meet fundamental legal requirements.\50\ Thus, by the explicit terms of
the statute and by design, air agencies generally have considerable
discretion in how they elect to structure or word their state
regulations submitted to meet CAA requirements in a SIP.
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    \50\ The EPA notes that notwithstanding discretion in wording in
regulatory provisions, many words have specific recognized legal
meaning whether by statute, regulation, case law, dictionary
definition, or common usage. For example, the term ``continuous''
has a specific meaning that must be complied with substantively,
however the state may elect to word its regulatory provisions.
---------------------------------------------------------------------------

    Second, under CAA section 110(k), the EPA has both the authority
and the responsibility to assess whether a SIP submission meets
applicable CAA and regulatory requirements. Given that air agencies
have authority and discretion to structure or word SIP provisions as
they think most appropriate so long as they meet CAA and regulatory
requirements, the EPA's role is to evaluate whether those provisions in
fact meet those legal requirements.\51\ Necessarily, this process
entails the exercise of judgment concerning the specific text of
regulations, with regard both to content and to clarity. Because
actions on SIP submissions are subject to notice-and-comment
rulemaking, there is also the opportunity for other parties to identify
SIP provisions that they consider problematic and to bring to the EPA's
attention any concerns about ambiguity in the meaning of the SIP
provisions under evaluation.
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    \51\ See, e.g., Luminant Generation Co. v. EPA, 699 F.3d 427
(5th Cir. 2012) (upholding the EPA's disapproval in part of
affirmative defense provision with unclear regulatory text); US
Magnesium, LLC v. EPA, 690 F.3d 1157, 1170 (10th Cir. 2012)
(upholding the EPA's issuance of a SIP call to clarify a provision
that could be interpreted in a way inconsistent with CAA
requirements).
---------------------------------------------------------------------------

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

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

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

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

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

    Startup and shutdown of process equipment are part of the normal
operation of a source and should be accounted for in the planning,
design and implementation of operating procedures for the process
and control equipment. Accordingly, it is reasonable to expect that
careful and prudent planning and design will eliminate violations of
emission limitations during such periods. However, for a few sources
there may exist infrequent short periods of excess emissions during
startup and shutdown which cannot be avoided. Excess emissions
during these infrequent short periods need not be treated as
violations providing the source adequately shows that the excess
could not have been prevented through careful planning and design
and that bypassing of control equipment was unavoidable to prevent
loss of life, personal injury, or severe property damage (emphasis
added).\52\
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    \52\ See, 1983 SSM Guidance at Attachment p. 3.

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

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

    \53\ See, 1999 SSM Guidance at 3.

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

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

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

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

B. Affirmative Defense Provisions During Periods of Malfunction

    The EPA's evaluation of the Petition indicates that it would be
helpful to reiterate the SSM Policy with respect to affirmative defense
provisions that would be consistent with CAA requirements for
malfunctions. Many of the specific SIP provisions identified in the
Petition may have been intended to operate as affirmative defenses, but
nevertheless they have significant deficiencies. In particular, many of
the SIP provisions at issue stipulate that if the source meets the
conditions specified, then the excess emissions would not be considered
violations for any purpose, not merely with respect to monetary
penalties. This is contrary to the EPA's interpretation of the CAA. In
addition, many of the SIP provisions identified in the Petition that
resemble affirmative defense provisions do not have sufficiently robust
criteria to assure that the affirmative defense is available only for
events that are entirely beyond the control of the owner or operator of
the source and events where the owner or operator of the sources has
made all practicable efforts to comply.
    After consideration of the issues raised by the Petition and the
wide variety of existing SIP provisions the Petitioner alleged are
deficient, the EPA wants to reiterate the criteria that it considers
appropriate for approvable affirmative defense provisions in SIPs. In
addition, to provide a clear illustration of regulatory text that
embodies these criteria effectively, the EPA also wishes to provide an
example of the regulatory provisions that the EPA employs in its own
regulations to serve this purpose effectively and consistently with CAA
requirements.
    The criteria that the EPA recommends for approvable affirmative
defense provisions for excess emissions for malfunctions consistent
with CAA requirements remain essentially the same as stated in the 1999
SSM Guidance.\55\ We repeat them here. Most importantly, a valid
affirmative defense for excess emissions due to a malfunction can only
be effective with respect to monetary penalties, not with respect to
potential injunctive relief. Second, the affirmative defense should be
limited only to malfunctions that are sudden, unavoidable, and
unpredictable. Third, a valid affirmative defense provision must
provide that the defendant has the burden of proof to demonstrate all
of the elements of the defense to qualify. This demonstration has to
occur in a judicial or administrative proceeding where the merits of
the affirmative defense are independently and objectively evaluated.
The specific criteria that the EPA recommends for an affirmative
defense provision for malfunctions to be consistent with CAA
requirements are:
---------------------------------------------------------------------------

    \55\ See, 1999 SSM Guidance at Attachment 3-4.
---------------------------------------------------------------------------

    (1) The excess emissions were caused by a sudden, unavoidable
breakdown of technology, beyond the control of the owner or operator;
    (2) The excess emissions (a) did not stem from any activity or
event that could have been foreseen and avoided, or planned for, and
(b) could not have been avoided by better operation and maintenance
practices;
    (3) To the maximum extent practicable the air pollution control
equipment or processes were maintained and operated in a matter
consistent with good practice for minimizing emissions;
    (4) Repairs were made in an expeditious fashion when the operator
knew or should have known that applicable emission limitations were
being exceeded. Off-shift labor and overtime must have been utilized,
to the extent practicable, to ensure that such repairs were made as
expeditiously as practicable;
    (5) The amount and duration of the excess emissions (including any
bypass) were minimized to the maximum extent practicable during periods
of such emissions;
    (6) All possible steps were taken to minimize the impact of the
excess emissions on ambient air quality;
    (7) All emission monitoring systems were kept in operation if at
all possible;
    (8) The owner or operator's actions in response to the excess
emissions were documented by properly signed,

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

    \56\ See, ``National Emission Standards for Hazardous Air
Pollutants From the Pulp and Paper Industry,'' final rule, 77 FR
55698 (Sept. 11, 2012). Parameters for the affirmative defense are
provided at p. 55712.

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

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

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

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

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

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

C. Affirmative Defense Provisions During Periods of Startup and
Shutdown

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

allow affirmative defense provisions during planned startup and
shutdown.\58\
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    \58\ In accordance with CAA section 113(e), sources retain the
ability to seek lower monetary penalties through the factors
provided for consideration in administrative or judicial enforcement
proceedings. In this context, for example, a violating source could
argue that factors such as good faith efforts to comply should
reduce otherwise applicable statutory penalties.
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D. Relationship Between SIP Provisions and Title V Regulations

    The EPA's review of the Petition has highlighted an area of
potential ambiguity or conflict between the SSM Policy applicable to
SIP provisions and the EPA's regulations applicable to title V permit
provisions. The EPA has promulgated regulations in 40 CFR part 70
applicable to state operating permit programs and in 40 CFR part 71
applicable to federal operating permit programs.\59\ Under each set of
regulations, the EPA has provided that permits may contain, at the
permitting authority's discretion, an ``emergency provision.'' \60\ The
relationship between such an ``emergency provision'' in a permit
applicable to a source and the SIP provisions applicable to the same
source with respect to excess emissions during a malfunction event
warrants explanation.
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    \59\ See, 40 CFR sections 70.1-70.12; 40 CFR sections 71.1-
71.27.
    \60\ See, 40 CFR 70.6(g); 40 CFR 71.6(g). The EPA also notes
that states are not required to adopt the ``emergency provision''
contained in 40 CFR 70.6(g) into their state operating permit
programs, and many states have chosen not to do so. See, e.g.,
``Clean Air Act Full Approval of Partial Operating Permit Program;
Allegheny County; Pennsylvania; Direct final rule,'' 66 FR 55112 at
55113 (Nov. 1, 2001).
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    The regulatory parameters applicable to such emergency provisions
in operating permits are the same for both state operating permit
programs regulations and the federal operating permit program
regulations. The definition of emergency is identical in the
regulations for each program:

    An ``emergency'' means any situation arising from sudden and
reasonably unforeseeable events beyond the control of the source,
including acts of God, which situation requires immediate corrective
action to restore normal operation, and that causes the source to
exceed a technology-based emission limitation under the permit, due
to unavoidable increases in emissions attributable to the emergency.
An emergency shall not include noncompliance to the extent caused by
improperly designed equipment, lack of preventative maintenance,
careless or improper operation or operator error.\61\
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    \61\ See, 40 CFR 70.6(g)(1); 40 CFR 71.6(g)(1).

Thus, the definition of ``emergency'' in these title V regulations is
similar to the concept of ``malfunctions'' in the EPA's SSM Policy for
SIP provisions, but it uses somewhat different terminology concerning
the nature of the event and restricts the qualifying exceedances to
``technology-based'' emission limitations.\62\ Some SIP provisions may
also be ``technology-based'' emission limitations and thus this
terminology in the operating permit regulations may engender some
potential inconsistency with the SSM Policy.
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    \62\ 1999 SSM Guidance at Attachment p. 1 and footnote 6. The
term ``malfunction'' means ``a sudden and unavoidable breakdown of
process or control equipment.'' The malfunction events that may be
suitable for an affirmative defense are those that are ``caused by
circumstances entirely beyond the control of the owner or
operator.'' The EPA notes that by definition emergencies do not
include normal source operation such as startup, shutdown, or
maintenance.
---------------------------------------------------------------------------

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

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

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

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

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

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

``emergency constitutes an affirmative defense to an action brought for
noncompliance'' if the source proves that it meets the conditions for
the affirmative defense.\67\ Given this lack of an explicit limitation,
it could be argued that SIP provisions that copy the wording of 40 CFR
70.6(g) and 40 CFR 71.6(g) are not limited to civil penalties.\68\ Such
a reading would be inconsistent with the EPA's view that affirmative
defenses in SIP provisions are only consistent with the CAA if they
apply to civil penalties and not to injunctive relief. The EPA believes
it is essential for SIPs to ensure that injunctive relief is available
should a court determine that such relief is necessary to prevent
excess emissions in the future.
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    \67\ 40 CFR 70.6(g)(2); 40 CFR 71.6(g)(2).
    \68\ Because title V requires that a source have a permit that
``assure[s] compliance with applicable [CAA] requirements,'' CAA
section 504(a), it follows that the title V emergency provision
itself can best be read to provide only an affirmative defense
against civil penalties and not against injunctive relief. See also,
``National Emission Standards for Hazardous Air Pollutant Emissions
for Primary Lead Processing; Final Rule,'' 76 FR 70834 at 70838/2
(Nov. 15, 2011) (explaining why limiting affirmative defenses to
civil penalties conforms with the purposes of the CAA and existing
case law).
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    Second, these operating permit regulatory provisions state that
they are ``in addition to any emergency or upset provision contained in
any applicable requirement.'' \69\ The EPA's view is that federal
technology-based standards already include the appropriate affirmative
defense provisions, if any, and that creation of additional affirmative
defenses via a SIP provision is impermissible.\70\ Thus, SIP provisions
that add to or alter the terms of any federal technology-based
standards would be substantially inadequate to meet CAA
requirements.\71\
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    \69\ 40 CFR 70.6(g)(5); 40 CFR 71.6(g)(5).
    \70\ 1999 SSM Guidance at Attachment p. 3, footnote 6. The EPA
explained that to the extent a state elected to include federal
technology-based standards into its SIP, such as NSPS or NESHAPs,
the standards should not deviate from those standards as
promulgated. Because the EPA has already taken into account
technological limitations in setting the standards, additional
exemptions or affirmative defenses would be inappropriate.
    \71\ See, ``Finding of Substantial Inadequacy of Implementation
Plan; Call for Utah State Implementation Plan Revision,'' 74 FR
21639 (Apr. 18, 2011) (the EPA issued a SIP call because, inter
alia, the SIP provision applied to NSPS and NESHAP); US Magnesium,
LLC v. EPA, 690 F.3d 1157 (10th Cir. 2012) (upholding the SIP call).
---------------------------------------------------------------------------

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

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

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

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

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

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

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

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

    By its explicit terms, this provision authorizes the EPA to find
that a state's existing SIP is ``substantially inadequate'' to meet CAA
requirements and, based on that finding, to ``require the State to
revise the [SIP] as necessary to correct such inadequacies.'' This type
of action is commonly referred to as a ``SIP call.'' \72\
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    \72\ The EPA also has other discretionary authority to address
incorrect SIP provisions, such as the authority in CAA section
110(k)(6) for the EPA to correct errors in prior SIP approvals. The
authority in CAA section 110(k)(5) and CAA section 110(k)(6) can
sometimes overlap and offer alternative mechanisms to address
problematic SIP provisions. In this instance, the EPA believes that
the mechanism provided by CAA section 110(k)(5) is the better
approach, because using the mechanism of the CAA section 110(k)(6)
error correction would eliminate the affected emission limitations
from the SIP potentially leaving no emission limitation in place,
whereas the mechanism of the CAA section 110(k)(5) SIP call will
keep the provisions in place during the pendency of the state's
revision of the SIP and the EPA's action on that revision. In the
case of provisions that include impermissible automatic exemptions
or discretionary exemptions, the EPA believes that retention of the
existing SIP provision is preferable to the absence of the provision
in the interim.
---------------------------------------------------------------------------

    Significantly, CAA section 110(k)(5) explicitly authorizes the EPA
to issue a SIP call ``whenever'' the EPA makes a finding that the
existing SIP is substantially inadequate, thus providing authority for
the EPA to take action to correct existing inadequate SIP provisions
even long after their initial approval, or even if the provisions only
become inadequate due to subsequent events.\73\ The statutory provision
is worded in the present tense, giving the EPA authority to rectify any
deficiency in a SIP that currently exists, regardless of the fact that
the EPA previously approved that particular provision in the SIP and
regardless of when that approval occurred.
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    \73\ See, e.g., Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000)
(upholding the ``NOX SIP Call'' to states requiring
revisions to previously approved SIPs with respect to ozone
transport and section 110(a)(20)(D)(i)(I)); ``Action to Ensure
Authority To Issue Permits Under the Prevention of Significant
Deterioration Program to Sources of Greenhouse Gas Emissions:
Finding of Substantial Inadequacy and SIP Call; Final Rule,'' 75 FR
77698 (Dec. 13, 2010) (the EPA issued a SIP call to 13 states
because the endangerment finding for GHGs meant that these
previously approved SIPs were substantially inadequate because they
did not provide for the regulation of GHGs in the PSD permitting
programs of these states as required by CAA section 110(a)(2)(C) and
section 110(a)(2)(J)); ``Finding of Substantial Inadequacy of
Implementation Plan; Call for Utah State Implementation Plan
Revision,'' 74 FR 21639 (Apr. 18, 2011) (the EPA issued a SIP call
to rectify SIP provisions dating back to 1980).
---------------------------------------------------------------------------

    It is also important to emphasize that CAA section 110(k)(5)
expressly directs the EPA to take action if the SIP provision is
substantially inadequate not just for purposes of attainment or
maintenance of the NAAQS, but also for purposes of ``any requirement''
of the CAA. The EPA interprets this reference to ``any requirement'' of
the CAA on its face to authorize reevaluation of an existing SIP
provision for compliance with those statutory and regulatory
requirements that are germane to the SIP provision at issue. Thus, for
example, a SIP provision that is intended to be an ``emission
limitation'' for purposes of a nonattainment plan for purposes of the
1997 PM2.5 NAAQS must meet various applicable statutory and
regulatory requirements, including requirements of CAA section
110(a)(2)(A) such as enforceability, the definition of the term
``emission limitation'' in CAA section 302(k), the level of emissions
control required to constitute a ``reasonably available control
measure'' in CAA section 172(c)(1), and the other applicable
requirements of the implementation regulations for the 1997
PM2.5 NAAQS. Failure to meet any of those applicable
requirements could constitute a substantial inadequacy suitable for a
SIP call, depending upon the facts and circumstances. By contrast, that
same SIP provision should not be expected to meet specifications of the
CAA that are completely irrelevant for its intended purpose, such as
the unrelated requirement of CAA section 110(a)(2)(G) that the state
have general legal authority comparable to CAA section 303 for
emergencies.
    Use of the term ``any requirement'' in CAA section 110(k)(5) also
reflects the fact that SIP provisions could be substantially inadequate
for widely differing reasons. One provision might be substantially
inadequate because it fails to prohibit emissions that contribute to
violations of the NAAQS in downwind areas many states away. Another
provision, or even the same provision, could be substantially
inadequate because it also infringes on the legal right of members of
the public who live adjacent to the source to enforce the SIP. Thus,
the EPA has previously interpreted CAA section 110(k)(5) to authorize a
SIP call to rectify SIP inadequacies of various kinds, both broad and
narrow in terms of the scope of the SIP revisions required.\74\ On its
face, CAA section 110(k)(5) authorizes the EPA to take action with
respect to SIP provisions that are substantially inadequate to meet any
CAA requirements, including requirements relevant to the proper
treatment of excess emissions during SSM events.
---------------------------------------------------------------------------

    \74\ See, e.g., ``Finding of Significant Contribution and
Rulemaking for Certain States in the Ozone Transport Assessment
Group Region for Purposes of Reducing Regional Transport of Ozone,''
63 FR 57356 (Oct. 27, 1998) (the EPA issued a SIP call to 23 states
requiring them to rectify the failure to address interstate
transport of pollutants as required by section 110(a)(2)(D);
``Finding of Substantial Inadequacy of Implementation Plan; Call for
Utah State Implementation Plan Revision,'' 74 FR 21639 (Apr. 18,
2011) (the EPA issued a SIP call to one state requiring it to
rectify several very specific SIP provisions).
---------------------------------------------------------------------------

    An important baseline question is whether a given deficiency
renders the SIP provision ``substantially inadequate.'' The EPA notes
that the term ``substantially inadequate'' is not defined in the CAA.
Moreover, CAA section 110(k)(5) does not specify a particular form of
analysis or methodology that the EPA must use to evaluate SIP
provisions for substantial inadequacy. Thus, under Chevron step 2, the
EPA is authorized to interpret this provision reasonably, consistent
with the provisions of the CAA. In addition, the EPA is authorized to
exercise its discretion in applying this provision to determine whether
a given SIP provision is substantially inadequate. To the extent that
the term ``substantially inadequate'' is ambiguous, the EPA believes
that it is reasonable to interpret the term in light of the specific
purposes for which the SIP provision at issue is required, and thus
whether the provision meets the fundamental CAA requirements applicable
to such a provision.
    The EPA does not interpret CAA section 110(k)(5) to require a
showing that the effect of a SIP provision that is facially
inconsistent with CAA

requirements is causally connected to a particular adverse impact. For
example, the plain language of CAA section 110(k)(5) does not require
direct causal evidence that excess emissions have occurred during a
specific malfunction at a specific source and have literally caused a
violation of the NAAQS in order to conclude that the SIP provision is
substantially inadequate.\75\ A SIP provision that purports to exempt a
source from compliance with applicable emission limitations during SSM
events, contrary to the requirements of the CAA for continuous emission
limitations, does not become legally permissible merely because there
is not definitive evidence that any excess emissions have resulted from
the exemption and have literally caused a specific NAAQS violation.\76\
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    \75\ See, US Magnesium, LLC v. EPA, 690 F.3d 1157 (10th Cir.
2012) (upholding the EPA's interpretation of section 110(k)(5) to
authorize a SIP call when the SIP provisions are inconsistent with
CAA requirements).
    \76\ The EPA notes that the GHG SIP call did not require
``proof'' that the failure of a state to address GHGs in a given PSD
permit ``caused'' particularized environmental impacts; it was
sufficient that the state's SIP fails to meet the current
fundamental legal requirements for regulation of GHGs in accordance
with the CAA. See, ``Action to Ensure Authority To Issue Permits
Under the Prevention of Significant Deterioration Program to Sources
of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and
SIP Call; Final Rule,'' 75 FR 77698 (Dec. 13, 2010).
---------------------------------------------------------------------------

    Similarly, the EPA does not interpret CAA section 110(k)(5) to
require direct causal evidence that a SIP provision that improperly
undermines enforceability of the SIP has resulted in a specific failed
enforcement attempt by any party. A SIP provision that has the
practical effect of barring enforcement by the EPA or through a citizen
suit, either because it would bar enforcement if an air agency elects
to grant a discretionary exemption or to exercise its own enforcement
discretion, is inconsistent with fundamental requirements of the
CAA.\77\ Such a provision also does not become legally permissible
merely because there is not definitive evidence that the state's action
literally undermined a specific attempted enforcement action by other
parties. Indeed, the EPA notes that these impediments to effective
enforcement likely have a chilling effect on potential enforcement in
general. The possibility for effective enforcement of emission
limitations in SIPs is itself an important principle of the CAA, as
embodied in CAA sections 113 and 304.
---------------------------------------------------------------------------

    \77\ See, ``Finding of Substantial Inadequacy of Implementation
Plan; Call for Utah State Implementation Plan Revision,'' 74 FR
21639 at 21641 (Apr. 18, 2011); see also, US Magnesium, LLC v. EPA,
690 F.3d 1157, 1168 (10th Cir. 2012) (upholding the EPA's
interpretation of section 110(k)(5) to authorize a SIP call when the
state's SIP provision worded so that state decisions whether a given
excess emissions event constituted a violation interfered with
enforcement by the EPA or citizens for such event).
---------------------------------------------------------------------------

    The EPA's interpretation of CAA section 110(k)(5) is that the
fundamental integrity of the CAA's SIP process and structure are
undermined if emission limitations relied upon to meet CAA requirements
related to protection of public health and the environment can be
violated without potential recourse. For example, the EPA does not
believe that it is authorized to issue a SIP call to rectify an
impermissible automatic exemption provision only after a violation of
the NAAQS has occurred, or only if that NAAQS violation can be directly
linked to the excess emissions that resulted from the impermissible
automatic exemption by a particular source on a particular day. If the
SIP contains a provision that is inconsistent with fundamental
requirements of the CAA, that renders the SIP provision substantially
inadequate.
    The EPA notes that CAA section 110(k)(5) can also be an appropriate
tool to address ambiguous SIP provisions that could be read by a court
in a way that would violate the requirements of the CAA. For example,
if an existing SIP provision concerning the state's exercise of
enforcement discretion is sufficiently ambiguous that it could be
construed to preclude enforcement by the EPA or through a citizen suit
if the state elects to deem a given SSM event not a violation, then
that could render the provision substantially inadequate by interfering
with the enforcement structure of the CAA.\78\ If a court could
construe the ambiguous SIP provision to bar enforcement, the EPA
believes that it may be appropriate to take action to eliminate that
uncertainty by requiring the state to revise the ambiguous SIP
provision. Under such circumstances, it may be appropriate for the EPA
to issue a SIP call to assure that the SIP provisions are sufficiently
clear and consistent with CAA requirements on their face.\79\
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    \78\ Courts have on occasion interpreted SIP provisions to limit
the EPA's enforcement authority as a result of ambiguous SIP
provisions. See, e.g., U.S. v. Ford Motor Co., 736 F.Supp. 1539
(W.D. Mo. 1990) and U.S. v. General Motors Corp., 702 F. Supp. 133
(N.D. Texas 1988) (the EPA could not pursue enforcement of SIP
emission limitations where states had approved alternative emission
limitations under procedures the EPA had approved in the SIP);
Florida Power & Light Co. v. Costle, 650 F.2d 579, 588 (5th Cir.
1981) (the EPA to be accorded no discretion in interpreting state
law). The EPA does not agree with the holdings of these cases, but
they illustrate why it is reasonable to eliminate any uncertainty
about enforcement authority by requiring a state to remove or revise
a SIP provision that could be read in a way inconsistent with the
requirements of the CAA.
    \79\ See, US Magnesium, LLC v. EPA, 690 F.3d 1157, 1170 (10th
Cir. 2012) (upholding the EPA's use of SIP call authority in order
to clarify language in the SIP that could be read to violate the
CAA, even if a court has not yet interpreted the language in that
way).
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    In this instance, the Petition raised questions concerning the
adequacy of existing SIP provisions that pertain to the treatment of
excess emissions during SSM events. The SIP provisions identified by
the Petitioner generally fall into four major categories: (i) Automatic
exemptions; (ii) exemptions as a result of director's discretion; (iii)
provisions that appear to bar enforcement by the EPA or through a
citizen suit if the state decides not to enforce through exercise of
enforcement discretion; and (iv) affirmative defense provisions that
appear to be inconsistent with the CAA and the EPA's SSM Policy. The
EPA believes that each of these types of SIP deficiency potentially
justifies a SIP call pursuant to CAA section 110(k)(5), if the SIP
provision is as the Petitioner describes it.
2. Substantial Inadequacy of Automatic Exemptions
    The EPA believes that SIP provisions that provide an automatic
exemption from otherwise applicable emission limitations are
substantially inadequate to meet CAA requirements. A typical SIP
provision that includes an impermissible automatic exemption would
provide that a source has to meet a specific emission limitation,
except during startup, shutdown, and malfunction, and by definition any
excess emissions during such events would not be violations and thus
there could be no enforcement based on those excess emissions. The
EPA's interpretation of CAA requirements for SIP provisions has been
reiterated multiple times through the SSM Policy and actions on SIP
submissions that pertain to this issue. The EPA's longstanding view is
that SIP provisions that include automatic exemptions for excess
emissions during SSM events, such that the excess emissions during
those events are not considered violations of the applicable emission
limitations, do not meet CAA requirements. Such exemptions undermine
the protection of the NAAQS and PSD increments and fail to meet other
fundamental requirements of the CAA.
    The EPA interprets CAA sections 110(a)(2)(A) and 110(a)(2)(C) to
require that SIPs contain ``emission limitations'' to meet CAA
requirements. Pursuant to CAA section 302(k), those emission

limitations must be ``continuous.'' Automatic exemptions from otherwise
applicable emission limitations thus render those limits less than
continuous as required by CAA sections 110(a)(2)(A) and 110(a)(2)(C),
thereby inconsistent with a fundamental requirement of the CAA and thus
substantially inadequate as contemplated in CAA section 110(k)(5).
    This inadequacy has far-reaching impacts. For example, air agencies
rely on emission limitations in SIPs in order to provide for attainment
and maintenance of the NAAQS. These emission limitations are basic
building blocks for SIPs, often used by air agencies to meet various
requirements including: (i) In the estimates of emissions for emissions
inventories; (ii) in the determination of what level of emissions meets
various statutory requirements such as ``reasonably available control
measures'' in nonattainment SIPs or ``best available retrofit
technology'' in regional haze SIPs; and (iii) in critical modeling
exercises such as attainment demonstration modeling for nonattainment
areas or increment use for PSD permitting purposes. All of these uses
typically assume continuous source compliance with applicable emission
limitations.
    Because the NAAQS are not directly enforceable against individual
sources, air agencies rely on the adoption and enforcement of these
generic and specific emission limits in SIPs in order to provide for
attainment and maintenance of the NAAQS, protection of PSD increments,
protection of visibility, and other CAA requirements. Automatic
exemption provisions for excess emissions eliminate the possibility of
enforcement for what would otherwise be clear violations of the relied-
upon emission limitations and thus eliminate any opportunity to obtain
injunctive relief that may be needed to protect the NAAQS or meet other
CAA requirements. Likewise, the elimination of any possibility for
penalties for what would otherwise be clear violations of the emission
limitations, regardless of the conduct of the source, eliminates any
opportunity for penalties to encourage appropriate design, operation,
and maintenance of sources and efforts by source operators to prevent
and to minimize excess emissions in order to protect the NAAQS or to
meet other CAA requirements. Removal of this monetary incentive to
comply with the SIP reduces a source's incentive to design, operate,
and maintain its facility to meet emission limitations at all times.
3. Substantial Inadequacy of Director's Discretion Exemptions
    The EPA believes that SIP provisions that allow discretionary
exemptions from otherwise applicable emission limitations are
substantially inadequate to meet CAA requirements for the same reasons
as automatic exemptions, but for additional reasons as well. A typical
SIP provision that includes an impermissible ``director's discretion''
component would purport to authorize air agency personnel to modify
existing SIP requirements under certain conditions, e.g., to grant a
variance from an otherwise applicable emission limitation if the source
could not meet the requirement in certain circumstances.\80\ If such
provisions are sufficiently specific, provide for sufficient public
process, and are sufficiently bounded, so that it is possible to
anticipate at the time of the EPA's approval of the SIP provision how
that provision will actually be applied and the potential adverse
impacts thereof, then such a provision might meet basic CAA
requirements. In essence, if it is possible to anticipate and evaluate
in advance how the exercise of enforcement discretion could impact
compliance with other CAA requirements, then it may be possible to
determine in advance that the pre-authorized exercise of director's
discretion will not interfere with other CAA requirements, such as
providing for attainment and maintenance of the NAAQS. Most director's
discretion-type provisions cannot meet this basic test.
---------------------------------------------------------------------------

    \80\ The EPA notes that problematic ``director's discretion''
provisions are not limited only to those that purport to authorize
alternative emission limitations from those required in a SIP. Other
problematic director's discretion provisions could include those
that purport to provide for discretionary changes to other
substantive requirements of the SIP, such as applicability,
operating requirements, recordkeeping requirements, monitoring
requirements, test methods, and alternative compliance methods.
---------------------------------------------------------------------------

    Unless it is possible at the time of the approval of the SIP
provision to anticipate and analyze the impacts of the potential
exercise of the director's discretion, such provisions functionally
could allow de facto revisions of the approved provisions of the SIP
without complying with the process for SIP revisions required by the
CAA. Sections 110(a)(1) and (2) of the CAA impose procedural
requirements on states that seek to amend SIP provisions. The elements
of CAA section 110(a)(2) and other sections of the CAA, depending upon
the subject of the SIP provision at issue, impose substantive
requirements that states must meet in a SIP revision. Section 110(i) of
the CAA prohibits modification of SIP requirements for stationary
sources by either the state or the EPA, except through specified
processes.\81\ Section 110(k) of the CAA imposes procedural and
substantive requirements on the EPA for action upon any SIP revision.
Sections 110(l) and 193 of the CAA both impose additional procedural
and substantive requirements on the state and the EPA in the event of a
SIP revision. Chief among these many requirements for a SIP revision
would be the necessary demonstration that the SIP revision in question
would not interfere with any requirement concerning attainment and
reasonable further progress or ``any other applicable requirement of''
the CAA to meet the requirements of CAA section 110(l).
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    \81\ Section 110(i) of the Act states that ``no order,
suspension, plan revision or other action modifying any requirement
of an applicable implementation plan may be taken with respect to
any stationary source by the State or by the Administrator'' except
in compliance with the CAA's requirements for promulgation or
revision of a plan, with limited exceptions. See, e.g., ``Approval
and Disapproval and Promulgation of Air Quality Implementation
Plans; Colorado; Revisions to Regulation 1; Notice of proposed
rulemaking,'' 75 FR 42342 at 42344 (July 21, 2010) (proposing to
disapprove ``director discretion'' provisions as inconsistent with
CAA requirements and noting that ``[s]ection 110(i) specifically
prohibits States, except in certain limited circumstances, from
taking any action to modify any requirement of a SIP with respect to
any stationary source, except through a SIP revision''), finalized
as proposed at 76 FR 4540 (Jan. 26, 2011); ``Corrections to the
California State Implementation Plan,'' 69 FR 67062 at 67063 (Nov.
16, 2004) (noting that ``a state-issued variance, though binding as
a matter of State law, does not prevent EPA from enforcing the
underlying SIP provisions unless and until EPA approves that
variance as a SIP revision''); Industrial Environmental Association
v. Browner, No. 97-71117 at n. 2 (9th Cir. May 26, 2000) (noting
that the EPA has consistently treated individual variances granted
under state variance provisions as ``modifications of the SIP
requiring independent EPA approval'').
---------------------------------------------------------------------------

    Congress presumably imposed these many explicit requirements in
order to assure that there is adequate public process at both the air
agency and federal level for any SIP revision, and to assure that any
SIP revision meets the applicable substantive requirements of the CAA.
Although no provision of the CAA explicitly addresses whether a
``director's discretion'' provision is acceptable by name, the EPA
interprets the statute to prohibit such provisions unless they would be
consistent with the statutory and regulatory requirements that apply to
SIP revisions.\82\ A SIP provision that

purports to give broad and unbounded director's discretion to alter the
existing legal requirements of the SIP with respect to meeting emission
limitations would be tantamount to allowing a revision of the SIP
without meeting the applicable procedural and substantive requirements
for such a SIP revision.
---------------------------------------------------------------------------

    \82\ See, e.g., EPA's implementing regulations at 40 CFR
51.104(d) (``In order for a variance to be considered for approval
as a revision to the [SIP], the State must submit it in accordance
with the requirements of this section'') and 51.105 (``Revisions of
a plan, or any portion thereof, will not be considered part of an
applicable plan until such revisions have been approved by the
Administrator in accordance with this part.'').
---------------------------------------------------------------------------

    For this reason, the EPA has long discouraged the creation of new
SIP provisions containing an impermissible director's discretion
feature and has also taken actions to remove existing SIP provisions
that it had previously approved in error.\83\ In recent years, the EPA
has also recommended that if an air agency elects to have SIP
provisions that contain a director's discretion feature consistent with
CAA requirements, then the provisions must be structured so that any
resulting variances or other deviations from the SIP requirements have
no federal law validity, unless and until the EPA specifically approves
that exercise of the director's discretion as a SIP revision. Barring
such a later ratification by the EPA through a SIP revision, the
exercise of director's discretion is only valid for state (or tribal)
law purposes and would have no bearing in the event of an action to
enforce the provision of the SIP as it was originally approved by the
EPA.
---------------------------------------------------------------------------

    \83\ See, e.g., ``Approval and Disapproval and Promulgation of
Air Quality Implementation Plans; Colorado; Revisions to Regulation
1,'' 76 FR 4540 (Jan. 26, 2011) (partial disapproval of SIP
submission based on inclusion of impermissible director's discretion
provisions); ``Correction of Implementation Plans; American Samoa,
Arizona, California, Hawaii, and Nevada State Implementation Plans;
Notice of proposed rulemaking,'' 61 FR 38664 (July 25, 1996)
(proposed SIP correction to remove, pursuant to CAA section
110(k)(6), several variance provisions from American Samoa, Arizona,
California, Hawaii, and Nevada SIPs), finalized at 62 FR 34641 (June
27, 1997); ``Approval and Promulgation of Implementation Plans;
Corrections to the Arizona and Nevada State Implementation Plans,''
74 FR 57051 (Nov. 3, 2009) (direct final rulemaking to remove,
pursuant to CAA section 110(k)(6), variance provisions from Arizona
and Nevada SIPs).
---------------------------------------------------------------------------

    The EPA's evaluation of the specific SIP provisions of this type
identified in the Petition indicates that none of them provide
sufficient process or sufficient bounds on the exercise of director's
discretion to be permissible. Most on their face would allow
potentially limitless exemptions with potentially dramatic adverse
impacts inconsistent with the objectives of the CAA. More importantly,
however, each of the identified SIP provisions goes far beyond the
limits of what might theoretically be a permissible director's
discretion provision by authorizing state personnel to create case-by-
case exemptions from the applicable emission limitations from the
requirements of the SIP for excess emissions during SSM events. Given
that the EPA interprets the CAA not to allow exemptions from SIP
emission limitations for excess emissions during SSM events in the
first instance, it follows that providing such exemptions through the
mechanism of director's discretion provision is also not permissible
and compounds the problem.
    As with automatic exemptions for excess emissions during SSM
events, a provision that allows discretionary exemptions would not meet
the statutory requirements of CAA sections 110(a)(2)(A) and
110(a)(2)(C) that require SIPs to contain ``emission limitations'' to
meet CAA requirements. Pursuant to CAA section 302(k), those emission
limitations must be ``continuous.'' Discretionary exemptions from
otherwise applicable emission limitations render those limits less than
continuous, as is required by CAA sections 110(a)(2)(A) and
110(a)(2)(C), and thereby inconsistent with a fundamental requirement
of the CAA and thus substantially inadequate as contemplated in section
CAA 110(k)(5). Such exemptions undermine the objectives of the CAA such
as protection of the NAAQS and PSD increments, and they fail to meet
other fundamental requirements of the CAA.
    In addition, discretionary exemptions undermine effective
enforcement of the SIP by the EPA or through a citizen suit, because
often there may have been little or no public process concerning the
exercise of director's discretion to grant the exemptions, or easily
accessible documentation of those exemptions, and thus even
ascertaining the possible existence of such ad hoc exemptions will
further burden parties who seek to evaluate whether a given source is
in compliance or to pursue enforcement if it appears that the source is
not. Where there is little or no public process concerning such ad hoc
exemptions, or inadequate access to relevant documentation of those
exemptions, enforcement by the EPA or through a citizen suit may be
severely compromised. As explained in the 1999 SSM Guidance, the EPA
does not interpret the CAA to allow SIP provisions that would allow the
exercise of director's discretion concerning violations to bar
enforcement by the EPA or through a citizen suit. The exercise of
director's discretion to exempt conduct that would otherwise constitute
a violation of the SIP would interfere with effective enforcement of
the SIP. Such provisions are inconsistent with and undermine the
enforcement structure of the CAA provided in CAA sections 113 and 304,
which provide independent authority to the EPA and citizens to enforce
SIP provisions, including emission limitations. Thus, SIP provisions
that allow discretionary exemptions from applicable SIP emission
limitations through the exercise of director's discretion are
substantially inadequate to comply with CAA requirements as
contemplated in CAA section 110(k)(5).
4. Substantial Inadequacy of Improper Enforcement Discretion Provisions
    The EPA believes that SIP provisions that pertain to enforcement
discretion but could be construed to bar enforcement by the EPA or
through a citizen suit if the air agency declines to enforce are
substantially inadequate to meet CAA requirements. A typical SIP
provision that includes an impermissible enforcement discretion
provision specifies certain parameters for when air agency personnel
should pursue enforcement action, but is worded in such a way that the
air director's decision defines what constitutes a ``violation'' of the
emission limitation for purposes of the SIP, i.e., by defining what
constitutes a violation, the air agency's own enforcement discretion
decisions are imposed on the EPA or citizens.\84\
---------------------------------------------------------------------------

    \84\ See, e.g., ``Finding of Substantial Inadequacy of
Implementation Plan; Call for Utah State Implementation Plan
Revision,'' 75 FR 70888 at 70892 (Nov. 19, 2010). The SIP provision
at issue provided that information concerning a malfunction ``shall
be used by the executive secretary in determining whether a
violation has occurred and/or the need of further enforcement
action.'' This SIP language appeared to give the state official
exclusive authority to determine whether excess emissions constitute
a violation.
---------------------------------------------------------------------------

    The EPA's longstanding view is that SIP provisions cannot enable an
air agency's decision concerning whether or not to pursue enforcement
to bar the ability of the EPA or the public to enforce applicable
requirements.\85\ Such enforcement discretion provisions in a SIP would
be inconsistent with the enforcement structure provided in the CAA.
Specifically, the statute provides explicit independent enforcement
authority to the EPA under CAA section 113 and to citizens under CAA
section 304. Thus, the CAA contemplates that the EPA and citizens have
authority to pursue enforcement for a violation even if the air agency
elects not to do so. The EPA, citizens, and any court in which they
seek to pursue an enforcement claim for violation of SIP requirements
must retain the authority to evaluate independently whether a source's
violation of an emission limitation

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

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

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

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

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

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

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

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

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

may vary depending upon the provisions at issue.

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

    If the EPA finalizes a proposed finding of substantial inadequacy
and a proposed SIP call for any state, CAA section 110(k)(5) requires
the EPA to establish a SIP submission deadline by which the state must
make a SIP submission to rectify the identified deficiency. Pursuant to
CAA section 110(k)(5), the EPA has authority to set a SIP submission
deadline up to 18 months from the date of the final finding of
inadequacy.
    The EPA is proposing that if it promulgates a final finding of
inadequacy and a SIP call for a state, the EPA will establish a date 18
months from the date of promulgation of the final finding for the state
to respond to the SIP call. If, for example, the EPA's final findings
are signed and disseminated in August 2013, then the SIP submission
deadline for each of the states subject to the final SIP call would
fall in February 2015. Thereafter, the EPA will review the adequacy of
that new SIP submission in accordance with the CAA requirements of
sections 110(a), 110(k), 110(l), and 193, including the EPA's
interpretation of the CAA reflected in the SSM Policy as clarified and
updated through this rulemaking.
    The EPA is proposing the maximum time permissible under the CAA for
a state to respond to a SIP call. The EPA believes that it is
appropriate to provide states with the maximum time allowable under CAA
section 110(k)(5) in order to allow states sufficient time to make SIP
revisions following their own SIP development process. The EPA
considers this a reasonable time period for the affected states to
revise their state regulations, provide for public input, process the
SIP revision through the state's own procedures, and submit the SIP
revision to the EPA. Such a schedule will allow for the necessary SIP
development process to correct the deficiencies, yet still achieve the
necessary SIP improvements as expeditiously as practicable. The EPA
acknowledges that the longstanding existence of many of the provisions
at issue, such as automatic exemptions for SSM events, may have
resulted in undue reliance on them as a compliance mechanism by some
sources. As a result, development of appropriate SIP revisions may
entail reexamination of the applicable emission limitations themselves,
and this process may require the maximum time allowed by the CAA.
Nevertheless, the EPA encourages the affected states to make the
necessary revisions in as timely a fashion as possible and encourages
the states to work with the respective EPA Regional Office as they
develop the SIP revisions.
    The EPA notes that the SIP calls that it is proposing for affected
states in this action would be narrow and apply only to the specific
SIP provisions determined to be inconsistent with the requirements of
the CAA. To the extent that a state is concerned that elimination of a
particular aspect of an existing emission limitation, such as an
impermissible exemption, will render that emission limitation more
stringent than the state originally intended and more stringent than
needed to meet the CAA requirements it was intended to address, the EPA
anticipates that the state will revise the emission limitation
accordingly, but without the impermissible exemption or other feature
that necessitated the SIP call.
    Finally, the EPA notes that its authority under CAA section
110(k)(5) does not extend to requiring a state to adopt a particular
control measure in its SIP in response to the SIP call. Under
principles of cooperative federalism, the CAA vests air agencies with
substantial discretion to develop SIP provisions, so long as the
provisions meet the legal requirements and objectives of the CAA.\89\
Thus, the issuance of a SIP call should not be misconstrued as a
directive to the state in question to adopt a particular control
measure. The EPA is merely proposing to require that affected states
make a SIP revision to remove or revise existing SIP provisions that
fail to comply with fundamental requirements of the CAA. The states
retain discretion to remove or revise those provisions as they
determine best, so long as they bring their SIPs into compliance with
the requirements of the CAA.\90\
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    \89\ See, Virginia, et al. v. EPA, 108 F.3d 1397 (D.C. Cir.
1997) (SIP call remanded and vacated because, inter alia, the EPA
had issued a SIP call that required states to adopt a particular
control measure for mobile sources).
    \90\ Notwithstanding the latitude states have in developing SIP
provisions, the EPA is required to assure that states meet the basic
legal criteria for SIPs. See, Michigan, et al. v. EPA, 213 F.3d 663,
686 (D.C. Cir. 2000) (upholding NOX SIP call because,
inter alia, the EPA was requiring states to meet basic legal
requirement that SIPs comply with section 110(a)(2)(D), not
dictating the adoption of a particular control measure).
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IX. What is the EPA proposing for each of the specific SIP provisions
identified in the petition?

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

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

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

notice, the EPA is also proposing to grant the Petition with respect to
any identified provision that creates an affirmative defense applicable
during planned startup and shutdown events, because such provisions are
not consistent with the requirements of the CAA.
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    \91\ By definition, an affirmative defense provision in a SIP
provides a source with a defense to assert in an enforcement
proceeding. The source has the ability to establish whether or not
it has met the legal and factual parameters for such affirmative
defense, and that question will be decided by the trier of fact in
the proceeding. The relevant circumstances in such a proceeding
would thus include issues relevant to the parameters for affirmative
defense provisions, as enumerated in section VII.B of this notice.
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5. Affirmative Defense Provisions Applicable to a ``Source or Small
Group of Sources''
    The Petitioner specifically objected to existing provisions in SIPs
for a few states that allow an affirmative defense for certain
categories of sources to be based on an after-the-fact showing that the
excess emissions during a particular SSM event did not cause a
violation of the NAAQS or PSD increments. The Petitioner argued that
these affirmative defense provisions are inconsistent with the CAA and
with the EPA's own recommendations for affirmative defenses in the SSM
Policy, because the provisions provide the possibility for an
affirmative defense to be used by sources that would fall into the
category of ``a source or small group of sources that has the potential
to cause an exceedance of the NAAQS or PSD increments.'' \92\
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    \92\ See, 1999 SSM Guidance at 4, and Attachment at 2, 3, and 5.
Footnote 2 to that document articulates the reasoning behind the
EPA's recommendation against such provisions, at least for some
sources and for some NAAQS.
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    The EPA acknowledges that its 1999 SSM Guidance recommended against
affirmative defense provisions in SIPs for sources that have the
potential, either individually or in small groups, to have excess
emissions during SSM events that could cause a violation of the NAAQS
or PSD increments. The EPA recommended that states utilize an
enforcement discretion approach, rather than create an affirmative
defense provision, for such sources. However, the EPA's SSM Policy is
guidance, and the facts and circumstances of a particular situation may
justify adopting a different approach. The EPA has evaluated each of
the affirmative defense provisions identified by the Petitioner on the
facts and circumstances of the particular provision. For each of these
provisions, the EPA proposes to grant or to deny the Petition, based on
an evaluation of whether the specific provision at issue in an
individual SIP contains adequate criteria to achieve the objective of
providing only a narrow affirmative defense for sources under certain
circumstances consistent with the overarching CAA objectives, such as
attaining and maintaining the NAAQS. The criteria that the EPA
recommends for an affirmative defense provision for malfunctions to be
consistent with CAA requirements are restated in this notice at section
VII.B, which also highlights EPA's view concerning case-by-case
approval of affirmative defenses in the case of geographic areas and
pollutants ``where a single source or small group of sources has the
potential to cause an exceedance of the NAAQS or PSD increments.''

B. Affected States in EPA Region I

1. Maine
a. Petitioner's Analysis
    The Petitioner first objected to a specific provision in the Maine
SIP that provides an exemption for certain boilers from otherwise
applicable SIP visible emission limits during startup and shutdown (06-
096-101 Me. Code R. Sec.  3).\93\ The provision exempts violations of
the otherwise applicable SIP emission limitations for boilers over a
certain rated input capacity ``during the first 4 hours following the
initiation of cold startup or planned shutdown.'' The Petitioner
recognized that this provision might operate as an affirmative defense
because the exemption is only available once the person claiming an
``exemption'' establishes that the facility was being run to minimize
emissions. The provision does not make clear who is authorized to
determine whether the visible emission limits apply. The Petitioner
argued that one plausible interpretation of this provision is that
state officials are ``authorized to decide that the exemption applies
and therefore preclude enforcement by the EPA and by citizens.'' \94\
The Petitioner argued that such an interpretation of this provision
precluding enforcement by the EPA or citizens, both for civil penalties
and injunctive relief, is forbidden by the EPA's interpretation of the
CAA. Accordingly, the Petitioner requested that this provision be
eliminated from the SIP.
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    \93\ Petition at 43-44.
    \94\ Petition at 44.
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    Second, the Petitioner objected to a provision that empowers the
state to ``exempt emissions occurring during periods of unavoidable
malfunction or unplanned shutdown from civil penalty under section 349,
subsection 2'' (06-096-101 Me. Code R. Sec.  4). The Petitioner noted