[Federal Register Volume 80, Number 113 (Friday, June 12, 2015)]
[Rules and Regulations]
[Pages 33839-33985]
[FR Doc No: 2015-12905]

Vol. 80

Friday,

No. 113

June 12, 2015

Part IV

Environmental Protection Agency

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40 CFR Part 52

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; Final Rule

Federal Register / Vol. 80 , No. 113 / Friday, June 12, 2015 / Rules
and Regulations

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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.

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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<PHONE_NUMBER>, and the telephone number for the Office
of Air and Radiation Docket is<PHONE_NUMBER>.

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<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: For information related to a specific SIP,
please contact the appropriate EPA Regional Office:

------------------------------------------------------------------------
                           Contact for Regional
                             Office  (person,
  EPA Regional  Office       mailing address,              State
                            telephone number)
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I......................  Alison Simcox,           Connecticut,
                          Environmental            Massachusetts, Maine,
                          Scientist, EPA Region    New Hampshire, Rhode
                          1, 5 Post Office         Island and Vermont.
                          Square, Suite 100,
                          Boston, MA 02109-3912,
<PHONE_NUMBER>.
II.....................  Karl Mangels, Chief,     New Jersey, New York,
                          Air Planning Section,    Puerto Rico and
                          EPA Region 2, 290        Virgin Islands.
                          Broadway, 25th Floor,
                          New York, NY 10007-
                          1866,<PHONE_NUMBER>.
III....................  Amy Johansen, EPA        District of Columbia,
                          Region 3, 1650 Arch      Delaware, Maryland,
                          Street, Philadelphia,    Pennsylvania,
                          PA 19103-2029, (215)     Virginia and West
                          814-2156.                Virginia.
IV.....................  Joel Huey, EPA Region    Alabama, Florida,
                          4, Atlanta Federal       Georgia, Kentucky,
                          Center, 61 Forsyth       Mississippi, North
                          Street SW., Atlanta,     Carolina, South
                          GA 30303-8960, (404)     Carolina and
                          562-9104.                Tennessee.
V......................  Mary Portanova, Air and  Illinois, Indiana,
                          Radiation Division (AR-  Michigan, Minnesota,
                          18J), EPA Region 5, 77   Ohio and Wisconsin.
                          West Jackson
                          Boulevard, Chicago, IL
                          60604-3507, (312) 353-
                          5954.
VI.....................  Alan Shar (6PD-L), EPA   Arkansas, Louisiana,
                          Region 6, Fountain       New Mexico, Oklahoma
                          Place 12th Floor,        and Texas.
                          Suite 1200, 1445 Ross
                          Avenue, Dallas, TX
                          75202-2733, (214) 665-
                          6691.
VII....................  Lachala Kemp, EPA        Iowa, Kansas, Missouri
                          Region 7, Air Planning   and Nebraska.
                          and Development
                          Branch, 11201 Renner
                          Boulevard, Lenexa, KS
                          66219-9601, (913) 551-
                          7214. Alternate
                          contact is Ward Burns,
<PHONE_NUMBER>.
VIII...................  Adam Clark, Air Quality  Colorado, Montana,
                          Planning Unit (8P-AR)    North Dakota, South
                          Air Program, EPA         Dakota, Utah and
                          Region 8, 1595 Wynkoop   Wyoming.
                          Street, Denver, CO
                          80202-1129, (303) 312-
                          7104.
IX.....................  Andrew Steckel, EPA      Arizona, California,
                          Region 9, Air            Hawaii, Nevada and
                          Division, 75 Hawthorne   the Pacific Islands.
                          Street (AIR-4), San
                          Francisco, CA 94105-
                          3901,<PHONE_NUMBER>.
X......................  Dave Bray, Office of     Alaska, Idaho, Oregon,
                          Air, Waste and Toxics    and Washington.
                          (AWT-150), EPA Region
                          10, 1200 Sixth Avenue,
                          Suite 900, Seattle, WA
                          98101-3140, (206) 553-
                          4253.
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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.
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    \1\ The EPA respects the unique relationship between the U.S.
government and tribal authorities and acknowledges that tribal
concerns are not interchangeable with state concerns. Under the CAA
and EPA regulations, a tribe may, but is not required to, apply for
eligibility to have a tribal implementation plan (TIP). For
convenience, 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.
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B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this 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 air agencies mean or refer to states,
the District of Columbia, U.S. territories, local air permitting
authorities with delegated authority from the state and tribal
authorities 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.
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    \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.
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    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\
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    \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\
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    \40\ CAA section 307(b)(1).
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    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.
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    \41\ 749 F.3d 1055, 1064, n.2.
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    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.
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    \42\ 551 F.3d 1019 (D.C. Cir. 2008).
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    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.
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    \43\ See, e.g., Train v. NRDC, 421 U.S. 60, 79 (1975).
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    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