
[Federal Register Volume 78, Number 36 (Friday, February 22, 2013)]
[Proposed Rules]
[Pages 12459-12540]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-03734]



[[Page 12459]]

Vol. 78

Friday,

No. 36

February 22, 2013

Part III





Environmental Protection Agency





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40 CFR Part 52





State Implementation Plans: Response to Petition for Rulemaking; 
Findings of Substantial Inadequacy; and SIP Calls To Amend Provisions 
Applying to Excess Emissions During Periods of Startup, Shutdown, and 
Malfunction; Proposed Rule

  Federal Register / Vol. 78, No. 36 / Friday, February 22, 2013 / 
Proposed Rules  

[[Page 12460]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2012-0322; FRL-9782-2]
RIN 2060-AR68


State Implementation Plans: Response to Petition for Rulemaking; 
Findings of Substantial Inadequacy; and SIP Calls To Amend Provisions 
Applying to Excess Emissions During Periods of Startup, Shutdown, and 
Malfunction

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to take action on a petition for 
rulemaking filed by the Sierra Club with the EPA Administrator on June 
30, 2011 (the Petition). The Petition includes interrelated requests 
concerning the treatment of excess emissions in state rules by sources 
during periods of startup, shutdown, or malfunction (SSM). The EPA is 
proposing to grant in part and to deny in part the request in the 
Petition to rescind its policy interpreting the Clean Air Act (CAA) to 
allow states to have appropriately drawn state implementation plan 
(SIP) provisions that provide affirmative defenses to monetary 
penalties for violations during periods of SSM. The EPA is also 
proposing either to grant or to deny the Petition with respect to the 
specific existing SIP provisions related to SSM in each of 39 states 
identified by the Petitioner as inconsistent with the CAA. Further, for 
each of those states where the EPA proposes to grant the Petition 
concerning specific provisions, the EPA also proposes to find that the 
existing SIP provision is substantially inadequate to meet CAA 
requirements and thus under CAA authority proposes a ``SIP call.'' For 
those states for which the EPA proposes a SIP call, the EPA also 
proposes a schedule for the states to submit a corrective SIP revision. 
Finally, the EPA is also proposing to deny the request in the Petition 
that the EPA discontinue reliance on interpretive letters from states 
to clarify any potential ambiguity in SIP submissions, even in 
circumstances where the EPA may determine that this approach is 
appropriate and has adequately documented that approach in a rulemaking 
action. This action reflects the EPA's current SSM Policy for SIPs.

DATES: Comments. Comments must be received on or before March 25, 2013.
    Public Hearing. If anyone contacts the EPA requesting a public 
hearing by March 11, 2013, we will hold a public hearing on March 12, 
2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2012-0322, by one of the following methods:
     http://www.regulations.gov: Follow the online instructions 
for submitting comments.
     Email: a-and-r-docket@epa.gov.
     Fax: (202) 566-9744.
     Mail: Attention Docket ID No. EPA-HQ-OAR-2012-0322, U.S. 
Environmental Protection Agency, EPA West (Air Docket), 1200 
Pennsylvania Avenue NW., Mail Code: 6102T, Washington, DC 20460. Please 
include a total of two copies.
     Hand Delivery: U.S. Environmental Protection Agency, EPA 
West (Air Docket), 1301 Constitution Avenue Northwest, Room 3334, 
Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2012-0322. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2012-0322. The EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through www.regulations.gov 
or email. The www.regulations.gov Web site is an ``anonymous access'' 
system, which means the EPA will not know your identity or contact 
information unless you provide it in the body of your comment. If you 
send an email comment directly to the EPA without going through 
www.regulations.gov, your email address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, the EPA recommends that you include your name and other 
contact information in the body of your comment and with any CD you 
submit. If the EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, the EPA may not 
be able to consider your comment. Electronic files should avoid the use 
of special characters, avoid any form of encryption, and be free of any 
defects or viruses. For additional information about the EPA's public 
docket visit the EPA Docket Center homepage at www.epa.gov/epahome/dockets.htm. For additional instructions on submitting comments, go to 
section I.C of the SUPPLEMENTARY INFORMATION section of this document.
    Docket. All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
at www.regulations.gov or in hard copy at the U.S. Environmental 
Protection Agency, Air Docket, EPA/DC, EPA West Building, Room 3334, 
1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
(202) 566-1744, and the telephone number for the Air Docket is (202) 
566-1742.
    Public Hearing: If a public hearing is held, it will be held on 
March 12, 2013, at the EPA Ariel Rios East building, Room 1153, 1301 
Constitution Avenue, Washington, DC 20460. The public hearing will 
convene at 9 a.m. (Eastern Standard Time) and continue until the later 
of 6 p.m. or 1 hour after the last registered speaker has spoken. 
People interested in presenting oral testimony or inquiring as to 
whether a hearing is to be held should contact Ms. Pamela Long, Air 
Quality Planning Division, Office of Air Quality Planning and Standards 
(C504-01), U.S. Environmental Protection Agency, Research Triangle 
Park, NC 27711, telephone (919) 541-0641, fax number (919) 541-5509, 
email address long.pam@epa.gov, at least 5 days in advance of the 
public hearing (see DATES). People interested in attending the public 
hearing must also call Ms. Long to verify the time, date, and location 
of the hearing. The public hearing will provide interested parties the 
opportunity to present data, views, or arguments concerning the 
proposed action. The EPA will make every effort to accommodate all 
speakers who arrive and register. A lunch break is scheduled from 12:30 
p.m. until 2 p.m. Because this hearing is being held at U.S. government 
facilities, individuals planning to attend the hearing should be 
prepared to show valid picture identification to the security staff in 
order to gain access to the meeting room. In addition, you will need to

[[Page 12461]]

obtain a property pass for any personal belongings you bring with you. 
Upon leaving the building, you will be required to return this property 
pass to the security desk. No large signs will be allowed in the 
building, cameras may only be used outside of the building, and 
demonstrations will not be allowed on federal property for security 
reasons. The EPA may ask clarifying questions during the oral 
presentations but will not respond to the presentations at that time. 
Written statements and supporting information submitted during the 
comment period will be considered with the same weight as oral comments 
and supporting information presented at the public hearing. If a 
hearing is held on March 12, 2013, written comments on the proposed 
rule must be postmarked by April 11, 2013. Commenters should notify Ms. 
Long if they will need specific equipment, or if there are other 
special needs related to providing comments at the hearing. The EPA 
will provide equipment for commenters to show overhead slides or make 
computerized slide presentations if we receive special requests in 
advance. Oral testimony will be limited to 5 minutes for each 
commenter. The EPA encourages commenters to provide the EPA with a copy 
of their oral testimony electronically (via email or CD) or in hard 
copy form. The hearing schedule, including lists of speakers, will be 
posted on the EPA's Web site at www.epa.gov/air/urbanair/sipstatus/. 
Verbatim transcripts of the hearings and written statements will be 
included in the docket for the rulemaking. The EPA will make every 
effort to follow the schedule as closely as possible on the day of the 
hearing; however, please plan for the hearing to run either ahead of 
schedule or behind schedule.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning the 
public hearing, please contact Ms. Pamela Long, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Planning Division, (C504-01), Research Triangle Park, NC 27711, 
telephone (919) 541-0641, fax number (919) 541-5509, email address: 
long.pam@epa.gov (preferred method for registering). Questions 
concerning this proposed rule should be addressed to Ms. Lisa Sutton, 
U.S. EPA, Office of Air Quality Planning and Standards, State and Local 
Programs Group, (C539-01), Research Triangle Park, NC 27711, telephone 
number (919) 541-3450, email at sutton.lisa@epa.gov.

SUPPLEMENTARY INFORMATION: For questions related to a specific SIP, 
please contact the appropriate EPA Regional Office:

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                       Contact for regional
   EPA regional      office (person, mailing             State
      office         address, telephone No.)
------------------------------------------------------------------------
I.................  Alison Simcox,             Connecticut,
                     Environmental Scientist,   Massachusetts, Maine,
                     EPA Region 1, 5 Post       New Hampshire, Rhode
                     Office Square, Suite       Island, and Vermont.
                     100, Boston, MA 02109-
                     3912, (617) 918-1684.
II................  Paul Truchan, EPA Region   New Jersey, New York,
                     2, 290 Broadway, 25th      Puerto Rico, and Virgin
                     Floor, New York, NY        Islands.
                     10007-1866, (212) 637-
                     3711.
III...............  Harold Frankford, EPA      District of Columbia,
                     Region 3, 1650 Arch        Delaware, Maryland,
                     Street, Philadelphia, PA   Pennsylvania, Virginia,
                     19103-2029, (215) 814-     and West Virginia.
                     2108.
IV................  Joel Huey, EPA Region 4,   Alabama, Florida,
                     Atlanta Federal Center,    Georgia, Kentucky,
                     61 Forsyth Street SW.,     Mississippi, North
                     Atlanta, GA 30303-8960,    Carolina, South
                     (404) 562-9104.            Carolina, and Tennessee.
V.................  Christos Panos, Air and    Illinois, Indiana,
                     Radiation Division (AR-    Michigan, Minnesota,
                     18J), EPA Region 5, 77     Ohio, and Wisconsin.
                     West Jackson Boulevard,
                     Chicago, IL 60604-3507,
                     (312) 353-8328.
VI................  Alan Shar (6PD-L), EPA     Arkansas, Louisiana, New
                     Region 6, Fountain Place   Mexico, Oklahoma, and
                     12th Floor, Suite 1200,    Texas.
                     1445 Ross Avenue,
                     Dallas, TX 75202-2733,
                     (214) 665-6691.
VII...............  Lachala Kemp, EPA Region   Iowa, Kansas, Missouri,
                     7, Air Planning and        and Nebraska.
                     Development Branch,
                     11201 Renner Boulevard,
                     Lenexa, KS 66219, (913)
                     551-7214. Alternate
                     contact is Ward Burns,
                     (913) 551-7960.
VIII..............  Adam Clark, Air Quality    Colorado, Montana, North
                     Planning Unit (8P-AR)      Dakota, South Dakota,
                     Air Program, Office of     Utah, and Wyoming.
                     Partnership and
                     Regulatory Assistance,
                     EPA Region 8, 1595
                     Wynkoop Street, Denver,
                     CO 80202-1129, (303) 312-
                     7104.
IX................  Lisa Tharp, EPA Region 9,  Arizona; California;
                     Air Division, 75           Hawaii and the Pacific
                     Hawthorne Street (AIR-     Islands; Indian Country
                     8), San Francisco, CA      within Region 9 and
                     94105, (415) 947-4142.     Nevada.
X.................  Donna Deneen,              Alaska, Idaho, Oregon,
                     Environmental Engineer,    and Washington.
                     Office of Air, Waste and
                     Toxics (AWT-107), EPA
                     Region 10, 1200 Sixth
                     Avenue, Suite 900,
                     Seattle, WA 98101, (206)
                     553-6706.
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I. General Information

A. Does this action apply to me?

    Entities potentially affected by this rule include states, U.S. 
territories, local authorities, and eligible tribes that are currently 
administering, or may in the future administer, the EPA-approved 
implementation plans (``air agencies'').\1\ The EPA's action on the 
Petition is potentially of interest to all such entities because the 
EPA is evaluating issues related to basic CAA requirements for SIPs. 
Through this rulemaking, the EPA is both clarifying and applying its 
interpretation of the CAA with respect to SIP provisions applicable to 
excess emissions during SSM events. In addition, the EPA may find 
specific SIP

[[Page 12462]]

provisions in states identified in the Petition to be substantially 
inadequate to meet CAA requirements, pursuant to CAA section 110(k)(5), 
and thus those states will potentially be affected by this rulemaking 
directly. For example, if a state's existing SIP provision allows an 
automatic exemption for excess emissions during periods of startup, 
shutdown, or malfunction, such that these excess emissions do not 
constitute a violation of the otherwise applicable emission limitations 
of the SIP, then the EPA may determine that the SIP provision is 
substantially inadequate because the provision is inconsistent with 
fundamental requirements of the CAA. This rule may also be of interest 
to the public and to owners and operators of industrial facilities that 
are subject to emission limits in SIPs, because it may require changes 
to state rules covering excess emissions. When finalized, this action 
will embody the EPA's updated SSM Policy for SIP provisions relevant to 
excess emissions during SSM events.
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    \1\ The EPA respects the unique relationship between the U.S. 
government and tribal authorities and acknowledges that tribal 
concerns are not interchangeable with state concerns. Under the CAA 
and EPA regulations, a tribe may, but is not required to, apply for 
eligibility to have a tribal implementation plan (TIP). For 
convenience, we refer to ``air agencies'' in this rulemaking 
collectively when meaning to refer in general to states, the 
District of Columbia, U.S. territories, local air permitting 
authorities, and eligible tribes that are currently administering, 
or may in the future administer, EPA-approved implementation plans. 
The EPA notes that the petition under evaluation does not identify 
any specific provisions related to tribal implementation plans. We 
therefore refer to ``state'' or ``states'' rather than ``air 
agency'' or ``air agencies'' when meaning to refer to one, some, or 
all of the 39 states identified in the Petition. We also use 
``state'' or ``states'' rather than ``air agency'' or ``air 
agencies'' when quoting or paraphrasing the CAA or other document 
that uses that term even when the original referenced passage may 
have applicability to tribes as well.
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B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this proposal notice will also be available on the World Wide Web. 
Following signature by the EPA Assistant Administrator, a copy of this 
notice will be posted on the EPA's Web site, under SSM SIP Call 2013, 
at www.epa.gov/air/urbanair/sipstatus. In addition to this notice, 
other relevant documents are located in the docket, including a copy of 
the Petition and copies of each of the four guidance documents 
pertaining to excess emissions issued by the EPA in 1982, 1983, 1999, 
and 2001, which are discussed in more detail later in this proposal 
notice.

C. What should I consider as I prepare my comments?

    1. Submitting CBI. Do not submit this information to the EPA 
through www.regulations.gov or email. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information in CD 
that you mail to the EPA, mark the outside of the CD as CBI and then 
identify electronically within the CD the specific information that is 
claimed as CBI. In addition to one complete version of the comment that 
includes information claimed as CBI, a copy of the comment that does 
not contain the information claimed as CBI must be submitted for 
inclusion in the public docket. Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2. Send or deliver information identified as CBI only to the following 
address: Roberto Morales, OAQPS Document Control Officer (C404-02), 
U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. 
EPA-HQ-OAR-2012-0322.
    2. Tips for preparing your comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date, and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

D. How is the preamble organized?

    The information presented in this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related 
information?
    C. What should I consider as I prepare my comments?
    D. How is the preamble organized?
    E. What is the meaning of key terms used in this notice?
II. Overview of Proposed Rule
    A. How is the EPA proposing to respond to the Petition?
    B. What did the Petitioner request?
    C. To which air agencies does this proposed rulemaking apply and 
why?
    D. What is the EPA proposing for any state that receives a 
finding of substantial inadequacy and a SIP call?
    E. What are potential impacts on affected states and sources?
    F. What happens if an affected state fails to meet the SIP 
submission deadline?
    G. What happens in an affected state in the interim period 
starting when the EPA promulgates the final SIP call and ending when 
the EPA approves the required SIP revision?
III. Statutory, Regulatory, and Policy Background
IV. Proposed Action in Response to Request To Rescind the EPA Policy 
Interpreting the CAA To Allow Appropriate Affirmative Defense 
Provisions
    A. Petitioner's Request
    B. The EPA's Response
V. Proposed Action in Response to Request for the EPA's Review of 
Specific Existing SIP Provisions for Consistency With CAA 
Requirements
    A. Petitioner's Request
    B. The EPA's Response
VI. Proposed Action in Response To Request That the EPA Limit SIP 
Approval to the Text of State Regulations and Not Rely Upon 
Additional Interpretive Letters From the State
    A. Petitioner's Request
    B. The EPA's Response
VII. Clarifications, Reiterations, and Revisions to the EPA's SSM 
Policy
    A. Applicability of Emission Limitations During Periods of 
Startup and Shutdown
    B. Affirmative Defense Provisions During Periods of Malfunction
    C. Affirmative Defense Provisions During Periods of Startup and 
Shutdown
    D. Relationship Between SIP Provisions and Title V Regulations
    E. Intended Effect of the EPA's Action on the Petition
VIII. Legal Authority, Process, and Timing for SIP Calls
    A. SIP Call Authority Under Section 110(k)(5)
    1. General Statutory Authority
    2. Substantial Inadequacy of Automatic Exemptions
    3. Substantial Inadequacy of Director's Discretion Exemptions
    4. Substantial Inadequacy of Improper Enforcement Discretion 
Provisions
    5. Substantial Inadequacy of Deficient Affirmative Defense 
Provisions
    B. SIP Call Process Under Section 110(k)(5)
    C. SIP Call Timing Under Section 110(k)(5)
IX. What is the EPA proposing for each of the specific SIP 
provisions identified in the Petition?
    A. Overview of the EPA's Evaluation of Specific SIP Provisions
    1. Automatic Exemption Provisions
    2. Director's Discretion Exemption Provisions
    3. State-Only Enforcement Discretion Provisions
    4. Adequacy of Affirmative Defense Provisions
    5. Affirmative Defense Provisions Applicable to a ``Source or 
Small Group of Sources''
    B. Affected States in EPA Region I
    1. Maine
    2. New Hampshire
    3. Rhode Island
    C. Affected States in EPA Region II
    1. New Jersey
    2. [Reserved]
    D. Affected States in EPA Region III
    1. Delaware
    2. District of Columbia
    3. Virginia
    4. West Virginia
    E. Affected States and Local Jurisdictions in EPA Region IV
    1. Alabama

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    2. Florida
    3. Georgia
    4. Kentucky
    5. Kentucky: Jefferson County
    6. Mississippi
    7. North Carolina
    8. North Carolina: Forsyth County
    9. South Carolina
    10. Tennessee
    11. Tennessee: Knox County
    12. Tennessee: Shelby County
    F. Affected States in EPA Region V
    1. Illinois
    2. Indiana
    3. Michigan
    4. Minnesota
    5. Ohio
    G. Affected States in EPA Region VI
    1. Arkansas
    2. Louisiana
    3. New Mexico
    4. Oklahoma
    H. Affected States in EPA Region VII
    1. Iowa
    2. Kansas
    3. Missouri
    4. Nebraska
    5. Nebraska: Lincoln-Lancaster
    I. Affected States in EPA Region VIII
    1. Colorado
    2. Montana
    3. North Dakota
    4. South Dakota
    5. Wyoming
    J. Affected States and Local Jurisdictions in EPA Region IX
    1. Arizona
    2. Arizona: Maricopa County
    3. Arizona: Pima County
    K. Affected States in EPA Region X
    1. Alaska
    2. Idaho
    3. Oregon
    4. Washington
X. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions to Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Determination Under Section 307(d)
    L. Judicial Review
XI. Statutory Authority

E. What is the meaning of key terms used in this notice?

    For the purpose of this notice, the following definitions apply 
unless the context indicates otherwise:
    The terms Act or CAA mean or refer to the Clean Air Act.
    The term affirmative defense means, in the context of an 
enforcement proceeding, a response or defense put forward by a 
defendant, regarding which the defendant has the burden of proof, and 
the merits of which are independently and objectively evaluated in a 
judicial or administrative proceeding. By demonstrating that the 
elements of an affirmative defense have been met, a source may avoid a 
civil penalty but cannot avoid injunctive relief.
    The terms air agency and air agencies mean or refer to states, the 
District of Columbia, U.S. territories, local air permitting 
authorities with delegated authority from the state, and tribal 
authorities.
    The term automatic exemption means a generally applicable provision 
in a SIP that would provide that if certain conditions existed during a 
period of excess emissions, then those exceedances would not be 
considered violations of the applicable emission limitations.
    The term director's discretion provision means, in general, a 
regulatory provision that authorizes a state regulatory official 
unilaterally to grant exemptions or variances from applicable emission 
limitations or control measures, or to excuse noncompliance with 
applicable emission limitations or control measures, in spite of SIP 
provisions that would otherwise render such conduct by the source a 
violation.
    The term EPA refers to the United States Environmental Protection 
Agency.
    The term excess emissions means the emissions of air pollutants 
from a source that exceed any applicable SIP emission limitations.
    The term malfunction means a sudden and unavoidable breakdown of 
process or control equipment.
    The term NAAQS means national ambient air quality standard or 
standards. These are the national primary and secondary ambient air 
quality standards that the EPA establishes under CAA section 109 for 
criteria pollutants for purposes of protecting public health and 
welfare.
    The term Petition refers to the petition for rulemaking titled, 
``Petition to Find Inadequate and Correct Several State Implementation 
Plans under Section 110 of the Clean Air Act Due to Startup, Shutdown, 
Malfunction, and/or Maintenance Provisions,'' filed by the Sierra Club 
with the EPA Administrator on June 30, 2011.
    The term Petitioner refers to the Sierra Club.
    The term shutdown means, generally, the cessation of operation of a 
source for any reason.
    The term SIP means or refers to a State Implementation Plan. 
Generally, the State Implementation Plan is the collection of state 
statutes and regulations approved by the EPA pursuant to CAA section 
110 that together provide for implementation, maintenance, and 
enforcement of a national ambient air quality standard (or any revision 
thereof) under section 109 for any air pollutant in each air quality 
control region (or portion thereof) within a state. In some parts of 
this notice, statements about SIPs in general also apply to tribal 
implementation plans in general even though not explicitly noted.
    The term SSM refers to startup, shutdown, or malfunction at a 
source. It does not include periods of maintenance at such a source. An 
SSM event is a period of startup, shutdown, or malfunction during which 
there are exceedances of the applicable emission limitations and thus 
excess emissions.
    The term SSM Policy refers to the cumulative guidance that EPA has 
issued concerning its interpretation of CAA requirements with respect 
to treatment of excess emissions during periods of startup, shutdown, 
and malfunction at a source. The most comprehensive statement of the 
EPA's SSM Policy prior to this proposed rulemaking is embodied in a 
1999 guidance document discussed in more detail in this proposal. When 
finalized, this action will embody the EPA's updated SSM Policy for SIP 
provisions relevant to excess emissions during SSM events.
    The term startup means, generally, the setting in operation of a 
source for any reason.

II. Overview of Proposed Rule

A. How is the EPA proposing to respond to the Petition?

    The EPA is proposing to take action on a petition for rulemaking 
that the Sierra Club (the Petitioner) filed with the EPA Administrator 
on June 30, 2011 (the Petition). The Petition concerns how air agency 
rules in EPA-approved SIPs treat excess emissions during periods of 
startup, shutdown, or malfunction of industrial process or emission 
control equipment. Many of these rules were added to SIPs and

[[Page 12464]]

approved by the EPA in the years shortly after the 1970 amendments to 
the CAA, which for the first time provided for the system of clean air 
plans that were to be prepared by air agencies and approved by the EPA. 
At that time, it was widely believed that emission limitations set at 
levels representing good control of emissions during periods of normal 
operation could in some cases not be met with the same emission control 
strategies during periods of startup, shutdown, maintenance, or 
malfunction. Accordingly, it was common for state plans to include 
provisions for special, more lenient treatment of excess emissions 
during such periods. Many of these provisions took the form of absolute 
or conditional statements that excess emissions from a source, when 
they occur outside of the source's normal operations, were not to be 
considered violations of the air agency rules, i.e., exemptions.
    Excess emission provisions for startup, shutdown, maintenance, and 
malfunctions were often included as part of the original SIPs that the 
EPA approved in 1971 and 1972. In the early 1970s, because the EPA was 
inundated with proposed SIPs and had limited experience in processing 
them, not enough attention was given to the adequacy, enforceability, 
and consistency of these provisions. Consequently, many SIPs were 
approved with broad and loosely-defined provisions to control excess 
emissions. Starting in 1977, however, the EPA discerned and articulated 
to air agencies that exemptions for excess emissions during such 
periods were inconsistent with certain requirements of the CAA. The EPA 
also realized that such provisions allow opportunities for sources to 
repeatedly emit pollutants during such periods in quantities that could 
cause unacceptable air pollution in nearby communities with no legal 
pathway for air agencies, the EPA, or the courts to require the sources 
to make reasonable efforts to reduce these emissions. The EPA has been 
more careful after 1977 not to give new approval to SIP rules that are 
inconsistent with the CAA and has issued several guidance memoranda to 
advise states on how to avoid impermissible provisions \2\ as they 
expand and revise their SIPs. The EPA has also found several SIPs to be 
deficient because of problematic SSM provisions and called upon the 
affected states to amend their SIPs. However, in light of the other 
priority work facing both air agencies and the EPA, the EPA has not to 
date initiated a broad effort to get all states to remove impermissible 
provisions from their SIPs and to adopt other, approvable approaches 
for addressing excess emissions when appropriate. Public interest 
groups, including the Petitioner, have sued the EPA in several state-
specific cases concerning SIP issues, and they have been urging the EPA 
to give greater priority to addressing the issue of SSM provisions in 
SIPs. In one of these SIP cases, the EPA entered into a settlement 
agreement requiring it to respond to the Petition from the Sierra Club. 
A copy of the settlement agreement is provided in the docket for this 
rulemaking.\3\
---------------------------------------------------------------------------

    \2\ The term ``impermissible provision'' as used throughout this 
notice is generally intended to refer to a SIP provision identified 
by the Petitioner that the EPA believes to be inconsistent with 
requirements of the CAA. As described later in this notice (see 
section VIII.A), the EPA is proposing to find a SIP ``substantially 
inadequate'' to meet CAA requirements where the EPA determines that 
the SIP includes an impermissible provision.
    \3\ See, Settlement Agreement executed Nov. 30, 2011, to address 
a lawsuit filed by Sierra Club and WildEarth Guardians in the United 
States District Court for the Northern District of California: 
Sierra Club et al. v. Jackson, No. 3:10-cv-04060-CRB (N.D. Cal.).
---------------------------------------------------------------------------

    As alluded to earlier in this notice, there are available CAA-
consistent approaches that can be incorporated into SIPs to address 
excess emissions during SSM events. While automatic exemptions and 
director's discretion exemptions from otherwise applicable emission 
limitations are not consistent with the CAA, SIPs may include criteria 
and procedures for the use of enforcement discretion by air agency 
personnel and appropriately defined affirmative defenses. In this 
action, the EPA is articulating a policy that reflects this principle 
and is reviewing the SIPs from 39 states to determine whether specific 
provisions identified in the Petition are consistent with the EPA's SSM 
Policy and the CAA. In some cases, this review involves a close reading 
of the provision in the SIP and its context to discern whether it is in 
fact an exemption, a statement regarding enforcement discretion by the 
air agency, or an affirmative defense. Each state will ultimately 
decide how to address any SIP inadequacies identified by the EPA once 
the EPA takes final action. Recognizing that for some states, the EPA's 
response to this Petition entails reviewing SIP provisions that may 
date back several decades, the EPA will work closely with each of the 
affected states to develop approvable SIPs consistent with the guidance 
articulated in the final action. Section IX of this notice presents the 
EPA's analysis of each SIP provision at issue. The EPA's review also 
hinges on interpretation of several relevant sections of the CAA. While 
the EPA has already developed and has been implementing the SSM Policy 
that is based on its interpretation of the CAA, this action provides 
the EPA an opportunity to invite public comment on this SSM Policy and 
its basis in the CAA. To that end, this notice contains a detailed 
clarifying explanation of the SSM Policy (including proposed revisions 
to it). Also, supplementary to this notice, the EPA is providing a 
memorandum to summarize the legal and administrative context for the 
proposed action, and the EPA invites public comment on the memorandum, 
which is available in the docket for this rulemaking.\4\ This notice, 
and the final notice for this action after considering public comment, 
will also clarify for the affected states how they can resolve the 
identified deficiencies in their SIPs, as well as provide all air 
agencies guidance and model language as they further develop their SIPs 
in the future.
---------------------------------------------------------------------------

    \4\ See, Memorandum, ``Statutory, Regulatory, and Policy Context 
for this Rulemaking,'' Feb. 4, 2013.
---------------------------------------------------------------------------

    In summary, the EPA proposes to agree with the Petitioner that many 
of the identified SIP provisions are not permissible under the CAA. 
However, in several cases we are proposing to find that an identified 
SIP provision is actually one of the permissible approaches. Of the 39 
states covered by the Petition, the EPA is proposing to make SIP calls 
for 36 states.
    The EPA is aware of other SSM-related SIP provisions that were not 
identified in the Petition but that may be inconsistent with the EPA's 
interpretation of the CAA. The EPA may address these other provisions 
later in a separate notice-and-comment action.

B. What did the Petitioner request?

    The Petition includes three interrelated requests concerning the 
treatment in SIPs of excess emissions by sources during periods of 
startup, shutdown, or malfunction.
    First, the Petitioner argued that SIP provisions providing an 
affirmative defense for monetary penalties for excess emissions in 
judicial proceedings are contrary to the CAA. Thus, the Petitioner 
advocated that the EPA should rescind its interpretation of the CAA 
expressed in the SSM Policy that allows appropriately drawn affirmative 
defense provisions in SIPs. The Petitioner made no distinction between 
affirmative defenses for excess emissions related to malfunction, 
startup, or shutdown. Further, the Petitioner requested that the EPA 
issue a SIP call requiring states to eliminate

[[Page 12465]]

all such affirmative defense provisions in existing SIPs. As explained 
later in this proposal, the EPA is proposing to grant in part and to 
deny in part this request. The EPA does not agree with the Petitioner 
that appropriately drawn affirmative defense provisions for violations 
due to excess emissions that result from malfunctions are contrary to 
the CAA, and thus the EPA is proposing to deny the request to revise 
its interpretation of the CAA concerning affirmative defenses for 
malfunctions. However, the EPA is proposing to revise its SSM Policy 
with respect to affirmative defenses for violations due to excess 
emissions that occur during startup and shutdown, in order to 
distinguish between planned events that are within the source's control 
and unplanned events that are not. The EPA believes that SIP provisions 
should encourage compliance during events that are within the source's 
control, and thus affirmative defenses for excess emissions during 
planned startup and shutdown are inappropriate, unlike those for excess 
emissions during malfunctions.
    Second, the Petitioner argued that many existing SIPs contain 
impermissible provisions, including automatic exemptions from 
applicable emission limitations during SSM events, director's 
discretion provisions that provide discretionary exemptions from 
applicable emission limitations during SSM events, enforcement 
discretion provisions that appear to bar enforcement by the EPA or 
citizens for such excess emissions, and inappropriate affirmative 
defense provisions that are not consistent with the recommendations in 
the EPA's SSM Policy. The Petitioner identified specific provisions in 
SIPs of 39 states that it considered inconsistent with the CAA and 
explained the basis for its objections to the provisions. As explained 
later in this proposal, the EPA agrees with the Petitioner that some of 
these existing SIP provisions are legally impermissible and thus 
proposes to find such provisions ``substantially inadequate'' \5\ to 
meet CAA requirements. Among the reasons for EPA's proposed action is 
to eliminate provisions that interfere with enforcement in a manner 
prohibited by the CAA. Simultaneously, the EPA proposes to issue a SIP 
call to the states in question requesting corrective SIP submissions to 
revise their SIPs accordingly. For the remainder of the identified 
provisions, however, the EPA disagrees with the contentions of the 
Petitioner and thus proposes to deny the Petition with respect to those 
provisions and to take no further action. The EPA's action on this 
portion of the Petition will assure that these SIPs comply with the 
fundamental requirements of the CAA with respect to the treatment of 
excess emissions during periods of startup, shutdown, or malfunction. 
The majority of the SIP calls that EPA is proposing in this action 
implement the EPA's longstanding interpretation of the CAA through 
multiple iterations of its SSM Policy. In a few instances, however, the 
EPA is also proposing a SIP call to address the issue of affirmative 
defenses during periods of planned startup and shutdown, because the 
EPA is revising its prior interpretation of the CAA to distinguish 
between violations due to excess emissions that occur during 
malfunctions and violations due to excess emissions that occur during 
planned startup and shutdown, which are modes of normal source 
operation.
---------------------------------------------------------------------------

    \5\ The term ``substantially inadequate'' is used in the CAA and 
is discussed in detail in section VIII.A of this notice.
---------------------------------------------------------------------------

    Third, the Petitioner argued that the EPA should not rely on 
interpretive letters from states to resolve any ambiguity, or perceived 
ambiguity, in state regulatory provisions in SIP submissions. The 
Petitioner reasoned that all regulatory provisions should be clear and 
unambiguous on their face and that any reliance on interpretive letters 
to alleviate facial ambiguity in SIP provisions can lead to later 
problems with compliance and enforcement. Extrapolating from several 
instances in which the basis for the original approval of a SIP 
provision related to excess emissions during SSM events was arguably 
not clear, the Petitioner contended that the EPA should never use 
interpretive letters to resolve such ambiguities. As explained later in 
this proposal, the EPA acknowledges the concern of the Petitioner that 
provisions in SIPs should be clear and unambiguous. However, the EPA 
does not agree with the Petitioner that reliance on interpretive 
letters in a rulemaking context is never appropriate. Thus, the EPA is 
proposing to deny the request that actions on SIP submissions never 
rely on interpretive letters. Instead, the EPA explains how proper 
documentation of reliance on interpretive letters in notice-and-comment 
rulemaking nevertheless addresses the practical concerns of the 
Petitioner.
    The EPA solicits comment on its proposed response to the 
overarching issues in the Petition, and in particular on its proposed 
action with respect to each of the specific existing SIP provisions 
identified in the Petition as inconsistent with the requirements of the 
CAA. Through this action on the Petition, the EPA is clarifying, 
restating, and revising its SSM Policy. When finalized, this action 
will embody the EPA's updated SSM Policy for SIP provisions relevant to 
excess emissions during SSM events.

C. To which air agencies does this proposed rulemaking apply and why?

    In general, the proposal may be of interest to all air agencies 
because the EPA is clarifying, restating, and revising its longstanding 
SSM Policy with respect to what the CAA requires concerning SIP 
provisions relevant to excess emissions during periods of startup, 
shutdown, and malfunction. For example, the EPA is denying the 
Petitioner's request that the EPA rescind its interpretation of the CAA 
to allow appropriately drawn affirmative defense provisions applicable 
to malfunctions, as explained in EPA guidance documents on this topic. 
The EPA is clarifying or revising its prior guidance with respect to 
several issues in order to ensure that future SIP submissions, not 
limited to those that affected states make in response to this action, 
are fully consistent with the CAA. For example, the EPA is revising its 
prior guidance concerning whether the CAA allows affirmative defense 
provisions that apply during periods of planned startup and shutdown. 
This proposal also addresses the use of interpretive letters for 
purposes of EPA action on SIPs.
    In addition, the proposal is directly relevant to the states with 
SIP provisions identified in the Petition that the Petitioner alleges 
are inconsistent with CAA requirements or with the EPA's guidance 
concerning SIP provisions relevant to excess emissions.
    The EPA is proposing either to grant or to deny the Petition with 
respect to the specific existing SIP provisions in each of 39 states 
identified by the Petitioner as allegedly inconsistent with the CAA. 
The 39 states (comprising 46 state and local authorities and no tribal 
authorities) are listed in table 1, ``List of States with SIP 
Provisions for Which the EPA Proposes Either to Grant or to Deny the 
Petition, in Whole or in Part.'' After evaluating the Petition, the EPA 
is proposing to grant the petition with respect to one or more 
provisions in 36 states of the 39 states listed, and these are the 
states for which the proposed action on petition, according to table 1, 
is either ``Grant'' or ``Partially grant, partially deny.'' Conversely, 
the EPA is proposing to deny the petition with respect to all 
provisions that the Petitioner identified in 3 of the 39 states, and 
these (Idaho, Nebraska, and

[[Page 12466]]

Oregon) are the states for which the proposed action on petition, 
according to table 1, is ``Deny.''
    For each of the states for which the EPA proposes to grant or 
partially to grant the Petition, the EPA proposes to find that one or 
more particular provisions in the state's existing SIP identified by 
the Petitioner are substantially inadequate to meet the requirements of 
the CAA. Thus, the EPA also proposes to promulgate a SIP call to each 
of those states, requiring the state to correct those particular SIP 
provisions, in accordance with the SIP call process of CAA section 
110(k)(5). The SIP calls apply only to those specific provisions, and 
the scope of each of the SIP calls is limited to those provisions.
    For each of the states for which the EPA proposes to deny or to 
partially deny the Petition, the EPA proposes to find that particular 
provisions in the existing SIP identified by the Petitioner are 
consistent with the requirements of the CAA and thus not substantially 
inadequate to meet the requirements pursuant to CAA section 110(k)(5). 
Thus, the EPA proposes to take no action with respect to those states 
for those particular SIP provisions.

 Table 1--List of States With SIP Provisions for Which the EPA Proposes Either To Grant or To Deny the Petition,
                                               in Whole or in Part
----------------------------------------------------------------------------------------------------------------
            EPA region                       State                        Proposed action on petition
----------------------------------------------------------------------------------------------------------------
I................................  Maine....................  Grant.
                                   New Hampshire............  Partially grant, partially deny.
                                   Rhode Island.............  Grant.
II...............................  New Jersey...............  Partially grant, partially deny.
III..............................  Delaware.................  Grant.
                                   District of Columbia.....  Partially grant, partially deny.
                                   Virginia.................  Grant.
                                   West Virginia............  Grant.
IV...............................  Alabama..................  Grant.
                                   Florida..................  Grant.
                                   Georgia..................  Grant.
                                   Kentucky.................  Grant.
                                   Mississippi..............  Grant.
                                   North Carolina...........  Grant.
                                   South Carolina...........  Partially grant, partially deny.
                                   Tennessee................  Grant.
V................................  Illinois.................  Grant.
                                   Indiana..................  Grant.
                                   Michigan.................  Grant.
                                   Minnesota................  Grant.
                                   Ohio.....................  Partially grant, partially deny.
VI...............................  Arkansas.................  Grant.
                                   Louisiana................  Grant.
                                   New Mexico...............  Grant.
                                   Oklahoma.................  Grant.
VII..............................  Iowa.....................  Partially grant, partially deny.
                                   Kansas...................  Grant.
                                   Missouri.................  Partially grant, partially deny.
                                   Nebraska.................  Deny.
VIII.............................  Colorado.................  Partially grant, partially deny.
                                   Montana..................  Grant.
                                   North Dakota.............  Grant.
                                   South Dakota.............  Grant.
                                   Wyoming..................  Grant.
IX...............................  Arizona..................  Partially grant, partially deny.
X................................  Alaska...................  Grant.
                                   Idaho....................  Deny.
                                   Oregon...................  Deny.
                                   Washington...............  Grant.
----------------------------------------------------------------------------------------------------------------

    For each state for which the proposed action on the Petition is 
either ``Grant'' or ``Partially grant, partially deny,'' the EPA 
proposes to find that certain specific provisions in each state's SIP 
are substantially inadequate to meet CAA requirements for the reason 
that these provisions are inconsistent with the CAA with regard to how 
the state treats excess emissions from sources during periods of 
startup, shutdown, and malfunction. The EPA believes that certain 
specific provisions in these SIPs fail to meet fundamental statutory 
requirements intended to protect the NAAQS, prevention of significant 
deterioration (PSD) increments, and visibility. Equally importantly, 
the EPA believes that the same provisions may undermine the ability of 
states, the EPA, and the public to enforce emission limitations in the 
SIP that have been relied upon to ensure attainment or maintenance of 
the NAAQS or to meet other CAA requirements.
    For each state for which the proposed action on the Petition is 
either ``Grant'' or ``Partially grant, partially deny,'' the EPA is 
also proposing in this rulemaking to call for a SIP revision as 
necessary to correct the identified provisions. The SIP revisions that 
the EPA is proposing to require will rectify a number of different 
types of defects in existing SIPs, including automatic exemptions from 
emission limitations, impermissible director's discretion provisions, 
enforcement discretion provisions that purport to bar enforcement by 
the EPA or through a citizen suit, and affirmative defense provisions 
that are inconsistent with

[[Page 12467]]

CAA requirements. A corrective SIP revision addressing automatic or 
impermissible discretionary exemptions will ensure that excess 
emissions during periods of startup, shutdown, and malfunction are 
treated in accordance with CAA requirements. Similarly, a corrective 
SIP revision addressing ambiguity in who may enforce against violations 
of these emission limitations will also ensure that CAA requirements to 
provide for enforcement are met. A SIP revision to rectify deficiencies 
in affirmative defense provisions will assure that such defenses are 
only available when sources have met the criteria that justify their 
being shielded from monetary penalties in an enforcement action. The 
particular provisions for which the EPA is requiring SIP revisions are 
summarized in section IX of this notice. Many of these provisions were 
added to the respective SIPs many years ago and have not been the 
subject of action by the state or the EPA since.

D. What is the EPA proposing for any state that receives a finding of 
substantial inadequacy and a SIP call?

    If the EPA finalizes a finding of substantial inadequacy and issues 
a SIP call for any state, the EPA's final action will establish a 
deadline by which the state must make a SIP submission to rectify the 
deficiency. Pursuant to CAA section 110(k)(5), the EPA has authority to 
set a SIP submission deadline up to 18 months from the date of the 
final finding of substantial inadequacy. Accordingly, the EPA is 
proposing that if it promulgates a final finding of substantial 
inadequacy and a SIP call for a state, the EPA will establish a date 18 
months from the date of promulgation of the final finding for the state 
to respond to the SIP call. If, for example, the EPA's final findings 
are signed and disseminated in August 2013, then the SIP submission 
deadline for each of the states subject to the final SIP call would 
fall in February 2015. Thereafter, the EPA will review the adequacy of 
that new SIP submission in accordance with the CAA requirements of 
sections 110(a), 110(k), 110(l), and 193, including the EPA's 
interpretation of the CAA reflected in the SSM Policy as clarified and 
updated through this rulemaking. The EPA believes that states should be 
provided the maximum time allowable under CAA section 110(k)(5) in 
order to have sufficient time to make appropriate SIP revisions 
following their own SIP development process. Such a schedule will allow 
for the necessary SIP development process to correct the deficiencies 
yet still achieve the necessary SIP improvements as expeditiously as 
practicable.

E. What are potential impacts on affected states and sources?

    The issuance of a SIP call would require an affected state to take 
action to revise its SIP. That action by the state may, in turn, affect 
sources as described below. The states that would receive a SIP call 
will in general have options as to exactly how to revise their SIPs. In 
response to a SIP call, a state retains broad discretion concerning how 
to revise its SIP, so long as that revision is consistent with the 
requirements of the CAA. Some provisions that may be identified in a 
final SIP call, for example an automatic exemption provision, would 
have to be removed entirely and an affected source could no longer 
depend on the exemption to avoid all liability for excess emissions. 
Some other provisions, for example a problematic enforcement discretion 
provision or affirmative defense provision, could either be removed 
entirely from the SIP or retained if revised appropriately, in 
accordance with the EPA's interpretation of the CAA as described in the 
EPA's SSM Policy. The EPA notes that if a state removes a SIP provision 
that pertains to the state's exercise of enforcement discretion, this 
removal would not affect the ability of the state to apply discretion 
in its enforcement program. It would make the exercise of such 
discretion case-by-case in nature.
    In addition, affected states may choose to consider reassessing 
particular emission limitations, for example to determine whether those 
limits can be revised such that well-managed emissions during planned 
operations such as startup and shutdown would not exceed the revised 
emission limitation, while still protecting air quality. Such a 
revision of an emission limitation may need to be submitted as a SIP 
revision for EPA approval if the existing limit to be changed is 
already included in the SIP or if the existing SIP relies on the 
particular existing emission limit to meet a CAA requirement. In such 
instances, the EPA would review the SIP revision for consistency with 
all applicable CAA requirements. A state that chooses to revise 
particular emission limitations, in addition to removing the aspect of 
the existing provision that is inconsistent with CAA requirements, 
could include those revisions in the same SIP submission that addresses 
the SSM provisions identified in the SIP call, or it could submit them 
separately.
    The implications for a regulated source in a given state, in terms 
of whether and how it would potentially have to change its equipment or 
practices in order to operate with emissions that comply with the 
revised SIP, will depend on the nature and frequency of the source's 
SSM events and how the state has chosen to revise the SIP to address 
excess emissions during SSM events. The EPA recognizes that after all 
the responsive SIP revisions are in place and are being implemented by 
the states, some sources may need to take steps to better control 
emissions so as to comply with emission limits continuously, as 
required by the CAA, or to increase durability of components and 
monitoring systems to detect and manage malfunctions promptly. If a 
state elects to have appropriately drawn affirmative defense 
provisions, however, such sources may not be liable for monetary 
penalties for any exceedances.
    The EPA Regional Offices will work with states to help them 
understand their options and the potential consequences for sources as 
the states prepare their SIP revisions in response to the SIP calls.

F. What happens if an affected state fails to meet the SIP submission 
deadline?

    If, in the future, the EPA finds that a state that is subject to a 
SIP call has failed to submit a complete SIP revision as required by 
the final rule, or the EPA disapproves such a SIP revision, then the 
finding or disapproval would trigger an obligation for the EPA to 
impose a federal implementation plan (FIP) within 24 months after that 
date. In addition, if a state fails to make the required SIP revision, 
or if the EPA disapproves the required SIP revision, then either event 
can also trigger mandatory 18-month and 24-month sanctions clocks under 
CAA section 179. The two sanctions that apply under CAA section 179(b) 
are the 2-to-1 emission offset requirement for all new and modified 
major sources subject to the nonattainment new source review program 
and restrictions on highway funding. More details concerning the timing 
and process of the SIP call, and potential consequences of the SIP 
call, are provided in section VIII.B of this notice.

G. What happens in an affected state in the interim period starting 
when the EPA promulgates the final SIP call and ending when the EPA 
approves the required SIP revision?

    If the EPA issues a final SIP call to a state, that action alone 
will not cause

[[Page 12468]]

any automatic change in the legal status of the existing affected 
provision(s) in the SIP. During the time that the state takes to 
develop a SIP revision in accordance with the SIP call and the time 
that the EPA takes to evaluate and act upon the SIP revision pursuant 
to CAA section 110(k), the existing affected SIP provision(s) will 
remain in place. The EPA notes, however, that the state regulatory 
revisions that the state has adopted and submitted for SIP approval 
will most likely be already in effect at the state level during the 
pendency of the EPA's evaluation of and action upon the new SIP 
submission.
    The EPA recognizes that in the interim period, there may continue 
to be instances of excess emissions that adversely impact attainment 
and maintenance of the NAAQS, interfere with PSD increments, interfere 
with visibility, and cause other adverse consequences as a result of 
the impermissible provisions. However, given the need to resolve these 
longstanding SIP deficiencies in a careful and comprehensive fashion, 
the EPA believes that providing sufficient time for these corrections 
to occur will ultimately be the best course to ensure the ultimate goal 
of eliminating the inappropriate SIP provisions and replacing them with 
provisions consistent with CAA requirements.

III. Statutory, Regulatory, and Policy Background

    The Petition raised issues related to excess emissions from sources 
during periods of startup, shutdown, or malfunction, and to the correct 
approach to these excess emissions in SIPs. In this context, ``excess 
emissions'' are air emissions that exceed the otherwise applicable 
emission limitations in a SIP, i.e., emissions that would be violations 
of such emission limitations. The question of how to address excess 
emissions correctly during startup, shutdown, and malfunction events 
has posed a challenge since the inception of the SIP program in the 
1970s. The primary objective of state and federal regulators is to 
ensure that sources of emissions are subject to appropriate emission 
controls as necessary in order to attain and maintain the NAAQS, 
protect PSD increments, protect visibility, and meet other statutory 
requirements. Generally, this is achieved through enforceable emission 
limitations on sources that apply, as required by the CAA, 
continuously.
    Several key statutory provisions of the CAA are relevant to the 
EPA's evaluation of the Petition. These provisions relate generally to 
the basic legal requirements for the content of SIPs, the authority and 
responsibility of air agencies to develop such SIPs, and the EPA's 
authority and responsibility to review and approve SIP submissions in 
the first instance, as well as the EPA's authority to require 
improvements to SIPs if the EPA later determines that to be necessary 
for a SIP to meet CAA requirements. In addition, the Petition raised 
issues that pertain to enforcement of provisions in a SIP. The 
enforcement issues relate generally to what constitutes a violation of 
an emission limitation in a SIP, who may seek to enforce against a 
source for that violation, and whether the violator should be subject 
to monetary penalties as well as other forms of judicial relief for 
that violation.
    The EPA has a longstanding interpretation of the CAA with respect 
to the treatment of excess emissions during periods of startup, 
shutdown, or malfunction in SIPs. This statutory interpretation has 
been expressed, reiterated, and elaborated upon in a series of guidance 
documents issued in 1982, 1983, 1999, and 2001. In addition, the EPA 
has applied this interpretation in individual rulemaking actions in 
which the EPA: (i) Approved SIP submissions that were consistent with 
the EPA's interpretation; \6\ (ii) disapproved SIP submissions that 
were not consistent with this interpretation; \7\ (iii) itself 
promulgated regulations in FIPs that were consistent with this 
interpretation; \8\ or (iv) issued a SIP call requiring a state to 
revise an impermissible SIP provision.\9\
---------------------------------------------------------------------------

    \6\ See, ``Approval and Promulgation of Implementation Plans; 
Texas; Excess Emissions During Startup, Shutdown, Maintenance, and 
Malfunction Activities,'' 75 FR 68989 (Nov. 10, 2010).
    \7\ See, ``Approval and Promulgation of State Implementation 
Plans; Michigan,'' 63 FR 8573 (Feb. 20, 1998).
    \8\ See, ``Federal Implementation Plan for the Billings/Laurel, 
MT, Sulfur Dioxide Area,'' 73 FR 21418 (Apr. 21, 2008).
    \9\ See, ``Finding of Substantial Inadequacy of Implementation 
Plan; Call for Utah State Implementation Plan Revision,'' 76 FR 
21639 (Apr. 18, 2011).
---------------------------------------------------------------------------

    The EPA's SSM Policy is a policy statement and thus constitutes 
guidance. As guidance, the SSM Policy does not bind states, the EPA, or 
other parties, but it does reflect the EPA's interpretation of the 
statutory requirements of the CAA. The EPA's evaluation of any SIP 
provision, whether prospectively in the case of a new provision in a 
SIP submission or retrospectively in the case of a previously approved 
SIP submission, must be conducted through a notice-and-comment 
rulemaking in which the EPA will determine whether or not a given SIP 
provision is consistent with the requirements of the CAA and applicable 
regulations.\10\
---------------------------------------------------------------------------

    \10\ See, generally, Catawba County, North Carolina et al. v. 
EPA, 571 F.3d 20, 33-35 (DC Cir. 2009) (upholding the EPA's process 
for developing and applying its guidance to designations).
---------------------------------------------------------------------------

    The Petition raised issues related to excess emissions from sources 
during periods of startup, shutdown, and malfunction, and the 
consequences of failing to address these emissions correctly in SIPs. 
In broad terms, the Petitioner expressed concerns that the exemptions 
for excess emissions and the other types of alleged deficiencies in 
existing SIP provisions ``undermine the emission limits in SIPs and 
threaten states' abilities to achieve and maintain the NAAQS, thereby 
threatening public health and public welfare, which includes 
agriculture, historic properties and natural areas.'' \11\ The 
Petitioner asserted that such exemptions for SSM events are 
``loopholes'' that can allow dramatically higher amounts of emissions 
and that these emissions ``can swamp the amount of pollutants emitted 
at other times.'' \12\ In addition, the Petitioner argued that these 
automatic and discretionary exemptions, as well as other SIP provisions 
that interfere with the enforcement structure of the CAA, undermine the 
objectives of the CAA.
---------------------------------------------------------------------------

    \11\ Petition at 2.
    \12\ Petition at 12.
---------------------------------------------------------------------------

    The EPA notes that the alleged SIP deficiencies are not legal 
technicalities. Compliance with the applicable requirements is intended 
to achieve the air quality protection and improvement purposes and 
objectives of the CAA. The EPA believes that the results of automatic 
and discretionary exemptions in SIPs, and of other provisions that 
interfere with effective enforcement of SIPs, are real-world 
consequences that adversely affect public health.
    As described earlier in this notice, the EPA invites public comment 
on a memorandum that supplements this notice and provides a more 
detailed discussion of the statutory, regulatory and policy background 
for the EPA's proposed action. The memorandum can be found in the 
docket for this rulemaking.\13\
---------------------------------------------------------------------------

    \13\ See, Memorandum, ``Statutory, Regulatory, and Policy 
Context for this Rulemaking,'' Feb. 4, 2013.
---------------------------------------------------------------------------

IV. Proposed Action in Response To Request To Rescind the EPA Policy 
Interpreting the CAA To Allow Appropriate Affirmative Defense 
Provisions

A. Petitioner's Request

    The Petitioner's first request was for the EPA to rescind its SSM 
Policy

[[Page 12469]]

element interpreting the CAA to allow affirmative defense provisions in 
SIPs for excess emissions during SSM events.\14\ Related to this 
request, the Petitioner also asked the EPA: (i) To find that SIPs 
containing an affirmative defense to monetary penalties for excess 
emissions during SSM events are substantially inadequate because they 
do not comply with the CAA; and (ii) to issue a SIP call pursuant to 
CAA section 110(k)(5) to require each such state to revise its SIP.\15\ 
Alternatively, if the EPA denies these two related requests, the 
Petitioner requested the EPA: (i) To require states with SIPs that 
contain such affirmative defense provisions to revise them so that they 
are consistent with the EPA's 1999 SSM Guidance for excess emissions 
during SSM events; and (ii) to issue a SIP call pursuant to CAA section 
110(k)(5) to states with provisions inconsistent with the EPA's 
interpretation of the CAA.\16\ The EPA interprets this latter request 
to refer to the specific SIP provisions that the Petitioner identified 
in a separate section of the Petition, titled, ``Analysis of Individual 
States' SSM Provisions,'' including specific existing affirmative 
defense provisions.
---------------------------------------------------------------------------

    \14\ Petition at 11.
    \15\ Id.
    \16\ Petition at 12.
---------------------------------------------------------------------------

    The Petitioner requested that the EPA rescind its SSM Policy 
element interpreting the CAA to allow SIPs to include affirmative 
defenses for violations due to excess emissions during any type of SSM 
events because the Petitioner contended there is no legal basis for the 
policy. Specifically, the Petitioner cited to two statutory grounds, 
CAA sections 113(b) and (e), related to the type of judicial relief 
available in an enforcement proceeding and to the factors relevant to 
the scope and availability of such relief, that the Petitioner claimed 
would bar the approval of any type of affirmative defense provision in 
SIPs.
    In the Petitioner's view, the CAA ``unambiguously grants 
jurisdiction to the district courts to determine penalties that should 
be assessed in an enforcement action involving the violation of an 
emissions limit.'' \17\ The Petitioner first argued that in any 
judicial enforcement action in the district court, CAA section 113(b) 
provides that ``such court shall have jurisdiction to restrain such 
violation, to require compliance, to assess such penalty, * * * and to 
award any other appropriate relief.'' The Petitioner reasoned that the 
EPA's SSM Policy is therefore fundamentally inconsistent with the CAA 
because it purports to remove the discretion and authority of the 
federal courts to assess monetary penalties for violations if a source 
is shielded from monetary penalties under an affirmative defense 
provision in the approved SIP.\18\ The Petitioner concluded that the 
EPA's interpretation of the CAA in the SSM Policy element allowing any 
affirmative defenses is impermissible ``because the inclusion of an 
affirmative defense provision in a SIP limits the courts' discretion--
granted by Congress--to assess penalties for Clean Air Act 
violations.'' \19\
---------------------------------------------------------------------------

    \17\ Petition at 10.
    \18\ Id.
    \19\ Id.
---------------------------------------------------------------------------

    Second, in reliance on CAA section 113(e)(1), the Petitioner argued 
that in a judicial enforcement action in a district court, the statute 
explicitly specifies a list of factors that the court is to consider in 
assessing penalties.\20\ That section provides that either the 
Administrator or the court:
---------------------------------------------------------------------------

    \20\ Petition at 11.

* * * shall take into consideration (in addition to such other 
factors as justice may require) the size of the business, the 
economic impact of the penalty on the business, the violator's full 
compliance history and good faith efforts to comply, the duration of 
the violation as established by any credible evidence (including 
evidence other than the applicable test method), payment by the 
violator of penalties previously assessed for the same violation, 
the economic benefit of noncompliance, and the seriousness of the 
---------------------------------------------------------------------------
violation.

    The Petitioner argued that the EPA's SSM Policy authorizes states 
to create affirmative defense provisions with criteria for monetary 
penalties that are inconsistent with the factors that the statute 
specifies and that the statute explicitly directs courts to weigh in 
any judicial enforcement action. In particular, the Petitioner 
enumerated those factors that it alleges the EPA's SSM Policy totally 
omits: (i) The size of the business; (ii) the economic impact of the 
penalty on the business; (iii) the violator's full compliance history; 
(iv) the economic benefit of noncompliance; and (v) the seriousness of 
the violation. By specifying particular factors for courts to consider, 
the Petitioner reasoned, Congress has already definitively spoken to 
the question of what factors are germane in assessing monetary 
penalties under the CAA for violations. The Petitioner concluded that 
the EPA has no authority to allow a state to include an affirmative 
defense provision in a SIP with different criteria to be considered in 
awarding monetary penalties because ``[p]reventing the district courts 
from considering these statutory factors is not a permissible 
interpretation of the Clean Air Act.'' \21\ The Petitioner drew no 
distinction between affirmative defenses for unplanned events such as 
malfunctions and planned events such as startup and shutdown.
---------------------------------------------------------------------------

    \21\ Petition at 11.
---------------------------------------------------------------------------

B. The EPA's Response

    The EPA has considered the concerns raised by the Petitioner 
regarding the legal basis under the CAA for any form of affirmative 
defense for violations due to excess emissions as contemplated in the 
EPA's SSM Policy. The EPA does not agree with the Petitioner's 
overarching argument that CAA section 113 prohibits any affirmative 
defense provisions in SIPs. However, the EPA has evaluated the broader 
legal basis that supports affirmative defense provisions in general and 
the specific affirmative defense provisions identified in the Petition 
in particular. Although the Petitioner did not distinguish between 
affirmative defense provisions for unplanned events such as 
malfunctions and affirmative defense provisions for planned events such 
as startup and shutdown, the EPA's evaluation of the legal basis for 
affirmative defense provisions indicates that the SSM Policy should 
differentiate between unplanned and planned events. Accordingly, the 
EPA is proposing to deny the Petition in part with respect to 
affirmative defenses for malfunction events and to grant the Petition 
in part with respect to affirmative defenses for planned startup and 
shutdown events. To address this issue fully, it is necessary: (i) To 
explain the legal and policy basis for affirmative defenses for 
malfunction events; (ii) to explain why that basis would not extend to 
startup and shutdown events; and (iii) to explain why the Petitioner's 
arguments with respect to CAA section 113 do not preclude affirmative 
defense provisions for malfunction events but support the distinction 
between unplanned and planned events.
    The EPA proposes to deny the Petition with respect to affirmative 
defense provisions in SIPs applicable to sources during malfunctions. 
The EPA's SSM Policy has long recognized that there may be limited 
circumstances in which excess emissions are entirely beyond the control 
of the owner or operator. Thus, the EPA believes that an appropriately 
drawn affirmative defense provision recognizes that, despite diligent 
efforts by sources, such circumstances may create difficulties in 
meeting a legally required emission limitation continuously and that

[[Page 12470]]

emission standards may be violated under limited circumstances beyond 
the control of the source.
    In accordance with CAA section 302(k), SIPs must contain emission 
limitations that ``limit the quantity, rate, or concentration of 
emissions of air pollutants on a continuous basis.'' \22\ While 
``continuous'' standards are required, there is also case law 
indicating that technology-based standards should account for the 
practical realities of technology. For example, in Essex Chemical v. 
Ruckelshaus, the court acknowledged that in setting standards under CAA 
section 111, ``variant provisions'' such as provisions allowing for 
upsets during startup, shutdown and equipment malfunction ``appear 
necessary to preserve the reasonableness of the standards as a whole 
and that the record does not support the `never to be exceeded' 
standard currently in force.'' \23\ Though intervening case law and 
amendments to the CAA call into question the relevance of this line of 
cases today, they support the EPA's view that a system that 
incorporates some level of flexibility is reasonable and consistent 
with the overall intent of the CAA. An appropriately drawn affirmative 
defense provision simply provides for a defense to monetary penalties 
for violations that are proven to be beyond the control of the source. 
The EPA notes that the affirmative defense does not excuse a source 
from injunctive relief, i.e., from being required to take further steps 
to prevent future upsets or malfunctions that cause harm to the public 
health. The EPA believes that affirmative defense provisions can supply 
flexibility both to ensure that emission limitations are ``continuous'' 
as required by CAA section 302(k), because any violations remain 
subject to a claim for injunctive relief, and to provide limited relief 
in actions for penalties for malfunctions that are beyond the control 
of the owner where the owner has taken necessary steps to minimize the 
likelihood and the extent of any such violation. This approach supports 
the reasonableness of the SIP emission limitations as a whole. SIP 
emission limitations must apply and be enforceable at all times. A 
narrow affirmative defense for malfunction events helps to meet this 
requirement by ensuring that even where there is a malfunction, the 
emission limitations are still applicable and enforceable through 
injunctive relief. Several courts have agreed with this approach.\24\
---------------------------------------------------------------------------

    \22\ Court decisions confirm that this requirement for 
continuous compliance prohibits exemptions for excess emissions 
during SSM events. See, e.g., Sierra Club v. EPA, 551 F.3d 1019, 
1021 (D.C. Cir. 2008); US Magnesium, LLC v. EPA, 690 F.3d 1157, 1170 
(10th Cir. 2012).
    \23\ See, 486 F.2d 427, 433 (D.C. Cir. 1973); Portland Cement 
Association v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973).
    \24\ See, Luminant Generation Co. v. EPA, 699 F.3d 427 (5th Cir. 
2012) (upholding the EPA's approval of an affirmative defense 
applicable during malfunctions in a SIP submission as a permissible 
interpretation of the statute under Chevron step 2 analysis); Mont. 
Sulphur & Chemical Co. v. EPA, 666 F.3d 1174, 1191-93 (9th Cir. 
2012) (upholding the EPA's creation of an affirmative defense 
applicable during malfunctions in a FIP); Ariz. Public Service Co. 
v. EPA, 562 F.3d 1116, 1130 (9th Cir. 2009) (upholding the EPA's 
creation of an affirmative defense applicable during malfunctions in 
a FIP).
---------------------------------------------------------------------------

    Because the Petitioner questioned the legal basis for affirmative 
defense provisions in SIPs, the EPA wants to reiterate the basis for 
its recommendations concerning such provisions. Starting with the 1982 
SSM Guidance, the EPA has made a series of recommendations concerning 
how states might address violations of SIP provisions consistent with 
CAA requirements in the event of malfunctions. In the 1982 SSM 
Guidance, the EPA recommended the exercise of enforcement discretion. 
Subsequently, in the 1983 SSM Guidance, the EPA expanded on this 
approach by recommending that a state could elect to adopt SIP 
provisions providing parameters for the exercise of enforcement 
discretion by the state's personnel. In the 1999 SSM Guidance, the EPA 
recognized the use of an affirmative defense as a permissible method 
for addressing excess emissions that were beyond the control of the 
owner or operator of the source and recommended parameters that should 
be included as part of such an affirmative defense in order to ensure 
that it would be available only in certain narrow circumstances.
    The EPA interprets the provisions in CAA section 110(a) to allow 
the use of narrowly tailored affirmative defense provisions in SIP 
provisions. In particular, CAA section 110(a) requires each state to 
have a SIP that provides for the attainment, maintenance, and 
enforcement of the NAAQS, protects PSD increments, protects visibility, 
and meets the other requirements of the CAA. These statutory provisions 
include the explicit requirements that SIPs contain emission 
limitations in accordance with section 110(a)(2)(A) and that these 
emission limitations must apply continuously in accordance with CAA 
section 302(k). The CAA is silent as to whether or not states may elect 
to create affirmative defense provisions in SIPs. In light of the 
ambiguity created by this silence, the EPA has interpreted the CAA to 
allow affirmative defense provisions in certain narrowly prescribed 
circumstances. While recognizing that there is some ambiguity in the 
statute, the EPA also recognizes that there are some limits imposed by 
the overarching statutory requirements such as the obligation that SIPs 
provide for the attainment and maintenance of the NAAQS. Thus, the EPA 
believes that in order for an affirmative defense provision to be 
consistent with the CAA, it: (i) Has to be narrowly drawn to address 
only those excess emissions that are unavoidable; (ii) cannot interfere 
with the requirement that the emission limitations apply continuously 
(i.e., cannot provide relief from injunctive relief); and (iii) cannot 
interfere with the overarching requirements of the CAA, such as 
attaining and maintaining the NAAQS.\25\
---------------------------------------------------------------------------

    \25\ See, e.g., ``Approval and Promulgation of Implementation 
Plans; Texas; Excess Emissions During Startup, Shutdown, 
Maintenance, and Malfunction Activities; Notice of proposed 
rulemaking,'' 75 FR 26892 at 26895 (May 13, 2010). In this proposed 
rule, the EPA explained 12 specific considerations that justified 
the proposed approval of the affirmative defense for unplanned 
events in the state's SIP submission as consistent with the 
requirements of the CAA.
---------------------------------------------------------------------------

    The EPA believes this interpretation is reasonable because it does 
not interfere with the overarching goals of title I of the CAA, such as 
attainment and maintenance of the NAAQS, and at the same time 
recognizes that, despite best efforts of sources, technology is 
fallible. The EPA disagrees with the suggestion that an affirmative 
defense will encourage lax behavior by sources and, in fact, believes 
the opposite. The potential relief from monetary penalties for 
violations in many cases may serve as an incentive for sources to be 
more diligent to prevent and to minimize excess emissions in order to 
be able to qualify for the affirmative defense. An underlying premise 
of an affirmative defense provision for malfunctions is that the excess 
emissions are entirely beyond the control of the owner or operator of 
the source. First, a malfunction is a sudden and unavoidable event that 
cannot be foreseen or planned for. As explained in the 1999 SSM 
Guidance, the EPA considers malfunctions to be ``sudden, unavoidable, 
and unpredictable in nature.'' \26\ In order to establish an 
affirmative defense for a malfunction, the recommended criteria specify 
that the source, among other things, must have been appropriately 
designed, operated, and maintained to prevent such an event, and the 
source must have taken all practicable steps to prevent

[[Page 12471]]

and to minimize the excess emissions that result from the malfunction. 
Through the criteria recommended in the 1999 SSM Guidance for 
approvable affirmative defense provisions for malfunctions, the EPA 
reflected its view that approvable provisions should be narrowly drawn 
and should be restricted to events beyond the control of the owner or 
operator of the source.\27\ The EPA recommends that states consider 10 
specific criteria in such affirmative defense provisions.
---------------------------------------------------------------------------

    \26\ See, 1999 SSM Guidance at Attachment p. 4.
    \27\ Id. at 3-4.
---------------------------------------------------------------------------

    Unlike the EPA's proposed response to the request to rescind its 
SSM Policy with respect to affirmative defenses for malfunctions, the 
EPA proposes to grant the Petition with respect to its interpretation 
of the CAA concerning affirmative defense for excess emissions during 
startup and shutdown events. Accordingly, the EPA is also proposing to 
issue a SIP call for SIP provisions identified in the Petition that 
provide an affirmative defense for excess emissions during planned 
events, such as startup and shutdown. The legal and factual rationale 
for an affirmative defense provision for malfunctions does not 
translate to planned events such as startup and shutdown. By 
definition, the owner or operator of a source can foresee and plan for 
startup and shutdown events. Because these events are planned and 
predictable, the EPA believes that air agencies should be able to 
establish, and sources should be able to comply with, the applicable 
emission limitations or other control measures during these periods of 
time. In addition, a source can be designed, operated, and maintained 
to control and to minimize emissions during such normal expected 
events. If sources in fact cannot meet the otherwise applicable 
emission limitations during planned events such as startup and 
shutdown, then an air agency can develop specific alternative 
requirements that apply during such periods, so long as they meet other 
applicable CAA requirements.
    Providing an affirmative defense to sources for violations that 
they could reasonably anticipate and prevent is not consistent with the 
theory that supports allowing such affirmative defenses for 
malfunctions, i.e., that where excess emissions are entirely beyond the 
control of the owner or operator of the source it is appropriate to 
provide limited relief to claims for monetary penalties. The EPA has 
previously made the distinction that excess emissions that occur during 
maintenance should not be accorded special treatment, because sources 
should be expected to comply with emission limitations during 
maintenance activities as they are planned and within the control of 
the source.\28\ The EPA believes that same rationale applies to periods 
of startup and shutdown.\29\
---------------------------------------------------------------------------

    \28\ See, ``Approval and Promulgation of Implementation Plans; 
Texas; Excess Emissions During Startup, Shutdown, Maintenance, and 
Malfunction Activities,'' 75 FR 68989 at 68992 (Nov. 10, 2010).
    \29\ In Luminant Generation Co. v. EPA, 699 F.3d 427 (5th Cir. 
2012), the court upheld the EPA's disapproval of an affirmative 
defense provision in a SIP submission that pertained to ``planned 
activities,'' which included startup, shutdown, and maintenance. The 
EPA disapproved this provision, in part because it provided an 
affirmative defense for maintenance. The court rejected challenges 
to the EPA's disapproval of this provision, holding that under 
Chevron step 2, the EPA's interpretation of the CAA was reasonable.
---------------------------------------------------------------------------

    The EPA acknowledges that its 1999 SSM Guidance explicitly 
recognized that states could elect to create affirmative defense 
provisions applicable to startup and shutdown events. However, the EPA 
has reevaluated the justification that could support an affirmative 
defense during these activities and now believes that the ability and 
obligation of sources to anticipate and to plan for routine events such 
as startup and shutdown negates the justification for relief from 
monetary penalties for violations during those events. Moreover, the 
EPA notes that the various criteria recommended for affirmative 
defenses for startup and shutdown to a large extent already mirrored 
those relevant for malfunctions, such as: (i) The event could not have 
been prevented through careful planning and design; (ii) the excess 
emissions were not part of a recurring pattern; and (iii) if the excess 
emissions resulted from bypassing a control measure, they were 
unavoidable to prevent loss of life, personal injury, or severe 
property damage.\30\ As a practical matter, many startup and shutdown 
events that could have met these conditions recommended in the 1999 SSM 
Guidance are likely to have been associated with malfunctions, and the 
EPA explicitly stated that if the excess emissions ``occur during 
routine startup or shutdown periods due to a malfunction, then those 
instances should be treated as malfunctions.'' The key distinction 
remains, however, that normal source operations such as startup and 
shutdown are planned and predictable events. For this reason, the EPA 
is proposing to revise its SSM Policy to reflect its interpretation of 
the CAA that affirmative defense provisions applicable during startup 
and shutdown are not appropriate.
---------------------------------------------------------------------------

    \30\ See, 1999 SSM Guidance at Attachment 5-6.
---------------------------------------------------------------------------

    Further support for distinguishing between malfunctions and planned 
events such as startup and shutdown is to be found in the Petitioner's 
argument that affirmative defense provisions in SIPs usurp the role of 
courts to decide liability and to assess penalties for violations under 
CAA section 113. The Petitioner views CAA sections 113(b) and 113(e) as 
statutory bars to any form of affirmative defense provision, regardless 
of the nature of the event. Rather than supporting the Petitioner's 
conclusion, however, the EPA believes that this argument illustrates 
why it is appropriate to allow affirmative defenses for malfunctions 
but not for planned events such as startup and shutdown.
    At the outset, the EPA disagrees with the Petitioner's view that 
CAA section 113(b) explicitly precludes air agencies from adopting, and 
the EPA from approving, SIP emission limitations for sources that 
distinguish between conduct such that some violations should only be 
subject to injunctive relief rather than injunctive relief and monetary 
penalties. Section 110(a)(2)(A) of the CAA requires states to develop 
SIPs that ``include enforceable emission limitations * * * as may be 
necessary or appropriate to meet the requirements of'' the CAA. 
However, CAA section 302(k) defines ``emission limitation'' very 
broadly to require limits on ``the quantity, rate, or concentration of 
emissions of air pollutants on a continuous basis.'' Significantly, the 
latter definition does not on its face preclude provisions devised by 
the state that may distinguish between violations based on the conduct 
of the source. The CAA is silent on whether or not a state may include 
an affirmative defense provision in its SIP. The EPA believes that the 
CAA thus provides states with discretion in developing plans that meet 
statutory and regulatory requirements, such as providing for attainment 
and maintenance of the NAAQS, as long as they are consistent with CAA 
requirements.\31\
---------------------------------------------------------------------------

    \31\ States have primary responsibility for developing SIPs in 
accordance with CAA section 107(a). An air agency's discretion to 
develop SIP provisions is not unbounded, however, and the EPA's 
responsibility under CAA section 110(k), section 110(l), and section 
193, to review SIP submissions prospectively, and under CAA section 
110(k)(5) retrospectively, is to determine whether the SIP 
provisions in fact meet all applicable statutory and regulatory 
requirements. Thus, for example, the EPA does not believe that an 
air agency has discretion to create an exemption for excess 
emissions during SSM events, because such exemption would conflict 
with fundamental CAA requirements for SIPs.
---------------------------------------------------------------------------

    The EPA believes that creating a narrowly tailored affirmative 
defense for malfunctions is within an air agency's

[[Page 12472]]

authority, and that approving such a provision to make it part of the 
SIP is within the EPA's authority. An affirmative defense provision can 
be a means of striking a reasonable balance between the requirements of 
the CAA and the realities and limits of technology. Air agencies and 
the EPA must ensure continuous compliance but also recognize that, 
despite diligent efforts by sources, there may be limited unforeseen 
and unavoidable circumstances that create difficulties in meeting 
applicable emission limitations continuously.
    The EPA's SSM Policy recognizes an approach under which air 
agencies may, if they elect, create two tiers of liability for 
violations due to excess emissions during periods of malfunction: (i) A 
lesser level of liability for violations for which the source could 
only be subject to injunctive relief (where it could meet the 
requirements for an affirmative defense with respect to penalties); and 
(ii) a higher level of liability for violations for which the source 
could be subject to both injunctive relief and monetary penalties 
(where it could not meet the requirements for an affirmative defense 
with respect to penalties).
    The EPA also disagrees with the Petitioner's argument that the 
inclusion of penalty factors in CAA section 113(e) is a statutory bar 
to all affirmative defense provisions in SIPs. The EPA believes that 
these statutory factors apply only for violations for which the 
regulations approved into the SIP contemplate monetary penalties. A 
court, in determining whether there is a violation of the SIP 
provision, and whether the source has met the conditions for an 
affirmative defense, cannot change the forms of relief for violations 
provided in the approved SIP. Approval of the regulation into the SIP 
by the EPA thus affects the availability of monetary penalties for the 
violation in the first instance. The EPA reiterates, however, that such 
a provision would not be consistent with the requirements of the CAA if 
it did not preserve the availability for injunctive relief in the event 
of violations. Failure to provide in a SIP provision for any form of 
enforcement for excess emissions during SSM events would be equivalent 
to the type of provision that excused excess emissions during 
malfunction from compliance with standards under CAA section 112 that 
the court rejected in Sierra Club v. EPA.\32\ The EPA's longstanding 
position with regard to SIPs is that blanket exemptions from compliance 
are not consistent with the requirements such as attainment and 
maintenance of the NAAQS because they eliminate much of the incentive 
that sources would otherwise have to minimize the likelihood of 
violations and to minimize the extent of a violation once it occurs. 
Elimination of potential availability of injunctive relief for 
violations would be fundamentally inconsistent with the requirement 
that there may be enforcement to cause the installation of control 
measures, changes of operation, or other changes necessary at the 
source in order to bring the source into compliance with the applicable 
emission limitations to meet CAA requirements.
---------------------------------------------------------------------------

    \32\ 551 F.3d 1019, 1021 (D.C. Cir. 2008).
---------------------------------------------------------------------------

    The EPA likewise disagrees with the Petitioner's claim that the 
elements for establishing an affirmative defense in a SIP provision 
supplant the mandatory factors that Congress provided for determining 
the amount of penalties to be assessed in CAA section 113(e). Under CAA 
section 110(a)(2), states have the responsibility to devise enforceable 
emission limitations for sources and to develop a program for their 
implementation and enforcement. The CAA does not require that air 
agencies treat all violations equally. In devising its SIP, an air 
agency has authority to determine what constitutes a violation and to 
distinguish between different types of violations, within the bounds 
allowed by the CAA and applicable regulations. As the EPA has long 
recognized in its SSM Policy, circumstances surrounding a given 
violation may justify distinguishing between those where injunctive 
relief is appropriate versus those where both injunctive relief and 
monetary penalties are appropriate. Providing an affirmative defense to 
monetary penalties in certain circumstances does not negate the factors 
that Congress provided in CAA section 113(e). In the event that a 
source violates its emission limitations and fails to meet the 
requirements of an available defense in the SIP, then it is the court 
that determines the level of monetary penalties appropriate using the 
statutory factors in CAA section 113(e).
    The EPA notes that the provisions of CAA section 304 relevant to 
citizen enforcement provide additional support for the view that air 
agencies can determine that certain violations should not be subject to 
monetary penalties. Section 304(a) explicitly provides that the court 
in an enforcement proceeding has jurisdiction to enforce emission 
limits, to issue orders, ``and to apply any appropriate civil 
penalties.'' The EPA believes that monetary penalties that might 
otherwise be an available response to a violation cannot be 
``appropriate'' if an air agency has properly created an affirmative 
defense provision that eliminates such penalties for violations under 
specified circumstances in the SIP provision that is before the court. 
The mere fact that CAA section 113(b) includes penalties as a potential 
form of relief for violations in general does not mean that air 
agencies must construct SIP requirements that in all instances require 
monetary penalties.
    As with CAA section 110(a) governing SIP provisions in general, 
neither CAA section 113(b) nor CAA 113(e) expressly addresses the 
availability of an affirmative defense. Thus, the EPA believes it is 
reasonable to interpret these specific provisions in light of the need 
to balance the requirement for continuous compliance with emission 
limitations in order to meet overarching goals of the statute such as 
attainment and maintenance of the NAAQS with the fact that even the 
most diligent source may not be able to meet emission limitations 100 
percent of the time. The EPA has recognized that it is permissible for 
an air agency to provide narrowly drawn affirmative defense provisions 
in SIPs that provide relief from monetary penalties for violations that 
occur due to circumstances beyond the control of the source. When a 
source has been properly designed, operated, and maintained, and has 
taken action to prevent and to minimize the excess emissions, such 
relief may be warranted. Also, as with CAA section 110(a), the EPA does 
not believe that CAA section 113's silence with regard to affirmative 
defense provisions should be interpreted to allow broad use of such 
provisions during planned events that are within the control of the 
source. The enforcement provisions of the CAA must be read in light of 
the goals and purposes of the provisions with which they are meant to 
ensure compliance. As provided above, the EPA believes that the use of 
an affirmative defense is appropriate only in those narrow 
circumstances where it is necessary to harmonize the competing 
interests of the CAA regarding continuous compliance and the limits or 
fallibility of technology.
    In summary, the EPA believes that the CAA provides air agencies in 
the first instance in their role as the developer of SIPs, and then the 
EPA in its role as approver of SIPs, some discretion in defining the 
substantive requirements that are necessary to attain and maintain the 
NAAQS, protect PSD increments, and protect visibility, or to meet other 
CAA requirements. Until the air agency takes action to create a SIP, or 
the EPA takes action to create a FIP, that imposes and defines the 
applicable emission

[[Page 12473]]

limitations, there is no standard for a source to violate and thus no 
conduct for which a court could assess any penalties. The EPA believes 
that the CAA allows air agencies (or the EPA when it is promulgating a 
FIP) in defining emission standards to define narrowly drawn 
affirmative defenses that provide limited relief from monetary 
penalties but not for injunctive relief in specified circumstances. The 
EPA emphasizes that affirmative defense provisions for malfunctions 
need to be appropriately and narrowly drawn, and thus the SSM Policy 
makes recommendations for the types of criteria that would make such a 
provision consistent with the requirements of the CAA.
    For the foregoing reasons, the EPA is proposing to grant the 
Petition in part, and to deny the Petition in part, with respect to the 
Petitioner's request that the EPA rescind its SSM Policy interpreting 
the CAA to allow affirmative defense provisions in SIPs for excess 
emissions during SSM events. In addition, the EPA is proposing to grant 
the Petition in part, and to deny the Petition in part, with respect to 
the Petitioner's request that the EPA issue SIP calls for those 
affirmative defense provisions in specific SIP provisions identified in 
the Petition. The EPA requests comment on this proposed action. As 
discussed in section VII.B of this notice, the EPA is also restating 
its recommended criteria for approvable affirmative defenses for 
malfunctions in SIP provisions consistent with CAA requirements. 
Further, as discussed in section IX of this notice, the EPA is 
proposing to grant or to deny the Petition with respect to the specific 
SIP provisions identified by the Petitioner as inconsistent with the 
CAA.

V. Proposed Action in Response to Request for the EPA's Review of 
Specific Existing SIP Provisions for Consistency With CAA Requirements

A. Petitioner's Request

    The Petitioner's second request was for the EPA to find that SIPs 
``containing an SSM exemption or a provision that could be interpreted 
to affect EPA or citizen enforcement are substantially inadequate to 
comply with the requirements of the Clean Air Act.'' \33\ In addition, 
the Petitioner requested that if the EPA finds such defects in existing 
SIPs, the EPA ``issue a call for each of the states with such a SIP to 
revise it in conformity with the requirements or otherwise remedy these 
defective SIPs.'' \34\
---------------------------------------------------------------------------

    \33\ Petition at 14.
    \34\ Id.
---------------------------------------------------------------------------

    In support of this request, the Petitioner expressed concern that 
many SIPs contain provisions that are inconsistent with the 
requirements of the CAA. According to the Petitioner, these provisions 
fall into two general categories: (1) Exemptions for excess emissions 
by which such emissions are not treated as violations; and (2) 
enforcement discretion provisions that may be worded in such a way that 
a decision by the state not to enforce against a violation could be 
construed by a court to bar enforcement by the EPA under CAA section 
113, or by citizens under CAA section 304.
    First, the Petitioner expressed concern that many SIPs have either 
automatic or discretionary exemptions for excess emissions that occur 
during periods of startup, shutdown, or malfunction. Automatic 
exemptions are those that, on the face of the SIP provision, provide 
that any excess emissions during such events are not violations even 
though the source exceeds the otherwise applicable emission 
limitations. These provisions preclude enforcement by the state, the 
EPA, or citizens, because by definition these excess emissions are 
defined as not violations. Discretionary exemptions or, more correctly, 
exemptions that may arise as a result of the exercise of ``director's 
discretion'' by state officials, are exemptions from an otherwise 
applicable emission limitation that a state may grant on a case-by-case 
basis with or without any public process or approval by the EPA, but 
that do purport to bar enforcement by the EPA or citizens. The 
Petitioner argued that ``[e]xemptions that may be granted by the state 
do not comply with the enforcement scheme of title I of the Act because 
they undermine enforcement by the EPA under section 113 of the Act or 
by citizens under section 304.''
    The Petitioner explained that all such exemptions are fundamentally 
at odds with the requirements of the CAA and with the EPA's 
longstanding interpretation of the CAA with respect to excess emissions 
in SIPs. SIPs are required to include emission limitations designed to 
provide for the attainment and maintenance of the NAAQS and for 
protection of PSD increments. The Petitioner emphasized that the CAA 
requires that such emission limitations be ``continuous'' and that they 
be established at levels that achieve sufficient emissions control to 
meet the required CAA objectives when adhered to by sources. Instead, 
the Petitioner contended, exemptions for excess emissions often result 
in real-world emissions that are far higher than the level of emissions 
envisioned and planned for in the SIP. Citing the EPA's own guidance 
and past administrative actions, the Petitioner explained that 
exemptions from otherwise applicable emission limitations can allow 
large amounts of additional emissions that are not accounted for in 
SIPs and that exemptions thus ``create large loopholes to the Act's 
fundamental requirement that a SIP must provide for attainment and 
maintenance of the NAAQS and PSD increments.''
    Second, the Petitioner expressed concern that many SIPs have 
provisions that may have been intended to govern only the exercise of 
enforcement discretion by the state's own personnel but are worded in a 
way that could be construed to preclude enforcement by the EPA or 
citizens if the state elects not to enforce against the violation. The 
Petitioner contended that ``any SIP provision that purports to vest the 
determination of whether or not a violation of the SIP has occurred 
with the state enforcement authority is inconsistent with the 
enforcement provisions of the Act.'' In support of this contention, the 
Petitioner quoted from the EPA's recent action to rectify such a 
provision in the Utah SIP:

* * * SIP provisions that give exclusive authority to a state to 
determine whether an enforcement action can be pursued for an 
exceedance of an emission limit are inconsistent with the CAA's 
regulatory scheme. EPA and citizens, and any court in which they 
seek to file an enforcement claim, must retain the authority to 
independently evaluate whether a source's exceedance of an emission 
limit warrants enforcement action.\35\

    \35\ See, ``Finding of Substantial Inadequacy of Implementation 
Plan; Call for Utah State Implementation Plan Revision; Notice of 
proposed rulemaking,'' 75 FR 70888 at 70892-93 (Nov. 19, 2010) 
(proposed SIP call, inter alia, to rectify an enforcement discretion 
provision that in fact appeared to bar enforcement by the EPA or 
citizens if the state decided not to enforce).
---------------------------------------------------------------------------

    After articulating these overarching concerns with existing SIP 
provisions, the Petitioner requested that the EPA evaluate specific SIP 
provisions identified in the separate section of the Petition titled, 
``Analysis of Individual States' SSM Provisions.'' \36\ In that 
section, the Petitioner identified specific provisions in the SIPs of 
39 states that the Petitioner believed to be inconsistent with the 
requirements of the CAA and explained in detail the basis for that 
belief. In the conclusion section of the Petition, the Petitioner

[[Page 12474]]

listed the SIP provisions in each state for which it seeks a specific 
remedy.
---------------------------------------------------------------------------

    \36\ Petition at 17.
---------------------------------------------------------------------------

B. The EPA's Response

    In general, the EPA agrees with key statements of the Petitioner. 
The EPA's longstanding interpretation of the CAA is that automatic 
exemptions from emission limitations in SIPs are impermissible because 
they are inconsistent with the fundamental requirements of the CAA. The 
EPA has reiterated this point in its guidance documents and in 
rulemaking actions numerous times. The EPA has also acknowledged that 
it previously approved some SIP provisions that provide such exemptions 
in error and encouraged states to rectify them.\37\
---------------------------------------------------------------------------

    \37\ See, e.g., 1982 SSM Guidance at 1.
---------------------------------------------------------------------------

    The EPA also has a longstanding interpretation of the CAA that does 
not allow ``director's discretion'' provisions in SIPs if they provide 
unbounded discretion to allow what would amount to a case-specific 
revision of the SIP without meeting the statutory requirements of the 
CAA for SIP revisions. Moreover, the CAA would not allow approval of a 
SIP provision that provided director's discretion to create 
discretionary exemptions for violations when the CAA would not allow 
such exemptions in the first instance.
    In addition, the EPA's longstanding interpretation of the CAA is 
that SIPs may contain provisions concerning ``enforcement discretion'' 
by the air agency's own personnel, but such provisions cannot bar 
enforcement by the EPA or through a citizen suit.\38\ In the event such 
a provision could be construed by a court to preclude EPA or citizen 
enforcement, that provision would be at odds with fundamental 
requirements of the CAA pertaining to enforcement. Although the EPA 
does not agree with the Petitioner concerning all affirmative defense 
provisions in SIPs, the EPA does agree that such provisions have to 
meet CAA requirements.
---------------------------------------------------------------------------

    \38\ See, e.g., 1983 SSM Guidance at Attachment p. 2.
---------------------------------------------------------------------------

    The EPA also agrees that automatic exemptions, discretionary 
exemptions via director's discretion, ambiguous enforcement discretion 
provisions that may be read to preclude EPA or citizen enforcement, and 
inappropriate affirmative defense provisions can interfere with the 
overarching objectives of the CAA, such as attaining and maintaining 
the NAAQS, protection of PSD increments, and protection of visibility. 
Such provisions in SIPs can interfere with effective enforcement by air 
agencies, the EPA, and the public to assure that sources comply with 
CAA requirements, contrary to the fundamental enforcement structure 
provided in CAA sections 113 and 304.
    The EPA's agreement on these broad principles, however, does not 
necessarily mean that the EPA agrees with the Petitioner's views as to 
each of the specific SIP provisions identified as problematic in the 
Petition. The EPA has undertaken a comprehensive review of those 
specific SIP provisions to determine whether they are consistent with 
CAA requirements, and if they are not consistent, whether the 
provisions are substantially inadequate to meet CAA requirements and 
thus warrant action to rectify.
    The EPA has carefully evaluated the concerns expressed by the 
Petitioner with respect to each of the identified SIP provisions and 
has considered the specific remedy sought by the Petitioner. In many 
instances, the EPA tentatively concurs with the Petitioner's analysis 
of the provision in question and accordingly is proposing to grant the 
Petition with respect to that provision and simultaneously proposing to 
make a finding of substantial inadequacy and to issue a SIP call to 
rectify the SIP inadequacy. In other instances, however, the EPA 
tentatively disagrees with the Petitioner's analysis of the provision 
and thus is proposing to deny the Petition with respect to that 
provision and to take no further action.
    The EPA's evaluation of each of the provisions identified in the 
Petition is summarized in section IX of this notice. For the reasons 
discussed in section IX of this notice, the EPA is proposing to grant 
the Petition in part, and to deny the Petition in part, with respect to 
the specific existing SIP provisions for which the Petitioner requested 
a remedy. The EPA requests comment on the proposed actions on these 
specific SIP provisions.

VI. Proposed Action in Response To Request That the EPA Limit SIP 
Approval to the Text of State Regulations and Not Rely Upon Additional 
Interpretive Letters From the State

A. Petitioner's Request

    The Petitioner's third request was that when the EPA evaluates SIP 
revisions submitted by a state, the EPA should require ``all terms, 
conditions, limitations and interpretations of the various SSM 
provisions to be reflected in the unambiguous language of the SIPs 
themselves.'' \39\ The Petitioner expressed concern that the EPA has 
previously approved SIP submissions with provisions that ``by their 
plain terms'' do not appear to comply with the EPA's interpretation of 
CAA requirements embodied in the SSM Policy and has approved those SIP 
submissions in reliance on separate ``letters of interpretation'' from 
the state that construe the provisions of the SIP submission itself to 
be consistent with the SSM Policy.\40\ Because of this reliance on 
interpretive letters, the Petitioner argued that ``such constructions 
are not necessarily apparent from the text of the provisions and their 
enforceability may be difficult and unnecessarily complex and 
inefficient.'' \41\
---------------------------------------------------------------------------

    \39\ Petition at 16.
    \40\ Petition at 14.
    \41\ Petition at 15.
---------------------------------------------------------------------------

    In support of this request, the Petitioner alleged that past SIP 
approvals related to Oklahoma and Tennessee illustrate the practical 
problems that can arise from reliance on interpretive letters. With 
respect to Oklahoma, the Petitioner asserted that a 1984 approval of a 
SIP submission from that state addressing SSM provisions required two 
letters of interpretation from the state in order for the EPA to 
determine that the actual regulatory text in the SIP submission was 
sufficiently consistent with CAA requirements pertaining to SSM 
provisions.\42\ The Petitioner conceded that the Federal Register 
notices for the proposed and final actions to approve the Oklahoma SIP 
submission did quote from the state's letters but expressed concern 
that those letters were not actually ``promulgated as part of the 
Oklahoma SIP.''
---------------------------------------------------------------------------

    \42\ See, ``Revision to Oklahoma Regulation 1.5--Reports 
Required, Excess Emissions During Startup, Shutdown and Malfunction 
of Equipment,'' 49 FR 3084 (Jan. 25, 1984). At the time of the 
proposed and final action, the operative EPA guidance was the 1983 
SSM Guidance.
---------------------------------------------------------------------------

    With respect to Tennessee, the Petitioner pointed to a more recent 
action concerning the redesignation of the Knoxville area to attainment 
for the 1997 8-hour ozone NAAQS.\43\ In this action, the EPA evaluated 
whether the SIP for that state met requirements necessary for 
redesignation from nonattainment to attainment in accordance with CAA 
section 107(d)(3).\44\ Again, the Petitioner noted that in order to 
complete that redesignation action, the EPA had to request that both 
the state and the local air planning officials confirm officially that 
the existing SIP provisions do not in fact provide an exemption for 
excess

[[Page 12475]]

emissions during SSM events and that the provisions should not be 
interpreted to do so. The implication of the Petitioner's observation 
is that if the SIP provisions had been clear and unambiguous in the 
first instance, interpretive letters would not have been necessary.
---------------------------------------------------------------------------

    \43\ Petition at 15.
    \44\ See, ``Redesignation of the Knoxville 1997 8-Hour Ozone 
Nonattainment Area to Attainment,'' 76 FR 12587 (Mar. 8, 2011).
---------------------------------------------------------------------------

    By contrast, the Petitioner pointed to the more recent SIP call 
action for Utah in which the EPA itself noted that it was unclear why 
the EPA had originally approved a particular SIP provision relevant to 
SSM events.\45\ Specifically, the Petitioner quoted the EPA's own 
statement that ``thirty years later, it is not clear how EPA reached 
the conclusion that exemptions granted by Utah would not apply as a 
matter of federal law or whether a court would honor EPA's 
interpretation * * *'' \46\ The Petitioner argued that this situation 
where the EPA itself was unable to ascertain why a SIP provision was 
previously approved as meeting CAA requirements illustrates the concern 
that ``the state's interpretation of its regulations may (or may not) 
be known by parties attempting to enforce the SIP decades after the 
provisions were created.'' \47\
---------------------------------------------------------------------------

    \45\ Petition at 15-16.
    \46\ See, ``Finding of Substantial Inadequacy of Implementation 
Plan; Call for Utah State Implementation Plan Revision; Notice of 
proposed rulemaking,'' 75 FR 70888 at 70890 (Nov. 19, 2010).
    \47\ Petition at 16. The Petitioner assumed that the original 
SIP action was one in which the EPA must have relied on an 
interpretive letter from the state as a basis for the prior SIP 
approval. In fact, however, the EPA recognized that the EPA 
statement in the prior final action approving the SIP revision in 
1980 concerning federal law superseding incorrect state law embodied 
in the SIP was incorrect. Moreover, subsequent case law has 
illustrated that courts will not decide that CAA requirements 
automatically override existing SIP provisions, regardless of 
whether those SIP provisions met CAA requirements at the time of the 
approval or since. See, Sierra Club, et al. v. Georgia Power Co., 
443 F.3d 1346, 1354 (11th Cir. 2006).
---------------------------------------------------------------------------

    From these examples, the Petitioner drew the conclusion that 
reliance on letters of interpretation from the state, even if reflected 
in the Federal Register notice as part of the explicit basis for the 
SIP approval, is insufficient. The Petitioner argued that such 
interpretations, if they are not plain on the face of the state 
regulations themselves, should be set forth in the SIP as reflected in 
the Code of Federal Regulations. The Petitioner advocated that all 
parties should be able to rely on the terms of the SIP as reflected in 
the Code of Federal Regulations, or alternatively on the SIP as shown 
on an EPA Internet Web page, rather than having to rely on other 
interpretive letters that may be difficult to locate. The Petitioner's 
preferred approach, however, was that ``all terms, conditions, 
limitations and interpretations of the various SSM provisions be 
reflected in the unambiguous language of the SIPs themselves.''

B. The EPA's Response

    The EPA agrees with the core principle advocated by the Petitioner, 
i.e., that the language of regulations in SIPs that pertain to SSM 
events should be clear and unambiguous. This is necessary as a legal 
matter but also as a matter of fairness to all parties, including the 
regulated entities, the regulators, and the public. In some cases, the 
lack of clarity may be so significant that amending the regulation may 
be warranted to eliminate the potential for confusion or 
misunderstanding about applicable legal requirements that could 
interfere with compliance or enforcement. Indeed, as noted by the 
Petitioner, the EPA has requested that states clarify ambiguous SIP 
provisions when the EPA has subsequently determined that to be 
necessary.\48\
---------------------------------------------------------------------------

    \48\ See, e.g., ``Finding of Substantial Inadequacy of 
Implementation Plan; Call for Utah State Implementation Plan 
Revision,'' 76 FR 21639 at 21648 (Apr. 18, 2011).
---------------------------------------------------------------------------

    However, the EPA believes that the use of interpretive letters to 
clarify perceived ambiguity in the provisions in a SIP submission is a 
permissible, and sometimes necessary, approach under the CAA. Used 
correctly, and with adequate documentation in the Federal Register and 
the docket for the underlying rulemaking action, reliance on 
interpretive letters can serve a useful purpose and still meet the 
enforceability concerns of the Petitioner. Regulated entities, 
regulators, and the public can readily ascertain the existence of 
interpretive letters relied upon in the EPA's approval that would be 
useful to resolve any perceived ambiguity. By virtue of being part of 
the stated basis for the EPA's approval of that provision, the 
interpretive letters necessarily establish the correct interpretation 
of any arguably ambiguous SIP provision.
    In addition, reliance on interpretive letters to address concerns 
about perceived ambiguity can often be the most efficient and timely 
way to resolve concerns about the correct meaning of regulatory 
provisions. Both air agencies and the EPA are required to follow time- 
and resource-intensive administrative processes in order to develop and 
evaluate SIP submissions. It is reasonable for the EPA to exercise its 
discretion to use interpretive letters to clarify concerns about the 
meaning of regulatory provisions, rather than to require air agencies 
to reinitiate a complete administrative process merely to resolve 
perceived ambiguity in a provision in a SIP submission.\49\ In 
particular, the EPA considers this an appropriate approach where 
reliance on such an interpretive letter allows the air agency and the 
EPA to put into place SIP provisions that are necessary to meet 
important CAA objectives and for which unnecessary delay would be 
counterproductive. For example, where an air agency is adopting 
emission limitations for purposes of attaining the NAAQS in an area, a 
timely letter from the air agency clarifying that an enforcement 
discretion provision is applicable only to air agency enforcement 
personnel and has no bearing on enforcement by the EPA or the public 
could help the area reach attainment more expeditiously than requiring 
the air agency to undertake a time-consuming administrative process to 
make a minor change in the regulatory text.
---------------------------------------------------------------------------

    \49\ CAA section 110(k) directs the EPA to act on SIP 
submissions and to approve those that meet statutory and regulatory 
requirements. Implicit in this authority is the discretion, through 
appropriate notice-and-comment rulemaking, to determine whether or 
not a given SIP provision meets such requirements, in reliance on 
the information that the EPA considers relevant for this purpose.
---------------------------------------------------------------------------

    Thus, to the extent that the Petitioner intended the Petition on 
this issue to be a request for the EPA never to use interpretive 
letters as part of the basis for approval of any SIP submission, the 
EPA disagrees with the Petitioner and accordingly is proposing to deny 
the request. The EPA notes that it is already the EPA's practice to 
assure that any interpretive letters are correctly and adequately 
reflected in the Federal Register and are included in the rulemaking 
docket for a SIP approval.
    There are multiple reasons why the EPA does not agree with the 
Petitioner with respect to the alleged inadequacy of using interpretive 
letters to clarify specific ambiguities SIP regulations, provided this 
process is done correctly. First, under section 107(a), the CAA gives 
air agencies both the authority and the primary responsibility to 
develop SIPs that meet applicable statutory and regulatory 
requirements. However, the CAA generally does not specify exactly how 
air agencies are to meet the requirements substantively, nor does the 
CAA specify that air agencies must use specific regulatory terminology, 
phraseology, or format, in provisions submitted in a SIP submission. 
Air agencies each have their own requirements and practices with 
respect to rulemaking, making flexibility toward

[[Page 12476]]

terminology on the EPA's part appropriate.
    As a prime example relevant to the SSM issue, CAA section 
110(a)(2)(A) requires that a state's SIP shall include ``enforceable 
emission limitations and other control measures, means, or techniques 
(including economic incentives such as fees, marketable permits, and 
auctions of emissions rights) as well as schedules and timetables for 
compliance as may be necessary or appropriate to meet the applicable 
requirements of '' the CAA. Section 302(k) of the CAA further defines 
the term ``emission limitation'' in important respects but nevertheless 
leaves room for variations of approach:

* * * a requirement established by the State or Administrator which 
limits the quantity, rate, or concentration of emissions of air 
pollutants on a continuous basis, including any requirement related 
to the operation or maintenance of a source to assure continuous 
emissions reduction, and any design, equipment, work practice or 
operational standard promulgated under [the CAA].

Even this most basic requirement of SIPs, the inclusion of enforceable 
``emission limitations,'' allows air agencies discretion in how to 
structure or word the emission limitations, so long as the provisions 
meet fundamental legal requirements.\50\ Thus, by the explicit terms of 
the statute and by design, air agencies generally have considerable 
discretion in how they elect to structure or word their state 
regulations submitted to meet CAA requirements in a SIP.
---------------------------------------------------------------------------

    \50\ The EPA notes that notwithstanding discretion in wording in 
regulatory provisions, many words have specific recognized legal 
meaning whether by statute, regulation, case law, dictionary 
definition, or common usage. For example, the term ``continuous'' 
has a specific meaning that must be complied with substantively, 
however the state may elect to word its regulatory provisions.
---------------------------------------------------------------------------

    Second, under CAA section 110(k), the EPA has both the authority 
and the responsibility to assess whether a SIP submission meets 
applicable CAA and regulatory requirements. Given that air agencies 
have authority and discretion to structure or word SIP provisions as 
they think most appropriate so long as they meet CAA and regulatory 
requirements, the EPA's role is to evaluate whether those provisions in 
fact meet those legal requirements.\51\ Necessarily, this process 
entails the exercise of judgment concerning the specific text of 
regulations, with regard both to content and to clarity. Because 
actions on SIP submissions are subject to notice-and-comment 
rulemaking, there is also the opportunity for other parties to identify 
SIP provisions that they consider problematic and to bring to the EPA's 
attention any concerns about ambiguity in the meaning of the SIP 
provisions under evaluation.
---------------------------------------------------------------------------

    \51\ See, e.g., Luminant Generation Co. v. EPA, 699 F.3d 427 
(5th Cir. 2012) (upholding the EPA's disapproval in part of 
affirmative defense provision with unclear regulatory text); US 
Magnesium, LLC v. EPA, 690 F.3d 1157, 1170 (10th Cir. 2012) 
(upholding the EPA's issuance of a SIP call to clarify a provision 
that could be interpreted in a way inconsistent with CAA 
requirements).
---------------------------------------------------------------------------

    Third, careful review of regulatory provisions in a SIP submission 
can reveal areas of potential ambiguity. It is essential, however, that 
regulations are sufficiently clear that regulated entities, regulators, 
and the public can understand the SIP requirements. Where the EPA 
perceives ambiguity in draft SIP submissions, it endeavors to resolve 
those ambiguities through interactions with the air agency in question 
even in advance of the SIP submission. On occasion, however, there may 
still remain areas of regulatory ambiguity in a SIP submission's 
provisions that the EPA identifies, either independently or as a result 
of public comments on a proposed action, for which resolution is both 
appropriate and necessary as part of the rulemaking action.
    In such circumstances, the ambiguity may be so significant as to 
require the air agency to revise the regulatory text in its SIP 
submission in order to resolve the concern. At other times, however, 
the EPA may determine that with adequate explanation from the state, 
the provision is sufficiently clear and complies with applicable CAA 
and regulatory requirements. In some instances, the air agency may 
supply that extra explanation in an official letter from the 
appropriate authority to resolve any potential ambiguity. When the EPA 
bases its approval of a SIP submission in reliance on the air agency's 
official interpretation of the provision, that reading is explicitly 
incorporated into the EPA's action and is memorialized as the proper 
intended reading of the provision.
    For example, in the Knoxville redesignation action that the 
Petitioner noted, the EPA took careful steps to ensure that the 
perceived ambiguity was substantively resolved and fully reflected in 
the rulemaking record, i.e., through inclusion of the interpretive 
letters in the rulemaking docket, quoting relevant passages from the 
letters in the Federal Register, and carefully evaluating the areas of 
potential ambiguity in response to public comments on a provision-by-
provision basis.
    Finally, the EPA notes that while it is possible to reflect or 
incorporate interpretive letters in the regulatory text of the CFR, 
there is no requirement to do so in all actions and there are other 
ways for the public to have a clear understanding of the content of the 
SIP. First, for each SIP, the CFR contains a list or table of actions 
that reflects the various components of the approved SIP, including 
information concerning the submission of, and the EPA's action 
approving, each component. With this information, interested parties 
can readily locate the actual Federal Register notice in which the EPA 
will have explained the basis for its approval in detail, including any 
interpretive letters that may have been relied upon to resolve any 
potential ambiguity in the SIP provisions. With this information, the 
interested party can also locate the docket for the underlying 
rulemaking and obtain a copy of the interpretive letter itself. Thus, 
if there is any debate about the correct reading of the SIP provision, 
either at the time of the EPA's approval or in the future, it will be 
possible to ascertain the mutual understanding of the air agency and 
the EPA of the correct reading of the provision in question at the time 
the EPA approved it into the SIP. Most importantly, regardless of 
whether the content of the interpretive letter is reflected in the CFR 
or simply described in the Federal Register preamble accompanying the 
EPA's approval of the SIP submission, this mutual understanding of the 
correct reading of that provision upon which the EPA relied will be the 
reading that governs, should that later become an issue.
    The EPA notes that the existence of, or content of, an interpretive 
letter that is part of the basis for the EPA's approval of a SIP 
submission is in reality analogous to many other things related to that 
approval. Not everything that may be part of the basis for the SIP 
approval in the docket, including the proposal or final preambles, the 
technical support documents, responses to comments, technical analyses, 
modeling results, or docket memoranda, will be restated verbatim, 
incorporated into, or referenced in the CFR. These background materials 
remain part of the basis for the SIP approval and remain available 
should they be needed for any purpose. To the extent that there is any 
question about the correct interpretation of an ambiguous provision in 
the future, an interested party will be able to access the docket to 
verify the correct meaning of SIP provisions.
    With regard to the Petitioner's concern that either actual or 
alleged ambiguity in a SIP provision could impede an effective 
enforcement action, the EPA believes that its current process for 
evaluating SIP submissions and resolving potential ambiguities, 
including the reliance on interpretive

[[Page 12477]]

letters in appropriate circumstances with correct documentation in the 
rulemaking action, minimizes the possibility for any such ambiguity in 
the first instance. To the extent that there remains any perceived 
ambiguity, the EPA concludes that regulated entities, regulators, the 
public, and ultimately the courts, have recourse to the administrative 
record to shed light on and resolve any such ambiguity as explained 
above.
    For the foregoing reasons, the EPA is proposing to deny the 
Petition on this issue concerning reliance on interpretive letters in 
actions on SIP submissions. The EPA requests comment on this proposed 
action.

VII. Clarifications, Reiterations, and Revisions to the EPA's SSM 
Policy

A. Applicability of Emission Limitations During Periods of Startup and 
Shutdown

    The EPA's evaluation of the Petition indicates that there is a need 
to clarify the SSM Policy with respect to excess emissions that occur 
during periods of planned startup and shutdown or other planned events. 
The significant number of SIP provisions identified in the Petition 
that create automatic or discretionary exemptions from emission 
limitations during startup and shutdown suggests that there may be a 
misunderstanding concerning whether the CAA permits such exemptions. 
Although the EPA's stated position on this issue has been consistent 
since 1977, ambiguity in some statements in the EPA's guidance 
documents may have left the misimpression that such exemptions are 
consistent with the requirements of the CAA. Recent court decisions 
have indicated that such exemptions for excess emissions during periods 
of startup and shutdown are not in fact permissible under the CAA. 
Thus, in acting upon the Petition the EPA is clarifying its 
interpretation of the requirements of the CAA to forbid exemptions from 
otherwise applicable emission limitations for excess emissions during 
planned events such as startup and shutdown in SIP provisions.
    The EPA believes that any misimpression that exemptions for excess 
emissions are permissible during planned events such as startup and 
shutdown may have begun with a statement in the 1983 SSM Guidance. In 
this guidance, the EPA distinguished between excess emissions during 
unforeseeable events like malfunctions and foreseeable events like 
startup and shutdown. In drawing distinctions between these broad 
categories of events, the EPA stated:

    Startup and shutdown of process equipment are part of the normal 
operation of a source and should be accounted for in the planning, 
design and implementation of operating procedures for the process 
and control equipment. Accordingly, it is reasonable to expect that 
careful and prudent planning and design will eliminate violations of 
emission limitations during such periods. However, for a few sources 
there may exist infrequent short periods of excess emissions during 
startup and shutdown which cannot be avoided. Excess emissions 
during these infrequent short periods need not be treated as 
violations providing the source adequately shows that the excess 
could not have been prevented through careful planning and design 
and that bypassing of control equipment was unavoidable to prevent 
loss of life, personal injury, or severe property damage (emphasis 
added).\52\
---------------------------------------------------------------------------

    \52\ See, 1983 SSM Guidance at Attachment p. 3.

    The phrase ``need not be treated as violations'' may have been 
misunderstood to be a statement that the CAA would allow SIP provisions 
that provide an exemption for the resulting excess emissions, thereby 
defining the excess emissions as not a violation of the applicable 
emission limitations. The EPA did not intend to suggest that SIP 
provisions that included an actual exemption for excess emissions 
during startup and shutdown events would be consistent with the CAA; 
the EPA made this statement in the context of whether air agencies 
should exercise enforcement discretion and more specifically whether 
air agencies could elect to have SIP provisions that embodied their own 
exercise of enforcement discretion in such circumstances. As with any 
such SIP provisions addressing parameters of the air agency's own 
exercise of enforcement discretion, that exercise of discretion cannot 
purport to bar enforcement by the EPA or through a citizen suit for 
excess emissions that must be treated as violations to meet CAA 
requirements. Thus, the use of the phrase ``need not be treated as 
violations'' was at a minimum confusing because it seemed to go to the 
definition of what could constitute a ``violation'' in a SIP provision 
rather than to whether the air agency might or might not elect to 
exercise enforcement discretion in such circumstances.
    The EPA believes that additional confusion may have resulted from 
ambiguity in the 1999 SSM Guidance. That document contained an entire 
section devoted to ``source category specific rules for startup and 
shutdown.'' In explaining its intentions in providing that section of 
the guidance, the EPA stated:

    Finally, EPA is clarifying how excess emissions that occur 
during periods of startup and shutdown should be addressed. In 
general, because excess emissions that occur during these periods 
are reasonably foreseeable, they should not be excused. However, EPA 
recognizes that, for some source categories, even the best available 
emissions control systems might not be consistently effective during 
startup or shutdown periods. [For certain sources in certain areas] 
these technological limitations may be addressed in the underlying 
standards themselves through narrowly-tailored SIP revisions that 
take into account the potential impacts on ambient air quality 
caused by the inclusion of these allowances (emphasis added).\53\
---------------------------------------------------------------------------

    \53\ See, 1999 SSM Guidance at 3.

    The phrase ``may be addressed * * * in narrowly-tailored SIP 
revisions'' may have been misunderstood to suggest that the CAA would 
allow SIP provisions that provide an actual exemption for the resulting 
excess emissions and thus not treat the emissions as a violation of the 
applicable emission limitations. The EPA did not intend to suggest that 
an exemption would be permissible; the EPA intended to suggest that the 
air agency might elect to design special emission limitations or other 
control measures that applied to the sources in question during startup 
and shutdown, as indicated by the earlier phrase that the excess 
emissions ``should not be excused.''
    In addition, Section III.A of the 1999 SSM Guidance recommended 
very specific criteria that air agencies should consider including as 
part of any SIP provision that was intended to apply to sources during 
startup and shutdown in lieu of the otherwise applicable emission 
limitations.\54\ In order to revise the otherwise applicable emission 
limitation in the SIP, the EPA recommended that in order to be 
approvable (i.e., meet CAA requirements), the new special requirements 
applicable to the source during startup and shutdown should be narrowly 
tailored and take into account considerations such as the technological 
limitations of the specific source category and the control technology 
that is feasible during startup and shutdown. However, the 1999 SSM 
Guidance should have been clearer that the SIP revisions under 
discussion could not create an exemption for emissions during startup 
and shutdown, but rather specific emission limitations or control 
measures that would apply during those periods. Also unstated but 
implicit was the requirement that any such SIP

[[Page 12478]]

revision that would alter the existing applicable emission limitations 
for a source during startup and shutdown would be subject to the same 
requirements as any other SIP submission, i.e., compliance with CAA 
sections 110(a), 110(k), 110(l), 193, and any other CAA provision 
substantively germane to the SIP revision.
---------------------------------------------------------------------------

    \54\ See, 1999 SSM Guidance at Attachment 3-4.
---------------------------------------------------------------------------

    The EPA concludes that the CAA does not allow SIP provisions that 
include exemptions from emission limitations during planned events such 
as startup and shutdown. Instead, the CAA would allow special emission 
limitations or other control measures or control techniques that are 
designed to minimize excess emissions during startup and shutdown. The 
EPA continues to recommend the seven specific criteria enumerated in 
Section III.A of the Attachment to the 1999 SSM Guidance as appropriate 
considerations for SIP provisions that apply to startup and shutdown. 
These criteria are:
    (1) The revision must be limited to specific, narrowly defined 
source categories using specific control strategies (e.g., cogeneration 
facilities burning natural gas and using selective catalytic 
reduction);
    (2) Use of the control strategy for this source category must be 
technically infeasible during startup or shutdown periods;
    (3) The frequency and duration of operation in startup or shutdown 
mode must be minimized to the maximum extent practicable;
    (4) As part of its justification of the SIP revision, the state 
should analyze the potential worst-case emissions that could occur 
during startup and shutdown;
    (5) All possible steps must be taken to minimize the impact of 
emissions during startup and shutdown on ambient air quality;
    (6) At all times, the facility must be operated in a manner 
consistent with good practice for minimizing emissions, and the source 
must have used best efforts regarding planning, design, and operating 
procedures to meet the otherwise applicable emission limitation; and
    (7) The owner or operator's actions during startup and shutdown 
periods must be documented by properly signed, contemporaneous 
operating logs, or other relevant evidence.
    The EPA's evaluation of the Petition also indicates that there is a 
need to reiterate the SSM Policy with respect to excess emissions that 
occur during other periods of normal source operation in addition to 
during periods of startup and shutdown. A number of SIP provisions 
identified in the Petition create automatic or discretionary exemptions 
from otherwise applicable emission limitations during periods such as 
``maintenance,'' ``load change,'' ``soot blowing,'' ``on-line operating 
changes,'' or other similar normal modes of operation. Like startup and 
shutdown, the EPA considers all of these to be phases of normal 
operation at a source, for which the source can be designed, operated, 
and maintained in order to meet the applicable emission limitations and 
during which a source should be expected to control and minimize 
emissions. Accordingly, exemptions for emissions during these periods 
of normal source operation are not consistent with CAA requirements. 
Excess emissions during planned and predicted periods should be treated 
as violations of the applicable emission limitations.

B. Affirmative Defense Provisions During Periods of Malfunction

    The EPA's evaluation of the Petition indicates that it would be 
helpful to reiterate the SSM Policy with respect to affirmative defense 
provisions that would be consistent with CAA requirements for 
malfunctions. Many of the specific SIP provisions identified in the 
Petition may have been intended to operate as affirmative defenses, but 
nevertheless they have significant deficiencies. In particular, many of 
the SIP provisions at issue stipulate that if the source meets the 
conditions specified, then the excess emissions would not be considered 
violations for any purpose, not merely with respect to monetary 
penalties. This is contrary to the EPA's interpretation of the CAA. In 
addition, many of the SIP provisions identified in the Petition that 
resemble affirmative defense provisions do not have sufficiently robust 
criteria to assure that the affirmative defense is available only for 
events that are entirely beyond the control of the owner or operator of 
the source and events where the owner or operator of the sources has 
made all practicable efforts to comply.
    After consideration of the issues raised by the Petition and the 
wide variety of existing SIP provisions the Petitioner alleged are 
deficient, the EPA wants to reiterate the criteria that it considers 
appropriate for approvable affirmative defense provisions in SIPs. In 
addition, to provide a clear illustration of regulatory text that 
embodies these criteria effectively, the EPA also wishes to provide an 
example of the regulatory provisions that the EPA employs in its own 
regulations to serve this purpose effectively and consistently with CAA 
requirements.
    The criteria that the EPA recommends for approvable affirmative 
defense provisions for excess emissions for malfunctions consistent 
with CAA requirements remain essentially the same as stated in the 1999 
SSM Guidance.\55\ We repeat them here. Most importantly, a valid 
affirmative defense for excess emissions due to a malfunction can only 
be effective with respect to monetary penalties, not with respect to 
potential injunctive relief. Second, the affirmative defense should be 
limited only to malfunctions that are sudden, unavoidable, and 
unpredictable. Third, a valid affirmative defense provision must 
provide that the defendant has the burden of proof to demonstrate all 
of the elements of the defense to qualify. This demonstration has to 
occur in a judicial or administrative proceeding where the merits of 
the affirmative defense are independently and objectively evaluated. 
The specific criteria that the EPA recommends for an affirmative 
defense provision for malfunctions to be consistent with CAA 
requirements are:
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    \55\ See, 1999 SSM Guidance at Attachment 3-4.
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    (1) The excess emissions were caused by a sudden, unavoidable 
breakdown of technology, beyond the control of the owner or operator;
    (2) The excess emissions (a) did not stem from any activity or 
event that could have been foreseen and avoided, or planned for, and 
(b) could not have been avoided by better operation and maintenance 
practices;
    (3) To the maximum extent practicable the air pollution control 
equipment or processes were maintained and operated in a matter 
consistent with good practice for minimizing emissions;
    (4) Repairs were made in an expeditious fashion when the operator 
knew or should have known that applicable emission limitations were 
being exceeded. Off-shift labor and overtime must have been utilized, 
to the extent practicable, to ensure that such repairs were made as 
expeditiously as practicable;
    (5) The amount and duration of the excess emissions (including any 
bypass) were minimized to the maximum extent practicable during periods 
of such emissions;
    (6) All possible steps were taken to minimize the impact of the 
excess emissions on ambient air quality;
    (7) All emission monitoring systems were kept in operation if at 
all possible;
    (8) The owner or operator's actions in response to the excess 
emissions were documented by properly signed,

[[Page 12479]]

contemporaneous operating logs, or other relevant evidence;
    (9) The excess emissions were not part of a recurring pattern 
indicative of inadequate design, operation, or maintenance; and
    (10) The owner or operator properly and promptly notified the 
appropriate regulatory authority.
    One refinement to these recommendations from the 1999 SSM Guidance 
that should be highlighted is the EPA's view concerning whether 
affirmative defenses should be provided in the SIP in the case of 
geographic areas and pollutants ``where a single source or small group 
of sources has the potential to cause an exceedance of the NAAQS or PSD 
increments.'' The EPA believes that such affirmative defenses may be 
permissible if there is no ``potential'' for exceedances. Such 
provisions may also be permissible if the affirmative defense 
alternatively requires the source to make an affirmative after-the-fact 
showing that the excess emissions that resulted from the violations did 
not in fact cause an exceedance of the NAAQS or PSD increments. The EPA 
has previously approved such provisions as meeting CAA requirements on 
a case-by-case basis in specific actions on SIP submissions, and in 
this action proposes to continue that approach under proper facts and 
circumstances.
    In addition to the foregoing criteria for appropriate affirmative 
defense provisions, the EPA also recommends that air agencies consider 
the following regulatory language that the EPA is currently using for 
affirmative defense provisions when it issues new National Emissions 
Standards for Hazardous Air Pollutants (NESHAP) for purposes of CAA 
section 112.\56\ Air agencies may wish to adapt this sample regulatory 
text for their own affirmative defense provisions in SIPs.
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    \56\ See, ``National Emission Standards for Hazardous Air 
Pollutants From the Pulp and Paper Industry,'' final rule, 77 FR 
55698 (Sept. 11, 2012). Parameters for the affirmative defense are 
provided at p. 55712.

Sec.  63.456 Affirmative defense for violation of emission standards 
during malfunction.

    In response to an action to enforce the standards set forth in 
Sec. Sec.  63.443(c) and (d), 63.444(b) and (c), 63.445(b) and (c), 
63.446(c), (d), and (e), 63.447(b) or Sec.  63.450(d), the owner or 
operator may assert an affirmative defense to a claim for civil 
penalties for violations of such standards that are caused by 
malfunction, as defined at 40 CFR 63.2. Appropriate penalties may be 
assessed, however, if the owner or operator fails to meet the burden 
of proving all of the requirements in the affirmative defense. The 
affirmative defense shall not be available for claims for injunctive 
relief.
    (a) To establish the affirmative defense in any action to 
enforce such a standard, the owner or operator must timely meet the 
reporting requirements in paragraph (b) of this section, and must 
prove by a preponderance of evidence that:
    (1) The violation:
    (i) Was caused by a sudden, infrequent, and unavoidable failure 
of air pollution control equipment, process equipment, or a process 
to operate in a normal or usual manner; and
    (ii) Could not have been prevented through careful planning, 
proper design, or better operation and maintenance practices; and
    (iii) Did not stem from any activity or event that could have 
been foreseen and avoided, or planned for; and
    (iv) Was not part of a recurring pattern indicative of 
inadequate design, operation, or maintenance; and
    (2) Repairs were made as expeditiously as possible when a 
violation occurred. Off-shift and overtime labor were used, to the 
extent practicable to make these repairs; and
    (3) The frequency, amount and duration of the violation 
(including any bypass) were minimized to the maximum extent 
practicable; and
    (4) If the violation resulted from a bypass of control equipment 
or a process, then the bypass was unavoidable to prevent loss of 
life, personal injury, or severe property damage; and
    (5) All possible steps were taken to minimize the impact of the 
violation on ambient air quality, the environment, and human health; 
and
    (6) All emissions monitoring and control systems were kept in 
operation if at all possible, consistent with safety and good air 
pollution control practices; and
    (7) All of the actions in response to the violation were 
documented by properly signed, contemporaneous operating logs; and
    (8) At all times, the affected source was operated in a manner 
consistent with good practices for minimizing emissions; and
    (9) A written root cause analysis has been prepared, the purpose 
of which is to determine, correct, and eliminate the primary causes 
of the malfunction and the violation resulting from the malfunction 
event at issue. The analysis shall also specify, using best 
monitoring methods and engineering judgment, the amount of any 
emissions that were the result of the malfunction.
    (b) Report. The owner or operator seeking to assert an 
affirmative defense shall submit a written report to the 
Administrator with all necessary supporting documentation, [showing] 
that it has met the requirements set forth in paragraph (a) of this 
section. This affirmative defense report shall be included in the 
first periodic compliance [report], deviation report, or excess 
emission report otherwise required after the initial occurrence of 
the violation of the relevant standard (which may be the end of any 
applicable averaging period). If such compliance [report], deviation 
report, or excess emission report is due less than 45 days after the 
initial occurrence of the violation, the affirmative defense report 
may be included in the second compliance [report], deviation report, 
or excess emission report due after the initial occurrence of the 
violation of the relevant standard. (Punctuation adjusted)

    The EPA notes that this example regulatory text has some features 
that are not explicitly among the criteria recommended for SIP 
provisions in the SSM Policy, such as the requirement for a ``root 
cause analysis'' in subsection (a)(9) and an affirmative requirement to 
report the malfunction to the regulator by a set date and in a 
particular report, rather than merely a general duty to report the 
malfunction event to the regulator. The EPA considers such features 
useful because they serve important purposes related to the analysis, 
documentation, and memorialization of the facts concerning the 
malfunction, thereby facilitating better evaluation of the events and 
better evaluation of the source's qualification for the affirmative 
defense. The EPA believes that these specific features would be very 
useful and thus recommends that they be included in SIP provisions for 
affirmative defenses. However, these features need not be required, so 
long as the SIP provision otherwise provides that the owner or operator 
of the source will: (i) Bear the burden of proof to establish that the 
elements of the affirmative defense have been met; and (ii) properly 
and promptly notify the appropriate regulatory authority about the 
malfunction.
    The EPA also wants to reiterate its views concerning appropriate 
affirmative defense provisions as they relate to malfunctions that 
occur during planned startup and shutdown and as they relate to startup 
and shutdown that occur as the result of or part of a malfunction. With 
respect to malfunctions that happen to occur during planned startup or 
shutdown, as the EPA articulated in the 1999 SSM Guidance, the excess 
emissions that occur as a result of the malfunction may be addressed by 
an appropriately drawn affirmative defense provision consistent with 
the recommended criteria for such provisions.\57\ By definition, the 
malfunction would have been sudden, unavoidable, and unpredictable, and 
the source could not have precluded the event by better source design, 
operation and maintenance. The EPA interprets the CAA to allow narrowly 
drawn affirmative defense provision in SIPs in such circumstances.
---------------------------------------------------------------------------

    \57\ See, 1999 SSM Guidance at attachment p. 6.
---------------------------------------------------------------------------

    Another question is how to treat the excess emissions that occur 
during a startup or shutdown that is necessitated

[[Page 12480]]

by the malfunction and are thus potentially components of the 
malfunction event. The EPA believes that drawing the distinction 
between what is directly caused by the malfunction itself and what is 
indirectly caused by the malfunction as a part of non-routine startup 
and shutdown must always be a case-specific enquiry, dependent upon the 
facts and circumstances of the specific event. It is foreseeable that a 
shutdown necessitated by a malfunction could be considered part of the 
malfunction event with the appropriate demonstration of the need to 
shut down differently than during a routine shutdown, during which a 
source should be expected to comply with applicable emission 
limitations. It is possible, however, that a routine shutdown may be 
achievable following a malfunction event, and a source should be 
expected to strive for this result. With respect to startups after a 
malfunction event, the EPA believes that such startups should not be 
considered part of the malfunction, because startups are within the 
control of the source. Malfunctions should have been resolved prior to 
startup, and the source should be designed, operated, and maintained so 
that it would meet emission limitations during startups. As a general 
matter, the EPA does not anticipate that there would be startups that 
would follow a malfunction that should be considered part of the 
malfunction event, but in this action the EPA is requesting that 
commenters address this issue if there could be circumstances that 
would justify such treatment.
    Finally, the EPA reiterates that an affirmative defense provision 
in a SIP cannot extend to direct federal regulations such as New Source 
Performance Standards (NSPS) or NESHAP that the air agency may elect to 
adopt into its SIP, or to incorporate by reference into its SIP in 
order to receive delegation of federal authority. To the extent that 
any affirmative defense is warranted during malfunctions for these 
technology-based standards, the federal standards contained in the 
EPA's regulations already specify the appropriate affirmative defense. 
No additional or different affirmative defense provision applicable 
through a SIP provision would be warranted or appropriate.

C. Affirmative Defense Provisions During Periods of Startup and 
Shutdown

    The EPA's evaluation of the Petition indicates that revisions to 
the SSM Policy are necessary with respect to affirmative defense 
provisions during startup and shutdown periods. In the 1999 SSM 
Guidance, the EPA explicitly discussed the possibility of affirmative 
defenses in the context of startup and shutdown, and provided 
recommended criteria to ensure that any such affirmative defense 
provisions in a SIP submission would be appropriately narrowly drawn to 
comply with CAA requirements. As with affirmative defense provisions 
for malfunctions, the EPA then believed that achieving a balance 
between the requirement of the statute for emission limitations that 
apply continuously and the possibility that not all sources can comply 
100 percent of the time justified such affirmative defenses during 
startup and shutdown as a means of providing some flexibility while 
still supporting the overall objectives of the CAA.
    Review of the Petition and reconsideration of this question in 
light of recent case law concerning emission limitations and 
affirmative defenses has caused the EPA to alter its view on the 
appropriateness of affirmative defenses applicable to planned events 
such as startup and shutdown. The EPA believes that sources should be 
designed, maintained, and operated in order to comply with applicable 
emission limitations during normal operations. By definition, planned 
events such as startup and shutdown are phases of normal source 
operation. Because these events are modes of normal operation, the EPA 
believes that sources should be expected to comply with applicable 
emission limitations during such events.
    Unlike malfunctions, startup and shutdown are not unexpected events 
and are not events that are beyond the control of the owner or operator 
of the source. Also unlike malfunctions, it is possible for the source 
to anticipate the amount of emissions during startup and shutdown, to 
take appropriate steps to limit those emissions as needed, and to 
remain in continuous compliance. In the event that a source in fact 
cannot comply with the otherwise applicable emission limitations during 
normal modes of source operation due to technological limitations, then 
it may be appropriate for the state to provide special emission 
limitations or control measures that apply to the source during startup 
and shutdown.
    The EPA acknowledges that the availability of an affirmative 
defense for planned startup and shutdown as contemplated in the 1999 
SSM Guidance may have provided extra incentive for sources to take 
extra precautions to minimize emissions during startup and shutdown in 
order to be eligible for the affirmative defense in the event of a 
violation. However, sources should not need extra incentive to comply 
during normal modes of operation such as startup and shutdown, as they 
should be designed, operated, and maintained in order to comply with 
applicable emission limitations at all times, and certainly during 
planned and predictable events. By logical extension, the theory that 
an affirmative defense should be available during planned startup and 
shutdown could apply to all phases of normal source operation, which 
would not be appropriate.
    The EPA believes that providing affirmative defenses for violations 
that occur as a result of planned events within the control of the 
owner or operator of the source is inconsistent with the requirements 
of CAA sections 113 and 304, which provide for potential civil 
penalties for violations of SIP requirements. The distinction that 
makes affirmative defenses appropriate for malfunctions is that by 
definition those events are unforeseen and could not have been avoided 
by the owner or operator of the source, and the owner or operator of 
the source will have taken steps to prevent the violation and to 
minimize the effects of the violation after it occurs. In such 
circumstances, the EPA interprets the CAA to allow narrowly drawn 
affirmative defense provisions that may shield owners or operators of 
sources from civil penalties, when their conduct justifies this relief.
    Such is not the case with planned and predictable events, such as 
startup and shutdown, during which the owners or operators of sources 
should be expected to comply with applicable emission limitations and 
should not be accorded relief from civil penalties if they fail to do 
so. Providing an affirmative defense for monetary penalties for 
violations that result from planned events is inconsistent with the 
basic premise that the excess emissions were beyond the control of the 
owner or operator of the source and thus is diametrically opposed to 
the intended purpose of such an affirmative defense to encourage better 
compliance even by sources for which 100-percent compliance is not 
possible. The EPA notes that enforcement discretion may still be 
warranted in such circumstances, but the elimination of potential civil 
penalties is not appropriate. For these reasons, the EPA is proposing 
to rescind its prior interpretation of the CAA that would

[[Page 12481]]

allow affirmative defense provisions during planned startup and 
shutdown.\58\
---------------------------------------------------------------------------

    \58\ In accordance with CAA section 113(e), sources retain the 
ability to seek lower monetary penalties through the factors 
provided for consideration in administrative or judicial enforcement 
proceedings. In this context, for example, a violating source could 
argue that factors such as good faith efforts to comply should 
reduce otherwise applicable statutory penalties.
---------------------------------------------------------------------------

D. Relationship Between SIP Provisions and Title V Regulations

    The EPA's review of the Petition has highlighted an area of 
potential ambiguity or conflict between the SSM Policy applicable to 
SIP provisions and the EPA's regulations applicable to title V permit 
provisions. The EPA has promulgated regulations in 40 CFR part 70 
applicable to state operating permit programs and in 40 CFR part 71 
applicable to federal operating permit programs.\59\ Under each set of 
regulations, the EPA has provided that permits may contain, at the 
permitting authority's discretion, an ``emergency provision.'' \60\ The 
relationship between such an ``emergency provision'' in a permit 
applicable to a source and the SIP provisions applicable to the same 
source with respect to excess emissions during a malfunction event 
warrants explanation.
---------------------------------------------------------------------------

    \59\ See, 40 CFR sections 70.1-70.12; 40 CFR sections 71.1-
71.27.
    \60\ See, 40 CFR 70.6(g); 40 CFR 71.6(g). The EPA also notes 
that states are not required to adopt the ``emergency provision'' 
contained in 40 CFR 70.6(g) into their state operating permit 
programs, and many states have chosen not to do so. See, e.g., 
``Clean Air Act Full Approval of Partial Operating Permit Program; 
Allegheny County; Pennsylvania; Direct final rule,'' 66 FR 55112 at 
55113 (Nov. 1, 2001).
---------------------------------------------------------------------------

    The regulatory parameters applicable to such emergency provisions 
in operating permits are the same for both state operating permit 
programs regulations and the federal operating permit program 
regulations. The definition of emergency is identical in the 
regulations for each program:

    An ``emergency'' means any situation arising from sudden and 
reasonably unforeseeable events beyond the control of the source, 
including acts of God, which situation requires immediate corrective 
action to restore normal operation, and that causes the source to 
exceed a technology-based emission limitation under the permit, due 
to unavoidable increases in emissions attributable to the emergency. 
An emergency shall not include noncompliance to the extent caused by 
improperly designed equipment, lack of preventative maintenance, 
careless or improper operation or operator error.\61\
---------------------------------------------------------------------------

    \61\ See, 40 CFR 70.6(g)(1); 40 CFR 71.6(g)(1).

Thus, the definition of ``emergency'' in these title V regulations is 
similar to the concept of ``malfunctions'' in the EPA's SSM Policy for 
SIP provisions, but it uses somewhat different terminology concerning 
the nature of the event and restricts the qualifying exceedances to 
``technology-based'' emission limitations.\62\ Some SIP provisions may 
also be ``technology-based'' emission limitations and thus this 
terminology in the operating permit regulations may engender some 
potential inconsistency with the SSM Policy.
---------------------------------------------------------------------------

    \62\ 1999 SSM Guidance at Attachment p. 1 and footnote 6. The 
term ``malfunction'' means ``a sudden and unavoidable breakdown of 
process or control equipment.'' The malfunction events that may be 
suitable for an affirmative defense are those that are ``caused by 
circumstances entirely beyond the control of the owner or 
operator.'' The EPA notes that by definition emergencies do not 
include normal source operation such as startup, shutdown, or 
maintenance.
---------------------------------------------------------------------------

    If there is an emergency event meeting the regulatory definition, 
then the EPA's regulations for operating permits provide that the 
source can assert an ``affirmative defense'' to enforcement for 
noncompliance with technology-based standards during the emergency 
event. In order to establish the affirmative defense, the regulations 
place the burden of proof on the source to demonstrate through 
specified forms of evidence that:
    (i) An emergency occurred and that the permittee can identify the 
cause(s) of the emergency;
    (ii) The permitted facility was at the time being properly 
operated;
    (iii) During the period of the emergency the permittee took all 
reasonable steps to minimize levels of emissions that exceeded the 
emission standards, or other requirements in the permit; and
    (iv) The permittee submitted notice of the emergency to the 
permitting authority within 2 working days of the time when emission 
limitations were exceeded due to the emergency. This notice fulfills 
the requirement of either paragraph 40 CFR 70.6(a)(3)(iii)(B) or 40 CFR 
71.6(a)(3)(iii)(B). This notice must contain a description of the 
emergency, any steps taken to mitigate emissions, and corrective 
actions taken.\63\
---------------------------------------------------------------------------

    \63\ 40 CFR 70.6(g)(3); 40 CFR 71.6(g)(3).
---------------------------------------------------------------------------

    The Petitioner did not directly request that the EPA evaluate the 
existing regulatory provisions applicable to operating permits in 40 
CFR part 70 and 40 CFR part 71, and the EPA is not revising those 
provisions in this action. However, the Petitioner did identify a 
number of specific SIP provisions that indirectly relate to this issue 
because the state may have modeled its SIP provision, at least in part, 
on the EPA's operating permit regulations.\64\ In those instances, the 
state in question presumably intended to create an affirmative defense 
applicable during malfunctions appropriate for SIP provisions, but by 
using the terminology used in the operating permit regulations, the 
state has created provisions that are not permissible in SIPs.
---------------------------------------------------------------------------

    \64\ See, e.g., Petition at 24. The Petitioner identified a 
provision in the Arkansas SIP that appears to be closely modeled on 
40 CFR 70.6(g).
---------------------------------------------------------------------------

    The elements for the affirmative defense in the title V permit 
regulations are similar to the criteria recommended in the SSM Policy 
for SIP provisions applicable to malfunctions. However, the elements 
for the affirmative defense provisions in operating permits do not 
explicitly include some of the criteria that the EPA believes are 
necessary in order to make such a provision appropriate in a SIP 
provision. For example, the EPA recommends that approvable SIP 
provisions include an affirmative duty for the source to establish that 
the malfunction was ``not part of a recurring pattern indicative of 
inadequate design, operation, or maintenance.'' \65\ In addition, the 
regulations applicable to operating permits use somewhat different 
terminology for the elements of the defense, such as providing that the 
emergencies were ``sudden and reasonably unforeseeable events beyond 
the control of the source,'' whereas the EPA's SSM Policy describes 
malfunctions as events that ``did not stem from any activity or event 
that could have been foreseen and avoided, or planned for.'' \66\ 
Again, the use of somewhat different terminology about the elements the 
source must establish in order to qualify for an affirmative defense 
may engender some potential inconsistency with the EPA's SSM Policy.
---------------------------------------------------------------------------

    \65\ 1999 SSM Guidance at Attachment pp. 3-4.
    \66\ 1999 SSM Guidance at Attachment p. 3.
---------------------------------------------------------------------------

    Although the differing regulatory terminology with respect to the 
nature of the event or the elements necessary to establish an 
affirmative defense may not ultimately be significant in practical 
application in a given enforcement action, there are two additional 
ways in which incorporation of the text of the regulatory provisions in 
40 CFR 70.6(g) and 40 CFR 71.6(g) into a SIP is potentially more 
directly in conflict with the SSM Policy. First, these provisions do 
not explicitly limit the affirmative defense only to civil penalties 
available under the CAA for violations of emission limitations. Each 
provision states only that an

[[Page 12482]]

``emergency constitutes an affirmative defense to an action brought for 
noncompliance'' if the source proves that it meets the conditions for 
the affirmative defense.\67\ Given this lack of an explicit limitation, 
it could be argued that SIP provisions that copy the wording of 40 CFR 
70.6(g) and 40 CFR 71.6(g) are not limited to civil penalties.\68\ Such 
a reading would be inconsistent with the EPA's view that affirmative 
defenses in SIP provisions are only consistent with the CAA if they 
apply to civil penalties and not to injunctive relief. The EPA believes 
it is essential for SIPs to ensure that injunctive relief is available 
should a court determine that such relief is necessary to prevent 
excess emissions in the future.
---------------------------------------------------------------------------

    \67\ 40 CFR 70.6(g)(2); 40 CFR 71.6(g)(2).
    \68\ Because title V requires that a source have a permit that 
``assure[s] compliance with applicable [CAA] requirements,'' CAA 
section 504(a), it follows that the title V emergency provision 
itself can best be read to provide only an affirmative defense 
against civil penalties and not against injunctive relief. See also, 
``National Emission Standards for Hazardous Air Pollutant Emissions 
for Primary Lead Processing; Final Rule,'' 76 FR 70834 at 70838/2 
(Nov. 15, 2011) (explaining why limiting affirmative defenses to 
civil penalties conforms with the purposes of the CAA and existing 
case law).
---------------------------------------------------------------------------

    Second, these operating permit regulatory provisions state that 
they are ``in addition to any emergency or upset provision contained in 
any applicable requirement.'' \69\ The EPA's view is that federal 
technology-based standards already include the appropriate affirmative 
defense provisions, if any, and that creation of additional affirmative 
defenses via a SIP provision is impermissible.\70\ Thus, SIP provisions 
that add to or alter the terms of any federal technology-based 
standards would be substantially inadequate to meet CAA 
requirements.\71\
---------------------------------------------------------------------------

    \69\ 40 CFR 70.6(g)(5); 40 CFR 71.6(g)(5).
    \70\ 1999 SSM Guidance at Attachment p. 3, footnote 6. The EPA 
explained that to the extent a state elected to include federal 
technology-based standards into its SIP, such as NSPS or NESHAPs, 
the standards should not deviate from those standards as 
promulgated. Because the EPA has already taken into account 
technological limitations in setting the standards, additional 
exemptions or affirmative defenses would be inappropriate.
    \71\ See, ``Finding of Substantial Inadequacy of Implementation 
Plan; Call for Utah State Implementation Plan Revision,'' 74 FR 
21639 (Apr. 18, 2011) (the EPA issued a SIP call because, inter 
alia, the SIP provision applied to NSPS and NESHAP); US Magnesium, 
LLC v. EPA, 690 F.3d 1157 (10th Cir. 2012) (upholding the SIP call).
---------------------------------------------------------------------------

    In this action, the EPA is taking action to evaluate the specific 
SIP provisions identified in the Petition and is proposing to make a 
finding of substantial inadequacy and to issue a SIP call for those SIP 
provisions that include features that are inappropriate for SIPs, 
regardless of whether those provisions contain terms found in other 
regulations. First, consistent with its longstanding interpretation of 
the CAA with respect to SIP requirements, the EPA believes that 
approvable affirmative defenses in a SIP provision can only apply to 
civil penalties, not to injunctive relief. Second, approvable 
affirmative defenses in a SIP provision should reflect the recommended 
criteria in the EPA's SSM Policy to assure that sources only assert 
affirmative defenses in appropriately narrow circumstances. Third, 
approvable affirmative defenses in a SIP provision cannot operate to 
create different or additional defenses from those that are provided in 
underlying federal technology-based emission limitations, such as NSPS 
or NESHAP. SIPs are comprised of emission limitations that are intended 
to provide for attainment and maintenance of the NAAQS, protection of 
PSD increments, protection of visibility, and other CAA objectives. 
Thus, the EPA believes that only narrowly drawn affirmative defense 
provisions, as recommended in its SSM Policy, are consistent with these 
overarching SIP requirements of the CAA.

E. Intended Effect of the EPA's Action on the Petition

    As in the 2001 SSM Guidance, the EPA is endeavoring to be 
particularly clear about the intended effect of its proposed action on 
the Petition, of its proposed clarifications and revisions to the SSM 
Policy, and ultimately of its final action on the Petition.
    First, the EPA only intends its actions on the larger policy or 
legal issues raised by the Petitioner to inform the public of the EPA's 
current views on the requirements of the CAA with respect to SIP 
provisions related to SSM events. Thus, for example, the EPA's proposed 
disapproval of the Petitioner's request that the EPA disallow all 
affirmative defense provisions for excess emissions during malfunctions 
is intended to convey that the EPA has not changed its views that such 
provisions can be consistent with CAA requirements for SIPs with 
respect to malfunctions. In this fashion, the EPA's action on the 
Petition provides updated guidance relevant to future SIP actions.
    Second, the EPA only intends its actions on the specific existing 
SIP provisions identified in the Petition to be applicable to those 
provisions. The EPA does not intend its action on those specific 
provisions to alter the current status of any other existing SIP 
provisions relating to SSM events. The EPA must take later rulemaking 
actions, if necessary, in order to evaluate any comparable deficiencies 
in other existing SIP provisions that may be inconsistent with the 
requirements of the CAA. Again, however, the EPA's actions on the 
Petition provide updated guidance on the types of SIP provisions that 
it believes would be consistent with CAA requirements in future 
rulemaking actions.
    Third, the EPA does not intend its action on the Petition to affect 
existing permit terms or conditions regarding excess emissions during 
SSM events that reflect previously approved SIP provisions. In the 
event that the EPA finalizes a proposed finding of substantial 
inadequacy and a SIP call for a given state, the state will have time 
to revise its SIP in response to the SIP call through the necessary 
state and federal administrative process. Thereafter, any needed 
revisions to existing permits will be accomplished in the ordinary 
course as the state issues new permits or reviews and revises existing 
permits. The EPA does not intend the issuance of a SIP call to have 
automatic impacts on the terms of any existing permit.
    Fourth, the EPA does not intend its action on the Petition to alter 
the emergency defense provisions at 40 CFR 70.6(g) and 40 CFR 71.6(g), 
i.e., the title V regulations pertaining to ``emergency provisions'' 
permissible in title V operating permits. The EPA's regulations 
applicable to title V operating permits may only be changed through 
appropriate rulemaking procedures and existing permit terms may only be 
changed through established permitting processes.
    Fifth, the EPA does not intend its interpretations of the 
requirements of the CAA in this action on the Petition to be legally 
dispositive with respect to any particular current enforcement 
proceedings in which a violation of SIP emission limitations is alleged 
to have occurred. The EPA handles enforcement matters by assessing each 
situation, on a case-by-case basis, to determine the appropriate 
response and resolution. For purposes of alleged violations of SIP 
provisions, however, the terms of the applicable SIP provision will 
continue to govern until that provision is revised following the 
appropriate process for SIP revisions, as required by the CAA.
    Finally, the EPA does intend that the final notice for this action 
after considering public comments will embody its most current SSM 
Policy, reflecting the EPA's interpretation of CAA requirements 
applicable to SIP provisions related to excess emissions during SSM 
events. In this regard, the EPA is proposing to add to and clarify its 
prior statements in the 1999 SSM Guidance and to make the specific

[[Page 12483]]

changes to that guidance as discussed in this action. Thus, the final 
notice for this action will constitute the EPA's SSM Policy on a going-
forward basis.

VIII. Legal Authority, Process, and Timing for SIP Calls

A. SIP Call Authority Under Section 110(k)(5)

1. General Statutory Authority
    The CAA provides a mechanism for the correction of flawed SIPs, 
under CAA section 110(k)(5), which provides:

    (5) Calls for plan revisions
    Whenever the Administrator finds that the applicable 
implementation plan for any area is substantially inadequate to 
attain or maintain the relevant national ambient air quality 
standards, to mitigate adequately the interstate pollutant transport 
described in section [176A] of this title or section [184] of this 
title, or to otherwise comply with any requirement of [the Act], the 
Administrator shall require the State to revise the plan as 
necessary to correct such inadequacies. The Administrator shall 
notify the State of the inadequacies and may establish reasonable 
deadlines (not to exceed 18 months after the date of such notice) 
for the submission of such plan revisions.

    By its explicit terms, this provision authorizes the EPA to find 
that a state's existing SIP is ``substantially inadequate'' to meet CAA 
requirements and, based on that finding, to ``require the State to 
revise the [SIP] as necessary to correct such inadequacies.'' This type 
of action is commonly referred to as a ``SIP call.'' \72\
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    \72\ The EPA also has other discretionary authority to address 
incorrect SIP provisions, such as the authority in CAA section 
110(k)(6) for the EPA to correct errors in prior SIP approvals. The 
authority in CAA section 110(k)(5) and CAA section 110(k)(6) can 
sometimes overlap and offer alternative mechanisms to address 
problematic SIP provisions. In this instance, the EPA believes that 
the mechanism provided by CAA section 110(k)(5) is the better 
approach, because using the mechanism of the CAA section 110(k)(6) 
error correction would eliminate the affected emission limitations 
from the SIP potentially leaving no emission limitation in place, 
whereas the mechanism of the CAA section 110(k)(5) SIP call will 
keep the provisions in place during the pendency of the state's 
revision of the SIP and the EPA's action on that revision. In the 
case of provisions that include impermissible automatic exemptions 
or discretionary exemptions, the EPA believes that retention of the 
existing SIP provision is preferable to the absence of the provision 
in the interim.
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    Significantly, CAA section 110(k)(5) explicitly authorizes the EPA 
to issue a SIP call ``whenever'' the EPA makes a finding that the 
existing SIP is substantially inadequate, thus providing authority for 
the EPA to take action to correct existing inadequate SIP provisions 
even long after their initial approval, or even if the provisions only 
become inadequate due to subsequent events.\73\ The statutory provision 
is worded in the present tense, giving the EPA authority to rectify any 
deficiency in a SIP that currently exists, regardless of the fact that 
the EPA previously approved that particular provision in the SIP and 
regardless of when that approval occurred.
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    \73\ See, e.g., Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000) 
(upholding the ``NOX SIP Call'' to states requiring 
revisions to previously approved SIPs with respect to ozone 
transport and section 110(a)(20)(D)(i)(I)); ``Action to Ensure 
Authority To Issue Permits Under the Prevention of Significant 
Deterioration Program to Sources of Greenhouse Gas Emissions: 
Finding of Substantial Inadequacy and SIP Call; Final Rule,'' 75 FR 
77698 (Dec. 13, 2010) (the EPA issued a SIP call to 13 states 
because the endangerment finding for GHGs meant that these 
previously approved SIPs were substantially inadequate because they 
did not provide for the regulation of GHGs in the PSD permitting 
programs of these states as required by CAA section 110(a)(2)(C) and 
section 110(a)(2)(J)); ``Finding of Substantial Inadequacy of 
Implementation Plan; Call for Utah State Implementation Plan 
Revision,'' 74 FR 21639 (Apr. 18, 2011) (the EPA issued a SIP call 
to rectify SIP provisions dating back to 1980).
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    It is also important to emphasize that CAA section 110(k)(5) 
expressly directs the EPA to take action if the SIP provision is 
substantially inadequate not just for purposes of attainment or 
maintenance of the NAAQS, but also for purposes of ``any requirement'' 
of the CAA. The EPA interprets this reference to ``any requirement'' of 
the CAA on its face to authorize reevaluation of an existing SIP 
provision for compliance with those statutory and regulatory 
requirements that are germane to the SIP provision at issue. Thus, for 
example, a SIP provision that is intended to be an ``emission 
limitation'' for purposes of a nonattainment plan for purposes of the 
1997 PM2.5 NAAQS must meet various applicable statutory and 
regulatory requirements, including requirements of CAA section 
110(a)(2)(A) such as enforceability, the definition of the term 
``emission limitation'' in CAA section 302(k), the level of emissions 
control required to constitute a ``reasonably available control 
measure'' in CAA section 172(c)(1), and the other applicable 
requirements of the implementation regulations for the 1997 
PM2.5 NAAQS. Failure to meet any of those applicable 
requirements could constitute a substantial inadequacy suitable for a 
SIP call, depending upon the facts and circumstances. By contrast, that 
same SIP provision should not be expected to meet specifications of the 
CAA that are completely irrelevant for its intended purpose, such as 
the unrelated requirement of CAA section 110(a)(2)(G) that the state 
have general legal authority comparable to CAA section 303 for 
emergencies.
    Use of the term ``any requirement'' in CAA section 110(k)(5) also 
reflects the fact that SIP provisions could be substantially inadequate 
for widely differing reasons. One provision might be substantially 
inadequate because it fails to prohibit emissions that contribute to 
violations of the NAAQS in downwind areas many states away. Another 
provision, or even the same provision, could be substantially 
inadequate because it also infringes on the legal right of members of 
the public who live adjacent to the source to enforce the SIP. Thus, 
the EPA has previously interpreted CAA section 110(k)(5) to authorize a 
SIP call to rectify SIP inadequacies of various kinds, both broad and 
narrow in terms of the scope of the SIP revisions required.\74\ On its 
face, CAA section 110(k)(5) authorizes the EPA to take action with 
respect to SIP provisions that are substantially inadequate to meet any 
CAA requirements, including requirements relevant to the proper 
treatment of excess emissions during SSM events.
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    \74\ See, e.g., ``Finding of Significant Contribution and 
Rulemaking for Certain States in the Ozone Transport Assessment 
Group Region for Purposes of Reducing Regional Transport of Ozone,'' 
63 FR 57356 (Oct. 27, 1998) (the EPA issued a SIP call to 23 states 
requiring them to rectify the failure to address interstate 
transport of pollutants as required by section 110(a)(2)(D); 
``Finding of Substantial Inadequacy of Implementation Plan; Call for 
Utah State Implementation Plan Revision,'' 74 FR 21639 (Apr. 18, 
2011) (the EPA issued a SIP call to one state requiring it to 
rectify several very specific SIP provisions).
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    An important baseline question is whether a given deficiency 
renders the SIP provision ``substantially inadequate.'' The EPA notes 
that the term ``substantially inadequate'' is not defined in the CAA. 
Moreover, CAA section 110(k)(5) does not specify a particular form of 
analysis or methodology that the EPA must use to evaluate SIP 
provisions for substantial inadequacy. Thus, under Chevron step 2, the 
EPA is authorized to interpret this provision reasonably, consistent 
with the provisions of the CAA. In addition, the EPA is authorized to 
exercise its discretion in applying this provision to determine whether 
a given SIP provision is substantially inadequate. To the extent that 
the term ``substantially inadequate'' is ambiguous, the EPA believes 
that it is reasonable to interpret the term in light of the specific 
purposes for which the SIP provision at issue is required, and thus 
whether the provision meets the fundamental CAA requirements applicable 
to such a provision.
    The EPA does not interpret CAA section 110(k)(5) to require a 
showing that the effect of a SIP provision that is facially 
inconsistent with CAA

[[Page 12484]]

requirements is causally connected to a particular adverse impact. For 
example, the plain language of CAA section 110(k)(5) does not require 
direct causal evidence that excess emissions have occurred during a 
specific malfunction at a specific source and have literally caused a 
violation of the NAAQS in order to conclude that the SIP provision is 
substantially inadequate.\75\ A SIP provision that purports to exempt a 
source from compliance with applicable emission limitations during SSM 
events, contrary to the requirements of the CAA for continuous emission 
limitations, does not become legally permissible merely because there 
is not definitive evidence that any excess emissions have resulted from 
the exemption and have literally caused a specific NAAQS violation.\76\
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    \75\ See, US Magnesium, LLC v. EPA, 690 F.3d 1157 (10th Cir. 
2012) (upholding the EPA's interpretation of section 110(k)(5) to 
authorize a SIP call when the SIP provisions are inconsistent with 
CAA requirements).
    \76\ The EPA notes that the GHG SIP call did not require 
``proof'' that the failure of a state to address GHGs in a given PSD 
permit ``caused'' particularized environmental impacts; it was 
sufficient that the state's SIP fails to meet the current 
fundamental legal requirements for regulation of GHGs in accordance 
with the CAA. See, ``Action to Ensure Authority To Issue Permits 
Under the Prevention of Significant Deterioration Program to Sources 
of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and 
SIP Call; Final Rule,'' 75 FR 77698 (Dec. 13, 2010).
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    Similarly, the EPA does not interpret CAA section 110(k)(5) to 
require direct causal evidence that a SIP provision that improperly 
undermines enforceability of the SIP has resulted in a specific failed 
enforcement attempt by any party. A SIP provision that has the 
practical effect of barring enforcement by the EPA or through a citizen 
suit, either because it would bar enforcement if an air agency elects 
to grant a discretionary exemption or to exercise its own enforcement 
discretion, is inconsistent with fundamental requirements of the 
CAA.\77\ Such a provision also does not become legally permissible 
merely because there is not definitive evidence that the state's action 
literally undermined a specific attempted enforcement action by other 
parties. Indeed, the EPA notes that these impediments to effective 
enforcement likely have a chilling effect on potential enforcement in 
general. The possibility for effective enforcement of emission 
limitations in SIPs is itself an important principle of the CAA, as 
embodied in CAA sections 113 and 304.
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    \77\ See, ``Finding of Substantial Inadequacy of Implementation 
Plan; Call for Utah State Implementation Plan Revision,'' 74 FR 
21639 at 21641 (Apr. 18, 2011); see also, US Magnesium, LLC v. EPA, 
690 F.3d 1157, 1168 (10th Cir. 2012) (upholding the EPA's 
interpretation of section 110(k)(5) to authorize a SIP call when the 
state's SIP provision worded so that state decisions whether a given 
excess emissions event constituted a violation interfered with 
enforcement by the EPA or citizens for such event).
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    The EPA's interpretation of CAA section 110(k)(5) is that the 
fundamental integrity of the CAA's SIP process and structure are 
undermined if emission limitations relied upon to meet CAA requirements 
related to protection of public health and the environment can be 
violated without potential recourse. For example, the EPA does not 
believe that it is authorized to issue a SIP call to rectify an 
impermissible automatic exemption provision only after a violation of 
the NAAQS has occurred, or only if that NAAQS violation can be directly 
linked to the excess emissions that resulted from the impermissible 
automatic exemption by a particular source on a particular day. If the 
SIP contains a provision that is inconsistent with fundamental 
requirements of the CAA, that renders the SIP provision substantially 
inadequate.
    The EPA notes that CAA section 110(k)(5) can also be an appropriate 
tool to address ambiguous SIP provisions that could be read by a court 
in a way that would violate the requirements of the CAA. For example, 
if an existing SIP provision concerning the state's exercise of 
enforcement discretion is sufficiently ambiguous that it could be 
construed to preclude enforcement by the EPA or through a citizen suit 
if the state elects to deem a given SSM event not a violation, then 
that could render the provision substantially inadequate by interfering 
with the enforcement structure of the CAA.\78\ If a court could 
construe the ambiguous SIP provision to bar enforcement, the EPA 
believes that it may be appropriate to take action to eliminate that 
uncertainty by requiring the state to revise the ambiguous SIP 
provision. Under such circumstances, it may be appropriate for the EPA 
to issue a SIP call to assure that the SIP provisions are sufficiently 
clear and consistent with CAA requirements on their face.\79\
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    \78\ Courts have on occasion interpreted SIP provisions to limit 
the EPA's enforcement authority as a result of ambiguous SIP 
provisions. See, e.g., U.S. v. Ford Motor Co., 736 F.Supp. 1539 
(W.D. Mo. 1990) and U.S. v. General Motors Corp., 702 F. Supp. 133 
(N.D. Texas 1988) (the EPA could not pursue enforcement of SIP 
emission limitations where states had approved alternative emission 
limitations under procedures the EPA had approved in the SIP); 
Florida Power & Light Co. v. Costle, 650 F.2d 579, 588 (5th Cir. 
1981) (the EPA to be accorded no discretion in interpreting state 
law). The EPA does not agree with the holdings of these cases, but 
they illustrate why it is reasonable to eliminate any uncertainty 
about enforcement authority by requiring a state to remove or revise 
a SIP provision that could be read in a way inconsistent with the 
requirements of the CAA.
    \79\ See, US Magnesium, LLC v. EPA, 690 F.3d 1157, 1170 (10th 
Cir. 2012) (upholding the EPA's use of SIP call authority in order 
to clarify language in the SIP that could be read to violate the 
CAA, even if a court has not yet interpreted the language in that 
way).
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    In this instance, the Petition raised questions concerning the 
adequacy of existing SIP provisions that pertain to the treatment of 
excess emissions during SSM events. The SIP provisions identified by 
the Petitioner generally fall into four major categories: (i) Automatic 
exemptions; (ii) exemptions as a result of director's discretion; (iii) 
provisions that appear to bar enforcement by the EPA or through a 
citizen suit if the state decides not to enforce through exercise of 
enforcement discretion; and (iv) affirmative defense provisions that 
appear to be inconsistent with the CAA and the EPA's SSM Policy. The 
EPA believes that each of these types of SIP deficiency potentially 
justifies a SIP call pursuant to CAA section 110(k)(5), if the SIP 
provision is as the Petitioner describes it.
2. Substantial Inadequacy of Automatic Exemptions
    The EPA believes that SIP provisions that provide an automatic 
exemption from otherwise applicable emission limitations are 
substantially inadequate to meet CAA requirements. A typical SIP 
provision that includes an impermissible automatic exemption would 
provide that a source has to meet a specific emission limitation, 
except during startup, shutdown, and malfunction, and by definition any 
excess emissions during such events would not be violations and thus 
there could be no enforcement based on those excess emissions. The 
EPA's interpretation of CAA requirements for SIP provisions has been 
reiterated multiple times through the SSM Policy and actions on SIP 
submissions that pertain to this issue. The EPA's longstanding view is 
that SIP provisions that include automatic exemptions for excess 
emissions during SSM events, such that the excess emissions during 
those events are not considered violations of the applicable emission 
limitations, do not meet CAA requirements. Such exemptions undermine 
the protection of the NAAQS and PSD increments and fail to meet other 
fundamental requirements of the CAA.
    The EPA interprets CAA sections 110(a)(2)(A) and 110(a)(2)(C) to 
require that SIPs contain ``emission limitations'' to meet CAA 
requirements. Pursuant to CAA section 302(k), those emission

[[Page 12485]]

limitations must be ``continuous.'' Automatic exemptions from otherwise 
applicable emission limitations thus render those limits less than 
continuous as required by CAA sections 110(a)(2)(A) and 110(a)(2)(C), 
thereby inconsistent with a fundamental requirement of the CAA and thus 
substantially inadequate as contemplated in CAA section 110(k)(5).
    This inadequacy has far-reaching impacts. For example, air agencies 
rely on emission limitations in SIPs in order to provide for attainment 
and maintenance of the NAAQS. These emission limitations are basic 
building blocks for SIPs, often used by air agencies to meet various 
requirements including: (i) In the estimates of emissions for emissions 
inventories; (ii) in the determination of what level of emissions meets 
various statutory requirements such as ``reasonably available control 
measures'' in nonattainment SIPs or ``best available retrofit 
technology'' in regional haze SIPs; and (iii) in critical modeling 
exercises such as attainment demonstration modeling for nonattainment 
areas or increment use for PSD permitting purposes. All of these uses 
typically assume continuous source compliance with applicable emission 
limitations.
    Because the NAAQS are not directly enforceable against individual 
sources, air agencies rely on the adoption and enforcement of these 
generic and specific emission limits in SIPs in order to provide for 
attainment and maintenance of the NAAQS, protection of PSD increments, 
protection of visibility, and other CAA requirements. Automatic 
exemption provisions for excess emissions eliminate the possibility of 
enforcement for what would otherwise be clear violations of the relied-
upon emission limitations and thus eliminate any opportunity to obtain 
injunctive relief that may be needed to protect the NAAQS or meet other 
CAA requirements. Likewise, the elimination of any possibility for 
penalties for what would otherwise be clear violations of the emission 
limitations, regardless of the conduct of the source, eliminates any 
opportunity for penalties to encourage appropriate design, operation, 
and maintenance of sources and efforts by source operators to prevent 
and to minimize excess emissions in order to protect the NAAQS or to 
meet other CAA requirements. Removal of this monetary incentive to 
comply with the SIP reduces a source's incentive to design, operate, 
and maintain its facility to meet emission limitations at all times.
3. Substantial Inadequacy of Director's Discretion Exemptions
    The EPA believes that SIP provisions that allow discretionary 
exemptions from otherwise applicable emission limitations are 
substantially inadequate to meet CAA requirements for the same reasons 
as automatic exemptions, but for additional reasons as well. A typical 
SIP provision that includes an impermissible ``director's discretion'' 
component would purport to authorize air agency personnel to modify 
existing SIP requirements under certain conditions, e.g., to grant a 
variance from an otherwise applicable emission limitation if the source 
could not meet the requirement in certain circumstances.\80\ If such 
provisions are sufficiently specific, provide for sufficient public 
process, and are sufficiently bounded, so that it is possible to 
anticipate at the time of the EPA's approval of the SIP provision how 
that provision will actually be applied and the potential adverse 
impacts thereof, then such a provision might meet basic CAA 
requirements. In essence, if it is possible to anticipate and evaluate 
in advance how the exercise of enforcement discretion could impact 
compliance with other CAA requirements, then it may be possible to 
determine in advance that the pre-authorized exercise of director's 
discretion will not interfere with other CAA requirements, such as 
providing for attainment and maintenance of the NAAQS. Most director's 
discretion-type provisions cannot meet this basic test.
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    \80\ The EPA notes that problematic ``director's discretion'' 
provisions are not limited only to those that purport to authorize 
alternative emission limitations from those required in a SIP. Other 
problematic director's discretion provisions could include those 
that purport to provide for discretionary changes to other 
substantive requirements of the SIP, such as applicability, 
operating requirements, recordkeeping requirements, monitoring 
requirements, test methods, and alternative compliance methods.
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    Unless it is possible at the time of the approval of the SIP 
provision to anticipate and analyze the impacts of the potential 
exercise of the director's discretion, such provisions functionally 
could allow de facto revisions of the approved provisions of the SIP 
without complying with the process for SIP revisions required by the 
CAA. Sections 110(a)(1) and (2) of the CAA impose procedural 
requirements on states that seek to amend SIP provisions. The elements 
of CAA section 110(a)(2) and other sections of the CAA, depending upon 
the subject of the SIP provision at issue, impose substantive 
requirements that states must meet in a SIP revision. Section 110(i) of 
the CAA prohibits modification of SIP requirements for stationary 
sources by either the state or the EPA, except through specified 
processes.\81\ Section 110(k) of the CAA imposes procedural and 
substantive requirements on the EPA for action upon any SIP revision. 
Sections 110(l) and 193 of the CAA both impose additional procedural 
and substantive requirements on the state and the EPA in the event of a 
SIP revision. Chief among these many requirements for a SIP revision 
would be the necessary demonstration that the SIP revision in question 
would not interfere with any requirement concerning attainment and 
reasonable further progress or ``any other applicable requirement of'' 
the CAA to meet the requirements of CAA section 110(l).
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    \81\ Section 110(i) of the Act states that ``no order, 
suspension, plan revision or other action modifying any requirement 
of an applicable implementation plan may be taken with respect to 
any stationary source by the State or by the Administrator'' except 
in compliance with the CAA's requirements for promulgation or 
revision of a plan, with limited exceptions. See, e.g., ``Approval 
and Disapproval and Promulgation of Air Quality Implementation 
Plans; Colorado; Revisions to Regulation 1; Notice of proposed 
rulemaking,'' 75 FR 42342 at 42344 (July 21, 2010) (proposing to 
disapprove ``director discretion'' provisions as inconsistent with 
CAA requirements and noting that ``[s]ection 110(i) specifically 
prohibits States, except in certain limited circumstances, from 
taking any action to modify any requirement of a SIP with respect to 
any stationary source, except through a SIP revision''), finalized 
as proposed at 76 FR 4540 (Jan. 26, 2011); ``Corrections to the 
California State Implementation Plan,'' 69 FR 67062 at 67063 (Nov. 
16, 2004) (noting that ``a state-issued variance, though binding as 
a matter of State law, does not prevent EPA from enforcing the 
underlying SIP provisions unless and until EPA approves that 
variance as a SIP revision''); Industrial Environmental Association 
v. Browner, No. 97-71117 at n. 2 (9th Cir. May 26, 2000) (noting 
that the EPA has consistently treated individual variances granted 
under state variance provisions as ``modifications of the SIP 
requiring independent EPA approval'').
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    Congress presumably imposed these many explicit requirements in 
order to assure that there is adequate public process at both the air 
agency and federal level for any SIP revision, and to assure that any 
SIP revision meets the applicable substantive requirements of the CAA. 
Although no provision of the CAA explicitly addresses whether a 
``director's discretion'' provision is acceptable by name, the EPA 
interprets the statute to prohibit such provisions unless they would be 
consistent with the statutory and regulatory requirements that apply to 
SIP revisions.\82\ A SIP provision that

[[Page 12486]]

purports to give broad and unbounded director's discretion to alter the 
existing legal requirements of the SIP with respect to meeting emission 
limitations would be tantamount to allowing a revision of the SIP 
without meeting the applicable procedural and substantive requirements 
for such a SIP revision.
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    \82\ See, e.g., EPA's implementing regulations at 40 CFR 
51.104(d) (``In order for a variance to be considered for approval 
as a revision to the [SIP], the State must submit it in accordance 
with the requirements of this section'') and 51.105 (``Revisions of 
a plan, or any portion thereof, will not be considered part of an 
applicable plan until such revisions have been approved by the 
Administrator in accordance with this part.'').
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    For this reason, the EPA has long discouraged the creation of new 
SIP provisions containing an impermissible director's discretion 
feature and has also taken actions to remove existing SIP provisions 
that it had previously approved in error.\83\ In recent years, the EPA 
has also recommended that if an air agency elects to have SIP 
provisions that contain a director's discretion feature consistent with 
CAA requirements, then the provisions must be structured so that any 
resulting variances or other deviations from the SIP requirements have 
no federal law validity, unless and until the EPA specifically approves 
that exercise of the director's discretion as a SIP revision. Barring 
such a later ratification by the EPA through a SIP revision, the 
exercise of director's discretion is only valid for state (or tribal) 
law purposes and would have no bearing in the event of an action to 
enforce the provision of the SIP as it was originally approved by the 
EPA.
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    \83\ See, e.g., ``Approval and Disapproval and Promulgation of 
Air Quality Implementation Plans; Colorado; Revisions to Regulation 
1,'' 76 FR 4540 (Jan. 26, 2011) (partial disapproval of SIP 
submission based on inclusion of impermissible director's discretion 
provisions); ``Correction of Implementation Plans; American Samoa, 
Arizona, California, Hawaii, and Nevada State Implementation Plans; 
Notice of proposed rulemaking,'' 61 FR 38664 (July 25, 1996) 
(proposed SIP correction to remove, pursuant to CAA section 
110(k)(6), several variance provisions from American Samoa, Arizona, 
California, Hawaii, and Nevada SIPs), finalized at 62 FR 34641 (June 
27, 1997); ``Approval and Promulgation of Implementation Plans; 
Corrections to the Arizona and Nevada State Implementation Plans,'' 
74 FR 57051 (Nov. 3, 2009) (direct final rulemaking to remove, 
pursuant to CAA section 110(k)(6), variance provisions from Arizona 
and Nevada SIPs).
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    The EPA's evaluation of the specific SIP provisions of this type 
identified in the Petition indicates that none of them provide 
sufficient process or sufficient bounds on the exercise of director's 
discretion to be permissible. Most on their face would allow 
potentially limitless exemptions with potentially dramatic adverse 
impacts inconsistent with the objectives of the CAA. More importantly, 
however, each of the identified SIP provisions goes far beyond the 
limits of what might theoretically be a permissible director's 
discretion provision by authorizing state personnel to create case-by-
case exemptions from the applicable emission limitations from the 
requirements of the SIP for excess emissions during SSM events. Given 
that the EPA interprets the CAA not to allow exemptions from SIP 
emission limitations for excess emissions during SSM events in the 
first instance, it follows that providing such exemptions through the 
mechanism of director's discretion provision is also not permissible 
and compounds the problem.
    As with automatic exemptions for excess emissions during SSM 
events, a provision that allows discretionary exemptions would not meet 
the statutory requirements of CAA sections 110(a)(2)(A) and 
110(a)(2)(C) that require SIPs to contain ``emission limitations'' to 
meet CAA requirements. Pursuant to CAA section 302(k), those emission 
limitations must be ``continuous.'' Discretionary exemptions from 
otherwise applicable emission limitations render those limits less than 
continuous, as is required by CAA sections 110(a)(2)(A) and 
110(a)(2)(C), and thereby inconsistent with a fundamental requirement 
of the CAA and thus substantially inadequate as contemplated in section 
CAA 110(k)(5). Such exemptions undermine the objectives of the CAA such 
as protection of the NAAQS and PSD increments, and they fail to meet 
other fundamental requirements of the CAA.
    In addition, discretionary exemptions undermine effective 
enforcement of the SIP by the EPA or through a citizen suit, because 
often there may have been little or no public process concerning the 
exercise of director's discretion to grant the exemptions, or easily 
accessible documentation of those exemptions, and thus even 
ascertaining the possible existence of such ad hoc exemptions will 
further burden parties who seek to evaluate whether a given source is 
in compliance or to pursue enforcement if it appears that the source is 
not. Where there is little or no public process concerning such ad hoc 
exemptions, or inadequate access to relevant documentation of those 
exemptions, enforcement by the EPA or through a citizen suit may be 
severely compromised. As explained in the 1999 SSM Guidance, the EPA 
does not interpret the CAA to allow SIP provisions that would allow the 
exercise of director's discretion concerning violations to bar 
enforcement by the EPA or through a citizen suit. The exercise of 
director's discretion to exempt conduct that would otherwise constitute 
a violation of the SIP would interfere with effective enforcement of 
the SIP. Such provisions are inconsistent with and undermine the 
enforcement structure of the CAA provided in CAA sections 113 and 304, 
which provide independent authority to the EPA and citizens to enforce 
SIP provisions, including emission limitations. Thus, SIP provisions 
that allow discretionary exemptions from applicable SIP emission 
limitations through the exercise of director's discretion are 
substantially inadequate to comply with CAA requirements as 
contemplated in CAA section 110(k)(5).
4. Substantial Inadequacy of Improper Enforcement Discretion Provisions
    The EPA believes that SIP provisions that pertain to enforcement 
discretion but could be construed to bar enforcement by the EPA or 
through a citizen suit if the air agency declines to enforce are 
substantially inadequate to meet CAA requirements. A typical SIP 
provision that includes an impermissible enforcement discretion 
provision specifies certain parameters for when air agency personnel 
should pursue enforcement action, but is worded in such a way that the 
air director's decision defines what constitutes a ``violation'' of the 
emission limitation for purposes of the SIP, i.e., by defining what 
constitutes a violation, the air agency's own enforcement discretion 
decisions are imposed on the EPA or citizens.\84\
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    \84\ See, e.g., ``Finding of Substantial Inadequacy of 
Implementation Plan; Call for Utah State Implementation Plan 
Revision,'' 75 FR 70888 at 70892 (Nov. 19, 2010). The SIP provision 
at issue provided that information concerning a malfunction ``shall 
be used by the executive secretary in determining whether a 
violation has occurred and/or the need of further enforcement 
action.'' This SIP language appeared to give the state official 
exclusive authority to determine whether excess emissions constitute 
a violation.
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    The EPA's longstanding view is that SIP provisions cannot enable an 
air agency's decision concerning whether or not to pursue enforcement 
to bar the ability of the EPA or the public to enforce applicable 
requirements.\85\ Such enforcement discretion provisions in a SIP would 
be inconsistent with the enforcement structure provided in the CAA. 
Specifically, the statute provides explicit independent enforcement 
authority to the EPA under CAA section 113 and to citizens under CAA 
section 304. Thus, the CAA contemplates that the EPA and citizens have 
authority to pursue enforcement for a violation even if the air agency 
elects not to do so. The EPA, citizens, and any court in which they 
seek to pursue an enforcement claim for violation of SIP requirements 
must retain the authority to evaluate independently whether a source's 
violation of an emission limitation

[[Page 12487]]

warrants enforcement action. Potential for enforcement by the EPA or 
through a citizen suit provides an important safeguard in the event 
that the air agency lacks resources or ability to enforce violations 
and provides additional deterrence. Accordingly, a SIP provision that 
operated to eliminate the authority of the EPA or the public to pursue 
enforcement actions because the air agency elects not to, would 
undermine the enforcement structure of the CAA and would thus be 
substantially inadequate to meet fundamental requirements in CAA 
sections 113 and 304.
---------------------------------------------------------------------------

    \85\ See, 1999 SSM Guidance at 3.
---------------------------------------------------------------------------

5. Substantial Inadequacy of Deficient Affirmative Defense Provisions
    The EPA believes that SIP provisions that provide inappropriate 
affirmative defenses for excess emissions during SSM events are 
substantially inadequate to meet CAA requirements. A typical SIP 
provision that includes an impermissible affirmative defense provision 
could contain several deficiencies simultaneously, even though it may 
superficially resemble such a defense and actually contain the term 
``affirmative defense.'' There are a number of ways in which such 
provisions can be deficient, including: (i) Extending the affirmative 
defense to injunctive relief; (ii) not including sufficient criteria to 
make the affirmative defense appropriately narrow; (iii) imposing the 
affirmative defense provision on federal technology-based emission 
limitations in the SIP; and (iv) providing an affirmative defense to 
startup, shutdown, or other planned and routine modes of source 
operation.
    First, the EPA interprets the CAA to allow only those affirmative 
defense provisions that provide a potential for relief from civil 
penalties and not those that provide relief from injunctive relief as 
well. As explained in more detail in section IV of this notice, the EPA 
interprets the provisions of CAA section 110(a) to allow affirmative 
defenses only in certain narrow circumstances, as a means of balancing 
the obligations of sources to meet emission limitations continuously as 
required by CAA section 302(k) with the practical reality that despite 
the most diligent of efforts, a source may violate emission standards 
under certain limited circumstances beyond the source's control. For 
sources that meet the conditions for an affirmative defense, the EPA 
believes that it is appropriate to provide relief only from monetary 
penalties. This limitation assures that the EPA and air agencies remain 
able to meet fundamental CAA requirements such as attainment and 
maintenance of the NAAQS, protection of PSD increments, protection of 
visibility, and other CAA requirements.
    By contrast, because SIP provisions are intended to meet 
fundamental CAA objectives including attainment and maintenance of the 
NAAQS, it would be inappropriate to eliminate the availability of 
injunctive relief for violations, in order to ensure that the necessary 
emissions reductions could be obtained through changes at the source or 
in source operation should that be necessary. In this way, the EPA 
believes that affirmative defense provisions applicable only to 
monetary penalties can meet the requirements of CAA sections 110(a) and 
302(k) and the enforcement structure provided in CAA sections 113 and 
304. Failure to preserve the availability of injunctive relief for 
violations would thus be substantially inadequate to meet CAA 
requirements.
    Second, the EPA interprets the CAA to allow only those affirmative 
defense provisions that are narrowly drawn to provide relief under 
appropriate circumstances where the event was entirely beyond the 
control of the owner or operator of the source and for which the source 
must have taken all practicable steps to prevent and to minimize the 
excess emissions that result from the event. Through the criteria in 
the 1999 SSM Guidance, the EPA has recommended the conditions that it 
considers appropriate for an approvable SIP provision in order to 
ensure that the affirmative defense is available to sources that 
warrant relief from monetary penalties otherwise required by the CAA. 
Affirmative defense provisions that are consistent with these criteria 
would be appropriately narrowly drawn. Affirmative defense provisions 
that do not address these criteria adequately, however, would 
potentially shield a source from CAA statutory penalties in 
circumstances that are not warranted.
    For example, an affirmative defense provision that did not impose a 
burden upon the source to establish that the violation was not the 
result of an event that could have been prevented through proper 
maintenance would not serve to encourage better maintenance. Similarly, 
an affirmative defense provision that failed to impose a burden upon 
the source to establish that it took all possible steps to minimize the 
effect of the violation on ambient air quality, the environment, and 
human health, would not serve to encourage diligence in rectifying the 
malfunction as quickly and effectively as possible. By addressing the 
recommended criteria adequately, a state can develop a narrow provision 
that appropriately balances the requirement for continuous compliance 
against the reality that there may be limited circumstances beyond the 
source's control that justify relief from monetary penalties. The EPA 
believes that failure to have an affirmative defense provision that is 
sufficiently narrowly drawn would fail to meet the requirements of CAA 
sections 110(a) and 302(k) and the enforcement structure provided in 
CAA sections 113 and 304. Failure to have a sufficiently narrow 
affirmative defense would thus be substantially inadequate to meet CAA 
requirements.
    Third, the EPA interprets the CAA to preclude SIP provisions that 
would create affirmative defense provisions applicable to federal 
regulations that an air agency may have copied into its SIP or 
incorporated by reference in order to take credit for resulting 
emissions reductions for SIP planning purposes or to receive delegation 
of federal authority, such as NSPS or NESHAP. To the extent that any 
affirmative defense appropriate for these technology-based standards is 
warranted, the federal standards contained in the EPA's regulations 
already specify the appropriate affirmative defense. Creating 
affirmative defenses that do not exist in such federal technology-based 
standards, or providing different affirmative defenses in addition to 
those that do exist, would be inappropriate. Similarly, reliance on 
inappropriate affirmative defenses in the context of PSD permitting or 
nonattainment New Source Review (NSR) permitting programs could 
likewise be problematic.
    Fourth, the EPA interprets the CAA to allow only affirmative 
defense provisions that are available for events that are entirely 
beyond the control of the owner or operator of the source. Thus, an 
affirmative defense may be appropriate for events like malfunctions, 
which are sudden and unavoidable events that cannot be foreseen or 
planned for. The underlying premise for an affirmative defense 
provision is that the source is properly designed, operated, and 
maintained, and could not have taken action to prevent the exceedance. 
Because the qualifying source could not have foreseen or prevented the 
event, the affirmative defense is available to provide relief from 
monetary penalties that could result from an event beyond the control 
of the source.
    The legal and factual basis that supports the concept of an 
affirmative defense for malfunctions does not support providing and an 
affirmative defense for normal modes of operation

[[Page 12488]]

like startup and shutdown. Such events are planned and predictable. The 
source should be designed, operated, and maintained to comply with 
applicable emission limitations. Because startup and shutdown periods 
are part of a source's normal operations, the same approach to 
compliance with, and enforcement of, applicable emission limitations 
during those periods should apply as otherwise applies during a 
source's normal operations. If justified, the state can develop special 
emission limitations or control measures that apply during startup and 
shutdown if the source cannot meet the otherwise applicable emission 
limitations in the SIP.
    Even if a source is a suitable candidate for distinct SIP emission 
limitations during startup and shutdown, however, that does not justify 
the creation of an affirmative defense in the case of excess emissions 
during such periods. Because these events are planned, the EPA believes 
that sources should be able to comply with applicable emission 
limitations during these periods of time. To provide an affirmative 
defense for violations that occur during planned and predictable events 
for which the source should have been expected to comply is tantamount 
to providing relief from civil penalties for a planned violation. The 
EPA believes that affirmative defense provisions that include periods 
of normal source operation that are within the control of the owner or 
operator of the source, such as planned startup and shutdown, would be 
inconsistent with the requirements of CAA sections 110(a) and 302(k) 
and the enforcement structure provided in CAA sections 113 and 304. An 
affirmative defense provision that expands the availability of the 
defense to planned events such as startup and shutdown would thus be 
substantially inadequate to meet CAA requirements.

B. SIP Call Process Under Section 110(k)(5)

    Section 110(k)(5) of the CAA provides the EPA with authority to 
determine whether a SIP is substantially inadequate to attain or 
maintain the NAAQS or otherwise comply with any requirement of the CAA. 
Where the EPA makes such a determination, the EPA then has a duty to 
issue a SIP call.
    In addition to providing general authority for a SIP call, CAA 
section 110(k)(5) sets forth the process and timing for such an action. 
First, the statute requires the EPA to notify the state of the final 
finding of substantial inadequacy. The EPA typically provides notice to 
states by a letter from the Assistant Administrator for the Office of 
Air and Radiation to the appropriate state officials in addition to 
publication of the final action in the Federal Register.
    Second, the statute requires the EPA to establish ``reasonable 
deadlines (not to exceed 18 months after the date of such notice)'' for 
the state to submit a corrective SIP submission to eliminate the 
inadequacy in response to the SIP call. The EPA proposes and takes 
comment on the schedule for the submission of corrective SIP revisions 
in order to ascertain the appropriate timeframe, depending on the 
nature of the SIP inadequacy.
    Third, the statute requires that any finding of substantial 
inadequacy and notice to the state be made public. By undertaking a 
notice-and-comment rulemaking, the EPA assures that the air agency, 
affected sources, and members of the public all are adequately informed 
and afforded the opportunity to participate in the process. Through 
this proposal notice and the later final notice, the EPA intends to 
provide a full evaluation of the issues raised by the Petition and to 
use this process as a means of giving clear guidance concerning SIP 
provisions relevant to SSM events that are consistent with CAA 
requirements.
    If the state fails to submit the corrective SIP revision by the 
deadline that the EPA finalizes as part of the SIP call, CAA section 
110(c) authorizes the EPA to ``find[] that [the] State has failed to 
make a required submission.'' \86\ Once the EPA makes such a finding of 
failure to submit, CAA section 110(c)(1) requires the EPA to 
``promulgate a Federal implementation plan at any time within 2 years 
after the [finding] * * * unless the State corrects the deficiency, and 
[the EPA] approves the plan or plan revision, before [the EPA] 
promulgates such [FIP].'' Thus, if the EPA finalizes a SIP call and 
then finds that the air agency failed to submit a complete SIP revision 
that responds to the SIP call, or if the EPA disapproves such SIP 
revision, then the EPA will have an obligation under CAA section 
110(c)(1) to promulgate a FIP no later than 2 years from the date of 
the finding or the disapproval, if the deficiency has not been 
corrected before that time.\87\
---------------------------------------------------------------------------

    \86\ CAA section 110(c)(1)(A).
    \87\ The 2-year deadline does not necessarily apply to FIPs 
following disapproval of a tribal implementation plan.
---------------------------------------------------------------------------

    The finding of failure to submit a revision in response to a SIP 
call, or the EPA's disapproval of that corrective SIP revision, can 
also trigger sanctions under CAA section 179. If a state fails to 
submit a complete SIP revision that responds to a final SIP call, CAA 
section 179(a) provides for the EPA to issue a finding of state 
failure. Such a finding starts mandatory 18-month and 24-month 
sanctions clocks. The two sanctions that apply under CAA section 179(b) 
are the 2-to-1 emission offset requirement for all new and modified 
major sources subject to the nonattainment new source review program 
and restrictions on highway funding. However, section 179 leaves it to 
the EPA to decide the order in which these sanctions apply. The EPA 
issued an order of sanctions rule in 1994 but did not specify the order 
of sanctions where a state fails to submit or submits a deficient SIP 
revision in response to a SIP call.\88\ As the EPA has done in other 
SIP calls, the EPA proposes that the 2-to-1 emission offset requirement 
will apply for all new sources subject to the nonattainment new source 
review program 18 months following such finding or disapproval unless 
the state corrects the deficiency before that date. The EPA proposes 
that the highway funding restrictions sanction will also apply 24 
months following such finding or disapproval unless the state corrects 
the deficiency before that date. The EPA is proposing that the 
provisions in 40 CFR 52.31 regarding staying the sanctions clock and 
deferring the imposition of sanctions would also apply.
---------------------------------------------------------------------------

    \88\ See, ``Selection of Sequence of Mandatory Sanctions for 
Findings Made Pursuant to Section 179 of the Clean Air Act,'' 59 FR 
39832 (Aug. 4, 1994), codified at 40 CFR 52.31.
---------------------------------------------------------------------------

    Mandatory sanctions under CAA section 179 generally apply only in 
nonattainment areas. By its definition, the emission offset sanction 
applies only in areas required to have a part D NSR program, typically 
areas designated nonattainment. Section 179(b)(1) expressly limits the 
highway funding restriction to nonattainment areas. Additionally, the 
EPA interprets the section 179 sanctions to apply only in the area or 
areas of the state that are subject to or required to have in place the 
deficient SIP and for the pollutant or pollutants the specific SIP 
element addresses. For example, if the deficient provision applies 
statewide and applies for all NAAQS pollutants, then the mandatory 
sanctions would apply in all areas designated nonattainment for all 
NAAQS within the state. In this case, the EPA will evaluate the 
geographic scope of potential sanctions at the time it makes a final 
determination whether the state's SIP is substantially inadequate and 
issues a SIP call, as this

[[Page 12489]]

may vary depending upon the provisions at issue.

C. SIP Call Timing Under Section 110(k)(5)

    If the EPA finalizes a proposed finding of substantial inadequacy 
and a proposed SIP call for any state, CAA section 110(k)(5) requires 
the EPA to establish a SIP submission deadline by which the state must 
make a SIP submission to rectify the identified deficiency. Pursuant to 
CAA section 110(k)(5), the EPA has authority to set a SIP submission 
deadline up to 18 months from the date of the final finding of 
inadequacy.
    The EPA is proposing that if it promulgates a final finding of 
inadequacy and a SIP call for a state, the EPA will establish a date 18 
months from the date of promulgation of the final finding for the state 
to respond to the SIP call. If, for example, the EPA's final findings 
are signed and disseminated in August 2013, then the SIP submission 
deadline for each of the states subject to the final SIP call would 
fall in February 2015. Thereafter, the EPA will review the adequacy of 
that new SIP submission in accordance with the CAA requirements of 
sections 110(a), 110(k), 110(l), and 193, including the EPA's 
interpretation of the CAA reflected in the SSM Policy as clarified and 
updated through this rulemaking.
    The EPA is proposing the maximum time permissible under the CAA for 
a state to respond to a SIP call. The EPA believes that it is 
appropriate to provide states with the maximum time allowable under CAA 
section 110(k)(5) in order to allow states sufficient time to make SIP 
revisions following their own SIP development process. The EPA 
considers this a reasonable time period for the affected states to 
revise their state regulations, provide for public input, process the 
SIP revision through the state's own procedures, and submit the SIP 
revision to the EPA. Such a schedule will allow for the necessary SIP 
development process to correct the deficiencies, yet still achieve the 
necessary SIP improvements as expeditiously as practicable. The EPA 
acknowledges that the longstanding existence of many of the provisions 
at issue, such as automatic exemptions for SSM events, may have 
resulted in undue reliance on them as a compliance mechanism by some 
sources. As a result, development of appropriate SIP revisions may 
entail reexamination of the applicable emission limitations themselves, 
and this process may require the maximum time allowed by the CAA. 
Nevertheless, the EPA encourages the affected states to make the 
necessary revisions in as timely a fashion as possible and encourages 
the states to work with the respective EPA Regional Office as they 
develop the SIP revisions.
    The EPA notes that the SIP calls that it is proposing for affected 
states in this action would be narrow and apply only to the specific 
SIP provisions determined to be inconsistent with the requirements of 
the CAA. To the extent that a state is concerned that elimination of a 
particular aspect of an existing emission limitation, such as an 
impermissible exemption, will render that emission limitation more 
stringent than the state originally intended and more stringent than 
needed to meet the CAA requirements it was intended to address, the EPA 
anticipates that the state will revise the emission limitation 
accordingly, but without the impermissible exemption or other feature 
that necessitated the SIP call.
    Finally, the EPA notes that its authority under CAA section 
110(k)(5) does not extend to requiring a state to adopt a particular 
control measure in its SIP in response to the SIP call. Under 
principles of cooperative federalism, the CAA vests air agencies with 
substantial discretion to develop SIP provisions, so long as the 
provisions meet the legal requirements and objectives of the CAA.\89\ 
Thus, the issuance of a SIP call should not be misconstrued as a 
directive to the state in question to adopt a particular control 
measure. The EPA is merely proposing to require that affected states 
make a SIP revision to remove or revise existing SIP provisions that 
fail to comply with fundamental requirements of the CAA. The states 
retain discretion to remove or revise those provisions as they 
determine best, so long as they bring their SIPs into compliance with 
the requirements of the CAA.\90\
---------------------------------------------------------------------------

    \89\ See, Virginia, et al. v. EPA, 108 F.3d 1397 (D.C. Cir. 
1997) (SIP call remanded and vacated because, inter alia, the EPA 
had issued a SIP call that required states to adopt a particular 
control measure for mobile sources).
    \90\ Notwithstanding the latitude states have in developing SIP 
provisions, the EPA is required to assure that states meet the basic 
legal criteria for SIPs. See, Michigan, et al. v. EPA, 213 F.3d 663, 
686 (D.C. Cir. 2000) (upholding NOX SIP call because, 
inter alia, the EPA was requiring states to meet basic legal 
requirement that SIPs comply with section 110(a)(2)(D), not 
dictating the adoption of a particular control measure).
---------------------------------------------------------------------------

IX. What is the EPA proposing for each of the specific SIP provisions 
identified in the petition?

A. Overview of the EPA's Evaluation of Specific SIP Provisions

    In reviewing the Petitioner's concerns with respect to the specific 
SIP provisions identified in the Petition, the EPA notes that most of 
the provisions relate to a small number of common issues. As the EPA 
acknowledges in section II.A of this notice, many of these provisions 
are as old as the original SIPs that the EPA approved in the early 
1970s, when the states and the EPA had limited experience in evaluating 
the provisions' adequacy, enforceability, and consistency with CAA 
requirements.
    In some instances the EPA does not agree with the Petitioner's 
reading of the provision in question, or with the Petitioner's 
conclusion that the provision is inconsistent with the requirements of 
the CAA. However, given the common issues that arise in the Petition 
for multiple states, there are some overarching conceptual points that 
merit discussion in general terms before delving into the facts and 
circumstances of the specific SIP provisions in each state. The EPA 
solicits comment on all aspects of this proposal.
1. Automatic Exemption Provisions
    A significant number of provisions identified by the Petitioner 
pertain to existing SIP provisions that create automatic exemptions for 
excess emissions during periods of startup, shutdown, or malfunction. 
Occasionally, these provisions also pertain to exemptions for excess 
emission that occur during maintenance, load change, or other types of 
normal source operation. These provisions typically provide that a 
source subject to a specific SIP emission limitation is exempted from 
compliance during startup, shutdown, and malfunction, so that the 
excess emissions are defined as not violations. Often, these provisions 
are artifacts of the early phases of the SIP program, approved before 
state and EPA regulators recognized the implications of such 
exemptions. Whatever the genesis of these existing SIP provisions, 
however, these automatic exemptions from emission limitations are not 
consistent with the CAA, as the EPA has stated in its SSM Policy since 
at least 1982.
    After evaluating the Petition, the EPA proposes to determine that a 
number of states have existing SIP provisions that create impermissible 
automatic exemptions for excess emissions during

[[Page 12490]]

malfunctions or during startup, shutdown, or other types of normal 
source operation. In those instances where the EPA agrees that a SIP 
provision identified by the Petitioner contains such an exemption 
contrary to the requirements of the CAA, the EPA is proposing to grant 
the Petition and accordingly to issue a SIP call to the appropriate 
state.
2. Director's Discretion Exemption Provisions
    Another category of problematic SIP provision identified by the 
Petitioner is exemptions for excess emissions that, while not 
automatic, are exemptions for such emissions granted at the discretion 
of state regulatory personnel. In some cases, the SIP provision in 
question may provide some minimal degree of process and some parameters 
for the granting of such discretionary exemptions, but the typical 
provision at issue allows state personnel to decide unilaterally and 
without meaningful limitations that what would otherwise be a violation 
of the applicable emission limitation is instead exempt. Because the 
state personnel have the authority to decide that the excess emissions 
at issue are not a violation of the applicable emission limitation, 
such a decision would transform the violation into a non-violation, 
thereby barring enforcement by the EPA or others.
    The EPA refers to this type of provision as a ``director's 
discretion'' provision, and the EPA interprets the CAA generally to 
forbid such provisions in SIPs because they have the potential to 
undermine fundamental statutory objectives such as the attainment and 
maintenance of the NAAQS and to undermine effective enforcement of the 
SIP. As discussed in sections VIII.A and IX of this notice, unbounded 
director's discretion provisions purport to allow unilateral revisions 
of approved SIP provisions without meeting the applicable statutory 
substantive and procedural requirements for SIP revisions. The specific 
SIP provisions at issue in the Petition (see section IX of this notice) 
are especially inappropriate because they purport to allow 
discretionary creation of case-by-case exemptions from the applicable 
emission limitations, when the CAA does not permit any such exemptions 
in the first instance. The practical impact of such provisions is that 
in effect they transform an enforcement discretion decision by the 
state (e.g., that the excess emission from a given SSM event should be 
excused for some reason) into an exemption from compliance that also 
prevents enforcement by the EPA or through a citizen suit. The EPA's 
longstanding SSM Policy has interpreted the CAA to preclude SIP 
provisions in which a state's exercise of its own enforcement 
discretion bars enforcement by the EPA or through a citizen suit. Where 
the EPA agrees that a SIP provision identified by the Petitioner 
contains such a discretionary exemption contrary to the requirements of 
the CAA, the EPA is proposing to grant the Petition and to call for the 
state to rectify the problem.
3. State-Only Enforcement Discretion Provisions
    The Petitioner identified existing SIP provisions in many states 
that ostensibly pertain to parameters for the exercise of enforcement 
discretion by state personnel for violations due to excess emissions 
during SSM events. The EPA's SSM Policy has consistently encouraged 
states to utilize traditional enforcement discretion within appropriate 
bounds for such violations and, in the 1982 SSM Guidance, explicitly 
recommended criteria that states might consider in the event that they 
elected to formalize their enforcement discretion with provisions in 
the SIP. The intent has been that such enforcement discretion 
provisions in a SIP would be ``state-only,'' meaning that the 
provisions apply only to the state's own enforcement personnel and not 
to the EPA or to others.
    The EPA has determined that a number of states have SIP provisions 
that, when evaluated carefully, could reasonably be construed to allow 
the state to make enforcement discretion decisions that would purport 
to foreclose enforcement by the EPA under CAA section 113 or by 
citizens under section 304. In those instances where the EPA agrees 
that a specific provision could have the effect of impeding adequate 
enforcement of the requirements of the SIP by parties other than the 
state, the EPA is proposing to grant the Petition and to take action to 
rectify the problem. By contrast, where the EPA's evaluation indicates 
that the existing provision on its face or as reasonably construed 
could not be read to preclude enforcement by parties other than the 
state, the EPA is proposing to deny the Petition, and the EPA is taking 
comment on this issue in particular to assure that the state and the 
EPA have a common understanding that the provision does not have any 
impact on potential enforcement by the EPA or through a citizen suit. 
This process should serve to ensure that there is no misunderstanding 
in the future that the correct reading of the SIP provision would not 
bar enforcement by the EPA or through a citizen suit when the state 
elected to exercise its own enforcement discretion.
    The EPA notes that another method by which to eliminate any 
potential ambiguity about the meaning of these enforcement discretion 
provisions would be for the state to revise its SIP to remove the 
provisions. Because these provisions are only applicable to the state, 
the EPA's current view is that they need not be included within the 
SIP. Thus, the EPA supports states that elect to revise their SIPs to 
remove these provisions to avoid any unnecessary confusion.
4. Adequacy of Affirmative Defense Provisions
    In addition to its overarching request that the EPA revise its 
interpretation of the CAA and forbid any form of affirmative defense, 
the Petitioner also identified specific existing affirmative defense 
provisions in SIPs that the Petitioner contended are not consistent 
with the EPA's SSM Policy. In general, these provisions are structured 
as affirmative defense provisions, but the Petitioner expressed concern 
that they fail to address some or all of the criteria for such 
provisions that the EPA recommended in the 1999 SSM Guidance.
    In reviewing the claims of the Petitioner with respect to this type 
of alleged SIP inadequacy, the EPA is reevaluating each of the 
challenged affirmative defense provisions on the merits to determine 
whether it provides the types of assurances that the EPA has 
recommended as necessary to meet CAA requirements. As the SSM Policy is 
guidance, it does not require any particular approach, but it does 
reflect the EPA's interpretation of the CAA with respect to what could 
constitute an acceptable affirmative defense provision. For each of 
these provisions identified by the Petitioner, the EPA proposes to 
grant or to deny the Petition, based on the EPA's evaluation as to 
whether the provision at issue provides adequate criteria to provide 
only a narrow affirmative defense for sources under certain 
circumstances consistent with the overarching CAA objectives, such as 
attaining and maintaining the NAAQS.\91\ In addition, as discussed in 
section VII.C of this

[[Page 12491]]

notice, the EPA is also proposing to grant the Petition with respect to 
any identified provision that creates an affirmative defense applicable 
during planned startup and shutdown events, because such provisions are 
not consistent with the requirements of the CAA.
---------------------------------------------------------------------------

    \91\ By definition, an affirmative defense provision in a SIP 
provides a source with a defense to assert in an enforcement 
proceeding. The source has the ability to establish whether or not 
it has met the legal and factual parameters for such affirmative 
defense, and that question will be decided by the trier of fact in 
the proceeding. The relevant circumstances in such a proceeding 
would thus include issues relevant to the parameters for affirmative 
defense provisions, as enumerated in section VII.B of this notice.
---------------------------------------------------------------------------

5. Affirmative Defense Provisions Applicable to a ``Source or Small 
Group of Sources''
    The Petitioner specifically objected to existing provisions in SIPs 
for a few states that allow an affirmative defense for certain 
categories of sources to be based on an after-the-fact showing that the 
excess emissions during a particular SSM event did not cause a 
violation of the NAAQS or PSD increments. The Petitioner argued that 
these affirmative defense provisions are inconsistent with the CAA and 
with the EPA's own recommendations for affirmative defenses in the SSM 
Policy, because the provisions provide the possibility for an 
affirmative defense to be used by sources that would fall into the 
category of ``a source or small group of sources that has the potential 
to cause an exceedance of the NAAQS or PSD increments.'' \92\
---------------------------------------------------------------------------

    \92\ See, 1999 SSM Guidance at 4, and Attachment at 2, 3, and 5. 
Footnote 2 to that document articulates the reasoning behind the 
EPA's recommendation against such provisions, at least for some 
sources and for some NAAQS.
---------------------------------------------------------------------------

    The EPA acknowledges that its 1999 SSM Guidance recommended against 
affirmative defense provisions in SIPs for sources that have the 
potential, either individually or in small groups, to have excess 
emissions during SSM events that could cause a violation of the NAAQS 
or PSD increments. The EPA recommended that states utilize an 
enforcement discretion approach, rather than create an affirmative 
defense provision, for such sources. However, the EPA's SSM Policy is 
guidance, and the facts and circumstances of a particular situation may 
justify adopting a different approach. The EPA has evaluated each of 
the affirmative defense provisions identified by the Petitioner on the 
facts and circumstances of the particular provision. For each of these 
provisions, the EPA proposes to grant or to deny the Petition, based on 
an evaluation of whether the specific provision at issue in an 
individual SIP contains adequate criteria to achieve the objective of 
providing only a narrow affirmative defense for sources under certain 
circumstances consistent with the overarching CAA objectives, such as 
attaining and maintaining the NAAQS. The criteria that the EPA 
recommends for an affirmative defense provision for malfunctions to be 
consistent with CAA requirements are restated in this notice at section 
VII.B, which also highlights EPA's view concerning case-by-case 
approval of affirmative defenses in the case of geographic areas and 
pollutants ``where a single source or small group of sources has the 
potential to cause an exceedance of the NAAQS or PSD increments.''

B. Affected States in EPA Region I

1. Maine
a. Petitioner's Analysis
    The Petitioner first objected to a specific provision in the Maine 
SIP that provides an exemption for certain boilers from otherwise 
applicable SIP visible emission limits during startup and shutdown (06-
096-101 Me. Code R. Sec.  3).\93\ The provision exempts violations of 
the otherwise applicable SIP emission limitations for boilers over a 
certain rated input capacity ``during the first 4 hours following the 
initiation of cold startup or planned shutdown.'' The Petitioner 
recognized that this provision might operate as an affirmative defense 
because the exemption is only available once the person claiming an 
``exemption'' establishes that the facility was being run to minimize 
emissions. The provision does not make clear who is authorized to 
determine whether the visible emission limits apply. The Petitioner 
argued that one plausible interpretation of this provision is that 
state officials are ``authorized to decide that the exemption applies 
and therefore preclude enforcement by the EPA and by citizens.'' \94\ 
The Petitioner argued that such an interpretation of this provision 
precluding enforcement by the EPA or citizens, both for civil penalties 
and injunctive relief, is forbidden by the EPA's interpretation of the 
CAA. Accordingly, the Petitioner requested that this provision be 
eliminated from the SIP.
---------------------------------------------------------------------------

    \93\ Petition at 43-44.
    \94\ Petition at 44.
---------------------------------------------------------------------------

    Second, the Petitioner objected to a provision that empowers the 
state to ``exempt emissions occurring during periods of unavoidable 
malfunction or unplanned shutdown from civil penalty under section 349, 
subsection 2'' (06-096-101 Me. Code R. Sec.  4). The Petitioner noted 
that the provision ``clearly provides an exemption at the discretion of 
the department.'' \95\ The Petitioner argued that such a provision 
provides exemptions from the otherwise applicable SIP emission 
limitations, and such exemptions are inconsistent with the requirements 
of the CAA and the EPA's SSM Policy. Further, the Petitioner argued 
that the provision precludes enforcement by the EPA or citizens, both 
for civil penalties and injunctive relief, and that the EPA's 
interpretation of the CAA would forbid such a provision.
---------------------------------------------------------------------------

    \95\ Petition at 44.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup, shutdown, or malfunctions are not violations 
of the applicable emission limitations are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes that inclusion of such an 
exemption in 06-096-101 Me. Code R. Sec.  3 from the otherwise 
applicable SIP emission limitation for violations during the first 4 
hours following cold startup or planned shutdown of boilers with a 
rated input capacity of more than 200 million BTU per hour is a 
substantial inadequacy and renders this specific SIP provision 
impermissible.
    With respect to the Petitioner's concern that this exemption could 
preclude enforcement by the EPA or citizens, the EPA agrees that this 
is one of the critical reasons why such a provision is impermissible 
under the CAA. By having a SIP provision that defines what would 
otherwise be violations of the applicable emission limitations as non-
violations, the state has effectively negated the ability of the EPA or 
the public to enforce against those violations.
    The EPA also believes that even if 06-096-101 Me. Code R. Sec.  3 
is interpreted to allow the source to make the required demonstration 
only in the context of an enforcement proceeding, the conditions set 
forth in the provision do not render it an acceptable affirmative 
defense provision. As explained in sections IV and VII.C of this 
notice, the EPA believes that affirmative defenses are only permissible 
under the CAA in the

[[Page 12492]]

case of events that are beyond the control of the source, i.e., 
malfunctions. Affirmative defense provisions are not appropriate in the 
case of planned source actions, such as cold startup or planned 
shutdown, because sources should be expected to comply with applicable 
emission limitations during those normal planned and predicted modes of 
source operation.
    Finally, the EPA believes that 06-096-101 Me. Code R. Sec.  4 is 
impermissible under the CAA as interpreted in the EPA's SSM Policy as 
an unbounded director's discretion provision. The provision authorizes 
a state official ``to exempt emissions occurring during periods of 
unavoidable malfunction or unplanned shutdown from civil penalty under 
section 349, subsection 2.'' Although the reference to section 349, 
subsection 2 is to a Maine state penalty provision, the EPA believes 
that the provision is unclear as written. This provision could be read 
to mean that once the state official has exempted excess emissions 
during malfunctions from otherwise applicable SIP limitations, those 
excess emissions are not subject to any penalties, including penalties 
under CAA section 113. As discussed in section VII.A of this notice, 
such director's discretion provisions are impermissible. Such an 
interpretation would make the state official the unilateral arbiter of 
whether the excess emissions in a given event constitute a violation, 
which could preclude enforcement by the EPA or the public who might 
disagree about whether enforcement action is warranted. Most 
importantly, however, the provision may be read to authorize the state 
official to create an exemption from the emission limitation, and such 
an exemption is impermissible in the first instance. The EPA believes 
that inclusion of an unbounded director's discretion provision in 06-
096-101 Me. Code R. Sec.  4 is thus a substantial inadequacy and 
renders this specific SIP provision impermissible for this reason.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 06-096-101 
Me. Code R. Sec.  3. The EPA believes that this provision allows for 
exemptions from the otherwise applicable SIP emission limitations, and 
that such exemptions are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by 
creating these impermissible exemptions, the state has defined 
violations in a way that would interfere with effective enforcement by 
the EPA and the public for excess emissions during these events as 
provided in CAA sections 113 and 304. Even if the EPA were to consider 
06-096-101 Me. Code R. Sec.  3 to provide an affirmative defense rather 
than an automatic exemption, the provision is not a permissible 
affirmative defense provision consistent with the requirements of the 
CAA as interpreted in the EPA's recommendations in the EPA's SSM 
Policy.
    The EPA also proposes to grant the Petition with respect to 06-096-
101 Me. Code R. Sec.  4. The EPA believes that this provision, as 
written, applies only to state penalties. However, the EPA is concerned 
that the provision could cause confusion among the public, the 
regulated community, and the courts, who might interpret the provision 
as applying to both state and federal penalties. Of course, such an 
interpretation would seem to allow for exemptions from otherwise 
applicable emission limitations through a state official's unilateral 
exercise of unbounded discretionary authority and therefore be 
inconsistent with the fundamental requirements of the CAA with respect 
to SIPs and SIP revisions. To avoid any such misunderstanding, the EPA 
is proposing to find that these provisions are substantially inadequate 
to meet CAA requirements and thus proposing to issue a SIP call with 
respect to these provisions.
2. New Hampshire
a. Petitioner's Analysis
    The Petitioner objected to two generally applicable provisions in 
the New Hampshire SIP that allow emissions in excess of otherwise 
applicable SIP emission limitations during ``malfunction or breakdown 
of any component part of the air pollution control equipment.'' \96\ 
The Petitioner argued that the challenged provisions provide an 
automatic exemption for excess emissions during the first 48 hours when 
any component part of air pollution control equipment malfunctions 
(N.H. Code R. Env-A 902.03) and further provide that ``[t]he director 
may * * * grant an extension of time or a temporary variance'' for 
excess emissions outside of the initial 48-hour time period (N.H. Code 
R. Env-A 902.04). The Petitioner argued that N.H. Code R. Env-A 902.03 
is an impermissible automatic exemption because it ``provides that if 
certain conditions existed during a period of excess emissions, then 
those exceedances would not be considered violations.'' \97\ The 
Petitioner argued that such exemptions are inconsistent with the 
requirements of the CAA and the EPA's SSM Policy. The Petitioner argued 
that the CAA and the EPA's interpretation of the CAA in the SSM Policy 
require that all such excess emissions be treated as violations. The 
Petitioner further argued that both N.H. Code R. Env-A 902.03 and N.H. 
Code R. Env-A 902.04 appear ``to authorize the division to allow 
[exemptions], which could be interpreted to preclude enforcement by EPA 
or citizens'' \98\ for the excess emissions that would otherwise be 
violations of applicable SIP emission limitations.
---------------------------------------------------------------------------

    \96\ Petition at 52-53.
    \97\ Petition at 52.
    \98\ Petition at 53.
---------------------------------------------------------------------------

    Second, the Petitioner objected to two specific provisions in the 
New Hampshire SIP which provide source-specific exemptions for periods 
of startup for ``any process, manufacturing and service industry'' 
(N.H. Code R. Env-A 1203.05) and for pre-June 1974 asphalt plants 
during startup, provided they are at 60-percent opacity for no more 
than 3 minutes (N.H. Code R. Env-A 1207.02).\99\ The Petitioner 
recognized that EPA permits source category-specific emission 
limitations for startup and shutdown if certain conditions are met. The 
Petitioner argued, however, that ``[o]f the seven criteria EPA 
considers adequate to justify a source specific emission limit during 
startup and shutdown, section 1207.02 arguably meets only one of them 
and section 1203.05 meets none at all.'' \100\ The Petitioner thus 
requested that EPA require New Hampshire to remove both provisions from 
the SIP.
---------------------------------------------------------------------------

    \99\ Petition at 52-53.
    \100\ Petition at 53.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup, shutdown, or malfunctions are not violations 
are inconsistent with the

[[Page 12493]]

fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The first provision identified by the Petitioner, 
N.H. Code R. Env-A 902.03, explicitly states that ``increased emissions 
shall be allowed'' during ``malfunction or breakdown of any component 
part of the air pollution control equipment.'' The third provision 
identified by the Petitioner, N.H. Code R. Env-A 1203.05, provides that 
applicable SIP emission limitations apply ``for any process, 
manufacturing and service industry'' ``[e]xcept during periods of 
start-ups and warm-ups.'' Both of these provisions allow automatic 
exemptions during periods of startup from otherwise applicable SIP 
emission limitations for excess emissions and thus are inconsistent 
with the requirements of the CAA as interpreted in the EPA's SSM 
Policy. The EPA believes that inclusion of such exemptions from 
otherwise applicable SIP emission limitations in these provisions is a 
substantial inadequacy and renders these SIP provisions impermissible.
    Similarly, N.H. Code R. Env-A 1203.05 does not appear to comply 
with the Act's requirements for source category-specific rules for 
startup and shutdown as interpreted in the EPA's SSM Policy. N.H. Code 
R. Env-A 1203.05 establishes a visible emissions limit for ``any 
process, manufacturing and service industry'' but further states that 
this limit does not apply during startups. Automatic exemptions from 
otherwise applicable SIP emission limitations for excess emissions 
during periods of startup are not permissible under the CAA. As 
discussed in section VII.A of this notice, states may elect to develop 
alternative emission limitations or other forms of enforceable control 
measures or techniques that apply during startup or shutdown, but 
exemptions for excess emissions during such periods are inconsistent 
with the fundamental requirements of the CAA.
    Similarly, N.H. Code R. Env-A 1207.02 provided an alternate opacity 
limit, ``60 percent opacity, No. 3 on the Ringelmann Smoke Chart,'' for 
pre-June 1974 asphalt plants during startups. The EPA believes that 
this alternate emissions limit does not meet the elements of the EPA's 
SSM Policy interpreting the CAA for establishing source-specific 
startup and shutdown alternative limits. However, after the Petitioner 
filed its Petition, the EPA acted on a SIP revision from New Hampshire 
correcting N.H. Code R. Env-A 1207.02 and renaming that provision as 
N.H. Code R. Env-A 2703.02. The N.H. Code R. Env-A 2703.02, as 
rewritten and submitted by New Hampshire, corrected the deficiencies 
identified by the Petitioner and removed the alternative limitations 
applicable during startups for pre-June 1974 asphalt plants. The EPA 
approved New Hampshire's SIP revision with respect to N.H. Code R. Env-
A 2703.02 on August 22, 2012.\101\ Thus, the Petitioner's objection to 
this provision is moot.
---------------------------------------------------------------------------

    \101\ See, 77 FR 50561 at 50608.
---------------------------------------------------------------------------

    Finally, the EPA believes that N.H. Code R. Env-A 902.04 is 
impermissible under the CAA as interpreted in the EPA's SSM Policy, 
because it includes an unbounded director's discretion provision. The 
provision authorizes a state official to grant ``an extension of time'' 
to the time-limited exemption provided by N.H. Code R. Env-A 902.03 or 
a ``temporary variance'' to an applicable SIP emission limitation 
during malfunctions of air pollution control equipment. This provision 
could be read to mean that once the state official has granted a time 
extension or temporary variance for excess emissions during 
malfunctions from otherwise applicable SIP limitations, those excess 
emissions are not violations. As discussed in section VII.A of this 
notice, such director's discretion provisions are impermissible. Such 
an interpretation would make the state official the unilateral arbiter 
of whether the excess emissions in a given event constitute a 
violation, which could preclude enforcement by the EPA or the public 
who might disagree about whether enforcement action is warranted. Most 
importantly, however, the provision may be read to authorize the state 
official to create an exemption from the emission limitation, and such 
an exemption is impermissible in the first instance. The EPA believes 
that inclusion of an unbounded director's discretion provision in N.H. 
Code R. Env-A 902.03 is thus a substantial inadequacy and renders this 
specific SIP provision impermissible for this reason.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to N.H. Code R. 
Env-A 902.03 and N.H. Code R. Env-A 1203.05. The EPA believes that both 
of these provisions allow for automatic exemptions from otherwise 
applicable emission limitations and that such outright exemptions are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs as required by sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k). In addition, by creating these impermissible 
exemptions, the state has defined violations in a way that would 
interfere with effective enforcement by the EPA and citizens for excess 
emissions during these events as provided in CAA sections 113 and 304. 
For these reasons, the EPA is proposing to find that these provisions 
are substantially inadequate to meet CAA requirements and thus is 
proposing to issue a SIP call with respect to these provisions.
    The EPA proposes to grant the Petition with respect to N.H. Code R. 
Env-A 902.04. The EPA believes that this provision allows for 
exemptions from otherwise applicable emission limitations through a 
state official's unilateral exercise of discretionary authority that is 
unbounded. Such provisions are inconsistent with the fundamental 
requirements of the CAA with respect to emission limitations in SIPs as 
required by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these 
reasons, the EPA is proposing to find that this provision is 
substantially inadequate to meet CAA requirements and thus proposing to 
issue a SIP call with respect to this provision.
    The EPA proposes to deny the Petition with respect to N.H. Code R. 
Env-A 1207.02. New Hampshire has corrected the inadequacy identified by 
the Petitioner, and the EPA approved the SIP revision. Therefore, the 
Petitioner's objection is moot.
3. Rhode Island
a. Petitioner's Analysis
    The Petitioner objected to a generally applicable provision in the 
Rhode Island SIP that allows for a case-by-case petition procedure 
whereby a source can obtain a variance from state personnel under R.I. 
Gen. Laws Sec.  23-23-15 to continue to operate during a malfunction of 
its control equipment that lasts more than 24 hours, if the source 
demonstrates that enforcement would constitute undue hardship without a 
corresponding benefit (25-4-13 R.I. Code R. Sec.  
16.2).102 103 The Petitioner argued that if the state grants 
the source's petition and provides a variance allowing the source to 
continue to operate, the facility could be excused from compliance with 
otherwise applicable SIP emission limitations

[[Page 12494]]

during malfunction periods. The Petitioner argued that this provision 
could be read to preclude enforcement by the EPA or citizens in the 
event that the state elects not to treat the event as a violation of 
SIP emission limitations. Thus, the Petitioner argued, the provision is 
inconsistent with the CAA and the EPA's SSM Policy because it allows 
the state to make a unilateral decision that the excess emissions were 
not a violation and thus purports to bar enforcement for the excess 
emissions by the EPA and citizens.
---------------------------------------------------------------------------

    \102\ Petition at 63-65.
    \103\ The EPA notes that the Petitioner also identified several 
additional provisions, 25-4-13 R.I. Code R. Sec. Sec.  13.4.1(a), 
27.2.3 and 25-4-39 R.I. Code R. Sec. Sec.  39.5.4, 39.7.5(a), 
39.7.6(b), 39.7.7(e), 39.7.8(f), 39.7.9(e), 39.7.11(c)(2), that it 
alleged are inconsistent with the CAA and the EPA's SSM Policy. 
However, the Petitioner did not request that the EPA address those 
provisions in its remedy request, and thus the EPA is not addressing 
those provisions in this action. The EPA may elect to evaluate those 
provisions in a later action.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that excess 
emissions during malfunctions are not violations are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs.
    The EPA believes that 25-4-13 R.I. Code R. Sec.  16.2 is 
impermissible under the CAA as interpreted in the EPA's SSM Policy, due 
to an insufficiently bounded director's discretion provision. The 
provision specifies a mechanism for a variance to be granted ``[i]n the 
event that the malfunction of an air pollution control system is 
expected or may reasonably be expected to continue for longer than 24 
hours.'' This provision could be read to mean that once a state 
official has exempted excess emissions during malfunctions from 
otherwise applicable SIP limitations, those excess emissions are not 
violations. As discussed in section VII.A of this notice, such 
director's discretion provisions are impermissible. Such an 
interpretation would make the state official the unilateral arbiter of 
whether the excess emissions in a given event constitute a violation, 
which could preclude enforcement by the EPA or the public who might 
disagree about whether enforcement action is warranted. Most 
importantly, however, the provision may be read to authorize the state 
official to create an exemption from the emission limitation, and such 
an exemption is impermissible in the first instance. The EPA believes 
that inclusion of an insufficiently bounded director's discretion 
provision in 25-4-13 R.I. Code R. Sec.  16.2 is thus a substantial 
inadequacy and renders this specific SIP provision impermissible for 
this reason.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 25-4-13 R.I. 
Code R. Sec.  16.2. The EPA believes that this provision allows for 
exemptions from otherwise applicable emission limitations through a 
state official's unilateral exercise of discretionary authority that is 
insufficiently bounded. Such provisions are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). For these reasons, the EPA is proposing to find that this 
provision is substantially inadequate to meet CAA requirements and thus 
proposing to issue a SIP call with respect to this provision.

C. Affected States in EPA Region II

1. New Jersey
a. Petitioner's Analysis
    The Petitioner objected to two specific provisions in the New 
Jersey SIP that allow for automatic exemptions for excess emissions 
during emergency situations.\104\ The Petitioner objected to the first 
provision because it provides industrial process units that have the 
potential to emit sulfur compounds an exemption from the otherwise 
applicable sulfur emission limitations where ``[t]he discharge from any 
stack or chimney [has] the sole function of relieving pressure of gas, 
vapor or liquid under abnormal emergency conditions'' (N.J. Admin. Code 
7:27-7.2(k)(2)). The Petitioner argued that such an exemption is 
inconsistent with the requirements of the CAA and the EPA's SSM Policy. 
The Petitioner argued that the CAA and the EPA's interpretation of the 
CAA in the SSM Policy require that all such excess emissions be treated 
as violations.
---------------------------------------------------------------------------

    \104\ Petition at 53-54.
---------------------------------------------------------------------------

    The Petitioner objected to the second provision because it provides 
electric generating units (EGUs) an exemption from the otherwise 
applicable NOX emission limitations when the unit is 
operating at ``emergency capacity,'' also known as a ``MEG alert,'' 
which is statutorily defined as a period in which one or more EGUs is 
operating at emergency capacity at the direction of the load dispatcher 
in order to prevent or mitigate voltage reductions or interruptions in 
electric service, or both (N.J. Admin. Code 7:27-19.1). The Petitioner 
argued that this source-specific exemption from the emission 
limitations ``cannot ensure compliance with the NAAQS and PSD 
increments for NOX because ambient air quality is nowhere 
mentioned as a relevant consideration.'' \105\
---------------------------------------------------------------------------

    \105\ Petition at 54.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations. In accordance with the 
requirements of CAA section 110(a)(2)(A), SIPs must contain emission 
limitations and, in accordance with the definition of ``emission 
limitations'' in CAA section 302(k), such emission limitations must be 
continuous. Thus, any excess emissions above the level of the 
applicable emission limitation must be considered violations of such 
limitations, whether or not the state elects to exercise its 
enforcement discretion. SIP provisions that create exemptions such that 
excess emissions during emergency conditions, however defined, are not 
violations are inconsistent with the fundamental requirements of the 
CAA with respect to emission limitations in SIPs.
    The first provision identified by the Petitioner explicitly states 
that emission limitations of sulfur compounds ``shall not apply'' to 
emissions coming from a stack or a chimney during ``abnormal emergency 
conditions,'' when the discharges are solely to relieve pressure of 
gas, vapor, or liquid. The EPA believes that inclusion of such an 
exemption from emission limitations in N.J. Admin. Code 7:27-7.2(k)(2) 
is a substantial inadequacy and renders this specific SIP provision 
impermissible. The EPA notes that this exemption is impermissible even 
though the state has imposed the limitation that such exemption would 
apply only during ``abnormal emergency conditions.'' The core problem 
remains that the provision provides an impermissible exemption from the 
sulfur compound emission limitations otherwise applicable under the 
SIP.
    With regard to the second provision raised by the Petitioner (N.J. 
Admin. Code 7:27-19.1), the EPA disagrees that it is a substantial 
inadequacy in the SIP, because the exemption from the NOX 
emission limitations ceased to be applicable after November 15, 2005. 
Because the statute's exemption applies only to those emergency 
situations, or

[[Page 12495]]

``MEG alerts,'' that occur ``on or before November 15, 2005'' (N.J. 
Admin. Code 7:27-19.1), the Petitioner's claim is moot.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to N.J. Admin. 
Code 7:27-7.2(k)(2). The EPA believes that this provision allows for an 
exemption from the otherwise applicable emission limitations, and that 
such an exemption is inconsistent with the fundamental requirements of 
the CAA with respect to emission limitations in SIPs as required by CAA 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For this reason, the 
EPA is proposing to find that this provision is substantially 
inadequate to meet CAA requirements and thus is proposing to issue a 
SIP call with respect to this provision. The EPA proposes to deny the 
Petition with respect to N.J. Admin. Code 7:27-19.1, because its 
effectiveness expired on November 15, 2005, and therefore Petitioner's 
claim with regard to the impermissibility of this provision is moot.
2. [Reserved]

D. Affected States in EPA Region III

1. Delaware
a. Petitioner's Analysis
    The Petitioner objected to seven provisions in the Delaware SIP 
that provide exemptions during startup and shutdown from the otherwise 
applicable SIP emission limitations.\106\ The seven source-specific and 
pollutant-specific provisions that provide exemptions during periods of 
startup and shutdown are: 7-1100-1104 Del. Code Regs Sec.  1.5 
(Particulate Emissions from Fuel Burning Equipment); 7-1100-1105 Del. 
Code Regs Sec.  1.7 (Particulate Emissions from Industrial Process 
Operations); 7-1100-1108 Del. Code Regs Sec.  1.2 (Sulfur Dioxide 
Emissions from Fuel Burning Equipment); 7-1100-1109 Del. Code Regs 
Sec.  1.4 (Emissions of Sulfur Compounds From Industrial Operations); 
7-1100-1114 Del. Code Regs Sec.  1.3 (Visible Emissions); 7-1100-1124 
Del. Code Regs Sec.  1.4 (Control of Volatile Organic Compound 
Emissions); and 7-1100-1142 Del. Code Regs Sec.  2.3.5 (Specific 
Emission Control Requirements). These provisions provide exemptions to 
the emission limitations during startup and shutdown when ``the 
emissions * * * during start-up and shutdown are governed by an 
operation permit issued pursuant to the provisions of 2.0 of 7 DE 
Admin. Code 1102.'' (E.g., 7-1100-1104 Del. Code Regs Sec.  1.5.)
---------------------------------------------------------------------------

    \106\ Petition at 28-29.
---------------------------------------------------------------------------

    The Petitioner objected to these provisions because they provide a 
state official with the discretion, through the permitting process, to 
exempt sources from otherwise applicable SIP emission limitations or to 
set alternative limitations for periods of startup and shutdown. The 
Petitioner argued that such discretion is not permissible because the 
CAA and the EPA's interpretation of the CAA in the SSM Policy require 
that all such excess emissions be treated as violations. Moreover, the 
Petitioner argued that any alternative limits for periods of startup 
and shutdown created by the state official through the permitting 
process do not meet the requirements of the Act and the EPA's SSM 
Policy, because there is no requirement in the provision that the 
limits be narrowly tailored, source-specific, created in consultation 
with the EPA, and approved into the Delaware SIP by the EPA.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup and shutdown could be deemed not a violation 
of the applicable emission limitations are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs.
    The EPA believes that the seven provisions raised by the Petitioner 
are impermissible because they are unbounded director's discretion 
provisions, created through the state permitting program, in which 
state officials are provided unbounded discretion to set alternative 
limits and could therefore provide an outright exemption from the 
emission limitations. In each of the provisions raised by the 
Petitioner, an exemption from the SIP's emission limitations during 
periods of startup and shutdown is automatically granted if the permit 
to which the source is subject has terms or conditions governing 
emissions during startup and shutdown. The SIP provisions therefore 
vest state officials with the unilateral power to establish alternative 
limits, or to create an exemption altogether, in permits by deeming 
such periods of excess emissions during startup and shutdown 
permissible. Were the state to exercise its discretion and decide on a 
case-by-case basis that such an event was not a violation of the 
emission limitations, the EPA and citizens could be precluded from 
enforcement. More importantly, however, an exemption from the emission 
limitations is impermissible in the first instance, and these 
provisions purport to authorize state officials in the permitting 
context to grant such exemptions. These provisions therefore undermine 
the SIP's emission limitations and the emissions reductions they are 
intended to achieve and render them less enforceable by the EPA or 
through a citizen suit. The EPA believes that the inclusion of 
insufficiently bounded director's discretion provisions in 7-1100-1104 
Del. Code Regs Sec.  1.5, 7-1100-1105 Del. Code Regs Sec.  1.7, 7-1100-
1108 Del. Code Regs Sec.  1.2, 7-1100-1109 Del. Code Regs Sec.  1.4, 7-
1100-1114 Del. Code Regs Sec.  1.3, 7-1100-1124 Del. Code Regs Sec.  
1.4, and 7-1100-1142 Del. Code Regs Sec.  2.3.5 is thus a substantial 
inadequacy and renders these specific SIP provisions impermissible for 
this reason.
    In addition, the EPA agrees with the Petitioner that while the CAA, 
as interpreted in the EPA's SSM Policy, allows states to set source 
category-specific alternative emission limitations or other forms of 
enforceable control measures or techniques that apply during periods of 
startup and shutdown, such alternative limitations are only permitted 
in a narrow set of circumstances and must be accomplished through the 
appropriate SIP process (see section VII.A of this notice.) Those 
alternative limitations must be developed in consultation with the EPA 
and must be approved by the EPA into the SIP. The provisions of 
Delaware's SIP raised by the Petitioner purport to authorize the state 
to establish alternative limitations for excess emissions during 
periods of startup and shutdown (or to exempt those emissions 
altogether, as discussed above) on a case-by-case basis in the 
permitting process, and the provisions do not require the state to 
consult with the EPA or have those alternative limits approved by the 
EPA into the SIP. The EPA believes that the inclusion of processes to 
establish alternative limits for some sources and in regard to some

[[Page 12496]]

pollutants in a manner that does not conform with the requirements of 
the Act as interpreted in the EPA's SSM Policy in 7-1100-1104 Del. Code 
Regs Sec.  1.5, 7-1100-1105 Del. Code Regs Sec.  1.7, 7-1100-1108 Del. 
Code Regs Sec.  1.2, 7-1100-1109 Del. Code Regs Sec.  1.4, 7-1100-1114 
Del. Code Regs Sec.  1.3, 7-1100-1124 Del. Code Regs Sec.  1.4, and 7-
1100-1142 Del. Code Regs Sec.  2.3.5 is thus a substantial inadequacy 
and renders these specific SIP provisions impermissible, in addition to 
the creation of unbounded discretion in a state official.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 7-1100-1104 
Del. Code Regs Sec.  1.5, 7-1100-1105 Del. Code Regs Sec.  1.7, 7-1100-
1108 Del. Code Regs Sec.  1.2, 7-1100-1109 Del. Code Regs Sec.  1.4, 7-
1100-1114 Del. Code Regs Sec.  1.3, 7-1100-1124 Del. Code Regs Sec.  
1.4, and 7-1100-1142 Del. Code Regs Sec.  2.3.5. The EPA believes that 
these provisions allow for exemptions from otherwise applicable SIP 
emission limitations, and that such outright exemptions are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs in sections 110(a)(2)(A), 110(a)(C), 
and 302(k). In addition, the aforementioned provisions each allow for 
such exemptions through a state official's unilateral exercise of 
insufficiently bounded discretionary authority in the permitting 
process, and such provisions are inconsistent with the fundamental 
requirements of the CAA with respect to SIPs and SIP revisions. 
Moreover, the discretion in these provisions also allows state 
officials to establish alternative emission limitations during periods 
of startup and shutdown through a process that does not conform to the 
requirements of the Act or the EPA's SSM Policy with regard to 
establishing alternative emission limitations. For these reasons, the 
EPA is proposing to find that these provisions are substantially 
inadequate to meet CAA requirements and thus is proposing to issue a 
SIP call with respect to these provisions.
2. District of Columbia
a. Petitioner's Analysis
    The Petitioner objected to five provisions in the District of 
Columbia (D.C.) SIP as being inconsistent with the CAA and the EPA's 
SSM Policy.\107\ The Petitioner first objected to a generally 
applicable provision in the D.C. SIP that allows for discretionary 
exemptions during periods of maintenance or malfunction (D.C. Mun. 
Regs. tit. 20 Sec.  107.3). The provision provides the Mayor with the 
authority to permit continued operation of a stationary source when air 
pollution controls are shut down due to maintenance or malfunction. The 
Petitioner argued that this provision could provide an exemption from 
the otherwise applicable SIP emission limitations, and such an 
exemption is impermissible under the CAA because the statute and the 
EPA's interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. Moreover, the Petitioner 
objected to this discretionary exemption because the Mayor's grant of 
permission to continue to operate during the period of malfunction or 
maintenance could be interpreted to excuse excess emissions during such 
time period and could thus be read to preclude enforcement by the EPA 
or citizens in the event that the Mayor elects not to treat the event 
as a violation. Thus, in addition to creating an impermissible 
exemption for the excess emissions, the Petitioner argued, the 
provision is also inconsistent with the CAA as interpreted in the EPA's 
SSM Policy because it allows the Mayor to make a unilateral decision 
that the excess emissions were not a violation and thus purports to bar 
enforcement for the excess emissions by the EPA and citizens.
---------------------------------------------------------------------------

    \107\ Petition at 29-30.
---------------------------------------------------------------------------

    Secondly, the Petitioner objected to the alternative limitations on 
stationary sources for visible emissions during periods of ``start-up, 
cleaning, soot blowing, adjustment of combustion controls, or 
malfunction,'' (D.C. Mun. Regs. tit. 20 Sec.  606.1) and, for fuel-
burning equipment placed in initial operation before January 1977, 
alternative limits for visible emissions during startup and shutdown 
(D.C. Mun. Regs. tit. 20 Sec.  606.2). The Petitioner also objected to 
the exemption from emission limitations for emergency standby engines 
(D.C. Mun. Regs. tit. 20 Sec.  805.1(c)(2)). The Petitioner argued that 
these provisions could provide exemptions or deviations from the 
otherwise applicable SIP emission limitations, and such exemptions are 
impermissible under the CAA because the statute and the EPA's 
interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. Moreover, the Petitioner 
argued that the alternative limits do not appear to meet the criteria 
for a source category-specific rule as permitted under the EPA's SSM 
Policy interpreting the Act.
    Finally, the Petitioner objected to the provision in the D.C. SIP 
that provides an affirmative defense for violations of visible emission 
limitations during ``unavoidable malfunction'' (D.C. Mun. Regs. tit. 20 
Sec.  606.4). The Petitioner objected to this provision because the 
elements of the defense are not laid out clearly in the SIP, because 
the term ``affirmative defense'' is not defined in the SIP, and 
finally, the Petitioner argues, because affirmative defenses for any 
excess emissions are wholly inconsistent with the CAA and should be 
removed from the SIP.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup, shutdown, load change, or emergencies are not 
violations of the applicable emission limitations are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes that the inclusion of such an 
exemption from the emission limitations in D.C. Mun. Regs. tit. 20 
Sec.  107.3 is thus a substantial inadequacy and renders this specific 
SIP provision impermissible.
    The EPA believes that D.C. Mun. Regs. tit. 20 Sec.  107.3 is also 
impermissible due to an unbounded director's discretion provision that 
purports to make the Mayor the unilateral arbiter of whether the excess 
emissions in a given event constitute a violation. In the case of D.C. 
Mun. Regs. tit. 20 Sec.  107.3, the provision authorizes the Mayor to 
permit continued operation at stationary sources without functioning 
air pollution control equipment. The Mayor's grant of permission to 
continue to operate during the period of malfunction or maintenance 
could be interpreted to excuse excess emissions from that time period, 
and it could thus be read to preclude enforcement by the EPA or through 
a citizen suit in the event that the Mayor elects not to treat the 
event as a violation. In addition, the provision vests the Mayor with 
the unilateral power to grant an exemption from the

[[Page 12497]]

otherwise applicable SIP emission limitation, without any additional 
public process at the D.C. or federal level, and without any bounds or 
parameters to the exercise of this discretion. Most importantly, 
however, the provision purports to authorize the Mayor to create an 
exemption from the emission limitation, and such an exemption is 
impermissible in the first instance. Such a director's discretion 
provision undermines the emission limitations and the emissions 
reductions they are intended to achieve and renders them less 
enforceable by the EPA or through a citizen suit. The EPA believes that 
the inclusion of an unbounded director's discretion provision in D.C. 
Mun. Regs. tit. 20 Sec.  107.3 is thus a substantial inadequacy and 
renders this specific SIP provision impermissible for this reason, in 
addition to the creation of an impermissible exemption.
    The EPA notes that while the CAA does not allow for exemptions for 
excess emissions, it does, as discussed in section VII.A of this 
notice, allow states to develop alternative emission limitations or 
other forms of enforceable control measures or techniques that apply 
during startup or shutdown. The EPA believes that emission limitations 
in SIPs should generally be developed in the first instance to account 
for the types of normal operation outlined in D.C. Mun. Regs. tit. 20 
Sec.  606.1, such as cleaning, soot blowing, and adjustment of 
combustion controls. The D.C. Mun. Regs. tit. 20 Sec. Sec.  606.1 and 
606.2 do not appear to comply with the CAA's requirements as 
interpreted in the EPA's SSM Policy. The alternative limitations on 
stationary sources for visible emissions during periods of ``start-up, 
cleaning, soot blowing, adjustment of combustion controls, or 
malfunction,'' (D.C. Mun. Regs. tit. 20 Sec.  606.1) do not comply with 
the Act and the EPA's policy interpreting the Act, because, for 
instance, they do not apply only to ``specific, narrowly-defined source 
categories using specific control strategies.'' \108\ The EPA believes 
that the inclusion of these alternative limitations, which do not 
comply with the requirements of the Act, in D.C. Mun. Regs. tit. 20 
Sec. Sec.  606.1 and 606.2 is thus a substantial inadequacy and renders 
these specific SIP provisions impermissible.
---------------------------------------------------------------------------

    \108\ 1999 SSM Guidance Attachment at 4-5.
---------------------------------------------------------------------------

    With respect to the Petitioner's objection to the exemption for 
emergency standby engines (D.C. Mun. Regs. tit. 20 Sec.  805.1(c)(2)), 
the EPA disagrees that this provision applies to an exemption from 
emission limitations during startup, shutdown, or malfunction periods. 
Instead, this provision applies to a specific source category that is 
not subject to control under the D.C. SIP. At this point in time, the 
SIP reflects that regulation of this source category is not necessary 
in the SIP in order to meet the applicable reasonably available control 
technology (RACT) requirements or other CAA requirements in this area. 
The EPA therefore disagrees with Petitioner that D.C. Mun. Regs. tit. 
20 Sec.  805.1(c)(2) renders the D.C. SIP substantially inadequate.
    Finally, the EPA agrees with the Petitioner that the affirmative 
defense contained in D.C. Mun. Regs. tit. 20 Sec.  606.4 is not an 
acceptable affirmative defense provision under the CAA as interpreted 
the EPA's SSM Policy. Although the EPA believes that narrowly drawn 
affirmative defenses are permitted under the CAA for malfunction events 
(see section VII.B of this notice), the EPA's interpretation of the CAA 
is that such affirmative defenses can only shield the source from 
monetary penalties and cannot be a bar to injunctive relief. An 
affirmative defense provision that purports to bar any enforcement 
action for injunctive relief for violations of emission limitations is 
inconsistent with the requirements of CAA sections 113 and 304. 
Furthermore, the SIP provision is deficient because while it appears to 
create an affirmative defense, it does so with conditions that are not 
consistent with the criteria that the EPA recommends in the SSM Policy. 
The EPA acknowledges that the SSM Policy is only guidance concerning 
what types of SIP provisions could be consistent with the requirements 
of the CAA. Nonetheless, through this rulemaking, the EPA is proposing 
to determine that D.C. Mun. Regs. tit. 20 Sec.  606.4 does not include 
criteria that are sufficiently robust to qualify as an acceptable 
affirmative defense provision. The EPA believes that the inclusion of 
the complete bar to liability, including injunctive relief, and the 
insufficiently robust qualifying criteria in D.C. Mun. Regs. tit. 20 
Sec.  606.4 are substantial inadequacies and render this specific SIP 
provision impermissible.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to D.C. Mun. 
Regs. tit. 20 Sec.  107.3. The EPA believes that this provision allows 
for exemptions from the otherwise applicable SIP emission limitations, 
and that such exemptions are inconsistent with the fundamental 
requirements of the CAA with respect to emission limitations in SIPs in 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, D.C. Mun. 
Regs. tit. 20 Sec.  107.3 allows for such an exemption through a state 
official's unilateral exercise of discretionary authority that is 
unbounded and includes no additional public process at the D.C. or 
federal level, and such provisions are inconsistent with the 
fundamental requirements of the CAA with respect to SIPs and SIP 
revisions. For these reasons, the EPA is proposing to find that D.C. 
Mun. Regs. tit. 20 Sec.  107.3 is substantially inadequate to meet CAA 
requirements and thus proposing to issue a SIP call with respect to 
this provision.
    The EPA also proposes to grant the Petition with respect to D.C. 
Mun. Regs. tit. 20 Sec. Sec.  606.1 and 606.2. The EPA believes that 
section 606.1 impermissibly provides an alternative visible emission 
limitation to stationary sources during periods of malfunction and 
during planned maintenance events. Furthermore, while sections 606.1 
and 606.2 appropriately provide alternative visible emission 
limitations only during periods of startup and shutdown, both sections 
apply to a broad category of sources and are not narrowly limited to a 
source category employing a specific control strategy, as required by 
the CAA as interpreted in the EPA's SSM Policy. For these reasons, the 
EPA is proposing to find that D.C. Mun. Regs. tit. 20 Sec. Sec.  606.1 
and 606.2 are substantially inadequate to meet CAA requirements and is 
thus proposing to issue a SIP call with respect to these provisions.
    The EPA proposes to deny the Petition with respect to D.C. Mun. 
Regs. tit. 20 Sec.  805.1(c)(2). The EPA disagrees that this provision 
applies to an exemption from emission limitations during startup, 
shutdown, or malfunction periods. Rather, this provision applies to a 
specific source category that is not subject to control under the D.C. 
SIP. At this point in time, the SIP reflects that regulation of this 
source category is not necessary in the SIP in order to meet the 
applicable RACT requirements or other CAA requirements in this area.
    Finally, the EPA proposes to grant the petition with respect to 
D.C. Mun. Regs. tit. 20 Sec.  606.4 because it is not a permissible 
affirmative defense provision consistent with the requirements of the 
CAA and the EPA's recommendations in the EPA's SSM Policy. By 
purporting to create a bar to enforcement that applies not just to 
monetary penalties but also to injunctive relief, this provision is 
inconsistent with the requirements of

[[Page 12498]]

CAA sections 113 and 304. By not including sufficient criteria to 
assure that sources seeking to raise the affirmative defense have in 
fact been properly designed, maintained, and operated, and to assure 
that sources have taken all appropriate steps to minimize excess 
emissions, the provision also fails to be sufficiently narrowly drawn 
to justify shielding from monetary penalties for violations. Thus, this 
provision is not appropriate as an affirmative defense provision 
because it is inconsistent with fundamental requirements of the CAA. 
For these reasons, the EPA is proposing to find that this provision is 
substantially inadequate to meet CAA requirements and thus proposing to 
issue a SIP call with respect to this provision.
3. Virginia
a. Petitioner's Analysis
    The Petitioner objected to a generally applicable provision in the 
Virginia SIP that allows for discretionary exemptions during periods of 
malfunction (9 Va. Admin. Code Sec.  5-20-180(G)).\109\ First, the 
Petitioner objected because this provision provides an exemption from 
the otherwise applicable SIP emission limitations, and such an 
exemption is impermissible under the CAA because the statute and the 
EPA's interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. The Petitioner argued that 
the CAA and the EPA's interpretation of the CAA in the SSM Policy 
require that all such excess emissions be treated as violations.
---------------------------------------------------------------------------

    \109\ Petition at 70-71.
---------------------------------------------------------------------------

    Second, the Petitioner objected to the discretionary exemption for 
excess emissions during malfunction because the provision gives the 
state the authority to determine whether a violation ``shall be judged 
to have taken place'' (9 Va. Admin. Code Sec.  5-20-180(G)). The 
Petitioner argued that this provision could be read to preclude 
enforcement by the EPA or citizens in the event that the state elects 
not to treat the event as a violation. Thus, in addition to creating an 
impermissible exemption for the excess emissions, the Petitioner 
argued, the provision is also inconsistent with the CAA and the EPA's 
SSM Policy because it allows the state to make a unilateral decision 
that the excess emissions were not a violation and thus purports to bar 
enforcement for the excess emissions by the EPA and citizens.
    Third, the Petitioner argued that while the regulation provides 
criteria, akin to an affirmative defense, by which the state must make 
such a judgment that the event is not a violation, the criteria ``fall 
far short of EPA policy'' and the provision ``fails to establish any 
procedure through which the criteria are to be evaluated.''
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions such as 9 Va. Admin. Code Sec.  5-20-180(G) 
that create exemptions by authorizing the state to determine that the 
excess emissions during startup, shutdown, load change, or emergencies 
are not violations of the applicable emission limitations are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs. The EPA believes that the inclusion of 
such an exemption in 9 Va. Admin. Code Sec.  5-20-180(G) is thus a 
substantial inadequacy and renders this specific SIP provision 
impermissible.
    The EPA believes that 9 Va. Admin. Code Sec.  5-20-180(G) is also 
impermissible due to the inclusion of a director's discretion provision 
that purports to make the state official the unilateral arbiter of 
whether the excess emissions in a given malfunction event constitute a 
violation. In the case of 9 Va. Admin. Code Sec.  5-20-180(G), the 
provision authorizes the state official to judge that ``no violation'' 
has taken place. The provision therefore vests the state official with 
the unilateral power to grant an exemption from the otherwise 
applicable SIP emission limitation, without any additional public 
process at the state or federal level. By deciding that an exceedance 
of the emission limitation was not a ``violation,'' exercise of this 
discretion could preclude enforcement by the EPA or the public who may 
not agree with that conclusion. Most importantly, however, the 
provision purports to authorize the state official to create an 
exemption from the otherwise applicable SIP emission limitation, and 
such an exemption is impermissible in the first instance. Such a 
director's discretion provision undermines the emission limitations in 
the SIP and the emissions reductions that they are intended to achieve 
and renders them less enforceable by the EPA or through a citizen suit. 
The EPA believes that the inclusion of a director's discretion 
provision in 9 Va. Admin. Code Sec.  5-20-180(G) is thus a substantial 
inadequacy and renders this specific SIP provision impermissible for 
this reason, in addition to the creation of an impermissible exemption.
    Finally, the EPA agrees with Petitioner that although the exemption 
requires that certain conditions must be met by the source, the 
conditions set forth in the provision do not render it an acceptable 
affirmative defense provision. The Petitioner is correct that 9 Va. 
Admin. Code Sec.  5-20-180(G) is not an acceptable affirmative defense 
provision under the CAA as interpreted in the EPA's SSM Policy. 
Although the EPA believes that narrowly drawn affirmative defenses are 
permitted under the CAA for malfunction events (see section VII.B of 
this notice), the EPA's interpretation of the CAA is that such 
affirmative defenses can only shield the source from monetary penalties 
and cannot be a bar to injunctive relief. An affirmative defense 
provision that purports to bar any enforcement action for injunctive 
relief for violations of emission limitations is inconsistent with the 
requirements of CAA sections 113 and 304. Furthermore, Virginia's SIP 
provision is deficient because even if it attempts to create an 
affirmative defense rather than an automatic exemption from the 
emission limitations, it does so with conditions that are not 
consistent with the criteria that the EPA recommends in the SSM Policy. 
The EPA acknowledges that the SSM Policy is only guidance concerning 
what types of SIP provisions could be consistent with the requirements 
of the CAA. Nonetheless, through this rulemaking, the EPA is proposing 
to determine that 9 Va. Admin. Code Sec.  5-20-180(G) does not include 
criteria that are sufficiently robust to qualify as an acceptable 
affirmative defense provision under the CAA. The EPA believes that the 
inclusion of the complete bar to liability, including injunctive 
relief, and the insufficiently robust qualifying criteria in 9 Va. 
Admin. Code Sec.  5-20-180(G) are substantial inadequacies and render 
this specific SIP provision impermissible.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 9 Va. Admin. 
Code Sec.  5-20-180(G). The EPA believes

[[Page 12499]]

that this provision allows for an exemption from the otherwise 
applicable SIP emission limitations, and that such exemptions are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs in sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, 9 Va. Admin. Code Sec.  5-20-180(G) allows for 
such an exemption through a state official's unilateral exercise of 
discretionary authority that includes no additional public process at 
the state or federal level, and such provisions are inconsistent with 
the fundamental requirements of the CAA with respect to SIPs and SIP 
revisions.
    Moreover, even if the EPA were to consider 9 Va. Admin. Code Sec.  
5-20-180(G) as providing for an affirmative defense rather than an 
automatic exemption, the provision is not a permissible affirmative 
defense provision consistent with the requirements of the CAA as 
interpreted in the EPA's recommendations in the EPA's SSM Policy. By 
purporting to create a bar to enforcement that applies not just to 
monetary penalties but also to injunctive relief, this provision is 
inconsistent with the requirements of CAA sections 113 and 304. By not 
including sufficient criteria to assure that sources seeking to raise 
the affirmative defense have in fact been properly designed, 
maintained, and operated, and to ensure that sources have taken all 
appropriate steps to minimize excess emissions, the provision also 
fails to be sufficiently narrowly drawn to justify shielding from 
monetary penalties for violations. Thus, this provision is not 
appropriate as an affirmative defense provision because it is 
inconsistent with fundamental requirements of the CAA.
    For these reasons, the EPA is proposing to find that this provision 
is substantially inadequate to meet CAA requirements and thus proposing 
to issue a SIP call with respect to this provision.
4. West Virginia
a. Petitioner's Analysis
    The Petitioner made four types of objections identifying 
inadequacies regarding startup, shutdown, and malfunction provisions in 
West Virginia's SIP.\110\ First, the Petitioner objected to three 
specific provisions in the West Virginia SIP that allow for automatic 
exemptions from emission limitations, standards, and monitoring and 
recordkeeping requirements for excess emission during startup, 
shutdown, or malfunction (W. Va. Code R. Sec.  45-2-9.1, W. Va. Code R. 
Sec.  45-7-10.3, and W. Va. Code R. Sec.  45-40-100.8). The Petitioner 
objected because all three of these provisions provide exemptions from 
the otherwise applicable SIP emission limitations, and such exemptions 
are inconsistent with the requirements of the CAA as interpreted in the 
EPA's SSM Policy. The Petitioner argued that the CAA and the EPA's 
interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. The Petitioner also objected 
to all three of these provisions because, by providing an outright 
exemption from otherwise applicable requirements, the state has defined 
these excess emissions as not violations, thereby precluding 
enforcement by the EPA or citizens for the excess emissions that would 
otherwise be violations.
---------------------------------------------------------------------------

    \110\ Petition at 72-74.
---------------------------------------------------------------------------

    Second, the Petitioner objected to seven discretionary exemption 
provisions because these provisions provide exemptions from the 
otherwise applicable SIP emission limitations, and such exemptions are 
impermissible under the CAA because the statute and the EPA's 
interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. The Petitioner noted that 
the provisions allow a state official to ``grant an exception to the 
otherwise applicable visible emissions standards'' due to ``unavoidable 
shortage of fuel'' or ``any emergency situation or condition creating a 
threat to public safety or welfare'' (W. Va. Code R. Sec.  45-2-10.1), 
to permit excess emissions ``due to unavoidable malfunctions of 
equipment'' (W. Va. Code R. Sec.  45-3-7.1, W. Va. Code R. Sec.  45-5-
13.1, W. Va. Code R. Sec.  45-6-8.2, W. Va. Code R. Sec.  45-7-9.1, and 
W. Va. Code R. Sec.  45-10-9.1), and to permit exceedances where the 
limit cannot be ``satisfied'' because of ``routine maintenance'' or 
``unavoidable malfunction'' (W. Va. Code R. Sec.  45-21-9.3). The 
Petitioner argued that these provisions could be read to preclude 
enforcement by the EPA or citizens in the event that the state official 
elects not to treat the event as a violation. Thus, in addition to 
creating an impermissible exemption for the excess emissions, the 
Petitioner argued, the SIP's provisions are also inconsistent with the 
CAA as interpreted in the EPA's SSM Policy because they allow the state 
official to make a unilateral decision that the excess emissions were 
not a violation and thus purport to bar enforcement for the excess 
emissions by the EPA and citizens.
    Third, the Petitioner objected to the alternative limit imposed on 
hot mix asphalt plants during periods of startup and shutdown in W. Va. 
Code R. Sec.  45-3-3.2 because it was ``not sufficiently justified'' 
under the requirements of source category-specific rules. The 
Petitioner argued that this provision could provide an unacceptable 
deviation during periods of startup and shutdown from the otherwise 
applicable SIP emission limitations, and such deviations are 
impermissible under the CAA because the statute and the EPA's 
interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. Moreover, the Petitioner 
argued that the alternative limits do not appear to meet the criteria 
for a source category-specific rule as permitted under the Act as 
interpreted in the EPA's SSM Policy.
    Fourth, the Petitioner objected to a discretionary provision 
allowing the state to approve an alternative visible emission standard 
during startups and shutdowns for manufacturing processes and 
associated operations (W. Va. Code R. Sec.  45-7-10.4). The Petitioner 
argued that such a provision ``allows a decision of the state to 
preclude enforcement by EPA and citizens.''
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for automatic exemptions 
from otherwise applicable SIP emission limitations. In accordance with 
the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations of such limitations, whether or not the state elects to 
exercise its enforcement discretion. SIP provisions that create 
exemptions such that the excess emissions during startup, shutdown, or 
malfunction are not violations are inconsistent with the fundamental 
requirements of the CAA with respect to emission limitations in SIPs. 
Two of the automatic exemption provisions identified by the Petitioner 
explicitly state that the standards shall not apply or that certain 
operations ``shall be exempt'' during periods of startup, shutdown, 
malfunction, or maintenance (W. Va. Code R. Sec.  45-2-9.1, W. Va. Code 
R. Sec.  45-7-10.3). The third automatic exemption states that 
requirements for monitoring, recordkeeping, and reporting will not 
apply under certain circumstances (W. Va. Code R. Sec.  45-40-100.8). 
Such an

[[Page 12500]]

exemption would affect the enforceability of the emission limitations 
and thus adversely affects the approvability of the emission 
limitations themselves. Moreover, failure to account accurately for 
excess emissions at sources during SSM events has a broader impact on 
NAAQS implementation and SIP planning, because such accounting directly 
informs the development of emissions inventories and emissions 
modeling. The exemptions therefore provide that the resulting excess 
emissions will not be violations, which is contrary to the requirements 
of the CAA. The EPA believes that the inclusion of such automatic 
exemptions from emission limitations in W. Va. Code R. Sec.  45-2-9.1, 
W. Va. Code R. Sec.  45-7-10.3, and W. Va. Code R. Sec.  45-40-100.8, 
is thus a substantial inadequacy and renders these specific SIP 
provisions impermissible.
    With respect to the Petitioner's concern that these exemptions 
preclude enforcement by the EPA or citizens, the EPA agrees that this 
is one of the critical reasons why such provisions are impermissible 
under the CAA. By having SIP provisions that define what would 
otherwise be violations of the applicable emission limitations as non-
violations, the state has effectively negated the ability of the EPA or 
the public to enforce against those violations.
    The EPA also agrees that the CAA does not allow for discretionary 
exemptions from otherwise applicable SIP emission limitations. As noted 
above, in accordance with the requirements of CAA section 110(a)(2)(A), 
SIPs must contain emission limitations and, in accordance with the 
definition of ``emission limitations'' in CAA section 302(k), such 
emission limitations must be continuous. Thus, any excess emissions 
above the level of the applicable emission limitation must be 
considered violations, whether or not the state elects to exercise its 
enforcement discretion. SIP provisions such as W. Va. Code R. Sec.  45-
2-10.1, W. Va. Code R. Sec.  45-3-7.1, W. Va. Code R. Sec.  45-5-13.1, 
W. Va. Code R. Sec.  45-6-8.2, W. Va. Code R. Sec.  45-7-9.1, W. Va. 
Code R. Sec.  45-10-9.1, and W. Va. Code R. Sec.  45-21-9.3 that create 
exemptions by permitting the state to determine that the excess 
emissions during startup, shutdown, load change, or emergencies are not 
violations of the applicable emission limitations are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes that the inclusion of these 
discretionary exemptions in the SIP is thus a substantial inadequacy 
and renders these specific SIP provisions impermissible.
    The EPA believes that W. Va. Code R. Sec.  45-2-10.1, W. Va. Code 
R. Sec.  45-3-7.1, W. Va. Code R. Sec.  45-5-13.1, W. Va. Code R. Sec.  
45-6-8.2, W. Va. Code R. Sec.  45-7-9.1, W. Va. Code R. Sec.  45-10-
9.1, and W. Va. Code R. Sec.  45-21-9.3 are also impermissible because 
these provisions purport to make a state official the unilateral 
arbiter of whether the excess emissions in a given malfunction, 
maintenance, or emergency event constitute a violation. In the case of 
W. Va. Code R. Sec.  45-2-10.1, the provision allows the state official 
to ``grant an exception to the otherwise applicable visible emissions 
standards'' due to ``unavoidable shortage of fuel'' or ``any emergency 
situation or condition creating a threat to public safety or welfare.'' 
W. Va. Code R. Sec.  45-3-7.1, W. Va. Code R. Sec.  45-5-13.1, W. Va. 
Code R. Sec.  45-6-8.2, W. Va. Code R. Sec.  45-7-9.1, and W. Va. Code 
R. Sec.  45-10-9.1 permit excess emissions ``due to unavoidable 
malfunctions of equipment.'' The provision at W. Va. Code R. Sec.  45-
21-9.3 permits exceedances where the limit cannot be ``satisfied'' 
because of ``routine maintenance'' or ``unavoidable malfunction.''
    These provisions authorize the state official to judge that 
violations have not occurred even though the emissions exceeded the 
applicable SIP emission limitations. The SIP's provisions therefore 
vest the state official with the unilateral power to grant exemptions 
from otherwise applicable SIP emission limitations, without any 
additional public process at the state or federal level. By deciding 
that an exceedance of the emission limitation was not a ``violation,'' 
exercise of this discretion could preclude enforcement by the EPA or 
through a citizen suit. Most importantly, however, the provision 
purports to authorize the state official to create an exemption from 
the otherwise applicable SIP emission limitation, and such an exemption 
is impermissible in the first instance. Such a director's discretion 
provision undermines the emission limitations and the emissions 
reductions they are intended to achieve and renders them less 
enforceable by the EPA or through a citizen suit. The EPA believes that 
the inclusion of director's discretion provisions in W. Va. Code R. 
Sec.  45-2-10.1, W. Va. Code R. Sec.  45-3-7.1, W. Va. Code R. Sec.  
45-5-13.1, W. Va. Code R. Sec.  45-6-8.2, W. Va. Code R. Sec.  45-7-
9.1, W. Va. Code R. Sec.  45-10-9.1, and W. Va. Code R. Sec.  45-21-9.3 
is thus a substantial inadequacy and renders these specific SIP 
provisions impermissible for this reason, in addition to the creation 
of an impermissible exemption.
    The EPA notes that while the CAA does not allow for exemptions for 
excess emissions, it does, as discussed in section VII.A of this 
notice, permit states to develop alternative emission limitations or 
other forms of enforceable control measures or techniques that apply 
during startup or shutdown. W. Va. Code R. Sec.  45-3-3.2 and W. Va. 
Code R. Sec.  45-2-10.2 \111\ do not appear to comply with the Act's 
requirements as interpreted in the EPA's SSM Policy. The alternative 
smoke and/or particulate matter limitation on hot mix asphalt plants 
that applies during periods of startup and shutdown (W. Va. Code R. 
Sec.  45-3-3.2) does not comply with the CAA as interpreted in the 
EPA's policy because, for instance, it does not apply only to 
``specific, narrowly-defined source categories using specific control 
strategies.'' \112\ W. Va. Code R. Sec.  45-2-10.2, which allows fuel-
burning units employing flue gas desulphurization systems to bypass 
such systems during ``necessary planned or unplanned maintenance'' and 
provides an alternative limit of 20-percent opacity during such 
periods, also does not comply with the CAA as interpreted in the EPA's 
SSM Policy. The EPA believes that such special emission limitations or 
emissions controls may be appropriate during startup or shutdown, but 
other modes of normal source operation, including maintenance, should 
be accounted for in the development of the emission limitations 
themselves. The EPA believes that the inclusion of alternative limits 
that do not meet the requirements of the CAA as interpreted in the 
EPA's SSM Policy in W. Va. Code R. Sec.  45-3-3.2 and W. Va. Code R. 
Sec.  45-2-10.2 is thus a substantial inadequacy and renders these 
specific SIP provisions impermissible for this reason.
---------------------------------------------------------------------------

    \111\ The EPA notes that the Petitioner specifically focused on 
concern with W. Va. Code R. Sec.  45-2-10.1, but the same issue 
affects W. Va. Code R. Sec.  45-2-10.2.
    \112\ 1999 SSM Guidance Attachment at 4-5.
---------------------------------------------------------------------------

    The EPA also agrees that the discretionary provision allowing a 
state official to approve an alternative visible emission standard 
during startups and shutdowns for manufacturing processes and 
associated operations (W. Va. Code R. Sec.  45-7-10.4) does not comply 
with the CAA or the EPA's SSM Policy interpreting the CAA. These 
provisions purport to authorize the state official to establish 
alternative limits for excess emissions during periods of startup and 
shutdown (or, potentially, to exempt

[[Page 12501]]

those emissions altogether) on a case-by-case basis, and these 
provisions do not require the state official to consult with the EPA or 
to have those alternative limits approved by the EPA into the SIP, 
contrary to the EPA's SSM Policy interpreting the requirements of the 
CAA. The EPA believes that the inclusion of these alternative 
limitations, which do not comply with the EPA's interpretations of the 
requirements of the CAA, in W. Va. Code R. Sec.  45-3-3.2 and W. Va. 
Code R. Sec.  45-7-10.4, is thus a substantial inadequacy and renders 
these specific SIP provisions impermissible.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to W. Va. Code 
R. Sec.  45-2-9.1, W. Va. Code R. Sec.  45-7-10.3, and W. Va. Code R. 
Sec.  45-40-100.8. The EPA believes that each of these provisions 
allows for automatic exemptions from the otherwise applicable SIP 
emission limitations, and that such exemptions are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, by creating these impermissible exemptions, 
the state has defined violations in way that would interfere with 
effective enforcement by the EPA and citizens for excess emissions 
during these events as provided in CAA sections 113 and 304. For these 
reasons, the EPA is proposing to find that these provisions are 
substantially inadequate to meet CAA requirements and thus proposing to 
issue a SIP call with respect to these provisions.
    The EPA proposes to grant the Petition with respect to W. Va. Code 
R. Sec.  45-2-10.1, W. Va. Code R. Sec.  45-3-7.1, W. Va. Code R. Sec.  
45-5-13.1, W. Va. Code R. Sec.  45-6-8.2, W. Va. Code R. Sec.  45-7-
9.1, W. Va. Code R. Sec.  45-10-9.1, and W. Va. Code R. Sec.  45-21-
9.3. The EPA believes that these provisions allow for discretionary 
exemptions from otherwise applicable SIP emission limitations, and that 
such exemptions are inconsistent with the fundamental requirements of 
the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, these 
provisions allow for exemptions through a state official's unilateral 
exercise of discretionary authority that includes no additional public 
process at the state or federal level, and such provisions are 
inconsistent with the fundamental requirements of the CAA with respect 
to SIPs and SIP revisions.
    The EPA also proposes to grant the Petition with respect to W. Va. 
Code R. Sec.  45-3-3.2, W. Va. Code R. Sec.  45-2-10.2, and W. Va. Code 
R. Sec.  45-7-10.4. The W. Va. Code R. Sec.  45-3-3.2 applies to a 
broad category of sources and is not narrowly limited to a source 
category that uses a specific control strategy, as required by the 
EPA's SSM Policy interpreting the CAA. Similarly, W. Va. Code R. Sec.  
45-2-10.2 is inconsistent with the EPA's SSM Policy interpreting the 
CAA because it is an alternative limit that applies during periods of 
maintenance, and such alternative limits are only permissible during 
periods of startup and shutdown. The W. Va. Code R. Sec.  45-7-10.4 
allows state officials the discretion to establish alternative visible 
emissions standards during startup and shutdown upon application. This 
provision is inconsistent with the EPA's SSM Policy and requirements 
under the Act because, for example, the emission limitations are 
required to be developed in consultation with the EPA and must be 
included in the SIP itself. For these reasons, the EPA is proposing to 
find that W. Va. Code R. Sec.  45-3-3.2, W. Va. Code R. Sec.  45-2-
10.2, and W. Va. Code R. Sec.  45-7-10.4 are substantially inadequate 
to meet CAA requirements and is thus proposing to issue a SIP call with 
respect to these provisions.

E. Affected States and Local Jurisdictions in EPA Region IV

1. Alabama
a. Petitioner's Analysis
    The Petitioner objected to two generally applicable provisions in 
the Alabama SIP that allow for discretionary exemptions during startup, 
shutdown, or load change (Ala Admin Code Rule 335-3-14-.03(1)(h)(1)), 
and during emergencies (Ala Admin Code Rule 335-3-
14-.03(1)(h)(2)).113 114 First, the Petitioner objected 
because both of these provisions provide exemptions from the otherwise 
applicable emission limitations, and such exemptions are inconsistent 
with the requirements of the CAA and the EPA's SSM Policy. The 
Petitioner argued that the CAA and the EPA's interpretation of the CAA 
in the SSM Policy require that all such excess emissions be treated as 
violations.
---------------------------------------------------------------------------

    \113\ Petition at 17-18.
    \114\ The EPA notes that the Petitioner also identified several 
additional pollutant-specific and source category-specific 
provisions in the Alabama SIP that it alleged are inconsistent with 
the CAA and the EPA's SSM Policy. However, the Petitioner did not 
request that the EPA address those SIP provisions in its remedy 
request, and thus the EPA is not addressing those provisions in this 
action. The EPA may elect to evaluate those provisions in a later 
action.
---------------------------------------------------------------------------

    Second, the Petitioner objected to the discretionary exemptions for 
excess emissions during startup, shutdown, or load change that are also 
present in Ala Admin Code Rule 335-3-14-.03(1)(h)(1) because the 
emissions during such events can be reasonably avoided. The Petitioner 
noted that such events are part of normal source operation and that any 
special treatment of excess emissions during such events must be 
justified with a showing that the excess emissions could not be avoided 
through careful planning and design, and that bypassing controls in 
such events is necessary to prevent loss of life, personal injury, or 
severe property damage.
    Third, the Petitioner objected to the discretionary emergency 
exemption provision that also is present in Ala Admin Code Rule 335-3-
14-.03(1)(h)(2), because the provision gives the state ``sole authority 
to determine whether or not a violation has occurred.'' The Petitioner 
argued that this provision could be read to preclude enforcement by the 
EPA or citizens in the event that the state elects not to treat the 
event as a violation. Thus, in addition to creating an impermissible 
exemption for the excess emissions, the Petitioner argued that the 
provision is also inconsistent with the CAA and the EPA's SSM Policy 
because it allows the state to make a unilateral decision that the 
excess emissions were not a violation and thus purports to bar 
enforcement for the excess emissions by the EPA and citizens.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable emission limitations, whether automatic or through 
the exercise of a state official's discretion. In accordance with the 
requirements of CAA section 110(a)(2)(A), SIPs must contain emission 
limitations and, in accordance with the definition of ``emission 
limitations'' in CAA section 302(k), such emission limitations must be 
continuous. Thus, any excess emissions above the level of the 
applicable emission limitations must be considered violations, whether 
or not the state elects to exercise its enforcement discretion. SIP 
provisions that create exemptions such that the excess emissions during 
startup, shutdown, load change, or emergencies are not violations of 
the applicable emission limitations are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes

[[Page 12502]]

that the inclusion of such exemptions from the emission limitations in 
Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-
3-14-.03(1)(h)(2) is thus a substantial inadequacy and renders these 
specific SIP provisions impermissible.
    In addition, the EPA agrees that startup, shutdown, and load change 
are all part of normal source operation and that such events are 
usually planned for and predictable, and thus emissions during such 
events are more controllable than those that might occur during an 
``emergency'' or other form of malfunction. Unlike excess emissions in 
malfunctions, which are by definition presumed to be beyond the 
reasonable control of the source through proper design, operation, and 
maintenance, excess emissions that occur during startup, shutdown, or 
load change can be anticipated and steps can be taken to minimize them. 
The Petitioner, citing the 1983 SSM Guidance, argued that the EPA's SSM 
Policy indicates that there should be ``a higher showing to escape 
enforcement'' during such planned events. While such a higher showing 
may be relevant in the context of whether a state elects to exercise 
its enforcement discretion, it should not be germane to whether or not 
the excess emissions constitute a violation of the applicable emission 
limitations. The EPA notes that the CAA does not allow exemptions for 
excess emissions during startup, shutdown, or load change, just as it 
does not allow such exemptions during malfunctions. As discussed in 
section VII.A of this notice, states may elect to develop alternative 
emission limitations or other forms of enforceable control measures or 
techniques that apply during startup and shutdown, but exemptions for 
excess emissions during such periods are inconsistent with the 
fundamental requirements of the CAA.
    Finally, the EPA believes that both Ala Admin Code Rule 335-3-
14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-14-.03(1)(h)(2) are also 
impermissible as unbounded director's discretion provisions that make a 
state official the unilateral arbiter of whether the excess emissions 
in a given event constitute a violation. In the case of Ala Admin Code 
Rule 335-3-14-.03(1)(h)(1), the provision authorizes a state official 
unilaterally to ``[], in the Air Permit, exempt on a case by case basis 
any exceedances of emission limits which cannot reasonably be avoided, 
such as during periods of start-up, shut-down or load change.'' This 
provision vests the state official with the unilateral power to grant 
in a state air permit, which may not provide any additional public 
process at the state or federal level, an exemption from the otherwise 
applicable emission limitations without any bounds or parameters to the 
exercise of this discretion. By deciding that an exceedance of the 
emission limitation will not be a ``violation,'' exercise of this 
discretion could preclude enforcement by the EPA or the public who may 
not agree that the emissions in question could not ``reasonably be 
avoided.'' Most importantly, however, the provision authorizes the 
state official to create an exemption from the emission limitations, 
and such an exemption is impermissible in the first instance. Such a 
director's discretion provision undermines the SIP emission limitations 
and the emissions reductions they are intended to achieve and renders 
them less enforceable by the EPA or through a citizen suit. As 
discussed in section VII.A of this notice, such provisions are 
substantially inadequate to meet CAA requirements.
    Similarly, the EPA believes that Ala Admin Code Rule 335-3-
14-.03(1)(h)(2) authorizes a state official unilaterally to decide that 
a given event was an ``emergency'' and thus to create an exemption from 
the otherwise applicable emission limitations. In this case, the 
provision does contain some general parameters for the source to 
establish that there was an emergency (e.g., the source has to 
``identify'' the cause of the emergency) but nevertheless empowers the 
state official to make a unilateral determination as to whether the 
event was an emergency. The provision thus vests the official with the 
power to grant an exemption from the otherwise applicable SIP emission 
limitations without any additional public process at the state or 
federal level, and with insufficient bounds or parameters applicable to 
the exercise of this discretion. Again, most significantly, this 
discretion authorizes the creation of an exemption on a case-by-case 
basis that is not permissible in the first instance. Thus, this 
provision also may undermine the SIP emission limitations, and the 
emissions reductions they are intended to achieve, and renders them 
less enforceable by the EPA or through a citizen suit. The EPA believes 
that the inclusion of an insufficiently bounded director's discretion 
provision in Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin 
Code Rule 335-3-14-.03(1)(h)(2) is thus a substantial inadequacy and 
renders these specific SIP provisions impermissible for this reason, in 
addition to the creation of impermissible exemptions.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Ala Admin 
Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-
14-.03(1)(h)(2). The EPA believes that both of these provisions allow 
for exemptions from the otherwise applicable emission limitations, and 
that such exemptions are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, Ala Admin 
Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-
14-.03(1)(h)(2) both allow for such exemptions through a state 
official's unilateral exercise of discretionary authority that is 
insufficiently bounded and includes no additional public process at the 
state or federal level, and such provisions are inconsistent with the 
fundamental requirements of the CAA with respect to SIPs and SIP 
revisions. Moreover, the discretion created by these provisions allows 
case-by-case exemptions from emission limitations, when such exemptions 
are not permissible in the first instance. For these reasons, the EPA 
is proposing to find that Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and 
Ala Admin Code Rule 335-3-14-.03(1)(h)(2) are substantially inadequate 
to meet CAA requirements and thus proposing to issue a SIP call with 
respect to these provisions.
2. Florida
a. Petitioner's Analysis
    The Petitioner objected to three specific provisions in the Florida 
SIP that allow for generally applicable automatic exemptions for excess 
emissions during startup, shutdown, or malfunction (Fla. Admin. Code 
Ann Rule 62-201.700(1)), for fossil fuel steam generators during 
startup and shutdown (Fla. Admin. Code Ann Rule 62-201.700(2)), and for 
such sources during boiler cleaning and load change (Fla. Admin. Code 
Ann Rule 62-201.700(3)).115 116 The Petitioner objected 
because all three of these provisions provide exemptions from the 
otherwise applicable SIP emission limitations, and such exemptions are

[[Page 12503]]

inconsistent with the requirements of the CAA and the EPA's SSM Policy. 
The Petitioner argued that the CAA and the EPA's interpretation of the 
CAA in the SSM Policy require that all excess emissions be treated as 
violations.
---------------------------------------------------------------------------

    \115\ Petition at 30-31.
    \116\ The EPA notes that the Petitioner also identified several 
additional pollutant-specific and source category-specific 
provisions in the Florida SIP that it alleged are inconsistent with 
the CAA and the EPA's SSM Policy. However, the Petitioner did not 
request that the EPA address those SIP provisions in its remedy 
request, and thus the EPA is not addressing those provisions in this 
action. The EPA may elect to evaluate those provisions in a later 
action.
---------------------------------------------------------------------------

    The Petitioner objected to all three of these provisions because, 
by stating that the excess emissions during the relevant events and 
time periods ``are permitted,'' the state has defined these excess 
emissions as not violations, thereby precluding enforcement by the EPA 
or citizens for the excess emissions that would otherwise be 
violations. The Petitioner also argued that the provision creating 
exemptions for excess emissions during boiler cleaning and load change 
in Fla. Admin. Code Ann Rule 62-201.700(3) is impermissible 
specifically because it creates an exemption for excess emissions 
during normal source operation that ``are not eligible for any relief 
under EPA guidance.''
    After objecting to the three provisions that create the exemptions, 
the Petitioner noted that the related provision in Fla. Admin. Code Ann 
Rule 62-201.700(4) reduces the potential scope of the exemptions in the 
other three provisions if the excess emissions at issue are caused 
entirely or in part by things such as poor maintenance but that it does 
not eliminate the impermissible exemptions. Moreover, the Petitioner 
asserted that none of the four provisions provides any ``procedure by 
which the factual premises of any of these subsections are to be 
proven.''
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable emission limitations. In accordance with the 
requirements of CAA section 110(a)(2)(A), SIPs must contain emission 
limitations and, in accordance with the definition of ``emission 
limitations'' in CAA section 302(k), such emission limitations must be 
continuous. Thus, any excess emissions above the level of the 
applicable SIP emission limitations must be considered violations of 
such limitations, whether or not the state elects to exercise its 
enforcement discretion. SIP provisions that create exemptions such that 
the excess emissions during startup, shutdown, malfunction, boiler 
cleaning, or load change are not violations are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The three provisions identified by the Petitioner 
explicitly state that the excess emissions ``shall be permitted'' under 
certain circumstances and thus provide that the resulting excess 
emissions will not be violations contrary to the CAA, as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). The EPA believes that 
the inclusion of such exemptions from emission limitations in Fla. 
Admin. Code Ann Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-
201.700(2) and Fla. Admin. Code Ann Rule 62-201.700(3), is thus a 
substantial inadequacy and renders these specific SIP provisions 
impermissible.
    The EPA notes that these exemptions are impermissible even though 
the state has imposed some factual and temporal limitations on their 
potential scope. For example, in Fla. Admin. Code Ann Rule 62-
201.700(1), the state has specified that the excess emissions from 
startup, shutdown, and malfunction events ``shall be permitted'' (i.e., 
allowed and thus not treated as violations) provided: ``(1) best 
operational practices to minimize emissions are adhered to and (2) the 
duration of excess emissions shall be minimized but in no case exceed 
two hours in any 24 hour period unless specifically authorized by the 
Department for longer duration.'' Similarly, in Fla. Admin. Code Ann 
Rule 62-201.700(2) with respect to startup and shutdown from certain 
sources, the state has conditioned the exemption ``provided that best 
operational practices to minimize emissions are adhered to and the 
duration of excess emissions shall be minimized.'' In Fla. Admin. Code 
Ann Rule 62-201.700(3), the state has imposed much more specific limits 
on the duration of the events and some additional limitations on the 
excess emissions in the form of specified opacity limits that apply 
during such events. Although these extra limitations on the scope of 
the exemptions are helpful features, they nevertheless constitute a 
variance at a state official's discretion from the otherwise applicable 
emissions limitations, and the core problem remains that each of the 
three provisions provides impermissible exemptions from the emission 
limitations by defining the excess emissions as ``permitted'' and thus 
not violations. The CAA does, as discussed in section VII.A of this 
notice, allow states to develop alternative emission limitations or 
other forms of enforceable control measures or techniques that apply 
during startup or shutdown. However, the Florida SIP provisions do not 
appear to comply with the Act's requirements as interpreted in the 
EPA's SSM Policy because, for instance, they do not apply only to 
``specific, narrowly-defined source categories using specific control 
strategies.'' \117\
---------------------------------------------------------------------------

    \117\ 1999 SSM Guidance Attachment at 4-5.
---------------------------------------------------------------------------

    With respect to the Petitioner's concern that these exemptions 
preclude enforcement by the EPA or citizens, the EPA agrees that this 
is one of the critical reasons why such provisions are impermissible 
under the CAA. By having SIP provisions that define what would 
otherwise be violations of the applicable emission limitations as non-
violations, the state has effectively negated the ability of the EPA or 
the public to enforce against those violations.
    In addition, the EPA agrees that the limiting provision of Fla. 
Admin. Code Ann Rule 62-201.700(4) that curtails the exemptions in the 
prior provisions if the excess emissions are caused ``entirely or in 
part'' by factors within the source's control such as ``poor 
maintenance'' does not negate the underlying problem of providing 
exemptions for the excess emissions in the first instance. The EPA 
acknowledges that this provision would serve to prevent sources that 
fail to maintain or operate correctly or otherwise to take action 
reasonably to prevent excess emissions during SSM events from getting 
the benefits of the exemption. However, the EPA recommends that these 
are the types of considerations that should be relevant either in the 
state's exercise of enforcement discretion for violations, in the 
state's adoption of a SIP provision concerning that exercise of 
enforcement discretion by the state, or by an appropriately drawn 
affirmative defense SIP provision for excess emissions in the case of 
malfunctions.
    Finally, the Petitioner expressed concern that the four SIP 
provisions at issue ``do not specify the procedure by which the factual 
premises are to be proven.'' Were these provisions authorizing a state 
official to make discretionary decisions as to whether or not a given 
event qualified for the (impermissible) exemption, there could be an 
additional concern that these provisions included a director's 
discretion problem as well. However, the EPA believes that these 
regulations are directly enforceable by the state, the EPA, or members 
of the public in the appropriate forums, and thus the ``procedure'' for 
proving the violation would be the normal process in such forums. The 
fact that the state has established factual requirements that would 
need to be evaluated in order to prove a violation of the applicable 
emission limitations is not itself inconsistent with CAA requirements. 
The EPA believes that providing

[[Page 12504]]

requisite factual evidence to establish a violation in an enforcement 
proceeding is entirely appropriate.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Fla. Admin. 
Code Ann Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-201.700(2), 
Fla. Admin. Code Ann Rule 62-201.700(3), and Fla. Admin. Code Ann Rule 
62-201.700(4). The EPA believes that each of these provisions allows 
for exemptions from the otherwise applicable emission limitations, and 
that such exemptions are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by 
creating these impermissible exemptions, the state has defined 
violations in way that would interfere with effective enforcement by 
the EPA and citizens for excess emissions during these events as 
provided in CAA sections 113 and 304. For these reasons, the EPA is 
proposing to find that these provisions are substantially inadequate to 
meet CAA requirements and thus proposing to issue a SIP call with 
respect to Fla. Admin. Code Ann Rule 62-201.700(1), Fla. Admin. Code 
Ann Rule 62-201.700(2), Fla. Admin. Code Ann Rule 62-201.700(3), and 
Fla. Admin. Code Ann Rule 62-201.700(4).
3. Georgia
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Georgia SIP that 
provides for exemptions for excess emissions during startup, shutdown, 
or malfunctions under certain circumstances (Ga. Comp. R. & Regs. 391-
3-1-.02(2)(a)(7)).\118\ The Petitioner acknowledged that this provision 
of the Georgia SIP includes some conditions for when sources may be 
entitled to seek the exemption under state law, such as when the source 
has used ``best operational practices'' to minimize emissions during 
the SSM event.
---------------------------------------------------------------------------

    \118\ Petition at 32.
---------------------------------------------------------------------------

    First, the Petitioner objected because the provision creates an 
exemption from the applicable emission limitations by providing that 
the excess emissions ``shall be allowed'' subject to certain 
conditions, whereas the CAA and the EPA's interpretation of the CAA in 
the SSM Policy prohibit any such exemptions. The Petitioner noted that 
all excess emissions are required to be treated as violations of the 
applicable emission limitations, even if they would qualify for some 
other special consideration through other means such as enforcement 
discretion.
    Second, the Petitioner argued that although the provision provides 
some ``substantive criteria,'' the provision does not meet the criteria 
the EPA recommends for an affirmative defense provision consistent with 
the requirements of the CAA in the EPA's SSM Policy. Third, the 
Petitioner asserted that the provision is not a permissible 
``enforcement discretion'' provision applicable only to state 
personnel, because it ``is susceptible to interpretation as an 
enforcement exemption, precluding EPA and citizen enforcement as well 
as state enforcement.''
b. The EPA's Evaluation
    At the outset, the EPA notes that the Petitioner failed to include 
any discussion of the extensive prior litigation and administrative 
proceedings concerning this specific provision of the Georgia SIP. 
Nearly 10 years ago, citizen suit plaintiffs including the Petitioner 
sought to bring an enforcement action against a source for self-
reported exceedances of emission limitations in the source's operating 
permit, and the source asserted that those exceedances were not 
``violations'' through application of a permit provision that mirrored 
the underlying SIP provision in Ga. Comp. R. & Regs. 391-3-
1-.02(2)(a)(7).\119\ In that case, the plaintiffs argued that the 
provision at issue was an ``enforcement discretion'' provision 
applicable to state personnel only and thus that it was not relevant in 
the event of enforcement actions by other parties. The District Court 
agreed and held that the provision was merely an enforcement discretion 
provision applicable to the state and that it provided no affirmative 
defense in the enforcement action, and thus the court ruled in favor of 
the plaintiffs on this issue.\120\
---------------------------------------------------------------------------

    \119\ See, Sierra Club, et al. v. Georgia Power Co., 365 F. Supp 
1297 (N.D. Ga. 2004).
    \120\ Id. at 1304. The court also made a series of findings to 
illustrate that the permit provision was not consistent with the 
EPA's interpretation of the CAA requirements concerning excess 
emissions during SSM events embodied in the 1999 SSM Guidance.
---------------------------------------------------------------------------

    On appeal, the Court of Appeals examined the same operating permit 
language and underlying SIP provision and came to a different 
conclusion.\121\ The Court of Appeals concluded that the provision does 
provide an affirmative defense and is not an enforcement discretion 
provision. Moreover, the Court noted that even if the provision is not 
consistent with the EPA's guidance on permissible affirmative defense 
provisions in SIPs (e.g., because it creates exemptions for exceedances 
and purports to allow a complete bar to any liability, not just relief 
from monetary penalties), the EPA had not taken action through 
rulemaking to rectify that discrepancy. Because the EPA had not called 
upon the state to revise the SIP to bring it into compliance with the 
EPA's current interpretation of the CAA embodied in the 1999 SSM 
Guidance, the Court held that the exceedances of the applicable 
emission limitations were not violations and thus ruled against the 
plaintiffs.
---------------------------------------------------------------------------

    \121\ See, Sierra Club, et al. v. Georgia Power Co., 443 F.3d 
1346 (11th Cir. 2006).
---------------------------------------------------------------------------

    Contemporaneously with this litigation, the Petitioner had also 
filed a May 23, 2005 petition for rulemaking, requesting that the EPA 
require the state to revise its SIP ``to correct a significant 
ambiguity'' concerning the excess emissions from SSM events.\122\ On 
July 18, 2007, the EPA denied that petition.\123\ As a basis for this 
denial, the EPA reasoned that the opinion of the Court of Appeals had 
rendered the petition moot as to the issues raised therein. 
Specifically, the EPA stated that the Court's decision that the 
existing provision did not create an ``automatic exemption'' and did 
constitute an ``affirmative defense'' resolved any ``ambiguity'' about 
the meaning and application of Ga. Comp. R. & Regs. 391-3-
1-.02(2)(a)(7).
---------------------------------------------------------------------------

    \122\ The petition was filed by Richard M. Watson of the Georgia 
Center for Law in the Public Interest on behalf of the Georgia 
Chapter of the Sierra Club.
    \123\ See, Letter from Stephen E. Johnson, Administrator, to 
Georgia Chapter of the Sierra Club, dated July 18, 2007. A copy of 
this letter is in the docket for this action.
---------------------------------------------------------------------------

    At this juncture, the EPA believes that the extensive proceedings 
concerning Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) in which 
plaintiffs, defendants, courts, and both state and federal agencies 
examined the same provision and came to different conclusions 
concerning its meaning illustrates the need to examine this SIP 
provision again. In particular, the EPA concludes that the provision 
warrants further evaluation on the merits, because the Petition 
requests that the EPA consider more specific allegations about 
deficiencies in the provision than did the 2005 petition. As the 11th 
Circuit Court of Appeals suggested, the EPA agrees that a formal 
notice-and-comment rulemaking though CAA section 110(k)(5) is a good 
mechanism through which to evaluate whether or not Ga. Comp. R. & Regs. 
391-3-1-.02(2)(a)(7) meets the substantive requirements of the CAA. 
Accordingly,

[[Page 12505]]

the EPA is reevaluating the provision on the merits.\124\
---------------------------------------------------------------------------

    \124\ The EPA notes that it is not bound to follow a prior 
incorrect interpretation of its own policy, nor is it precluded from 
changing its policy interpretations. See, e.g., Luminant Generation 
Co. v. EPA, 699 F.3d 427 (5th Cir. 2012), and U.S. Supreme Court 
precedent cited therein for these propositions.
---------------------------------------------------------------------------

    The first concern with this provision is that it does create 
exemptions from the applicable emission limitations. The provision 
explicitly states that the ``excess emissions resulting from startup, 
shutdown, malfunction of any source which occur though ordinary 
diligence is employed shall be allowed,'' i.e., are exempt and not 
subject to enforcement for either monetary penalties or injunctive 
relief. The exemption for these excess emissions is conditioned upon 
several criteria relevant to minimizing emissions during the startup, 
shutdown, or malfunction event, which criteria are helpful and are 
structured as a form of affirmative defense. Even if Ga. Comp. R. & 
Regs. 391-3-1-.02(2)(a)(7) could otherwise qualify as an affirmative 
defense provision, however, the EPA's interpretation of the CAA is that 
such affirmative defenses can only shield the source from monetary 
penalties and cannot be a bar to injunctive relief. An affirmative 
defense provision that purports to bar any enforcement action for 
violations of emission limitations is inconsistent with the 
requirements of CAA sections 113 and 304.
    The EPA's second concern with Ga. Comp. R. & Regs. 391-3-
1-.02(2)(a)(7) is that while the provision appears to create an 
affirmative defense, it does so with conditions that are not consistent 
with the full range of criteria that the EPA recommends in the SSM 
Policy. The EPA acknowledges that the SSM Policy is only guidance 
concerning what types of SIP provisions could be consistent with the 
requirements of the CAA. Nonetheless, through this rulemaking, the EPA 
is proposing to determine that Ga. Comp. R. & Regs. 391-3-
1-.02(2)(a)(7) does not include criteria that are sufficiently robust 
to qualify as an acceptable affirmative defense provision. In 
particular, the provision does not limit the type of event that 
qualifies as a malfunction to those that are entirely beyond the 
control of the source, that were not reasonably foreseeable and 
avoidable, and that were not part of a recurring pattern indicative of 
inadequate design, operation, or maintenance. While the EPA continues 
to believe that affirmative defense provisions applying to malfunctions 
can be consistent with the CAA as long as the criteria set forth in the 
SSM Policy are carefully adhered to, as explained in more detail in 
sections IV.B and VII.B of this notice, the EPA believes that the 
criteria in Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) should be 
augmented to assure that the affirmative defense is available only in 
appropriately narrow circumstances.
    The EPA's third concern with Ga. Comp. R. & Regs. 391-3-
1-.02(2)(a)(7) is that even if the provision were otherwise construed 
as an affirmative defense, it extends not just to malfunctions but also 
to startup and shutdown events. As explained in sections IV.B and VII.C 
of this notice, the EPA interprets the CAA to allow affirmative defense 
provisions applicable to malfunctions but not to other normal modes of 
source operation, including startup and shutdown. Thus, the provision 
is not drawn to assure that the affirmative defense is available only 
in appropriately narrow circumstances, as required by the EPA's 
interpretation of CAA requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Ga. Comp. R. 
& Regs. 391-3-1-.02(2)(a)(7). The EPA believes that this provision 
allows for exemptions from the otherwise applicable emission 
limitations, and that such outright exemptions for excess emissions are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs. Such a provision is inconsistent with 
the requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 
302(k).
    In addition, Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) is not a 
permissible affirmative defense provision consistent with the 
requirements of the CAA and the EPA's recommendations for such 
provisions in the EPA's SSM Policy. By creating a bar to enforcement 
that applies not just to monetary penalties but also to injunctive 
relief, this provision is inconsistent with the requirements of CAA 
sections 113 and 304. By not including sufficient criteria to assure 
that sources seeking to raise the affirmative defense have in fact been 
properly designed, maintained, and operated, and to assure that sources 
have taken all appropriate steps to minimize excess emissions, the 
provision also fails to be sufficiently narrowly drawn to justify 
shielding from monetary penalties for violations. Moreover, Ga. Comp. 
R. & Regs. 391-3-1-.02(2)(a)(7) currently applies not only to 
malfunctions but also to startup and shutdown events, contrary to the 
EPA's interpretation of the CAA. Thus, this provision is not 
appropriate as an affirmative defense provision because it is 
inconsistent with fundamental requirements of the CAA as interpreted in 
the EPA's SSM Policy. For these reasons, the EPA is proposing to find 
that Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) is substantially 
inadequate to meet CAA requirements and thus proposing to issue a SIP 
call with respect to this provision.
4. Kentucky
a. Petitioner's Analysis
    The Petitioner objected to a generally applicable provision that 
allows discretionary exemptions from otherwise applicable SIP emission 
limitations in Kentucky's SIP (401 KAR 50:055 Sec.  
1(1)).125 126 The provision provides that ``[e]missions 
which, due to shutdown or malfunctions, temporarily exceed the standard 
* * * shall be deemed in violation of such standards unless the 
requirements of this section are satisfied and the determinations 
specified in subsection (4) * * * are made.'' The provision requires 
sources to notify the director that such violations are going to or 
have occurred. The provision then provides that ``[a] source shall be 
relieved from compliance with the standards * * * if the director 
determines'' that the source has met a number of enumerated criteria.
---------------------------------------------------------------------------

    \125\ Petition at 39-40.
    \126\ The EPA notes that the Petitioner also identified several 
additional pollutant-specific and source category-specific 
provisions in Kentucky's SIP that it alleged are inconsistent with 
the CAA and the EPA's SSM Policy. However, the Petitioner did not 
request that the EPA address those SIP provisions in its remedy 
request, and thus the EPA is not addressing those provisions in this 
action. The EPA may elect to evaluate those provisions in a later 
action.
---------------------------------------------------------------------------

    The Petitioner argued that this provision could provide an 
exemption from the otherwise applicable SIP emission limitations, and 
such an exemption is impermissible under the CAA because the statute 
and the EPA's interpretation of the CAA in the SSM Policy require that 
all such excess emissions be treated as violations. Moreover, the 
Petitioner objected to this discretionary exemption because the 
director's determination that the source has met the specified criteria 
could be interpreted to excuse excess emissions during such time period 
and could thus be read to preclude enforcement by the EPA or citizens 
in the event that the director elects not to treat the event as a 
violation. Thus, in addition to creating an impermissible exemption for 
the excess emissions, the Petitioner argued, the provision is also 
inconsistent with the CAA as interpreted in the EPA's SSM Policy 
because it allows the

[[Page 12506]]

director to make a unilateral decision that the excess emissions were 
not a violation and thus could bar enforcement for the excess emissions 
by the EPA and citizens.
    The Petitioner noted that the criteria that sources must 
demonstrate to the director in order to qualify for the exemption 
``resemble the criteria that are supposed to guide a state's 
enforcement discretion for malfunctions,'' but that if the provision is 
not removed from the SIP, it ``must stipulate that all excess emissions 
are violations and preserve the authority of EPA and citizens to 
enforce the SIP standards and limitations.'' Thus, the Petitioner 
viewed this provision as either an impermissible discretionary 
exemption mechanism or an impermissible enforcement discretion 
provision.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup, shutdown, or malfunctions are not violations 
of the applicable emission limitations are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes that the inclusion of such an 
exemption from the emission limitations in 401 KAR 50:055 Sec.  1(1) is 
thus a substantial inadequacy and renders this specific SIP provision 
impermissible.
    The EPA believes that 401 KAR 50:055 Sec.  1(1) is impermissible as 
an unbounded director's discretion provision that makes a state 
official the unilateral arbiter of whether the excess emissions in a 
given event constitute a violation. In the case of 401 KAR 50:055 Sec.  
1(1), the provision authorizes the state official to make a 
determination that the source has met the specified criteria, and such 
a determination could be interpreted to excuse excess emissions during 
the event and could thus be read to preclude enforcement by the EPA or 
through a citizen suit. In addition, the provision vests a state 
official with the unilateral power to grant an exemption from the 
otherwise applicable SIP emission limitation, without any additional 
public process at the state or federal level. Most importantly, 
however, the provision authorizes a state official to create an 
exemption from the emission limitation, and such an exemption is 
impermissible in the first instance. Such a director's discretion 
provision undermines the SIP emission limitations, and the emissions 
reductions they are intended to achieve, and renders them less 
enforceable by the EPA or through a citizen suit. The EPA believes that 
the inclusion of an insufficiently bounded director's discretion 
provision in 401 KAR 50:055 Sec.  1(1) is thus a substantial inadequacy 
and renders this specific SIP provision impermissible for this reason, 
in addition to the creation of an impermissible exemption.
    The EPA also notes that after the submission of the Petition, there 
has been a subsequent regulatory action that touched upon this SIP 
provision tangentially. In connection with a redesignation of the 
Kentucky portion of the tri-state Cincinnati-Hamilton area for the 1997 
PM2.5 NAAQS, the state submitted an interpretive letter to 
the EPA explaining the state's reading of 401 KAR 50:055 Sec.  
1(1).\127\ In this November 4, 2011 letter, the Kentucky Division of 
Air Quality (KDAQ) stated that it has ``never formally taken the 
position that excess emissions under the regulations are not 
violations'' and that a determination by KDAQ ``does not limit'' the 
authority of the EPA and citizens to take enforcement action.\128\ 
Based on the state's interpretation of 401 KAR 50:055 Sec.  1(1), the 
EPA at that time concluded that the provision could be construed not to 
bar enforcement by the EPA or through a citizen suit if the state 
elects not to pursue enforcement; i.e., it could be construed as an 
enforcement discretion provision applicable to state personnel. In the 
context of acting upon the redesignation request under CAA section 
107(d)(3), this clarification from the state was sufficient to address 
the concern raised in comments on that action. Nevertheless, the EPA 
noted in the redesignation action that it would evaluate 401 KAR 50:055 
Sec.  1(1) as part of its consideration of issues raised by the 
Petition.
---------------------------------------------------------------------------

    \127\ See, ``Approval and Promulgation of Implementation Plans 
and Designations of Areas for Air Quality Planning Purposes; 
Kentucky; Redesignation of the Kentucky Portion of the Cincinnati-
Hamilton, OH-KY-IN 1997 Annual Fine Particulate Matter Nonattainment 
Area to Attainment,'' 76 FR 77903 (Dec. 15, 2011).
    \128\ A copy of this letter can be found in the docket for this 
rulemaking.
---------------------------------------------------------------------------

    At this juncture, the EPA believes that the difference of views 
about the correct reading of 401 KAR 50:055 Sec.  1(1) illustrates the 
need to examine this SIP provision again. The EPA appreciates KDAQ's 
clarification of its reading of the provision in the November 4, 2011, 
letter and the EPA considers that interpretation sufficient for 
purposes of the redesignation action. However, in the course of 
reevaluating this provision in light of the issues raised in the 
Petition, the EPA believes that the provision contains regulatory 
language that is potentially contradictory and requires formal revision 
to eliminate significant ambiguities. For example, subsection 1 of the 
provision states that: ``[e]missions which, due to shutdown or 
malfunctions, temporarily exceed the standard * * * shall be deemed in 
violation of such standards unless the requirements of this section are 
satisfied.'' In subsection 4, the provision states that ``a source 
shall be relieved from compliance with the standards * * * if the 
director determines, upon a showing by the owner or operator of the 
source, that'' certain conditions are met. KDAQ has indicated that it 
reads these provisions not to bar enforcement by the EPA or through a 
citizen suit in the event that the state does not pursue enforcement, 
but the EPA believes that the provision is sufficiently ambiguous on 
this point that a revision is necessary to ensure that outcome in the 
event of an enforcement action.
    As discussed in section VI.B of this notice, the EPA believes that 
in some instances it is appropriate to clarify provisions of a SIP 
through the use of interpretive letters. However, in some cases, there 
may be areas of regulatory ambiguity in a SIP's provisions that are 
sufficiently significant for which resolution is both appropriate and 
necessary. Because the text of Kentucky's SIP provision is not clearly 
phrased in terms of the state's exercise of enforcement discretion and 
could be interpreted to allow discretionary exemptions from the 
otherwise applicable SIP emission limitations or as an affirmative 
defense provision inconsistent with the criteria recommended in the 
EPA's SSM Policy, the EPA believes that the provision is substantially 
inadequate to meet CAA requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 401 KAR 
50:055 Sec.  1(1). The EPA believes that this provision requires 
clarification to ensure that it meets CAA requirements.

[[Page 12507]]

The current provision could be read to allow for exemptions from the 
otherwise applicable SIP emission limitations, and such exemptions are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs in sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, 401 KAR 50:055 Sec.  1(1) could be read to 
allow exemptions through a state official's unilateral exercise of 
discretionary authority that is insufficiently bounded and includes no 
additional public process at the state or federal level, and such 
provisions are inconsistent with the fundamental requirements of the 
CAA with respect to SIPs and SIP revisions. Moreover, the provision 
could be read to create discretion to allow case-by-case exemptions 
from emission limitations when such exemptions are not permissible in 
the first instance. In light of the potential conflicts between the 
provision and the differing interpretations that parties or a court 
might give the provision in an enforcement action, the EPA is proposing 
to find that 401 KAR 50:055 Sec.  1(1) is substantially inadequate to 
meet CAA requirements and thus proposing to issue a SIP call with 
respect to this provision.
5. Kentucky: Jefferson County
a. Petitioner's Analysis
    First, the Petitioner objected to a generally applicable provision 
in the Jefferson County Air Regulations 1.07 because it provides for 
discretionary exemptions from compliance with emission limitations 
during startup, shutdown, and malfunction.129 130 The 
provision states that ``[e]missions due to startup, shutdown, 
malfunction, or emergency, that temporarily exceed the standards * * * 
shall be deemed in violation of those standards unless, based upon a 
showing by the owner or operator of the source and an affirmative 
determination by the District, the applicable requirements of this 
regulation are satisfied.'' The provision requires different 
demonstrations for exemptions for excess emissions during startup and 
shutdown (Regulation 1.07 Sec.  3), malfunction (Regulation 1.07 Sec.  
4 and Sec.  7), and emergency (Regulation 1.07 Sec.  5 and Sec.  7).
---------------------------------------------------------------------------

    \129\ The Petitioner noted that this regulation was approved 
into Kentucky's SIP in ``Approval and Promulgation of Air Quality 
Implementation Plans; Kentucky; Approval of Revisions to State 
Implementation Plan; Revised Format for Materials Being Incorporated 
by Reference for Jefferson County, Kentucky,'' 66 FR 53503 at 53660 
(Oct. 23, 2001).
    \130\ Petition at 40-42.
---------------------------------------------------------------------------

    The Petitioner argued that this provision could provide exemptions 
from the otherwise applicable SIP emission limitations, and that such 
exemptions are impermissible under the CAA because the statute and the 
EPA's interpretation of the CAA in the SSM Policy require that all 
excess emissions be treated as violations. The Petitioner objected to 
this provision as allowing discretionary exemptions, because a local 
official's determination that the source has met the specified criteria 
could be interpreted to excuse excess emissions during such events and 
could thus be read to preclude enforcement by the EPA or citizens if 
the district elects not to treat the event as a violation.
    Second, the Petitioner objected to the affirmative defense for 
emergencies in Jefferson County Air Regulations 1.07. The Petitioner 
noted that the SIP provision ``mirrors the language in 40 C.F.R. Sec.  
70.6(g)'' in the EPA's own title V regulations. Thus, the Petitioner 
argued that the provision should not be included in the SIP because it 
is modeled on the EPA's own title V regulations, and such regulations 
do not belong in the SIP. The Petitioner also argued that even if the 
provision were appropriate as a SIP provision, it is deficient because 
it is not a ``true affirmative defense.'' On the latter point the 
Petitioner argued that a ``true affirmative defense'' is a defense to 
be asserted by the source in the context of a judicial or 
administrative enforcement proceeding. The Petitioner opined that the 
emergency affirmative defense in Jefferson County Air Regulations 1.07 
``appears to allow the District to decide whether the defense 
applies.''
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a government official's discretion. In 
accordance with the requirements of CAA section 110(a)(2)(A), SIPs must 
contain emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup, shutdown, load change, or emergencies are not 
violations of the applicable emission limitations are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes that the inclusion of such an 
exemption from the emission limitations in Jefferson County Air 
Regulations 1.07 is thus a substantial inadequacy and renders this 
specific SIP provision impermissible.
    The EPA believes that Regulation 1.07 is also impermissible as an 
insufficiently bounded director's discretion provision that makes a 
local official the unilateral arbiter of whether the excess emissions 
in a given event constitute a violation. In the case of Regulation 
1.07, the provision authorizes local officials to make a determination 
that the source has met the specified criteria for each type of event--
startup and shutdown (Regulation 1.07 Sec.  3), malfunction (Regulation 
1.07 Sec.  4), emergency (Regulation 1.07 Sec.  5), and extended 
malfunction or emergency (Regulation 1.07 Sec.  7). The local 
official's ``affirmative determination'' that such requirements have 
been met has the effect of excusing the excess emissions (Regulation 
1.07 Sec.  2.1). This determination could be interpreted to preclude 
enforcement by the EPA or through a citizen suit. In addition, the 
provision vests the local official with the unilateral power to grant 
an exemption from the otherwise applicable SIP emission limitations, 
without any additional public process at the state or federal level. 
Most importantly, however, the provision authorizes the local official 
to create an exemption from the emission limitation, and such an 
exemption is impermissible in the first instance. Such a director's 
discretion provision undermines the emission limitations, and the 
emissions reductions they are intended to achieve, and renders them 
less enforceable by the EPA or through a citizen suit. The EPA believes 
that the inclusion of an insufficiently bounded director's discretion 
provision in Regulation 1.07 is thus a substantial inadequacy and 
renders this specific SIP provision impermissible for this reason, in 
addition to the creation of an impermissible exemption.
    The EPA also agrees that Regulation 1.07 provides an impermissible 
exemption for excess emissions that occur during ``emergencies.'' The 
provision uses language that is borrowed from the EPA's title V 
regulations (Regulation 1.07 Sec.  5) but that is not appropriate for a 
SIP provision (see section VII.D of this notice). In addition, because 
Regulation 1.07 Sec.  2.1 provides that the district may make a 
determination of whether ``applicable requirements'' of the regulation 
are ``satisfied,'' and the affirmative defense

[[Page 12508]]

for emergencies is defined as one such ``applicable requirement,'' the 
structure of Regulation 1.07 could be read as providing the district 
with the unilateral discretion to decide that the source has met the 
conditions for the affirmative defense. The EPA agrees with the 
Petitioner that affirmative defenses are only permitted in the context 
of an enforcement proceeding and cannot be granted unilaterally by a 
state agency, because this would have the effect of precluding the EPA 
or the public from taking enforcement action.
    Regulation 1.07 also does not explicitly limit the affirmative 
defense for emergency events to civil penalties. Although the EPA 
believes that narrowly drawn affirmative defenses are permitted under 
the CAA for malfunction events (see sections IV.B and VII.B of this 
notice), the EPA's interpretation of the CAA is that affirmative 
defenses can only shield the source from monetary penalties and cannot 
be a bar to injunctive relief. An affirmative defense provision that 
purports to bar any enforcement action for injunctive relief for 
violations of emission limitations is inconsistent with the 
requirements of CAA sections 113 and 304. In addition, the provision 
does not contain elements for establishing the affirmative defense 
consistent with all of the recommended criteria in the EPA's SSM 
Policy. The EPA acknowledges that the SSM Policy is only guidance 
concerning what types of SIP provisions could be consistent with the 
requirements of the CAA. Nonetheless, through this rulemaking, the EPA 
is proposing to determine that Regulation 1.07 does not include 
criteria that are sufficiently robust to qualify as an acceptable 
affirmative defense provision for purposes of SIP requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Jefferson 
County Air Regulation 1.07.\131\ The EPA believes that this provision 
allows for exemptions from the otherwise applicable SIP emission 
limitations, and that such exemptions are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs in sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). 
In addition, Regulation 1.07 allows for such exemptions through a local 
official's unilateral exercise of discretionary authority that is 
insufficiently bounded and includes no additional public process at the 
state or federal level, and such provisions are inconsistent with the 
fundamental requirements of the CAA with respect to SIPs and SIP 
revisions. Moreover, the discretion created by these provisions allows 
case-by-case exemptions from emission limitations, when such exemptions 
are not permissible in the first instance. For these reasons, the EPA 
is proposing to find that Regulation 1.07 is substantially inadequate 
to meet CAA requirements and thus proposing to issue a SIP call with 
respect to this provision.
---------------------------------------------------------------------------

    \131\ The EPA notes that Kentucky has recently made a SIP 
submission that includes revisions to the portion of the SIP 
applicable to Jefferson County that would amend Regulation 1.07. In 
this action, the EPA is only evaluating Regulation 1.07 as currently 
approved into the SIP. The EPA is not evaluating the more recent SIP 
submission as part of this action. The EPA will address the SIP 
submission in a later action.
---------------------------------------------------------------------------

    The EPA also proposes to grant the Petition because Regulation 1.07 
contains an impermissible exemption for excess emissions during 
emergency events, conditioned upon an affirmative defense provision 
that is inconsistent with the criteria recommended in the EPA's SSM 
Policy. Regulation 1.07 can be read to authorize the district to grant 
an exemption under Sec.  2.1 and Sec.  5, and such an interpretation 
could preclude the EPA and the public from bringing an enforcement 
action. Furthermore, the affirmative defense provision is impermissible 
because it does not explicitly limit the defense to monetary penalties, 
and it does not include sufficient criteria to assure that sources 
seeking to raise the affirmative defense have in fact been properly 
designed, maintained, and operated, and to assure that sources have 
taken all appropriate steps to minimize excess emissions. The provision 
therefore also fails to be sufficiently narrowly drawn to justify 
shielding from monetary penalties for violations. For these reasons, 
the EPA is proposing to find that Regulation 1.07 is substantially 
inadequate to meet CAA requirements and proposes to issue a SIP call 
with respect to this provision.
6. Mississippi
a. Petitioner's Analysis
    The Petitioner objected to two generally applicable provisions in 
the Mississippi SIP that allow for affirmative defenses for violations 
of otherwise applicable SIP emission limitations during periods of 
upset, i.e., malfunctions (11-1-2 Miss. Code R. Sec.  10.1) and 
unavoidable maintenance (11-1-2 Miss. Code R. Sec.  10.3).\132\ First, 
the Petitioner objected to both of these provisions based on its 
assertion that the CAA allows no affirmative defense provisions in 
SIPs. Second, the Petitioner asserted that even if affirmative defense 
provisions were permissible under the CAA, the affirmative defenses in 
these provisions ``fall far short of the EPA policy.'' Specifically, 
the Petitioner argued that the EPA's guidance for affirmative defenses 
recommends that they ``are not appropriate where a single source or a 
small group of sources has the potential to cause an exceedance of the 
NAAQS or PSD increments,'' \133\ and Mississippi's provisions do not 
contain a restriction to address this point. Further, the Petitioner 
argued that the affirmative defenses in Mississippi's SIP are not 
limited to actions seeking civil penalties and that they fail to meet 
other criteria ``that EPA requires for acceptable defense provisions.'' 
\134\ Finally, the Petitioner argued that the CAA and the EPA's SSM 
Policy interpreting it do not allow affirmative defenses for excess 
emissions during maintenance events under any circumstances.
---------------------------------------------------------------------------

    \132\ Petition at 47-49.
    \133\ Petition at 48.
    \134\ Petition at 47-48.
---------------------------------------------------------------------------

    The Petitioner also objected to a generally applicable provision 
that provides an exemption from otherwise applicable SIP emission 
limitations during startup and shutdown (11-1-2 Miss. Code R. Sec.  
10.2).\135\ Within that provision, 11-1-2 Miss. Code R. Sec.  
10.2(a)(2) specifies that emission limitations apply during startup and 
shutdown except ``when a startup or shutdown is infrequent, the 
duration of the excess emissions is brief in each event, and the design 
of the source is such that the period of excess emissions cannot be 
avoided without causing damage to the equipment or persons.'' The 
Petitioner argued that such an exemption is inconsistent with the 
requirements of the CAA and the EPA's SSM Policy. The Petitioner argued 
that the CAA and the EPA's interpretation of the CAA in the SSM Policy 
require that all such excess emissions be treated as violations.
---------------------------------------------------------------------------

    \135\ Petition at 47-49.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA disagrees with the Petitioner's contention that no 
affirmative defense provisions are permissible in SIPs under the CAA. 
As explained in more detail in section IV of this notice, the EPA 
interprets the CAA to allow affirmative defense provisions for 
malfunctions. So long as these provisions are narrowly drawn and 
consistent with the CAA, as recommended in the EPA's guidance for 
affirmative defense provisions in SIPs,

[[Page 12509]]

the EPA believes that states may elect to have affirmative defense 
provisions for malfunctions.
    The EPA agrees, however, that the affirmative defense contained in 
11-1-2 Miss. Code R. Sec.  10.1 for upsets is not an acceptable 
affirmative defense provision under the CAA as interpreted in the EPA's 
SSM Policy. Section 10.1 provides that ``[t]he occurrence of an upset * 
* * constitutes an affirmative defense to an enforcement action brought 
for noncompliance with emission standards,'' conditioned upon the 
source meeting a series of criteria. Although the EPA believes that 
narrowly drawn affirmative defenses are permitted under the Act for 
malfunction events (i.e., upsets) (see section VII.B of this notice), 
the EPA's interpretation of the CAA is that an affirmative defense can 
only shield the source from monetary penalties and cannot be a bar to 
injunctive relief. The provisions of 11-1-2 Miss. Code R. Sec.  10.1 
applicable to upsets appears to create a bar not just to monetary 
penalties but also to injunctive relief. An affirmative defense 
provision that purports to bar any enforcement action for injunctive 
relief for violations of emission limitations is inconsistent with the 
requirements of CAA sections 113 and 204.
    In addition, the EPA agrees that 11-1-2 Miss. Code R. Sec.  10.1 
creates an affirmative defense for upsets with conditions that are not 
fully consistent with the criteria that the EPA recommends in the SSM 
Policy. The EPA acknowledges that the SSM Policy is only guidance 
concerning what types of SIP provisions could be consistent with the 
requirements of the CAA. Nonetheless, through this rulemaking, the EPA 
is proposing to determine that 11-1-2 Miss. Code R. Sec.  10.1 does not 
include criteria that are sufficiently robust to qualify as an 
acceptable affirmative defense provision. Although this provision does 
contain many criteria that are comparable to those the EPA recommends, 
it does not address several that the EPA believes to be necessary to 
assure that the affirmative defense is available only in appropriate 
circumstances. For example, 11-1-2 Miss. Code R. Sec.  10.1 does not 
contain criteria requiring the source to show that the malfunction 
event was not part of a recurring pattern indicative of inadequate 
design, operation, or maintenance. In addition, as discussed in section 
VII.B of this notice, the EPA believes that affirmative defense 
provisions should address the issue of single sources or groups of 
sources that have the potential to have adverse impacts on the NAAQS or 
PSD increments in one of two recommended ways. On its face, 11-1-2 
Miss. Code R. Sec.  10.1 does not appear to address this issue in 
either way. The EPA believes that the inclusion of the bar to 
enforcement for injunctive relief and the insufficiently robust 
qualifying criteria render 11-1-2 Miss. Code R. Sec.  10.1 
substantially inadequate to meet CAA requirements.
    The EPA also agrees with the Petitioner that the affirmative 
defense for excess emissions during maintenance provided in 11-1-2 
Miss. Code R. Sec.  10.3 is not consistent with CAA requirements. As 
explained in sections IV and VII.C of this notice, the EPA believes 
that affirmative defenses are only permissible under the CAA in the 
case of events that are beyond the control of the source, i.e., 
malfunctions. Affirmative defense provisions are not appropriate in the 
case of planned source actions, such as maintenance, because sources 
should be expected to comply with applicable emission limitations 
during those normal planned and predicted modes of source operation. 
Although this provision does contain parameters to limit its 
availability, it still provides an affirmative defense that is 
inconsistent with CAA requirements. The EPA believes that the inclusion 
of the affirmative defense for excess emissions during maintenance in 
11-1-2 Miss. Code R. Sec.  10.3 renders that provision substantially 
inadequate to meet CAA requirements.
    The EPA also agrees that 11-1-2 Miss. Code R. Sec.  10.2(a)(2) 
contains an exemption for excess emissions during startup and shutdown 
events that is inconsistent with CAA requirements. The EPA acknowledges 
that the state has imposed some parameters on the scope of the 
exemption by requiring that the events be infrequent, of short 
duration, and required to avoid damage to equipment or people. However, 
the EPA does not interpret the CAA to allow for exemptions for excess 
emissions during startup and shutdown. As discussed in section VII.A of 
this notice, the EPA believes that sources should be designed, 
operated, and maintained so that they can comply with applicable SIP 
emission limitations during normal modes of source operation. If 
appropriate, the state may elect to develop special emission 
limitations or other control measures that apply during startup and 
shutdown. The EPA believes that the inclusion of an exemption for 
excess emissions during startup and shutdown in 11-1-2 Miss. Code R. 
Sec.  10.2 is substantially inadequate to meet CAA requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 11-1-2 Miss. 
Code R. Sec.  10.1, 11-1-2 Miss. Code R. Sec.  10.2, and 11-1-2 Miss. 
Code R. Sec.  10.3. None of these provisions is consistent with the 
requirements of the CAA as interpreted in the EPA's recommendations in 
the EPA's SSM Policy. The EPA believes that 11-1-2 Miss. Code R. Sec.  
10.1 and 11-1-2 Miss. Code R. Sec.  10.3 create affirmative defenses 
that are inconsistent with the fundamental requirements of the CAA with 
respect to emission limitations in SIPs as required by sections 
110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by purporting to 
create a bar to enforcement that applies not just to monetary penalties 
but also to injunctive relief, these provisions are inconsistent with 
the requirements of CAA sections 113 and 304. By not including 
sufficient criteria to assure that sources seeking to raise these 
affirmative defenses have in fact been properly designed, maintained, 
and operated, and to assure that sources have taken all appropriate 
steps to minimize excess emissions, 11-1-2 Miss. Code R. Sec.  10.1 
also fails to be sufficiently narrowly drawn to justify shielding from 
monetary penalties for violations. The comparable affirmative defense 
for maintenance in 11-1-2 Miss. Code R. Sec.  10.3 is not consistent 
with CAA requirements because maintenance is a normal mode of source 
operation during which the source should be expected to comply with the 
applicable emission limitations. Thus, these provisions are not 
appropriate as affirmative defense provisions because they are 
inconsistent with fundamental requirements of the CAA.
    The EPA is proposing to find that 11-1-2 Miss. Code R. Sec.  10.2 
is substantially inadequate to meet CAA requirements because it 
provides an exemption for excess emissions that occur during startup 
and shutdown, which are normal modes of source operation during which 
sources should comply with applicable emission limitations. Such an 
exemption provision is inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k).
    For these reasons, the EPA is proposing to find that these 
provisions are substantially inadequate to meet CAA requirements and 
thus proposing to issue a SIP call with respect to these provisions.

[[Page 12510]]

7. North Carolina
a. Petitioner's Analysis
    The Petitioner objected to two generally applicable provisions in 
the North Carolina SIP that provide exemptions for emissions exceeding 
otherwise applicable SIP emission limitations at the discretion of the 
state agency during malfunctions (15A N.C. Admin. Code 2D.0535(c)) and 
during startup and shutdown (15A N.C. Admin. Code 2D.0535(g)).\136\ The 
Petitioner argued that both provisions allow a state official to exempt 
sources from compliance with otherwise applicable SIP emission 
limitations, and therefore both provisions allow a state official to 
decide whether a violation has occurred. This decision would preclude 
enforcement action by the EPA and citizens for both civil penalties and 
injunctive relief, and such an interpretation is inconsistent with the 
CAA and the EPA's SSM policy interpreting the CAA. The Petitioner noted 
that the director's discretion provision for malfunctions provided by 
15A N.C. Admin. Code 2D.0535(c) is limited to 15 percent of operating 
time during each calendar year. According to the Petitioner, this 
temporal limit does not render the provision permissible under the CAA 
and the EPA's SSM policy interpreting the CAA, because the limit ``does 
nothing to ensure that ambient air quality standards are met.'' \137\
---------------------------------------------------------------------------

    \136\ Petition at 57-58.
    \137\ Petition at 58.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitations must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion.
    The EPA believes that 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. 
Admin. Code 2D.0535(g) are impermissible as insufficiently bounded 
director's discretion provisions. The explicit text of 15A N.C. Admin. 
Code 2D.0535(c) states that ``[a]ny excess emissions * * * are 
considered a violation * * * unless the owner or operator of the source 
of excess emissions demonstrates to the Director, that the excess 
emissions are the result of a malfunction.'' Similarly, 15A N.C. Admin. 
Code 2D.0535(g) provides that a state official may determine that 
excess emissions during startup and shutdown are unavoidable, in which 
case emissions exceeding the otherwise applicable SIP limitations are 
not considered violations. These provisions vest the state official 
with unilateral power to grant an exemption from the otherwise 
applicable SIP emission limitation, without any public process at the 
state or federal level. Such a determination that the excess emissions 
in a given event do not constitute a violation could preclude 
enforcement by the EPA or through a citizen suit. While both provisions 
contain a list of factors that the state official ``shall consider'' in 
making the discretionary determination, they nevertheless empower the 
state official to create an exemption from the emission limitations, 
and such an exemption is impermissible in the first instance. Such a 
director's discretion provision undermines the emission limitations in 
the SIP, and the emissions reductions they are intended to achieve, and 
renders them less enforceable by the EPA or through a citizen suit. The 
EPA believes that the inclusion of an insufficiently bounded director's 
discretion provision in 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. 
Admin. Code 2D.0535(g) is thus a substantial inadequacy and renders 
these specific SIP provisions impermissible for this reason.
    Finally, the EPA notes that 15A N.C. Admin. Code 2D.0535(c) and 15A 
N.C. Admin. Code 2D.0535(g) contain a number of criteria for 
consideration by the state official when deciding whether the excess 
emissions should be treated as exempt and thus not as a violation. 
Superficially, these criteria are similar to those recommended by the 
EPA for affirmative defense provisions for malfunctions to meet CAA 
requirements, but they are not presented as criteria for an affirmative 
defense. Instead, each provision is structured so that if the source 
has met these criteria, the state official will deem the excess 
emissions not a violation. Moreover, instead of requiring that the 
source establish these facts in an administrative or judicial process, 
the provision appears to authorize the state official to make a 
unilateral determination whether the emissions are a violation and thus 
appears to bar enforcement by the EPA or through a citizen suit.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 15A N.C. 
Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g). The EPA 
believes that both of these provisions could be read to allow for 
exemptions from otherwise applicable SIP emission limitations through a 
state official's unilateral exercise of discretionary authority that is 
insufficiently bounded and includes no additional public process at the 
state or federal level. Moreover, the discretion created by this 
provision could be read to allow case-by-case exemptions from emission 
limitations when such exemptions are not permissible in the first 
instance. Such exemption provisions are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, by creating these impermissible exemptions, 
the state has defined violations in a way that would interfere with 
effective enforcement by the EPA and citizens for excess emissions 
during these events as provided in CAA sections 113 and 304. For these 
reasons, the EPA is proposing to find 15A N.C. Admin. Code 2D.0535(c) 
and 15A N.C. Admin. Code 2D.0535(g) are substantially inadequate to 
meet CAA requirements and thus is proposing to issue a SIP call with 
respect to these provisions.
8. North Carolina: Forsyth County
a. Petitioner's Analysis
    The Petitioner objected to two generally applicable provisions in 
the Forsyth County Code that provide exemptions for emissions exceeding 
otherwise applicable SIP emission limitations at the discretion of a 
local official during malfunctions (Forsyth County Code, ch. 3, 
3D.0535(c)) and startup and shutdown (Forsyth County Code, ch. 3, 
3D.0535(g)).\138\ The Petitioner argued that these ``local regulations 
have the same problems as the [North Carolina] state-wide regulations'' 
addressed in the previous section.\139\ The Petitioner argued that both 
provisions allow the local official to exempt sources from compliance 
with otherwise applicable SIP emission limitations, and therefore both 
provisions allow the local official to decide whether a violation has 
occurred. This decision would preclude action by the EPA and citizens 
for both civil penalties and injunctive relief, and such a provision is 
inconsistent with the

[[Page 12511]]

CAA and the EPA's SSM policy interpreting the CAA.
---------------------------------------------------------------------------

    \138\ Petition at 58.
    \139\ Petition at 58.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a government official's discretion. In 
accordance with the requirements of CAA section 110(a)(2)(A), SIPs must 
contain emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitations must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion.
    The EPA believes that Forsyth County Code, ch. 3, 3D.0535(c) and 
Forsyth County Code, ch. 3, 3D.0535(g) are impermissible as 
insufficiently bounded director's discretion provisions. Forsyth County 
Code, ch. 3, 3D.0535(c) states that ``[a]ny excess emissions * * * are 
considered a violation * * * unless the owner or operator of the source 
of excess emissions demonstrates to the Director, that the excess 
emissions are the result of a malfunction.'' Similarly, Forsyth County 
Code, ch. 3, 3D.0535(g) provides that a local official may determine 
that excess emissions during startup and shutdown are unavoidable, in 
which case emissions exceeding the otherwise applicable SIP limitations 
are not considered violations. These provisions vest the local official 
with unilateral power to grant an exemption from the otherwise 
applicable SIP emission limitation, without any public process at the 
local, state, or federal level. Such a determination that the excess 
emissions in a given event do not constitute a violation could preclude 
enforcement by the EPA or through a citizen suit. While both provisions 
contain a list of factors that the local official ``shall consider'' in 
making the discretionary determination, they nevertheless empower the 
local official to create an exemption from the emission limitation, and 
such an exemption is impermissible in the first instance. Such a 
director's discretion provision undermines the emission limitations in 
the SIP, and the emissions reductions they are intended to achieve, and 
renders them less enforceable by the EPA or through a citizen suit. The 
EPA believes that the inclusion of an insufficiently bounded director's 
discretion provision in Forsyth County Code, ch. 3, 3D.0535(c) and 
Forsyth County Code, ch. 3, 3D.0535(g) is thus a substantial inadequacy 
and renders these specific SIP provisions impermissible for this 
reason.
    As with the comparable statewide SIP provisions, the EPA notes that 
Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 
3D.0535(g) also would not qualify as affirmative defense provisions 
consistent with CAA requirements. The provisions authorize the local 
official to deem excess emissions exempt and thus not subject to 
enforcement for injunctive relief. The provisions also appear to 
authorize the local official to make a unilateral determination that 
the emissions are not a violation and thus to bar enforcement by the 
EPA or through a citizen suit.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Forsyth 
County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 
3D.0535(g). The EPA believes that both of these provisions could be 
read to allow for exemptions from otherwise applicable SIP emission 
limitations through a local official's unilateral exercise of 
discretionary authority that is insufficiently bounded and includes no 
additional public process at the local, state, or federal level. 
Moreover, the discretion created by this provision could be read to 
allow case-by-case exemptions from emission limitations when such 
exemptions are not permissible in the first instance. Such exemption 
provisions are inconsistent with the fundamental requirements of the 
CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by 
creating these impermissible exemptions, the air agency has defined 
violations in a way that would interfere with effective enforcement by 
the EPA and citizens for excess emissions during these events as 
provided in CAA sections 113 and 304. For these reasons, the EPA is 
proposing to find that Forsyth County Code, ch. 3, 3D.0535(c) and 
Forsyth County Code, ch. 3, 3D.0535(g) are substantially inadequate to 
meet CAA requirements and thus is proposing to issue a SIP call with 
respect to these provisions.
9. South Carolina
a. Petitioner's Analysis
    The Petitioner objected to three provisions in the South Carolina 
SIP, arguing that they contained impermissible source category- and 
pollutant-specific exemptions.\140\ The Petitioner characterized these 
provisions as providing exemptions from opacity limits for fuel-burning 
operations for excess emissions that occur during startup or shutdown 
(S.C. Code Ann. Regs. 61-62.5 St 1(C)), exemptions from NOx limits for 
special-use burners that are operated less than 500 hours per year 
(S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14)), and exemptions from 
sulfur limits for kraft pulp mills for excess emissions that occur 
during startup, shutdown, or malfunction events (S.C. Code Ann. Regs. 
St 4(XI)(D)(4)). The Petitioner argued that such exemptions violate the 
fundamental CAA requirement that all excess emissions be considered 
violations and that they interfere with enforcement by the EPA and 
citizens.
---------------------------------------------------------------------------

    \140\ Petition at 65-66.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations. In accordance with CAA 
sections 110(a)(2)(A) and 302(k), SIPs must contain ``emission 
limitations'' and those limitations must be continuous. Thus, any 
excess emissions above the level of the applicable SIP emission 
limitation must be considered a violation of such limitation, 
regardless of whether the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during startup, shutdown, maintenance, or malfunctions are 
not violations of the applicable SIP emission limitations are 
inconsistent with the fundamental requirements of the CAA.
    The first provision identified by the Petitioner states that 
``[t]he opacity standards set forth above do not apply during startup 
or shutdown.'' The EPA agrees with the Petitioner that the effect of 
this language is to exempt excess emissions that occur during startup 
or shutdown from otherwise applicable opacity standards, essentially 
treating such emissions as non-violations. The EPA believes that such 
automatic exemptions are impermissible under the CAA. By having SIP 
provisions that define what would otherwise be violations of the 
applicable SIP emission limitations as non-violations, the state has 
effectively negated the ability of the EPA or the public to enforce 
against those violations. Therefore, the EPA believes that the 
inclusion of such an automatic exemption in S.C. Code Ann. Regs. 61-
62.5 St 1(C) is impermissible and renders the provision a substantial 
inadequacy under the CAA.
    With respect to the Petitioner's second objection relating to the 
exemption for special-use burners, however, the EPA disagrees with the

[[Page 12512]]

Petitioner's characterization of the provision. S.C. Code Ann. Regs. 
61-62.5 St 5.2(I)(b)(14) provides: ``The following sources are exempt 
from all requirements of this regulation unless otherwise specified: * 
* * (14) Special use burners, such as start-up/shut-down burners, that 
are operated less than 500 hours a year.'' The Petitioner argued that 
this provision provides an exemption from otherwise applicable NOx 
limitations for excess emissions that occur during startup or shutdown. 
Although this provision superficially resembles an exemption for 
emissions during startup and shutdown, the EPA interprets this 
provision merely to define a specific source category--special-use 
burners--that is not subject to control under S.C. Code Ann. Regs. 61-
62.5 St 5.2, Control of Oxides of Nitrogen (NOX). In other words, the 
provision reflects that regulation of special-use burners is not 
necessary in order to meet the applicable RACT requirements or any 
other CAA requirements for NOX emissions in this area. 
Rather than an exemption for NOX emissions during startup 
and shutdown for a source category that is regulated for 
NOX, this provision merely reflects that this category of 
source is not subject to regulation under S.C. Code Ann. Regs. 61-62.5 
St 5.2. Therefore, the EPA disagrees with the Petitioner that S.C. Code 
Ann. Regs. 61-62.5 St 5.2(I)(b)(14) renders the South Carolina SIP 
substantially inadequate.
    Finally, the EPA agrees that S.C. Code Ann. Regs. St 4(XI)(D)(4) 
implicitly includes impermissible exemptions for excess emissions 
during startup, shutdown, and malfunction events for the affected 
sources. The provision states that ``[t]he Department will consider 
periods of excess emissions reported under Subpart D(3) of this section 
to be indicative of a violation if'' the emissions from the specified 
source categories exceed certain limits over certain time periods. For 
example, for recovery furnaces, S.C. Code Ann. Regs. St 4(XI)(D)(4)(b) 
specifies that excess emissions will be ``indicative of a violation'' 
if ``(a) the number of 12 hour exceedances from recovery furnaces is 
greater than 1% of the total number of contiguous 12 hour periods in a 
quarter (excluding periods of startup, shutdown, or malfunction * * 
*).'' The parenthetical explicitly excludes the excess emissions that 
occur during startup, shutdown, and malfunction, automatically treating 
those emissions as non-violations. The other two source category-
specific provisions to be considered in determining whether excess 
emissions are indicative of a violation contain similar parenthetical 
exclusions. Therefore, these provisions could reasonably be construed 
to preclude the EPA and the public from enforcing against violations 
that occur during these SSM events at these sources. The EPA believes 
that S.C. Code Ann. Regs. St 4(XI)(D)(4) includes automatic exemptions 
for excess emissions during SSM events for the three categories of 
sources and is thus substantially inadequate to satisfy CAA 
requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to S.C. Code 
Ann. Regs. 61-62.5 St 1(C). The EPA believes that S.C. Code Ann. Regs. 
61-62.5 St 1(C) allows for an exemption from otherwise applicable SIP 
emission limitations and that such exemptions are inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). The EPA also proposes to grant the Petition with respect to 
S.C. Code Ann. Regs. St 4(XI)(D)(4). This provision appears to define 
violations at three source categories in a way that excludes excess 
emissions that occur during SSM events. It is unclear whether this 
provision is intended only to apply to the exercise of enforcement 
discretion by state personnel, but the EPA believes that it could 
reasonably be interpreted to preclude the EPA and citizen enforcement 
as well. Because S.C. Code Ann. Regs. St 4(XI)(D)(4) appears to define 
violations of the applicable emission limitations in a way that 
excludes excess emissions during SSM events, it is inconsistent with 
the fundamental requirements of CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to 
find that S.C. Code Ann. Regs. 61-62.5 St 1(C) and S.C. Code Ann. Regs. 
St 4(XI)(D)(4) are substantially inadequate to meet CAA requirements 
and proposes to issue a SIP call with respect to these provisions.
    However, the EPA proposes to deny the Petition with respect to S.C. 
Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14), which does not exempt excess 
emissions from an otherwise applicable SIP emission limitation during 
startup and shutdown but rather excludes a specific source category 
from regulation under the South Carolina SIP, because such regulation 
was deemed unnecessary to meet other applicable CAA requirements. As a 
consequence, this provision does not constitute a substantial 
inadequacy in the SIP.
10. Tennessee
a. Petitioner's Analysis
    The Petitioner objected to three provisions in the Tennessee 
SIP.\141\ First, the Petitioner objected to two provisions that 
authorize a state official to ``excuse or proceed upon'' (Tenn. Comp. 
R. & Regs. 1200-3-20-.07(1)) violations of otherwise applicable SIP 
emission limitations that occur during ``malfunctions, startups, and 
shutdowns'' (Tenn. Comp. R. & Regs. 1200-3-20-.07(3)). The Petitioner 
argued that together, these provisions constitute a ``blanket exemption 
from enforcement at the unfettered discretion of'' a state official. 
Further, the Petitioner contended that once a violation has been 
``excused'' by the state official, that decision could preclude 
enforcement by the EPA or citizens in violation of the CAA.
---------------------------------------------------------------------------

    \141\ Petition at 67-69.
---------------------------------------------------------------------------

    Second, the Petitioner objected to a provision that excludes excess 
visible emissions from the requirement that the state automatically 
issue a notice of violation for all excess emissions (Tenn. Comp. R. & 
Regs. 1200-3-5-.02(1)). This provision states that ``due allowance may 
be made for visible emissions in excess of that permitted in this 
chapter which are necessary or unavoidable due to routine startup and 
shutdown conditions.'' The Petitioner argued that Tenn. Comp. R. & 
Regs. 1200-3-5-.02(1) is inconsistent with EPA's interpretation of the 
CAA because it operates as a blanket exemption for opacity violations.
b. The EPA's Evaluation
    While the Petitioner suggested that Tenn. Comp. R. & Regs. 1200-3-
20-.07(1) and Tenn. Comp. R. & Regs. 1200-3-20-.07(3) combine to 
operate as an impermissible discretionary exemption, the EPA believes 
that these provisions are better understood as attempting to provide 
the state agency with the discretion to decide whether to pursue an 
enforcement action. As discussed more fully in section IX.A of this 
notice, the EPA's SSM Policy has consistently encouraged states to 
utilize traditional enforcement discretion within appropriate bounds 
for violations relating to excess emissions that occur during SSM 
events. Moreover, the 1982 SSM Guidance explicitly recommended criteria 
that states might consider in the event that they elected to formalize 
their enforcement discretion with provisions in the SIP. However, such 
enforcement discretion provisions in a SIP must be ``state-only,'' 
meaning that the

[[Page 12513]]

provisions apply only to the state's own enforcement personnel and not 
to the EPA or to others. Here, the Tennessee SIP goes too far because a 
court could reasonably conclude that the provisions in question 
preclude the EPA and the public from enforcing against violations that 
occur during SSM events if the state official chooses to ``excuse'' 
such violations. Therefore, the EPA ultimately agrees with the 
Petitioner that Tenn. Comp. R. & Regs. 1200-3-20-.07(1) and Tenn. Comp. 
R. & Regs. 1200-3-20-.07(3) are substantially inadequate to satisfy CAA 
requirements.
    In regard to Tenn. Comp. R. & Regs. 1200-3-5-.02(1), the EPA agrees 
with the Petitioner that this provision operates as an impermissible 
discretionary exemption because it allows a state official to excuse 
excess visible emissions after giving ``due allowance'' to the fact 
that they were emitted during startup or shutdown events. The EPA 
believes that this provision is impermissible because it creates 
unbounded discretion that purports to make a state official the 
unilateral arbiter of whether the excess emissions in a given event 
constitute a violation of otherwise applicable SIP emission 
limitations. More importantly, the provision purports to authorize the 
state official to create exemptions from applicable SIP emission 
limitations when such exemptions are impermissible in the first 
instance. As discussed in more detail in section VII.A of this notice, 
these types of director's discretion provisions undermine the purpose 
of emission limitations and the reductions they are intended to 
achieve, thereby rendering them less enforceable by the EPA or through 
a citizen suit. The EPA believes that the inclusion of such a 
director's discretion provision in Tenn. Comp. R. & Regs. 1200-3-
5-.02(1) is therefore a substantial inadequacy that renders the 
provision impermissible under the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Tenn. Comp. 
R. & Regs. 1200-3-20-.07(1) and Tenn. Comp. R. & Regs. 1200-3-
20-.07(3). These enforcement discretion provisions could reasonably be 
interpreted to preclude EPA and citizen enforcement of applicable SIP 
emission limitations, in violation of CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k). The EPA also proposes to grant the Petition 
with respect to Tenn. Comp. R. & Regs. 1200-3-5-.02(1). The discretion 
created by this provision allows for revisions of the applicable SIP 
emission limitations without meeting the applicable SIP revision 
requirements of the CAA, and it allows case-by-case exemptions from 
emission limitations when such exemptions are not permissible in the 
first instance. Thus, this provision is also inconsistent with CAA 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the 
EPA is proposing to find that these provisions are substantially 
inadequate to meet CAA requirements and proposes to issue a SIP call 
with respect to these provisions.
11. Tennessee: Knox County
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Knox County portion 
of the Tennessee SIP that bars evidence of a violation of SIP emission 
limitations from being used in a citizen enforcement action (Knox 
County Regulation 32.1(C)).\142\ The provision specifies that ``[a] 
determination that there has been a violation of these regulations or 
orders issued pursuant thereto shall not be used in any law suit 
brought by any private citizen.'' The Petitioner argued that this 
provision would prevent reports of SSM conditions, which owners and 
operators are required to submit per Knox County Regulation 34.1(A), 
from being used as evidence in citizen suits, thereby undermining the 
express authorization of citizen enforcement actions under the CAA.
---------------------------------------------------------------------------

    \142\ Petition at 69.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees with the Petitioner that Knox County Regulation 
32.1(C) is inconsistent with the fundamental requirements of the CAA. 
Section 113(e)(1) of the CAA requires a court to take into 
consideration ``the duration of the violation as established by any 
credible evidence'' in determining penalties in citizen enforcement 
actions. Moreover, section 114(c) of the CAA states that ``[a]ny 
records, reports or information'' obtained from sources ``shall be 
available to the public * * * .'' In accordance with these statutory 
mandates, the EPA promulgated its ``credible evidence rule'' in 1997. 
That rule states: ``[f]or purpose of * * * establishing whether or not 
a person has violated or is in violation of any standard * * *, the 
[SIP] must not preclude the use, including the exclusive use, of any 
credible evidence or information, relevant to whether a source would 
have been in compliance with applicable requirements * * *'' \143\
---------------------------------------------------------------------------

    \143\ 51 CFR 31.212(c); see also ``Credible Evidence 
Revisions,'' 62 FR 8155 at 8314 (Feb. 24, 1997).
---------------------------------------------------------------------------

    The EPA believes that the Knox County Regulation 32.1(C) runs afoul 
of these statutory and regulatory provisions. Knox County Regulation 
32.1(c) explicitly bars a state official's determination that there has 
been a violation of a SIP emission limitation from being used as 
evidence in a citizen enforcement action, even though SIPs are 
prohibited from precluding the use of such evidence. The provision 
could also be interpreted to bar citizens from using evidence of a 
violation used by the state official in making such a determination, 
including reports of SSM conditions. Consequently, Knox County 
Regulation 32.1(C) is inconsistent with the fundamental requirements of 
CAA sections 113(e)(1) and 114(c) and the credible evidence rule. 
Moreover, by seeking to restrain the ability of private citizens to 
pursue enforcement actions, the provision is inconsistent with the 
fundamental enforcement structure created by Congress in CAA section 
304. As such, the EPA believes that the Knox County Regulation 32.1(C) 
constitutes a substantial inadequacy in the Tennessee SIP.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Knox County 
Regulation 32.1(C). This provision precludes the use of a state 
determination that a violation has occurred from being used as evidence 
in a citizen enforcement action, in violation of CAA sections 
113(e)(1), 114(c), and 304, and the credible evidence rule. Therefore, 
the EPA is proposing to find that this provision is substantially 
inadequate to meet CAA requirements and proposes to issue a SIP call 
with respect to this provision in the Knox County portion of the 
state's SIP.
12. Tennessee: Shelby County
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Shelby County Code 
(Shelby County Code Sec.  16-87) that addresses enforcement for excess 
emissions that occur during ``malfunctions, startups, and shutdowns'' 
by incorporating by reference the state's provisions in Tenn. Comp. R. 
& Regs. 1200-3-20.\144\ Shelby County Code Sec.  16-87 provides that 
``all such additions, deletions, changes and amendments as may 
subsequently be made'' to Tennessee's regulations will automatically 
become part of the Shelby County Code. The Petitioner argued that once 
Tennessee changes its regulations, those revised provisions will be

[[Page 12514]]

effective in the Shelby County Code but will not be effective as part 
of the SIP until they are submitted to the EPA and approved.
---------------------------------------------------------------------------

    \144\ Petition at 69-70.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that because Shelby County Code Sec.  16-87 
incorporates by reference provisions in the Tennessee SIP that are 
substantially inadequate, the Shelby County portion of the Tennessee 
SIP is likewise substantially inadequate to satisfy the fundamental 
requirements of the CAA for the same reasons.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Shelby 
County Code Sec.  16-87. For the same reasons that the EPA has 
determined that the Tennessee SIP is substantially inadequate to meet 
CAA requirements, the EPA believes that the Shelby County portion of 
the Tennessee SIP is substantially inadequate as well. Therefore, the 
EPA proposes to issue a SIP call with respect to this provision in the 
Shelby County portion of the state's SIP.

F. Affected States in EPA Region V

1. Illinois
a. Petitioner's Analysis
    The Petitioner objected to three generally applicable provisions in 
the Illinois SIP which together have the effect of providing 
discretionary exemptions from otherwise applicable SIP emission 
limitations, and such exemptions are impermissible under the CAA 
because the statute and the EPA's interpretation of the CAA in the SSM 
Policy require that all such excess emissions be treated as 
violations.145 146 The Petitioner noted that the provisions 
invite sources to request, during the permitting process, advance 
permission to continue to operate during a malfunction or breakdown, 
and, similarly to request advance permission to ``violate'' otherwise 
applicable emission limitations during startup (Ill. Admin. Code tit. 
35 Sec.  201.261). The Illinois SIP provisions establish criteria that 
a state official must consider before granting the advance permission 
to violate the emission limitations (Ill. Admin. Code tit. 35 Sec.  
201.262). However, the Petitioner asserted, the provisions state that, 
once granted, the advance permission to violate the emission 
limitations ``shall be a prima facie defense to an enforcement action'' 
(Ill. Admin. Code tit. 35 Sec.  201.265).
---------------------------------------------------------------------------

    \145\ The EPA notes that the Petitioner also identified several 
additional pollutant-specific and source category-specific 
provisions in the Illinois SIP that it alleged are inconsistent with 
the CAA and the EPA's SSM Policy. However, the Petitioner did not 
request that the EPA address those SIP provisions in its remedy 
request, and thus the EPA is not addressing those provisions in this 
action. The EPA may elect to evaluate those provisions in a later 
action.
    \146\ Petition at 33-36.
---------------------------------------------------------------------------

    The Petitioner noted that Illinois has claimed that its SIP 
provisions do not provide for advance permission to violate emission 
limitations but that its SIP provisions instead authorize ``case-by-
case claims of exemption.'' \147\ The Petitioner argued that despite 
this explanation, the language in the SIP is not clear and appears to 
grant advance permission for violations during malfunction and startup 
events. Furthermore, the Petitioner objected because the effect of 
granting that permission would be to provide the source with an 
absolute defense to any later enforcement action, that is, ``a defense 
[would] attach[] at the state's discretion.'' The Petitioner argued 
that this approach would violate the fundamental requirement that all 
excess emissions be considered violations.
---------------------------------------------------------------------------

    \147\ Petition at 35 (citing Ill. Envtl. Prot. Agency, Statement 
of Basis for a Planned Revision of the CAAPP Permit for U.S. Steel 
Corp. Granite City Works (Mar. 15, 2011), at 26-27). The EPA notes 
that the Petitioner appears to have cited the incorrect portion of 
this document and that the correct citation is to pages 36-37.
---------------------------------------------------------------------------

    Finally, the Petitioner objected to the use of the term ``prima 
facie defense'' in Ill. Admin. Code tit. 35 Sec.  201.265, arguing that 
the term is ``ambiguous in its operation.'' The Petitioner argued that 
the provision is not clear regarding whether the defense is to be 
evaluated ``in a judicial or administrative proceeding or whether the 
Agency determines its availability.'' Allowing defenses to be raised in 
these undefined contexts, the Petitioner argued, is ``inconsistent with 
the enforcement structure of the Clean Air Act.'' The Petitioner 
asserted that ``if * * * the ``prima facie defense'' is anything short 
of the ``affirmative defense'' as contemplated in the 1999 SSM 
Guidance, then ``it clearly has the potential to interfere with EPA and 
citizen enforcement.''
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for discretionary 
exemptions from otherwise applicable SIP emission limitations. In 
accordance with the requirements of CAA section 110(a)(2)(A), SIPs must 
contain emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. The EPA agrees that together Ill. Admin. Code tit. 35 Sec.  
201.261, Ill. Admin. Code tit. 35 Sec.  201.262, and Ill. Admin. Code 
tit. 35 Sec.  201.265 \148\ can be read to create exemptions by 
authorizing a state official to determine in the permitting process 
that the excess emissions during startup and malfunction will not be 
considered violations of the applicable emission limitations. The 
language of the SIP on its face appears to permit the state official to 
grant advance permission to ``continue to operate during a malfunction 
or breakdown'' or ``to violate the standards or limitations * * * 
during startup'' (Ill. Admin. Code tit. 35 Sec.  201.261(a)).
---------------------------------------------------------------------------

    \148\ The EPA notes that there are a number of other provisions 
in the same portion of the Illinois SIP that are integral to the 
regulation of startups, shutdowns, and malfunctions. Those 
provisions include Ill. Admin. Code tit. 35 Sec.  201.149, Ill. 
Admin. Code tit. 35 Sec.  201.263, and Ill. Admin. Code tit. 35 
Sec.  201.264. The Petitioner did not object to these provisions in 
its Petition, but because they are part of a functional scheme in 
the SIP, the state may elect to revise these provisions in 
accordance with the EPA's proposal.
---------------------------------------------------------------------------

    The EPA notes that the Petitioner's characterization of Illinois's 
interpretation of its SIP is not accurate. While the Petitioner alleged 
that Illinois believed its SIP provisions to authorize ``case-by-case 
exemptions,'' Illinois in fact described the effect of the permission 
granted under these provisions as providing the source with the:

    * * * opportunity to make a claim of malfunction/breakdown or 
startup, with the viability of such claim subject to specific review 
against the requisite requirements. Indeed, 35 IAC 201.265 clearly 
states that violating an applicable state standard even if 
consistent with any expression of authority regarding malfunction/
breakdown or startup set forth in a permit shall only constitute a 
prima facie defense to an enforcement action for violation of said 
regulation.

(Ill. Envtl. Prot. Agency, Statement of Basis for a Planned Revision of 
the CAAPP Permit for U.S. Steel Corp. Granite City Works (March 15, 
2011), at 37.) Thus, the state claimed that under its SIP provisions, 
any excess emissions during periods of startup or malfunction would 
still constitute a ``violation'' and that the only effect of the 
permission granted by the state official in the permit would be to 
allow a source to assert a ``prima facie defense'' in an enforcement 
action. Even in light of this explanation, the EPA agrees that the 
plain language of the SIP provisions do not make explicit this 
limitation on the

[[Page 12515]]

state official's authorization to grant exemptions. Indeed, by 
expressly granting ``permission,'' the provisions are ambiguous and 
could be read as allowing the state official to be the unilateral 
arbiter of whether the excess emissions in a given malfunction, 
breakdown, or startup event constitute a violation. By deciding that an 
exceedance of the emission limitation was not a ``violation,'' exercise 
of this discretion could preclude enforcement by the EPA or through a 
citizen suit. Most importantly, however, the grant of permission would 
authorize the state official to create an exemption from the otherwise 
applicable SIP emission limitation, and such an exemption is 
impermissible in the first instance. Such a director's discretion 
provision undermines the emission limitations and the emission 
reductions they are intended to achieve and renders them less 
enforceable by the EPA or through a citizen suit. The EPA believes that 
the inclusion of director's discretion provisions in Ill. Admin. Code 
tit. 35 Sec.  201.261, Ill. Admin. Code tit. 35 Sec.  201.262, and Ill. 
Admin. Code tit. 35 Sec.  201.265 is thus a substantial inadequacy and 
renders these specific SIP provisions impermissible for this reason.
    Furthermore, even if the Illinois SIP provisions cited by the 
Petitioner are intended to provide only an affirmative defense to 
enforcement, rather than as advance permission to violate the otherwise 
applicable SIP emission limitations, the EPA agrees that the ``prima 
facie defense'' mechanism in Ill. Admin. Code tit. 35 Sec.  201.261, 
Ill. Admin. Code tit. 35 Sec.  201.262, and Ill. Admin. Code tit. 35 
Sec.  201.265 is not an acceptable affirmative defense provision under 
the CAA as interpreted in the EPA's SSM Policy. Although the EPA 
believes that narrowly drawn affirmative defenses are permitted for 
malfunction events (see section VII.B of this notice), the EPA's 
interpretation of the CAA is that such affirmative defenses can only 
shield the source from monetary penalties and cannot be a bar to 
injunctive relief. An affirmative defense provision that purports to 
bar any enforcement action for injunctive relief for violations of 
emission limitations is inconsistent with the requirements of CAA 
sections 113 and 304. In addition, Illinois's SIP provisions allow 
sources to obtain a prima facie defense for violations that occurred 
during startup periods, and, as discussed in section VII.C of this 
notice, the EPA does not believe affirmative defenses for violations of 
the otherwise applicable SIP emission limitations that occur during 
startup or shutdown periods is permissible under the CAA.
    Significantly, these Illinois SIP provisions are also deficient 
because, although not defined in the Illinois SIP, a prima facie 
defense typically would shift the burden of proof to the opposing 
party, in this case the party bringing the enforcement action against 
the source. The EPA's longstanding interpretation of the CAA is that an 
affirmative defense provision must be narrowly drawn and must require 
the source to establish that it has met the conditions to justify 
relief from monetary penalties for excess emissions in a given event. 
Thus, an acceptable affirmative defense under EPA's interpretation of 
the CAA places the burden on the source to demonstrate that it has met 
all the appropriate criteria before it is entitled to the defense.
    Lastly, the criteria that the Illinois SIP provisions require be 
met before advance permission and the prima facie defense may be 
granted are not consistent with the criteria that the EPA recommends in 
the SSM Policy. The EPA acknowledges that the SSM Policy is only 
guidance concerning what types of SIP provisions could be consistent 
with the requirements of the CAA. Nonetheless, through this rulemaking, 
the EPA is proposing to determine that Ill. Admin. Code tit. 35 Sec.  
201.261, Ill. Admin. Code tit. 35 Sec.  201.262, and Ill. Admin. Code 
tit. 35 Sec.  201.265 do not include criteria that are sufficiently 
robust to qualify as an acceptable affirmative defense provision. The 
EPA believes that the inclusion of the complete bar to liability, 
including injunctive relief, the availability of the defense for 
violations during startup and shutdown, the burden-shifting effect, and 
the insufficiently robust qualifying criteria in Ill. Admin. Code tit. 
35 Sec.  201.261, Ill. Admin. Code tit. 35 Sec.  201.262, and Ill. 
Admin. Code tit. 35 Sec.  201.265, are substantial inadequacies and 
render these specific SIP provisions impermissible.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Ill. Admin. 
Code tit. 35 Sec.  201.261, Ill. Admin. Code tit. 35 Sec.  201.262, and 
Ill. Admin. Code tit. 35 Sec.  201.265. The EPA believes that these 
provisions allow for exemptions from the otherwise applicable emission 
limitations, and that such exemptions are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs. In addition, Ill. Admin. Code tit. 35 Sec.  
201.261, Ill. Admin. Code tit. 35 Sec.  201.262, and Ill. Admin. Code 
tit. 35 Sec.  201.265 potentially allow for such an exemption through a 
state official's unilateral exercise of discretionary authority, and 
such provisions are inconsistent with the fundamental requirements of 
the CAA with respect to SIPs and SIP revisions in sections 
110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is 
proposing to find that Ill. Admin. Code tit. 35 Sec.  201.261, Ill. 
Admin. Code tit. 35 Sec.  201.262, and Ill. Admin. Code tit. 35 Sec.  
201.265 are substantially inadequate to meet CAA requirements and thus 
proposing to issue a SIP call with respect to these provisions.
    The EPA is proposing to grant the Petition with respect to these 
provisions even though the state has stated that the effect of these 
provisions only provides sources with a prima facie defense in an 
enforcement proceeding. Illinois's SIP provisions do not constitute an 
affirmative defense provision consistent with the EPA's recommendations 
in the EPA's SSM Policy interpreting the CAA, for a number of reasons: 
it is not clear that the defense applies only to monetary penalties, 
which is inconsistent with the requirements of CAA sections 113 and 
304; the defense applies to violations that occurred during startup 
periods, which is inconsistent with CAA sections 113 and 304; the 
provisions shift the burden of proof to the enforcing party; and 
finally, the provisions do not include sufficient criteria to assure 
that sources seeking to raise the affirmative defense have in fact been 
properly designed, maintained, and operated, and to assure that sources 
have taken all appropriate steps to minimize excess emissions. 
Accordingly, even if Ill. Admin. Code tit. 35 Sec.  201.261, Ill. 
Admin. Code tit. 35 Sec.  201.262, and Ill. Admin. Code tit. 35 Sec.  
201.265 are interpreted to provide a defense to enforcement rather than 
an exemption, the EPA is proposing to find that the provisions are 
substantially inadequate to meet CAA requirements and thus proposing to 
issue a SIP call with respect to these provisions.
2. Indiana
a. Petitioner's Analysis
    The Petitioner objected to a generally applicable provision in the 
Indiana SIP that allows for discretionary exemptions during 
malfunctions (326 Ind. Admin. Code 1-6-4(a)).149 150 The 
Petitioner

[[Page 12516]]

objected to the provision because it provides an exemption from the 
otherwise applicable SIP emission limitations, and such exemptions are 
impermissible under the CAA because the statute and the EPA's 
interpretation of the CAA in the SSM Policy require that all such 
excess emissions be treated as violations. The Petitioner noted that 
the provision is ambiguous because it states that excess emissions 
during malfunction periods ``shall not be considered a violation'' if 
the source demonstrates that a number of conditions are met (326 Ind. 
Admin. Code 1-6-4(a)), but the provision does not specify to whom or in 
what forum such demonstration must be made. If made in a showing to the 
state, the Petitioner argued, the provision would give a state official 
the sole authority to determine that the excess emissions were not a 
violation and could thus be read to preclude enforcement by the EPA or 
citizens in the event that the state official elects not to treat the 
excess emissions as a violation. Thus, in addition to creating an 
impermissible exemption for the excess emissions, the Petitioner argued 
that the SIP's provision is also inconsistent with the CAA as 
interpreted in the EPA's SSM Policy because it allows the state 
official to make a unilateral decision that the excess emissions were 
not a violation and thus bar enforcement for the excess emissions by 
the EPA and citizens.
---------------------------------------------------------------------------

    \149\ The EPA notes that the Petitioner also identified several 
additional pollutant-specific and source category-specific 
provisions in the Indiana SIP that it alleged are inconsistent with 
the CAA and the EPA's SSM Policy. However, the Petitioner did not 
request that the EPA address those SIP provisions in its remedy 
request, and thus the EPA is not addressing those provisions in this 
action. The EPA may elect to evaluate those provisions in a later 
action.
    \150\ Petition at 36-37.
---------------------------------------------------------------------------

    Alternatively, the Petitioner noted, if the demonstration was 
required to have been made in an enforcement context, the provision 
could be interpreted as providing an affirmative defense. The 
Petitioner argued that even if interpreted in this way, the provision 
is not permissible because it ``appears to confuse an enforcement 
discretion approach with the affirmative defense approach.'' 
Furthermore, the Petitioner argued that 326 Ind. Admin. Code 1-6-4(a) 
is not an acceptable affirmative defense provision because it ``could 
be interpreted to preclude EPA and citizen enforcement and shield 
sources from injunctive relief.''
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for discretionary 
exemptions from otherwise applicable SIP emission limitations. In 
accordance with the requirements of CAA section 110(a)(2)(A), SIPs must 
contain emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions such as 326 Ind. Admin. Code 1-6-4(a) that 
can be interpreted to authorize a state official to determine 
unilaterally that the excess emissions during malfunctions are not 
violations of the applicable emission limitations are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs. The EPA believes that the inclusion of a provision 
that allows discretionary exemptions in the SIP is thus a substantial 
inadequacy and renders 326 Ind. Admin. Code 1-6-4(a) impermissible.
    The EPA believes that 326 Ind. Admin. Code 1-6-4(a) is also 
impermissible because the provision can be interpreted to make a state 
official the unilateral arbiter of whether the excess emissions in a 
given malfunction event constitute a violation. The 326 Ind. Admin. 
Code 1-6-4(a) provides that if a source demonstrates that four criteria 
are met, the excess emissions ``shall not be considered a violation.'' 
Because the provision does not establish who is to evaluate whether the 
source has made an adequate demonstration, the provision could be read 
to authorize a state official to judge that violations have not 
occurred even though the emissions exceeded the applicable SIP emission 
limitations. These provisions therefore appear to vest the state 
official with the unilateral power to grant exemptions from otherwise 
applicable SIP emission limitations, without any additional public 
process at the state or federal level. By deciding that an exceedance 
of the emission limitation was not a ``violation,'' exercise of this 
discretion could preclude enforcement by the EPA or through a citizen 
suit. Most importantly, however, the provision could be read to 
authorize the state official to create an exemption from the otherwise 
applicable SIP emission limitation, and such an exemption is 
impermissible in the first instance. Such a director's discretion 
provision undermines the emission limitations and the emissions 
reductions they are intended to achieve and renders them less 
enforceable by the EPA or through a citizen suit. The EPA believes that 
the inclusion of a director's discretion provision in 326 Ind. Admin. 
Code 1-6-4(a) is thus a substantial inadequacy and renders these 
specific SIP provisions impermissible for this reason.
    The EPA believes that even if 326 Ind. Admin. Code 1-6-4(a) is 
interpreted to allow the source to make the required demonstration only 
in the context of an enforcement proceeding, the conditions set forth 
in the provision do not render it an acceptable affirmative defense 
provision. Although the EPA believes that narrowly drawn affirmative 
defenses are permitted under the CAA for malfunction events (see 
section VII.B of this notice), the EPA's interpretation of the CAA is 
that such affirmative defenses can only shield the source from monetary 
penalties and cannot be a bar to injunctive relief. An affirmative 
defense provision that purports to bar any enforcement action for 
injunctive relief for violations of emission limitations is 
inconsistent with the requirements of CAA sections 113 and 304.
    Furthermore, Indiana's SIP provision is deficient because even if 
it were interpreted to create an affirmative defense rather than an 
exemption from the applicable emission limitations, it does so with 
conditions that are not consistent with the criteria that the EPA 
recommends in the SSM Policy. The EPA acknowledges that the SSM Policy 
is only guidance concerning what types of SIP provisions could be 
consistent with the requirements of the CAA. Nonetheless, through this 
rulemaking, the EPA is proposing to determine that 326 Ind. Admin. Code 
1-6-4(a) does not include criteria that are sufficiently robust to 
qualify as an acceptable affirmative defense provision under the CAA. 
The conditions in the provision are helpful but are not consistent with 
all of the criteria recommended in the EPA's SSM Policy. For example, 
this provision does not contain criteria requiring the source to 
establish that the malfunction event was not foreseeable and not part 
of a recurring pattern indicative of inadequate design, operation, or 
maintenance. Indeed, the explicit limitation that the ``malfunctions 
have not exceeded five percent (5%), as a guideline, of the normal 
operational time of the facility'' suggests that a source could be 
granted exemptions for excess emissions even though it was habitually 
violating the applicable emission limitations over some extended period 
of time.
    The EPA believes that the inclusion of the complete bar to 
liability, including injunctive relief, and the insufficiently robust 
qualifying criteria render 326 Ind. Admin. Code 1-6-4(a) substantially 
inadequate to meet CAA requirements.
    Significantly, the EPA notes that the correct meaning of 326 Ind. 
Admin.

[[Page 12517]]

Code 1-6-4(a) has been addressed in the past in conjunction with an 
interpretive letter from the state in 1984, which characterized the 
provision as an enforcement discretion provision applicable to state 
personnel rather than as a provision allowing exemptions from the 
emission limitations. The EPA appreciates Indiana's clarification of 
its reading of the provision in the 1984 letter, but at this juncture, 
in the course of reevaluating this provision in light of the issues 
raised in the Petition, the EPA believes that 326 Ind. Admin. Code 1-6-
4(a) contains regulatory language that requires formal revision to 
eliminate significant ambiguities. For example, the provision states 
that: ``[e]missions temporarily exceeding the standards which are due 
to malfunctions * * * shall not be considered a violation of the rules 
provided the source demonstrates'' four criteria. Indiana has 
acknowledged that it reads these provisions not to bar enforcement by 
the EPA or citizens in the event that the state does not pursue 
enforcement, but the EPA believes that the provision is sufficiently 
ambiguous on this point that a revision is necessary to ensure that 
outcome in the event of an enforcement action.
    As discussed in section VI of this notice, the EPA believes that in 
some instances it is appropriate to clarify provisions of a SIP 
submission through the use of interpretive letters. However, in some 
cases, there may be areas of regulatory ambiguity in a SIP provision 
that are significant and for which resolution is both appropriate and 
necessary. Because the text of 326 Ind. Admin. Code 1-6-4(a) provision 
is not clear on its face that it is limited to the exercise of 
enforcement discretion by state personnel but rather could be 
interpreted as a discretionary exemption from the otherwise applicable 
SIP emission limitations or as an inadequate affirmative defense 
provision, the EPA believes this SIP provision is substantially 
inadequate to meet CAA requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 326 Ind. 
Admin. Code 1-6-4(a). The EPA believes that this provision appears on 
its face to allow for discretionary exemptions from otherwise 
applicable SIP emission limitations, and that such exemptions are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs in sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). This provision allows for exemptions through a state 
official's unilateral exercise of discretionary authority that includes 
no additional public process at the state or federal level, and such 
provisions are inconsistent with the fundamental requirements of the 
CAA with respect to SIPs and SIP revisions. Moreover, the discretion 
created by this provision allows case-by-case exemptions from emission 
limitations when such exemptions are not permissible in the first 
instance.
    Even if the EPA were to interpret 326 Ind. Admin. Code 1-6-4(a) to 
be an affirmative defense applicable in an enforcement context, the 
provision is not consistent with the EPA's recommendations in the EPA's 
SSM Policy interpreting the CAA. By purporting to create a bar to 
enforcement that applies not just to monetary penalties but also to 
injunctive relief, and by including criteria inconsistent with those 
recommended by the EPA for affirmative defense provisions, this 
provision is inconsistent with the requirements of CAA sections 113 and 
304. For these reasons, the EPA is proposing to find that 326 Ind. 
Admin. Code 1-6-4(a) is substantially inadequate to meet CAA 
requirements and thus proposing to issue a SIP call with respect to 
this provision.
3. Michigan
a. Petitioner's Analysis
    The Petitioner objected to a generally applicable provision in 
Michigan's SIP that provides for an affirmative defense to monetary 
penalties for violations of otherwise applicable SIP emission 
limitations during periods of startup and shutdown.\151\ The Petitioner 
argued that affirmative defenses for excess emissions are inconsistent 
with the CAA and requested that the provision be removed from 
Michigan's SIP. Alternatively, if such a provision were to remain in 
the SIP, the Petitioner asked that the SIP be amended to address two 
deficiencies.
---------------------------------------------------------------------------

    \151\ Petition at 44-46.
---------------------------------------------------------------------------

    First, the Petitioner objected to one of the criteria in the 
affirmative defense provision, Mich. Admin. Code r. 336.1916, which 
makes the defense available to a single source or small group of 
sources as long as such source did not ``cause[] an exceedance of the 
national ambient air quality standards or any applicable prevention of 
significant deterioration increment.'' The Petitioner argued that this 
criterion of Michigan's affirmative defense provision is contrary to 
the EPA's SSM Policy because ``[s]ources with the potential to cause an 
exceedance should be more strictly controlled at all times and should 
not be able to mire enforcement proceedings in the difficult empirical 
questions of whether or not the NAAQS or PSD increments were exceeded 
as a matter of fact'' (emphasis in original).
    Second, the Petitioner objected to the availability of Michigan's 
affirmative defense provision, Mich. Admin. Code r. 336.1916, for 
violations of ``an applicable emission limitation,'' which Petitioner 
pointed out would include ``limits derived from federally promulgated 
technology based standards, such as NSPSs and NESHAPs.'' The Petitioner 
argued that according to the EPA's SSM Policy, sources should not be 
able to seek an affirmative defense for violations of these federal 
technology-based standards.
b. The EPA's Evaluation
    As discussed in more detail in section IV.B of this notice, the EPA 
does not agree with the Petitioner that affirmative defenses should 
never be permissible in SIPs. The EPA believes that narrowly drawn 
affirmative defenses can be permitted under the CAA for malfunction 
events, because where excess emissions are entirely beyond the control 
of the owner or operator of the source, it can be appropriate to 
provide limited relief to claims for monetary penalties (see section 
VII.B of this notice). However, as discussed in section IV.B of this 
notice, this basis for permitting affirmative defenses for malfunctions 
does not translate to planned events such as startup and shutdown. By 
definition, the owner or operator of a source can foresee and plan for 
startup and shutdown events, and therefore the EPA believes that states 
should be able to establish, and sources should be able to comply with, 
the applicable emission limitations or other controls measures during 
these periods of time. A source can be designed, operated, and 
maintained to control and to minimize emissions during such normal 
expected events. If sources in fact cannot meet the otherwise 
applicable emission limitations during planned events such as startup 
and shutdown, then a state may elect to develop specific alternative 
requirements that apply during such periods, so long as they meet other 
applicable CAA requirements. The EPA believes that the inclusion of an 
affirmative defense that applies only to violations that occurred 
during periods of startup and shutdown in Mich. Admin. Code r. 336.1916 
is thus a substantial inadequacy and renders this specific SIP 
provision impermissible.

[[Page 12518]]

    The EPA does not agree with the Petitioner that affirmative defense 
provisions are, per se, impermissible for a ``single source or small 
group of sources.'' The EPA believes that a SIP provision may meet the 
overarching statutory requirements through a demonstration by the 
source that the excess emissions during the SSM event did not in fact 
cause a violation of the NAAQS. As discussed in section VII B of this 
notice, the EPA considers this another means by which to assure that 
affirmative defense provisions are narrowly drawn to justify relief 
from monetary penalties for excess emissions during malfunction events. 
Through this alternative approach, sources also have an incentive to 
comply with applicable emission limitations and thereby to support the 
larger objective of attaining and maintaining the NAAQS.
    The EPA does agree that an approvable affirmative defense 
provision, consistent with CAA requirements, cannot apply to any 
federal emission limitations approved into a SIP. Thus, if the state 
has elected to incorporate NSPS or NESHAP into its SIP for any purpose, 
such as to obtain credit for the resulting emissions reductions as part 
of an attainment plan, the SIP cannot have a provision that would 
extend any affirmative defense to sources beyond what is otherwise 
provided in the underlying federal regulation. To the extent that any 
affirmative defense is warranted during malfunctions for these 
technology-based standards, the federal standards contained in the 
EPA's regulations already specify the appropriate affirmative defense. 
No additional or different affirmative defense provision applicable 
through a SIP provision is warranted or appropriate. On its face, Mich. 
Admin. Code r. 336.1916 does not explicitly limit its scope to exclude 
federal emission limitations approved into the SIP. Thus, this would be 
an additional way in which the provision is substantially inadequate to 
meet CAA requirements.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Mich. Admin. 
Code r. 336.1916, which provides for an affirmative defense to 
violations of applicable emission limitations during startup and 
shutdown events. The availability of an affirmative defense for excess 
emissions that occur during planned events is contrary to the EPA's 
interpretation of the CAA to allow such affirmative defenses only for 
events beyond the control of the source, i.e., during malfunctions. For 
this reason, the EPA is proposing to find that Mich. Admin. Code r. 
336.1916 is substantially inadequate to meet CAA requirements and thus 
proposing to issue a SIP call with respect to this provision.
4. Minnesota
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Minnesota SIP that 
provides automatic exemptions for excess emissions resulting from 
flared gas at petroleum refineries when those flares are caused by 
startup, shutdown, or malfunction (Minn. R. 7011.1415).\152\ The 
provision states that: ``The combustion of process upset gas in a 
flare, or the combustion in a flare of process gas or fuel gas which is 
released to the flare as a result of relief valve leakage is exempt 
from the standards of performance set forth in this regulation.'' The 
Petitioner noted that ``process upset gas'' is defined in the 
regulation as ``any gas generated by a petroleum refinery process unit 
as a result of start-up, shutdown, upset, or malfunction'' (Minn. R. 
7011.1400(12)). The Petitioner argued that such an automatic exemption 
for emissions during startup, shutdown, or malfunction in a SIP 
provision is a violation of the fundamental requirements of the CAA and 
the EPA's SSM Policy that all excess emissions be considered 
violations, and that such an exemption interferes with enforcement by 
the EPA and citizens.
---------------------------------------------------------------------------

    \152\ Petition at 46-47.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for automatic exemptions 
from otherwise applicable SIP emission limitations and requirements. In 
accordance with the requirements of CAA section 110(a)(2)(A), SIPs must 
contain emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations of such limitations, whether or not the state elects to 
exercise its enforcement discretion. SIP provisions that create 
exemptions such that the excess emissions during startup, shutdown, or 
malfunction are not violations are inconsistent with the fundamental 
requirements of the CAA with respect to emission limitations in SIPs.
    The automatic exemption provision identified by the Petitioner 
explicitly states that ``process upset gas,'' which is defined as gas 
generated by the affected sources as a result of start-up, shutdown, 
upset, or malfunction, ``is exempt from the standards'' (Minn. R. 
7011.1415). Any exceedances of the standards during those periods would 
therefore not be considered a violation under this provision. With 
respect to the Petitioner's concern that these exemptions could 
interfere with enforcement by the EPA or citizens, the EPA agrees that 
this is one of the critical reasons why such provisions are 
impermissible under the CAA. By having SIP provisions that define what 
would otherwise be violations of the applicable emission limitations as 
non-violations, the state has effectively negated the ability of the 
EPA or the public to enforce against those violations. The EPA believes 
that the inclusion of such automatic exemptions from SIP requirements 
in Minn. R. 7011.1415 is thus a substantial inadequacy and renders this 
specific SIP provision impermissible.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Minn. R. 
7011.1415. The EPA believes that this provision allows for automatic 
exemptions from the otherwise applicable SIP emission limitations and 
requirements, and that such exemptions are inconsistent with the 
fundamental requirements of the CAA with respect to emission 
limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, by creating these impermissible exemptions, 
the state has defined violations in a way that would interfere with 
effective enforcement by the EPA and citizens for excess emissions 
during these events as provided in CAA sections 113 and 304. For these 
reasons, the EPA is proposing to find that Minn. R. 7011.1415 is 
substantially inadequate to meet CAA requirements and thus is proposing 
to issue a SIP call with respect to this provision.
5. Ohio
a. Petitioner's Analysis
    The Petitioner first objected to a generally applicable provision 
in the Ohio SIP that allows for discretionary exemptions during periods 
of scheduled maintenance (Ohio Admin. Code 3745-15-06(A)(3)).\153\ The 
provision provides the state official with the authority to permit 
continued operation of a source during scheduled maintenance ``where a 
complete source shutdown may result in damage to the air pollution 
sources or is otherwise impossible or

[[Page 12519]]

impractical.'' Upon application, the state official ``shall authorize 
the shutdown of the air pollution control equipment if, in his 
judgment, the situation justifies continued operation of the sources.'' 
The Petitioner also objected to two source category-specific and 
pollutant-specific provisions that provide for discretionary exemptions 
during malfunctions (Ohio Admin. Code 3745-17-07(A)(3)(c) and Ohio 
Admin. Code 3745-17-07(B)(11)(f)).\154\
---------------------------------------------------------------------------

    \153\ Petition at 60-61.
    \154\ The EPA notes that Petitioner did not categorize these 
provisions as discretionary exemptions, but both Ohio Admin. Code 
3745-17-07(A)(3)(c) and Ohio Admin. Code 3745-17-07(B)(11)(f) 
provide for exemptions during malfunctions if sources have complied 
with Ohio Admin. Code 3745-15-06(C), which allows the director to 
``evaluate'' malfunction reports required by the rule and to ``take 
appropriate action upon a determination.'' The EPA therefore 
believes that the mechanism by which exemptions are granted under 
Ohio Admin. Code 3745-17-07(A)(3)(c) and Ohio Admin. Code 3745-17-
07(B)(11)(f) is by exercise of the state director's discretion.
---------------------------------------------------------------------------

    The Petitioner argued that these provisions could provide 
exemptions from the otherwise applicable SIP emission limitations, and 
such exemptions are impermissible under the CAA because the statute and 
the EPA's interpretation of the CAA in the SSM Policy require that all 
such excess emissions be treated as violations. Moreover, the 
Petitioner objected to these discretionary exemptions because the state 
official's grant of permission to continue to operate during the period 
of maintenance, or to exempt sources from otherwise applicable SIP 
emission limitations during malfunctions, could be interpreted to 
excuse excess emissions during such time periods and could thus be read 
to preclude enforcement by the EPA or citizens in the event that the 
state official elects not to treat the events as violations. Thus, in 
addition to creating an impermissible exemption for the excess 
emissions, the Petitioner argued, the provisions are also inconsistent 
with the CAA as interpreted in the EPA's SSM Policy because they allow 
the state official to make a unilateral decision that the excess 
emissions were not a violation and thus bar enforcement for the excess 
emissions by the EPA and citizens.
    The Petitioner also objected to a source category-specific 
provision in the Ohio SIP that allows for an automatic exemption from 
applicable emission limitations and requirements during periods of 
startup, shutdown, malfunction, or regularly scheduled maintenance 
activities (Ohio Admin. Code 3745-14-11(D)). The Petitioner objected 
because this provision provides an exemption from the otherwise 
applicable SIP requirements, and such exemptions are inconsistent with 
the requirements of the CAA as interpreted in the EPA's SSM Policy. The 
Petitioner argued that the CAA and the EPA's interpretation of the CAA 
in the SSM Policy require that all excess emissions be treated as 
violations. The Petitioner also objected to this provision because, by 
providing an outright exemption from otherwise applicable requirements, 
the state has defined these excess emissions as not violations, thereby 
precluding enforcement by the EPA or citizens for the excess emissions 
that would otherwise be violations.
    Finally, the Petitioner objected to provisions that contain 
exemptions for Hospital/Medical/Infectious Waste Incinerator (HMIWI) 
sources during startup, shutdown, and malfunction (Ohio Admin. Code 
3745-75-02(E), Ohio Admin. Code 3745-75-02(J), Ohio Admin. Code 3745-
75-03(I), Ohio Admin. Code 3745-75-04(K), Ohio Admin. Code 3745-75-
04(L)). The Petitioner requested that these exemptions be removed 
entirely from Ohio's SIP.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations through the exercise of a 
state official's discretion. In accordance with the requirements of CAA 
section 110(a)(2)(A), SIPs must contain emission limitations and, in 
accordance with the definition of ``emission limitations'' in CAA 
section 302(k), such emission limitations must be continuous. Thus, any 
excess emissions above the level of the applicable emission limitation 
must be considered violations, whether or not the state elects to 
exercise its enforcement discretion. SIP provisions that create 
exemptions such that excess emissions during startup, shutdown, 
malfunctions, or maintenance are not violations of the applicable 
emission limitations are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs. The EPA 
believes that the inclusion of such exemptions from the emission 
limitations in Ohio Admin. Code 3745-15-06(A)(3), Ohio Admin. Code 
3745-17-07(A)(3)(c), Ohio Admin. Code 3745-17-07(B)(11)(f), and Ohio 
Admin. Code 3745-15-06(C) is thus a substantial inadequacy and renders 
these specific SIP provisions impermissible.
    The EPA believes that Ohio Admin. Code 3745-15-06(A)(3), Ohio 
Admin. Code 3745-17-07(A)(3)(c), Ohio Admin. Code 3745-17-07(B)(11)(f), 
and Ohio Admin. Code 3745-15-06(C) are also impermissible as unbounded 
director's discretion provisions that make a state official the 
unilateral arbiter of whether the excess emissions in a given event 
constitute a violation. In the case of Ohio Admin. Code 3745-15-
06(A)(3), the provision authorizes the state official to allow 
continued operation at sources ``during scheduled maintenance of air 
pollution control equipment.'' The state official's grant of permission 
to continue to operate during the period of maintenance could be 
interpreted to excuse excess emissions during that period and could 
thus be read to preclude enforcement by the EPA or through a citizen 
suit in the event that the state official elects not to treat the 
excess emissions as a violation. In addition, the provision vests the 
state official with the unilateral power to grant an exemption from the 
otherwise applicable SIP emission limitations, without any additional 
public process at the state or federal level. Although the provision 
does require sources to submit a report indicating the expected length 
of the event and estimated quantities of emissions, among other things, 
ultimately the state official makes his determination ``if, in his 
judgment, the situation justifies continued operation of the sources.'' 
The state official's discretion is therefore not sufficiently bounded 
and extends to granting a complete exemption from applicable emission 
limitations that would be impermissible in the first instance.
    The EPA believes that Ohio Admin. Code 3745-17-07(A)(3)(c), which 
exempts sources from visible particulate matter limitations during 
malfunctions, and Ohio Admin. Code 3745-17-07(B)(11)(f), which exempts 
sources from fugitive dust limitations during malfunctions, also 
impermissibly provide exemptions through exercise of a state official's 
discretion because the provisions authorize exemptions if the source 
has complied with Ohio Admin. Code 3745-15-06(C). The Ohio Admin. Code 
3745-15-06(C) provides the state official with the discretion to 
``evaluate'' reports of malfunctions submitted by sources and to ``take 
appropriate action upon a determination'' that sources have not 
adequately met the requirements of the provision. Although the 
Petitioner did not request that the EPA evaluate Ohio Admin. Code 3745-
15-06(C), it is the regulatory mechanism by which exemptions are 
granted in the two provisions to which the Petitioner did object. 
Similar to Ohio Admin. Code 3745-15-06(A)(3), which is the director's 
discretion provision discussed earlier in this section of the notice, 
the EPA finds that Ohio Admin. Code 3745-

[[Page 12520]]

17-07(A)(3)(c) and Ohio Admin. Code 3745-17-07(B)(11)(f) could be 
interpreted to excuse excess emissions during malfunction events and 
could thus be read to preclude enforcement by the EPA or through a 
citizen suit in the event that the state official elects not to treat 
the excess emissions as a violation. In addition, the provision vests 
the state official with the unilateral power to grant an exemption from 
otherwise applicable SIP emission limitations, without any additional 
public process at the state or federal level. Although the provision 
does require the state official to consider the reports filed by 
sources before making a determination, the provision remains 
insufficiently bounded.
    Most importantly, however, these provisions all purport to 
authorize the state official to create exemptions from the emission 
limitations, and such exemptions are impermissible in the first 
instance. Such director's discretion provisions undermine the emission 
limitations and the emissions reductions they are intended to achieve 
and render them less enforceable by the EPA or through a citizen suit. 
The EPA believes that the inclusion of an unbounded director's 
discretion provision in Ohio Admin. Code 3745-15-06(A)(3), Ohio Admin. 
Code 3745-17-07(A)(3)(c), Ohio Admin. Code 3745-17-07(B)(11)(f), and 
Ohio Admin. Code 3745-15-06(C) is thus a substantial inadequacy and 
renders these specific SIP provisions impermissible for this reason, in 
addition to the creation of impermissible exemptions.
    With regard to the Petitioner's objection to the exemption for 
portland cement kilns from otherwise applicable requirements at Ohio 
Admin. Code 3745-14-11(D), the EPA agrees that the CAA does not allow 
for automatic exemptions from otherwise applicable SIP emission 
limitations and requirements. In accordance with the requirements of 
CAA section 110(a)(2)(A), SIPs must contain emission limitations and, 
in accordance with the definition of ``emission limitations'' in CAA 
section 302(k), such emission limitations must be continuous. Thus, any 
excess emissions above the level of the applicable emission limitation 
must be considered violations of such limitations, whether or not the 
state elects to exercise its enforcement discretion. SIP provisions 
that create exemptions such that the excess emissions during startup, 
shutdown, malfunction, or maintenance are not violations are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs.
    The automatic exemption provision in Ohio Admin. Code 3745-14-11(D) 
explicitly states that the regulation's requirement that the use of 
control measures such as low-NOx burners during the ozone season and 
monitoring, reporting, and recordkeeping of ozone season NOx emissions 
``shall not apply'' during periods of startup, shutdown, malfunction, 
and maintenance. The exemptions therefore provide that the excess 
emissions resulting from failure to run required control measures will 
not be violations, contrary to the requirements of the CAA. In 
addition, exemption from monitoring, recordkeeping, and reporting 
requirements during these events affects the enforceability of the 
emission limitation in the SIP provision. Moreover, failure to account 
accurately for excess emissions at sources during SSM events has a 
broader impact on NAAQS implementation and SIP planning, because such 
accounting directly informs the development of emissions inventories 
and emissions modeling. With respect to the Petitioner's concern that 
these exemptions preclude enforcement by the EPA or citizens, the EPA 
agrees that this is one of the critical reasons why such provisions are 
impermissible under the CAA. By having SIP provisions that define what 
would otherwise be violations of the applicable emission limitations as 
non-violations, the state has effectively negated the ability of the 
EPA or the public to enforce against those violations. The EPA believes 
that the inclusion of such automatic exemptions from SIP requirements 
in Ohio Admin. Code 3745-14-11(D) is thus substantially inadequate to 
meet CAA requirements.
    Finally, the EPA disagrees that the provisions providing exemptions 
for HMIWI must be removed from the SIP. Ohio Admin. Code 3745-75-02(E), 
Ohio Admin. Code 3745-75-02(J), Ohio Admin. Code 3745-75-03(I), Ohio 
Admin. Code 3745-75-04(K), and Ohio Admin. Code 3745-75-04(L) are not 
approved into Ohio's SIP, but rather those rules were approved as part 
of the separate state plan to meet the applicable emissions guidelines 
under CAA Sec.  111(d) and 40 CFR part 60. Because those rules are not 
in the Ohio SIP and are not related to any provisions in the SIP, they 
do not represent a substantial inadequacy in the SIP.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Ohio Admin. 
Code 3745-15-06(A)(3), Ohio Admin. Code 3745-17-07(A)(3)(c), and Ohio 
Admin. Code 3745-17-07(B)(11)(f). The EPA believes that these 
provisions allow for exemptions from the otherwise applicable SIP 
emission limitations, and that such exemptions are inconsistent with 
the fundamental requirements of the CAA with respect to emission 
limitations in SIPs. In addition, Ohio Admin. Code 3745-15-06(A)(3), 
Ohio Admin. Code 3745-17-07(A)(3)(c), Ohio Admin. Code 3745-17-
07(B)(11)(f), and by extension, Ohio Admin. Code 3745-15-06(C), allow 
for such exemptions through a state official's unilateral exercise of 
discretionary authority that is insufficiently bounded and includes no 
additional public process at the state or federal level, and such 
provisions are inconsistent with the fundamental requirements of the 
CAA with respect to SIPs and SIP revisions. Moreover, the discretion 
created by these provisions allows case-by-case exemptions from 
emission limitations when such exemptions are not permissible in the 
first instance. As described in section VII.A of this notice, such 
provisions are inconsistent with fundamental CAA requirements for SIP 
revisions. For these reasons, the EPA is proposing to find that Ohio 
Admin. Code 3745-15-06(A)(3), Ohio Admin. Code 3745-17-07(A)(3)(c), 
Ohio Admin. Code 3745-17-07(B)(11)(f), and Ohio Admin. Code 3745-15-
06(C) are substantially inadequate to meet CAA requirements and thus is 
proposing to issue a SIP call with respect to these provisions.
    The EPA also proposes to grant the Petition with respect to Ohio 
Admin. Code 3745-14-11(D). The EPA believes that this provision allows 
for automatic exemptions from the otherwise applicable SIP emission 
limitations and requirements, and that such exemptions are inconsistent 
with the fundamental requirements of the CAA with respect to emission 
limitations in SIPs as required by CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k). In addition, by creating these impermissible 
exemptions, the state has defined violations in a way that would 
interfere with effective enforcement by the EPA and citizens for excess 
emissions during these events as provided in CAA sections 113 and 304. 
For these reasons, the EPA is proposing to find that this provision is 
substantially inadequate to meet CAA requirements and thus is proposing 
to issue a SIP call with respect to this provision.
    The EPA proposes to deny the Petition with respect to Ohio Admin. 
Code 3745-75-02(E), Ohio Admin. Code 3745-75-02(J), Ohio Admin. Code 
3745-75-03(I), Ohio Admin. Code

[[Page 12521]]

3745-75-04(K), and Ohio Admin. Code 3745-75-04(L). These provisions are 
not part of the Ohio SIP and thus cannot represent a substantial 
inadequacy in the SIP.

G. Affected States in EPA Region VI

1. Arkansas
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the Arkansas SIP.\155\ 
First, the Petitioner objected to a provision that provides an 
automatic exemption for excess emissions of volatile organic compounds 
(VOC) for sources located in Pulaski County that occur due to 
malfunctions (Reg. 19.1004(H)). The provision states that excess 
emissions ``which are temporary and result solely from a sudden and 
unavoidable breakdown, malfunction or upset of process or emission 
control equipment, or sudden and unavoidable upset or operation will 
not be considered a violation * * *.'' The Petitioner argued that this 
language is impermissible because the CAA and the EPA's interpretation 
of the CAA in the SSM Policy require that all excess emissions be 
treated as violations.
---------------------------------------------------------------------------

    \155\ Petition at 24. The Petitioner cites to 014-01-1 Ark. Code 
R. Sec. Sec.  19.1004(H) and 19.602. The EPA interprets these 
citations as references to Reg. 19.1004(H) and Reg. 19.602 of the 
Arkansas Pollution Control & Ecology Commission (APC&EC), Regulation 
No. 19--Regulations of the Arkansas Plan of Implementation for Air 
Pollution Control, as approved by the EPA on Apr. 12, 2007 (72 FR 
18394) (hereinafter referred to as Reg. 19.1004(H) and Reg. 19.602).
---------------------------------------------------------------------------

    Second, the Petitioner objected to a separate provision that 
provides a ``complete affirmative defense'' for excess emissions that 
occur during emergency conditions (Reg. 19.602). The Petitioner argued 
that this provision, which the state may have modeled after the EPA's 
title V regulations, is impermissible because its application is not 
clearly limited to operating permits.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations. In accordance with CAA 
sections 110(a)(2)(A) and 302(k), SIPs must contain ``emission 
limitations'' and those limitations must be continuous. Thus, any 
excess emissions above the level of the applicable SIP emission 
limitation must be considered a violation of such limitation, 
regardless of whether the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions from applicable 
emission limitations during malfunctions or emergency conditions, 
however defined, are inconsistent with the fundamental requirements of 
the CAA.
    The first provision identified by the Petitioner explicitly states 
that excess emissions of VOC ``will not be considered a violation'' of 
the applicable emission limitation if they occur due to an 
``unavoidable breakdown'' or ``malfunction.'' This exemption in Reg. 
19.1004(H) is impermissible even though the state has limited the 
exemption to unavoidable breakdowns and malfunctions. The core problem 
remains that the provision provides an impermissible exemption from the 
otherwise applicable VOC emission limitations. In addition, by having a 
SIP provision that defines what would otherwise be violations of the 
applicable emission limitations as non-violations, the state has 
effectively negated the ability of the EPA or the public to enforce 
against those violations. The EPA believes that the inclusion of such 
an automatic exemption in Reg. 19.1004(H) is thus a substantial 
inadequacy and renders this SIP provision impermissible under the CAA.
    The second provision identified by the Petitioner defines 
``emergency'' conditions that may cause a source to exceed a 
technology-based emission limitation under a permit and provides a 
``complete affirmative defense'' to an action brought for non-
compliance with such limitations if certain criteria are met. The EPA 
believes that Reg. 19.602 is substantially inadequate for three 
reasons. First, the provision does not explicitly limit the affirmative 
defense to civil penalties. Although the EPA believes that narrowly 
drawn affirmative defenses are permitted under the CAA for malfunction 
events (see sections IV.B and VII.B of this notice), the EPA's 
interpretation of the CAA is that such affirmative defenses can only 
shield the source from monetary penalties and cannot be a bar to 
injunctive relief. An affirmative defense provision that purports to 
bar any enforcement action for injunctive relief for violations of 
emission limitations is inconsistent with the requirements of CAA 
sections 113 and 304. Second, the provision does not contain elements 
for establishing the affirmative defense consistent with all of the 
recommended criteria in the EPA's SSM Policy for SIP provisions. The 
EPA acknowledges that the SSM Policy is only guidance concerning what 
types of SIP provisions could be consistent with the requirements of 
the CAA. Nonetheless, through this rulemaking, the EPA is proposing to 
determine that Reg. 19.602 does not include criteria that are 
sufficiently robust to qualify as an acceptable affirmative defense 
provision. Finally, the provision can be read to provide additional 
defenses beyond those already provided in federal technology-based 
standards. The EPA believes that approvable affirmative defenses in a 
SIP provision cannot operate to create different or additional defenses 
from those that are provided in underlying federal technology-based 
emission limitations, such as NSPS or NESHAP. For these reasons, the 
EPA believes that Reg. 19.602 is substantially inadequate to meet the 
fundamental requirements of the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Reg. 
19.1004(H) and Reg. 19.602. The EPA believes that Reg. 19.1004(H) 
allows for an exemption from otherwise applicable SIP emission 
limitations and that such exemptions are inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). Additionally, the EPA believes that Reg. 19.602 is an 
impermissible affirmative defense provision because it does not 
explicitly limit the defense to monetary penalties, establishes 
criteria that are inconsistent with those in the EPA's SSM Policy, and 
can be read to create different or additional defenses from those that 
are provided in underlying federal technology-based emission 
limitations. As a consequence, Reg. 19.602 is also inconsistent with 
CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, 
the EPA is proposing to find that these provisions are substantially 
inadequate to meet CAA requirements and proposes to issue a SIP call 
with respect to these provisions.
2. Louisiana
a. Petitioner's Analysis
    The Petitioner objected to several provisions in the Louisiana SIP 
that allow for automatic and discretionary exemptions from SIP emission 
limitations during various situations, including startup, shutdown, 
maintenance, and malfunctions.\156\ First, the Petitioner objected to 
provisions that provide automatic exemptions for excess emissions of 
VOC from wastewater tanks (LAC 33:III.2153(B)(1)(i)) and excess 
emissions of NOx from certain sources within the Baton Rouge 
Nonattainment Area (LAC 33:III.2201(C)(8)).\157\ The

[[Page 12522]]

LAC 33:III.2153(B)(1)(i) provides that control devices ``shall not be 
required'' to meet emission limitations ``during periods of malfunction 
and maintenance on the devices for periods not to exceed 336 hours per 
year.'' Similarly, LAC 33:III.2201(C)(8) provides that certain sources 
``are exempted'' from emission limitations ``during start-up and 
shutdown * * * or during a malfunction.'' The Petitioners argued that 
these provisions are impermissible because the CAA and the EPA's 
interpretation of the CAA in the SSM Policy require that all excess 
emissions be treated as violations.
---------------------------------------------------------------------------

    \156\ Petition at 42-43.
    \157\ The EPA interprets the Petitioner's reference to La. Adm. 
Code tit. 33, Sec.  III:2153(B)(1)(i) as a citation to LAC 
33:III.2153(B)(1)(i), as approved by the EPA on June 20, 2002 (67 FR 
41840) (hereinafter referred to as LAC 33:III.2153(B)(1)(i)). 
Similarly, the EPA interprets the Petitioner's reference to La. Adm. 
Code tit. 33, Sec.  III:2201(C)(8) as a citation to LAC 
33:III.2201(C)(8), as approved by the EPA on July 5, 2011 (76 FR 
38977) (hereinafter referred to as LAC 33:III.2201(C)(8)).
---------------------------------------------------------------------------

    Second, the Petitioner objected to provisions that provide 
discretionary exemptions to various emission limitations.\158\ Three of 
these provisions provide discretionary exemptions from otherwise 
applicable SO2 and visible emission limitations in the 
Louisiana SIP for excess emissions that occur during certain startup 
and shutdown events (LAC 33:III.1107, LAC 33:III.1507(A)(1), LAC 
33:III.1507(B)(1)), while the other two provide such exemptions for 
excess emissions from nitric acid plants during startups and ``upsets'' 
(LAC 33:III.2307(C)(1)(a) and LAC 33:III.2307(C)(2)(a)). For example, 
LAC 33:III.1107, which deals with the control of emissions from flares, 
states that exemptions ``may be granted by the administrative authority 
during startup and shutdown periods if the flaring was not the result 
of failure to maintain and repair equipment.'' The Petitioner argued 
that this language effectively allows a discretionary decision by a 
state official to exempt excess emissions during such events and 
thereby precludes enforcement by the EPA and citizens for what would 
otherwise be violations of the applicable SIP emission limitations, 
contrary to the requirements of the CAA.
---------------------------------------------------------------------------

    \158\ The EPA interprets the Petitioner's reference to La. Adm. 
Code tit. 33, Sec.  III:1107 as a citation to LAC 33:III.1107(A), as 
approved by the EPA on July 5, 2011 (76 FR 38977 (hereinafter 
referred to as LAC 33:III.1107(A)). Similarly, the EPA interprets 
the Petitioner's reference to La. Adm. Code tit. 33, Sec.  
III:1507(A)(1) and (B)(1) as citations to LAC 33:III.1507(A)(1) and 
(B)(1), as approved by the EPA on July 15, 1993 (58 FR 38060) 
(hereinafter referred to as LAC 33:III.1507(A)(1) and (B)(1)). Also, 
the EPA interprets the Petitioner's reference to La. Adm. Code tit. 
33, Sec.  III:2307(C)(1)(a) and (C)(2)(a) as a citation to LAC 
33:III.2307(C)(1)(a) and (C)(2)(a), as approved by the EPA on July 
5, 2011 (76 FR 38977) (hereinafter referred to as LAC 
33:III.2307(C)(1)(a) and (C)(2)(a)).
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions for 
excess emissions from otherwise applicable SIP emission limitations, 
whether automatic or through the exercise of a state official's 
discretion. In accordance with sections 110(a)(2)(A) and 302(k), SIPs 
must contain ``emission limitations'' and those limitations must be 
continuous. Thus, any excess emissions above the level of the 
applicable SIP emission limitation must be considered a violation of 
such limitation, regardless of whether the state elects to exercise its 
enforcement discretion. SIP provisions that create exemptions such that 
the excess emissions during startup, shutdown, maintenance, or 
malfunctions are not violations of the applicable SIP emission 
limitations are inconsistent with the fundamental requirements of the 
CAA.
    The first two SIP provisions identified by the Petitioner 
explicitly state that emission limitations for VOC and NOx are either 
``not required'' or ``exempted'' during specified types of SSM events. 
The EPA believes that such automatic exemptions are impermissible under 
the CAA. By having SIP provisions that define what would otherwise be 
violations of the applicable SIP emission limitations as non-
violations, the state has effectively negated the ability of the EPA or 
the public to enforce against those violations. Therefore, the EPA 
believes that the inclusion of such automatic exemptions in LAC 
33:III.2153(B)(1)(i) and LAC 33:III.2201(C)(8) is a substantial 
inadequacy that renders these SIP provisions impermissible under the 
CAA.
    The other five provisions identified by the Petitioner all provide 
the state with the discretion to ``grant,'' ``authorize,'' or 
``extend'' exemptions from the otherwise applicable SIP emission 
limitations during various SSM events. The EPA believes that these 
provisions are impermissible as unbounded director's discretion 
provisions that make a state official the unilateral arbiter of whether 
the excess emissions in a given event constitute a violation of 
otherwise applicable SIP emission limitations. More importantly, the 
provisions purport to authorize the state official to create exemptions 
from applicable SIP emission limitations when such exemptions are 
impermissible in the first instance. As discussed in more detail in 
section VII.A of this notice, these types of director's discretion 
provisions undermine the purpose of emission limitations and the 
reductions they are intended to achieve, thereby rendering them less 
enforceable by the EPA or through a citizen suit. The EPA believes that 
the inclusion of such a director's discretion provision in LAC 
33:III.1107(A), LAC 33:III.1507(A)(1), LAC 33:III.1507(B)(1), LAC 
33:III.2307(C)(1)(a), and LAC 33:III.2307(C)(2)(a) is therefore a 
substantial inadequacy that renders these specific SIP provisions 
impermissible under the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to LAC 
33:III.2153(B)(1)(i) and LAC 33:III.2201(C)(8). The EPA believes that 
these provisions allow for exemptions from otherwise applicable 
emission limitations and that such exemptions are inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). The EPA also proposes to grant the Petition with respect to 
LAC 33:III.1107(A), LAC 33:III.1507(A)(1) & (B)(1), and LAC 
33:III.2307(C)(1)(a) & (C)(2)(a). The discretion created by these 
provisions allows for revisions of the applicable SIP emission 
limitations without meeting the applicable SIP revision requirements of 
the CAA, and it allows case-by-case exemptions from emission 
limitations when such exemptions are not permissible in the first 
instance. Thus, these provisions are also inconsistent with CAA 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the 
EPA is proposing to find that each of these provisions is substantially 
inadequate to meet CAA requirements and proposes to issue a SIP call 
with respect to these specific provisions.
3. New Mexico
a. Petitioner's Analysis
    The Petitioner objected to three provisions in the New Mexico SIP 
that provide affirmative defenses for excess emissions that occur 
during malfunctions (20.2.7.111 NMAC), during startup and shutdown 
(20.2.7.112 NMAC), and during emergencies 20.2.7.113 NMAC).\159\ The 
Petitioner objected to the inclusion of these provisions in the SIP 
based on its view that affirmative defense provisions

[[Page 12523]]

are always inconsistent with CAA requirements. The Petitioner also 
argued that each of these affirmative defenses is generally available 
to all sources, which is in contravention of the EPA's recommendation 
in the SSM Policy that affirmative defenses should not be available to 
``a single source or groups of sources that has the potential to cause 
an exceedance of the NAAQS.'' Finally, the Petitioner argued that the 
affirmative defense provision applicable to emergency events is 
impermissible because it was modeled after the EPA's title V 
regulations, which are not meant to apply to SIP provisions.
---------------------------------------------------------------------------

    \159\ Petition at 54-57. The EPA interprets the Petitioner's 
reference to N.M. Code R. Sec.  20.2.7.111, N.M. Code R. Sec.  
20.2.7.112, and N.M. Code R. Sec.  20.2.7.113, as citations to 
20.2.7.111 NMAC, 20.2.7.112 NMAC, and 20.2.7.113 NMAC, as approved 
by the EPA on Sept. 14, 2009 (74 FR 46910) (hereinafter referred to 
as 20.2.7.111 NMAC, 20.2.7.112 NMAC, and 20.2.7.113 NMAC).
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA disagrees with the Petitioner's contention that no 
affirmative defense provisions are permissible in SIPs under the CAA. 
As explained in more detail in sections IV.B and VII.B of this notice, 
the EPA interprets the CAA to allow affirmative defense provisions for 
malfunctions. As long as these provisions are narrowly drawn and 
consistent with the CAA, as recommended in the EPA's guidance for 
affirmative defense provisions in SIPs, the EPA believes that states 
may elect to have affirmative defense provisions for malfunctions. By 
contrast, however, based on evaluation of the legal and factual basis 
for affirmative defenses in SIPs, the EPA now believes that affirmative 
defense provisions are not appropriate in the case of planned source 
actions, such as startup and shutdown, because sources should be 
expected to comply with applicable emission limitations during those 
normal planned and predicted modes of source operation. Again, as 
explained in sections IV.B and VII.C of this notice, the EPA is 
changing its interpretation of the CAA with respect to affirmative 
defenses applicable during startup and shutdown events. As a result, 
20.2.7.112 NMAC, which provides an affirmative defense to excess 
emissions that occur during startup or shutdown, is substantially 
inadequate to meet the requirements of the CAA.
    With respect to the Petitioner's second concern, the EPA agrees 
that the state's inclusion of an affirmative defense for malfunctions 
that is available to all sources, including single sources or groups of 
sources with the potential to cause exceedances of the NAAQS or PSD 
increments, renders the provision inconsistent with the CAA. As 
explained more fully in section VII.B of this notice, the EPA believes 
that such affirmative defenses may be permissible if either there is no 
``potential'' for exceedances, or alternatively, if the provision 
requires that the source make an affirmative showing that any excess 
emissions did not in fact cause an exceedance of the NAAQS or PSD 
increments. The EPA has previously approved such provisions as meeting 
CAA requirements on a case-by-case basis in specific actions on SIP 
submissions. Here, however, 20.2.7.111 NMAC is not restricted in 
application to only those sources that do not have the potential to 
cause an exceedance, nor does it contain any criteria requiring an 
``after the fact'' showing that excess emissions from a single source 
or group of sources did not cause an exceedance. Therefore, the 
provision is substantially inadequate to satisfy the CAA and EPA's 
interpretation of CAA requirements.
    Finally, 20.2.7.113 NMAC provides an affirmative defense for excess 
emissions that occur during emergencies, a concept borrowed from the 
EPA's title V regulations. This provision defines ``emergency'' 
conditions that may cause a source to exceed a technology-based 
emission limitation and provides a ``complete affirmative defense'' to 
an action brought for non-compliance with such limitations if certain 
criteria are met. The 20.2.7.113 NMAC is substantially inadequate for 
three reasons. First, the provision does not explicitly limit the 
affirmative defense to civil penalties. Although the EPA believes that 
narrowly drawn affirmative defenses are permitted under the CAA for 
malfunction events (see sections IV.B and VII.B of this notice), the 
EPA's interpretation of the CAA is that such affirmative defenses can 
only shield the source from monetary penalties and cannot be a bar to 
injunctive relief. An affirmative defense provision that purports to 
bar any enforcement action for injunctive relief for violations of 
emission limitations is inconsistent with the requirements of CAA 
sections 113 and 304. Second, the provision does not contain elements 
for establishing the affirmative defense consistent with all of the 
recommended criteria in the EPA's SSM Policy for SIP provisions. The 
EPA acknowledges that the SSM Policy is only guidance concerning what 
types of SIP provisions could be consistent with the requirements of 
the CAA. Nonetheless, through this rulemaking, the EPA is proposing to 
determine that 20.2.7.113 NMAC does not include criteria that are 
sufficiently robust to qualify as an acceptable affirmative defense 
provision. Finally, the provision can be read to provide additional 
defenses beyond those already provided in federal technology-based 
standards. The EPA believes that approvable affirmative defenses in a 
SIP provision cannot operate to create different or additional defenses 
from those that are provided in underlying federal technology-based 
emission limitations, such as NSPS or NESHAP. For these reasons, the 
EPA believes that 20.2.7.113 NMAC is impermissible under the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 20.2.7.112 
NMAC, which includes an affirmative defense applicable during startup 
and shutdown events that is contrary to the EPA's interpretation of the 
CAA. The EPA believes that this provision is inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, this provision is inconsistent with the 
requirements of CAA sections 113 and 304. The EPA also proposes to 
grant the Petition with respect to 20.2.7.111 NMAC, which includes an 
affirmative defense applicable during malfunction events. This 
provision is inconsistent with the CAA because it neither limits the 
defense to only those sources that do not have the potential to cause 
exceedances of the NAAQS or PSD increments nor does it require sources 
to make an ``after the fact'' showing that no such exceedances actually 
occurred. Therefore, the EPA believes that this provision is similarly 
inconsistent with the fundamental requirements of CAA sections 
110(a)(2)(A), 110(a)(2)(C), and 302(k), and with respect to CAA 
sections 113 and 304. Finally, the EPA proposes to grant the Petition 
with respect to 20.2.7.113 NMAC. The EPA believes that this provision 
is an impermissible affirmative defense because it does not explicitly 
limit the defense to monetary penalties, it establishes criteria that 
are inconsistent with those in EPA's SSM Policy, and it can be read to 
create different or additional defenses from those that are provided in 
underlying federal technology-based emission limitations. Thus, this 
provision too is inconsistent with CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k), and with respect to CAA sections 113 and 304. 
For these reasons, the EPA is proposing to find that these provisions 
are substantially inadequate to meet CAA requirements and proposes to 
issue a SIP call with respect to these provisions.
4. Oklahoma
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the Oklahoma SIP that 
together allow for discretionary

[[Page 12524]]

exemptions from emission limitations during startup, shutdown, 
maintenance, and malfunctions (OAC 252:100-9-3(a) and OAC 252:100-9-
3(b)).\160\ These provisions state that excess emissions during each of 
these types of events constitute violations of the applicable SIP 
emission limitations ``unless the owner or operator of the facility has 
complied with the notification requirements,'' which consist of a 
demonstration to the Director of the Air Quality Division that at least 
one of several criteria have been met. One example of the criteria 
includes a demonstration that the excess emissions resulted from 
``either malfunction or damage to the air pollution control or process 
equipment'' or ``scheduled maintenance.'' The Petitioner argued that 
these provisions empower the director to excuse violations entirely and 
thereby preclude enforcement by the EPA or citizens. Specifically, if 
an owner or operator satisfies the director that the regulatory 
criteria under section 3(b) have been met, then the language of section 
3(a) creates an exemption for the source and strongly implies that the 
excess emissions are not a violation of the applicable SIP emission 
limitations. Therefore, the Petitioner argued that these provisions are 
inconsistent with the requirements of the CAA.
---------------------------------------------------------------------------

    \160\ Petition at 61-63. The EPA interprets the Petitioner's 
reference to Okla. Admin. Code Sec.  252:100-9-3(a) and Okla. Admin. 
Code Sec.  252:100-9-3(b) as citations to OAC 252:100-9-3(a) and OAC 
252:100-9-3(b), as approved by the EPA on Nov. 3, 1999 (64 FR 59629) 
(hereinafter referred to as OAC 252:100-9-3(a) and (3)(b)).
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, even where the exemption 
is only available at the exercise of a state official's discretion. In 
accordance with sections 110(a)(2)(A) and 302(k), SIPs must contain 
``emission limitations'' and those limitations must be continuous. 
Thus, any excess emissions above the level of the applicable SIP 
emission limitations must be considered a violation of such 
limitations, regardless of whether the state elects to exercise its 
enforcement discretion. SIP provisions that create exemptions such that 
the excess emissions during startup, shutdown, malfunctions, or 
maintenance are not violations of the applicable emission limitations 
are inconsistent with the fundamental requirements of the CAA.
    The provisions identified by the Petitioner state that excess 
emissions during SSM events constitute violations ``unless'' the 
Director of the Air Quality Division provides an exemption. The EPA 
believes that OAC 252:100-9-3(a) and OAC 252:100-9-3(b) are 
impermissible, because they are unbounded director's discretion 
provisions that purport to make a state official the unilateral arbiter 
of whether the excess emissions in a given event constitute a 
violation. The provisions authorize the state official to create 
exemptions from applicable SIP emission limitations on a case-by-case 
basis when such exemptions are impermissible in the first instance. 
These types of director's discretion provisions undermine the purpose 
of emission limitations, and the reductions they are intended to 
achieve, thereby rendering them less enforceable by the EPA or through 
a citizen suit. The EPA believes that the inclusion of such a 
director's discretion provision in OAC 252:100-9-3(a) and OAC 252:100-
9-3(b) is therefore a substantial inadequacy and renders these SIP 
provisions impermissible.
    The EPA further notes that the provision allowing exemptions for 
excess emissions that occur during scheduled maintenance is 
inconsistent with CAA requirements for the reason that maintenance is a 
normal mode of source operation, during which sources should be 
expected to meet applicable SIP emission limitations. Since the 1983 
SSM Guidance, the EPA has indicated its view that excess emissions that 
occur during maintenance should not be excused. Similarly, in the 1999 
SSM Guidance, the EPA did not recommend any affirmative defense for 
excess emissions that occur during maintenance. In this action, the EPA 
is reiterating its view that the CAA does not permit exemptions or 
affirmative defenses for excess emissions that occur during such 
planned events.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to OAC 252:100-
9-3(a) and OAC 252:100-9-3(b).\161\ The discretion created by these 
provisions allows for revisions of the applicable SIP emission 
limitations without meeting the applicable SIP revision requirements of 
the CAA, and it allows case-by-case exemptions from emission 
limitations when such exemptions are not permissible in the first 
instance. As a result, these provisions are inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). Therefore, the EPA is proposing to find that these 
provisions are substantially inadequate to meet CAA requirements and 
proposes to issue a SIP call with respect to these provisions.
---------------------------------------------------------------------------

    \161\ The EPA notes that on July 16, 2010, Oklahoma submitted a 
SIP revision that would remove OAC 252:100-9-3(a) and OAC 252:100-9-
3(b) and replace them with affirmative defense provisions. In this 
action, the EPA is only evaluating these provisions as they are 
currently found in the EPA-approved Oklahoma SIP. The EPA is not 
evaluating the July 16, 2010 SIP revision as part of this action. 
The EPA will address the July 16, 2010 SIP revision in a later 
action.
---------------------------------------------------------------------------

H. Affected States in EPA Region VII

1. Iowa
a. Petitioner's Analysis
    The Petitioner first objected to a specific provision in the Iowa 
SIP that allows for automatic exemptions from otherwise applicable SIP 
emission limitations during periods of startup, shutdown, or cleaning 
of control equipment (Iowa Admin. Code r. 567-24.1(1)).\162\ The 
Petitioner noted that Iowa Admin. Code r. 567-24.1(1) provides that 
excess emissions from these periods are not violations of the emissions 
standard ``if the startup, shutdown or cleaning is accomplished 
expeditiously and in a manner consistent with good practice for 
minimizing emissions.'' The Petitioner argued that such exemptions are 
inconsistent with the requirements of the CAA and the EPA's SSM Policy. 
The Petitioner argued that the CAA and the EPA's interpretation of the 
CAA in the SSM Policy require that all such excess emissions be treated 
as violations.
---------------------------------------------------------------------------

    \162\ Petition at 37-38.
---------------------------------------------------------------------------

    Second, the Petitioner objected to a provision that empowers the 
state to exercise enforcement discretion for violations of the 
otherwise applicable SIP emission limitations during malfunction 
periods (Iowa Admin. Code r. 567-24.1(4)).\163\ The Petitioner noted 
that this provision--which states that ``[d]etermination of any 
subsequent enforcement action will be made following review of [a] 
report'' (emphasis added by Petitioner) submitted by the owner or 
operator of the source demonstrating certain conditions--could be 
interpreted to mean that ``no enforcement is warranted at all, by 
anyone.'' \164\ The Petitioner argued that such an interpretation of 
this provision could preclude enforcement by the EPA or citizens, both 
for civil penalties and injunctive relief, and that the EPA's 
interpretation of the CAA would forbid such a provision. The Petitioner 
thus requested that Iowa revise this provision to eliminate any 
confusion that a decision by Iowa state personnel not to enforce 
against a violation would in any way

[[Page 12525]]

foreclose enforcement by the EPA or citizens.
---------------------------------------------------------------------------

    \163\ Petition at 37-38.
    \164\ Petition at 38.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations. In accordance with the 
requirements of CAA section 110(a)(2)(A), SIPs must contain emission 
limitations and, in accordance with the definition of ``emission 
limitations'' in CAA section 302(k), such emission limitations must be 
continuous. Thus, any excess emissions above the level of the 
applicable emission limitation must be considered violations, whether 
or not the state elects to exercise its enforcement discretion. SIP 
provisions that create exemptions such that excess emissions during 
startup, shutdown, or control equipment cleaning are not violations are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs. The first provision identified by the 
Petitioner explicitly states that excess emission during periods of 
startup, shutdown, and cleaning of control equipment ``is not a 
violation,'' contrary to the requirements of the CAA. The EPA believes 
that the inclusion of such an exemption from otherwise applicable SIP 
emission limitations in Iowa Admin. Code r. 567-24.1(1) is thus a 
substantial inadequacy and renders this specific SIP provision 
impermissible.
    The EPA notes that these exemptions are impermissible even though 
the state has imposed some factual limitations on their potential 
scope. In Iowa Admin. Code r. 567-24.1(1), the state has conditioned 
the exemption for excess emissions during periods of startup, shutdown, 
or cleaning of control equipment, requiring that such activities be 
``accomplished expeditiously and in a manner consistent with good 
practice for minimizing emissions.'' Although this limitation on the 
scope of the exemptions is a helpful feature, the core problem remains 
that the provision provides impermissible exemptions from the otherwise 
applicable SIP emission limitations by defining the excess emission as 
``not a violation.'' Such provisions are impermissible under the CAA 
because the state has effectively negated the ability of the EPA or 
through a citizen suit to enforce against those violations.
    However, the EPA disagrees with Petitioner that Iowa Admin. Code r. 
567-24.1(4) is impermissible under the CAA. The EPA believes that this 
provision is permissible because it defines parameters for the exercise 
of enforcement discretion by state personnel for violations of emission 
limitations during malfunctions. According to the EPA's SSM Policy 
interpreting the CAA, as discussed in section IX.A of this notice, a 
state has authority to have a SIP provision that pertains to the 
exercise of enforcement discretion concerning actions taken by state 
personnel. The provision at issue clearly states that any excess 
emission during malfunction ``is a violation.'' The rule also 
delineates factors that will be considered by state personnel in 
determining whether to pursue enforcement for those regulatory 
violations that are due to excess emissions during malfunctions. The 
listing of these factors does not alter the statement that excess 
emissions are violations under the Iowa regulations. The provisions 
that describe the factors to be considered by state personnel only 
require that the state personnel consider such factors. The regulations 
do not state or imply that if a source makes an appropriate showing of 
meeting the factors, it is exempt from penalties or injunctive relief. 
The provision does not state or imply that any other entity, including 
the EPA or a member of the public, is precluded from taking an 
enforcement action if the state exercises its discretion not to enforce 
violations of the emission limitations during malfunctions. Iowa Admin. 
Code r. 567-24.1(4) expressly identifies excess emissions described in 
the rule as violations and allows for the exercise of enforcement 
discretion in addressing malfunctions. This is consistent with the CAA 
and the EPA's SSM Policy and therefore does not render the SIP 
provision substantially inadequate.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Iowa Admin. 
Code. R. 567-24.1(1). The EPA believes that this provision allows for 
exemptions from the otherwise applicable SIP emission limitations, and 
that such exemptions are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For this reason, the 
EPA is proposing to find that Iowa Admin. Code. R. 567-24.1(1) is 
substantially inadequate to meet CAA requirements and thus proposing to 
issue a SIP call with respect to this provision.
    The EPA proposes to deny the Petition with respect to Iowa Admin. 
Code r. 567-24.1(4). The EPA believes that the provision is on its face 
clearly applicable only to Iowa state enforcement personnel and that 
the provision could not reasonably be read by a court to foreclose 
enforcement by the EPA or through a citizen suit where Iowa state 
personnel elect to exercise enforcement discretion. The EPA solicits 
comments on this issue, in particular from the State of Iowa, to assure 
that there is no misunderstanding with respect to the correct 
interpretation of Iowa Admin. Code r. 567-24.1(4).
2. Kansas
a. Petitioner's Analysis
    The Petitioner objected to three provisions in the Kansas SIP that 
allow for exemptions for excess emissions during malfunctions and 
necessary repairs (K.A.R. Sec.  28-19-11(A)), scheduled maintenance 
(K.A.R. Sec.  28-19-11(B)), and certain routine modes of operation 
(K.A.R. Sec.  28-19-11(C)).\165\ The Petitioner objected because all 
three of these provisions ``state that excess emissions are not 
violations (or are permitted),'' \166\ contrary to the fundamental 
requirement of the CAA that all excess emissions be considered 
violations. The Petitioner argued that all three of these provisions 
would thus appear impermissibly to preclude enforcement by the EPA or 
citizens for the excess emissions that would otherwise be violations.
---------------------------------------------------------------------------

    \165\ Petition at 38-39.
    \166\ Petition at 39.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitation must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion. SIP provisions that create exemptions such that the excess 
emissions during malfunctions, necessary repairs, and routine modes of 
operation are not violations of the applicable emission limitations are 
inconsistent with the fundamental requirements of the CAA with respect 
to emission limitations in SIPs. Two of the provisions identified by 
the Petitioner explicitly state that excess emissions under certain 
circumstances will ``not be deemed violations,'' which is contrary to 
the requirements of the CAA. The EPA believes that the inclusion of 
such exemptions from the

[[Page 12526]]

emission limitations in K.A.R. Sec.  28-19-11(A) and the first part of 
K.A.R. Sec.  28-19-11(C) is thus a substantial inadequacy and renders 
these specific SIP provisions impermissible.
    The EPA notes that these exemptions are impermissible even though 
the state has imposed some factual and temporal limitations on their 
potential scope. For example, in K.A.R. Sec.  28-19-11(A), the state 
has specified that excess emissions during malfunctions or necessary 
repairs ``shall not be deemed violations provided that: (1) The person 
responsible * * * notifies the department of the occurrence and nature 
of such malfunctions, breakdowns, or repairs, in writing, within ten 
(10) days of noted occurrence.'' Similarly, in the first part of K.A.R. 
Sec.  28-19-11(C) with respect to ``[e]xcessive contaminant emission 
from fuel burning equipment used for indirect heating purposes 
resulting from fuel or load changes, start up, soot blowing, cleaning 
of fires, and rapping of precipitators,'' the state has made the 
exemption available only in such events that ``do not exceed a period 
or periods aggregating more than five (5) minutes during any 
consecutive one (1) hour period.'' Although these extra limitations on 
the scope of the exemptions are helpful features, the core problem 
remains that both of the provisions provide impermissible exemptions 
from the emission limitations by defining the excess emissions as non-
violations.
    The EPA believes that both K.A.R. Sec.  28-19-11(B) and the second 
part of K.A.R. Sec.  28-19-11(C) are impermissible as unbounded 
director's discretion provisions that purport to make a state official 
the unilateral arbiter of whether the excess emissions in a given event 
constitute a violation. In the case of K.A.R. Sec.  28-19-11(B), the 
provision authorizes a state official unilaterally to grant ``prior 
approval'' to permit ``[e]missions in excess of the limitations 
specified in these emission control regulations resulting from 
scheduled maintenance of control equipment and appurtenances.'' The 
provision vests the state official with unilateral power to grant an 
exemption from the otherwise applicable emission limitation, without 
any public process at the state or federal level. By deciding that an 
exceedance of the emission limitation is ``permitted,'' exercise of 
this discretion could preclude enforcement by the EPA or through a 
citizen suit. K.A.R. Sec.  28-19-11(B) does contain a requirement that 
the source establish that it was not possible for the scheduled 
maintenance to occur during periods of shutdown but nevertheless 
empowers the state official to create an exemption from the emission 
limitation, and such an exemption is impermissible in the first 
instance. Such a director's discretion provision undermines the 
emission limitations in the SIP, and the emissions reductions they are 
intended to achieve, and renders them less enforceable by the EPA or 
through a citizen suit.
    Similarly, the EPA believes that the second part of K.A.R. Sec.  
28-19-11(C) is impermissible because it allows a state official 
unilaterally to ``authorize, upon request of the operator, an adjusted 
time schedule for permitting * * * excessive emissions'' if the source 
can demonstrate that the period of ``fuel or load changes, start up, 
soot blowing, cleaning of fires, and rapping of precipitators'' is 
required to extend longer than the five minutes during a consecutive 
one-hour period allowed by the first part of K.A.R. Sec.  28-19-11(C). 
Because the K.A.R. Sec.  28-19-11(C) grant of an automatic exemption of 
excess emissions during these events is impermissible in the first 
instance, the provision's authorization of the state official to extend 
the period of exemption for an even longer period upon request from a 
source is also impermissible. Moreover, the provision permits the state 
official to extend the time period of exemption without any additional 
public process at the state or federal level. This discretion 
authorizes the creation of an extended exemption on a case-by-case 
basis, where the exemption is not permissible in the first instance. 
Thus, this provision undermines the SIP emission limitations, and the 
emissions reductions they are intended to achieve, and renders them 
less enforceable by the EPA or through a citizen suit. The EPA believes 
that the inclusion of director's discretion provisions in K.A.R. Sec.  
28-19-11(B) and K.A.R. Sec.  28-19-11(C) is thus a substantial 
inadequacy and renders these specific SIP provisions impermissible for 
this reason.
    The EPA notes that K.A.R. Sec.  28-19-11(C) does condition the 
state official's authorization of an extended time period in which 
excess emissions are not considered violations upon a source limiting 
``visible emissions'' to not exceed 60 percent opacity. The CAA does, 
as discussed in section VII.A of this notice, permit states to develop 
alternative emission limitations or other forms of enforceable control 
measures or techniques that apply during startup or shutdown. The EPA 
believes that emission limitations in SIPs should generally be 
developed in the first instance to account for the types of normal 
operation outlined in K.A.R. Sec.  28-19-11(C), such as cleaning and 
soot blowing. K.A.R. Sec.  28-19-11(C) does not appear to comply with 
the Act's requirements as interpreted in the EPA's SSM Policy in a 
number of respects. The provision's exemptions apply to all SIP 
emission limitations, and the alternative limitation in K.A.R. Sec.  
28-19-11(C) restricts only visible emissions and thus, at best, is an 
alternative emission limitation only for particulate matter. In 
addition, such alternative emission limitations must be developed in 
consultation with the EPA and must be narrowly drawn to apply to small 
groups of sources using specific types of control strategy. To the 
extent that the requirement limiting the opacity of visible emissions 
during periods of fuel or load changes, start up, soot blowing, 
cleaning of fires, and rapping of precipitators in K.A.R. Sec.  28-19-
11(C) was intended to function as an alternative emission limitation 
rather than as an exemption granted at the state official's discretion 
from the otherwise applicable SIP emission limitations, the terms of 
the alternative limitation are substantially inadequate and do not 
render this specific SIP provision permissible under the CAA.
    With respect to the Petitioner's concern that the challenged 
exemptions preclude enforcement by the EPA or citizens, the EPA agrees 
that this is one of the critical reasons why such provisions are 
impermissible under the CAA. By having SIP provisions that 
automatically exempt or allow state officials to define what would 
otherwise be violations of the applicable SIP emission limitations as 
non-violations, the state has effectively negated the ability of the 
EPA or the public to enforce against those violations.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to K.A.R. Sec.  
28-19-11(A) and the first part of K.A.R. Sec.  28-19-11(C). The EPA 
believes that both of these provisions allow for automatic exemptions 
from the otherwise applicable emission limitations, and that such 
outright exemptions are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by 
creating these impermissible exemptions, the state has defined 
violations in a way that would interfere with effective enforcement by 
the EPA and citizens for excess emissions during these events as 
provided in CAA sections 113 and 304.
    The EPA also proposes to grant the Petition with respect to K.A.R. 
Sec.  28-19-11(B) and the second part of K.A.R.

[[Page 12527]]

Sec.  28-19-11(C). The EPA believes both allow for exemptions from 
otherwise applicable emission limitations through a state official's 
unilateral exercise of discretionary authority that is insufficiently 
bounded and includes no additional public process at the state or 
federal level. Such provisions are inconsistent with the fundamental 
requirements of the CAA with respect to SIPs and SIP revisions. 
Moreover, the requirement that visible emissions not exceed 60-percent 
opacity during the periods of operation specified in K.A.R. Sec.  28-
19-11(C) is not a permissible alternative emission limitation under the 
EPA's SSM Policy interpreting the CAA.
    For these reasons, the EPA is proposing to find that K.A.R. Sec.  
28-19-11(A), K.A.R. Sec.  28-19-11(B), and K.A.R. Sec.  28-19-11(C) are 
substantially inadequate to meet CAA requirements and thus is proposing 
to issue a SIP call with respect to these provisions.
3. Missouri
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the Missouri SIP that 
could be interpreted to provide discretionary 
exemptions.167 168 The first provides exemptions for visible 
emissions exceeding otherwise applicable SIP opacity limitations (Mo. 
Code Regs. Ann. tit 10, Sec.  10-6.220(3)(C)). The second provides 
authorization to state personnel to decide whether excess emissions 
``warrant enforcement action'' where a source submits information to 
the state showing that such emissions were ``the consequence of a 
malfunction, start-up or shutdown.'' (Mo. Code Regs. Ann. tit 10, Sec.  
10-6.050(3)(C)). The Petitioner argued that Mo. Code Regs. Ann. tit 10, 
Sec.  10-6.050(3)(C) ``clearly gives the director the authority to 
decide whether excess emissions occurred during a malfunction, start-
up, or shutdown, and whether they `warrant enforcement action.' '' 
\169\ According to the Petitioner, the provision could be interpreted 
to decide that enforcement is not warranted by anybody, which could 
preclude action by the EPA and citizens for both civil penalties and 
injunctive relief, and such an interpretation is inconsistent with the 
CAA and the EPA's SSM policy interpreting the CAA. Similarly, the 
Petitioner argued that Mo. Code Regs. Ann. tit 10, Sec.  10-6.220(3)(C) 
could be construed to empower the director to preclude enforcement by 
the EPA and citizens. The Petitioner noted that the CAA and the EPA's 
SSM policy forbid such provisions if they would purport to preclude 
enforcement by the EPA or citizens.
---------------------------------------------------------------------------

    \167\ Petition at 49-50.
    \168\ The EPA notes that the Petitioner also identified 
additional provisions Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(1), Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(3)(C)(I), Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(4)(B), Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(5)(E), Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(6)(F), Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(7)(E), Mo. Code Regs. Ann. tit 10, Sec.  10-
6.200(3)(E)(11)(C), which provide for exemptions to HMIWIs, that it 
alleged are inconsistent with the CAA and the EPA's SSM Policy. 
However, the Petitioner did not request that the EPA address these 
provisions in its remedy request, and thus the EPA is not addressing 
these provisions in this action. (This is in contrast to the case of 
a similar HMIWI provision in Nebraska for which the Petition did 
specifically make such a request.) The EPA further notes that the 
provisions enumerated above are not part of Missouri's SIP but were 
approved as part of the separate state plan to meet the applicable 
emissions guidelines under CAA Sec.  111(d) and 40 CFR Part 60. 
Therefore, a SIP call is not appropriate. The EPA may elect to 
evaluate these provisions in a later action.
    \169\ Petition at 50.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitations must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion.
    The EPA believes that Mo. Code Regs. Ann. tit 10, Sec.  10-
6.220(3)(C) is impermissible as an insufficiently bounded director's 
discretion provision. The provision states that ``[v]isible emissions 
over the limitations * * * of this rule are in violation of this rule 
unless the director determines that the excess emissions do not warrant 
enforcement action based on data submitted'' by sources regarding 
startup, shutdown, and malfunction events. This provision could be read 
to mean that once the state official has determined that excess visible 
emissions do not warrant enforcement action, those excess emissions are 
not violations. Such an interpretation would make the state official 
the unilateral arbiter of whether the excess emissions in a given event 
constitute a violation, which could preclude enforcement by the EPA or 
the public who might disagree about whether enforcement action is 
warranted. Most importantly, however, the provision may be read to 
authorize the state official to create an exemption from the emission 
limitation, and such an exemption is impermissible in the first 
instance. The EPA believes that the inclusion of an insufficiently 
bounded director's discretion provision in Mo. Code Regs. Ann. tit 10, 
Sec.  10-6.220(3)(C) is thus a substantial inadequacy and renders this 
specific SIP provision impermissible for this reason.
    The EPA believes that Mo. Code Regs. Ann. tit 10, Sec.  10-
6.050(3)(C) is permissible because it defines parameters for the 
exercise of enforcement discretion by state personnel for violations of 
emission limitations. According to the EPA's SSM Policy, as discussed 
in section IX.A of this notice, a state has authority to have a SIP 
provision that pertains to the exercise of enforcement discretion 
concerning actions taken by state personnel. The provision only 
maintains that state enforcement personnel ``shall consider'' certain 
factors in determining whether to take an enforcement action under the 
state statutory enforcement provisions. The regulations do not state or 
imply that if a source makes an appropriate showing it is exempt from 
penalties or injunctive relief. The provisions that describe the 
factors to be considered by a state official only state that the 
official will consider such factors. The provision does not state or 
imply that any other entity, including the EPA or a member of the 
public, is precluded from taking an enforcement action if the state 
exercises its discretion not to pursue enforcement. The EPA believes 
that Mo. Code Regs. Ann. tit 10, Sec.  10-6.050(3)(C) is consistent 
with the CAA and the EPA's SSM Policy and therefore does not render the 
SIP provision substantially inadequate.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Mo. Code 
Regs. Ann. tit 10, Sec.  10-6.220(3)(C). The EPA believes that this 
provision could be read to allow for exemptions from the otherwise 
applicable SIP emission limitations through a state official's 
unilateral exercise of discretionary authority that is insufficiently 
bounded and includes no additional public process at the state or 
federal level. Such a provision is inconsistent with the fundamental 
requirements of the CAA with respect to SIPs as required by sections 
110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is 
proposing to find Mo. Code Regs. Ann. tit 10, Sec.  10-6.220(3)(C) is 
substantially inadequate to meet CAA requirements and thus is proposing 
to issue a SIP call with respect to this provision.

[[Page 12528]]

    The EPA proposes to deny the Petition with respect to Mo. Code 
Regs. Ann. tit 10, Sec.  10-6.050(3)(C). The EPA believes that the 
provision is on its face clearly applicable only to Missouri state 
enforcement personnel and that the provision could not reasonably be 
read by a court to foreclose enforcement by the EPA or through a 
citizen suit where Missouri state personnel elect to exercise 
enforcement discretion. The EPA solicits comments on this issue, in 
particular from the State of Missouri, to assure that there is no 
misunderstanding with respect to the correct interpretation of Mo. Code 
Regs. Ann. tit 10, Sec.  10-6.050(3)(C).
4. Nebraska
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the Nebraska SIP.\170\ 
First, the Petitioner objected to a generally applicable provision that 
provides authorization to state personnel to decide whether excess 
emissions ``warrant enforcement action'' where a source submits 
information to the state showing that such emissions were ``the result 
of a malfunction, start-up or shutdown'' (Neb. Admin. Code Title 129 
Sec.  11-35.001). The Petitioner argued that this provision ``clearly 
gives the Director the authority to decide whether excess emission 
occurred during a malfunction, startup or shutdown, and whether they 
`warrant enforcement action.' '' \171\ According to the Petitioner, the 
provision could be interpreted to give a state official the authority 
to decide that enforcement is not warranted by anybody, which could 
preclude action by the EPA and citizens for both civil penalties and 
injunctive relief, and such an interpretation is inconsistent with the 
CAA and the EPA's SSM policy interpreting the CAA. The Petitioner thus 
requested that Nebraska revise the provision to eliminate any confusion 
that a decision by state personnel not to enforce against a violation 
would in any way foreclose enforcement by the EPA or citizens.
---------------------------------------------------------------------------

    \170\ Petition at 51.
    \171\ Petition at 51.
---------------------------------------------------------------------------

    Second, the Petitioner objected to a specific provision in Nebraska 
state law that contains exemptions for excess emissions at HMIWI during 
startup, shutdown, and malfunction (Neb. Admin. Code Title 129 Sec.  
18-004.02). The Petitioner requested that these exemptions be removed 
entirely from Nebraska's SIP.
b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In accordance 
with the requirements of CAA section 110(a)(2)(A), SIPs must contain 
emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitations must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion.
    The EPA believes that Neb. Admin. Code Title 129 Sec.  11-35.001 is 
permissible because it defines parameters for the exercise of 
enforcement discretion by state personnel for violations of emission 
limitations. According to the EPA's SSM Policy, as discussed in section 
IX.A of this notice, a state has authority to have a SIP provision that 
pertains to the exercise enforcement discretion concerning actions 
taken by state personnel. The provision in question maintains that 
state enforcement personnel ``shall consider'' certain factors in 
determining whether to take an enforcement action under the state 
statutory enforcement provisions. The regulation does not expressly or 
implicitly place any limits on the state personnel's ability to 
exercise discretion, and the enforcement discretion provided by this 
regulation is not an exemption to the SIP emission limitations. The 
provision does not state or imply that any other entity, including the 
EPA or a member of the public, is precluded from taking enforcement 
action if the state exercises its discretion not to pursue enforcement. 
The EPA believes that Neb. Admin. Code Title 129 Sec.  11-35.001 is 
consistent with the CAA and the EPA's SSM Policy and therefore does not 
render the SIP substantially inadequate.
    The EPA disagrees that the provisions providing exemptions for 
HMIWI must be removed from the SIP. Nebraska Admin. Code Title 129 
Sec.  18-004.02 was not approved into Nebraska's SIP, but rather it was 
approved as part of the separate state plan to meet the applicable 
emissions guidelines under CAA Sec.  111(d) and 40 CFR Part 60. Because 
that rule is not in the Nebraska SIP is not related to any provisions 
in the SIP, it does not represent an inadequacy in the SIP.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to Neb. Admin. 
Code Title 129 Sec.  11-35.001. The EPA believes that this provision is 
on its face clearly applicable only to Nebraska state enforcement 
personnel and that the provision could not reasonably be read by a 
court to foreclose enforcement by the EPA or through a citizen suit 
where personnel from Nebraska elect to exercise enforcement discretion. 
The EPA solicits comments on this issue, in particular from the State 
of Nebraska, to assure that there is no misunderstanding with respect 
to the correct interpretation of this provision.
    The EPA proposes to deny the Petition with respect to Neb. Admin. 
Code Title 129 Sec.  18-004.02. This regulation is not part of the 
Nebraska SIP and thus cannot represent an inadequacy in the SIP.
5. Nebraska: Lincoln-Lancaster
a. Petitioner's Analysis
    The Petitioner objected to a generally applicable provision in the 
Lincoln-Lancaster County Air Pollution Control Program (Art. 2 Sec.  
35), which governs the Lincoln-Lancaster County Air Pollution Control 
District of Nebraska, that is parallel ``in all aspects pertinent to 
this analysis'' to Neb. Admin. Code Title 129 Sec.  11-35.001.\172\ The 
Lincoln-Lancaster County provision provides authorization to local 
personnel to decide whether excess emissions `warrant enforcement 
action'' where a source submits information to the county showing that 
such emissions were ``the result of a malfunction, start-up or 
shutdown.'' The Petitioner argued that this provision ``clearly gives 
the Director the authority to decide whether excess emission occurred 
during a malfunction, startup or shutdown, and whether they 'warrant 
enforcement action.' '' \173\ According to the Petitioner, the 
provision could be interpreted to decide that enforcement is not 
warranted by anybody, which could preclude action by the EPA and 
citizens for both civil penalties and injunctive relief, and such an 
interpretation is inconsistent with the CAA and the EPA's SSM Policy 
interpreting the CAA. The Petitioner thus requested that Nebraska or 
Lincoln-Lancaster County revise the provision to eliminate any 
confusion that a decision by local personnel not to enforce against a 
violation would in any way foreclose enforcement by the EPA or 
citizens.
---------------------------------------------------------------------------

    \172\ Petition at 51-52.
    \173\ Petition at 52.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations, whether automatic or 
through the exercise of a state official's discretion. In

[[Page 12529]]

accordance with the requirements of CAA section 110(a)(2)(A), SIPs must 
contain emission limitations and, in accordance with the definition of 
``emission limitations'' in CAA section 302(k), such emission 
limitations must be continuous. Thus, any excess emissions above the 
level of the applicable emission limitations must be considered 
violations, whether or not the state elects to exercise its enforcement 
discretion.
    The EPA believes that Lincoln-Lancaster County Air Pollution 
Control Program, Art. 2 Sec.  35 is permissible because it defines 
parameters for the exercise of enforcement discretion by local 
personnel for violations of emission limitations. According to the 
EPA's SSM Policy, as discussed in section IX.A of this notice, a state 
has authority to have a SIP provision that pertains to the exercise 
enforcement discretion concerning actions taken by state personnel. The 
provision in question maintains that local enforcement personnel 
``shall consider'' certain factors in determining whether to take an 
enforcement action under the local statutory enforcement provisions. 
The regulation does not expressly or implicitly place any limits on the 
local personnel's ability to exercise discretion, and the enforcement 
discretion provided by the regulation is not an exemption to the SIP 
emission limitations. The provision does not state or imply that any 
other entity, including the EPA or a member of the public, is precluded 
from taking enforcement action if the county exercises its discretion 
not to pursue enforcement. The EPA believes that Lincoln-Lancaster 
County Air Pollution Control Program, Art. 2 Sec.  35 is consistent 
with the CAA and EPA's SSM Policy and therefore does not render the SIP 
substantially inadequate.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to Lincoln-
Lancaster County Air Pollution Control Program, Art. 2 Sec.  35. The 
EPA believes that this provision is on its face clearly applicable only 
to Lincoln-Lancaster County enforcement personnel and that the 
provision could not reasonably be read by a court to foreclose 
enforcement by the EPA or through a citizen suit where personnel from 
Lincoln-Lancaster County elect to exercise enforcement discretion. The 
EPA solicits comments on this issue, in particular from the State of 
Nebraska and from the Lincoln-Lancaster County Air Pollution Control 
Program, to assure that there is no misunderstanding with respect to 
the correct interpretation of this provision.

I. Affected States in EPA Region VIII

1. Colorado
a. Petitioner's Analysis
    The Petitioner objected to two affirmative defense provisions in 
the Colorado SIP that provide for affirmative defenses to qualifying 
sources during malfunctions (5 Colo. Code Regs Sec.  1001-2(II.E)) and 
during periods of startup and shutdown (5 Colo. Code Regs Sec.  1001-
2(II.J)).\174\ The Petitioner acknowledged that this state has 
correctly revised its SIP in important ways in order to be consistent 
with CAA requirements, as interpreted in the EPA's SSM Policy, 
including providing affirmative defense provisions that are limited to 
monetary penalties, that do not apply in actions to enforce federal 
standards such as NSPS or NESHAP approved into the SIP, and that meet 
``almost word for word'' the recommendations of the 1999 SSM Guidance. 
Nevertheless, the Petitioner had two concerns with these SIP 
provisions.
---------------------------------------------------------------------------

    \174\ Petition at 25-27.
---------------------------------------------------------------------------

    First, the Petitioner objected to both of these provisions based on 
its assertion that the CAA allows no affirmative defense provisions in 
SIPs. Second, the Petitioner asserted that even if affirmative defense 
provisions were permissible under the CAA, the state had properly 
followed EPA guidance in the affirmative defense provision applicable 
to startup and shutdown events but failed to do so in the affirmative 
defense provision applicable to malfunctions. Specifically, the 
Petitioner argued that the EPA's own guidance for affirmative defenses 
recommended that they ``are not appropriate where a single source or a 
small group of sources has the potential to cause an exceedance of the 
NAAQS or PSD increments.'' \175\ Instead, the state's affirmative 
defense for malfunction events is potentially available to any source, 
if it can establish that the excess emissions during the event did not 
result in exceedances of ambient air quality standards that could be 
attributed to the source.\176\ The Petitioner objected to this as not 
merely inconsistent with the EPA's 1999 SSM Guidance but an approach 
``that does not have the same deterrent effect'' on sources and that 
would not have the same effects on sources to assure that they comply 
at all times in order to avoid violations. As a practical matter, the 
Petitioner also argued that including this element to the affirmative 
defense could ``mire enforcement proceedings in the question of whether 
or not the NAAQS or PSD increments were exceeded as a matter of fact.''
---------------------------------------------------------------------------

    \175\ Id. at 25.
    \176\ See, 5 Colo. Code Regs Sec.  1001-2(II.E.1.j).
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA disagrees with the Petitioner's contention that no 
affirmative defense provisions are permissible in SIPs under the CAA. 
As explained in more detail in section IV.B of this notice, the EPA 
interprets the CAA to allow affirmative defense provisions for 
malfunctions. So long as these provisions are narrowly drawn and 
consistent with the CAA, as recommended in the EPA's guidance for 
affirmative defense provisions in SIPs, the EPA believes that states 
may elect to have affirmative defense provisions for malfunctions. 
However, based on evaluation of the legal and factual basis for 
affirmative defenses in SIPs, the EPA now believes that affirmative 
defense provisions are not appropriate in the case of planned source 
actions, such as startup and shutdown, because sources should be 
expected to comply with applicable emission limitations during those 
normal planned and predicted modes of source operation. Again, as 
explained in section IV.B of this notice, the EPA is changing its 
interpretation with respect to affirmative defenses for startup and 
shutdown. The EPA acknowledges that at the time of its approval of 5 
Colo. Code Regs Sec.  1001-2(II.J) into the SIP in 2006, the state had 
complied with the EPA's then-applicable interpretation of the CAA and 
had worked with the EPA to develop that provision.\177\ However, based 
on further consideration of this issue prompted by the Petition, the 
EPA is revising its SSM Policy to interpret the CAA to allow 
affirmative defenses only in the case of events that are beyond the 
control of the source, i.e., malfunctions.
---------------------------------------------------------------------------

    \177\ See, ``Approval and Disapproval and Promulgation of 
Colorado Affirmative Defense Provisions for Startup and Shutdown,'' 
71 FR 8958 (Feb. 22, 2006).
---------------------------------------------------------------------------

    With respect to the Petitioner's second concern, the EPA disagrees 
that the state's inclusion of an affirmative defense available to all 
sources, including single sources or groups of sources with the 
``potential'' to cause exceedances of the NAAQS or PSD increments, 
renders the provision inconsistent with the CAA. The EPA's 
recommendations for appropriate criteria for affirmative defenses in 
the SSM Policy are guidance, and as guidance, the EPA believes that 
there can be facts and circumstances in which a state may elect to 
develop a SIP

[[Page 12530]]

provision with somewhat different criteria, so long as they still meet 
the same statutory objectives. Conditioning the affirmative defense on 
a factual showing that there was no actual violation of air standards 
attributable to the excess emissions during the malfunction is an 
acceptable alternative means to the same end. For example, instead of 
providing no affirmative defense to sources with this ``potential'' for 
these impacts on air quality, the state could provide the affirmative 
defense to sources on the condition that the source must be able to 
demonstrate that the excess emissions did not have these impacts. The 
EPA considers this an appropriate means to the same end of providing 
the affirmative defense to sources in a way that provides relief from 
monetary penalties for events that were beyond their control, at the 
same time providing incentive to the source to prevent the violation 
and to take all practicable steps to minimize the impacts of the 
violation in order to qualify for the relief from penalties. As 
described in more detail in section VII.B of this notice, the EPA is 
revising its recommendations for affirmative defense provisions for 
malfunctions with respect to this specific point in this proposal.
    Finally, the EPA understands the Petitioner's concern about 
enforcement proceedings becoming ``mired'' in various questions of fact 
that must be established in an enforcement action. However, the EPA 
notes that all enforcement proceedings turn upon important questions of 
fact that must be proven, including facts necessary to establish 
whether there was a violation, the extent of the violation, and whether 
there are extenuating circumstances that should be taken into 
consideration in the assessment of monetary penalties or injunctive 
relief for the violation. Indeed, the statutory factors that Congress 
provided for the assessment of penalties in CAA section 113(e) 
explicitly include ``the seriousness of the violation,'' which would 
encompass the extent and severity of the environmental impact of the 
violation. Thus, the EPA does not agree that it is unreasonable to 
include an affirmative defense element that pertains to whether or not 
the excess emissions in question caused a violation of the NAAQS or PSD 
increments.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to 5 Colo. Code 
Regs Sec.  1001-2(II.J) because it provides an affirmative defense for 
violations due to excess emissions applicable during startup and 
shutdown events, contrary to the EPA's current interpretation of the 
CAA. The EPA believes that this provision allows for an affirmative 
defense that is inconsistent with the fundamental requirements of CAA 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, this 
provision is inconsistent with the requirements of CAA sections 113 and 
304. For these reasons, the EPA is proposing to find that this 
provision is substantially inadequate to meet CAA requirements and 
proposes to issue a SIP call with respect to this provision.
    The EPA proposes to deny the Petition with respect to 5 Colo. Code 
Regs Sec.  1001-2(II.E), because this provision includes an affirmative 
defense applicable to malfunction events that is consistent with the 
requirements of the CAA, as interpreted by the EPA in the SSM Policy. 
In particular, the EPA denies the Petition with respect to the claim 
that this provision is inconsistent with the CAA because it is 
available to sources or groups of sources that might have the potential 
to cause violations of the NAAQS or PSD increments. The EPA believes 
that an acceptable alternative approach is to require the source to 
establish, as an element of the affirmative defense, that the excess 
emissions in question did not cause such impacts. Accordingly, the EPA 
is proposing to find that this provision is consistent with CAA 
requirements and thus declining to make a finding of substantial 
inadequacy with respect to this provision.
2. Montana
a. Petitioner's Analysis
    The Petitioner objected to an exemption from otherwise applicable 
emission limitations for aluminum plants during startup and shutdown 
(Montana Admin. R 17.8.334).\178\ The Petitioner argued that an 
automatic exemption for emissions during startup and shutdown events is 
inconsistent with the CAA and the EPA's interpretation of the CAA in 
the SSM Policy. In addition, the Petitioner argued that these 
exemptions also could not qualify as source-specific alternative limits 
applicable during startup and shutdown because there ``is nothing to 
indicate that the State addressed the feasibility of control 
strategies, minimization of the frequency and duration of startup and 
shutdown modes, worst-case emissions, and impacts on air quality.'' 
\179\ The Petitioner further objected that this provision would be in 
contravention of the EPA's recommendation that source-specific emission 
limitations for startup and shutdown would not be appropriate when a 
single source or small group of sources has the potential to cause an 
exceedance of the NAAQS or PSD increments.
---------------------------------------------------------------------------

    \178\ Petition at 50-51.
    \179\ Id. at 51.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA agrees that ARM 17.8.334 (in Administrative Rule of 
Montana) is inconsistent with the requirements of the CAA. This 
provision explicitly provides that affected sources are exempted from 
otherwise applicable SIP emission limitations during startup and 
shutdown. The relevant part of this SIP provision specifies that 
``[o]perations during startup and shutdown shall not constitute 
representative conditions for the purposes of determining compliance 
with this rule'' and further specifies ``nor shall emission in excess 
of the levels required in ARM 17.8.331 and 17.8.332 during periods of 
startup and shutdown be considered a violation of ARM 17.8.331 and 
17.8.332.'' \180\ The latter regulatory cross-references are to 
emission limits for fluorides and opacity at the source, both of which 
relate to the attainment and maintenance of the NAAQS and PSD 
increments.\181\ Moreover, the provision in question also contains 
ambiguous regulatory text that suggests the exemption extends to other 
emission limitations applicable to this source category. By stating 
that operations during startup and shutdown are not representative 
conditions for determining compliance with ``this rule,'' the provision 
appears to provide the same exemptions from other emission limitations 
that may apply to aluminum plants with respect to other air emissions 
as well. The EPA's longstanding interpretation of the CAA is that SIP 
provisions containing exemptions during startup and shutdown are not 
permissible.
---------------------------------------------------------------------------

    \180\ See, Montana Admin. R 17.8.334(1).
    \181\ The EPA notes that the state has elected to control 
fluoride emissions as a means of addressing particulate matter from 
the affected sources.
---------------------------------------------------------------------------

    The EPA also agrees that ARM 17.8.334 does not qualify as a source-
specific emission limitation applicable during startup and shutdown, as 
recommended in the 1999 SSM Guidance. As explained in section VII.A of 
this notice, the EPA is clarifying that guidance to eliminate any 
misperception that exemptions from otherwise applicable emission 
limitations are permissible during startup and shutdown. States can 
elect to develop appropriate source-specific alternative emission 
limitations that

[[Page 12531]]

apply during startup and shutdown events. The EPA recommended that in 
order to be approvable (i.e., meet CAA requirements), any new special 
emission limitations applicable to the source during startup and 
shutdown should be narrowly tailored and take into account 
considerations such as the technological limitations of the specific 
source category and the control technology that is feasible during 
startup and shutdown. Any such SIP revision that would alter the 
existing applicable emission limitations for a source during startup 
and shutdown must meet the same requirements as any other SIP 
submission, i.e., compliance with CAA sections 110(a), 110(k), 110(l), 
and 193, and any other CAA provision substantively germane to the SIP 
revision. Given the text of ARM 17.8.334, however, the EPA believes the 
state intended not to create a source-specific emission limitation 
applicable during startup and shutdown but instead merely an exemption 
for such emissions. Likewise, the EPA does not believe that the issue 
of special emission limitations during startup or shutdown for a single 
source or group of sources was contemplated at the time the state 
created this SIP provision. Nevertheless, the EPA notes that its 
current SSM Policy does not interpret the CAA to be a bar to special 
emission limitations in these circumstances, if the state addresses the 
concern about impacts on NAAQS and PSD increments in some other 
comparable way.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to ARM 
17.8.334. The EPA believes that this provision allows for exemptions 
from otherwise applicable SIP emission limitations during startup and 
shutdown and that such exemptions are inconsistent with the fundamental 
requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). It 
is not necessary to reach the Petitioner's argument that this provision 
is not an appropriate source-specific emission limitation, because the 
provision at issue instead provides an impermissible exemption for 
emissions during startup and shutdown. Similarly, it is not necessary 
to reach the Petitioner's concern with respect to the issue of a single 
source or group of sources with the potential to cause an exceedance of 
the NAAQS or PSD increment, because the provision at issue provides an 
impermissible exemption. For these reasons, the EPA is proposing to 
find that this provision is substantially inadequate to meet CAA 
requirements and thus proposes to issue a SIP call with respect to this 
provision.
3. North Dakota
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the North Dakota SIP 
that create exemptions from otherwise applicable emission 
limitations.\182\ The first provision creates exemptions from a number 
of cross-referenced opacity limits ``where the limits specified in this 
article cannot be met because of operations and processes such as, but 
not limited to, oil field service and drilling operations, but only so 
long as it is not technically feasible to meet said specifications'' 
(N.D. Admin. Code Sec.  33-15-03-04(4)). The second provision creates 
an implicit exemption for ``temporary operational breakdowns or 
cleaning of air pollution equipment'' if the source meets certain 
conditions (N.D. Admin. Code Sec.  33-15-05-01(2)(a)(1)). The 
Petitioner claimed that both provisions violate the CAA and the EPA's 
interpretation of the CAA in the SSM Policy because they create 
exemptions from otherwise applicable emission limitations for excess 
emissions during these events rather than treating the excess emissions 
as violations, and because the provisions could be construed to 
preclude enforcement of the emission limitations for these violations 
by the EPA and citizens.
---------------------------------------------------------------------------

    \182\ Petition at 59.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA believes that N.D. Admin. Code 33-15-03-04.4 and N.D. 
Admin. Code 33-15-03-04.3 \183\ are inconsistent with the requirements 
of the CAA. These provisions explicitly allow exemptions from the 
otherwise applicable emission limitations for opacity in several other 
regulations: N.D. Admin. Code 33-15-03-01, N.D. Admin. Code 33-15-03-
02, N.D. Admin. Code 33-15-03-03, and N.D. Admin. Code 33-15-03-03.1. 
The exemption created by N.D. Admin. Code 33-15-03-04.4 is indefinite 
in scope and has unclear limits, because it is available whenever a 
source cannot meet the emission limitations ``because of operations or 
processes such as, but not limited to, oil field service and drilling 
operations,'' but ``only so long as it is not technically feasible to 
meet said [emission limitations]''. It is unclear whether the provision 
is intended to apply only to special circumstances, such as 
malfunctions, or to a broader range of normal source operations. It is 
also unclear who determines what operations or processes make 
compliance impossible or who determines when it again becomes 
technically feasible to meet the limits. Whatever the parameters of 
this imprecise provision, however, it is clear that it contemplates 
outright exemptions from the applicable emission limitations under 
certain circumstances and at certain times.
---------------------------------------------------------------------------

    \183\ The EPA interprets the Petitioner's reference to N.D. 
Admin. Code Sec.  33-15-03-04(4) as a citation to N.D. Admin. Code 
33-15-03-04.4. The EPA notes also that the Petitioner specifically 
focused on concern with N.D. Admin. Code 33-15-04.4, but N.D. Admin. 
Code 33-15-03-04.3 also includes a related problem.
---------------------------------------------------------------------------

    The EPA believes that N.D. Admin. Code 33-15-03-04.3 is 
impermissible under the CAA as interpreted in the EPA's SSM Policy as 
an unbounded director's discretion provision. The provision states that 
the otherwise applicable emission limitations for opacity in the 
several other listed regulations do not apply ``where an applicable 
opacity standard is established for a specific source.'' In accordance 
with this provision, a state official could modify the opacity limits 
in a permit or other document to allow emissions in excess of the 
otherwise applicable SIP limitations. As discussed in section VII.A of 
this notice, such director's discretion provisions are impermissible. 
Such an interpretation would make the state official the unilateral 
arbiter of whether the excess emissions in a given event constitute a 
violation, which could preclude enforcement by the EPA or the public 
who might disagree about whether enforcement action is warranted. Most 
importantly, however, the provision may be read to authorize the state 
official to create an exemption from the emission limitation, and such 
an exemption is impermissible in the first instance. The EPA believes 
that the inclusion of an unbounded director's discretion provision in 
N.D. Admin. Code 33-15-03-04.3 is thus a substantial inadequacy and 
renders this specific SIP provision impermissible for this reason.
    In accordance with the requirements of CAA section 110(a)(2)(A), 
SIPs must contain emission limitations and, in accordance with the 
definition of ``emission limitations'' in CAA section 302(k), such 
emission limitations must be continuous. SIP provisions that create 
exemptions such that the excess emissions during startup, shutdown, or 
malfunctions are not violations of the applicable emission limitations 
are inconsistent with the fundamental requirements of the CAA with 
respect to emission limitations in SIPs. The exemptions provided in 
N.D. Admin. Code 33-15-03-04.4 are not consistent with CAA 
requirements, because they would exempt excess emissions that

[[Page 12532]]

occur during the periods in question. In addition, the provision does 
not operate to create a source-specific emission limitation that 
applies during the periods in question, nor does it meet the 
recommended criteria and parameters for an affirmative defense for 
violations that occur as a result of a qualifying malfunction. 
Moreover, the amorphous nature of the provision, in which it is unclear 
who makes the determination whether the source should be excused from 
the emission limitations and what the precise parameters are for these 
exemptions, exacerbates the problem. Thus, the EPA also agrees with the 
Petitioner's concern that this provision could be interpreted to bar 
enforcement by the EPA or through a citizen suit, not only because it 
creates impermissible exemptions but also because of the inherent 
ambiguities about: (i) Who makes the determination whether the excess 
emissions are to be considered a violation; and (ii) what constitutes 
an event during which the excess emissions are to be excused. In its 
current form, the EPA has concerns not only about the impermissible 
exemptions created by the provision but also about its practical 
enforceability as a SIP provision meeting basic CAA requirements for 
implementation, maintenance, and enforcement of the NAAQS as 
contemplated in CAA section 110.
    The EPA agrees that N.D. Admin. Code 33-15-05-01.2a(1) \184\ is 
also inconsistent with CAA requirements for SIP provisions. This 
provision creates an implicit exemption for ``temporary operational 
breakdowns or cleaning of air pollution equipment'' if the source meets 
certain conditions. N.D. Admin. Code 33-15-05-01 in general imposes 
emission limitations for particulate matter from industrial processes, 
with the limitations stated in terms of the maximum amount of 
particulate matter allowed in any one hour. Notwithstanding these 
emission limitations, however, N.D. Admin. Code 33-15-05-01.2a(1) 
provides that:
---------------------------------------------------------------------------

    \184\ The EPA interprets the Petitioner's reference to N.D. 
Admin. Code Sec.  33-15-05-01(2)(a)(1) as a citation to N.D. Admin. 
Code 33-15-05-01.2a(1).

    [t]emporary operational breakdowns or cleaning of air equipment 
for any process are permitted provided that the owner or operator 
immediately advises the department of the circumstances and outlines 
an acceptable corrective program and provided such operations do not 
---------------------------------------------------------------------------
cause an immediate public health hazard (emphasis added).

    Although N.D. Admin. Code 33-15-05-01.2a(1) does not explicitly 
state that the exceedances of the emission limitations are not 
violations, the EPA believes that this is the most reasonable reading 
of the provision. Moreover, the title for this subsection is 
``exceptions,'' and the immediately preceding provisions impose the 
emission limitations on sources. Thus, the provision creates an 
impermissible exemption from the otherwise applicable SIP emission 
limitations.
    The EPA notes that although the state has imposed some conditions 
on the exemptions, e.g., the requirement to notify state officials of 
occurrence of the event, this provision would not qualify as an 
affirmative defense consistent with CAA requirements. First, the 
exemptions would negate the availability of monetary penalties or 
injunctive relief in any enforcement proceeding. Second, the conditions 
for qualifying for the exemption are not consistent with the criteria 
that EPA recommends for elements of an affirmative defense for which 
the source bears the burden of proof in order to assure that they are 
narrowly drawn and available only in suitable circumstances. Third, the 
provision extends not just to ``breakdowns,'' which presumably equates 
to malfunctions, but also extends to ``cleaning of air equipment,'' 
which clearly encompasses excess emissions during normal source 
maintenance--events for which sources should be designed, operated, and 
maintained to comply with emission limitations, and during which 
sources should be expected to comply.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to N.D. Admin. 
Code 33-15-03-04.4 (cited in the Petition as N.D. Admin. Code Sec.  33-
15-03-04(4)). The EPA believes that this provision allows for 
exemptions from otherwise applicable SIP emission limitations during 
startup and shutdown and that such exemptions are inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). In addition, the EPA believes that this provision is 
sufficiently ambiguous that it would be difficult for the state, the 
EPA, or the public to enforce the provision effectively in its current 
form, and that this provision is thus inconsistent with the 
requirements of CAA section 110(a) on this basis as well. For these 
reasons, the EPA is proposing to find that this provision is 
substantially inadequate to meet CAA requirements and proposes to issue 
a SIP call with respect to this provision.
    The EPA also proposes to grant the Petition with respect to N.D. 
Admin. Code 33-15-03-04.3 (cited in the Petition as N.D. Admin. Code 
Sec.  33-15-03-04(3)). The EPA believes that this provision allows for 
discretionary exemptions from otherwise applicable emission limitations 
through a state official's unilateral exercise of discretionary 
authority that is insufficiently bounded. Such provisions are 
inconsistent with the fundamental requirements of the CAA with respect 
to SIPs and SIP revisions. Moreover, the discretion created by these 
provisions allows case-by-case exemptions from emission limitations, 
when such exemptions are not permissible in the first instance. Such 
exemptions are inconsistent with the fundamental requirements of the 
CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the 
EPA is proposing to find that this provision is substantially 
inadequate to meet CAA requirements and thus proposing to issue a SIP 
call with respect to this provision.
    The EPA also proposes to grant the Petition with respect to N.D. 
Admin. Code 33-15-05-01.2a(1) (cited in the Petition as N.D. Admin. 
Code Sec.  33-15-05-01(2)(a)(1)). The EPA believes that this provision 
allows for exemptions from otherwise applicable SIP emission 
limitations during operational breakdowns (i.e., malfunctions) or 
cleaning of air equipment (i.e., maintenance) and that such exemptions 
are inconsistent with the fundamental requirements of CAA sections 
110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is 
also proposing to find that this provision is substantially inadequate 
to meet CAA requirements and proposes to issue a SIP call with respect 
to this provision.
4. South Dakota
a. Petitioner's Analysis
    The Petitioner objected to a provision in the South Dakota SIP that 
creates exemptions from otherwise applicable SIP emission limitations 
(S.D. Admin, R. 74:36:12:02(3)).\185\ The Petitioner asserted that the 
provision imposes visible emission limitations on sources but 
explicitly excludes emissions that occur ``for brief periods during 
such operations as soot blowing, start-up, shut-down, and 
malfunctions.'' The Petitioner argued that such automatic exemptions 
for excess emissions is contrary to the requirements of the CAA for SIP 
provisions, as well as contrary to the EPA's 1982 SSM Guidance and 1999 
SSM Guidance.
---------------------------------------------------------------------------

    \185\ Petition at 66.

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

[[Page 12533]]

b. The EPA's Evaluation
    The EPA agrees that S.D. Admin. R. 74:36:12:02(3) is inconsistent 
with CAA requirements for SIP provisions. This provision creates an 
exemption from applicable visible emission limitations from the 
generally applicable SIP requirements. The S.D. Admin. R. 74:36:12:01 
imposes a generally applicable opacity limit on all sources, measured 
using the EPA's Method 9. However, S.D. Admin. R. 74:36:12:02 provides 
exceptions to these limits and, in particular, in S.D. Admin. R. 
74:36:12:02(3) includes an explicit exemption for emissions for ``brief 
periods during such operations as soot blowing, start-up, shut-down, 
and malfunctions.''
    In accordance with the requirements of CAA section 110(a)(2)(A), 
SIPs must contain emission limitations and, in accordance with the 
definition of ``emission limitations'' in CAA section 302(k), such 
emission limitations must be continuous. SIP provisions that create 
exemptions such that the excess emissions during startup, shutdown, or 
malfunctions are not violations of the applicable emission limitations 
are inconsistent with the fundamental requirements of the CAA with 
respect to emission limitations in SIPs. In addition, the EPA's SSM 
Policy has long interpreted the CAA not to permit exemptions for excess 
emissions during other modes of normal source operation, such as ``soot 
blowing.'' The EPA notes that by its terms, S.D. Admin. R. 
74:36:12:02(3) implies that it also would exempt excess emissions 
during other modes of normal source operation because it explicitly 
applies to events ``such as'' the four listed types, therefore implying 
it is not an exclusive list and could extend to other types of events 
as well. The exemptions provided in S.D. Admin. R. 74:36:12:02(3) are 
not consistent with CAA requirements, because they would exempt excess 
emissions that occur during the periods in question. Excess emissions 
must be treated as violations of the applicable emission limitations.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to S.D. Admin. 
R. 74:36:12:02(3). The EPA believes that this provision allows for 
exemptions from otherwise applicable SIP emission limitations during 
startup, shutdown, and malfunction, as well as during other modes of 
normal source operations such as ``soot blowing.'' Automatic exemptions 
from otherwise applicable SIP emission limitations are inconsistent 
with the fundamental requirements of CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k). For these reasons, the EPA is also proposing 
to find that this provision is substantially inadequate to meet CAA 
requirements and proposes to issue a SIP call with respect to this 
provision.
5. Wyoming
a. Petitioner's Analysis
    The Petitioner objected to a specific provision in the Wyoming SIP 
that provides an exemption for excess particulate matter emissions from 
diesel engines during startup, malfunction, and maintenance (ENV-AQ-1 
Wyo. Code R. Sec.  2(d)).\186\ The provision exempts emission of 
visible air pollutants from diesel engines from applicable SIP 
limitations ``during a reasonable period of warmup following a cold 
start or where undergoing repairs and adjustment following 
malfunction.'' The Petitioner argued that this exemption ``is contrary 
to EPA policy for source category-specific rules for startup and 
shutdown.'' \187\ Accordingly, the Petitioner requested that this 
provision be eliminated from the SIP.
---------------------------------------------------------------------------

    \186\ Petition at 74. The EPA notes that the Petitioner appears 
to have provided an incorrect citation to this provision; 
accordingly, in this notice, the EPA replaces that citation with the 
following: ``Wyoming Air Quality Standards and Regulations (WAQSR) 
Chapter 3, section 2(d).''
    \187\ Id.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA believes that the CAA does not allow for exemptions from 
otherwise applicable SIP emission limitations. In accordance with the 
requirements of CAA section 110(a)(2)(A), SIPs must contain emission 
limitations and, in accordance with the definition of ``emission 
limitations'' in CAA section 302(k), such emission limitations must be 
continuous. Thus, any excess emissions above the level of the 
applicable emission limitation must be considered violations, whether 
or not the state elects to exercise its enforcement discretion. SIP 
provisions that create exemptions such that the excess emissions during 
startup, shutdown, or malfunctions are not violations of the applicable 
emission limitations are inconsistent with the fundamental requirements 
of the CAA with respect to emission limitations in SIPs. The EPA 
believes that the inclusion of such an exemption in WAQSR Chapter 3, 
section 2(d) from otherwise applicable SIP emission limitations for 
violations during cold startup or following malfunction of diesel 
engines is a substantial inadequacy and renders this specific SIP 
provision impermissible.
    The EPA notes that WAQSR Chapter 3, section 2(d) does not appear to 
comply with the CAA's requirements for source category-specific rules 
for startup and shutdown as interpreted in the EPA's SSM Policy. The 
provision provides that the otherwise applicable emission ``limitation 
shall not apply during a reasonable period of warmup following a cold 
start.'' Recent court decisions have made clear that automatic 
exemptions from otherwise applicable SIP emission limitations for 
excess emissions during periods of startup are not in fact permissible 
under the CAA. As discussed in section VII.A of this notice, states may 
elect to develop alternative emission limitations or other forms of 
enforceable control measures or techniques that apply during startup or 
shutdown, but exemptions for excess emissions during such periods are 
inconsistent with the fundamental requirements of the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to WAQSR 
Chapter 3, section 2(d) (cited as ENV-AQ-1 Wyo. Code R. Sec.  2(d) in 
the Petition). The EPA believes that this provision allows for 
exemptions from otherwise applicable SIP emission limitations, and that 
such exemptions are inconsistent with the fundamental requirements of 
the CAA with respect to emission limitations in SIPs as required by 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by 
creating these impermissible exemptions, the state has defined 
violations in a way that would interfere with effective enforcement by 
the EPA and citizens for excess emissions during these events as 
provided in CAA sections 113 and 304. For these reasons, the EPA is 
proposing to find that this provision is substantially inadequate to 
meet CAA requirements and thus proposing to issue a SIP call with 
respect to this provision.

J. Affected States and Local Jurisdictions in EPA Region IX

1. Arizona
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the Arizona Department 
of Air Quality's (ADEQ) Rule R18-2-310, which provide affirmative 
defenses for excess emissions during malfunctions (AAC Section R18-2-
310(B)) and for excess emissions during startup or shutdown (AAC 
Section R18-2- 310(C)).\188\ First, the Petitioner asserted

[[Page 12534]]

that all affirmative defenses for excess emissions are inconsistent 
with the CAA and should be removed from the Arizona SIP.
---------------------------------------------------------------------------

    \188\ Petition at 20-22.
---------------------------------------------------------------------------

    Additionally, quoting from the EPA's statement in the SSM Policy 
that such affirmative defenses should not be available to ``a single 
source or small group of sources [that] has the potential to cause an 
exceedance of the NAAQS or PSD increments,'' the Petitioner contended 
that ``sources with the power to cause an exceedance should be strictly 
controlled at all times, not just when they actually cause an 
exceedance.'' \189\ Although acknowledging that R18-2-310 contains some 
limitations to address this issue, the Petitioner argued that the 
limitation in the SIP provision is not the same as entirely disallowing 
affirmative defenses for these types of sources, which removes the 
``incentive'' for such sources to emit at levels close to those that 
would violate a NAAQS or PSD increment. Accordingly, the Petitioner 
requested that the EPA require Arizona either to entirely remove R18-2-
310(B) and (C) from the SIP or to revise the rule so that affirmative 
defenses are not available to a single source or any small group of 
sources that has the potential to cause an exceedance of the NAAQS.
---------------------------------------------------------------------------

    \189\ Petition at 20.
---------------------------------------------------------------------------

    Second, the Petitioner asserted that the provision applicable to 
startup and shutdown periods (R18-2-310(C)) does not include an 
explicit requirement for a source seeking to establish an affirmative 
defense to prove that ``the excess emissions were not part of a 
recurring pattern indicative of inadequate design, operation, or 
maintenance.'' The Petitioner provided a table specifically comparing 
the provisions in R18-2-310(C) against the EPA's recommended criteria 
in the 1999 SSM Guidance to show that R18-2-310(C) does not contain a 
specific provision to address this recommended criterion and stated 
that the rule should be revised to require such a demonstration.
b. The EPA's Evaluation
    The EPA disagrees with the Petitioner's contention that no 
affirmative defense provisions are permissible in SIPs under the CAA. 
As explained in more detail in section IV of this notice, the EPA 
interprets the CAA to allow affirmative defense provisions for 
malfunctions. So long as these provisions are narrowly drawn and 
consistent with the CAA, as recommended in the EPA's guidance for 
affirmative defense provisions in SIPs, the EPA believes that states 
may elect to have affirmative defense provisions for malfunctions.
    With respect to the potential air quality impacts of a ``single 
source or small group of sources,'' the EPA believes that R18-2-310 
satisfies the statutory requirements as interpreted in the EPA 
guidance. Rule R18-2-310 specifies five types of standards or 
limitations for which affirmative defenses are not available under the 
rule and includes among those five types: standards or limitations 
contained in any PSD or NSR permit issued by the EPA; standards or 
limitations included in a PSD permit issued by the ADEQ to meet the 
requirements of R18-2-406(A)(5) (Permit Requirements for Sources 
Located in Attainment and Unclassifiable Areas); and standards or 
limitations contained in R18-2-715(F) (``Standards of Performance for 
Existing Primary Copper Smelters; Site-specific Requirements'') (R18-2-
310(A)). Thus, no existing primary copper smelter subject to emission 
standards or limitations under R18-2-715(F) may seek an affirmative 
defense for any emissions in excess of those provisions, and likewise 
no major stationary source subject to permit conditions designed to 
protect the PSD increments in a PSD permit issued by ADEQ or the EPA 
may seek an affirmative defense for any emissions in excess of those 
permit conditions. Existing copper smelters are, to the EPA's 
knowledge, the only sources under ADEQ jurisdiction that have the 
potential to cause an exceedance of the NAAQS, and requirements to 
protect the PSD increments are implemented entirely through PSD permits 
issued by states and the EPA. Accordingly, the clear exclusion of these 
standards and limitations from the affirmative defense provisions in 
R18-2-310 adequately addresses the EPA's concerns with respect to 
potential violations of the NAAQS or PSD increments.
    With respect to other emission standards or limitations (i.e., 
those not specifically excluded from coverage under the rule), R18-2-
310 requires each source seeking to establish an affirmative defense to 
demonstrate, among other things, that ``[d]uring the period of excess 
emissions there were no exceedances of the relevant ambient air quality 
standards * * * that could be attributed to the emitting source'' (R18-
2-310(B)(7), (C)(1)(f)). The state's election to provide such an 
affirmative defense contingent upon a demonstration by the source that 
there were no exceedances of the relevant ambient air quality standards 
during the relevant period that could be attributed to the emitting 
source reasonably assures that these affirmative defense provisions 
will not create incentives to emit at higher levels or interfere with 
attainment and maintenance of the NAAQS. As described in section VII.B 
of this notice, the EPA considers this type of requirement an 
acceptable alternative approach to address the concern of sources or 
small groups of sources that could adversely impact the NAAQS or PSD 
increments through excess emissions.
    Second, with respect to the Petitioner's assertion that R18-2-310 
should be revised to require a demonstration that excess emissions 
during startup or shutdown are not part of a recurring pattern 
indicative of inadequate design, operation, or maintenance, it is not 
necessary to reach this issue. Instead, the EPA is proposing to modify 
its interpretation of the CAA with respect to affirmative defenses for 
startup and shutdown to eliminate the recommended criteria for such 
provisions as articulated in the 1999 SSM Guidance and to find, 
instead, that all affirmative defense provisions for planned startup 
and shutdown periods are not appropriate for SIP provisions under the 
CAA. As discussed in sections IV and VII.C of this notice, the EPA 
believes that affirmative defense provisions are appropriate in SIPs 
for malfunctions but not for startup and shutdown.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to the arguments 
concerning ADEQ's affirmative defense provisions for malfunctions in 
R18-2-310(B). For the reasons provided above and in our previous 
approval of R18-2-310 into the Arizona SIP,\190\ the EPA believes that 
these affirmative defense provisions are consistent with the 
requirements of the CAA.
---------------------------------------------------------------------------

    \190\ See, 66 FR 48085 at 48087 (Sept. 18, 2001) (final rule 
approving R18-2-310 into Arizona SIP).
---------------------------------------------------------------------------

    With respect to the arguments concerning ADEQ's affirmative defense 
provisions for startup and shutdown periods in R18-2-310(C), however, 
the EPA proposes to grant the Petition, because R18-2-310(C) is 
inconsistent with the requirements of CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k), as well as CAA sections 113 and 304. The EPA 
believes that a SIP provision establishing an affirmative defense for 
planned startup and shutdown periods is substantially inadequate to 
comply with CAA requirements. For these reasons, the EPA is proposing 
to issue a SIP call with respect to R18-2-310(C).

[[Page 12535]]

2. Arizona: Maricopa County
a. Petitioner's Analysis
    The Petitioner objected to two provisions in the Maricopa County 
Air Pollution Control Regulations that provide affirmative defenses for 
excess emissions during malfunctions (Maricopa County Air Pollution 
Control Regulation 3, Rule 140, Sec.  401) and for excess emissions 
during startup or shutdown (Maricopa County Air Pollution Control 
Regulation 3, Rule 140, Sec.  402).\191\ These provisions in Maricopa 
County Air Quality Department (MCAQD) Rule 140 are similar to the 
affirmative defense provisions in ADEQ R18-2-310.
---------------------------------------------------------------------------

    \191\ Petition at 23.
---------------------------------------------------------------------------

    First, the Petitioner asserted that the affirmative defense 
provisions in Rule 140 are problematic for the same reasons identified 
in the Petition with respect to ADEQ R18-2-310. Specifically, the 
Petitioner argued that affirmative defenses should not be allowed in 
any SIP and, alternatively, that to the extent affirmative defenses are 
permissible, the provisions in Rule 140 addressing exceedances of the 
ambient standards are ``inappropriately permissive and do not comply 
with EPA guidance.'' \192\ Accordingly, the Petitioner requested that 
the EPA require Arizona and/or MCAQD either to entirely remove these 
provisions from the SIP or to revise them so that they are not 
available to a single source or small group of sources that has the 
potential to cause a NAAQS exceedance. Second, the Petitioner asserted 
that the provisions for startup and shutdown in Rule 140 do not include 
an explicit requirement for a source seeking to establish an 
affirmative defense to prove that ``the excess emissions in question 
were not part of a recurring pattern indicative of inadequate design, 
operation, or maintenance.'' The Petitioner argued that Rule 140 should 
be revised to require such a demonstration.
---------------------------------------------------------------------------

    \192\ Petition at 23.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    First, with respect to the potential air quality impacts of a 
``single source or small group of sources,'' the EPA believes that 
MCAQD Rule 140 satisfies the statutory requirements as interpreted in 
the EPA's guidance. Rule 140 specifies four types of standards or 
limitations for which affirmative defenses are not available under the 
rule, including standards and limitations contained in any Prevention 
of Significant Deterioration (PSD) or New Source Review (NSR) permit 
issued by the EPA, and standards and limitations included in a PSD 
permit issued by MCAQD to meet the requirements of subsection 308.1(e) 
of Rule 240 (Permit Requirements For New Major Sources And Major 
Modifications To Existing Major Sources) (Rule 140, sections 103.3, 
103.4). Thus, no major stationary source subject to permit conditions 
designed to protect the PSD increments in a PSD permit issued by MCAQD 
or the EPA may seek an affirmative defense for any emissions in excess 
of those permit conditions. These provisions adequately address the 
EPA's concerns regarding potential violations of the PSD increments.
    Rule 140 also requires each source seeking to establish an 
affirmative defense to demonstrate, among other things, that ``[d]uring 
the period of excess emissions there were no exceedances of the 
relevant ambient air quality standards * * * that could be attributed 
to the emitting source'' (Rule 140, sections 401.7, 402.1(f)). The 
state's election to provide such an affirmative defense contingent upon 
a demonstration by the source that there were no exceedances of the 
relevant ambient air quality standards during the relevant period that 
could be attributed to the emitting source reasonably assures that 
these affirmative defenses provisions will not create incentives to 
emit at higher levels or interfere with attainment and maintenance of 
the NAAQS. As described in section VII.B of this notice, the EPA 
considers this type of requirement an acceptable alternative approach 
to address the concern of sources or small groups of sources that could 
adversely impact the NAAQS or PSD increments through excess emissions.
    Second, with respect to the Petitioner's assertion that MCAQD Rule 
140 should be revised to require a demonstration that excess emissions 
during startup or shutdown are not part of a recurring pattern 
indicative of inadequate design, operation, or maintenance, it is not 
necessary to reach this issue. Instead, the EPA is proposing to modify 
its interpretation of the CAA with respect to affirmative defenses for 
startup and shutdown to eliminate the recommended criteria for such 
provisions as articulated in the 1999 SSM Guidance and to find, 
instead, that all affirmative defense provisions for planned startup 
and shutdown periods are not appropriate for SIP provisions under the 
CAA. As discussed in sections IV and VII.C of this notice, the EPA 
believes that affirmative defense provisions are appropriate in SIPs 
for malfunctions but not for startup and shutdown.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to the arguments 
concerning MCAQD's affirmative defense provisions for malfunctions in 
Rule 140, section 401. For the reasons provided above and in our 
previous approval of Rule 140 into the Arizona SIP,\193\ the EPA 
believes that these affirmative defense provisions are consistent with 
the requirements of the CAA.
---------------------------------------------------------------------------

    \193\ See, 67 FR 54957 (Aug. 27, 2002) (final rule approving 
Rule 140 into Arizona SIP).
---------------------------------------------------------------------------

    With respect to the arguments concerning ADEQ's affirmative defense 
provisions for startup and shutdown periods in Rule 140, section 402, 
however, the EPA proposes to grant the Petition, because it is 
inconsistent with the requirements of CAA sections 110(a)(2)(A), 
110(a)(2)(C), and 302(k), as well as CAA sections 113 and 304. The EPA 
believes that a SIP provision establishing an affirmative defense for 
planned startup and shutdown periods is substantially inadequate to 
comply with CAA requirements. For these reasons, the EPA is proposing 
to issue a SIP call with respect to Maricopa County Air Pollution 
Control Regulation 3, Rule 140, Sec.  402.
3. Arizona: Pima County
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Pima County 
Department of Environmental Quality's (PCDEQ) Rule 706 that pertains to 
enforcement discretion.\194\ Quoting from paragraph (D) of Rule 706, 
which provides that ``[t]he Control Officer may defer prosecution of a 
Notice of Violation issued for an exceedance of a control standard if * 
* *'' certain conditions are met, the Petitioner argued that ambiguity 
in this provision could be construed to preclude enforcement by the EPA 
or citizens. The Petitioner requested that the EPA require the PCDEQ 
and/or Arizona to revise this provision to make clear that a decision 
by the Pima County Control Officer not to enforce under the rule would 
in no way affect enforcement by the EPA or citizens.
---------------------------------------------------------------------------

    \194\ Petition at 23-24.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA disagrees with the Petitioner's assertion that Rule 706 
creates ambiguity that could be construed to preclude enforcement by 
the EPA or through a citizen suit. Paragraph (D) of Rule 706 states 
that ``[t]he control officer may defer prosecution of a Notice of 
Violation

[[Page 12536]]

issued for an exceedance of a control standard if'' four specific 
conditions are met (PCDEQ Rule 706, paragraph (D), emphasis added). 
Rule 706 does not address the EPA or citizen enforcement in any way and 
on its face does nothing to preclude enforcement by the EPA or through 
a citizen suit. Even with respect to the PCDEQ's authorities, the rule 
authorizes but does not require the Control Officer to defer 
prosecution where the identified criteria are met.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to PCDEQ Rule 
706. The EPA believes that the provision regarding enforcement in 
paragraph (D) of this rule clearly applies only to the PCDEQ Control 
Officer and could not reasonably be read by a court to foreclose 
enforcement by the EPA or through a citizen suit where the PCDEQ 
Control Officer elects to exercise enforcement discretion. The EPA 
solicits comment on this issue, in particular from the State of Arizona 
and from the PCDEQ, to assure that there is no misunderstanding with 
respect to the correct interpretation of Rule 706.

K. Affected States in EPA Region X

1. Alaska
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Alaska SIP that 
provides an excuse for ``unavoidable'' excess emissions that occur 
during SSM events, including startup, shutdown, scheduled maintenance, 
and ``upsets'' (Alaska Admin. Code tit. 18 Sec.  50.240).\195\ The 
provision provides: ``Excess emissions determined to be unavoidable 
under this section will be excused and are not subject to penalty. This 
section does not limit the department's power to enjoin the emission or 
require corrective action.'' The Petitioner argued that this provision 
excuses excess emissions in violation of the CAA and the EPA's SSM 
Policy, which require all such emissions to be treated as violations of 
the applicable SIP emission limitations. The Petitioner further argued 
that it is unclear whether the provision could be interpreted to bar 
enforcement actions brought by the EPA or citizens, because it is 
drafted as if the state were the sole enforcement authority. Finally, 
the Petitioner pointed out, the provision is worded as if it were an 
affirmative defense, but it uses criteria for enforcement discretion.
---------------------------------------------------------------------------

    \195\ Petition at 18-20.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA interprets Alaska Admin. Code tit. 18 Sec.  50.240 as 
providing an affirmative defense under which excess emissions that 
occur during certain SSM events may be ``excused'' if the requisite 
showing is made by the source. This provision is substantially 
inadequate for three reasons. First, provisions that allow a state 
official's decision to bar EPA or citizen enforcement are impermissible 
under the CAA. Although Alaska Admin. Code tit. 18 Sec.  50.240 states 
that it ``does not limit the department's power to enjoin the emission 
nor require corrective action'' (emphasis added), it also states that 
``[e]xcess emissions determined to be unavoidable under this section 
will be excused and are not subject to penalty.'' The net effect of 
this language appears to bar the EPA and the public from seeking 
injunctive relief. Moreover, the provision is ambiguous as to whether 
the EPA or the public could pursue an action for civil penalties if 
they disagreed with the state official's determination that excess 
emissions were unavoidable.
    Second, as explained more fully in sections IV.B and VII.C of this 
notice, the EPA believes that affirmative defense provisions that apply 
to startup, shutdown, or maintenance events are inconsistent with the 
requirements of the CAA. Consequently, Alaska Admin. Code tit. 18 Sec.  
50.240, which applies to excess emissions that occur during startup, 
shutdown, and scheduled maintenance, is impermissible for this reason 
as well.
    Finally, while the EPA continues to believe that affirmative 
defense provisions applying to malfunctions can be consistent with the 
CAA, as long as the criteria set forth in the SSM Policy are carefully 
adhered to (as explained in more detail in sections IV.B and VII.B of 
this notice), the criteria in Alaska Admin. Code tit. 18 Sec.  50.240 
are not sufficiently similar to those recommended in the EPA's SSM 
Policy to assure that the affirmative defense is available only in 
appropriately narrow circumstances. The EPA acknowledges that the SSM 
Policy is only guidance concerning what types of SIP provisions could 
be consistent with the requirements of the CAA. Nonetheless, through 
this rulemaking, the EPA is proposing to determine that Alaska Admin. 
Code tit. 18 Sec.  50.240 does not include criteria that are 
sufficiently robust to qualify as an acceptable affirmative defense 
provision for malfunctions (i.e., upsets). For example, the defense 
available in Alaska Admin. Code tit. 18 Sec.  50.240 is not limited to 
excess emissions caused by sudden, unavoidable, breakdown of technology 
beyond the control of the owner or operator. Similarly, the provision 
contains neither a statement that the defense does not apply in 
situations where a single source or small group of sources has the 
potential to cause an exceedance of the NAAQS or PSD increments nor a 
requirement that sources make an after-the-fact showing that no such 
exceedance occurred. Accordingly, the EPA agrees with the Petitioner's 
contention that the provision is substantially inadequate to satisfy 
the requirements of the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Alaska 
Admin. Code tit. 18 Sec.  50.240. The provision applies to startup, 
shutdown, and maintenance events, contrary to the EPA's interpretation 
of the CAA to allow such affirmative defenses only for malfunctions. 
Additionally, the section of Alaska Admin. Code tit. 18 Sec.  50.240 
applying to ``upsets'' is inadequate because the criteria referenced 
are not sufficiently similar to those recommended in the EPA's SSM 
Policy for affirmative defense provisions applicable to malfunctions. 
Thus, the provision is inconsistent with the requirements of CAA 
sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). Moreover, the 
provision appears to bar the EPA and citizens from seeking penalties 
and injunctive relief. As a result, Alaska Admin. Code tit. 18 Sec.  
50.240 is inconsistent with the fundamental requirements of CAA 
sections 113 and 304. For these reasons, the EPA is proposing to find 
that the provision is substantially inadequate to meet CAA requirements 
and proposes to issue a SIP call with respect to the provision.
2. Idaho
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Idaho SIP that 
appears to grant enforcement discretion to the state as to whether to 
impose penalties for excess emissions during certain SSM events (Idaho 
Admin. Code r. 58.01.01.131).\196\ The provision provides that ``[t]he 
Department shall consider the sufficiency of the information submitted 
and the following criteria to determine if an enforcement action to 
impose penalties is warranted * * *.'' The Petitioner argued that this 
provision could be interpreted to give the Department authority to 
decide that

[[Page 12537]]

enforcement is not warranted by anyone, thereby precluding action by 
the EPA and citizens for civil penalties or injunctive relief.
---------------------------------------------------------------------------

    \196\ Petition at 33.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA's SSM Policy interprets the CAA to allow states to elect to 
have appropriately drawn SIP provisions addressing the exercise of 
enforcement discretion by state personnel. As the Petitioner 
recognized, Idaho Admin. Code r. 58.01.01.131 appears to be a statement 
of enforcement discretion, and it delineates factors that will be 
considered by the Department in determining whether to pursue 
enforcement for violations due to excess emissions. Subsection 101.03 
of the provision clearly states that ``[a]ny decision by the Department 
* * * shall not excuse the owner or operator from compliance with the 
relevant emission standard.'' There is no language suggesting that the 
Department's determination to forgo state enforcement against a source 
would in any way preclude the EPA or the public from demonstrating that 
violations occurred or from taking enforcement action. Consequently, 
the EPA believes the provision is consistent with the requirements of 
the CAA.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to Idaho Admin. 
Code r. 58.01.01.131. The EPA interprets this provision to allow both 
the EPA and the public to seek civil penalties or injunctive relief, 
regardless of how the state chooses to exercise its enforcement 
discretion. The EPA solicits comments on this issue, in particular from 
the State of Idaho, to assure that there is no misunderstanding with 
respect to the correct interpretation of Idaho Admin. Code r. 
58.01.01.131.
3. Oregon
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Oregon SIP that 
grants enforcement discretion to the state to pursue violations for 
excess emissions during certain SSM events (Or. Admin. R. 340-028-
1450).\197\ The provision provides that ``[i]n determining if a period 
of excess emissions is avoidable, and whether enforcement action is 
warranted, the Department, based upon information submitted by the 
owner and or operator, shall consider whether the following criteria 
are met * * *.'' The Petitioner argued that this provision could be 
interpreted to give the Department authority to decide that enforcement 
is not warranted by anyone, thereby precluding action by the EPA and 
citizens for civil penalties or injunctive relief.
---------------------------------------------------------------------------

    \197\ Petition at 63.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    After the Petition was filed, the provision of the Oregon SIP cited 
by the Petitioner was recodified and revised by the state and was 
submitted to the EPA as part of a SIP revision. The EPA approved the 
SIP revision on December 27, 2011.\198\ The provision has been 
recodified and revised at Or. Admin. R. 340-214-0350. The provision as 
recodified provides that ``[i]n determining whether to take enforcement 
action for excess emissions, the Department considers, based upon 
information submitted by the owner or operator,'' a list of factors.
---------------------------------------------------------------------------

    \198\ 76 FR 80725 at 80747.
---------------------------------------------------------------------------

    The EPA's SSM Policy interprets the CAA to allow states to elect to 
have SIP provisions that pertain to the exercise of enforcement 
discretion by state personnel. As revised by Oregon and approved by the 
EPA into the SIP, Or. Admin. R. 340-214-0350 is plainly a statement of 
enforcement discretion, and it delineates factors that will be 
considered by the Department in determining whether to pursue state 
enforcement for violations of the applicable SIP emission limitations 
due to excess emissions. There is no language in this provision 
suggesting that the Department's determination to forgo enforcement 
against a source would in any way preclude the EPA or the public from 
demonstrating that violations occurred and taking enforcement action. 
Consequently, the EPA believes the current SIP provision is consistent 
with the requirements of the CAA.
c. The EPA's Proposal
    The EPA proposes to deny the Petition with respect to Or. Admin. R. 
340-028-1450. This provision has since been recodified and approved by 
the EPA at Or. Admin. R. 340-214-0350. The EPA interprets the 
recodified provision to allow both the EPA and the public to seek civil 
penalties or injunctive relief, regardless of how the state chooses to 
exercise its enforcement discretion. The EPA solicits comments on this 
issue, in particular from the State of Oregon, to assure that there is 
no misunderstanding with respect to the correct interpretation of Or. 
Admin. R. 340-214-0350.
4. Washington
a. Petitioner's Analysis
    The Petitioner objected to a provision in the Washington SIP that 
provides an excuse for ``unavoidable'' excess emissions that occur 
during certain SSM events, including startup, shutdown, scheduled 
maintenance, and ``upsets'' (Wash. Admin. Code Sec.  173-400-107).\199\ 
The provision provides that ``[e]xcess emissions determined to be 
unavoidable under the procedures and criteria under this section shall 
be excused and are not subject to penalty.'' The Petitioner argued that 
this provision excuses excess emissions in violation of the CAA and the 
EPA's SSM Policy, which require all such emissions to be treated as 
violations of the applicable SIP emission limitations. The Petitioner 
further argued that it is unclear whether the provision could be 
interpreted to bar enforcement actions brought by the EPA or citizens, 
because it is drafted as if the state were the sole enforcement 
authority. Finally, the Petitioner pointed out, the provision is worded 
as if it were an affirmative defense, but it uses criteria for 
enforcement discretion.
---------------------------------------------------------------------------

    \199\ Petition at 71-72.
---------------------------------------------------------------------------

b. The EPA's Evaluation
    The EPA interprets Wash. Admin. Code Sec.  173-400-107 as an 
affirmative defense under which excess emissions that occur during 
certain SSM events can be ``excused'' if the requisite showing is made 
by the source. This provision is substantially inadequate for four 
reasons. First, provisions that allow a state official's decision to 
bar the EPA or citizen enforcement are impermissible under the CAA. The 
Wash. Admin. Code Sec.  173-400-107 provides that ``[t]he owner or 
operator of a source shall have the burden of proving to Ecology or the 
authority or the decision-maker in an enforcement action that excess 
emissions were unavoidable.'' This language makes clear that the 
state's determination is not binding on the EPA or the public, because 
it refers to other authorities and decision-makers besides the state 
agency. However, the provision also states that ``[e]xcess emissions 
determined to be unavoidable * * * shall be excused and not subject to 
penalty.'' This language could be interpreted to preclude those excess 
emissions deemed ``unavoidable'' from being considered violations of 
the applicable SIP emission limitations, and thus it could preclude 
enforcement by the EPA or through a citizen suit.
    Second, it is unclear whether the affirmative defense applies only 
to

[[Page 12538]]

actions for monetary penalties or could also be used to bar actions 
seeking injunctive relief. Although the EPA believes that narrowly 
drawn affirmative defenses are permitted under the CAA for malfunction 
events, as discussed in sections IV.B and VII.B of this notice, the 
EPA's interpretation is that such affirmative defenses can only shield 
the source from monetary penalties and cannot be a bar to injunctive 
relief.
    Third, as explained more fully in sections IV.B and VII.C of this 
notice, the EPA believes that affirmative defense provisions that apply 
to startup, shutdown, or maintenance events are inconsistent with the 
requirements of the CAA on their face. Consequently, Wash. Admin. Code 
Sec.  173-400-107, which applies to excess emissions that occur during 
startup, shutdown, and scheduled maintenance, is impermissible for this 
reason as well.
    Finally, while the EPA continues to believe that affirmative 
defense provisions applying to malfunctions can be consistent with the 
CAA as long as the criteria set forth in the SSM Policy are carefully 
adhered to, as discussed in sections IV.B and VII.B of this notice, the 
criteria in Wash. Admin. Code Sec.  173-400-107 are not sufficiently 
similar to those recommended in the EPA's SSM Policy to assure that the 
affirmative defense is available only in appropriately narrow 
circumstances. The EPA acknowledges that the SSM Policy is only 
guidance concerning what types of SIP provisions could be consistent 
with the requirements of the CAA. Nonetheless, through this rulemaking, 
the EPA is proposing to determine that Wash. Admin. Code Sec.  173-400-
107 does not include criteria that are sufficiently robust to qualify 
as an acceptable affirmative defense provision for malfunctions (i.e., 
``upsets''). For example, the defense available in Wash. Admin. Code 
Sec.  173-400-107 is not limited to excess emissions caused by sudden, 
unavoidable, breakdown of technology beyond the control of the owner or 
operator. Similarly, the provision contains neither a statement that 
the defense does not apply in situations where a single source or small 
group of sources has the potential to cause an exceedance of the NAAQS 
or PSD increments nor a requirement that sources make an after-the-fact 
showing that no such exceedance occurred. As a result, the EPA believes 
that the provision is substantially inadequate to satisfy the 
requirements of the CAA.
c. The EPA's Proposal
    The EPA proposes to grant the Petition with respect to Wash. Admin. 
Code Sec.  173-400-107. The provision applies to startup, shutdown, and 
maintenance events, contrary to the EPA's interpretation of the CAA to 
allow such affirmative defenses only for malfunctions. Furthermore, the 
section of Wash. Admin. Code Sec.  173-400-107 applying to ``upsets'' 
is inadequate because the criteria referenced are not sufficiently 
similar to those recommended in the EPA's SSM Policy for affirmative 
defenses for excess emissions due to malfunctions. Finally, the 
provision is unclear as to whether the EPA and the public could still 
seek injunctive relief if a state official made a determination that 
excess emissions were unavoidable. As a result, the EPA believes that 
Wash. Admin. Code Sec.  173-400-107 is inconsistent with the 
fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), 
and 302(k). For these reasons, the EPA is proposing to find that the 
provision is substantially inadequate to meet CAA requirements and 
proposes to issue a SIP call with respect to the provision.

X. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a ``significant regulatory action'' because it raises novel 
legal or policy issues. Accordingly, the EPA submitted this action to 
the Office of Management and Budget (OMB) for review under Executive 
Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes 
made in response to OMB recommendations have been documented in the 
docket for this action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
The EPA's proposed action in response to the Petition merely reiterates 
the EPA's interpretation of the statutory requirements of the CAA and 
does not require states to collect any additional information. To the 
extent that the EPA proposes to grant the Petition and thus proposes to 
issue a SIP call to a state under CAA section 110(k)(5), the EPA is 
only proposing an action that requires the state to revise its SIP to 
comply with existing requirements of the CAA.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice-and-comment rulemaking requirements under the Administrative 
Procedure Act or any other statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities.\200\
---------------------------------------------------------------------------

    \200\ Small entities include small businesses, small 
organizations, and small governmental jurisdictions. For purposes of 
assessing the impacts of this notice on small entities, small entity 
is defined as: (1) A small business that is a small industrial 
entity as defined in the U.S. Small Business Administration (SBA) 
size standards (see 13 CFR 121.201); (2) a small governmental 
jurisdiction that is a government of a city, county, town, school 
district, or special district with a population of less than 50,000; 
or (3) a small organization that is any not-for-profit enterprise 
that is independently owned and operated and is not dominant in its 
field.
---------------------------------------------------------------------------

    After considering the economic impacts of this proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. Courts have 
interpreted the RFA to require a regulatory flexibility analysis only 
when small entities will be subject to the requirements of the rule. 
See, e.g., Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000); Mid-Tex 
Elec. Co-op, Inc. v. FERC, 773 F.2d 327 (D.C. Cir. 1985). This proposed 
rule will not impose any requirements on small entities. Instead, the 
proposed action merely reiterates the EPA's interpretation of the 
statutory requirements of the CAA. To the extent that the EPA proposes 
to grant the Petition and thus proposes to issue a SIP call to a state 
under CAA section 110(k)(5), the EPA is only proposing an action that 
requires the state to revise its SIP to comply with existing 
requirements of the CAA. The EPA's action, therefore, would leave to 
states the choice of how to revise the SIP provision in question to 
make it consistent with CAA requirements and determining, among other 
things, which of the several lawful approaches to the treatment of 
excess emissions during SSM events will be applied to particular 
sources. We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    This rule does not contain a federal mandate that may result in 
expenditures of $100 million or more for state, local, and tribal 
governments, in the aggregate, or the private sector in any one year. 
The action may impose a duty on

[[Page 12539]]

certain state governments to meet their existing obligations to revise 
their SIPs to comply with CAA requirements. The direct costs of this 
action on states would be those associated with preparation and 
submission of a SIP revision by those states for which the EPA issues a 
SIP call. Examples of such costs could include development of a state 
rule, conducting notice and public hearing, and other costs incurred in 
connection with a SIP submission. These aggregate costs would be far 
less than the $100-million threshold in any one year. Thus, this rule 
is not subject to the requirements of sections 202 or 205 of UMRA.
    This rule is also not subject to the requirements of section 203 of 
UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments. The regulatory 
requirements of this action would apply to the states for which the EPA 
issues a SIP call. To the extent that such states allow local air 
districts or planning organizations to implement portions of the 
state's obligation under the CAA, the regulatory requirements of this 
action would not significantly or uniquely affect small governments 
because those governments have already undertaken the obligation to 
comply with the CAA.

E. Executive Order 13132--Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132 because it will simply maintain the 
relationship and the distribution of power between the EPA and the 
states as established by the CAA. The proposed SIP calls are required 
by the CAA because the EPA is proposing to find that the current SIPs 
of the affected states are substantially inadequate to meet fundamental 
CAA requirements. In addition, the effects on the states will not be 
substantial because where a SIP call is finalized for a state, the SIP 
call will require the affected state to submit only those revisions 
necessary to address the SIP deficiencies and applicable CAA 
requirements. While this action may impose direct effects on the 
states, the expenditures would not be substantial because they would be 
far less than $25 million in the aggregate in any one year.\201\ Thus, 
Executive Order 13132 does not apply to this action.
---------------------------------------------------------------------------

    \201\ ``EPA's Action Development Process-Guidance on Executive 
Order 13132: Federalism,'' dated November 2008.
---------------------------------------------------------------------------

    In the spirit of Executive Order 13132, and consistent with the EPA 
policy to promote communications between the EPA and state and local 
governments, the EPA specifically solicits comment on this proposed 
rule from state and local officials.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). In this action, 
the EPA is not addressing any tribal implementation plans. This action 
is limited to states. Thus, Executive Order 13175 does not apply to 
this action. However, the EPA invites comment on this proposed action 
from tribal officials.

G. Executive Order 13045--Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as 
applying only to those regulatory actions that concern health or safety 
risks, such that the analysis required under section 5-501 of the EO 
has the potential to influence the regulation. This action is not 
subject to EO 13045 because it merely prescribes the EPA's action for 
states regarding their obligations for SIPs under the CAA.

H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355(May 22, 2001)), because it is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. This action merely prescribes the EPA's 
action for states regarding their obligations for SIPs under the CAA.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, 12(d) (15 U.S.C. 272 note) 
directs the EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are technical 
standards (e.g., materials specifications, test methods, sampling 
procedures, and business practices) that are developed or adopted by 
voluntary consensus standards bodies. NTTAA directs the EPA to provide 
Congress, through OMB, explanations when the EPA decides not to use 
available and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards. 
Therefore, the EPA is not considering the use of any voluntary 
consensus standards.

J. Executive Order 12898--Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes 
federal executive policy on environmental justice. Its main provision 
directs federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the U.S.
    The EPA has determined that this proposed rule will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations because it increases the 
level of environmental protection for all affected populations without 
having any disproportionately high and adverse human health or 
environmental effects on any population, including any minority or low-
income population. The rule is intended to ensure that all communities 
and populations across the affected states, including minority, low-
income and indigenous populations overburdened by pollution, receive 
the full human health and environmental protection provided by the CAA. 
This proposed action concerns states' obligations regarding the 
treatment they give, in rules included in their SIPs under the CAA, to 
excess emissions during startup, shutdown, and malfunctions. This 
proposed action would require 36 states to bring their treatment of 
these emissions into line with CAA requirements, which would lead to 
sources' having greater incentives to control emissions during such 
events.

K. Determination Under Section 307(d)

    Pursuant to CAA section 307(d)(1)(U), the Administrator determines 
that this action is subject to the provisions of section 307(d). 
Section 307(d)(1)(U) provides that the provisions of section

[[Page 12540]]

307(d) apply to ``such other actions as the Administrator may 
determine.''

L. Judicial Review

    Section 307(b)(1) of the CAA indicates which Federal Courts of 
Appeal have venue for petitions of review of final agency actions by 
the EPA under the CAA. This section provides, in part, that petitions 
for review must be filed in the Court of Appeals for the District of 
Columbia Circuit (i) when the agency action consists of ``nationally 
applicable regulations promulgated, or final actions taken, by the 
Administrator,'' or (ii) when such action is locally or regionally 
applicable, if ``such action is based on a determination of nationwide 
scope or effect and if in taking such action the Administrator finds 
and publishes that such action is based on such a determination.''
    This rule responding to the Petition is ``nationally applicable'' 
within the meaning of section 307(b)(1). First, the rulemaking 
addresses a Petition that raises issues that are applicable in all 
states and territories in the U.S. For example, the Petitioner 
requested that the EPA revise its SSM Policy with respect to whether 
affirmative defense provisions in SIPs are consistent with CAA 
requirements. The EPA's response is relevant for all states nationwide. 
Second, the rulemaking will address a Petition that raises issues 
relevant to specific existing SIP provisions in 39 states across the 
U.S. that are located in each of the 10 EPA Regions, 10 different 
federal circuits, and multiple time zones. Third, the rulemaking 
addresses a common core of knowledge and analysis involved in 
formulating the decision and a common interpretation of the 
requirements of the CAA being applied to SIPs in states across the 
country. Fourth, the rulemaking, by addressing issues relevant to 
appropriate SIP provisions in one state, may have precedential impacts 
upon the SIPs of other states nationwide. Courts have found similar 
rulemaking actions to be of nationwide scope and effect.\202\
---------------------------------------------------------------------------

    \202\ See, e.g., State of Texas, et al. v. EPA, 2011 U.S. App. 
LEXIS 5654 (5th Cir. 2011) (finding SIP call to 13 states to be of 
nationwide scope and effect and thus transferring the case to the 
U.S. Court of Appeals for the D.C. Circuit in accordance with CAA 
section 307(b)(1)).
---------------------------------------------------------------------------

    This determination is appropriate because in the 1977 CAA 
Amendments that revised CAA section 307(b)(1), Congress noted that the 
Administrator's determination that an action is of ``nationwide scope 
or effect'' would be appropriate for any action that has ``scope or 
effect beyond a single judicial circuit.'' H.R. Rep. No. 95-294 at 
323--324, reprinted in 1977 U.S.C.C.A.N. 1402-03. Here, the scope and 
effect of this rulemaking extends to numerous judicial circuits because 
the action on the petition extends to states throughout the country. In 
these circumstances, section 307(b)(1) and its legislative history 
authorize the Administrator to find the rule to be of ``nationwide 
scope or effect'' and thus to indicate that venue for challenges to be 
in the D.C. Circuit. Thus, any petitions for review must be filed in 
the Court of Appeals for the District of Columbia Circuit. Accordingly, 
the EPA is proposing to determine that this will be a rulemaking of 
nationwide scope or effect.
    In addition, pursuant to CAA section 307(d)(1)(V), the EPA is 
determining that this rulemaking action will be subject to the 
requirements of section 307(d).

XI. Statutory Authority

    The statutory authority for this action is provided by CAA section 
101 et seq. (42 U.S.C. 7401 et seq.).

List of Subjects in 40 CFR Part 52

    Affirmative defense, Air pollution control, Carbon dioxide, Carbon 
dioxide equivalents, Carbon monoxide, Environmental protection, Excess 
emissions, Greenhouse gases, Hydrofluorocarbons, Intergovernmental 
relations, Lead, Methane, Nitrogen dioxide, Nitrous oxide, Ozone, 
Particulate matter, Perfluorocarbons, Reporting and recordkeeping 
requirements, Startup, shutdown, and malfunction, State implementation 
plan, Sulfur hexafluoride, Sulfur oxides, Volatile organic compounds.

    Dated: February 12, 2013.
Gina McCarthy,
Assistant Administrator.
[FR Doc. 2013-03734 Filed 2-21-13; 8:45 am]
BILLING CODE 6560-50-P


