationary Source Reporting Requirements), 216 (Air Contaminant Discharge Permits), 218 (Oregon Title V Operating Permits), 222 (Stationary Source Plant Site Emission Limits), 224 (Major New Source Review), 225 (Air Quality Analysis Requirements), 226 (General Emission Standards), 228 (Requirements for Fuel Burning Equipment and Fuel Sulfur Content), 232 (Emission Standards for VOC Point Sources), 234 (Emission Standards for Wood Products Industries), 236 (Emission Standards for Specific Industries), 240 (Rules for Areas with Unique Air Quality Needs), 242 (Rules Applicable to the Portland Area), 250 (General Conformity), 252 (Transportation Conformity), 256 (Motor Vehicles), 258 (Motor Vehicle Fuel Specifications), 262 (Residential Woodheating), 264 (Rules for Open Burning), 266 (Field Burning Rules (Willamette Valley)), and 268 (Emission Reduction Credits). Cross reference tables for the old and new division numbers are available in the docket for this action.

B. Summary of Action

We are approving the recodified version of Oregon's rules to replace the old divisions in the current SIP. ODEQ submitted revised versions of Divisions 200, 202, 204, 210, 212, 214, 216, 222, 224, 226, 240, and 268 on June 26, 2001. The approval of these sections is discussed in section III below. In addition, in the process of reviewing the recodification submittal against the current SIP, some past errors were discovered. We are correcting these errors in this action, and they are described below, along with the exceptions to our approval of the recodification submittal.
Division 208, Visible Emissions and Nuisance Requirements; Division 256, Motor Vehicles; and Division 264, Rules for Open Burning (New Division Numbers)

We are not acting on Division 208 (Visible Emissions and Nuisance Requirements), Division 256 (Motor Vehicles), and Division 264 (Rules for Open Burning) in this action. These divisions have been subsequently revised by ODEQ and were submitted to EPA for approval on March 13, 2001 (Division 208), September 21, 2000 (Division 256), December 1, 2000 (Division 256), and June 26, 2000 (Division 264). We will be acting on Divisions 208, 256, and 264 in a separate rulemaking. Division 218, Oregon Title V Operating Permits

We are taking no action on Division 218, Oregon title V Operating Permits, because Federal Operating Permit (title V) programs and rules are reviewed and approved by EPA through the title V approval process, which is independent of the SIP approval process.
Division 21, General Emission Standards for Particulate Matter (Old Division Number)

On May 13, 1998 (63 FR 26460), EPA approved the removal of section 21025, Refuse Burning Equipment Limitations, which had been repealed by ODEQ in 1996. In 1999, this section was mistakenly reapproved back into the SIP. We are removing section 21025 from the SIP in this action. Sections 21015, 21050, 21055, and 21060, Visible Air Contaminant Limitations and Fugitive Emissions, will not be removed from the SIP. These sections were renumbered to Division 208, which, as discussed above, will be acted on in a separate rulemaking. Sections 21200 through 21245, Industrial Contingency Requirements for PM10 Nonattainment Areas, will also remain in the SIP at this time. These sections were repealed by ODEQ in 1998 and ODEQ submitted a PM10 revocation package requesting the removal of these sections from the SIP. These sections will be acted on in a separate rulemaking. Division 22, General Gaseous Emissions (Old Division Number)

In 1997, EPA approved section 22108, Applicability of Alternative Control Systems, into the SIP. This approval was done in error as ODEQ repealed this rule in 1983. Therefore, we are removing section 22108 from the SIP in this action.
Division 31, Ambient Air Quality Standards (Old Division Number)

We are removing section 31035, Hydrocarbons, from the SIP. ODEQ repealed this outdated section in 1998. In 1978, EPA revoked the hydrocarbons standard from 40 CFR 50 and changed the precursor for ozone from hydrocarbons to volatile organic compounds (VOC). Therefore, a hydrocarbons standard is no longer necessary.

Division 232, Emission Standards for VOC Point Sources

40 CFR 52.1985 describes the conditions of our past approvals of ODEQ's VOC regulations. We are removing 40 CFR 52.1985 because the version of Division 232 that we are approving in this action satisfies these conditions.
Division 234, Emission Standards for Wood Products Industries (New Division Number)

We are not acting on references to total reduced sulfur (TRS) in this division because control of TRS is not appropriate for inclusion in the SIP because it is not a criteria pollutant.
Division 236, Emission Standards for Specific Industries (New Division Number)

We are approving this division, with the exception of references to Fluorides because control of Fluorides is not appropriate for inclusion in the SIP because it is not a criteria pollutant.

Division 250, General Conformity (New Division Number)

On September 27, 1995, ODEQ submitted a complete package of General Conformity rules (Division 20) to EPA for approval into the SIP. On October 8, 1998, ODEQ submitted further revisions to their General Conformity rules. This 1998 submittal only contained the sections that were revised. The 1998 submittal was approved in a Federal Register document on March 22, 2000 (65 FR 15244). The sections that were not revised in 1998 (201500, 201540, 201550, and 201560), however, were never approved as part of the SIP. The entire package of General Conformity rules was submitted in the recodification package in 1999, where Division 20 was renumbered to Division 250. The previously unapproved sections comply with the Federal rules under 40 CFR part 51, subpart W, so therefore we are now approving all sections of ODEQ's General Conformity rules, under the new Division 250. However, we are taking no action on section 2500110, Savings Provision, which describes how the Federal and State rules work together, because it is not needed in the SIP.
Division 252, Transportation Conformity (New Division Number)

On March 22, 2000 (65 FR 15244), EPA approved ODEQ's Transportation Conformity rules into the SIP. We are approving the new rule numbers for the Transportation Conformity rules with the same exceptions as the original approval in 2000. In the March 22, 2000, Federal Register document there was a typographical error regarding an exception in the Incorporation by Reference (IBR). The exception should refer to section 750(5)(b) rather than
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750(4)(b). We are correcting this error in this action.
II. Emission Standards for VOC Point SourcesMarine Vapor Loading A. Description of Submittal

EPA redesignated the Portland area as attainment for ozone and approved a maintenance plan for the area on May 19, 1997 (62 FR 27204). The plan relied on reductions from a crossCascades pipeline that would have provided a cost effective alternative to barging gasoline to fuel terminals east of the mountains. In July 1999, planning for the pipeline was halted following an explosion from a pipeline rupture in Bellingham. The maintenance plan states that if the pipeline is not constructed, ODEQ will propose alternate control measures. In fulfilment of that commitment, ODEQ submitted a revision to the SIP on March 13, 2000, which included a Marine Vapor Loading rule, OAR 340 2320110, and changes to definitions in OAR 3402320030. These revisions were adopted by Oregon's Environmental Quality Commission (EQC) on February 11, 2000, and became effective as a matter of State law on June 1, 2001.

OAR 3402320110 requires all bulk gas terminals in the Portland ozone air quality maintenance area to use pollution control equipment when loading gasoline onto river barges. If the previous load in the barge was gasoline, then vapor control is required when loading any subsequent petroleum product. Shiptoship transfers, known as ``lightering,'' are now required to be conducted with vapor control if either vessel is berthed at a terminal dock. Midriver lightering transfers do not require vapor control but are prohibited on ``Clean Air Action Days''. The ``Clean Air Action Days'' program is outlined and described within ODEQ's Air Quality Public Education and Incentive Program that was reviewed previously by EPA as part of Oregon's SIP. The revisions to OAR 3402320030 include adding definitions for gas freed, lightering, loading event, marine tank vessel, marine terminal, marine vessel, and vapor tight.

B. Summary of Action

ODEQ submitted information showing that the emission reductions that will be achieved by its newly adopted marine vapor loading provisions are equivalent to those that would have resulted from the crossCascades pipeline. Section 183(f) of the 1990 Clean Air Act Amendments authorizes States to adopt standards that regulate emissions from marine vessels. Accordingly, we are approving this submittal (OAR 3402320030 and OAR 3402320110).
III. Permitting Rules

A. Description of Submittals

On June 26, 2001, the Director of the ODEQ submitted 17 Divisions of the Oregon Administrative Rules as revisions to the Oregon SIP. The submittal includes amendments to the following Divisions, effective July 1, 2001: 12 (Enforcement Procedure and Civil Penalties), 200 (General Air Pollution Procedures and Definitions), 202 (Ambient Air Quality Standards and PSD Increments), 204 (Designation of Air Quality Areas), 210 (Stationary Source Notification Requirements), 212 (Stationary Source Testing and Monitoring), 214 (Stationary Source Reporting Requirements), 216 (Air Contaminant Discharge Permits), 222 (Stationary Source Plant Site Emission Limits), 224 (Major New Source Review), 226 (General Emission Standards), 240 (Rules for Areas with Unique Air Quality Needs), and 268 (Emission Reduction Credits); new Divisions 209 (Public Participation) and 225 (Air Quality Analysis Requirements); and the revocation of Division 14 (Procedures for Issuance, Denial, Modification, and Revocation of Permits). A comprehensive summary of the rule changes, including rulebyrule descriptions, is included in the SIP submittal (Attachment 3.3).

On November 4, 2002, the Director of the ODEQ submitted the PM10 maintenance plans for the Grants Pass and Klamath Falls nonattainment areas. This submittal included revisions to Divisions 2040030 (Designation of Nonattainment Areas), 2040040 (Designation of Maintenance Areas), 222041 (Source Specific Annual PSEL), 2240060 (Requirements for Sources in Maintenance Areas), 2240070 (Prevention of Significant Deterioration Requirements for Sources in Attainment or Unclassified Areas), 2250020 (Definitions), 2250050 (Requirements for Analysis in PSD Class II and Class III Areas), 2250060 (Requirements for Demonstrating Compliance with Standards and Increments in PSD Class I Areas), and 2250090 (Requirements for Demonstrating a Net Air Quality Benefit) and a new section 2250045 (Requirements for Analysis in Maintenance Areas), effective October 8, 2002. These Divisions were revised as part of the maintenance plan efforts, and sections 225 0020(10) and 2250090 (1)(c) were further revised as part of a temporary rulemaking to change the applicability date for the new ozone precursor significant impact distance from January 1, 2003, to January 1, 2004. This temporary rulemaking is effective from October 8, 2002, through April 6, 2003. EPA will be acting on the maintenance plans and redesignation requests (including sections 2040030 and 2040040) in a separate rulemaking.

B. Background

The current ODEQ new source review (NSR) program and Federally enforceable state operating permit (FESOP) program were developed in 1981 and approved by EPA on August 13, 1982 (47 FR 35191). Although there have been a number of minor revisions to Oregon's permitting rules over the years, there had been no comprehensive review or revision of the rules. Over the years, ODEQ, EPA, industry, and others identified a number of concerns with the rules that were usually addressed through ODEQ internal implementation guidance rather than through rulemaking. However in 1998, ODEQ decided to undertake a comprehensive review of its existing permitting rules.

A workgroup of representatives from ODEQ and the Lane Regional Air Pollution Authority, with input from EPA, identified permitting rule problems and recommended solutions, building on recommendations of the Oregon Industrial Source Advisory Committee in 19941995 and an air quality process improvement team in 1998. An extensive list of rule changes was suggested by the workgroup and then reviewed and critiqued by ODEQ permit writers, inspectors, and management to develop final recommendations.ODEQ's final recommendations were discussed in detail with industrial source and environmental representatives during a variety of workgroup and roundtable meetings. In addition, the recommendations were presented and discussed with permitted sources, source representatives, and the public at several locations in Oregon prior to publication of the proposed rules for public comment.

The rulemaking package finally adopted by ODEQ and submitted to EPA as a SIP revision includes numerous changes to several different permitting programsminor NSR, PSD, part D (nonattainment area) NSR, visibility permitting, state operating permits, emissions trading, and other permitrelated rules. The changes were intended to clarify and update Oregon's existing permitting rules and to provide additional tools to streamline the permitting and planning process, while obtaining the same air quality benefits
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as the existing rules. The changes include:
(1) Simpler permitting procedures;
(2) Greater use of general permits;
(3) Less need for permit revisions;
(4) Simpler emission trading options;
(5) Improved construction approval procedures;
(6) Better targeted public involvement;
(7) Simpler fees and billing; and

(8) Clearer applications and other requirements.

EPA has reviewed the amendments to the ODEQ rules and has determined that they meet EPA's requirements under sections 110, part C and part D of title 1 of the Clean Air Act. EPA is therefore approving them as revisions to the Oregon SIP.

C. Key Changes to Oregon's SIP

The docket includes a technical support document which describes in more detail the substantive changes to the Oregon rules that have been submitted by Oregon as revisions to the SIP, EPA's evaluation of the changes, and the basis for EPA's action. A summary of the key changes to Oregon's rules and EPA's proposed action follows:
1. Division 200 General Air Pollution Procedures and Definitions

This Division contains ODEQ's general air quality definitions (section 0020), a list of abbreviations and acronyms (section 0025), general exceptions (section 0030), provisions for adopting and submitting the Oregon SIP (section 0040), provisions for compliance schedules (section 0050), and rules for conflicts of interest and makeup of boards (sections 0100 to 0120).

EPA is taking no action on section 0040 State of Oregon Clean Air Act Implementation Plan because this section describes the State's procedures for adopting its SIP and incorporates by reference all of the revisions adopted by the EQC for approval into the Oregon SIP (as a matter of state law). This is not what is actually approved by EPA as the Federallyenforceable SIP for Oregon, so we are therefore taking no action on it. Previously, section 0040 had been approved by EPA into the SIP in error, and we are correcting that error in this action. EPA is taking no action on section 0050 Compliance Schedules because any compliance schedule established by Oregon under this provision must be submitted to, and approved by, EPA before it will be Federally enforceable or change the requirements of the EPAapproved SIP (see 40 CFR 51.260 and 40 CFR 51.102(a)(2) and (c)). We reviewed sections 200 0100, 2000110, and 2000120 which cover conflicts of interest and found them to meet the requirements of section 128 of the CAA. These provisions will not be incorporated by reference, however.

A few new or revised definitions merit discussion:

AdjacentThis definition was added to clarify that facilities that are located near each other and which are interdependent will be considered to be adjacent for purposes of the definition of the term ``source.''

Federal major sourceThis new definition defines the size of major stationary sources (as that term is defined in the ODEQ rules) that will be subject to certain provisions of the ODEQ permit rules. The size thresholds used to define this term are the same as those in EPA's PSD rules (40 CFR 51.166(a)(1), specifically, the 100 ton per year and 250 ton per year thresholds.

Generic PSELThis new definition establishes the annual (12month rolling average) emission limits that will be included in general ACDP's and other permits for pollutants that are emitted in less than significant emission rates. Generic PSEL's will limit the potential to emit of any pollutant to less than the Oregon major source thresholds.

Major modificationThis definition was revised to better implement the ODEQ accumulation approach to determining when a major modification will occur. It also clarifies when increases in emissions that do not result from physical or operational changes are not considered to be modifications and are regulated under the PSEL rule.

ModificationThis new definition was added to define the term modification for the minor source construction permitting program. The definition is essentially the same as EPA's definition of the term ``modification'' in 40 CFR part 60 (i.e., the NSPS definition).

Netting basisThis new definition was added to better implement the ODEQ definition of ``major modification.'' It defines both the baseline emissions from which increases are measured to determine if changes are subject to review, as well as the process for re establishing the baseline after changes have been through the major source permitting process.

Significant emission rateThis definition was revised to delete the hazardous air pollutants from table 2; to clarify that for pollutants not listed in table 2, the significant emission rate is zero unless ODEQ has established a rate for that pollutant; and to revise table 3 so that the lower significant emission rates apply only to the MedfordAshland AirQuality Maintenance Area and not to the Klamath Falls Urban Growth Area and the Lakeview PM10 Nonattainment Area.

Unassigned emissionsThis new definition defines how the quantity of unassigned emissions is to be determined for purposes of the Plant Site Emission Limit rule.

2. Division 204 Designation of Air Quality Areas

This Division identifies the carbon monoxide, particulate matter (PM10) and ozone nonattainment areas in the State of Oregon. The Division was amended to reinstate the nonattainment designation for the Salem Nonattainment Area for Ozone as a result of the reinstatement of EPA's onehour ozone standard.

3. Division 209 Public Participation

This is a new Division that contains all of the public participation procedures and requirements for issuing permits that used to be contained in Divisions 14, 216, 218, and 224. It establishes public participation procedures for four categories of permit actions. The permitting program rules assign permit actions to the appropriate public participation procedures established in this Division. The four categories of permit actions and associated procedures are:

Category Ichanges that are not environmentally significant and do not involve choices made by ODEQ (e.g., facility name change). These actions require no prior public notice, but a list of permit actions will periodically be made available for public review after the changes have been made.

Category IIchanges that have the potential for low to medium environmental and public health significance (e.g., renewing a simple permit). These actions will require a 30day public notice period, but not a public hearing.

Category IIIchanges that have the potential for medium to high environmental and public health significance (e.g., increasing the plant site emission limit). These actions will require a 35day public notice period and a hearing if requested. A hearing can also be pre scheduled by ODEQ.

Category IVchanges that have the potential for high environmental and public health significance (e.g., siting a new major facility). These actions will require a public notice when the application is submitted and an informational meeting prior to drafting
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a proposed permit. Once the proposed permit is drafted, a 40day public notice period and a public hearing will be required.

If a permitting action is not specifically assigned to a category, then it will be processed under Category III.

EPA has reviewed these public participation procedures, and the assignment of permit actions in each of the separate permitting rules, and finds them to be consistent with the EPA requirements for public participation set forth in 40 CFR 51.161 for minor source permits to construct and nonattainment area (part D) NSR, 40 CFR 51.166(q) for PSD permits, the June 28, 1989, Federal Register (54 FR 27274) for Federallyenforceable State operating permits, and the December 4, 1986, Federal Register (51 FR 43814) for generic bubble rules. 4. Division 210 Stationary Source Notification Requirements

This Division contains a registration program for sources not subject to one of the Oregon operating permit programs (air contaminant discharge permit or title V operating permit programs) and also contains ODEQ's ``minor source'' preconstruction permitting program, titled ``Notice of Construction and Approval of Plans.'' The existing notice of construction and approval of plans provisions have been repealed and replaced with provisions intended to improve the effectiveness of the program. The new provisions also include the ``Notice of Approval'' provisions originally located within Oregon's title V operating permit rules.

The notice of construction requirements apply to all stationary sources and air pollution control equipment except those that are specifically exempted in the rules. These exemptions include: (1) Equipment used in agricultural operations and the growing or harvesting of crops or the raising of fowls and animals;
(2) Agricultural land clearing operations or land grading; (3) Residential heating for dwellings for four families or less; (4) Other residential activities at dwellings for four families or less; and

(5) Categorically insignificant activities.

The rules require that no person can construct a new stationary source, modify an existing stationary source, or construct or modify air pollution control equipment without first notifying the ODEQ. It is important to note that the definitions of ``stationary source'' and ``modification'' that apply in this program are essentially the same as EPA's definitions of these terms in 40 CFR part 60 (New Source Performance Standards).

The rules classify construction and modification into four types Type 1 which are changes that are truly de minimis; Type 2 which are changes that are more than de minimis, but less than significant; Type 3 which are changes that are significant, but not new major sources or major modifications; and Type 4 which are changes that are significant and may be new major sources or major modifications.

The rules require Type 1 and 2 changes to provide a notice to ODEQ before constructing or modifying a stationary source or air pollution control equipment. Type 3 or 4 changes must submit an application for either a construction ACDP, new ACDP, or modified ACDP as appropriate. It is important to note that the rules include a provision that waives the notice and application requirements for changes that are pre approved (i.e., changes that have already been approved in accordance with the provisions of this Division and/or Division 224 New Source Review) in an ACDP or title V operating permit.

Type 1 changes may begin construction or modification 10 days after the ODEQ receives the notice unless the ODEQ notifies the owner or operator that the change is not a Type 1 change. Type 2 changes may begin construction or modification 60 days after the ODEQ receives the notice or the date that ODEQ approves the change in writing, whichever is sooner. Type 3 changes must obtain either a construction ACDP or a new or modified standard ACDP before proceeding with construction or modification. Type 4 changes must obtain a new or modified standard ACDP before proceeding with construction or modification. Type 4 changes may also be subject to the major source ``New Source Review'' rules (OAR 340 Division 224).

The rules include a requirement for the owner or operator to notify ODEQ that construction or modification has been completed within 30 days and on a form furnished by ODEQ. This requirement can be changed, however, in the construction permit or approval to allow for a different time period or reporting format. ODEQ can also issue an order prohibiting the construction or modification if it finds that it is not in accordance with applicable requirements.

Finally, the rules state that the approval to construct does not provide approval to operate unless otherwise allowed by either the ACDP or title V operating permit rules. Depending upon the type of change and the permit status of the source, a new or modified ACDP or a modified title V permit may be needed before the change can be operated. Changes at title V operating permit sources are governed by Oregon's title V operating permit program rules (OAR 3402180190(2)).

Although this new rule is structured quite differently from Oregon's previous program, with one exception, it requires approval prior to construction or modification for the same universe of stationary sources as does the current SIPapproved program. The new rule now exempts categorically insignificant activities from the minor source construction program. Oregon's list of categorically insignificant activities was adopted initially as part of its title V operating permits program and was approved by EPA as meeting the requirements of 40 CFR part 70. Oregon's list of categorically insignificant activities is limited to activities that have only trivial emissions or activities that are not appropriate for regulating under a construction permit program (e.g., accidental fires, motor vehicles). EPA has determined that the Oregon rules for ``Notice of Construction and Approval of Plans'' comply with EPA's requirements for minor new source review programs at 40 CFR 51.160 through 51.164. 5. Division 212, Stationary Source Testing and Monitoring

This Division contains ODEQ's provisions for emission testing and monitoring, including Oregon's rules for ``Compliance Assurance Monitoring.'' The division also contains ODEQ's provisions regulating the use of stack heights and dispersion techniques to comply with ambient standards. The Division was amended by relocating section 0160 Records; Maintaining and Reporting to Division 214. Numerous editorial changes and corrections to citations were made throughout. Oregon has adopted it's own rules for implementing EPA's Compliance Assurance Monitoring regulations and has submitted them for inclusion in the SIP. Because EPA's regulations are nationally applicable, both Oregon's rules (OAR 3402120200 through 0280) and EPA's rules (40 CFR part 64) apply to title V sources in Oregon. As such, EPA is approving the Oregon Compliance Assurance Monitoring rules as SIP strengthening provisions.

EPA is approving ODEQ's rules for emission testing. As provided in 40 CFR 51.212(c) and consistent with EPA guidance for alternative test methods for New Source Performance Standards and
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National Emission Standards for Hazardous Air Pollutants, however, major changes to test methods for SIPapproved emission limits must be approved by EPA. See also ``How To Review and Issue Clean Air Act Applicability Determinations and Alternative Monitoring: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants,'' February 1999.

6. Division 214, Stationary Source Reporting Requirements

This Division contains ODEQ's provisions for reporting and recordkeeping, information requests (CAA section 114 authority), credible evidence, business confidentiality, emission statements, and excess emissions. Numerous editorial changes were made throughout. The provisions for Records; Maintaining and Reporting were amended and relocated to section 0114 from Division 212.

On October 17, 2002, Oregon withdrew the provisions for excess emissions (OAR 3402140300 through 0360) because ODEQ was beginning the process of revising those rules. As a result, the current excess emissions provisions in OAR 340 Division 28 will remain the SIP approved version of these provisions.

7. Division 216, Air Contaminant Discharge Permits

This Division is the ODEQ Federallyenforceable State operating permit (FESOP) program, and is also the administrative permit mechanism used to implement the notice of construction and major new source review programs. This Division has been revised to clarify the different types of ACDP's, the requirements for applying for ACDP's and the processes for issuing and modifying ACDP's. The rule has also been revised to clarify when the ODEQ or the Lane Regional Air Pollution Authority has permitting responsibility for portable sources.

The rules now establish 6 types of ACDP's:
(1) Construction ACDP, which is used for approving Type 3 changes; (2) General ACDP, which is for categories of sources for which individual permits are unnecessary to protect the environment; (3) Short Term Activity ACDP, which is a letter permit for unexpected or emergency activities, operations or emissions; (4) Basic ACDP, which is a letter permit for sources and activities listed in Table 1 part A;
(5) Simple ACDP, which is a permit that contains all relevant applicable requirements, generic PSEL's, and appropriate testing, monitoring, recordkeeping, and reporting requirements.
(6) Standard ACDP, which is a permit that contains all applicable requirements, sourcespecific PSEL's or generic PSEL's as appropriate, and appropriate testing, monitoring, recordkeeping, and reporting requirements. Sources listed in table 1 part C must obtain a Standard ACDP.

Basic ACDP's are available only for sources whose emissions are less than de minimis. Sources and activities listed in table 1 part B which do not qualify for a General or Simple ACDP must obtain a Standard ACDP. Any source not required to obtain a Standard ACDP may choose to obtain a Standard ACDP. The primary difference between a Simple ACDP and a Standard ACDP is that Simple ACDP's can only include generic PSEL's (the significant emission rate less one ton per year), not sourcespecific PSEL's, and have a netting basis of zero (see discussion in section III.C.9 below).

The rules have been revised to clarify the general application requirements for new permits, permit renewals, and permit
modifications, along with the process for determining the completeness of applications and for obtaining additional information during permit application review. The rules also include specific provisions for the application, content, and issuance of each type of ACDP, including the public comment process that will be followed for permit issuance and permit modifications. The provisions for General ACDP's include both the process for ODEQ issuance of a General ACDP as well as the procedures for sources to be assigned to the General ACDP.

The rules were also revised to clarify the requirements for permitting multiple sources at a single adjacent or contiguous site, delete obsolete provisions for sources to obtain limits on potential to emit prior to the date for initial title V permit applications, add provisions for terminating or revoking an ACDP, add provisions for ODEQ initiated permit modifications, simplify fee requirements, clarify how fees may be reduced for sources that are temporarily suspending activities, and deleting obsolete provisions regarding ACDP's issued by the Lane Regional Air Pollution Authority.

Finally, table 1, which previously contained the list of source types required to have ACDP's along with the associated fees, has been revised and restructured into two tablestable 1 which lists the source types required to have ACDP's and table 2 which establishes initial permitting application fees, annual fees, specific activity fees, and late fees. While the fee structure has been substantially revised, the ODEQ has striven to make sure the revisions are revenue neutral.

Although the Oregon ACDP program has been significantly revised to clarify applicability, establish several different types of permits, and to streamline the permitting process, it continues to comply with EPA's requirements for FESOP programs as set forth in the June 28, 1989, Federal Register (54 FR 27274).
8. Division 222, Stationary Source Plant Site Emission Limits

This Division contains the ODEQ program for managing airshed capacity by regulating increases and decreases in air emissions of permitted sources through a Plant Site Emission Limit (PSEL). PSEL's are used to protect ambient air quality standards, prevent significant deterioration of air quality, and to ensure protection of visibility. It is important to note that PSEL's are not plantwide applicability limits (PAL's) for purposes of major new source review (see discussion in section III.C.9. below).

The Division has been extensively revised to clarify that PSEL's are not required for pollutants that are emitted at less than de minimis levels, for Short Term Activity and Basic ACDP's, or for hazardous air pollutants, establish the concept of a generic PSEL and the criteria for establishing such, clarify the process for establishing and revising PSEL's, change the requirements for short term PSEL's, add provisions for addressing ``unassigned'' emissions (the difference between a source's netting basis and it's current potential to emit (PTE) when the netting basis exceeds the current PTE), and add provisions for addressing how PSEL's are treated when sources combine or split.

Generic PSEL's are used for sources with a capacity less than the Significant Emission Rate (SER) unless the source has a netting basis and requests a source specific PSEL. Generic PSEL's may be used for any category of ACDP or title V permit. Generic PSEL's are set by rule at 1 ton less than the SER (except for lead, municipal waste combustor organics, and PM10 in Medford which are set slightly below the SER). Importantly, a source with a generic PSEL for a pollutant will have a netting basis of zero and will not have any emissions that can be used for netting (see discussion of netting basis in section III.C.9 below). Accumulated emission increases from physical or
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operational changes that exceed the SER will be subject to NSR.

Shortterm PSEL's were previously required to be included in all permits for pollutants with shortterm ambient air quality standards. The rules have been revised to require shortterm PSEL's only for pollutants for which a shortterm SER has been established (ODEQ establishes shortterm SER's on an area specific basis as needed to ensure attainment and maintenance of a shortterm NAAQS). The rules also have been revised to include procedures and criteria to be used when revising a shortterm PSEL (previously, the rules only included criteria applicable to the annual PSEL's). Although this change will allow most ACDP's and title V operating permits to be issued in the future without including shortterm PSEL's, ACDP's and title V operating permits will still need to include shortterm PSEL's for areas where ODEQ has previously relied upon them to demonstrate attainment and maintenance of the NAAQS.

The general requirements for all PSEL's have been revised to clarify that annual PSEL's will be established on a rolling 12month basis and to require sources to maintain either a Standard ACDP or a title V operating permit in order to have a netting basis (and a sourcespecific PSEL). It is ODEQ's intention that the PSEL function as a limit on a source's PTE.

EPA has reviewed the provisions of the PSEL rule and finds that it establishes limits on a source's PTE that are Federally enforceable and enforceable as a practical matter (with adequate requirements for monitoring, recordkeeping, and reporting in section 0080) in accordance with EPA's guidance for limiting PTE. Therefore, EPA is approving this rule such that PSEL's in ACDP's and title V operating permits that comply with the requirements of this rule will be considered to be limits on a source's PTE.

New provisions for addressing unassigned emissions have been added. The purpose of this section is to track and manage the difference between the netting basis and what a source could emit based on its current physical and operational design. This section essentially limits unassigned emissions to no more than the SER, and establishes the process for reducing unassigned emissions and the netting basis when permits are renewed, modified, or reopened. Unassigned emissions may only be used for netting purposes, and cannot be sold or banked. Emissions that are removed from the netting basis cannot be used in future netting actions. The provision for temporary PSD increment allocation has been repealed. The effect of this repeal is that all requested increases in PSEL's will be evaluated for compliance with applicable PSD increments using the same criteria.

The provisions for voluntary PSEL's for hazardous air pollutants (OAR 3402220060) has been revised to reflect the change to a rolling 12month average and to accommodate generic PSEL's. Because this provision does not directly relate to the SIP, EPA is taking no action on this portion of the PSEL rule. The effect of this is that HAP PSEL's established in ACDP's will not be Federallyenforceable limits on a source's PTE. However, for purposes of the Federal hazardous air pollutant program under section 112 of the CAA and for purposes of title V of the CAA, limits on PTE need not be Federally enforceable at this time.

It is important to note that the rule explains how insignificant activities are addressed in plantsite emission limits. Categorically insignificant activities are generally not considered when establishing PSEL's and demonstrating compliance with PSEL's. However, emissions from aggregate insignificant activities are considered. Importantly, the rules state that all emissions from insignificant activities must be included when determining whether a source or modification is major for purposes of NSR or PSD. This means that a source which requests a PSEL below the major source thresholds to avoid NSR or PSD must include emissions from all insignificant activities in the PSEL.

The rule includes a new section with specific requirements for ensuring compliance with PSEL's. It requires sources to monitor emissions or other parameters on a frequency and with averaging periods sufficient to demonstrate compliance with the annual PSEL on a monthly basis and with shortterm PSEL's. Sources are required to maintain adequate records and to submit annual reports as required in ACDP's or title V operating permits. Specific requirements for monitoring, recordkeeping, and reporting will be included in all permits with PSEL's.

Finally, the rule includes a new section which specifies how PSEL's and netting bases will be treated when two or more sources combine into one (e.g., when one source buys a neighboring plant), or when one source splits into two or more sources (e.g., when one source sells a portion of its plant to another company).

Overall, the revisions to ODEQ's rules for Plant Site Emission Limits have clarified and strengthened the rules. Although the new provisions for generic PSEL's may allow insignificant increases at some existing nonmajor sources, the Oregon PSEL's still establish a more rigorous mechanism for regulating nonconstruction emissions increases at existing sources than do most other State programs. Furthermore, the new provisions for unassigned emissions will reduce PSEL's for major sources now and into the future. EPA is therefore approving the revisions to the PSEL rules.

9. Division 224, Major New Source Review

This Division contains the ODEQ major source permit to construct programs as required by title I, parts C and D of the CAA. It requires an ACDP prior to beginning construction on a new major source or major modification. This Division applies to new major sources and major modifications and requires that no owner or operator begin actual construction without first having received an ACDP and having satisfied the requirements of this Division.

Revisions to this Division must be evaluated in the context of the currentlyapproved ODEQ NSR rule. ODEQ's NSR rule differs from EPA's regulations in a number of fundamental ways. EPA evaluated and initially approved the ODEQ NSR program on August 13, 1982 (47 FR 35191), as being equivalent or more stringent than EPA's regulations on a program basis. The ODEQ NSR program, which is closely linked to the ODEQ PSEL program, does not subject the same sources and modifications to major NSR as would EPA's rules. The ODEQ program has lower major source thresholds, so smaller new sources and changes to smaller existing sources are subject to review. However, the ODEQ program utilizes a plantwide cap approach to defining major modification rather than a contemporaneous net emissions increase approach as does EPA's rules. The effect of this plantwide cap approach is that some changes which would be subject to review under EPA's rules are not subject under ODEQ's rules. However, some changes which would not be subject to review under EPA's rules are subject under ODEQ's rules. In addition, changes which would result in increased emissions, but would not be considered modifications under EPA's rules, are reviewed for compliance with standards and increments under ODEQ's PSEL program. Overall, EPA when it initially approved Oregon's program in 1982 determined that the Oregon program would review and control emissions from new and modified sources equal to
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or better than EPA's program regardless of the fact that some specific changes might not be subject to NSR in Oregon that would be under EPA's program.

EPA has evaluated the changes to the ODEQ program and determined they would improve the implementation and enforcement of the current ODEQ approach and that they would not result in any relaxation that could impair the ability of the program to protect NAAQS, PSD increments, and visibility in Class I areas. EPA is therefore approving the changes. Note that, with respect to Oregon's rules relating to new source review, EPA is taking no position on whether Oregon will need to make changes to its new source review rules to meet requirements that EPA promulgates as part of new source review reform.

a. Nonattainment Area (Part D) NSR

Under ODEQ's rules, all new major sources or major modifications in nonattainment areas must comply with the Lowest Achievable Emission Rate (LAER). Because the ODEQ definition of major modification accumulates emission increases and decreases since the baseline date or last NSR permit, emission units that were constructed or modified in the past as minor changes are subject to major NSR when the accumulated increases exceed the SER. As such, the ODEQ rule includes special provisions for applying LAER retroactively to these new or modified emission units, including the consideration of whether the retrofit controls are technically feasible. Because EPA's regulations would not require LAER to be required retroactively for minor changes that were not part of the current permitting action, the additional ODEQ criteria for applying LAER to these changes does not conflict with the CAA or EPA's requirements.

Under ODEQ's rules, all new major sources and major modifications in nonattainment areas must also provide emissions offsets and demonstrate that a net air quality benefit will be achieved. Under ODEQ's rules, however, only Federal major sources in nonattainment areas must evaluate alternative sites, sizes, production process and environmental control techniques and demonstrate that the benefits of the proposed source or modification will significantly outweigh the environmental and social costs (see section 173(a)(5) of the Act). Similarly, only Federal major sources must demonstrate that all major sources owned or operated with Oregon are in compliance or on a compliance schedule (see section 173(a)(3) of the Act). Finally, only Federal major sources must comply with the requirements for visibility protection (see 40 CFR 51.307(b)(2) and (c)).

The rule also includes a special exemption for the Salem ozone nonattainment area which exempts new major sources and major modifications from the offset requirement. The Salem ozone nonattainment area is considered to be a rural ozone nonattainment area under EPA's policy in effect in 1978 when the area was designated nonattainment.

Finally, the revisions to the definition of significant emission rate changed the size threshold for major sources in the Klamath Falls Urban Growth Area and the Lakeview PM10 Nonattainment Area. EPA is approving these revisions because they only affect future permitting and the revised major source size thresholds are still lower than the Federal major source size thresholds.

b. Maintenance Area NSR

The ODEQ rules also include provisions for new major sources and major modifications in maintenance areas (areas that were designated nonattainment for particulate matter, carbon monoxide, or ozone, but have been redesignated to attainment). This provision essentially merges several of the concepts of PSD and nonattainment area NSR for use in maintenance areas. All new major sources and major modifications must apply the Best Available Control Technology (BACT) for the maintenance pollutant. The scheme for the application of BACT is similar to the scheme for the application of LAER in nonattainment areas with respect to retroactive application of BACT to emission units that have already been constructed or modified.

All new major sources and major modifications must either obtain emission offsets and provide for a net air quality benefit, or must obtain an allocation of the growth allowance (for carbon monoxide or ozone areas only) established in the approved maintenance plan (if one was established). However, a carbon monoxide major source which demonstrates that it would have an insignificant impact at all locations is exempt from the requirement to obtain offsets or a growth allowance allocation. Similarly, a PM10 major source is exempt from the requirement to obtain offsets if it demonstrates that it would not cause or contribute to a cumulative air quality impact greater than certain ambient ceilings specified in the rules. Importantly, the rules require all Federal major sources to comply with the PSD requirements in addition to the maintenance area provisions.

The maintenance area provisions also include a contingency plan component. If the contingency plan in an applicable maintenance plan is implemented due to a violation of an ambient air quality standard, the requirements of the maintenance area NSR program become more stringent until a revised maintenance plan is approved by EPA. Instead of BACT, new major sources and major modifications are required to apply LAER; growth allowances may no longer be used to meet the offset requirement; and the exemption for carbon monoxide sources would no longer apply. Finally, the rule clarifies that the nonattainment area provisions continue to apply in areas with pending redesignation requests until the area is formally redesignated to attainment by EPA.

c. Attainment Area PSD/NSR

The ODEQ rules include provisions for new major sources and major modifications in attainment and unclassifiable areas. However, these provisions are applicable only to ``Federal major sources'' as that term is defined in the ODEQ rules. The definition of ``Federal major sources'' is essentially the same as the EPA definition of major stationary source in 40 CFR 51.166(a)(1) (the PSD definition) with one significant difference. Because the ODEQ rules specifically require that fugitive emissions be counted in determining major source status for all sources, the ODEQ PSD rules will potentially require more sources to be subject to PSD than required by EPA's rules.

Note that the provisions applicable to new major sources and major modifications that are not Federal major sources are found in the provisions for standard ACDP's and PSEL's. All new major stationary sources and major modifications need to obtain an ACDP and comply with the applicable requirements of those Divisions. For ODEQ major sources located in attainment or unclassifiable areas, the ACDP and PSEL rules require that the owner or operator demonstrate that the new source or modification would not cause or contribute to a violation of the ambient standards and applicable PSD increments.

New major sources and major modifications must apply BACT for each pollutant emitted in significant amounts. The scheme for the application of BACT is similar to the scheme for the application of LAER in nonattainment areas with respect to retroactive application of BACT to
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emission units that have already been constructed or modified. New major sources and major modifications must also provide an analysis of air quality impacts, including ambient air quality monitoring, in accordance with the requirements of Division 225 (see section III.C.10 below). New major sources and major modifications that significantly impact a PM10 maintenance area must also meet the requirements of OAR 3402240060(2) Air Quality Protection. Finally, the rules include provisions for temporary and portable major sources, and for temporary construction related emissions. The rules also clarify how fugitive emissions and secondary emissions are counted for applicability purposes and for inclusion in ambient impact analyses.

The current SIPapproved rules exempt new major sources and major modifications that are not Federal major sources from the requirements of BACT, preapplication and postconstruction air quality monitoring, and the additional impacts analysis. This exemption was only available if the source demonstrated that it did not cause or contribute to any violation of a NAAQS or PSD increment. The current SIPapproved rules did not exempt any new major source or major modification from the Class I area provisions of the rules. The revised rules exempt new major sources and major modifications that are not Federal major sources from all of the PSD requirements, including the Class I area provisions. Furthermore, the revised rules do not include the eligibility criteria regarding violations of the NAAQS and PSD increments. Although these changes will have the effect of relaxing the ODEQ major source NSR rule, EPA believes that they are approvable. First, a State is not required to apply PSD requirements to sources which are not Federal major sources. Second, ODEQ's permit to construct program for nonFederal major sources still complies with EPA's requirements in 40 CFR 51.160 through 51.164 and ensures that new and modified major sources will not cause or contribute to violations of any NAAQS.

d. StateFederal Relationship in New Source Review

In approving the Oregon new source review rules, EPA recognizes that it has a responsibility to insure that all States properly implement their preconstruction permitting programs. EPA's approval of the Oregon new source review rules does not divest EPA of the duty to continue appropriate oversight to insure that permits issued by Oregon are consistent with the requirements of the Act, EPA regulations, and the SIP. EPA's authority to oversee permit program implementation is set forth in sections 113, 167, and 505(b) of the Act. For example, section 167 provides that EPA shall issue administrative orders, initiate civil actions, or take whatever other enforcement action may be necessary to prevent construction of a major stationary source that does not ``conform to the requirements of'' the PSD program. Similarly, section 113(a)(5) of the CAA provides for administrative orders and civil actions whenever EPA finds that a State ``is not acting in compliance with'' any requirement or prohibition of the CAA regarding construction of new or modified sources. Likewise, section 113(a)(1) provides for a range of enforcement remedies whenever EPA finds that a person is in violation of an applicable implementation plan.

Enactment of title V of the CAA and the EPA objection opportunity provided therein has added new tools for addressing deficient new source review decisions by States. Section 505(b) requires EPA to object to the issuance of a permit issued pursuant to title V whenever the Administrator finds during the applicable review period, either on her own initiative or in response to a citizen petition, that the permit is ``not in compliance with the requirements of an applicable requirement of this Act, including the requirements of an applicable implementation plan.''

Regardless of whether EPA addresses deficient permits using objection authorities or enforcement authorities or both, EPA cannot intervene unless the State decision fails to comply with applicable requirements. In determining whether a title V permit incorporating PSD or part D NSR provisions calls for EPA objection under section 505(b) or use of enforcement authorities under sections 113 and 167, EPA will consider whether the applicable substantive and procedural requirements for public review and development of supporting documentation were followed. In particular, EPA will review the process followed by the permitting authority in determining BACT or LAER, assessing air quality impacts, meeting Class I area requirements, and other PSD or Part D requirements, to ensure that the required SIP procedures (including public participation and Federal Land Manager consultation opportunities) were met. EPA will also review whether any determination by the permitting authority was made on reasonable grounds properly supported on the record, described in enforceable terms, and consistent with all applicable requirements. Finally, EPA will review whether the terms of the PSD or Part D NSR permit were properly incorporated into the title V operating permit.

10. Division 225, Air Quality Analysis Requirements

This new Division contains all of the modeling, monitoring, impact analysis, and net air quality benefit requirements that are necessary to ensure ambient air quality requirements are met in the permitting process. These requirements were previously located in Division 224. The Division also includes new provisions which specify the technical information and processes to be used in air quality impact analyses.

The Division includes sections that: (1) Specify the information required to be submitted in permit applications; (2) require compliance with EPA's Guidelines on Air Quality Models (40 CFR part 51, appendix W); (3) establish requirements for demonstrating compliance with the ambient air quality ceilings, standards and increments in maintenance areas; (4) establish the requirements for demonstrating compliance with standards and increments in Class II and Class III areas, including the requirements for preapplication and postconstruction monitoring; (5) establish requirements for demonstrating compliance with standards and increments in Class I areas; (6) establish requirements for demonstration compliance with air quality related values (including visibility) protection; and (7) establish the requirements for demonstrating that offsets provide for a net air quality benefit.

The provisions for air quality impact analyses for Class I, Class II, and Class III areas comply with EPA's requirements for SIP PSD programs (40 CFR 51.166) for air quality impact analyses and with EPA's requirements for visibility protection (40 CFR 51.307). The provisions for Class I areas and the provisions for protection of air quality related values (including visibility) also conform to the Federal Land Manager recommendations in the FLAG Report. Importantly, the provisions for Class I areas include PSD Class I Significant Impact levels that are the same as those EPA has proposed for 40 CFR 51.166 and 52.21 (61 FR 38250, July 23, 1996). EPA is therefore approving these provisions, including the Class I area significant impact levels, as a revision to the Oregon permitting program.

The provisions for demonstrating net air quality benefit comply with the CAA and EPA's requirements for emission
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offsets (section 173 of the Act, 40 CFR 51.165(a) and 40 CFR part 51, appendix S (Emission Offset Interpretative Ruling)). EPA is therefore approving these provisions as complying with part D of title 1 of the Act.

Note that EPA is approving both the permanent versions of sections 2250020(10) and 2250090(1)(c) and the temporary versions of these provisions for the time period they are in effect.

11. Division 226, General Emission Standards

This Division contains emission standards and requirements of general applicability, including requirements for highest and best practicable treatment and control (section 0100), pollution prevention (section 0110), operating and maintenance (section 0120), and typically achievable control technology (section 0130). This Division also includes authority for ODEQ to impose additional requirements on a permitbypermit basis (section 0140) and to approve alternative emission controls (bubbles) (section 0400). Finally, this Division includes the statewide particulate emission limits for process equipment and other sources (except for fuel or refuse burning equipment).

The Division was amended by revising the provisions for alternative emission controls (bubbles) to comply with EPA's Final Emissions Trading Policy Statement for generic bubble rules (51 FR 43814, December 4, 1986). Oregon's previous rules had been approved as meeting EPA's requirements for generic bubble rules under the April 7, 1982, Emission Trading Policy Statement (47 FR 15076). In order to address the requirement for replicable procedures, the rule has been revised to exclude trades involving pollutants other than ozone precursors from the generic bubble approach. As such, bubbles involving ozone precursors (VOC and NOX) can still be done without caseby case SIP revisions, but bubbles for all other pollutants will need to be submitted to, and approved by, EPA before they become the applicable requirements of the Oregon SIP.

Note that EPA is approving section 0140 (authority to impose additional requirements on a permitbypermit basis) because any requirement established under this provision would be in addition to existing requirements and could not change any existing requirement. However, ODEQ would still need to submit requirements established under this provision for inclusion in the SIP if such requirements are necessary to comply with any specific provision of the CAA or EPA regulations.

12. Division 268, Emission Reduction Credits

This Division contains ODEQ's procedures for generating, banking, and using emission reduction credits (ERC's). The Division was revised to simplify the program, make it consistent with changes to ODEQ's Plant Site Emission Limit rule (specifically the treatment of unassigned emissions), and to ensure emission reduction credits conform to the requirements of the CAA and EPA regulations. The authority to issue an ERC permit to sources which are not otherwise required to have an Air Contaminant Discharge Permit or title V operating permit was also established. Finally, the provisions for ``Baseline for Determining Credit for Offsets'' (section 0040) were repealed and replaced by provisions in section 0030.

The provisions for creating emission reduction credits are also used for establishing creditable emission reductions in netting and offset transactions. As such, these rules must conform with the requirements of the CAA and EPA regulations for part D NSR and PSD for creditable emission reductions (including 40 CFR 51.165(a)(1)(vi), 51.165(a)(3), 51.166(b)(3) of EPA's regulations and sections 173(a)(1) and 173(c) of the Act). The rules require that any emission reduction credit be created through permanent reductions in current actual emissions, be enforceable by ODEQ, and be surplus. Emission reductions necessary to comply with any applicable emission limits are not creditable. Note that the requirement for offsets to be Federally enforceable at the time of permit issuance is included in Division 225.

The rules establish the process for banking emission reduction credits and using banked emission reduction credits. The rules also establish the requirements for unused banked credits, returning them to the source as unassigned PSEL and then reducing them through the process set forth in the PSEL rules. These banking provisions comply with EPA's requirements for SIP emission reduction credit banking programs as set forth in the Final Emissions Trading Policy Statement (51 FR 43814, December 4, 1986).
IV. Letter Notice ApprovalRepeal of Rule for Parking Offsets in the Portland Central Business District

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FOR FURTHER INFORMATION CONTACT David C. Bray, Senior Air Pollution Scientist, EPA, Office of Air Quality (OAQ107), Seattle, Washington 98101, (206) 5534253.