# State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls To Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2015-12905 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** June 12, 2015 - **Citation:** 80 FR 33840 ## Text ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-HQ-OAR-2012-0322; FRL-9924-05-OAR] RIN 2060-AR68 State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; 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: Final action. SUMMARY: The Environmental Protection Agency (EPA) is taking final action on a petition for rulemaking filed by the Sierra Club (Petitioner) that concerns how provisions in EPA-approved state implementation plans (SIPs) treat excess emissions during periods of startup, shutdown or malfunction (SSM). Further, the EPA is clarifying, restating and revising its guidance concerning its interpretation of the Clean Air Act (CAA or Act) requirements with respect to treatment in SIPs of excess emissions that occur during periods of SSM. The EPA evaluated existing SIP provisions in a number of states for consistency with the EPA's interpretation of the CAA and in light of recent court decisions addressing this issue. The EPA is issuing a finding that certain SIP provisions in 36 states (applicable in 45 statewide and local jurisdictions) are substantially inadequate to meet CAA requirements and thus is issuing a “SIP call” for each of those 36 states. Further, the EPA is establishing a due date for states subject to this SIP call action to submit corrective SIP revisions. Finally, this final action embodies the EPA's updated SSM Policy as it applies to SIP provisions. The SSM Policy provides guidance to states for compliance with CAA requirements for SIP provisions applicable to excess emissions during SSM events. DATES: This final action shall become applicable on May 22, 2015. The deadline for each affected state to submit its corrective SIP revision is November 22, 2016. ADDRESSES: The EPA has established a docket for this rulemaking under Docket ID No. EPA-HQ-OAR-2012-0322. All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information 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 http://www.regulations.gov or in hard copy at the U.S. Environmental Protection Agency, EPA Docket Center, William Jefferson Clinton 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 Office of Air and Radiation Docket is (202) 566-1742. FOR FURTHER INFORMATION CONTACT: 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 address: sutton.lisa@epa.gov . SUPPLEMENTARY INFORMATION: For information related to a specific SIP, please contact the appropriate EPA Regional Office: EPA Regional Office Contact for Regional Office (person, mailing address, telephone number) State I Alison Simcox, Environmental Scientist, EPA Region 1, 5 Post Office Square, Suite 100, Boston, MA 02109-3912, (617) 918-1684 Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont. II Karl Mangels, Chief, Air Planning Section, EPA Region 2, 290 Broadway, 25th Floor, New York, NY 10007-1866, (212) 637-4078 New Jersey, New York, Puerto Rico and Virgin Islands. III Amy Johansen, EPA Region 3, 1650 Arch Street, Philadelphia, PA 19103-2029, (215) 814-2156 District of Columbia, Delaware, Maryland, Pennsylvania, Virginia and West Virginia. IV Joel Huey, EPA Region 4, Atlanta Federal Center, 61 Forsyth Street SW., Atlanta, GA 30303-8960, (404) 562-9104 Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. V Mary Portanova, Air and Radiation Division (AR-18J), EPA Region 5, 77 West Jackson Boulevard, Chicago, IL 60604-3507, (312) 353-5954 Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin. VI Alan Shar (6PD-L), EPA Region 6, Fountain Place 12th Floor, Suite 1200, 1445 Ross Avenue, Dallas, TX 75202-2733, (214) 665-6691 Arkansas, Louisiana, New Mexico, Oklahoma and Texas. VII Lachala Kemp, EPA Region 7, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, KS 66219-9601, (913) 551-7214. Alternate contact is Ward Burns, (913) 551-7960 Iowa, Kansas, Missouri and Nebraska. VIII Adam Clark, Air Quality Planning Unit (8P-AR) Air Program, EPA Region 8, 1595 Wynkoop Street, Denver, CO 80202-1129, (303) 312-7104 Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming. IX Andrew Steckel, EPA Region 9, Air Division, 75 Hawthorne Street (AIR-4), San Francisco, CA 94105-3901, (415) 947-4115 Arizona, California, Hawaii, Nevada and the Pacific Islands. X Dave Bray, Office of Air, Waste and Toxics (AWT-150), EPA Region 10, 1200 Sixth Avenue, Suite 900, Seattle, WA 98101-3140, (206) 553-4253 Alaska, Idaho, Oregon, and Washington. I. General Information A. Does this action apply to me? Entities potentially affected by this action include states, U.S. territories, local authorities and eligible tribes that are currently administering, or may in the future administer, EPA-approved implementation plans (“air agencies”). 1 The EPA's action on the petition for rulemaking filed by the Sierra Club with the EPA Administrator on June 30, 2011 (the Petition), is potentially of interest to all such entities because the EPA is addressing issues related to basic CAA requirements for SIPs. The particular issues addressed in this rulemaking are the same issues that the Petition identified, which relate specifically to section 110 of the CAA. Pursuant to section 110, through what is generally referred to as the “SIP program,” the states and the EPA together provide for implementation, maintenance and enforcement of the national ambient air quality standards (NAAQS). While recognizing similarity to (and in some instances overlap with) issues concerning other air programs, e.g., concerning SSM provisions in the EPA's regulatory programs for New Source Performance Standards (NSPS) pursuant to section 111 and National Emission Standards for Hazardous Air Pollutants (NESHAP) pursuant to section 112, the EPA notes that the issues addressed in this rulemaking are specific to SSM provisions in the SIP program. 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 general. In addition, the EPA is issuing findings that some of the specific SIP provisions in some of the states identified in the Petition and some SIP provisions in additional states are substantially inadequate to meet CAA requirements, pursuant to CAA section 110(k)(5), and thus those states (named in section II.C of this document) are directly affected by this rulemaking. For example, where a state's existing SIP includes an affirmative defense provision that would purport to alter the jurisdiction of the federal courts to assess monetary penalties for violations of CAA requirements, then the EPA is determining that the SIP provision is substantially inadequate because the provision is inconsistent with fundamental requirements of the CAA. This action may also be of interest to the public and to owners and operators of industrial facilities that are subject to emission limitations in SIPs, because it will require changes to certain state rules applicable to excess emissions during SSM events. This action embodies the EPA's updated SSM Policy concerning CAA requirements for SIP provisions relevant to excess emissions during SSM events. 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, the EPA refers 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. This final action does not include action on any provisions in any TIP. The EPA therefore refers to “state” or “states” rather than “air agency” or “air agencies” when meaning to refer to the District of Columbia and/or one, some, or all of the states at issue in this rulemaking. The EPA also uses “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. 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 document will also be available on the World Wide Web. Following signature by the EPA Administrator, a copy of this document will be posted on the EPA's Web site, under “State Implementation Plans to Address Emissions During Startup, Shutdown and Malfunction,” at http://www.epa.gov/air/urbanair/sipstatus . The EPA's initial proposed response to the Petition in the February 2013 proposal, the EPA's revised proposed response to the Petition in the September 2014 supplemental notice of proposed rulemaking (SNPR) and the EPA's Response to Comments document may be found in the docket for this action. C. 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. How is the preamble organized? D. What is the meaning of key terms used in this document? II. Overview of Final Action and Its Consequences A. Summary B. What the Petitioner Requested C. To which air agencies does this rulemaking apply and why? D. What are the next steps for states that are receiving 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 is the status of SIP provisions affected by this SIP call action 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. Final Action in Response to Request To Rescind the EPA Policy Interpreting the CAA To Allow Affirmative Defense Provisions A. What the Petitioner Requested B. What the EPA Proposed C. What Is Being Finalized in This Action D. Response to Comments Concerning Affirmative Defense Provisions in SIPs V. Generally Applicable Aspects of the Final Action in Response to Request for the EPA's Review of Specific Existing SIP Provisions for Consistency With CAA Requirements A. What the Petitioner Requested B. What the EPA Proposed C. What Is Being Finalized in This Action D. Response to Comments Concerning the CAA Requirements for SIP Provisions Applicable to SSM Events VI. Final 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. What the Petitioner Requested B. What the EPA Proposed C. What Is Being Finalized In This Action D. Response to Comments Concerning Reliance on Interpretive Letters in SIP Revisions VII. Clarifications, Reiterations and Revisions to the EPA's SSM Policy A. Applicability of Emission Limitations During Periods of SSM 1. What the EPA Proposed 2. What Is Being Finalized in This Action 3. Response to Comments B. Alternative Emission Limitations During Periods of Startup and Shutdown 1. What the EPA Proposed 2. What Is Being Finalized in This Action 3. Response to Comments C. Director's Discretion Provisions Pertaining to SSM Events 1. What the EPA Proposed 2. What Is Being Finalized in This Action 3. Response to Comments D. Enforcement Discretion Provisions Pertaining to SSM Events 1. What the EPA Proposed 2. What Is Being Finalized in This Action 3. Response to Comments E. Affirmative Defense Provisions in SIPs During Any Period of Operation F. Relationship Between SIP Provisions and Title V Regulations G. 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 Affirmative Defense Provisions B. SIP Call Process Under Section 110(k)(5) C. SIP Call Timing Under Section 110(k)(5) D. Response to Comments Concerning SIP Call Authority, Process and Timing IX. What is the EPA's final action for each of the specific SIP provisions identified in the Petition or by the EPA? A. Overview of the EPA's Evaluation of Specific SIP Provisions B. Affected States in EPA Region I C. Affected State in EPA Region II D. Affected States in EPA Region III E. Affected States and Local Jurisdictions in EPA Region IV F. Affected States in EPA Region V G. Affected States in EPA Region VI H. Affected States in EPA Region VII I. Affected States in EPA Region VIII J. Affected States and Local Jurisdictions in EPA Region IX K. Affected States in EPA Region X X. Implementation Aspects of EPA's SSM SIP Policy A. Recommendations Concerning Alternative Emission Limitations for Startup and Shutdown B. Recommendations for Compliance With Section 110(l) and Section 193 for SIP Revisions XI. Statement of the EPA's SSM SIP Policy as of 2015 A. Definitions B. Emission Limitations in SIPs Must Apply Continuously During All Modes of Operation, Without Automatic or Discretionary Exemptions or Overly Broad Enforcement Discretion Provisions That Would Bar Enforcement by the EPA or by Other Parties in Federal Court Through a Citizen Suit C. Emission Limitations in SIPs May Contain Components Applicable to Different Modes of Operation That Take Different Forms, and Numerical Emission Limitations May Have Differing Levels and Forms for Different Modes of Operation D. Recommendations for Development of Alternative Emission Limitations Applicable During Startup and Shutdown E. Enforcement Discretion Provisions F. Affirmative Defense Provisions in SIPs G. Anti-Backsliding Considerations XII. Environmental Justice Consideration XIII. References XIV. 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 (PRA) C. Regulatory Flexibility Act (RFA) D. Unfunded Mandates Reform Act (UMRA) 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 (NTTAA) J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations K. Determination Under Section 307(d) L. Congressional Review Act (CRA) XV. Judicial Review XVI. Statutory Authority D. What is the meaning of key terms used in this document? For the purpose of this document, the following definitions apply unless the context indicates otherwise: The terms Act or CAA or the statute 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. The term affirmative defense provision means more specifically a state law provision in a SIP that specifies particular criteria or preconditions that, if met, would purport to preclude a court from imposing monetary penalties or other forms of relief for violations of SIP requirements in accordance with CAA section 113 or CAA section 304. The term Agency means or refers to the EPA. When not capitalized, this term refers to an agency in general and not specifically to the EPA. The terms air agency and a ir 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 with appropriate CAA jurisdiction. The term alternative emission limitation means, in this document, an emission limitation in a SIP that applies to a source during some but not all periods of normal operation ( e.g., applies only during a specifically defined mode of operation such as startup or shutdown). An alternative emission limitation is a component of a continuously applicable SIP emission limitation, and it may take the form of a control measure such as a design, equipment, work practice or operational standard (whether or not numerical). This definition of the term is independent of the statutory use of the term “alternative means of emission limitation” in sections 111(h)(3) and 112(h)(3), which pertain to the conditions under which the EPA may pursuant to sections 111 and 112 promulgate emission limitations, or components of emission limitations, that are not necessarily in numeric format. 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 otherwise applicable emission limitations or control measures, or to excuse noncompliance with otherwise applicable emission limitations or control measures, which would be binding on the EPA and the public. The term EPA refers to the United States Environmental Protection Agency. The term emission limitation means, in the context of a SIP, a legally binding restriction on emissions from a source or source category, such as a numerical emission limitation, a numerical emission limitation with higher or lower levels applicable during specific modes of source operation, a specific technological control measure requirement, a work practice standard, or a combination of these things as components of a comprehensive and continuous emission limitation in a SIP provision. In this respect, the term emission limitation is defined as in section 302(k) of the CAA. By definition, an emission limitation can take various forms or a combination of forms, but in order to be permissible in a SIP it must be applicable to the source continuously, i.e., cannot include periods during which emissions from the source are legally or functionally exempt from regulation. Regardless of its form, a fully approvable SIP emission limitation must also meet all substantive requirements of the CAA applicable to such a SIP provision, e.g., the statutory requirement of section 172(c)(1) for imposition of reasonably available control measures and reasonably available control technology (RACM and RACT) on sources located in designated nonattainment areas. The term excess emissions means the emissions of air pollutants from a source that exceed any applicable SIP emission limitation. In particular, this term includes those emissions above the otherwise applicable SIP emission limitation that occur during startup, shutdown, malfunction or other modes of source operation, i.e., emissions that would be considered violations of the applicable emission limitation but for an impermissible automatic or discretionary exemption from such emission limitation. The term February 2013 proposal means the notice of proposed rulemaking that the EPA signed on February 12, 2013, and published in the Federal Register on February 22, 2013. The February 2013 proposal comprises the EPA's initial proposed response to the Petition. The EPA subsequently issued the September 2014 SNPR that updated and revised the EPA's February 2013 proposal with respect to affirmative defense provisions in SIPs. 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 practically enforceable means, in the context of a SIP emission limitation, that the limitation is enforceable as a practical matter ( e.g., contains appropriate averaging times, compliance verification procedures and recordkeeping requirements). The term uses “practically” as it means “in a practical manner” and not as it means “almost” or “nearly.” In this document, the EPA uses the term “practically enforceable” as interchangeable with the term “practicably enforceable.” The term shutdown means, generally, the cessation of operation of a source for any reason. In this document, the EPA uses this term in the generic sense. In individual SIP provisions it may be appropriate to include a specifically tailored definition of this term to address a particular source category for a particular purpose. The term SIP means or refers to a State Implementation Plan. Generally, the SIP 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) promulgated under section 109 for any air pollutant in each air quality control region (or portion thereof) within a state. In some parts of this document, statements about SIPs in general would also apply to tribal implementation plans in general even though not explicitly noted. The term SNPR means the supplemental notice of proposed rulemaking that the EPA signed and posted on the Agency Web site on September 5, 2014, and published in the Federal Register on September 17, 2014. Supplementing the February 2013 proposal, the SNPR comprises the EPA's revised proposed response to the Petition with respect to affirmative defense provisions in SIPs. 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 may be exceedances of the applicable emission limitations and thus excess emissions. The term SSM Policy refers to the cumulative guidance that the EPA has issued as of any given date concerning its interpretation of CAA requirements with respect to treatment of excess emissions during periods of startup, shutdown and malfunction at a source in SIP provisions. The most comprehensive statement of the EPA's SSM Policy prior to this final action is embodied in a 1999 guidance document discussed in more detail in this final action. That specific guidance document is referred to as the 1999 SSM Guidance. The final action described in this document embodies the EPA's updated SSM Policy for SIP provisions relevant to excess emissions during SSM events. In section XI of this document, the EPA provides a statement of the Agency's SSM SIP Policy as of 2015. The term startup means, generally, the setting in operation of a source for any reason. In this document, the EPA uses this term in the generic sense. In an individual SIP provision it may be appropriate to include a specifically tailored definition of this term to address a particular source category for a particular purpose. II. Overview of Final Action and Its Consequences A. Summary The EPA is in this document taking final action on a petition for rulemaking that the Sierra Club filed with the EPA Administrator on June 30, 2011. The Petition concerns how air agency rules in EPA-approved SIPs treat excess emissions during periods of SSM of industrial source process or emission control equipment. Many of these rules were added to SIPs and 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 so-called “normal” operation (which, until no later than 1982, was meant by the EPA to refer to periods of operation other than during startup, shutdown, maintenance or malfunction) could in some cases not be met with the same emission control strategies during periods of startup, shutdown, maintenance or malfunction. 2 Accordingly, it was common for state plans to include provisions for special, more lenient treatment of excess emissions during such periods of startup, shutdown, maintenance or malfunction. Many of these provisions took the form of absolute or conditional statements that excess emissions from a source, when they occur during startup, shutdown, malfunction or otherwise outside of the source's so-called “normal” operations, were not to be considered violations of the air agency rules; i.e., these emissions were considered exempt from legal control. 2 Since at least 1982, however, the EPA has used the term “normal” in the SSM Policy in the ordinary sense of the word to distinguish between predictable modes of source operation such as startup and shutdown and genuine “malfunctions,” which are by definition supposed to be unpredictable and unforeseen events and which could not have been precluded by proper source design, maintenance and operation. See, e.g., 1982 SSM Guidance, Attachment at 2, in which the EPA states, “[s]tart-up and shutdown of process equipment are part of the normal operation of a source and should be accounted for in the design and implementation of the operating procedure for the process and control equipment.” The 1982 SSM Guidance is in the rulemaking docket at EPA-HQ-OAR-2012-0322-0005. 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. 3 The EPA also realized that such provisions allow opportunities for sources to emit pollutants during such periods repeatedly and in quantities that could cause unacceptable air pollution in nearby communities with no legal pathway within the existing EPA-approved SIP for air agencies, the EPA, the public or the courts to require the sources to make reasonable efforts to reduce these emissions. The EPA has attempted to be more careful after 1977 not to approve SIP submissions that contain illegal SSM provisions and has issued several guidance memoranda to advise states on how to avoid impermissible provisions 4 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 high-priority work facing both air agencies and the EPA, the EPA had not until the February 2013 proposal initiated a broader effort to require a larger number of states to remove impermissible provisions from their SIPs and to adopt other, approvable approaches for addressing excess emissions when appropriate. Public interest in the issue of SSM provisions in SIPs is evidently high, on the basis of the large number of public submissions made to the rulemaking docket in response to the February 2013 proposal (representing approximately 69,000 unique commenters) and the SNPR (over 20,000 commenters, some of whom had also made submissions in response to the earlier proposal). The EPA has attempted to further count commenters according to general categories (state and local governments, industry commenters, public interest groups and individual commenters), as described in section V.D.1 of this document. 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 generally 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. 5 3 In 1977, the EPA took actions related to specific sources located in Utah and Idaho in which the EPA expressed its views regarding issues such as automatic exemptions from applicable emission limitations. See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” at n.2, February 4, 2013, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0029. 4 The term “impermissible provision” as used throughout this document is generally intended to refer to a SIP provision that the EPA now believes to be inconsistent with requirements of the CAA. As described later in this document ( 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. 5 See Settlement Agreement executed November 30, 2011, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0039, 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.). A subsequent Modification to the Settlement Agreement specifies a deadline of May 22, 2015, for signature on the final action to respond to the Petition. The EPA emphasizes that there are other approaches that would be consistent with CAA requirements for SIP provisions that states can use to address 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. Similarly, SIPs may, rather than exempt emissions during SSM events, include emission limitations that subject those emissions to alternative numerical limitations or other technological control requirements or work practice requirements during startup and shutdown events, so long as those components of the emission limitations meet applicable CAA requirements. In this action, the EPA is again articulating its interpretation of the CAA in the SSM Policy that reflects these principles and is applying this interpretation to issue a SIP call for specific existing provisions in the SIPs of 36 states. In some cases, the EPA's review involved a close reading of the provision in the SIP and its context to discern whether it was in fact an exemption, a statement regarding exercise of enforcement discretion by the air agency or an affirmative defense. Each state will ultimately decide how to address the SIP inadequacies identified by the EPA in this final action. The EPA acknowledges that for some states, this rulemaking entailed the EPA's evaluation of SIP provisions that may date back several decades. Aware of that fact, the EPA is committed to working closely with each of the affected states to develop approvable SIP submissions consistent with the guidance articulated in the updated SSM Policy in this final action. Section IX of this document presents the EPA's analysis of each specific SIP provision at issue in this action. The EPA's review also involved 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 for SIP provisions, this action provides the EPA an opportunity to update the SSM Policy and its basis in the CAA through notice and comment. To that end, section XI of this document contains a restatement of the EPA's SSM Policy for SIP provisions as revised and updated for 2015. Also, supplementary to the February 2013 proposal, the EPA provided a background memorandum to summarize the legal and administrative context for this action which is available in the docket for this rulemaking. 6 This final document is intended to clarify how states can resolve the identified deficiencies in their SIPs as well as to provide all air agencies guidance as they develop SIPs in the future. 6 See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” February 4, 2013, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0029. The EPA notes that with respect to the legal basis for affirmative defense provisions in SIPs, the Agency has revised its views as a result of a court decision, as explained in more detail in the SNPR. Thus, the portions of that background memorandum that concern affirmative defense provisions are no longer germane to this action. In summary, the EPA is agreeing with the Petitioner that many of the identified SIP provisions are not permissible under the CAA. However, in some cases the EPA is instead concluding that an identified SIP provision is actually consistent with CAA requirements. In addition, the EPA notes, this final action does not include a final finding of substantial inadequacy and SIP call for specific SIP provisions included in the February 2013 proposal for several air agencies, because of SIP revisions made subsequent to that proposal. The state of Kentucky has already submitted, and the EPA has approved, SIP revisions that corrected the problematic provisions applicable in the Jefferson County (Louisville, Kentucky) area. 7 The state of Wyoming has already submitted, and the EPA has approved, SIP revisions that corrected the problematic provisions applicable statewide. 8 The state of North Dakota has likewise already submitted, and the EPA has approved, SIP revisions that corrected a portion of the problematic provisions applicable statewide. 9 7 See “Approval and Promulgation of Implementation Plans; Kentucky; Approval of Revisions to the Jefferson County Portion of the Kentucky SIP; Emissions During Startups, Shutdowns, and Malfunctions,” 79 FR 33101 (June 10, 2014). 8 See “Approval and Promulgation of Implementation Plans; Wyoming; Revisions to the Air Quality Standards and Regulations,” 79 FR 62859 (October 21, 2014). 9 See “Approval and Promulgation of Implementation Plans; North Dakota; Revisions to the Air Pollution Control Rules,” 79 FR 63045 (October 22, 2014). Of the 41 states for which SIP provisions were identified by the Petition or identified independently by the Agency in the SNPR, the EPA is issuing a SIP call 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. For SIP provisions that have potential defects other than an impermissible affirmative defense, the EPA elected to focus on the provisions specifically raised in the Petition. The EPA may address these other provisions later in a separate notice-and-comment action. States are encouraged to consider the updated SSM Policy laid out in this final action in reviewing their own SIP provisions. With respect to affirmative defense provisions, however, the EPA elected to identify some additional provisions not included in the Petition. This is necessary to minimize potential confusion relating to other recent rulemakings and court decisions that pertain generally to affirmative defense provisions. Therefore, in order to give updated and comprehensive guidance with respect to affirmative defense provisions, the EPA has also addressed additional affirmative defense provisions in 17 states in the SNPR and in this final action. See section V.D.3 of this document for further explanation as to which SSM-related SIP provisions the EPA reviewed for consistency with CAA requirements as part of this rulemaking. B. What the Petitioner Requested The Petition includes three interrelated requests concerning the treatment in SIPs of excess emissions by sources during periods of SSM. 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 and those related to startup or shutdown. Further, the Petitioner requested that the EPA issue a SIP call requiring states to eliminate all such affirmative defense provisions in existing SIPs. As explained later in this final document, the EPA has decided to fully grant this request. Although the EPA initially proposed to grant in part and to deny in part this request in the February 2013 proposal, a subsequent court decision concerning the legal basis for affirmative defense provisions under the CAA caused the Agency to reexamine this question. As a result, the EPA issued the SNPR to present its revised interpretation of the CAA with respect to this issue and to propose action on the Petition and on specific existing affirmative defense provisions in the SIPs of 17 states consistent with the reasoning of that court decision. In this final action, the EPA is revising its SSM Policy with respect to affirmative defenses for violations of SIP requirements. The EPA believes that SIP provisions that function to alter the jurisdiction of the federal courts under CAA section 113 and section 304 to determine liability and to impose remedies are inconsistent with fundamental legal requirements of the CAA, especially with respect to the enforcement regime explicitly created by statute. 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 in particular 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 CAA or 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 final document, the EPA agrees with the Petitioner that some of these existing SIP provisions are legally impermissible and thus finds such provisions “substantially inadequate” 10 to meet CAA requirements. Among the reasons for the EPA's action is to eliminate SIP provisions that interfere with enforcement in a manner prohibited by the CAA. Simultaneously, where the EPA agrees with the Petitioner, the EPA is issuing a SIP call that directs the affected state to revise its SIP accordingly. For the remainder of the identified provisions, however, the EPA disagrees with the contentions of the Petitioner and is thus denying the Petition with respect to those provisions and taking no further action. The EPA's action issuing the SIP calls 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 SSM. The majority of the state-specific provisions affected by this SIP call action are inconsistent with the EPA's longstanding interpretation of the CAA through multiple iterations of its SSM Policy. With respect to SIP provisions that include an affirmative defense for violations of SIP requirements, however, the EPA has revised its prior interpretation of the statute that would have allowed such provisions under certain very limited conditions. Based upon an evaluation of the relevant statutory provisions in light of more recent court decisions, the EPA is issuing a SIP call to address existing affirmative defense provisions that would operate to alter or eliminate the jurisdiction of courts to assess liability and impose remedies and that would thereby contradict explicit provisions of the CAA relating to judicial authority. 10 The term “substantially inadequate” is used in the CAA and is discussed in detail in section VIII.A of this document. 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. Without the ability to rely on a state's interpretive letter that can in a timely way clarify perceived ambiguity in a provision in a SIP submission, however small that ambiguity may be, the EPA may have no recourse other than to disapprove the state's SIP submission. Thus, the EPA is denying 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. C. To which air agencies does this rulemaking apply and why? In general, the final action 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 SSM. For example, the EPA is granting the Petitioner's request that the EPA rescind its prior interpretation of the CAA that, as stated in prior guidance in the SSM Policy, allowed appropriately drawn affirmative defense provisions applicable to malfunctions. The EPA is also reiterating, clarifying or revising its prior guidance with respect to several other issues related to SIP provisions applicable to SSM events 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 reiterating and clarifying its prior guidance concerning how states may elect to replace existing exemptions for excess emissions during SSM events with properly developed alternative emission limitations that apply to the affected sources during startup, shutdown or other normal modes of source operation ( i.e., that apply to excess emissions during those normal modes of operation as opposed to during malfunctions). This action also addresses the use of interpretive letters for purposes of resolving an actual or perceived ambiguity in a SIP submission during the EPA's evaluation of the SIP revision at issue. In addition, this final action is directly relevant to the states with SIP provisions relevant to excess emissions that the EPA has determined are inconsistent with CAA requirements or with the EPA's interpretation of those requirements in the SSM Policy. In this final action, the EPA is either granting or denying 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 (for which the Petitioner identified SIP provisions applicable in 46 statewide and local jurisdictions and no tribal areas) 11 are listed in table 1, “List of States with SIP Provisions for Which the EPA Either Grants or Denies the Petition, in Whole or in Part.” After evaluating the Petition, the EPA is granting the Petition with respect to one or more provisions in 34 of the 39 states listed, and these are the states for which the action on the Petition, according to table 1, is either “Grant” or “Partially grant, partially deny.” Conversely, the EPA is denying the petition with respect to all provisions that the Petitioner identified in 5 of the 39 states, and these (Idaho, Nebraska, New Hampshire, Oregon and Wyoming) are the states for which the final action on the Petition, according to table 1, is “Deny.” 11 The state has the primary responsibility to implement SIP obligations, pursuant to CAA section 107(a). However, as CAA section 110(a)(2)(E) allows, a state may authorize and rely on a local or regional government, agency or instrumentality to carry out the SIP or a portion of the SIP within its jurisdiction. As a result, some of the SIP provisions at issue in this rulemaking apply to specific portions of a state. Thus, in certain states, submission of a corrective SIP revision may involve rulemaking in more than one jurisdiction. Table 1—List of States With SIP Provisions for Which the EPA Either Grants or Denies the Petition, in Whole or in Part EPA region State Final action on petition I Maine Grant. New Hampshire 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 Partially grant, partially deny. 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 Grant. Montana Grant. North Dakota Partially grant, partially deny. South Dakota Grant. Wyoming Deny. IX Arizona Partially grant, partially deny. X Alaska Grant. Idaho Deny. Oregon Deny. Washington Grant. For each state for which the final action on the Petition is either “Grant” or “Partially grant, partially deny,” the EPA finds 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 SSM. With respect to the affirmative defense provisions identified in the Petition, the EPA finds that they improperly impinge upon the statutory jurisdiction of the courts to determine liability and impose remedies for violations of SIP emission limitations. The EPA believes that certain specific provisions in these SIPs fail to meet fundamental statutory requirements intended to attain and maintain the NAAQS, protect prevention of significant deterioration (PSD) increments and improve 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 final action on the Petition is either “Grant” or “Partially grant, partially deny,” the EPA is also in this final action calling for a SIP revision as necessary to correct the identified deficient provisions. The SIP revisions that the states are directed to make 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 have the effect of barring enforcement by the EPA or through a citizen suit and affirmative defense provisions that are inconsistent with CAA requirements. A corrective SIP revision addressing automatic or impermissible discretionary exemptions will ensure that excess emissions during periods of SSM 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 remove affirmative defense provisions will assure that the SIP provision does not purport to alter or eliminate the jurisdiction of federal courts to assess liability or to impose remedies consistent with the statutory authority provided in CAA section 113 and section 304. The particular provisions for which the EPA is requiring SIP revisions are summarized in section IX of this document. 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. For each of the states for which the EPA is denying or is partially denying the Petition, the EPA finds that the particular provisions identified by the Petitioner are not substantially inadequate to meet the requirements pursuant to CAA section 110(k)(5), because the provisions: (i) Are, as they were described in the Petition and as they appear in the existing SIP, consistent with the requirements of the CAA; or (ii) are, as they appear in the existing SIP after having been revised subsequent to the date of the Petition, consistent with the requirements of the CAA; or (iii) have, subsequent to the date of the Petition, been removed from the SIP. Thus, in this final action, the EPA is taking no action to issue a SIP call with respect to those states for those particular SIP provisions. In addition to evaluating specific SIP provisions identified in the Petition, the EPA has independently evaluated additional affirmative defense provisions in the SIPs of six states (applicable in nine statewide and local jurisdictions). 12 As explained in the SNPR, the EPA determined that this approach was necessary in order to take into consideration recent judicial decisions concerning affirmative defense provisions and CAA requirements. As the result of this evaluation, the EPA finds that specific affirmative defense provisions in 17 states (applicable in 23 statewide and local jurisdictions) are substantially inadequate to meet CAA requirements for the reason that these provisions impinge upon the statutory jurisdiction of the federal courts to determine liability and impose remedies for violations of SIP emission limitations. 13 By improperly impinging upon the jurisdiction of the federal courts, the EPA believes, these provisions fail to meet fundamental statutory requirements intended to attain and maintain the NAAQS, protect PSD increments and improve visibility. As with the affirmative defense provisions identified in the Petition, the EPA believes that these 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. 12 The six states in which the EPA independently evaluated affirmative defense provisions are: California; South Carolina, New Mexico, Texas, Washington and West Virginia. The EPA evaluated the New Mexico SIP with respect to provisions applicable to the state and Albuquerque-Bernalillo County. The EPA evaluated the Washington SIP with respect to provisions applicable to the state, the Energy Facility Site Evaluation Council and the Southwest Clean Air Agency. 13 The 17 states for which the EPA finds that specific affirmative defense provisions are substantially inadequate to meet CAA requirements are counted as follows: The EPA evaluated affirmative defense provisions identified by the Petitioner for 14 states: Alaska; Arizona; Arkansas; Colorado; District of Columbia; Georgia; Illinois; Indiana; Kentucky; Michigan; Mississippi; New Mexico; Virginia; and Washington. The EPA evaluated affirmative defense provisions that it independently identified among two states identified by the Petitioner: South Carolina; and West Virginia. Further, the EPA independently identified and evaluated affirmative defense provisions in two states that were not included in the Petition: California; and Texas. In the final action, the EPA is finding one or more affirmative defense provisions to be substantially inadequate in all but one of the 18 states for which the EPA evaluated affirmative defense provisions; for one state, Kentucky, the affirmative defense provision, which was applicable in Jefferson County, was corrected prior to the EPA's issuing its SNPR. In this final action, the EPA is issuing a SIP call to each of 36 states (for provisions applicable in 45 statewide and local jurisdictions) with respect to these provisions. The 36 states are listed in table 2, “List of All States With SIP Provisions Subject to SIP Call.” The EPA emphasizes that this SIP call action pertains to the specific SIP provisions identified and discussed in section IX of this document. The actions required of individual states in response to this SIP call action are discussed in more detail in section IX of this action. Table 2—List of All States With SIP Provisions Subject to SIP Call EPA region State Area I Maine State. Rhode Island State. II New Jersey State. III Delaware State. District of Columbia State. Virginia State. West Virginia State. IV Alabama State. Florida State. Georgia State. Kentucky State. Mississippi State. North Carolina State and Forsyth County. South Carolina State. Tennessee State, Knox County and Shelby County. V Illinois State. Indiana State. Michigan State. Minnesota State. Ohio State. VI Arkansas State. Louisiana State. New Mexico State and Albuquerque-Bernalillo County. Oklahoma State. Texas State. VII Iowa State. Kansas State. Missouri State. VIII Colorado State. Montana State. North Dakota State. South Dakota State. IX Arizona State and Maricopa County. California Eastern Kern APCD, Imperial County APCD and San Joaquin Valley Unified APCD. X Alaska State. Washington State, Energy Facility Site Evaluation Council and Southwest Clean Air Agency. D. What are the next steps for states that are receiving a finding of substantial inadequacy and a SIP call? The EPA is finalizing a finding of substantial inadequacy and issuing a SIP call for the states listed in table 2 ( see section II.C of this document). The EPA is also establishing a deadline by which these states must make a SIP submission to rectify the specifically identified deficiencies in their respective SIPs. Pursuant to CAA section 110(k)(5), the EPA has authority to set a SIP submission deadline that is up to 18 months from the date of the final finding of substantial inadequacy. After considering comment on this issue, the EPA is in this final action establishing a deadline of November 22, 2016, by which each affected state is to respond to the SIP call. The deadline falls 18 months from the date of signature and dissemination of this final finding of substantial inadequacy. Thereafter, the EPA will review the adequacy of that new SIP submission in accordance with the CAA requirements of sections 110(a), 110(k)(3), 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 consistent with the maximum time allowed by statute. E. What are potential impacts on affected states and sources? The issuance of a SIP call requires an affected state to take action to revise its SIP. That action by the state may, in turn, affect sources as described later in this document. The states that are receiving a SIP call in this final action 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 are affected by this SIP call, for example an automatic exemption provision, have to be removed entirely and an affected source could no longer depend on the exemption to avoid all liability for excess emissions during SSM events. Some other provisions, for example a problematic enforcement discretion provision, could either be removed entirely from the SIP or retained if revised appropriately to apply only to state enforcement personnel, 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 its traditional enforcement discretion in its enforcement program. It would merely make the exercise of such discretion case-by-case in nature, as is the normal form of such discretion. In addition, affected states may choose to consider reassessing particular emission limitations, for example to determine whether those emission limitations 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 and meeting other applicable CAA requirements. Such a revision of an emission limitation will need to be submitted as a SIP revision for the EPA's approval if the existing limitation to be changed is already included in the SIP or if the existing SIP relies on the particular existing emission limitation 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 or revising the aspect of the existing SIP 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 did not conduct an analysis that would indicate, e.g., how many owners or operators of sources in each affected state would likely change any procedures or processes for control of emissions from those sources during periods of SSM. The impacts of revised SIP provisions will be unique to each affected state and its particular mix of affected sources, and thus the EPA cannot predict what those impacts might be. Furthermore, the EPA does not believe the results of such analysis, had one been conducted, would significantly affect this rulemaking that pertains to whether SIP provisions comply with CAA requirements. 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 control emissions better so as to comply with emission limitations continuously, as required by the CAA, or to increase durability of components and monitoring systems to detect and manage malfunctions promptly. 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 this SIP call. 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 this SIP call action has failed to submit a complete SIP revision as required, 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. That FIP obligation would be discharged without promulgation of a FIP only if the state makes and the EPA approves the called-for SIP submission. 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 (NSR) 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 of this document. G. What is the status of SIP provisions affected by this SIP call action in the interim period starting when the EPA promulgates the final SIP call and ending when the EPA approves the required SIP revision? When the EPA issues a final SIP call to a state, that action alone does not cause 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 response to the SIP call and the time that the EPA takes to evaluate and act upon the resulting SIP submission from the state 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 affect 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. The EPA is particularly concerned about the potential for serious adverse consequences for public health in this interim period during which states, the EPA and sources make necessary adjustments to rectify deficient SIP provisions and take steps to improve source compliance. However, given the need to resolve these longstanding SIP deficiencies in a careful and comprehensive fashion, the EPA believes that providing sufficient time consistent with statutory constraints for these corrections to occur will ultimately be the best course to meet 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 SSM and the correct treatment of 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 SSM 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, improve 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 a previously approved SIP 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 SSM 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; 14 (ii) disapproved SIP submissions that were not consistent with this interpretation; 15 (iii) itself promulgated regulations in FIPs that were consistent with this interpretation; 16 or (iv) issued a SIP call requiring a state to revise an impermissible SIP provision. 17 14 See “Approval and Promulgation of Implementation Plans; Texas; Excess Emissions During Startup, Shutdown, Maintenance, and Malfunction Activities,” 75 FR 68989 (November 10, 2010). 15 See “Approval and Promulgation of State Implementation Plans; Michigan,” 63 FR 8573 (February 20, 1998). 16 See “Federal Implementation Plan for the Billings/Laurel, MT [Montana], Sulfur Dioxide Area,” 73 FR 21418 (April 21, 2008). 17 See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 76 FR 21639 (April 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 a given SIP provision is consistent with the requirements of the CAA and applicable regulations. 18 18 See generally Catawba County, North Carolina v. EPA, 571 F.3d 20, 33-35 (D.C. Cir. 2009) (upholding the EPA's process for developing and applying its guidance for designations). The Petition raised issues related to excess emissions from sources during periods of SSM, 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.” 19 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.” 20 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. 19 Petition at 2. 20 Petition at 12. The EPA notes that the types of SIP deficiencies identified in the Petition 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 SIP provisions, and of other provisions that interfere with effective enforcement of SIPs, are real-world consequences that adversely affect public health. Commenters on the February 2013 proposal provided illustrative examples of impacts that these types of SIP provisions have on the communities located near sources that rely on automatic or discretionary exemptions for excess emissions during SSM events, rather than by designing, operating and maintaining their sources to meet the applicable emission limitations. 21 These comments also illustrated the ways in which such exemptions, incorrect enforcement discretion provisions and affirmative defense provisions have interfered with the enforcement structure of the CAA by raising inappropriate impediments to enforcement by states, the EPA or citizens. 21 The EPA notes that a number of commenters described the impacts of SIP provisions of these types. See, e.g., comments of Sierra Club, et al., EPA-HQ-OAR-2012-0322-0622, pp. 28-35 (describing impacts on several specific communities); comments of American Bottom Conservancy, EPA-HQ-OAR-2012-0322-0579 (describing impacts on one specific community); and comments of Citizen for Envt'l Justice and Env'l Integrity Project, EPA-HQ-OAR-2012-0322-0621, pp. 8-17 (discussing impacts of such provisions on enforcement more generally). The EPA's memorandum providing a detailed discussion of the statutory, regulatory and policy background for this action can be found in the docket for this rulemaking. 22 22 See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” February 4, 2013, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0029. IV. Final Action in Response To Request To Rescind the EPA Policy Interpreting the CAA To Allow Affirmative Defense Provisions A. What the Petitioner Requested The Petitioner's first request was for the EPA to rescind its SSM Policy element interpreting the CAA to allow affirmative defense provisions in SIPs for excess emissions during SSM events. 23 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. 24 Alternatively, if the EPA denies these two related requests, the Petitioner asked 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. 25 23 Petition at 11. 24 Id. 25 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 Agency's interpretation. Specifically, the Petitioner cited to two statutory grounds, CAA sections 113(b) and 113(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. The Petitioner drew no distinction between affirmative defense provisions for malfunctions versus affirmative defense provisions for startup and shutdown or other normal modes of operation; in the Petitioner's view all are equally inconsistent with CAA requirements. 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.” 26 The Petitioner first argued that in any judicial enforcement action in a 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 district courts to assess monetary penalties for violations if a source is shielded from monetary penalties under an affirmative defense provision in the approved SIP. 27 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.” 28 26 Petition at 10. 27 Id. 28 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. 29 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. 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.” 30 A more detailed explanation of the Petitioner's arguments appears in the 2013 February proposal. 31 29 Petition at 11. 30 Petition at 11. 31 See February 2013 proposal, 78 FR 12459 at 12468 (February 22, 2013). B. What the EPA Proposed In the February 2013 proposal, consistent with its interpretation of the Act at that time, the EPA proposed to deny in part and to grant in part the Petition with respect to this overarching issue. As a revision to the SSM Policy as embodied in the 1999 SSM Guidance, the EPA proposed a distinction between affirmative defenses for unplanned events such as malfunctions and planned events such as startup and shutdown. The EPA explained the basis for its initial proposed action in detail, including why the Agency then believed that there was a statutory basis for narrowly drawn affirmative defense provisions that met certain criteria applicable to malfunction events but no such statutory basis for affirmative defense provisions applicable to startup and shutdown events. In the February 2013 proposal, the EPA also proposed to deny in part and to grant in part the Petition with respect to specific affirmative defense provisions in the SIPs of various states identified in the Petition consistent with that interpretation. With respect to these specific existing SIP provisions, the EPA distinguished between those provisions that were consistent with the Agency's interpretation of the CAA as set forth in 1999 SSM Guidance and were limited to malfunction events and other affirmative defense provisions that were not limited to malfunctions or otherwise not consistent with the Agency's interpretation of the CAA and included one or more deficiencies. Subsequent to the February 2013 proposal, however, a judicial decision by the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) in NRDC v. EPA concerning the legal basis for affirmative defense provisions in the EPA's own regulations caused the Agency to reconsider the legal basis for any affirmative defense provisions in SIPs, regardless of the type of events to which they apply, the criteria they may contain or the types of judicial remedies they purport to limit or eliminate. 32 Thus, the EPA issued an SNPR to revise its proposed response to the Petition with respect to whether affirmative defense provisions in SIPs are consistent with fundamental legal requirements of the CAA. 33 In the SNPR, the EPA also revised its proposed response related to each of the specific affirmative defense provisions identified in the Petition. Changes to the proposed response included revision of the basis for the proposed finding of substantial inadequacy for many of the provisions (to incorporate the EPA's revised interpretation of the CAA into that basis). Other changes to the proposed response included reversal of the proposed denial of the Petition for some provisions that the Agency previously believed to be consistent with CAA requirements but subsequently determined were not authorized by the Act under the analysis prompted by the NRDC v. EPA decision. In order to provide comprehensive guidance to all states concerning affirmative defense provisions in SIPs and to avoid confusion that may arise due to recent court decisions relevant to such provisions under the CAA, the EPA also addressed additional existing SIP affirmative defense provisions of which it was aware although the provisions were not specifically identified in the Petition. The EPA initially examined the specific affirmative defense provisions identified by the Petitioner in 14 states but subsequently broadened its review to include additional provisions in four states, including two states that were not included in the Petition. Most importantly, the EPA provided a detailed explanation in the SNPR as to why it now believes that the logic of the court in the NRDC v. EPA decision vacating the affirmative defense in an Agency emission limitation under CAA section 112 likewise extends to affirmative defense provisions in SIPs. 32 See NRDC v. EPA, 749 F.3d 1055 (D.C. Cir. 2014). 33 See SNPR, 79 FR 55919 (September 17, 2014). C. What Is Being Finalized in This Action The EPA is taking final action to grant the Petition on the request to rescind its SSM Policy element that interpreted the CAA to allow states to elect to create affirmative defense provisions in SIPs. The EPA is also taking final action to grant the Petition on the request to make a finding of substantial inadequacy and to issue SIP calls for specific existing SIP provisions that include an affirmative defense as identified in the SNPR. The specific SIP provisions at issue are discussed in section IX of this document. These existing affirmative defense provisions include some provisions that the EPA had previously determined were consistent with the CAA as interpreted in the 1999 SSM Guidance and other provisions that were not consistent even with that interpretation of the CAA. As explained in the SNPR, the EPA has now concluded that the enforcement structure of the CAA, embodied in section 113 and section 304, precludes any affirmative defense provisions that would operate to limit a court's jurisdiction or discretion to determine the appropriate remedy in an enforcement action. These provisions are not appropriate under the CAA, no matter what type of event they apply to, what criteria they contain or what forms of remedy they purport to limit or eliminate. The EPA is revising its interpretation of the CAA with respect to affirmative defenses based upon a reevaluation of the statutory provisions that pertain to enforcement of SIP provisions in light of recent court opinions. Section 113(b) provides courts with explicit jurisdiction to determine liability and to impose remedies of various kinds, including injunctive relief, compliance orders and monetary penalties, in judicial enforcement proceedings. This grant of jurisdiction comes directly from Congress, and the EPA is not authorized to alter or eliminate this jurisdiction under the CAA or any other law. With respect to monetary penalties, CAA section 113(e) explicitly includes the factors that courts and the EPA are required to consider in the event of judicial or administrative enforcement for violations of CAA requirements, including SIP provisions. Because Congress has already given federal courts the jurisdiction to determine what monetary penalties are appropriate in the event of judicial enforcement for a violation of a SIP provision, neither the EPA nor states can alter or eliminate that jurisdiction by superimposing restrictions on that jurisdiction and discretion granted by Congress to the courts. Affirmative defense provisions by their nature purport to limit or eliminate the authority of federal courts to determine liability or to impose remedies through factual considerations that differ from, or are contrary to, the explicit grants of authority in section 113(b) and section 113(e). Accordingly, pursuant to section 110(k) and section 110(l), the EPA cannot approve any such affirmative defense provision in a SIP. If such an affirmative defense provision is included in an existing SIP, the EPA has authority under section 110(k)(5) to require a state to remove that provision. States have great discretion in how to devise SIP provisions, but they do not have discretion to create provisions that contradict fundamental legal requirements of the CAA. The jurisdiction of federal courts to determine liability and to impose statutory remedies for violations of SIP emission limitations is one such fundamental requirement. The court in the recent NRDC v. EPA decision did not remand the regulation to the EPA for better explanation of the legal basis for an affirmative defense; the court instead vacated the affirmative defense and indicated that there could be no valid legal basis for such a provision because it contradicted fundamental requirements of the CAA concerning the jurisdiction of courts in judicial enforcement of CAA requirements. A more detailed explanation of the EPA's basis for determining that affirmative defense provisions in SIPs are similarly contrary to the requirements of the CAA appears in the SNPR. 34 34 See 79 FR 55919 at 12931-34 (September 17, 2014). Couching an affirmative defense provision in terms of merely defining whether the emission limitation applies and thus whether there is a “violation,” as suggested by some commenters, is also problematic. If there is no “violation” when certain criteria or conditions for an “affirmative defense” are met, then there is in effect no emission limitation that applies when the criteria or conditions are met; the affirmative defense thus operates to create an exemption from the emission limitation. As explained in the February 2013 proposal, the CAA requires that emission limitations must apply continuously and cannot contain exemptions, conditional or otherwise. This interpretation is consistent with the decision in Sierra Club v. Johnson concerning the term “emission limitation” in section 302(k). 35 Characterizing the exemptions as an “affirmative defense” runs afoul of the requirement that emission limitations must apply continuously. 35 551 F.3d 1019 (D.C. Cir. 2008). The EPA recognizes that the original policy objectives behind states' affirmative defense provisions were likely well-intentioned, e.g., to encourage better source design, maintenance and operation through the incentive of being shielded from certain statutory remedies for violations under certain specified conditions. Nevertheless, creation of SIP provisions that would operate to limit or eliminate the jurisdiction of courts to determine liability or to impose remedies provided for by statute is inconsistent with the enforcement structure of the CAA. The EPA emphasizes that the absence of an affirmative defense provision in a SIP, whether as a freestanding generally applicable provision or as a specific component of a particular emission limitation, does not mean that all exceedances of SIP emission limitations will automatically be subject to enforcement or automatically be subject to imposition of particular remedies. Pursuant to the CAA, all parties with authority to bring an enforcement action to enforce SIP provisions ( i.e., the state, the EPA or any parties who qualify under the citizen suit provision of section 304) have enforcement discretion that they may exercise as they deem appropriate in any given circumstances. For example, if the event that causes excess emissions is an actual malfunction that occurred despite reasonable care by the source operator to avoid malfunctions, then each of these parties may decide that no enforcement action is warranted. In the event that any party decides that an enforcement action is warranted, then it has enforcement discretion with respect to what remedies to seek from the court for the violation ( e.g., injunctive relief, compliance order, monetary penalties or all of the above), as well as the type of injunctive relief and/or amount of monetary penalties sought. 36 Further, courts have the discretion under section 113 to decline to impose penalties or injunctive relief in appropriate cases as explained below. 36 The EPA notes that only the state and the Agency have authority to seek criminal penalties for knowing and intentional violation of CAA requirements. The EPA has this explicit authority under section 113(c). Similarly, the absence of an affirmative defense provision in a SIP does not alter the legal rights of sources under the CAA. In the event of an enforcement action for an exceedance of a SIP emission limit, a source can elect to assert any common law or statutory defenses that it determines is supported, based upon the facts and circumstances surrounding the alleged violation. Under section 113(b), courts have explicit authority to impose injunctive relief, issue compliance orders, assess monetary penalties or fees and impose any other appropriate relief. Under section 113(e), courts are required to consider the enumerated statutory factors when assessing monetary penalties, including “such other factors as justice may require.” For example, if the exceedance of the SIP emission limitation occurs due to a malfunction, that exceedance is a violation of the applicable emission limitation, but the source retains the ability to defend itself in an enforcement action and to oppose the imposition of particular remedies or to seek the reduction or elimination of monetary penalties, based on the specific facts and circumstances of the event. Thus, elimination of a SIP affirmative defense provision that purported to take away the statutory jurisdiction of the court to exercise its authority to impose remedies does not disarm sources in potential enforcement actions. Sources retain all of the equitable arguments they could previously have made under an affirmative defense provision; they must simply make such arguments to the reviewing court as envisioned by Congress in section 113(b) and section 113(e). Congress vested the courts with the authority to judge how best to weigh the evidence in an enforcement action and determine appropriate remedies. Removal of such impermissible SIP affirmative defense provisions is necessary to preserve the enforcement structure of the CAA, to preserve the jurisdiction of courts to adjudicate questions of liability and remedies in judicial enforcement actions and to preserve the potential for enforcement by states, the EPA and other parties under the citizen suit provision as an effective deterrent to violations. In turn, this deterrent encourages sources to be properly designed, maintained and operated and, in the event of violation of SIP emission limitations, to take appropriate action to mitigate the impacts of the violation. In this way, as intended by the existing enforcement structure of the CAA, sources can mitigate the potential for enforcement actions against them and the remedies that courts may impose upon them in such enforcement actions, based upon the facts and circumstances of the event. D. Response to Comments Concerning Affirmative Defense Provisions in SIPs The EPA received numerous comments concerning the portion of the Agency's proposed response to the Petition in the February 2013 proposal that addressed the question of whether affirmative defense provisions are consistent with CAA requirements for SIPs. As explained in the SNPR, those particular comments submitted on the original February 2013 proposal are no longer germane, given that the EPA has substantially revised its initial proposed action on the Petition and its basis, both with respect to the overarching issue of whether such provisions are valid in SIPs under the CAA and with respect to specific affirmative defense provisions in existing SIPs of particular states. Accordingly, as the EPA indicated in the SNPR, it considers those particular comments on the February 2013 proposal no longer relevant and has determined that it is not necessary to respond to them. Concerning affirmative defense provisions, the appropriate focus of this rulemaking is on the comments that addressed the EPA's revised proposal in the SNPR. With respect to the revised proposal concerning affirmative defense provisions in the SNPR, the EPA received numerous comments, some supportive and some critical of the Agency's proposed action on the Petition as revised in the SNPR. Many of these comments raised conceptual issues and arguments concerning the EPA's revised interpretation of the CAA with respect to affirmative defense provisions in SIPs in light of the NRDC v. EPA decision and concerning the EPA's application of that interpretation to specific affirmative defense provisions discussed in the SNPR. For clarity and ease of discussion, the EPA is responding to these overarching comments, grouped by issue, in this section of this document. 1. Comments that the EPA is misapplying the decision of the D.C. Circuit in NRDC v. EPA to SIP provisions because the decision only applies to the Agency's own regulations pursuant to CAA section 112. Comment: Many commenters stated that the EPA's reliance on the D.C. Circuit's decision in NRDC v. EPA is misplaced in the SNPR because the opinion is limited to disapproval of a Maximum Achievable Control Technology (MACT) standard's affirmative defense for unavoidable malfunctions. The commenters noted that the NRDC v. EPA decision did not address the issue of affirmative defense provisions in SIPs. The commenters argued that the D.C. Circuit's opinion only stands for the narrow proposition that the EPA may not include an affirmative defense to civil penalties in a NESHAP 37 under CAA section 112. 37 The NESHAPs are found in 40 CFR part 61 and 40 CFR part 63. The NESHAPs promulgated after the 1990 CAA Amendments are found in 40 CFR part 63. These standards require application of technology-based emissions standards referred to as Maximum Achievable Control Technology (MACT). Consequently, these post-1990 NESHAPs are also referred to as MACT standards. One commenter noted that the EPA, in the SNPR, stated that the NRDC v. EPA decision did not turn on any factors specific to CAA section 112 as support for the EPA applying the decision to SIPs. However, the commenter argued that this fact is not probative because neither party raised any argument specific to CAA section 112 and it is reasonable for a court to limit its analysis to the arguments presented before it. One commenter also noted that the EPA is not bound to apply D.C. Circuit law to actions reviewable in other circuits. Response: As explained in the SNPR, the EPA believes the reasoning of the court in the NRDC v. EPA decision indicates that states, like the EPA, have no authority in SIP provisions to alter the jurisdiction of federal courts to assess penalties for violations of CAA requirements through affirmative defense provisions. 38 If states lack authority under the CAA to alter the jurisdiction of the federal courts through affirmative defense provisions in SIPs, then the EPA lacks authority to approve any such provision in a SIP. 38 See 79 FR 55929-30; 55931-34. The EPA agrees with the commenters' statement that the NRDC v. EPA decision pertained to a challenge to the EPA's NESHAP regulations issued pursuant to CAA section 112 to regulate hazardous air pollutants (HAPs) from sources that manufacture Portland cement. However, the EPA disagrees with the commenters' contention that, because the NRDC v. EPA decision was based on a NESHAP, it is somehow inappropriate for the EPA to rely on the reasoning of the D.C. Circuit's decision as a basis for this action. As acknowledged by a commenter, the EPA explained in the SNPR that the NRDC v. EPA decision did not turn on the specific provisions of CAA section 112. 39 However, the commenter missed the importance of this point. Although the NRDC v. EPA decision analyzed the legal validity of an affirmative defense provision created by the EPA in conjunction with a specific NESHAP, the court based its decision upon the provisions of sections 113 and 304. Sections 113 and 304 pertain to enforcement of the CAA requirements more broadly, including to enforcement of SIP requirements. The court addressed section 112 and not sections germane specifically to SIPs, as only that section was before it. The EPA has applied the NRDC court's analysis to sections 113 and 304 with respect to SIPs and has concluded that the NRDC court's analysis is the better reading of the statutory provisions. 39 SNPR, 79 FR 55919 at 55932. The affirmative defense provision in the Portland Cement NESHAP required the source to prove, by a preponderance of the evidence in an enforcement proceeding, that the source met specific criteria concerning the nature of the event. These specific criteria required to establish the affirmative defense in the Portland Cement NESHAP are functionally the same as the criteria that the EPA previously recommended to states for SIP provisions in the 1999 SSM Guidance and that the EPA repeated in the February 2013 proposal document. Accordingly, the EPA believes that the opinion of the court in NRDC v. EPA has significant impacts on the Agency's SSM Policy with respect to affirmative defense provisions. The reasoning by the NRDC court, as logically extended to SIP provisions, indicates that neither states nor the EPA have authority to alter either the rights of other parties to seek relief or the jurisdiction of federal courts to impose relief for violations of CAA requirements in SIPs. The EPA believes that the court's decision in NRDC v. EPA compelled the Agency to reevaluate its interpretation of the CAA as described in the SNPR. The EPA also disagrees with commenters who suggested that a decision of the D.C. Circuit should have no bearing on actions that affect states in other circuit courts. The CAA vests authority with the D.C. Circuit to review nationally applicable regulations and any action of nationwide scope or effect. Accordingly, any decision of the D.C. Circuit in conducting such review is binding nationwide with respect to the action under review, and the D.C. Circuit's reasoning is also binding with respect to review of future EPA actions raising the same issues that will be subject to review within that Circuit. Given that the EPA has determined that this action has nationwide scope and effect, it is subject to exclusive review in the D.C. Circuit, so the EPA believes it is appropriate to apply the reasoning of the NRDC court, which interprets CAA sections 113 and 304, to determine the legality of affirmative defense provisions in this national action. 40 40 CAA section 307(b)(1). 2. Comments that the EPA is misapplying the decision of the D.C. Circuit in NRDC v. EPA to SIP provisions because the court did not address the legality of affirmative defense provisions in SIPs. Comment: Many commenters alleged that the EPA inappropriately relied on the D.C. Circuit's decision in NRDC v. EPA in the SNPR because the court specifically stated that its decision did not address whether affirmative defense provisions in SIPs were appropriate. The commenters pointed to the second footnote in the decision, in which the court explicitly stated: “We do not here confront the question whether an affirmative defense may be appropriate in a State Implementation Plan.” 41 Accordingly, the commenters argued that the NRDC v. EPA decision is “non-binding” with respect to SIP provisions. 41 749 F.3d 1055, 1064, n.2. Response: The EPA disagrees that the footnote relied upon by commenters renders application of the legal interpretation of the NRDC court to SIP provisions improper. The EPA specifically acknowledged and discussed the footnote in the NRDC v. EPA decision in the SNPR. The EPA explained its view of the significance of the footnote: “footnote 2 in the opinion does not signify that the court intended to take any position with respect to the application of its interpretation of the CAA to SIP provisions, let alone to suggest that its interpretation would not apply more broadly.” As discussed in the SNPR in detail, the EPA believes the logic of the court's decision in NRDC v. EPA regarding the interpretation of sections 113 and 304 concerning affirmative defenses does extend to SIP provisions. 3. Comment that the EPA is inappropriately relying on the NRDC v. EPA decision because the DC Circuit's decision was decided in error. Comment: One commenter alleged that the EPA's reliance on the NRDC v. EPA decision is misplaced because the court in that decision mistakenly relied on section 304(a) when holding that the EPA cannot restrict the jurisdiction of the courts with affirmative defense provisions. The commenter alleged that Congress did not intend to give the judiciary “fully-unfettered discretion” in section 304(a) because such a reading cannot be squared with section 304(b), which provides that “[n]o action can be commenced . . . if the Administrator or State has commenced and is diligently prosecuting a civil action in a court of the United States.” Response: The EPA does not agree with the commenter's premise that the NRDC court erred by not considering section 304(b) as well as section 304(a). As the court correctly reasoned, section 304(a) authorizes any person to bring an enforcement action for violations of emission limitations. Section 304(f) defines the term “emission limitation” for this purpose very broadly. Section 304(b) does not alter the rights of any person who has given proper notice to bring such an action under section 304(a), unless the EPA or the state is diligently prosecuting a civil action to require compliance. The fact that section 304(b) limits the ability of any person to bring an enforcement action (as opposed to intervening in such action) if the EPA or the state is pursuing enforcement has no bearing upon whether the EPA or a state could seek to alter or eliminate the jurisdiction of the courts to determine liability or to impose remedies for violations of SIP emission limitations in judicial enforcement. The EPA also does not believe that this rulemaking is the appropriate forum in which to challenge the court's decision. 4. Comments that the court's reasoning in the NRDC v. EPA decision does not apply to affirmative defenses in SIP provisions because if a source qualifies for an affirmative defense, then there has been no violation. Comment: Several commenters stated that the D.C. Circuit's analysis in the NRDC v. EPA opinion is based on statutory language that indicates Congress intended the courts, not the EPA, to decide what constitutes an appropriate penalty once a violation has occurred. The commenters argued that if a SIP provision contains an affirmative defense, and if a source meets the requirements to qualify for that affirmative defense, then there is no violation of the SIP requirements. One commenter contended that if there is no violation, then the courts have no jurisdiction to award any remedies and thus there can be no concern that the affirmative defense provision alters or eliminates the jurisdiction of the courts. Another commenter argued that affirmative defense provisions in the context of a SIP can be described as limitations on the application of an emission limitation to the conditions under which the emission reduction technology can be effectively operated. The commenters stated that the NRDC court did not address the EPA's or states' authority to establish requirements that determine, in the first instance, whether a violation has occurred. Response: The EPA disagrees with the commenters' arguments that affirmative defense provisions are appropriate in SIPs if they merely define what constitutes a violation. As explained in detail in the SNPR, the EPA believes that SIP provisions with affirmative defenses that operate to limit or eliminate the jurisdiction of the courts to determine liability and to impose remedies are not consistent with CAA requirements. Under the commenters' theory, such provisions would not improperly impinge on the jurisdiction of the courts to impose remedies for violations by redefining what constitutes a “violation.” First, the EPA does not agree that all affirmative defense provisions in the SIPs at issue in this action are constructed in this way. Some, including those that the EPA previously approved as consistent with the Agency's 1999 SSM Guidance, explicitly provide that the excess emissions that occur are still violations, but a source could be excused from monetary penalties if the source met the criteria for the affirmative defense. Under the EPA's prior interpretation of the CAA, the legal basis for any affirmative defense started with the fact that the excess emissions still constituted a violation and injunctive relief would still be available as appropriate. As explained in the SNPR and this document, the EPA no longer interprets the CAA to allow even narrowly drawn affirmative defense provisions in SIPs, let alone those advocated by the commenters that would provide a complete bar to any type of judicial remedy provided for in section 113(b). Second, even if a specific affirmative defense provision were worded in the way that the commenters' claim, then that provision would be deficient for other reasons. Under the commenters' premise, if certain criteria are met then there is no “violation” for excess emissions during SSM events. The EPA's view is that this formulation of an affirmative defense in effect means that there is no emission limitation that applies when the criteria are met, i.e., the affirmative defense operates to create a conditional exemption for emissions from the source during SSM events. Such an approach would be inconsistent with the decision in Sierra Club v. Johnson concerning the term “emission limitation” in section 302(k). 42 Exemptions for emissions during SSM events, whether automatic or conditional based upon the criteria of an affirmative defense, are inconsistent with the requirement for continuous controls on sources. 42 551 F.3d 1019 (D.C. Cir. 2008). Finally, the EPA believes that the commenters' premise that an affirmative defense provision merely defines what a violation is also runs afoul of other fundamental requirements for SIP provisions. To the extent any such provision would allow state personnel to decide, unilaterally, whether excess emissions during an SSM event constitute a violation ( e.g., through application of an “affirmative defense”), this would interfere with the ability of the EPA or other parties to enforce for violations of SIP requirements. The EPA interprets the CAA to prohibit SIP provisions that impose the enforcement discretion decisions of a state on other parties. This includes provisions that are structured or styled as an affirmative defense but in effect allow ad hoc conditional exemptions from emission limitations and preclude enforcement for excess emission during SSM events. 5. Comments that the NRDC v. EPA decision, which concerned an emission limitation under section 112, does not apply in the context of section 110, because section 110 affords states flexibility in how to develop emission limitations in SIP provisions. Comment: Commenters argued that the EPA's extension of the logic of the NRDC v. EPA decision to affirmative defenses in SIP provisions is incorrect because the EPA's NESHAP standards are governed by section 112, whereas SIP provisions are governed by section 110. Under the latter, commenters asserted, states are afforded wide discretion in how to develop emission limitations. 43 The commenters stated that section 110 governs the development of state SIPs to satisfy the NAAQS, which may address many different types of sources, major and minor, industrial and non-industrial, small and large, and old and new. The commenters alleged that states have independent authority to include affirmative defenses in SIP provisions, so long as the provisions are otherwise approvable, because the state has met its section 110 planning responsibilities and the SIP is enforceable. 43 See, e.g., Train v. NRDC, 421 U.S. 60, 79 (1975). Response: The EPA agrees with the commenters that section 110 governs the development of state SIPs and that states are accorded great discretion in determining how to meet CAA requirements in SIPs. However, as explained in the February 2013 proposal, the SNPR and sections IV.D.13 and V.D.2 of this document, states are obligated to develop SIP provisions that meet fundamental CAA requirements. The EPA has the responsibility to review SIP provisions developed by states to ensure that they in fact meet fundamental CAA requirements. As explained in the SNPR and this document, the EPA no longer believes that affirmative defense provisions meet CAA requirements. Based on the logic of the court in the NRDC v. EPA decision, the better reading of the statute is that such provisions have the effect of limiting or eliminating the statutory jurisdiction of the courts to determine liability or impose remedies. The EPA also disagrees with the commenters' arguments that “emission limitations” under section 112 and section 110 are not comparable with respect to meeting fundamental CAA requirements. As an initial matter, both section 112 MACT standards and section 110 SIP emission limitations can be composed of various elements that include, among other things, numerical emission limitations, work practice standards and monitoring and recordkeeping requirements. However, whether there are other components that are part of the emission limitation to make it apply continuously is not relevant for purposes of determining whether an affirmative defense provision that provides relief from penalties for a violation of either a MACT standard under section 112 or a SIP provision under section 110 is consistent with the CAA. As explained in the SNPR, the EPA has revised its interpretation of the CAA with respect to affirmative defense provisions in SIPs, based upon the logic of the court in the NRDC v. EPA decision. Section 304(a) sets forth the basis for a civil enforcement action and section 113(a)(1) does the same for administrative or judicial enforcement actions brought by the EPA. Sections 113(b) and 304(a) provide the federal district courts with jurisdiction to hear civil enforcement cases. Furthermore, section 113(e) confers jurisdiction on the district court in a civil enforcement case to determine the amount of penalty to be assessed where a violation has been established. 6. Comments that the NRDC v. EPA decision does not pertain to the appropriateness of affirmative defense provisions in the context of state administrative or civil enforcement. Comment: Some commenters noted that the NRDC court only reviewed whether affirmative defense provisions could be used to limit CAA citizen suit remedies in judicial enforcement actions. The commenters alleged that the use of an affirmative defense in a citizen suit under federal regulations does not dictate the appropriateness of similar provisions in the context of state administrative or civil actions. According to the commenters, a SIP represents an air quality management system and the state administrative process is distinct from federal citizen suits. Similarly, the commenters believed that SIP emission limitations are enforceable via state regulation penalty provisions that are separate from the CAA civil penalty provisions. Because the NRDC court spoke only to the appropriateness of affirmative defense provisions in the context of federal citizen suits, the commenters asserted, the decision is inapplicable in the EPA's SIP call action. Response: The EPA agrees that the court in the NRDC v. EPA decision did not speak directly to the issue of whether states can establish affirmative defenses to be used by sources exclusively in state administrative enforcement actions or in judicial enforcement in state courts. The reasoning of the NRDC court indicates only that such provisions would be inconsistent with the CAA in the context of judicial enforcement of SIP requirements in federal court. Indeed, the NRDC court suggested that if the EPA elected to consider factors comparable to the affirmative defense criteria in its own administrative enforcement proceedings, it may be able to do so. The implication of the commenters, however, is that the EPA should interpret the CAA to allow affirmative defenses in SIP provisions, so long as it is unequivocally clear that sources cannot assert the affirmative defenses in federal court enforcement actions and cannot assert the affirmative defenses in enforcement actions brought by any party other than the state. The EPA of course agrees that states can exercise their own enforcement discretion and elect not to bring an enforcement action or seek certain remedies, using criteria analogous to an affirmative defense. It does not follow, however, that states can impose this enforcement discretion on other parties by adopting SIP provisions that would apply in federal judicial enforcement, or in enforcement brought by the EPA or other parties. To the extent that the state developed an “enforcement discretion” type provision that applied only in its own administrative enforcement actions or only with respect to enforcement actions brought by the state in state courts, such a provision may be appropriate. This authority is not unlimited because the state could not create affirmative defense provision that in effect undermines its legal authority to enforce SIP requirements. Section 110(a)(2)(C) requires states to have a program that provides for enforcement of the state's SIP, and enforcement discretion provisions that unreasonably limit the state's own authority to enforce the requirements of the SIP would be inconsistent with section 110(a)(2)(C). The EPA's obligations with respect to SIPs include determining whether states have adequate enforcement authority. 7. Comments that the EPA's proposal is inappropriate because it runs counter to previous court decisions, including the decision of the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit) in Luminant Generation v. EPA. Comment: Many commenters on the SNPR argued that the decision of the Fifth Circuit in Luminant Generation v. EPA precludes the EPA's proposed action concerning affirmative defenses in SIP provisions, in general and with respect to the provisions in the Texas SIP in particular. The commenters noted that the court upheld the EPA's approval of an affirmative defense provision for unavoidable excess emissions during unplanned SSM events in the Texas SIP. 44 The commenters argued that the Fifth Circuit ruled that in approving the Texas SIP affirmative defense provision, the EPA “acted neither contrary to law nor in excess of its statutory authority.” 45 According to the commenters, the court specifically considered and rejected arguments by litigants concerning sections 113 and 304. Some commenters argued that the court also considered and “decisively rejected” the legal arguments articulated by the EPA in the SNPR. The commenters alleged that the Luminant Generation v. EPA decision demonstrates that affirmative defenses for malfunctions are permissible in SIP provisions. The commenters contended that, because the Fifth Circuit in Luminant Generation v. EPA specifically considered whether an affirmative defense provision applicable to malfunctions included in a SIP violates the CAA, unlike the D.C. Circuit in NRDC v. EPA, the EPA should follow the Luminant Generation v. EPA decision rather than the D.C. Circuit decision in NRDC v. EPA. 44 714 F.3d 841 (5th Cir. 2013). 45 Id. at 853. The EPA notes that the Fifth Circuit also upheld the Agency's disapproval of the affirmative defense provisions that the state sought to create for “planned” events. Some commenters also pointed out that the D.C. Circuit, in the recent NRDC v. EPA decision, mentioned and cited the Luminant Generation v. EPA opinion and did not expressly disagree with the Fifth Circuit's holding. One commenter noted that if the NRDC court believed that the issue it was deciding was the same as the issue decided in Luminant Generation v. EPA, the D.C. Circuit would have explicitly stated that it was declining to follow the Fifth Circuit on the issue instead of acknowledging that the issue upon which the Fifth Circuit ruled was not before the D.C. Circuit. Several commenters also argued that, because the Fifth Circuit previously determined in Luminant Generation v. EPA that the Texas SIP affirmative defense provision at issue in this SIP call action is consistent with CAA sections 113 and 304, the EPA does not have any legal authority under the CAA to finalize the action proposed in SNPR. Some commenters further stated that the EPA lacks authority to disagree with the Fifth Circuit's determination of the law as applied to a state within the Fifth Circuit's jurisdiction. These commenters believed that if the EPA were to finalize the action discussed in the SNPR with respect to the affirmative defense for malfunctions in the Texas SIP, this action would violate the mandate rule. Some commenters also alleged that courts outside the Fifth Circuit, including the D.C. Circuit, will apply principles of claim preclusion, or res judicata, to give effect to the Fifth Circuit's prior adjudication on the legal basis for the affirmative defense in the Texas SIP. One commenter claimed that the EPA's “failure” to address how the holdings in Luminant Generation v. EPA will no longer apply and how the EPA is exempt from the court's mandate render the theories presented in the SNPR unsupported as a basis for the SIP call action. Some commenters alleged that the EPA is bound by its own prior representations before the Fifth Circuit, in which it asserted and defended its approval of the affirmative defense provision for malfunctions in the Texas SIP, under the doctrine of judicial estoppel. 46 Similarly, the commenters alleged that under the doctrine of issue preclusion, or collateral estoppel, the EPA is precluded from re-litigating the issues previously considered and determined by the Fifth Circuit, regardless of where any subsequent challenge to this final action is brought. 46 See, e.g., New Hampshire v. Maine, 532 U.S. 742, 749 (2001). Some commenters also cited to other circuit court decisions that have upheld the EPA's approvals of affirmative defense provisions for malfunctions. 47 The commenters alleged that other than calling the NRDC v. EPA decision a newer decision, the EPA did not explain its justification for relying on the NRDC v. EPA opinion instead of following the three circuit court decisions that are directly on point. 47 See Montana Sulphur & Chemical Co. v. EPA, 666 F.3d 1174 (9th Cir. 2012); Arizona Public Service Co. v. EPA, 562 F.3d 1116 (10th Cir. 2009). Response: The EPA disagrees with the commenters' arguments concerning the application of the court's decision in Luminant Generation v. EPA to this SIP call action. As explained in the SNPR, the EPA acknowledges that it has previously approved affirmative defenses in SIP provisions or, when appropriate, promulgated affirmative defenses in FIPs. The EPA also acknowledged that its approval of an affirmative defense provision applicable to “unplanned events” ( i.e., malfunctions) in a Texas SIP submission was upheld in 2012 by the U.S. Court of Appeals for the Fifth Circuit. In that litigation, the EPA argued that sections 113 a [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2015-12905. Public record. Not legal advice.