The EPA Assistant Administrator, Gina McCarthy, signed the following notice on 2/12/2013, and EPA is submitting it for publication in the Federal Register (FR). While we have taken steps to ensure the accuracy of this Internet version of the rule, it is not the official version of the rule for purposes of compliance. Please refer to the official version in a forthcoming FR publication, which will appear on the Government Printing Office's FDSys website (http://fdsys.gpo.gov/fdsys/search/home.action ) and on Regulations.gov (http://www.regu lations.gov ) in Docket No. EPA

‐ HQ

‐ OAR

‐ 2012

‐ 0322. Once the official version of this document is published in the FR, this version will be removed from the Internet and replaced with a link to the official version.



### 6560-50-P

ENVIRONMENTAL PRO TECTION AGENCY

40 CFR Part 52 [EPA-HQ-OAR-2012-0322; FRL-xxxx-x]

RIN 2060-AR68 State Implementation Plans: Response to Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Star tup, Shutdown, and Malfunction

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

SUMMARY: The EPA is proposing to take action on a petition for rulemaking filed by

the Sierra Club with the EPA Administrato r on June 30, 2011 (the Petition). The Petition includes interrelated requests concerning the treatment of ex cess emissions in state rules by sources during periods of startup, shut down, or malfunction (SSM). The EPA is proposing to grant in part and to deny in pa rt the request in the Petition to rescind its policy interpreting the Clean Air Act (CAA) to allow states to have appropriately drawn state implementation plan (SIP) provisions that provide affirmative defenses to monetary penalties for violations during periods of SSM . The EPA is also proposing either to grant or to deny the Petition with respect to the sp ecific existing SIP provi sions related to SSM

in each of 39 states identified by the Petitioner as inconsistent with the CAA. Further, for each of those states where the EPA proposes to grant the Petition concerning specific provisions, the EPA also proposes to find that the existing SIP provi sion is substantiallyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 2 of 327 inadequate to meet CAA requirements and t hus under CAA authority proposes a "SIP call." For those states for which the EPA pr oposes a SIP call, the EPA also proposes a

schedule for the states to submit a correc tive SIP revision. Finally, the EPA is also proposing to deny the request in the Petit ion that the EPA discontinue reliance on interpretive letters from states to clarify a ny potential ambiguity in SIP submissions, even in circumstances where the EPA may determine that this approach is appropriate and has adequately documented that approach in a rulemaking action. This action reflects the EPA's current SSM Policy for SIPs.

DATES: Comments . Comments must be received on or before [INSERT DATE 30 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER]. Public Hearing . If anyone contacts the EPA requesting a public hearing by [INSERT DATE 15 DAYS AFTER PU BLICATION IN THE FEDERAL REGISTER] , we will hold a public hearing on March 12, 2013.

ADDRESSES: Submit your comments, identifie d by Docket ID No. EPA-HQ-OAR2012-0322, by one of the following methods:

 http://www.regulations.gov : Follow the online instructions for submitting

comments.

 Email: a-and-r-docket@epa.gov

.

 Fax : (202) 566-9744.

 Mail : Attention Docket ID No. EPA- HQ-OAR-2012-0322, U.S. Environmental Protection Agency, EPA West (Air Dock et), 1200 Pennsylvania Avenue, NW, Mail Code: 6102T, Washington, D.C. 20460. Please include a total of two copies.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 3 of 327  Hand Delivery : U.S. Environmental Protection Ag ency, EPA West (Air Docket), 1301 Constitution Avenue, Northwest, R oom 3334, Washington, D.C. 20004, Attention Docket ID No. EPA-HQ-OAR-2012-0322. Such deliveries are only accepted during the Docket's normal hours of operation, and sp ecial arrangements should be made for

deliveries of boxed information.

Instructions . Direct your comments to Dock et ID No. EPA-HQ-OAR-2012-0322. The EPA's policy is that all comments receiv ed will be included in the public docket without change and may be made available online at www.regulations.gov , including any personal information provided, unless the comme nt includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit informa tion that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov website is an "anonymous access" system, which means th e EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without going through www.regulations.gov , your email address will be automatically captured a nd included as part of the comment that is placed in the public docket and made avai lable on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment and with any CD you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. El ectronic files should avoid the use of special characters, avoid any form of encryption, and be free of anyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 4 of 327 defects or viruses. For additional informa tion about the EPA's public docket visit the EPA Docket Center homepage at www.epa.gov/epahome/dockets.htm . For additional instructions on submitting comments, go to section I.C of the SUPPLEMENTARY

INFORMATION section of this document.

Docket . All documents in the doc ket are listed in the www.regulations.gov index. Although listed in the index, some info rmation is not publicly available, e.g. , CBI or

other information whose disclosure is restricted by statute. Ce rtain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available

docket materials are availabl e either electronically at www.regulations.gov or in hard copy at the U.S. Environmental Protecti on Agency, Air Docket, EPA/DC, EPA West Building, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for th e Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742. Public Hearing : If a public hearing is held, it will be held on March 12, 2013, at the EPA Ariel Rios East building, Room 1153, 1301 Constitution Avenue, Washington, D.C. 20460. The public hearing will convene at 9 a.m. (Eastern Standard Time) and

continue until the late r of 6 p.m. or 1 hour after the la st registered speaker has spoken. People interested in presenting oral testimony or inquiring as to whether a hearing is to be held should contact Ms. Pamela Long, Air Quality Planning Divi sion, Office of Air Quality Planning and Standards (C504-01), U.S. Environmental Protection Agency, Research Triangle Park, NC 27711, telephone (919) 541-0641, fax number (919) 541- 5509, email address long.pam@epa.gov , at least 5 days in advance of the public hearingThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 5 of 327 ( see DATES ). People interested in attending the public hearing must also call Ms. Long to verify the time, date, and location of the hearing. The public hearing will provide interested parties the opport unity to present data, views, or arguments concerning the proposed action. The EPA will make every e ffort to accommodate all speakers who arrive and register. A lunch break is schedul ed from 12:30 p.m. until 2 p.m. Because this hearing is being held at U.S. government facilities, individuals planning to attend the hearing should be prepared to show valid pi cture identification to the security staff in order to gain access to the meeting room. In addition, you will need to obtain a property pass for any personal belongings you bring with you. Upon leaving the building, you will be required to return this property pass to the security desk. No large signs will be allowed in the building, cameras may only be used outside of the building, and

demonstrations will not be allowed on federa l property for security reasons. The EPA may ask clarifying questions during the oral presentations but will not respond to the presentations at that time. Written statements and supporting information submitted during the comment period will be considered with the same weight as oral comments and supporting information presented at the pub lic hearing. If a hearing is held on March 12, 2013, written comments on the proposed rule must be postmarked by April 11, 2013. Commenters should notify Ms. Long if they will need specific equipmen t, or if there are other special needs related to providing co mments at the hearing. The EPA will provide equipment for commenters to show overhead slides or make computerized slide presentations if we receive special requests in advance. Oral testimony will be limited to 5 minutes for each commenter. The EPA encourages commenters to provide the EPA with a copy of their oral test imony electronically (via email or CD) or in hard copy form.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 6 of 327 The hearing schedule, including lists of speak ers, will be posted on the EPA's website at www.epa.gov/air/urbanair/sipstatus/ . Verbatim transcripts of the hearings and written statements will be included in the docket for the rulemaking. The EPA will make every effort to follow the schedule as closely as possible on the day of the hearing; however, please plan for the hearing to run either ahead of schedule or behind schedule.

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

. SUPPLEMENTARY INFORMATION: For questions related to a specific SI P, please contact th e appropriate EPA Regional Office:

EPA Regional Office Contact for Regional Office (person, mailing address, telephone number) State I Alison Simcox, Environmental Scientist, EPA Region 1, 5 Post Office Square, Suite 100, Boston, MA 02109-3912, (617) 918-1684. Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont. II Paul Truchan, EPA Region 2, 290 Broadway, 25th Floor, New York, NY 10007-1866, (212) 637-3711. New Jersey, New York, Puerto Rico, and Virgin Islands.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 7 of 327 EPA Regional Office Contact for Regional Office (person, mailing address, telephone number) State III Harold Frankford, EPA Region 3, 1650 Arch Street, Philadelphia, PA 19103- 2029, (215) 814-2108. District of Columbia, Delaware, Maryland, Pennsylvania, Virginia, and West Virginia. IV Joel Huey, EPA Region 4, Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, GA 30303-8960, (404) 562- 9104. Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee. V Christos Panos, Air and Radiation Division (AR-18J), EPA Region 5, 77 West Jackson Boulevard, Chicago, IL 60604-3507, (312) 353-8328. Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. VI Alan Shar (6PD-L), EPA Region 6, Fountain Place 12th Floor, Suite 1200, 1445 Ross Avenue, Dallas, TX 75202- 2733, (214) 665-6691. Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.

VII Lachala Kemp, EPA Region 7, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, KS 66219, (913) 551-7214. Alternate contact is Ward Burns, (913) 551-7960. Iowa, Kansas, Missouri, and Nebraska.

VIII Adam Clark, Air Quality Planning Unit (8P-AR) Air Program, Office of Partnership and Regulatory Assistance, EPA Region 8, 1595 Wynkoop Street, Denver, CO 80202-1129, (303) 312- 7104. Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming.

IX Lisa Tharp, EPA Re gion 9, Air Division, 75 Hawthorne Street (AIR-8), San Francisco, CA 94105, (415) 947-4142. Arizona; California; Hawaii and the Pacific Islands; Indian Country within Region 9 and Nevada. X Donna Deneen, Environmental Engineer,Office of Air, Waste and Toxics (AWT107), EPA Region 10, 1200 Sixth Avenue, Suite 900, Seattle, WA 98101, (206) 553-6706. Alaska, Idaho, Oregon, and Washington.

I. General Information A. Does this action apply to me?This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 8 of 327 Entities potentially affected by this rule include states, U.S. territories, local authorities, and eligible tribes that are curr ently administering, or may in the futureThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 9 of 327 administer, the EPA-approved implementation plans ("air agencies"). 1 

### The EPA's action on the Petition is potentially of interest to all such entities because the EPA is evaluating issues related to basic CAA requirements fo r SIPs. Through this rulemaking, the EPA is both clarifying and applying its interpretation of the CAA with respect to SIP provisions applicable to excess emissions during SSM events. In addition, the EPA may find specific SIP provisions in states identified in th e Petition to be substantially inadequate to meet CAA requirements, pursuant to CAA sec tion 110(k)(5), and thus those states will potentially be affected by this rulemaking dir ectly. For example, if a state's existing SIP provision allows an automatic exemption for excess emissions during periods of startup, shutdown, or malfunction, such that these exce ss emissions do not constitute a violation of the otherwise applicable emission limitations of the SIP, then the EPA may determine that the SIP provision is substantially inade quate because the provision is inconsistent with fundamental requirements of the CAA. Th is rule may also be of interest to the public and to owners and opera tors of industrial facilities that are subject to emission limits in SIPs, because it may require change s to state rules covering excess emissions.

1 

### The EPA respects the unique relationship between the U.S. government and tribal authorities and acknowledges that tribal conc erns are not intercha ngeable with state concerns. Under the CAA and EPA regulations, a tribe may, but is not required to, apply for eligibility to have a tribal implementati on plan (TIP). For conve nience, we refer to "air agencies" in this rulemaking collectively when meaning to refer in general to states, the District of Columbia, U.S. territories, local air permitting authorities, and eligible tribes that are currently administering, or may in the future administer, EPA-approved implementation plans. The EPA notes that the petition under evaluati on does not identify any specific provisions related to tribal im plementation plans. We therefore refer to "state" or "states" rather than "air agency" or "air agencies" when meaning to refer to one, some, or all of the 39 states identified in th e Petition. We also use "state" or "states" rather than "air agency" or "air agencies" when quoting or paraphras ing the CAA or other document that uses that term even when the original referenced passage may have applicability to tribes as well.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 10 of 327 When finalized, this action will embody the EPA's updated SSM Policy for SIP provisions relevant to excess emissions during SSM events. B. Where can I get a copy of this do cument and other related information? In addition to being available in the docke t, an electronic copy of this proposal

notice will also be available on the Worl d Wide Web. Following signature by the EPA Assistant Administrator, a copy of this not ice will be posted on th e EPA's website, under SSM SIP Call 2013, at www.epa.gov/air/urbanair/sipstatus . In addition to this notice,

other relevant documents are located in the docket, including a copy of the Petition and copies of each of the four guidance docume nts pertaining to excess emissions issued by the EPA in 1982, 1983, 1999, and 2001, which are discussed in more detail later in this proposal notice.

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

1. Submitting CBI . Do not submit this information to the EPA through www.regulations.gov or email. Clearly mark the part or all of the info rmation that you claim to be CBI. For CBI information in CD that you mail to the EPA, mark the outside of the CD as CBI and then identify electroni cally within the CD the specific information

that is claimed as CBI. In addition to one co mplete version of the comment that includes information claimed as CBI, a copy of the co mment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identif ied as CBI only to the following address: Roberto Morales, OAQPS Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Do cket ID No. EPA-HQ-OAR-2012-0322.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 11 of 327 2. Tips for preparing your comments . When submitting comments,

remember to:

 Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date, and page number).

 Follow directions - The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (C FR) part or section

number.

 Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

 Describe any assumptions and provide any technical information and/or data that you used.

 If you estimate potential costs or burd ens, explain how you arrived at your

estimate in sufficient detail to allow for it to be reproduced.

 Provide specific examples to illustrate your concerns, and sugge st alternatives.

 Explain your views as clearly as possibl e, avoiding the use of profanity or personal threats.

 Make sure to submit your comments by the comment period deadline identified. D. How is the preamble organized? The information presented in this preamble is organized as follows:

I. General Information A. Does this action apply to me? B. Where can I get a copy of this document and other related information? C. What should I consider as I prepare my comments? D. How is the preamble organized?This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 12 of 327 E. What is the meaning of key terms used in this notice? II. Overview of Proposed Rule A. How is the EPA proposing to respond to the Petition? B. What did the Pe titioner request? C. To which air agencies does this proposed rulemaking apply and why? D. What is the EPA proposing for a ny state that recei ves a finding of substantial inadequacy and a SIP call? E. What are potential impacts on affected states and sources? F. What happens if an affected st ate fails to meet the SIP submission deadline? G. What happens in an affected state in the interim period starting when the EPA promulgates the fi nal SIP call and ending when the EPA approves the required SIP revision? III. Statutory, Regulatory, and Policy Background IV. Proposed Action in Response to Request to Rescind the EPA Policy Interpreting the CAA to Allow Appropriate Affirmative Defense Provisions A. Petitioner's Request B. The EPA's Response V. Proposed Action in Response to Request for the EPA's Review of Specific Existing SIP Provisions for Consis tency with CAA Requirements A. Petitioner's Request B. The EPA's Response VI. Proposed Action in Response to Reque st that the EPA Limit SIP Approval to the Text of State Regulations and Not Rely upon Additional Interpretive Letters from the State A. Petitioner's Request B. The EPA's Response VII. Clarifications, Reiterations, a nd Revisions to the EPA's SSM Policy A. Applicability of Emission Lim itations During Periods of Startup and Shutdown B. Affirmative Defense Provisions During Periods of Malfunction C. Affirmative Defense Provisions During Periods of Startup and Shutdown D. Relationship Between SIP Provi sions and Title V Regulations E. Intended Effect of the EPA's Action on the Petition VIII. Legal Authority, Process, and Timing for SIP Calls A. SIP Call Authority U nder Section 110(k)(5) 1. General Statutory Authority 2. Substantial Inadequacy of Automatic Exemptions 3. Substantial Inadequacy of Dir ector's Discretion Exemptions 4. Substantial Inadequacy of Improper Enforcement Discretion ProvisionsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 13 of 327 5. Substantial Inadequacy of Deficient Affirmative Defense Provisions B. SIP Call Process U nder Section 110(k)(5) C. SIP Call Timing Under Section 110(k)(5) IX. What is the EPA proposing for each of the specific SIP provisions identified in the Petition? A. Overview of the EPA's Evalua tion of Specific SIP Provisions 1. Automatic Exemption Provisions 2. Director's Discretion Exemption Provisions 3. State-only Enforcement Discretion Provisions 4. Adequacy of Affirmative Defense Provisions 5. Affirmative Defense Provisions Applicable to a "Source or Small Group of Sources" B. Affected States in EPA Region I 1. Maine 2. New Hampshire 3. Rhode Island C. Affected States in EPA Region II 1. New Jersey 2. [Reserved] D. Affected States in EPA Region III 1. Delaware 2. District of Columbia 3. Virginia 4. West Virginia E. Affected States and Local Ju risdictions in EPA Region IV 1. Alabama 2. Florida 3. Georgia 4. Kentucky 5. Kentucky: Jefferson County 6. Mississippi 7. North Carolina 8. North Carolina: Forsyth County 9. South Carolina 10. Tennessee 11. Tennessee: Knox County 12. Tennessee: Shelby County F. Affected States in EPA Region V 1. Illinois 2. Indiana 3. Michigan 4. Minnesota 5. Ohio G. Affected States in EPA Region VIThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 14 of 327 1. Arkansas 2. Louisiana 3. New Mexico 4. Oklahoma H. Affected States in EPA Region VII 1. Iowa 2. Kansas 3. Missouri 4. Nebraska 5. Nebraska: Lincoln-Lancaster I. Affected States in EPA Region VIII 1. Colorado 2. Montana 3. North Dakota 4. South Dakota 5. Wyoming J. Affected States and Local Ju risdictions in EPA Region IX 1. Arizona 2. Arizona: Maricopa County 3. Arizona: Pima County K. Affected States in EPA Region X 1. Alaska 2. Idaho 3. Oregon 4. Washington X. Statutory and Executive Order Reviews A. Executive Order 12866: Regulat ory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132 – Federalism F. Executive Order 13175 – Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045 – Protection of Children from Environmental Health Risks and Safety Risks H. Executive Order 13211 – Actions Concerning Regulations That Significantly Affect Energy S upply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898 – Federal Actions to Address Environmental Justice in Minorit y Populations and Low-Income Populations K. Determination Under Section 307(d) L. Judicial ReviewThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 15 of 327 XI. Statutory Authority E. What is the meaning of key te rms used in this notice? For the purpose of this notice, the foll owing definitions appl y unless the context

indicates otherwise:

The terms Act or CAA mean or refer to the Clean Air Act.

The term affirmative defense means, in the context of an enforcement proceeding, a response or defense put forward by a defenda nt, regarding which the defendant has the burden of proof, and the merits of which are independently and objectively evaluated in a judicial or administrative proceeding. By demonstrating that the elements of an affirmative defense have been met, a sour ce may avoid a civil penalty but cannot avoid injunctive relief.

The terms air agency and air agencies mean or refer to states, the District of Columbia, U.S. territories, local air permitting authorities with delegated authority from the state, and tribal authorities.

The term automatic exemption means a generally applic able provision in a SIP that would provide that if cer tain conditions existed during a period of excess emissions,

then those exceedances would not be considered violations of the applicable emission

limitations.

The term director's discretion provision means, in general, a regulatory provision that authorizes a state regulatory official un ilaterally to grant exemptions or variances from applicable emission limitations or cont rol measures, or to excuse noncompliance with applicable emission limitations or contro l measures, in spite of SIP provisions that

would otherwise render such c onduct by the source a violation.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 16 of 327 The term EPA refers to the United States Environmental Protection Agency.

The term excess emissions means the emissions of air pollutants from a source that exceed any applicable SIP emission limitations.

The term malfunction means a sudden and unavoidable breakdown of process or control equipment.

The term NAAQS means national ambient air quality standard or standards. These are the national primary and secondary am bient air quality standards that the EPA

establishes under CAA section 109 for criter ia pollutants for purposes of protecting public health and welfare.

The term Petition refers to the petition for ru lemaking titled, "Petition to Find Inadequate and Correct Seve ral State Implementation Plan s under Section 110 of the Clean Air Act Due to Startup, Shutdown, Ma lfunction, and/or Maintenance Provisions," filed by the Sierra Club with the EPA Administrator on June 30, 2011.

The term Petitioner refers to the Sierra Club.

The term shutdown means, generally, the cessati on of operation of a source for

any reason.

The term SIP means or refers to a State Implementation Plan. Generally, the State Implementation Plan is the collection of st ate statutes and regu lations approved by the EPA pursuant to CAA section 110 that together provide for implementation, maintenance, and enforcement of a national am bient air quality standard (or any revision thereof) under section 109 for any air pollu tant in each air quality control region (or portion thereof) within a state. In some part s of this notice, statements about SIPs in general also apply to tribal implementation plans in gene ral even though not explicitlyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 17 of 327 noted.

The term SSM refers to startup, shutdown, or ma lfunction at a source. It does not include periods of maintenance at such a s ource. An SSM event is a period of startup, shutdown, or malfunction during which there ar e exceedances of the applicable emission

limitations and thus excess emissions.

The term SSM Policy refers to the cumulative guidance that EPA has issued concerning its interpretation of CAA requirements with respect to treatment of excess emissions during periods of startup, shutdown, and malfunction at a source. The most comprehensive statement of the EPA's SSM Po licy prior to this proposed rulemaking is embodied in a 1999 guidance document discussed in more detail in this proposal. When finalized, this action will embody the EPA' s updated SSM Policy for SIP provisions relevant to excess emissions during SSM events.

The term startup means, generally, the setting in operation of a source for any

reason. II. Overview of Proposed Rule A. How is the EPA proposing to respond to the Petition? The EPA is proposing to take action on a petition for rulemaking that the Sierra Club (the Petitioner) filed with the EPA Administrator on June 30, 2011 (the Petition). The Petition concerns how air agency rules in EPA-approved SIPs treat excess emissions during periods of startup, shutdown, or ma lfunction of industrial process or emission control equipment. Many of these rules were added to SIPs and approved by the EPA in the years shortly after the 1970 amendments to the CAA, which for the first time provided for the system of clean air plans that were to be prepared by air agencies andThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 18 of 327 approved by the EPA. At that time, it was wide ly believed that emission limitations set at levels representing good control of emissions during periods of normal operation could in

some cases not be met with the same emi ssion control strategies during periods of startup, shutdown, maintenance, or malfunc tion. Accordingly, it was common for state plans to include provisions for special, more lenient treatment of excess emissions during such periods. Many of these provisions t ook the form of absolute or conditional statements that excess emissions from a source, when they occur outside of the source's normal operations, were not to be considered violations of the air agency rules, i.e. , exemptions. Excess emission provisions for startup, s hutdown, maintenance, and malfunctions were often included as part of the original SIPs that the EPA approved in 1971 and 1972. In the early 1970s, because the EPA was inunda ted with proposed SIPs and had limited experience in processing them, not enough attention was given to the adequacy, enforceability, and consistency of these provisions. Consequently, many SIPs were approved with broad and loosely-defined provi sions to control excess emissions. Starting in 1977, however, the EPA discerned and articula ted to air agencies that exemptions for excess emissions during such periods were inco nsistent with certain requirements of the CAA. The EPA also realized that such pr ovisions allow opportunities for sources to repeatedly emit pollutants during such periods in quantities that c ould cause unacceptable air pollution in nearby communities with no le gal pathway for air agencies, the EPA, or the courts to require the sources to make reasonable efforts to reduce these emissions.

The EPA has been more careful after 1977 not to give new approval to SIP rules that are

inconsistent with the CAA and has issued se veral guidance memoranda to advise statesThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 19 of 327 on how to avoid impermissible provisions 2 

### as they expand and revise their SIPs. The

EPA has also found several SIPs to be defi cient because of problematic SSM provisions and called upon the affected states to amend their SIPs. However, in light of the other priority work facing both air agencies and th e EPA, the EPA has not to date initiated a broad effort to get all states to remove im permissible provisions from their SIPs and to adopt other, approvable approaches for addr essing excess emissions when appropriate. Public interest groups, includi ng the Petitioner, have sued the EPA in several statespecific cases concerning SIP issues, and they have been urging the EPA to give greater priority to addressing the issu e of SSM provisions in SIPs. In one of these SIP cases, the EPA entered into a settlement agreement re quiring it to respond to the Petition from the Sierra Club. A copy of the settlement agr eement is provided in the docket for this rulemaking. 3



### As alluded to earlier in this notice, ther e are available CAA-consistent approaches that can be incorporated into SIPs to a ddress excess emissions during SSM events. While automatic exemptions and director’s discre tion exemptions from otherwise applicable

emission limitations are not consistent with the CAA, SIPs may include criteria and procedures for the use of enforcemen t discretion by air agency personnel and

2 

### The term "impermissible provision" as used throughout this notice is generally intended to refer to a SIP provision identified by the Petitioner that the EPA believes to be inconsistent with requirements of the C AA. As described later in this notice ( see section VIII.A), the EPA is proposing to find a SI P "substantially inadequate" to meet CAA requirements where the EPA determines th at the SIP includes an impermissible provision.

3 

### See, Settlement Agreement executed Nov. 30, 2011, to address a lawsuit filed by Sierra Club and WildEarth Guardians in the United States District Court for the Northern District of California: Sierra Club et al. v. Jackson , No. 3:10-cv-04060-CRB (N.D. Cal.).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 20 of 327 appropriately defined affirmative defenses. In this action, the EPA is articulating a policy that reflects this principle a nd is reviewing the SIPs from 39 states to determine whether specific provisions identified in the Petiti on are consistent with the EPA's SSM Policy and the CAA. In some cases, this review i nvolves a close reading of the provision in the

SIP and its context to discern whether it is in fact an exemption, a statement regarding enforcement discretion by the air agency, or an affirmative defense. Each state will ultimately decide how to address any SIP inadequacies identified by the EPA once the EPA takes final action. Recognizing that for some states, the EPA's response to this Petition entails reviewing SIP provisions that may date back several decades, the EPA will work closely with each of the affected states to develop approvable SIPs consistent with the guidance articulated in the final ac tion. Section IX of this notice presents the EPA’s analysis of each SIP provision at issue. The EPA's review also hinges on interpretation of several relevant secti ons of the CAA. While the EPA has already developed and has been implementing the SSM Policy that is based on its interpretation of the CAA, this action provide s the EPA an opportunity to invite public comment on this SSM Policy and its basis in the CAA. To th at end, this notice contains a detailed clarifying explanation of the SSM Policy (i ncluding proposed revi sions to it). Also, supplementary to this notice, the EPA is providing a memorandum to summarize the legal and administrative context for the proposed action, and the EPA invites public comment on the memorandum, which is available in the docket for this rulemaking. 4 

### This notice, and the final notice for this action af ter considering public comment, will also

4 

### See, Memorandum, "Statutory, Regulatory, and Policy Context for this Rulemaking," Feb. 4, 2013.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 21 of 327 clarify for the affected states how they can resolve the identified deficiencies in their SIPs, as well as provide all air agencies guidance and model language as they further develop their SIPs in the future. In summary, the EPA proposes to agree with the Petitioner that many of the identified SIP provisions are not permissibl e under the CAA. However, in several cases we are proposing to find that an identified SIP provision is ac tually one of the permissible approaches. Of the 39 states covered by the Petition, the EPA is proposing to make SIP

calls for 36 states. The EPA is aware of other SSM-related SIP pr ovisions that were not identified in the Petition but that may be inconsistent w ith the EPA's interpretation of the CAA. The EPA may address these other pr ovisions later in a separate notice-and-comment action. B. What did the Petitioner request? The Petition includes three interrelated requests concerning the treatment in SIPs of excess emissions by sources during peri ods of startup, shutdown, or malfunction. First, the Petitioner argued that SIP provisions providing an affirmative defense for monetary penalties for excess emissions in judicial proceedings are contrary to the CAA. Thus, the Petitioner advocated that the EPA should rescind its interpretation of the CAA expressed in the SSM Policy that allows appropriately drawn affirmative defense provisions in SIPs. The Petitioner made no di stinction between affirmative defenses for excess emissions related to malfunction, star tup, or shutdown. Furt her, the Petitioner requested that the EPA issue a SIP call requiring states to eliminate all such affirmative defense provisions in existing SIPs. As e xplained later in this proposal, the EPA is proposing to grant in part and to deny in pa rt this request. The EPA does not agree withThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 22 of 327 the Petitioner that appropriately drawn affirmative defense provisions for violations due

to excess emissions that result from malfuncti ons are contrary to the CAA, and thus the EPA is proposing to deny the request to revise its interpretation of the CAA concerning

affirmative defenses for malfunctions. Howeve r, the EPA is proposing to revise its SSM Policy with respect to affirmative defenses for violations due to excess emissions that occur during startup and shutdown, in order to distinguish between planned events that

are within the source's contro l and unplanned events that are not. The EPA believes that SIP provisions should encourage compliance duri ng events that are within the source's control, and thus affirmative defenses fo r excess emissions duri ng planned startup and shutdown are inappropriate, unlike those for excess emissions during malfunctions. Second, the Petitioner argued that many existing SIPs contain impermissible provisions, including automatic exemptions fr om applicable emission limitations during SSM events, director's discretion provisions that provide discretiona ry exemptions from applicable emission limitations during SSM events, enforcement discretion provisions that appear to bar enforcement by the EPA or citizens for such excess emissions, and inappropriate affirmative defense provisi ons that are not consistent with the recommendations in the EPA's SSM Policy. Th e Petitioner identified specific provisions

in SIPs of 39 states that it considered inc onsistent with the CAA and explained the basis for its objections to the provisions. As expl ained later in this proposal, the EPA agrees with the Petitioner that some of these existing SIP provisions are legally impermissible and thus proposes to find such provisions "substan tially inadequate" 5 

### to meet CAA

5 

### The term "substantially inadequate" is used in the CAA and is discussed in detail in section VIII.A of this notice.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 23 of 327 requirements. Among the reasons for EPA's proposed action is to eliminate provisions

that interfere with enforcement in a manner prohibited by the CAA. Simultaneously, the EPA proposes to issue a SIP call to the st ates in question requesting corrective SIP

submissions to revise their SIPs accord ingly. For the remainder of the identified provisions, however, the EPA disagrees with the contentions of the Petitioner and thus proposes to deny the Petition wi th respect to those provisions and to take no further action. The EPA's action on this por tion of the Petition will assu re that these SIPs comply with the fundamental requirements of the CAA with respect to the treatment of excess emissions during periods of startup, shutdown, or malfunction. The majority of the SIP calls that EPA is proposing in this action implement the EPA's longstanding interpretation of the CAA through multiple iterations of its SSM Policy. In a few instances, however, the EPA is also propos ing a SIP call to a ddress the issue of affirmative defenses during pe riods of planned startup and shutdown, because the EPA is revising its prior interpretati on of the CAA to distinguish between violations due to excess emissions that occur during malfunctions and violations due to excess emissions that occur during planned startup and s hutdown, which are modes of normal source operation. Third, the Petitioner argued that the EPA should not rely on interpretive letters from states to resolve any ambiguity, or perceived ambiguity, in state regulatory provisions in SIP submissions. The Petitione r reasoned that all regulatory provisions should be clear and unambiguous on their face a nd that any reliance on interpretive letters to alleviate facial ambiguity in SIP provision s can lead to later problems with compliance and enforcement. Extrapolating from several in stances in which the basis for the originalThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 24 of 327 approval of a SIP provision re lated to excess emissions during SSM events was arguably not clear, the Petitioner cont ended that the EPA should neve r use interpretive letters to resolve such ambiguities. As explained late r in this proposal, the EPA acknowledges the concern of the Petitioner that provisions in SIPs should be clear and unambiguous. However, the EPA does not agree with the Petitioner that reliance on interpretive letters in a rulemaking context is never appropria te. Thus, the EPA is proposing to deny the request that actions on SIP s ubmissions never rely on interp retive letters. Instead, the EPA explains how proper documentation of reli ance on interpretive letters in notice-andcomment rulemaking nevertheless addresses the practical concerns of the Petitioner. The EPA solicits comment on its proposed response to the overarching issues in the Petition, and in particular on its proposed action with respec t to each of the specific existing SIP provisions identified in the Petiti on as inconsistent with the requirements of the CAA. Through this action on the Petiti on, the EPA is clarifying, restating, and revising its SSM Policy. When finalized, this action will embody the EPA's updated SSM Policy for SIP provisions relevant to excess emissions during SSM events. C. To which air agencies does this proposed rulemaking apply and why? In general, the proposal may be of interest to all air agencies because the EPA is clarifying, restating, and revisi ng its longstanding SSM Policy with respect to what the CAA requires concerning SIP pr ovisions relevant to excess emissions during periods of startup, shutdown, and malfunction. For exampl e, the EPA is denying the Petitioner's request that the EPA rescind its interpretati on of the CAA to allo w appropriately drawn affirmative defense provisions applicable to malfunctions, as explained in EPA guidance documents on this topic. The EPA is clarifyi ng or revising its prior guidance with respectThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 25 of 327 to several issues in order to ensure that fu ture SIP submissions, not limited to those that affected states make in response to this ac tion, are fully consistent with the CAA. For example, the EPA is revising its prior gui dance concerning whether the CAA allows affirmative defense provisions that apply during periods of planned startup and shutdown. This proposal also addresses th e use of interpretive letter s for purposes of EPA action on

SIPs. In addition, the proposal is directly rele vant to the states with SIP provisions

identified in the Petition that the Peti tioner alleges are inc onsistent with CAA requirements or with the EPA's guidance conc erning SIP provisions relevant to excess

emissions. The EPA is proposing either to grant or to deny the Petition with respect to the specific existing SIP provisions in each of 39 states identified by the Petitioner as allegedly inconsistent with the CAA. Th e 39 states (comprising 46 state and local

authorities and no tribal aut horities) are listed in table 1, "List of States with SIP Provisions for Which the EPA Proposes Either to Grant or to Deny the Petition, in Whole or in Part." After evaluating the Petition, the EPA is proposi ng to grant the petition with respect to one or more provisions in 36 stat es of the 39 states listed, and these are the states for which the proposed action on petiti on, according to table 1, is either "Grant" or "Partially grant, partially deny." Conversely, the EPA is pr oposing to deny the petition with respect to all provisions that the Petitioner identified in 3 of the 39 states, and these (Idaho, Nebraska, and Oregon) are the states for which the proposed action on petition, according to table 1, is "Deny." For each of the states for which the EPA pr oposes to grant or partially to grant theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 26 of 327 Petition, the EPA proposes to find that one or more particular provisions in the state's existing SIP identified by the Petitioner are substantially inadequate to meet the requirements of the CAA. Thus, the EPA also proposes to promulgate a SIP call to each of those states, requiring th e state to correct those part icular SIP provisions, in accordance with the SIP call process of CAA s ection 110(k)(5). The SIP calls apply only to those specific provisions, and the scope of each of the SIP calls is limited to those provisions.

For each of the states for which the EPA proposes to deny or to partially deny the Petition, the EPA proposes to find that particul ar provisions in the existing SIP identified by the Petitioner are consistent with th e requirements of the CAA and thus not substantially inadequate to meet the requirements pursuan t to CAA section 110(k)(5). Thus, the EPA proposes to take no action with re spect to those states for those particular SIP provisions.

Table 1. List of States with SIP Provision s for Which the EPA Proposes Either to Grant or to Deny the Petition, in Whole or in Part

EPA Region State Proposed action on petition I Maine ............................................... ...........

. Grant New Hampshire ...........................................

. Partially grant, partially deny Rhode Island ................................................

. Grant II New Jersey ..................................................

. Partially grant, partially deny III Delaware ......................................................

. Grant District of Columbia ....................................

. Partially grant, partially deny Virginia ........................................................

. Grant West Virginia ..............................................

. Grant IV Alabama .......................................................

. Grant Florida .........................................................

. Grant Georgia ........................................................

. GrantThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 27 of 327 Kentucky .....................................................

. Grant Mississippi ...................................................

. Grant North Carolina .............................................

. Grant South Carolina .............................................

. Partially grant, partially deny Tennessee ....................................................

. Grant V Illinois ..........................................................

. Grant Indiana .........................................................

. Grant Michigan ......................................................

. Grant Minnesota ....................................................

. Grant Ohio .............................................................

. Partially grant, partially deny VI Arkansas ......................................................

. Grant Louisiana .....................................................

. Grant New Mexico ................................................

. Grant Oklahoma ....................................................

. Grant VII Iowa .............................................................

. Partially grant, partially deny Kansas .........................................................

. Grant Missouri .......................................................

. Partially grant, partially deny Nebraska ......................................................

. Deny VIII Colorado ......................................................

. Partially grant, partially deny Montana .......................................................

. Grant North Dakota ...............................................

. Grant South Dakota ...............................................

. Grant Wyoming .....................................................

. Grant IX Arizona ........................................................

. Partially grant, partially deny X Alaska ..........................................................

. Grant Idaho ............................................................

. Deny Oregon .........................................................

. Deny Washington ..................................................

. Grant

For each state for which the proposed acti on on the Petition is either "Grant" or "Partially grant, partially de ny," the EPA proposes to find that certain specif ic provisions in each state's SIP are substantially inadequa te to meet CAA requirements for the reason that these provisions are inconsistent with th e CAA with regard to how the state treats excess emissions from sources during periods of startup, shutdown, and malfunction. The EPA believes that certain specific provisions in these SIPs fail to meet fundamental statutory requirements intended to prot ect the NAAQS, prevention of significantThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 28 of 327 deterioration (PSD) increments, and visibilit y. Equally importantly, the EPA believes that the same provisions may undermine the ability of states, the EPA, and the public to

enforce emission limitations in the SIP that ha ve been relied upon to en sure attainment or maintenance of the NAAQS or to meet other CAA requirements. For each state for which the proposed acti on on the Petition is either "Grant" or "Partially grant, partially de ny," the EPA is also proposing in this rulemaking to call for a SIP revision as necessary to correct the iden tified provisions. The SIP revisions that the EPA is proposing to require will rectify a numbe r of different types of defects in existing SIPs, including automatic exemptions from em ission limitations, impermissible director's discretion provisions, enforcement discretion pr ovisions that purport to bar enforcement by the EPA or through a citizen suit, and affirmative defense provisions that are inconsistent with CAA requirements. A correc tive SIP revision addressing automatic or impermissible discretionary exemptions will ensure that excess emissions during periods of startup, shutdown, and malfunction are trea ted in accordance with CAA requirements. Similarly, a corrective SIP revision addressi ng ambiguity in who may enforce against

violations of these emission limitations w ill also ensure that CAA requirements to provide for enforcement are met. A SIP revisi on to rectify deficiencies in affirmative defense provisions will assure that such de fenses are only availabl e when sources have met the criteria that justif y their being shielded from monetary penalties in an enforcement action. The particular provisi ons for which the EPA is requiring SIP

revisions are summarized in section IX of this notice. Many of these provisions were added to the respective SIPs many years ago a nd have not been the subject of action by

the state or the EPA since.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 29 of 327 D. What is the EPA proposing for any state that receives a finding of substantial inadequacy and a SIP call? If the EPA finalizes a finding of substant ial inadequacy and issues a SIP call for any state, the EPA's final action will estab lish a deadline by which the state must make a SIP submission to rectify the deficiency. Purs uant to CAA section 110(k)(5), the EPA has authority to set a SIP submission deadline up to 18 months from the date of the final finding of substantial inadequacy. Accord ingly, the EPA is proposing that if it promulgates a final finding of substantial inad equacy 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 exam ple, the EPA's final findings are signed and disseminated in August 2013, then the SIP s ubmission 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, includ ing the EPA's interpretation of the CAA reflected in the SSM Policy as clarifie d and updated through this rulemaking. The EPA believes that states should be provided th e maximum time allowable under CAA section 110(k)(5) in order to have sufficient time to make appropriate SIP revisions following their own SIP development process. Such a schedule will allow for the necessary SIP development process to correct the deficien cies yet still achieve the necessary SIP improvements as expeditiously as practicable. E. What are potential impacts on affected states and sources? The issuance of a SIP call would require an affected state to take action to revise its SIP. That action by the state may, in turn, a ffect sources as described below. The statesThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 30 of 327 that would receive a SIP call will in general have options as to exactly how to revise their SIPs. In response to a SIP call, a state retain s broad discretion con cerning how to revise its SIP, so long as that revision is consiste nt with the requirements of the CAA. Some provisions that may be identified in a final SIP call, for example an automatic exemption provision, would have to be removed entire ly and an affected source could no longer depend on the exemption to avoid all liability for excess emissions. Some other provisions, for example a problematic enfor cement discretion provision or affirmative defense provision, could either be removed en tirely from the SIP or retained if revised appropriately, in accordance with the EPA's interpretation of the CAA as described in the EPA’s SSM Policy. The EPA notes that if a stat e removes a SIP provision that pertains to the state's exercise of enforcement discretion, this removal would not affect the ability of the state to apply discretion in its enforcement program. It would make the exercise of such discretion case-by -case in nature. In addition, affected states may choose to consider reassessin g particular emissionlimitations, for example to determine whether those limits can be revised such that wellmanaged emissions during planned operations such as startup and shutdown would not exceed the revised emission limitation, while still protecting air quality. Such a revision of an emission limitation may need to be submitted as a SIP revision for EPA approval if the existing limit to be changed is already included in the SIP or if the existing SIP relies on the particular existing emission limit to meet a CAA requirement. In such instances,

the EPA would review the SIP revision fo r consistency with all applicable CAA requirements. A state that choos es to revise particular emi ssion limitations, in addition to removing the aspect of the existing provision th at is inconsistent with CAA requirements,This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 31 of 327 could include those revisions in the same SIP submission that addresses the SSM provisions identified in the SIP call, or it could submit them separately. The implications for a regulated source in a given state, in terms of whether and how it would potentially have to change its equipment or practices in order to operate with emissions that comply with the revise d SIP, will depend on the nature and frequency

of the source's SSM events and how the stat e has chosen to revise the SIP to address excess emissions during SSM events. The EPA recognizes that afte r all the responsive SIP revisions are in place and are being im plemented by the states, some sources may need to take steps to better control emissions so as to comply with emission limits continuously, as required by the CAA, or to increase durability of components and monitoring systems to detect and manage malfunc tions promptly. If a state elects to have appropriately drawn affirmative defense provi sions, however, such sources may not be liable for monetary penalties for any exceedances. The EPA Regional Offices will work with states to help them understand their options and the potential consequences for sources as the states prepare their SIP revisions in response to the SIP calls. F. What happens if an affected state fails to meet the SIP submission deadline? If, in the future, the EPA finds that a state that is subject to a SIP call has failed to submit a complete SIP revision as required by the final rule, or th e EPA disapproves such a SIP revision, then the finding or disapproval would trigger an oblig ation for the EPA to impose a federal implementation plan (FIP) with in 24 months after that date. In addition, if a state fails to make the required SIP re vision, or if the EPA disapproves the required SIP revision, then either event can also trigger mandatory 18-month and 24-monthThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 32 of 327 sanctions clocks under CAA section 179. Th e two sanctions that apply under CAA section 179(b) are the 2-to-1 emission offset requirement for all new and modified major sources subject to the nonattainment new source review program and restrictions on highway funding. More details concerning the timing and process of the SIP call, and potential consequences of the SIP call, are pr ovided in section VIII.B of this notice. G. What happens in an affected state in the interim period starting when the EPA promulgates the final SIP call and ending when the EPA approves the required SIP

revision?

If the EPA issues a final SIP call to a st ate, that action alone will not cause any automatic change in the legal status of th e existing affected provision(s) in the SIP. During the time that the state takes to deve lop a SIP revision in accordance with the SIP

call and the time that the EPA takes to eval uate and act upon the SIP revision pursuant to CAA section 110(k), the existing affected SIP provision(s) will remain in place. The EPA notes, however, that the state regulatory revisions that the state has adopted and submitted for SIP approval will most likely be already in effect at the state level during the pendency of the EPA's evaluation of and action upon the new SIP submission. The EPA recognizes that in the interim pe riod, there may continue to be instances of excess emissions that adversely impact attainment and maintenance of the NAAQS, interfere with PSD increments, interfere with visibility, and cause other adverse consequences as a result of the impermissibl e provisions. However, given the need to resolve these longstanding SIP deficiencies in a careful and comprehensive fashion, the EPA believes that providing sufficient time for these corrections to occur will ultimately

be the best course to ensure the ultimate goal of eliminating the inappropriate SIPThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 33 of 327 provisions and replacing them with provisi ons consistent with CAA requirements. III. Statutory, Regulatory , and Policy Background

The Petition raised issues related to ex cess emissions from sources during periods of startup, shutdown, or malfunction, and to the correct approach to these excess emissions in SIPs. In this context, "excess emissions" are air emissions that exceed the otherwise applicable emission limitations in a SIP, i.e. , emissions that would be

violations of such emission limitations. The question of how to address excess emissions correctly during startup, shut down, and malfunction events ha s posed a challenge since the inception of the SIP program in the 1970s . The primary objective of state and federal regulators is to ensure that sources of emissions are s ubject to appropriate emission controls as necessary in order to attain and maintain the NAAQS, protect PSD increments, protect visibility, and meet othe r statutory requirements . Generally, this is achieved through enforceable emission limitatio ns on sources that apply, as required by the CAA, continuously. Several key statutory provis ions of the CAA are relevant to the EPA's evaluation of the Petition. These provisions relate generally to the ba sic legal requirements for the content of SIPs, the authority and responsibility of air agenci es to develop such SIPs, and the EPA's authority and responsibility to revi ew and approve SIP submissions in the first instance, as well as the EPA's authority to re quire improvements to SIPs if the EPA later determines that to be necessary for a SIP to meet CAA requirements. In addition, the Petition raised issues that pertain to enfor cement of provisions in a SIP. The enforcement issues relate generally to what constitutes a violation of an emission limitation in a SIP, who may seek to enforce against a source fo r that violation, and whether the violatorThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 34 of 327 should be subject to monetary penalties as we ll as other forms of judicial relief for that

violation. The EPA has a longstanding interpretati on of the CAA with respect to the treatment of excess emissions during periods of startup, shutdown, or malfunction in SIPs. This statutory interpretation has been expressed, reiterated, and elaborated upon in a series of guidance documents issu ed in 1982, 1983, 1999, and 2001. In addition, the EPA has applied this interpretation in indivi dual rulemaking actions in which the EPA: (i) approved SIP submissions that were consistent with the EPA's interpretation; 6 

### (ii) disapproved SIP submissions that were not consistent with this interpretation; 7 

### (iii) itself promulgated regulations in FIPs that were consistent with this interpretation; 8 

### or (iv) issued a SIP call requiring a state to revise an impermissible SIP provision. 9 

### The EPA's SSM Policy is a policy statement and thus constitutes guidance. As guidance, the SSM Policy does not bind states, the EPA, or other pa rties, but it does reflect the EPA's interpretation of the stat utory requirements of the CAA. The EPA's evaluation of any SIP provision, whether prospe ctively in the case of a new provision in a SIP submission or retrospectively in the cas e of a previously a pproved SIP submission, must be conducted through a notice-and-comment rulemaking in which the EPA will

6 

### See, "Approval and Promulgation of Implemen tation Plans; Texas; Excess Emissions During Startup, Shutdown, Maintenance, and Malfunction Activ ities," 75 FR 68989 (Nov. 10, 2010).

7 

### See, "Approval and Promulgation of State Im plementation Plans; Michigan," 63 FR 8573 (Feb. 20, 1998).

8 

### See, "Federal Implementation Plan for the Bi llings/Laurel, MT, Sulfur Dioxide Area," 73 FR 21418 (Apr. 21, 2008).

9 

### See, "Finding of Substantial In adequacy of Implementation Plan; Call for Utah State Implementation Plan Revision," 76 FR 21639 (Apr. 18, 2011).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 35 of 327 determine whether or not a give n SIP provision is consistent w ith the requirements of the CAA and applicable regulations. 10



### The Petition raised issues related to ex cess emissions from sources during periods of startup, shutdown, and malfunction, and the consequences of failing to address these emissions correctly in SIPs. In broad terms, the Petitioner expressed concerns that the exemptions for excess emissions and the other types of alleged deficiencies in existing SIP provisions "undermine the emission limits in SIPs and threaten states' abilities to achieve and maintain the NAAQS, thereby thre atening public health and public welfare, which includes agriculture, histor ic properties and natural areas." 11 

### The Petitioner asserted that such exemptions for SSM even ts are "loopholes" that can allow dramatically higher amounts of emissions and that these emissions "can swamp the amount of pollutants emitted at other times." 12 

### In addition, the Petitioner argued that these automatic and discretionary exemptions, as well as ot her SIP provisions that interfere with the enforcement structure of the CAA, un dermine the objectives of the CAA. The EPA notes that the alleged SIP defi ciencies are not le gal technicalities. Compliance with the applicable requirement s is intended to achieve the air quality protection and improvement purposes and objec tives of the CAA. The EPA believes that the results of automatic and discretionary exem ptions in SIPs, and of other provisions that interfere with effective enforcement of SIPs, are real-world consequences that adversely

10 

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

11 

### Petition at 2.

12 

### Petition at 12.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 36 of 327 affect public health. As described earlier in this notice, the EPA invites public comment on a memorandum that supplements this notice and provides a more detailed discussion of the statutory, regulatory and policy background for the EPA's proposed action. The memorandum can be found in the docket for this rulemaking. 13 

### IV. Proposed Action in Response to Request to Rescind the EPA Policy Interpreting the CAA to Allow Appropri ate Affirmative De fense Provisions A. Petitioner's Request The Petitioner's first request was for the EPA to rescind its SSM Policy element interpreting the CAA to allow affirmative defe nse provisions in SIPs for excess emissions during SSM events. 14 

### Related to this request, the Petiti oner also asked the EPA: (i) to find that SIPs containing an affirmative defense to monetary penalties for excess emissions during SSM events are substantially inadequa te because they do not comply with the CAA; and (ii) to issue a SIP call pursuant to CAA section 110 (k)(5) to require each such

state to revise its SIP. 15 

### Alternatively, if the EPA denies these two related requests, the Petitioner requested the EPA: (i) to require states with SIPs that contain such affirmative defense provisions to revise them so that they are consistent with the EPA's 1999 SSM Guidance for excess emissions during SSM events; and (ii) to issue a SIP call pursuant to CAA section 110(k)(5) to states with pr ovisions inconsistent with the EPA's

13 

### See, Memorandum, "Statutory, Regulatory, and Policy Context for this Rulemaking," Feb. 4, 2013.

14 

### Petition at 11.

15 

### Id.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 37 of 327 interpretation of the CAA. 16 

### The EPA interprets this latter request to refer to the specific SIP provisions that the Petitioner identified in a separate section of the Petition, titled, "Analysis of Individual Stat es' SSM Provisions," including specific existing affirmative defense provisions. The Petitioner requested that the EPA re scind its SSM Policy element interpreting

the CAA to allow SIPs to include affirma tive defenses for violations due to excess emissions during any type of SSM events beca use the Petitioner contended there is no legal basis for the policy. Specifically, the Petitioner cited to two statutory grounds, CAA sections 113(b) and (e), related to the type of judicial relief available in an enforcement proceeding and to the factors relevant to the sc ope and availability of such relief, that the

Petitioner claimed would bar th e approval of any t ype of affirmative defense provision in

SIPs. In the Petitioner's view, the CAA "una mbiguously grants jurisdiction to the district courts to determine penalties that should be assessed in an enforcement action involving the violation of an emissions limit." 17 

### The Petitioner first argued that in any judicial enforcement action in the district co urt, CAA section 113(b) provides that "such court shall have jurisdiction to restrain such violation, to require compliance, to assess such penalty, . . . and to award any other ap propriate relief." The Petitioner reasoned that the EPA's SSM Policy is therefore fundamenta lly inconsistent with the CAA because it purports to remove the discreti on and authority of the federa l courts to assess monetary penalties for violations if a source is shielded from monetary penalties under an

16 

### Petition at 12.

17 

### Petition at 10.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 38 of 327 affirmative defense provis ion in the approved SIP. 18 

### The Petitioner concluded that the EPA's interpretation of the CAA in the SSM Policy element allowing any affirmative defenses is impermissible "because the inclusi on of an affirmative defense provision in a SIP limits the courts' discretion—granted by C ongress—to assess pena lties for Clean Air

Act violations." 19 

### Second, in reliance on CAA section 113(e)(1 ), the Petitioner argued that in a judicial enforcement action in a district court, the statute explicitly specifies a list of

factors that the court is to c onsider in assessing penalties. 20 

### That section provides that

either the Administrator or the court: ...shall take into consideration (in add ition to such other factors as justice may require) the size of the business, the economic impact of the penalty on the business, the violator's fu ll compliance history and good faith efforts to comply, the duration of the violation as established by any credible evidence (including evidence other than the applicable test method), payment by the violator of pe nalties previously assessed for the same violation, the economic benefit of noncompliance, and the seriousness of the violation. The Petitioner argued that the EPA's SSM Policy authorizes states to create affirmative defense provisions with criteria for monetary pe nalties that are inconsistent with the factors that the statute specifies and that the statute explicitly directs courts to weigh in any judicial enforcement action. In particular, the Petitioner enumerated those factors that it alleges the EPA's SSM Policy to tally omits: (i) the size of the business; (ii) the economic impact of the penalty on the bus iness; (iii) the viol ator's full compliance

18 

### Id

. 19 

### Id

. 20 

### Petition at 11.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 39 of 327 history; (iv) the economic benefit of nonc ompliance; and (v) the seriousness of the violation. By specifying particular factors fo r courts to consider, the Petitioner reasoned, Congress has already definitively spoken to the question of what factors are germane in assessing monetary penalties under the CAA fo r violations. The Petit ioner concluded that the EPA has no authority to allow a state to include an affirmative defense provision in a

SIP with different criteria to be consider ed in awarding monetary penalties because "[p]reventing the district courts from c onsidering these statutory factors is not a permissible interpretation of the Clean Air Act." 21 

### The Petitioner dr ew no distinction between affirmative defenses for unplanned events such as malfunctions and planned events such as startup and shutdown. B. The EPA's Response

The EPA has considered the concerns rais ed by the Petitioner regarding the legal basis under the CAA for any form of affirma tive defense for violations due to excess emissions as contemplated in the EPA's SSM Policy. The EPA does not agree with the Petitioner's overarching argument that CAA s ection 113 prohibits any affirmative defense provisions in SIPs. However, the EPA has eval uated the broader legal basis that supports affirmative defense provisions in general a nd the specific affirmative defense provisions

identified in the Petition in particular. Although the Petitione r did not distinguish between affirmative defense provisions for unplanned events such as malfunctions and affirmative defense provisions for planned events such as startup and shutdown, the EPA's evaluation of the legal basis for affirmative defense pr ovisions indicates that the SSM Policy should

21 

### Petition at 11.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 40 of 327 differentiate between unplanned and planne d events. Accordingly, the EPA is proposing to deny the Petition in part with respect to affirmative defenses for malfunction events and to grant the Petition in pa rt with respect to affirmativ e defenses for planned startup

and shutdown events. To address this issue fu lly, it is necessary: (i) to explain the legal and policy basis for affirmative defenses for malfunction events; (ii) to explain why that basis would not extend to startup and shut down events; and (iii) to explain why the Petitioner's arguments with respect to C AA section 113 do not preclude affirmative defense provisions for malfunction events but support the distinc tion between unplanned and planned events. The EPA proposes to deny the Petition w ith respect to affirmative defense provisions in SIPs applicable to sources during malfunctions. The EPA's SSM Policy has long recognized that there may be limited circumstances in which excess emissions are entirely beyond the control of the owner or operator. Thus, the EPA believes that an appropriately drawn affirmative defense provisi on recognizes that, despite diligent efforts by sources, such circumstances may create difficulties in meeting a legally required emission limitation continuously and that emission standards may be violated under limited circumstances beyond the control of the source. In accordance with CAA section 302(k), SIPs must contain emission limitations that "limit the quantity, rate, or concentr ation of emissions of air pollutants on a

continuous basis." 22 

### While "continuous" standards are required, there is also case law

22 

### Court decisions confirm that this requ irement for continuous compliance prohibits exemptions for excess emissions during SSM events. See, e.g., Sierra Club v. EPA , 551 F.3d 1019, 1021 (D.C. Cir. 2008); US Magnesium, LLC v. EPA , 690 F.3d 1157, 1170 (10th Cir. 2012).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 41 of 327 indicating that technology-based standards s hould account for the prac tical realities of technology. For example, in Essex Chemical v. Ruckelshaus , the court acknowledged that in setting standards under CAA section 111, "v ariant provisions" such as provisions allowing for upsets during startup, shut down and equipment malfunction "appear necessary to preserve the reasonableness of th e standards as a whole and that the record does not support the 'never to be exce eded' standard currently in force." 23 

### Though intervening case law and amendments to the C AA call into question the relevance of this line of cases today, they suppor t the EPA's view that a syst em that incorporates some level of flexibility is reasona ble and consistent with the ove rall intent of the CAA. An appropriately drawn affirmative defense pr ovision simply provides for a defense to monetary penalties for violations that are pr oven to be beyond the control of the source.

The EPA notes that the affirmative defens e does not excuse a source from injunctive relief, i.e. , from being required to take further steps to prevent future upsets or malfunctions that cause harm to the public health. The EPA believes that affirmative defense provisions can supply flexibility bot h to ensure that emission limitations are "continuous" as required by CAA section 302(k ), because any violations remain subject to a claim for injunctive relief , and to provide limited relief in actions for penalties for malfunctions that are beyond the control of the owner where the owner has taken necessary steps to minimize the likelihood and the extent of any such violation. This approach supports the reasonabl eness of the SIP emission li mitations as a whole. SIP emission limitations must apply and be enfo rceable at all times. A narrow affirmative

23 

### See , 486 F.2d 427, 433 (D.C. Cir. 1973); Portland Cement Association v. Ruckelshaus , 486 F.2d 375 (D.C. Cir. 1973).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 42 of 327 defense for malfunction events helps to meet this requirement by ensuring that even where there is a malfunction, the emission limita tions are still applic able and enforceable through injunctive relief. Se veral courts have agreed with this approach. 24 

### Because the Petitioner questioned the legal basis for affirmative defense provisions in SIPs, the EPA wants to reit erate the basis for its recommendations concerning such provisions. Starting with the 1982 SSM Guidance, the EPA has made a series of recommendations concerning how states might address violations of SIP provisions consistent with CAA requirements in the event of malfunctions. In the 1982 SSM Guidance, the EPA recommended the exercise of enforcement discretion. Subsequently, in the 1983 SSM Guidance, the EPA expanded on this approach by recommending that a state could elect to a dopt SIP provisions providing parameters for

the exercise of enforcement discretion by the state's personnel. In the 1999 SSM Guidance, the EPA recognized the use of an affirmative defense as a permissible method for addressing excess emissions that were beyo nd the control of the owner or operator of the source and recommended parameters that should be included as part of such an

affirmative defense in order to ensure that it would be available only in certain narrow

circumstances. The EPA interprets the provisions in C AA section 110(a) to allow the use of

24 

### See , Luminant Generation Co. v. EPA , 699 F.3d 427 (5th Cir. 2012) (upholding the EPA's approval of an affirmative defense applicable during malfunctions in a SIP submission as a permissible inte rpretation of the statute under Chevron step 2 analysis); Mont. Sulphur & Chemical Co. v. EPA , 666 F.3d 1174, 1191-93 (9th Cir. 2012) (upholding the EPA's creation of an affirma tive defense applicable during malfunctions in a FIP); Ariz. Public Service Co. v. EPA , 562 F.3d 1116, 1130 (9th Cir. 2009) (upholding the EPA's creation of an affirma tive defense applicable during malfunctions in a FIP).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 43 of 327 narrowly tailored affirmative defense provisi ons in SIP provisions. In particular, CAA section 110(a) requires each state to have a SIP that provides for the attainment, maintenance, and enforcement of the NAA QS, protects PSD increments, protects visibility, and meets the other requirement s of the CAA. These statutory provisions include the explicit requireme nts that SIPs contain emission limitations in accordance with section 110(a)(2)(A) and th at these emission limitations must apply continuously in accordance with CAA section 302(k). The CAA is silent as to whether or not states may elect to create affirmative defense provisions in SIPs. In light of the ambiguity created by this silence, the EPA has interpreted the C AA to allow affirmative defense provisions in certain narrowly prescribed circumstances . While recognizing that there is some ambiguity in the statute, the EPA also recognizes that there are some limits imposed by the overarching statutory requirements such as the obligation that SIPs provide for the attainment and maintenance of the NAAQS. Th us, the EPA believes that in order for an affirmative defense provision to be consiste nt with the CAA, it: (i) has to be narrowly drawn to address only those ex cess emissions that are unavoi dable; (ii) cannot interfere with the requirement that the emi ssion limitations apply continuously ( i.e. , cannot provide relief from injunctive relief); and (iii) cannot interfere with the overarching requirements of the CAA, such as attaining and maintaining the NAAQS. 25 

### The EPA believes this interpretation is reasonable because it does not interfere

25 

### See, e.g. , "Approval and Promulgation of Impl ementation Plans; Texas; Excess Emissions During Startup, Shutdown, Maintena nce, and Malfunction Activities; Notice of proposed rulemaking," 75 FR 26892 at 26895 (May 13, 2010). In this proposed rule, the EPA explained 12 specific c onsiderations that justified the proposed approval of the affirmative defense for unplanned events in th e state's SIP submission as consistent with the requirements of the CAA.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 44 of 327 with the overarching goals of title I of the C AA, such as attainment and maintenance of the NAAQS, and at the same time recognizes that, despite best efforts of sources, technology is fallible. The EPA disagrees with the suggestion that an affirmative defense will encourage lax behavior by sources and, in fact, believes the opposite. The potential relief from monetary penaltie s for violations in many cases may serve as an incentive for sources to be more diligent to prevent and to minimize excess emissions in order to be able to qualify for the affirmative defense. An underlying premise of an affirmative defense provision for malfunctions is that the excess emissions ar e entirely beyond the control of the owner or operator of the s ource. First, a malfunction is a sudden and

unavoidable event that cannot be foreseen or planned for. As explained in the 1999 SSM Guidance, the EPA considers malfunctions to be "sudden, unavoidable, and unpredictable

in nature." 26 

### In order to establish an affirmative defense for a malfunction, the recommended criteria specify that the s ource, among other things, must have been appropriately designed, operated, and maintained to prevent such an event, and the source must have taken all practicable steps to preven t and to minimize the excess emissions that result from the malfunction. Through the criteria recommended in the 1999 SSM Guidance for approvable affirmative defens e provisions for malfunctions, the EPA reflected its view that appr ovable provisions should be narrowly drawn and should be restricted to events beyond the control of the owner or operator of the source. 27 

### The EPA recommends that states consider 10 specifi c criteria in such affirmative defense provisions.

26 

### See , 1999 SSM Guidance at Attachment p. 4.

27 

### Id . at 3-4.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 45 of 327 Unlike the EPA's proposed response to the re quest to rescind its SSM Policy with respect to affirmative defenses for malfunc tions, the EPA proposes to grant the Petition with respect to its interpretation of the CAA concerning affirmative defense for excess emissions during startup and shutdown events. Accordingly, the EPA is also proposing to issue a SIP call for SIP provisions indentified in the Petition that provide an affirmative defense for excess emissions during planned events, such as startup and shutdown. The legal and factual rationale for an affirmative defense provision for ma lfunctions does not translate to planned events such as start up and shutdown. By definition, the owner or operator of a source can foresee and plan for startup and shutdown events. Because these events are planned and predictable, the EPA beli eves that air agencies should be able to establish, and sources should be able to comp ly with, the applicable emission limitations

or other control measures dur ing these periods of time. In addition, a source can be designed, operated, and maintained to cont rol and to minimize emissions during such normal expected events. If sour ces in fact cannot meet the otherwise applicable emission limitations during planned events such as st artup and shutdown, then an air agency can develop specific alternative re quirements that apply during su ch periods, so long as they meet other applicable CAA requirements. Providing an affirmative defense to sour ces for violations that they could reasonably anticipate and prevent is not consis tent with the theory that supports allowing such affirmative defenses for malfunctions, i.e. , that where excess emissions are entirely beyond the control of the owner or operator of the source it is a ppropriate to provide limited relief to claims for monetary pena lties. The EPA has previously made the distinction that excess emissions that occur during maintenance should not be accordedThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 46 of 327 special treatment, because sources should be expected to comply with emission limitations during maintenance activities as they are planned and within the control of the

source. 28 

### The EPA believes that same rationale applies to periods of startup and

shutdown. 29 

### The EPA acknowledges that its 1999 SSM Guidance explicitly recognized that

states could elect to create affirmative de fense provisions applicable to startup and shutdown events. However, the EPA has reeval uated the justificati on that could support an affirmative defense during these activiti es and now believes that the ability and obligation of sources to anticip ate and to plan for routine events such as startup and shutdown negates the justificati on for relief from monetary pe nalties for violations during those events. Moreover, the EPA notes that the various criteria recommended for affirmative defenses for startup and shutdow n to a large extent already mirrored those relevant for malfunctions, such as: (i) the ev ent could not have been prevented through careful planning and design; (ii) the excess emi ssions were not part of a recurring pattern; and (iii) if the excess emissions resulted fr om bypassing a control measure, they were unavoidable to prevent loss of life, pers onal injury, or severe property damage. 30 

### As a

28 

### See, "Approval and Promulgation of Implemen tation Plans; Texas; Excess Emissions During Startup, Shutdown, Maintenance, a nd Malfunction Activi ties," 75 FR 68989 at 68992 (Nov. 10, 2010).

29 

### In Luminant Generation Co. v. EPA, 699 F.3d 427 (5th Cir. 2 012), the court upheld the EPA's disapproval of an affirmative defense pr ovision in a SIP submission that pertained to "planned activities," wh ich included startup, shutdown, and maintenance. The EPA disapproved this provision, in part because it provided an affirmative defense for maintenance. The court rejected challenges to the EPA's disapproval of this provision, holding that under Chevron step 2, the EPA's interpretati on of the CAA was reasonable.

30 

### See, 1999 SSM Guidance at Attachment 5-6.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 47 of 327 practical matter, many startup and shutdown ev ents that could have met these conditions recommended in the 1999 SSM Guidance are likely to have been associated with malfunctions, and the EPA explicitly stated that if the excess emissions "occur during routine startup or shutdown periods due to a malfunction, then those instances should be treated as malfunctions." The key distinc tion remains, however, that normal source operations such as startup and shutdown ar e planned and predictable events. For this reason, the EPA is proposing to revise its SSM Policy to reflect its interpretation of the CAA that affirmative defense provisions appl icable during startup and shutdown are not appropriate. Further support for distingui shing between malfunctions and planned events such as startup and shutdown is to be found in the Petitioner's argument that affirmative defense provisions in SIPs usurp the role of courts to decide liability and to assess penalties for violations under CAA sec tion 113. The Petitioner views CAA sections 113(b) and 113(e) as statutor y bars to any form of a ffirmative defense provision, regardless of the nature of th e event. Rather than supporti ng the Petitioner's conclusion, however, the EPA believes that this argument illustrates why it is appropriate to allow

affirmative defenses for malfunctions but not for planned events such as startup and

shutdown. At the outset, the EPA disagrees with the Petitioner's view that CAA section 113(b) explicitly precludes air agencies fr om adopting, and the EPA from approving, SIP

emission limitations for sources that dist inguish between conduct such that some violations should only be subject to injunctive relief rather than injunctive relief and monetary penalties. Section 110( a)(2)(A) of the CAA requires st ates to develop SIPs thatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 48 of 327 "include enforceable emission limitations . . . as may be necessary or appropriate to meet the requirements of" the CAA. Howeve r, CAA section 302(k) defines "emission limitation" very broadly to require limits on "the quantity, rate, or concentration of emissions of air pollutants on a continuous ba sis." Significantly, the latter definition does not on its face preclude provi sions devised by the state th at may distinguish between

violations based on the conduct of the source. The CAA is silent on whether or not a state may include an affirmative defense provision in its SIP. The EPA believes that the CAA thus provides states with discre tion in developing plans that meet statutory and regulatory requirements, such as providing for attainme nt and maintenance of the NAAQS, as long as they are consistent with CAA requirements. 31 

### The EPA believes that creating a narrowl y tailored affirmative defense for malfunctions is within an air agency's aut hority, and that approvi ng such a provision to make it part of the SIP is within the EPA' s authority. An affirmative defense provision can be a means of striking a reasonable ba lance between the requirements of the CAA and the realities and limits of technology. Air agencies and the EPA must ensure continuous compliance but also recognize that , despite diligent efforts by sources, there may be limited unforeseen and unavoidable ci rcumstances that create difficulties in

31 

### States have primary responsibility for deve loping SIPs in accordance with CAA section 107(a). An air agency's discretion to de velop SIP provisions is not unbounded, however, and the EPA's responsibility under CAA sec tion 110(k), section 110(l), and section 193, to review SIP submissions prospectiv ely, and under CAA section 110(k)(5) retrospectively, is to determine whether the SIP provisions in fact meet all applicable statutory and regulator y requirements. Thus, for example, the EPA does not believe that an air agency has discretion to create an exemption for excess emissions during SSM events, because such exemption would conf lict with fundamental CAA requirements for SIPs.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 49 of 327 meeting applicable emission limitations continuously. The EPA's SSM Policy recognizes an appr oach under which air agencies may, if they elect, create two tiers of liability fo r violations due to excess emissions during periods of malfunction: (i) a le sser level of liability for viol ations for which the source could only be subject to injunc tive relief (where it could meet the requirements for an affirmative defense with respect to penalties) ; and (ii) a higher level of liability for violations for which the source could be subj ect to both injunctive relief and monetary penalties (where it could not meet the re quirements for an affirmative defense with respect to penalties). The EPA also disagrees with the Petitioner's argument that the inclusion of penalty factors in CAA section 113(e) is a statutory bar to all affirmative defense provisions in SIPs. The EPA believes that these statutory factors apply only for violations for which the regulations approved into the SI P contemplate monetary penalties. A court, in determining whether there is a violation of the SIP provision, and whether the source has met the conditions for an affirmative defense, cannot change the forms of relief for violations provided in the a pproved SIP. Approval of the re gulation into the SIP by the EPA thus affects the availability of moneta ry penalties for the vi olation in the first instance. The EPA reiterates, however, that su ch a provision would not be consistent with the requirements of the CAA if it did not preserve the availability for injunctive relief in the event of violations. Failure to provide in a SIP provision for any form of enforcement for excess emissions during SSM events would be equivalent to the t ype of provision that excused excess emissions during malfuncti on from compliance with standards underThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 50 of 327 CAA section 112 that the court rejected in Sierra Club v. EPA

. 32 

### The EPA's longstanding position with regard to SIPs is that bl anket exemptions from compliance are not consistent with the requirements such as attainment and maintenance of the NAAQS because they eliminate much of the incenti ve that sources would otherwise have to

minimize the likelihood of violations and to minimize the extent of a violation once it occurs. Elimination of potential availability of injunctive re lief for violations would be fundamentally inconsistent with the requireme nt that there may be enforcement to cause the installation of control measures, changes of operation, or other changes necessary at the source in order to bring the source into compliance with the applicable emission limitations to meet CAA requirements. The EPA likewise disagrees with the Petit ioner's claim that the elements for establishing an affirmative defense in a SIP pr ovision supplant the mandatory factors that Congress provided for determining the amount of penalties to be assessed in CAA section 113(e). Under CAA section 110(a)(2), states have the responsibility to devise enforceable emission limitations for sources and to develop a program for their implementation and enforcement. The CAA does not require that ai r agencies treat all violations equally. In devising its SIP, an air agency has authority to determine what constitutes a violation and to distinguish between different types of violations, within the bounds allowed by the CAA and applicable regulations. As the EP A has long recognized in its SSM Policy, circumstances surrounding a given violation may justify distinguishing between those where injunctive relief is appropriate vers us those where both injunctive relief and

32 

### 551 F.3d 1019, 1021 (D.C. Cir. 2008).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 51 of 327 monetary penalties are appr opriate. Providing an affirma tive defense to monetary penalties in certain circumstances does not ne gate the factors that Congress provided in CAA section 113(e). In the event that a source violates its emission limitations and fails to meet the requirements of an available defe nse in the SIP, then it is the court that

determines the level of moneta ry penalties appropriate using the statutory factors in CAA section 113(e). The EPA notes that the provisions of CAA section 304 relevant to citizen enforcement provide additional support for the view that air agencies can determine that certain violations should not be subject to monetary penalties. S ection 304(a) explicitly provides that the court in an enforcement pr oceeding has jurisdiction to enforce emission limits, to issue orders, "and to apply any a ppropriate civil penalties." The EPA believes that monetary penalties that might otherwis e be an available re sponse to a violation cannot be "appropriate" if an air agency has properly created an affirmative defense provision that eliminates such penalties for violations under specified circumstances in the SIP provision that is befo re the court. The mere fact that CAA section 113(b) includes penalties as a potential form of relief for vi olations in general does not mean that air agencies must construct SIP requi rements that in all instances require monetary penalties. As with CAA section 110(a) governing SI P provisions in general, neither CAA section 113(b) nor CAA 113(e) expressly addres ses the availability of an affirmative defense. Thus, the EPA believes it is reasonabl e to interpret these specific provisions in light of the need to balan ce the requirement for conti nuous compliance with emission limitations in order to meet overarching goals of the statute such as attainment and maintenance of the NAAQS with the fact that even the most diligent source may not beThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 52 of 327 able to meet emission limitations 100 percent of the time. The EPA ha s recognized that it is permissible for an air agency to provide narrowly drawn affirmative defense provisions in SIPs that provide relief from monetary penalties for violations that occur due to circumstances beyond the control of the s ource. When a source has been properly designed, operated, and maintained, and has ta ken action to prevent and to minimize the excess emissions, such relief may be warrant ed. Also, as with CAA section 110(a), the

EPA does not believe that CAA section 113's si lence with regard to affirmative defense provisions should be interprete d to allow broad use of su ch provisions during planned

events that are within the control of the s ource. The enforcement provisions of the CAA must be read in light of the goals and purpos es of the provisions with which they are meant to ensure compliance. As provided a bove, the EPA believes that the use of an affirmative defense is appropriate only in those narrow circumstances where it is necessary to harmonize the competing inte rests of the CAA regarding continuous compliance and the limits or fallibility of technology. In summary, the EPA believes that the CAA provides air agencies in the first

instance in their role as the de veloper of SIPs, and then the EP A in its role as approver of SIPs, some discretion in defining the substantiv e requirements that are necessary to attain and maintain the NAAQS, protect PSD increments , and protect visibility, or to meet other CAA requirements. Until the air agency takes action to create a SIP, or the EPA takes action to create a FIP, that imposes and defi nes the applicable emission limitations, there

is no standard for a source to violate and thus no conduct for which a court could assess any penalties. The EPA believes that the CAA allows air agencies (or the EPA when it is promulgating a FIP) in defining emission stan dards to define narrowly drawn affirmativeThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 53 of 327 defenses that provide limited relief from mone tary penalties but not for injunctive relief in specified circumstances. The EPA emphasi zes that affirmative defense provisions for malfunctions need to be appropriately a nd narrowly drawn, and thus the SSM Policy makes recommendations for the types of crit eria that would make such a provision consistent with the requ irements of the CAA. For the foregoing reasons, the EPA is propos ing to grant the Petition in part, and to deny the Petition in part, with respect to the Petitioner's request that the EPA rescind its SSM Policy interpreting the CAA to allow affirmative defense provisions in SIPs for excess emissions during SSM events. In addi tion, the EPA is proposing to grant the Petition in part, and to deny the Petition in pa rt, with respect to th e Petitioner's request

that the EPA issue SIP calls for those affi rmative defense provisions in specific SIP provisions identified in the Petition. The EP A requests comment on this proposed action. As discussed in section VII.B of this notice, the EPA is also restating its recommended criteria for approvable affirmative defenses for malfunctions in SIP provisions consistent with CAA requirements. Further, as discussed in section IX of this notice, the EPA is proposing to grant or to deny the Petition wi th respect to the specific SIP provisions identified by the Petitioner as inconsistent with the CAA. V. Proposed Action in Response to Request for the EPA's Review of Specific Existing SIP Provisions for Cons istency with CAA Requirements A. Petitioner's Request The Petitioner's second request was for the EPA to find that SIPs "containing an SSM exemption or a provision that could be interpreted to affect EPA or citizen enforcement are substantially inadequate to comply with the requi rements of the CleanThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 54 of 327 Air Act." 33 

### In addition, the Petitioner requested th at if the EPA finds such defects in existing SIPs, the EPA "issue a call for each of the states with such a SIP to revise it in conformity with the requirements or otherwise remedy these defective SIPs." 34 

### In support of this request, the Petitioner expressed concern that many SIPs contain provisions that are inconsiste nt with the requirements of the CAA. According to the Petitioner, these provisions fa ll into two general categories: (1) exemptions for excess emissions by which such emissions are not tr eated as violations; and (2) enforcement discretion provisions that may be worded in su ch a way that a decision by the state not to enforce against a violation could be construe d by a court to bar enforcement by the EPA under CAA section 113, or by citi zens under CAA section 304. First, the Petitioner expressed concern that many SIPs have either automatic or discretionary exemptions for excess emissi ons that occur during periods of startup, shutdown, or malfunction. Automatic exemptions are those that, on the face of the SIP provision, provide that any excess emissions dur ing such events are not violations even though the source exceeds the otherwise a pplicable emission limitations. These provisions preclude enforcement by the state, the EPA, or citizens, because by definition

these excess emissions are defined as not viol ations. Discretionary exemptions or, more correctly, exemptions that may arise as a resu lt of the exercise of "director's discretion" by state officials, are exemptions from an ot herwise applicable emission limitation that a state may grant on a case-by-case basis with or without any public pr ocess or approval by the EPA, but that do purport to bar enforcem ent by the EPA or citizens. The Petitioner

33 

### Petition at 14.

34 

### Id.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 55 of 327 argued that "[e]xemptions that may be gran ted by the state do not comply with the

enforcement scheme of title I of the Act because they undermine enforcement by the EPA

under section 113 of the Act or by citizens under section 304." The Petitioner explained that all such ex emptions are fundamentally at odds with the requirements of the CAA and with the EPA's longstanding inte rpretation of the CAA with respect to excess emissions in SIPs. SI Ps are required to include emission limitations designed to provide for the attainment and maintenance of the NAAQS and for protection of PSD increments. The Petitioner emphasized that the CAA requires that such emission limitations be "continuous" and that they be es tablished at levels th at achieve sufficient emissions control to meet the required C AA objectives when adhered to by sources. Instead, the Petitioner contended, exemptions for excess emissions often result in realworld emissions that are far higher than the le vel of emissions envisi oned and planned for in the SIP. Citing the EPA's own guidance and past administrative actions, the Petitioner explained that exemptions from otherwise a pplicable emission limitations can allow large

amounts of additional emissions that are not accounted for in SIPs and that exemptions thus "create large loopholes to the Act's fundamental requireme nt that a SIP must provide for attainment and maintenance of the NAAQS and PSD increments." Second, the Petitioner expresse d concern that many SIPs have provisions that may have been intended to govern only the exercise of enfor cement discretion by the state's own personnel but are worded in a way that co uld be construed to preclude enforcement by the EPA or citizens if the state elects not to enforce against the violation. The

Petitioner contended th at "any SIP provision that purports to vest the determination of whether or not a violation of the SIP has occurred with the state enforcement authority isThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 56 of 327 inconsistent with the enforcement provisions of the Act." In support of this contention, the Petitioner quoted from the EPA's recent actio n to rectify such a provision in the Utah

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

### After articulating these overarching con cerns with existing SIP provisions, the Petitioner requested that the EPA evaluate specific SIP provisions identified in the separate section of the Petit ion titled, "Analysis of Indi vidual States' SSM Provisions." 36 

### In that section, the Petitioner identified specific provisions in the SIPs of 39 states that the

Petitioner believed to be inconsistent with th e requirements of the CAA and explained in

detail the basis for that belief. In the c onclusion section of the Petition, the Petitioner listed the SIP provisions in each state for which it seeks a specific remedy. B. The EPA's Response In general, the EPA agrees with key st atements of the Petitioner. The EPA's longstanding interpretation of the CAA is that automatic exemptions from emission limitations in SIPs are impermissible because th ey are inconsistent with the fundamental requirements of the CAA. The EPA has reiter ated this point in its guidance documents

35 

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

36 

### Petition at 17.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 57 of 327 and in rulemaking actions numerous times. The EPA has also acknowledged that it previously approved some SIP provisions that provide such exemptions in error and encouraged states to rectify them. 37 

### The EPA also has a longstanding interpre tation of the CAA that does not allow "director's discretion" provisi ons in SIPs if they provide unbounded discretion to allow what would amount to a case-specific revision of the SIP without meeting the statutory requirements of the CAA for SIP revisi ons. Moreover, the CAA would not allow approval of a SIP provision that provided director's discre tion to create discretionary exemptions for violations when the CAA woul d not allow such exemptions in the first

instance. In addition, the EPA's longstanding interpre tation of the CAA is that SIPs may contain provisions concerning "enforcemen t discretion" by the air agency's own personnel, but such provisions cannot bar enforcement by the EPA or through a citizen

suit. 38 

### In the event such a provision could be construed by a court to preclude EPA or citizen enforcement, that provision would be at odds with fundamental requirements of the CAA pertaining to enforcement. Although the EPA does not agree with the Petitioner concerning all affirmative defense provision s in SIPs, the EPA does agree that such provisions have to meet CAA requirements. The EPA also agrees that automatic exemptions, discretionary exemptions via director's discretion, ambiguous enforcement di scretion provisions that may be read to preclude EPA or citizen enforcement, and in appropriate affirmative defense provisions

37 

### See, e.g. , 1982 SSM Guidance at 1.

38 

### See, e.g. , 1983 SSM Guidance at Attachment p. 2.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 58 of 327 can interfere with the overarching objectiv es of the CAA, such as attaining and maintaining the NAAQS, protection of PSD increm ents, and protection of visibility. Such provisions in SIPs can interfere with effec tive enforcement by air agencies, the EPA, and the public to assure that sources comply with CAA requirements, contrary to the fundamental enforcement structure pr ovided in CAA sections 113 and 304. The EPA's agreement on these broad prin ciples, however, does not necessarily mean that the EPA agrees with the Petitione r's views as to each of the specific SIP provisions identified as problematic in the Petition. The EP A has undertaken a comprehensive review of those specific SI P provisions to determine whether they are consistent with CAA requirements, and if they are not consistent, wh ether the provisions are substantially inadequate to meet CAA requi rements and thus warrant action to rectify. The EPA has carefully evaluated the con cerns expressed by the Petitioner with respect to each of the identified SIP provisi ons and has considered the specific remedy sought by the Petitioner. In many instances , the EPA tentatively concurs with the Petitioner's analysis of the provision in quest ion and accordingly is proposing to grant the Petition with respect to that provision and simultaneously proposing to make a finding of substantial inadequacy and to issue a SIP ca ll to rectify the SIP inadequacy. In other instances, however, the EPA tentatively disagr ees with the Petitioner's analysis of the provision and thus is proposing to deny the Pe tition with respect to that provision and to

take no further action. The EPA's evaluation of each of the pr ovisions identified in the Petition is

summarized in section IX of this notice. For the reasons discussed in section IX of this notice, the EPA is proposing to grant the Petiti on in part, and to deny the Petition in part,This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 59 of 327 with respect to the specific existing SIP pr ovisions for which the Petitioner requested a remedy. The EPA requests comment on the pr oposed actions on these specific SIP provisions. VI. Proposed Action in Response to Re quest that the EPA Limit SIP Approval to the Text of State Regulations and Not Re ly upon Additional Interpretive Letters

from the State A. Petitioner's Request The Petitioner's third request was that when the EPA evaluates SIP revisions submitted by a state, the EPA should require "all terms, conditions, limitations and interpretations of the various SSM provisi ons to be reflected in the unambiguous language of the SIPs themselves." 39 

### The Petitioner expressed concern that the EPA has previously approved SIP submissions with pr ovisions that "by their plain terms" do not appear to comply with the EPA's interpre tation of CAA requirements embodied in the SSM Policy and has approved those SIP submissi ons in reliance on sepa rate "letters of interpretation" from the state that construe the provisions of the SIP submission itself to be consistent with the SSM Policy. 40 

### Because of this reliance on interpretive letters, the Petitioner argued that "such cons tructions are not necessarily apparent from the text of the provisions and their enforceability may be difficult and unnecessarily complex and

inefficient." 41 

### In support of this request, the Petitioner al leged that past SIP approvals related to

39 

### Petition at 16.

40 

### Petition at 14.

41 

### Petition at 15.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 60 of 327 Oklahoma and Tennessee illustrate the practical problems that can arise from reliance on interpretive letters. With respect to Oklahoma, the Pe titioner asserted that a 1984 approval of a SIP submission from that st ate addressing SSM pr ovisions required two letters of interpretation from the state in order for the EPA to determine that the actual regulatory text in the SIP submission was su fficiently consistent with CAA requirements pertaining to SSM provisions. 42 

### The Petitioner conceded that the Federal Register notices for the proposed and final actions to a pprove the Oklahoma SIP submission did quote

from the state's letters but expressed concern that those letters were not actually "promulgated as part of the Oklahoma SIP." With respect to Tennessee, the Petitioner pointed to a more recent action concerning the redesignation of the Knoxville area to attainment for the 1997 8-hour ozone NAAQS. 43 

### In this action, the EPA evaluated whether the SIP for that state met requirements necessary for redesignation from nonattainment to attainment in accordance with CAA section 107(d)(3). 44 

### Again, the Petitioner noted that in order to complete that redesignation action, the EPA ha d to request that both the st ate and the local air planning officials confirm officially that the existi ng SIP provisions do not in fact provide an exemption for excess emissions during SSM even ts and that the prov isions should not be interpreted to do so. The implication of the Petitioner's observation is that if the SIP

42 

### See, "Revision to Oklahoma Regulation 1.5 – Reports Required, Excess Emissions During Startup, Shutdown and Malfunction of Equipment," 49 FR 3084 (Jan. 25, 1984). At the time of the proposed and final ac tion, the operative EPA guidance was the 1983 SSM Guidance.

43 

### Petition at 15.

44 

### See , "Redesignation of the Knoxville 1997 8- Hour Ozone Nonattainment Area to Attainment," 76 FR 12587 (Mar. 8, 2011).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 61 of 327 provisions had been clear and unambiguous in th e first instance, interpretive letters would not have been necessary. By contrast, the Petitioner pointed to the more recent SIP call action for Utah in

which the EPA itself noted that it was uncle ar why the EPA had originally approved a particular SIP provision relevant to SSM events. 45 

### Specifically, the Petitioner quoted the EPA's own statement that "thirty years late r, it is not clear how EPA reached the conclusion that exemptions granted by Utah w ould not apply as a matter of federal law or whether a court would honor EPA's interpretation . . . " 46 

### The Petitioner argued that this

situation where the EPA itself was unable to ascertain why a SIP provision was previously approved as meeting CAA requirement s illustrates the concern that "the state's interpretation of its regulations may (o r may not) be known by parties attempting to enforce the SIP decades after the provisions were created." 47 

### From these examples, the Petitioner drew th e conclusion that relia nce on letters of interpretation from the state, even if reflected in the Federal Register notice as part of the explicit basis for the SIP approval, is insu fficient. The Petitioner argued that such

45 

### Petition at 15-16.

46 

### See , "Finding of Substantial In adequacy of Implementation Plan; Call for Utah State Implementation Plan Revision; Notice of proposed rulemaking," 75 FR 70888 at 70890 (Nov. 19, 2010).

47 

### Petition at 16. The Petitioner assumed that the original SIP action was one in which the EPA must have relied on an interpretive letter from the state as a basis for the prior SIP approval. In fact, however, the EPA recognized that the EPA statement in the prior final action approving the SIP revi sion in 1980 concerning federal law superseding incorrect state law embodied in the SIP was incorrect. Moreover, subsequent case law has illustrated that courts will not decide th at CAA requirements automatically override existing SIP provisions, regardless of whether those SIP provisions met CAA requirements at the time of the approval or since. See , Sierra Club, et al. v. Georgia Power Co. , 443 F.3d 1346, 1354 (11th Cir. 2006).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 62 of 327 interpretations, if they are not plain on the face of the state regulations themselves, should

be set forth in the SIP as reflected in th e Code of Federal Regu lations. The Petitioner advocated that all parties should be able to rely on the terms of the SIP as reflected in the Code of Federal Regulations, or alternativ ely on the SIP as shown on an EPA Internet webpage, rather than having to rely on other interpretive letters that may be difficult to locate. The Petitioner's pref erred approach, however, was that "all terms, conditions, limitations and interpretations of the vari ous SSM provisions be reflected in the unambiguous language of the SIPs themselves." B. The EPA's Response The EPA agrees with the core prin ciple advocated by the Petitioner, i.e. , that the language of regulations in SIPs that pertain to SSM events should be clear and unambiguous. This is necessary as a legal ma tter but also as a matte r of fairness to all parties, including the regulated entities, the regulators, and the public. In some cases, the lack of clarity may be so significant that amending the regulation may be warranted to eliminate the potential for confusion or misunderstanding about applicable legal requirements that could interfere with complia nce or enforcement. Indeed, as noted by the Petitioner, the EPA has requested that st ates clarify ambiguous SIP provisions when the EPA has subsequently determined that to be necessary. 48



### However, the EPA believes that the use of interpretive letters to clarify perceived ambiguity in the provisions in a SIP su bmission is a permissible, and sometimes necessary, approach under the CAA. Used corre ctly, and with adequate documentation in

48 

### See, e.g. , "Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revisi on," 76 FR 21639 at 21648 (Apr. 18, 2011).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 63 of 327 the Federal Register and the docket for the underlying rulemaking action, reliance on interpretive letters can serve a useful purpose an d still meet the enforceability concerns of the Petitioner. Regulated entities, regulato rs, and the public can readily ascertain the existence of interpretive letter s relied upon in the EPA's approva l that would be useful to resolve any perceived ambiguity. By virtue of being part of the stated basis for the EPA's approval of that provision, th e interpretive letters necessarily establish the correct interpretation of any argua bly ambiguous SIP provision. In addition, reliance on interpretive letters to address concer ns about perceived ambiguity can often be the most efficient a nd timely way to resolv e concerns about the correct meaning of regulatory provisions. Both air agencies and the EPA are required to

follow time- and resource-intensive administ rative processes in order to develop and

evaluate SIP submissions. It is reasonable fo r the EPA to exercise its discretion to use interpretive letters to clarify concerns about the meaning of regulatory provisions, rather than to require air agencies to reinitiate a complete administrative process merely to resolve perceived ambiguity in a provision in a SIP submission. 49 

### In particular, the EPA considers this an appropriate approach wh ere reliance on such an interpretive letter allows the air agency and the EPA to put into place SIP provisions that are necessary to meet important CAA objectives and fo r which unnecessary delay would be counterproductive. For example, where an ai r agency is adopting emission limitations for

49 

### CAA section 110(k) directs the EPA to act on SIP submissions and to approve those that meet statutory and regul atory requirements. Implicit in this authority is the discretion, through appropriate notice-and-comment rulemaking, to determine whether or not a given SIP provision meets such requirements, in reliance on the information that the EPA considers relevant for this purpose.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 64 of 327 purposes of attaining the NAAQS in an area, a timely letter from the air agency clarifying that an enforcement discretion provision is applicable only to air agency enforcement personnel and has no bearing on enforcement by the EPA or the public could help the area reach attainment more expeditiously th an requiring the air agency to undertake a time-consuming administrative process to make a minor change in the regulatory text. Thus, to the extent that the Petitioner in tended the Petition on this issue to be a request for the EPA never to use interpretive le tters as part of the basis for approval of any SIP submission, the EPA disagrees with the Petitioner and acco rdingly is proposing to deny the request. The EPA notes that it is already the EPA's practice to assure that any interpretive letters are correctly and adequately reflected in the Federal Register and are included in the rulemaking docket for a SIP approval. There are multiple reasons why the EPA does not agree with the Petitioner with respect to the alleged inadequacy of using interpretive letters to clarify specific ambiguities SIP regulations, provided this pro cess is done correctly. First, under section 107(a), the CAA gives air agenci es both the authority and th e primary responsibility to develop SIPs that meet applicable statutor y and regulatory requirements. However, the CAA generally does not specify exactly how ai r agencies are to meet the requirements substantively, nor does the CAA specify that ai r agencies must use specific regulatory terminology, phraseology, or format, in provisions submitted in a SIP submission. Air agencies each have their own requirements and practices with respect to rulemaking, making flexibility toward terminol ogy on the EPA's part appropriate. As a prime example relevant to th e SSM issue, CAA section 110(a)(2)(A) requires that a state's SIP shall include "enforceable emission limitations and otherThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 65 of 327 control measures, means, or techniques (i ncluding economic incentives such as fees, marketable permits, and auctions of emissions rights) as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of" the CAA. Section 302(k) of the CAA further defines the term "emission limitation" in important respects but nevertheless leaves room for variations of approach: ...a requirement established by the State or Administrator which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous basis, including any requir ement related to the operation or maintenance of a source to assure co ntinuous emissions reduction, and any design, equipment, work practice or operational standard promulgated under [the CAA]. Even this most basic requirement of SIPs, the inclusion of enforceable "emission limitations," allows air agencies discretion in how to structure or word the emission limitations, so long as the provisions meet fundamental legal requirements. 50 

### Thus, by the explicit terms of the statute and by design, ai r agencies generally have considerable discretion in how they elect to structure or word their state regulations submitted to meet CAA requirements in a SIP. Second, under CAA section 110(k), the EP A has both the authority and the responsibility to assess whether a SIP subm ission meets applicab le CAA and regulatory requirements. Given that air agencies have au thority and discretion to structure or word SIP provisions as they think most appropriate so long as they m eet CAA and regulatory requirements, the EPA's role is to evaluate whether those provisions in fact meet those

50 

### The EPA notes that notwithstanding discre tion in wording in re gulatory provisions, many words have specific rec ognized legal meaning whether by statute, regulation, case law, dictionary definition, or common usag e. 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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 66 of 327 legal requirements. 51 

### Necessarily, this pr ocess entails the ex ercise of judgment concerning the specific text of regulations, with regard bot h to content and to clarity. Because actions on SIP submissions are subj ect 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 atte ntion any concerns a bout ambiguity in the meaning of the SIP provisions under evaluation. Third, careful review of regulatory provi sions 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 ambigu ity 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, ho wever, there may still remain areas of regulatory ambiguity in a SIP submission's pr ovisions that the EPA identifies, either independently or as a result of public comments on a proposed action, for which resolution is both appropriate and necessa ry 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 applicab le CAA and regulatory

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 co uld be interpreted in a way inconsistent with CAA requirements).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 67 of 327 requirements. In some instances, the air agen cy may supply that extr a 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 provisi on, that reading is explicitly incorporated into the EPA's action and is memorialized as the prop er intended reading of the provision. For example, in the Knoxville redesigna tion action that the Petitioner noted, the EPA took careful steps to ensure that the pe rceived ambiguity was s ubstantively resolved and fully reflected in the rulemaking record, i.e. , through inclusion of the interpretive letters in the rulemaking docket, quoting re levant passages from the letters in the Federal Register , and carefully evaluating th e areas of potential ambigu ity 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 regul atory text of the CFR, there is no requirement to do so in all actions and there are other ways for th e public to have a cl ear understanding of the content of the SIP. First, for each SIP, the CF R contains a list or table of actions that reflects the various components of the appr oved 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 basi s for its approval in detail, including any interpretive letters that may have been relied upon to resolve any pot ential 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 co rrect reading of the SIP provisi on, either at the time of theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 68 of 327 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 provisi on 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 co rrect reading of th at provision upon which the EPA relied will be the reading that governs, shou ld 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. No t everything that may be part of the basis for the SIP approval in the docket, includi ng the proposal or final preambles, the technical support documents, responses to comments, technical analyses, modeling results, or docket memoranda, will be restated verbatim , incorporated int o, 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 en forcement 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 ambiguityThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 69 of 327 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 pr oposing to deny the Petition on this issue concerning reliance on interpretive letter s in actions on SIP submissions. The EPA requests comment on this proposed action. VII. Clarifications, Reiterations, a nd Revisions to the EPA's SSM Policy A. Applicability of Emission Limitati ons 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 th at 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 sugge sts 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 pe riods of startup and shutdown are not in fact permissible under the CAA. Thus, in ac ting upon the Petition the EPA is clarifying its interpretation of the requi rements 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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 70 of 327 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 distin ctions between these broad categories of events, the EPA stated: Startup and shutdown of process eq uipment are part of the normal operation of a source and should be a ccounted for in the planning, design and implementation of operating proce dures for the process and control equipment. Accordingly, it is reasonable to expect that careful and prudent planning and design will eliminate vi olations 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 emi ssions during these infrequent short periods need not be treated as violations providing the source adequately shows that the excess could not ha ve been prevente d 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 

### The phrase "need not be treated as violat ions" may have been misunderstood to be a statement that the CAA would allow SIP pr ovisions that provide an exemption for the resulting excess emissions, thereby defining th e excess emissions as no t a violation of the applicable emission limitations. The EPA did not intend to suggest that SIP provisions that included an actual exemption for ex cess emissions during startup and shutdown

events would be consistent w ith the CAA; the EPA made this statement in the context of whether air agencies should exercise en forcement discretion and more specifically whether air agencies could elec t to have SIP provisions that embodied their own exercise

52 

### See , 1983 SSM Guidance at Attachment p. 3.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 71 of 327 of enforcement discretion in such circumstances. As with any such SIP provisions addressing parameters of the air agency's ow n 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 treate d as violations to m eet 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 defini tion 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 containe d an entire section devoted to "source category specific rules for startup and shutdown." In explaining its in tentions in providing that section of the guida nce, the EPA stated: Finally, EPA is clarifying how excess emissions that occur during periods of startup and shutdown should be ad dressed. In general, because excess emissions that occur during these pe riods are reasonably foreseeable, they should not be excused . However, EPA recognizes that, for some source categories, even the best available em issions control systems might not be consistently effective during start up or shutdown periods. [For certain sources in certain areas] thes e technological limitations may be addressed in the underlying standards themsel ves through narrowly-tailored SIP revisions that take into account the potential impacts on ambient air quality caused by the inclusion of th ese allowances (emphasis added). 53 

### The phrase "may be addressed ... in narro wly-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 emissi ons and thus not treat the emissions as a violation of the applicable emission limitati ons. The EPA did not intend to suggest that

53 

### See , 1999 SSM Guidance at 3.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 72 of 327 an exemption would be permissible; the EP A 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 shoul d consider including as part of any SIP provision that was intended to apply to sources during start up 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 recommende d that in order to be approvable ( i.e. , meet CAA requirements), the new special requirement s applicable to the source during startup and shutdown should be narrowly tailored and take into acco unt considerations such as the technological limitations of the specifi c source category and the control technology that is feasible during startup and shut down. However, the 1999 SSM Guidance should

have been clearer that the SIP revisions unde r discussion could not create an exemption for emissions during startup and shutdown, but rather specific emission limitations or control measures that would apply during t hose 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 star tup 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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 73 of 327 The EPA concludes that th e 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 specia l emission limitations or other control measures or control techniques that are de signed to minimize excess emissions during startup and shutdown. The EPA continues to recommend the seven specific criteria

enumerated in Section III.A of the Attachme nt to the 1999 SSM Guidance as appropriate considerations for SIP provisions that apply to startup and shutdown. Th ese 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 st rategy 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 coul d 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 beThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 74 of 327 documented by properly signed, contemporane ous operating logs, or other relevant

evidence.

The EPA's evaluation of the Petition also indi cates that there is a need to reiterate the SSM Policy with respect to excess emi ssions that occur during other periods of normal source operation in addition to during pe riods of startup and shutdown. A number of SIP provisions identified in the Petition create automatic or discretionary exemptions from otherwise applicable emission limitati ons during periods such as "maintenance," "load change," "soot blowing," "on-line operating changes," or other similar normal modes of operation. Like star tup and shutdown, the EPA cons iders all of these to be phases of normal operation at a source, for wh ich the source can be designed, operated, and maintained in order to meet the applic able emission limitations and during which a source should be expected to control and minimize emissions. Accordingly, exemptions for emissions during these pe riods of normal source operatio n are not consistent with CAA requirements. Excess emissions during planned and predicted periods should be

treated as violations of the a pplicable 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 b een 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 meet s the conditions specified, then the excess

emissions would not be consider ed violations for any purpose, not merely with respect toThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 75 of 327 monetary penalties. This is c ontrary to the EPA's interpretati on of the CAA. In addition, many of the SIP provisions identified in the Petition that resemble affirmative defense provisions do not have sufficiently robust criteri a 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 opera tor 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 Petiti oner 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 illustra tion 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 re gulations 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 malfunc tions 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 defens e for excess emissions due to a malfunction can only be effective with respect to moneta ry penalties, not with respect to potential injunctive relief. Second, the affirmative defense should be limited only to malfunctions that are sudden, unavoidable, and unpredict able. Third, a valid affirmative defense provision must provide that the defendant has the burden of proof to demonstrate all of

55 

### See, 1999 SSM Guidance at Attachment 3-4.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 76 of 327 the elements of the defense to qualify. This de monstration has to occu r in a judicial or administrative proceeding where the merits of the affirmative defense are independently and objectively evaluated. The specific crit eria that the EPA recommends for an affirmative defense provision for malfunctions to be consistent with CAA requirements

are: (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 fo r, 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 expediti ous fashion when the operator knew or should have known that applicable emission lim itations were being exceeded. Off-shift

labor and overtime must have b een utilized, to the extent practicable, to ensure that such repairs were made as expe ditiously as practicable; (5) The amount and duration of the excess emissions (including any bypass) were minimized to the maximum extent practicab le during periods of such emissions; (6) All possible steps were taken to mini mize the impact of the excess emissions on ambient air quality; (7) All emission monitoring systems were ke pt in operation if at all possible; (8) The owner or operator's actions in response to the excess emissions wereThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 77 of 327 documented by properly signed, contemporane ous operating logs, or other relevant evidence; (9) The excess emissions were not part of a recurring patt ern indicative of inadequate design, operation, or maintenance; and (10) The owner or operator properly a nd promptly notified the appropriate regulatory authority.

One refinement to these recommendati ons from the 1999 SSM Guidance that should be highlighted is the EPA's view con cerning whether affirmative defenses should be provided in the SIP in th e case of geographic areas a nd pollutants "where a single source or small group of sources has the poten tial to cause an exceedance of the NAAQS

or PSD increments." The EPA believes that su ch 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 viol ations did not in fact cause an exceedance of the NAAQS or PSD incremen ts. 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 affirm ative defense provisions when it issues new

National Emissions Standards for Hazardous Air Pollutants (NESHAP) for purposes ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 78 of 327 CAA section 112. 56 

### Air agencies may wish to adapt th is sample regulatory text for their own affirmative defense provisions in SIPs. §63.456 Affirmative defense for viol ation of emission standards during malfunction. In response to an action to enforce the standards set forth in §§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 §63.450(d), the ow ner or operator may assert an affirmative defense to a claim for civ il penalties for violations of such standards that are cau sed by malfunction, as defined at 40 CFR 63.2. Appropriate penalties may be assesse d, 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 contro l 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 operati on 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 overti me labor were used, to the extent practicable to make these repairs; and (3) The frequency, amount and dur ation of the violation (including any bypass) were minimized to the ma ximum extent practicable; and (4) If the violation resulted fr om a bypass of control equipment or a process, then the bypass was unavoidabl e to prevent loss of life, personal injury, or severe property damage; and (5) All possible steps were take n to minimize the impact of the violation on ambient air quality, the e nvironment, and human health; and (6) All emissions monitoring and control systems were kept in

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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 79 of 327 operation if at all possible, consiste nt with safety and good air pollution control practices; and (7) All of the actions in respons e to the violation were documented by properly signed, contemporan eous 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 result ing from the malfunction event at issue. The analysis shall also spec ify, using best monitoring methods and engineering judgment, the amount of a ny emissions that were the result of the malfunction. (b) Report . The owner or operator seeki ng 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 peri odic compliance [report], deviation report, or excess emission report otherwise required after the initial occurrence of the vi olation of the relevant standard (which may be the end of any applicable averaging period). If such compliance [report], deviation report, or excess emission re port is due less than 45 days after the initial occurrence of the violati on, 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 regulator y text has some feat ures that are not explicitly among the criteria recommended fo r 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 re gulator 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 becau se they serve important purposes related to the analysis, documentation, and memorial ization of the fact s concerning the malfunction, thereby facilitating better evaluati on 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 SIPThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 80 of 327 provisions for affirmative defenses. However, these features need not be required, so long as the SIP provision otherwise pr ovides that the owner or ope rator of the source will: (i) bear the burden of proof to establish that th e elements of the affirmative defense have been met; and (ii) properly and promptly notif y the appropriate regul atory authority about

the malfunction.

The EPA also wants to reiterate its vi ews concerning appropriate affirmative defense provisions as they relate to malf unctions that occur duri ng planned startup and shutdown and as they relate to startup and shutdo wn that occur as the re sult 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 woul d have been sudden, unavoidable, and unpredictable, and the source could not have precluded the event by better source design, operation and maintenance. The EPA interp rets the CAA to allow narrowly drawn affirmative defense provision in SIPs in such circumstances. Another question is how to treat the exce ss emissions that occur during a startup or shutdown that is necessitated by the malf unction and are thus potentially components

of the malfunction event. The EPA believes th at drawing the distinct ion between what is directly caused by the malfunc tion itself and what is indi rectly caused by the malfunction as a part of non-routine startup and shutdow n must always be a case-specific enquiry,

57 

### See , 1999 SSM Guidance at attachment p. 6.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 81 of 327 dependent upon the facts and circumstances of th e 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 th e 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 malfunc tion, 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 EP A does not anticipate that there would be startups that would follow a malfunction th at 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 affi rmative 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 duri ng malfunctions for these technology-based standards, the federal standards contained in the EPA's regulations already specify the appropriate affirmative defens e. No additional or different affirmative defense provision applicable through a SIP provision woul d be warranted or appropriate. C. Affirmative Defense Provisions Du ring Periods of Startup and ShutdownThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 82 of 327 The EPA's evaluation of the Petition indi cates that revisions to the SSM Policy are necessary with respect to affirmative de fense provisions during startup and shutdown periods. In the 1999 SSM Guidance, the EPA explicitly discussed the possibility of

affirmative defenses in the context of st artup and shutdown, and provided recommended criteria to ensure that any such affirmativ e defense provisions in a SIP submission would be appropriately narrowly drawn to comply w ith 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 th e overall objectives of the CAA.

Review of the Petition and r econsideration of this questi on in light of recent case law concerning emission limitations and affirmat ive defenses has caused the EPA to alter its view on the appropriateness of affirmative de fenses applicable to planned events such as startup and shutdown. The EPA believes that sources should be designed, maintained, and operated in order to co mply with applicable emission limitations during normal operations. By definition, planned events such as startup and shutdown are phases of normal source operation. Because these even ts 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 ow ner or operator of the source. Also unlike malfunctions, it is possible for the source to anticipate the amount of emissions duringThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 83 of 327 startup and shutdown, to take appropriate step s to limit those emissions as needed, and to remain in continuous compliance. In the even t that a source in fact cannot comply with the otherwise applicable emission limitati ons 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 th at apply to the sour ce 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 pr ecautions 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 app licable emission limitations at all times, and certainly during planned and predictable events . By logical extension, the theory that an

affirmative defense should be available duri ng planned startup and shutdown could apply to all phases of normal source operati on, which would not be appropriate. The EPA believes that providing affirmative defenses for violations that occur as a result of planned events with in 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 vi olations of SIP requirements. The distinction that makes affirmative defenses appropriate for malfunctio ns 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 toThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 84 of 327 minimize the effects of the violation after it occurs. In such circumstances, the EPA interprets the CAA to allow narrowly draw n 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 pr edictable 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 pur pose of such an affirmative defense to encourage better compliance even by sources for which 100-percen t 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 pr ior interpretation of the CAA that would allow affirmative defense provisions during planned startup and shutdown. 58 

### D. Relationship Between SIP Provisions and Title V Regulations The EPA's review of the Petition has highlig hted an area of potential ambiguity or conflict between the SSM Policy applicable to SIP provisions and the EPA's regulations

58 

### In accordance with CAA section 113(e), so urces retain the ability to seek lower monetary penalties thro ugh the factors provided for consid eration in administrative or judicial enforcement proceedings. In this co ntext, for example, a violating source could argue that factors such as good faith efforts to comply should reduce otherwise applicable statutory penalties.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 85 of 327 applicable to title V permit provisions. The EPA has promulgated regulations in 40 CFR part 70 applicable to state operating permit pr ograms and in 40 CFR part 71 applicable to federal operating permit programs. 59 

### Under each set of regulat ions, the EPA has provided that permits may contain, at the permitti ng 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 malf unction event warrants explanation. 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 defi nition of emergency is identical in the regulations for each program: An "emergency" means any situation arising from sudden and reasonably unforeseeable events beyond the contro l of the source, including acts of God, which situation requires imme diate 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 emerge ncy. 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 

### Thus, the definition of "emergency" in these ti tle V regulations is similar to the concept of "malfunctions" in the EPA's SSM Policy for SIP provisions, but it uses somewhat

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).

61 

### See, 40 CFR 70.6(g)(1); 40 CFR 71.6(g)(1).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 86 of 327 different terminology concerni ng the nature of the event and restricts the qualifying exceedances to "technology-based" emission limitations. 62 

### Some SIP provisions may also be "technology-based" emissi on limitations and thus this terminology in the operating permit regulations may engender some potentia l inconsistency with the SSM Policy. If there is an emergency event meeting the regulatory definition, then the EPA's regulations for operating permits provide th at 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 th e 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 ex ceeded 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 tim e when emission limitations were exceeded due to the emergency. This notice fulfills the requirement of either paragraph 40 CFR

62 

### 1999 SSM Guidance at Attachment p. 1 and footnote 6. The term "malfunction" means "a sudden and unavoidable breakdown of proce ss or control equipment." The malfunction events that may be suitable for an affirm ative defense are those that are "caused by circumstances entirely beyond the control of th e owner or operator." The EPA notes that by definition emergencies do not include normal source operation such as startup, shutdown, or maintenance.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 87 of 327 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 

### The Petitioner did not directly reques t that the EPA evaluate the existing regulatory provisions applicable to operati ng 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 provisi on, 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. 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 in clude 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

63 

### 40 CFR 70.6(g)(3); 40 CFR 71.6(g)(3).

64 

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

65 

### 1999 SSM Guidance at Attachment pp. 3-4.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 88 of 327 permits use somewhat different terminology for the elements of the defense, such as providing that the emergencies were "s udden and reasonably unforeseeable events beyond the control of the source," whereas th e 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 inconsiste ncy with the EPA's SSM Policy. 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 applic ation 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 c onflict with the SSM Policy. First, these provisions do not explicit ly limit the affirmative defense only to civil penalties available under the CAA for viola tions of emission limitations. Each provision states only that an "emergency constitutes an affirmative de fense 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 limita tion, 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

66 

### 1999 SSM Guidance at Attachment p. 3.

67 

### 40 CFR 70.6(g)(2); 40 CFR 71.6(g)(2).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 89 of 327 penalties. 68 

### Such a reading would be inconsistent with the EPA's view that affirmative defenses in SIP provisions ar e only consistent with the C AA 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 c ourt determine that such relief is necessary to prevent excess emissions in the future. Second, these operating permit regulatory pr ovisions 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 techno logy-based standards already include the appropriate affirmative defense provisions , if any, and that cr eation of additional

affirmative defenses via a SI P provision is impermissible. 70 

### Thus, SIP provisions that add

to or alter the terms of a ny federal technology-based standa rds would be substantially inadequate to meet CAA requirements. 71

68 

### Because title V requires that a source have a permit that "assure[s] compliance with applicable [CAA] requirements," CAA sec tion 504(a), it follow s that the title V emergency provision itself can be st 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 Prim ary 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).

69 

### 40 CFR 70.6(g)(5); 40 CFR 71.6(g)(5).

70 

### 1999 SSM Guidance at Attachment p. 3, foot note 6. The EPA explained that to the extent a state elected to incl ude 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 take n into account technological limitations in setting the standards, additional exemp tions or affirmative defenses would be inappropriate.

71 

### See , "Finding of Substantial In adequacy of Implementation Plan; Call for Utah State Implementation Plan Revision," 74 FR 21639 (A pr. 18, 2011) (the EPA issued a SIP call because, inter alia , the SIP provision applie d to NSPS and NESHAP); US Magnesium, LLC v. EPA , 690 F.3d 1157 (10th Cir. 2012) (upholding the SIP call).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 90 of 327 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 approvabl e affirmative defenses in a SIP provision can only apply to civil penalties, not to in junctive 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 a ffirmative 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 Po licy, and ultimately of its final action on the

Petition. First, the EPA only intends its actions on th e larger policy or legal issues raised byThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 91 of 327 the Petitioner to inform the public of the EP A's current views on the requirements of the CAA with respect to SIP provi sions 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 duri ng 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 malf unctions. 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 EP A does not intend its action on those specific provision s 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 compar able deficiencies in other existing SIP provisions that may be inconsistent with th e requirements of the CAA. Again, however, the EPA's actions on the Petition provide update d guidance on the types of SIP provisions

that it believes would be consistent with C AA 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 give n state, the state will have time to revise its SIP in response to the SI P call through the necessary stat e 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 review s and revises existing permits.

The EPA does not intend the issuance of a SIP call to have automatic impacts on theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 92 of 327 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 provi sions" 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 ex isting permit terms may only be changed through established permitting processes. Fifth, the EPA does not intend its interpre tations 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 dete rmine the appropriate response and resolution. For purposes of alleged violations of SIP pr ovisions, however, the term s of the applicable SIP provision will continue to govern until that provision is revised following the appropriate process for SIP revisi ons, as required by the CAA. Finally, the EPA does intend that the final notice for this actio n after considering public comments will embody its most current SSM Policy, reflecting the EPA's interpretation of CAA requirements applic able 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, th e 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 CallsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 93 of 327 A. SIP Call Authority U nder Section 110(k)(5) 1. General Statutory Authority The CAA provides a mechanism for the correction of flaw ed 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 subs tantially inadequate to attain or maintain the relevant national ambien t air quality standards, to mitigate adequately the interstate pollutant tr ansport described in section [176A] of this title or section [184] of this ti tle, or to otherwise comply with any requirement of [the Act], the Administra tor shall require the State to revise the plan as necessary to correct su ch inadequacies. The Administrator shall notify the State of the inade quacies 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 aut horizes 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 

### Significantly, CAA section 110(k)(5) explici tly authorizes the EPA to issue a SIP

72 

### The EPA also has other discretionary aut hority to address inco rrect 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 secti on 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 be lieves 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 th e mechanism of the CAA section 110(k)(5) SIP call will keep th e provisions in place during the pendency of the state's revision of the SIP and the EP A'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 existi ng SIP provision is preferable to the absence of the provision in the interim.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 94 of 327 call "whenever" the EPA makes a finding th at the existing SIP is substantially inadequate, thus providing authority for th e EPA to take action to correct existing inadequate SIP provisions even long after their initial approval, or ev en 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. It is also important to emphasize that CAA section 110( k)(5) expressly directs the EPA to take action if the SIP pr ovision is substantially inadeq uate 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 SI P 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 PM 2.5 

### NAAQS must meet various applicable statutory and regulatory re quirements, including requi rements of CAA section

73 

### See, e.g. , Michigan v. EPA , 213 F.3d 663 (D.C. Cir. 2000) (upholding the "NOx SIP Call" to states requiring revi sions to previously approved SIPs with respect to ozone transport and section 110(a)(2 0(D)(i)(I)); "Action to Ensure Authority To Issue Permits Under the Prevention of Significant Deterior ation Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequ acy 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 appr oved SIPs were substantially inadequate because they did not provide for the regula tion of GHGs in the PSD permitting programs of these states as required by CAA sec tion 110(a)(2)(C) and s ection 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).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 95 of 327 110(a)(2)(A) such as enforceability, the definition of the term "emission limitation" in CAA section 302(k), the level of emissions c ontrol required to cons titute a "reasonably

available control measure" in CAA sec tion 172(c)(1), and th e other applicable requirements of the implementation regulations for the 1997 PM 2.5 

### NAAQS. Failure to meet any of those applicable requirements could constitute a substantial inadequacy suitable for a SIP call, depending upon the f acts 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 unrelate d requirement of CAA section 110(a)(2)(G) that the state have ge neral 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 th e public who live adjacent to the source to enforce the SIP. Thus, the EPA has previ ously interpreted CAA section 110(k)(5) to authorize a SIP call to rectify SIP inadequ acies of various kinds, both broad and narrowThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 96 of 327 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 resp ect to SIP provisions th at are substantially inadequate to meet any CAA requirements, in cluding requirements relevant to the proper treatment of excess emissions during SSM events. An important baseline question is whethe r 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 reasona bly, consistent with the provisions of the CAA. In addition, the EPA is authorized to exercise its discre tion in applying this provision to determine whether a given SIP provision is substa ntially inadequate. To the extent that the term "substantially inadequa te" 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 require d, and thus whether the provisi on 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

74 

### See, e.g. , "Finding of Significant Co ntribution and Rulemaking fo r 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 Implementati on Plan Revision," 74 FR 21639 (Apr. 18, 2011) (the EPA issued a SIP call to one state requi ring it to rectify several very specific SIP provisions).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 97 of 327 connected to a particular adverse impact . For example, the plain language of CAA section 110(k)(5) does not requ ire direct causal evidence th at excess emissions have occurred during a specific malfunction at a sp ecific 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 exem pt a source from compliance with applicable emission limitations during SSM even ts, 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 ca used a specific NAAQS violation. 76 

### Similarly, the EPA does not interpret C AA section 110(k)(5) to require direct causal evidence that a SIP provision that impr operly undermines enforceability of the SIP has resulted in a specific failed enforcemen t attempt by any party. A SIP provision that has the practical effect of ba rring 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 inconsiste nt with fundamental

75 

### See , US Magnesium, LLC v. EPA , 690 F.3d 1157 (10th Cir. 2012) (upholding the EPA's interpretation of secti on 110(k)(5) to authorize a SIP call when the SIP provisions are inconsistent with CAA requirements).

76 

### The EPA notes that the GHG SI P 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 m eet 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 Deteriorati on Program to Sources of Greenhouse Gas Emissions: Finding of S ubstantial Inadequacy and SIP Call; Final Rule," 75 FR 77698 (Dec. 13, 2010).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 98 of 327 requirements of the CAA. 77 

### Such a provision also does not become legally permissible merely because there is not definitive eviden ce 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 lik ely 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. The EPA's interpretation of CAA secti on 110(k)(5) is that the fundamental integrity of the CAA's SIP process and stru cture are undermined if emission limitations relied upon to meet CAA requirements relate d to protection of public health and the environment can be violated without potenti al recourse. For example, the EPA does not

believe that it is authorized to issue a SI P 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 particul ar source on a particular day. If the SIP contains a provision that is in consistent with fundamental re quirements of the CAA, that renders the SIP provision s ubstantially 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

77 

### See , "Finding of Substantial In adequacy 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 wh en 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).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 99 of 327 violate the requirements of the CAA. For example, if an existing SIP provision concerning the state's exercise of enforcemen t discretion is sufficiently ambiguous that it could be construed to preclude enforcemen t 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 interfer ing 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 ta ke action to eliminat e 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 SI P call to assure that the SIP provisions are sufficiently clear and consistent with CAA requirements on their face. 79 

### In this instance, the Petition raised ques tions concerning the adequacy of existing SIP provisions that pertain to the treatmen t of excess emissions during SSM events. The SIP provisions identified by the Petitioner gene rally fall into four major categories: (i) automatic exemptions; (ii) exemptions as a resu lt of director's disc retion; (iii ) provisions that appear to bar enforcement by the EPA or through a citizen suit if the state decides

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 pursu e enforcement of SIP emission limitations where states had approved alternative emissi on 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 la w). 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 Ci r. 2012) (upholding the EPA's use of SIP call authority in order to cl arify language in the SIP that could be read to violate the CAA, even if a court has not yet interpreted the langua ge in that way).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 100 of 327 not to enforce through exercise of enforcemen t 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 Pet itioner describes it. 2. Substantial Inadequacy of Automatic Exemptions The EPA believes that SIP provisions that provide an automatic exemption from otherwise applicable emission limitations ar e 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 emi ssion limitation, except during startup, shutdown, and malfunction, and by definition any excess emissions during

such events would not be vi olations and thus there coul d 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 th is 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 incremen ts 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 asThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 101 of 327 required by CAA sections 110(a)(2)(A) and 110 (a)(2)(C), thereby in consistent 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 pr ovide for attainment a nd maintenance of the NAAQS. These emission limitations are basic bui lding blocks for SIPs, often used by air agencies to meet various requirements includi ng: (i) in the estimates of emissions for emissions inventories; (ii) in the determination of what le vel of emissions meets various statutory requirements such as "reasonably available control meas ures" in nonattainment SIPs or "best available retrofit technology" in regional haze SIPs; a nd (iii) in critical modeling exercises such as attainment de monstration modeling for nonattainment areas or increment use for PSD permitting purposes. All of these uses typically assume continuous source compliance with a pplicable emission limitations. Because the NAAQS are not directly enfo rceable 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 cl ear violations of the relied-upon emission

limitations and thus eliminate any opportunity to obtain inju nctive 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 ot herwise be clear violations of the emission limitations, regardless of the conduct of the source, eliminates anyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 102 of 327 opportunity for penalties to encourage appropr iate design, operation, and maintenance of sources and efforts by source operators to pr event 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 Dir ector's Discretion Exemptions The EPA believes that SIP provisions that allow discretionary exemptions from otherwise applicable emission limitations ar e 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 impermissi ble "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 pr ovision 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 c ould impact compliance with other CAA

80 

### The EPA notes that problematic "director's discretion" provisions are not limited only to those that purport to author ize alternative emission limitati ons from those required in a SIP. Other problematic director's discretion pr ovisions could include th ose that purport to provide for discretionary changes to other s ubstantive requirements of the SIP, such as applicability, operating requirements, r ecordkeeping requirements, monitoring requirements, test methods, and alternative compliance methods.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 103 of 327 requirements, then it may be possible to de termine 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 direct or's discretion-type provisions cannot meet this basic test. Unless it is possible at the time of the a pproval of the SIP provision to anticipate and analyze the impacts of the potential exer cise 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 procedur al requirements on states that seek to amend SIP provisions. The elements of CAA section 110(a)(2) and ot her 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. Secti on 110(i) of the CAA prohibits modification of SIP requirements for stationary sources by either the state or the EPA,This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 104 of 327 except through specified processes. 81 

### Section 110(k) of the C AA imposes procedural and substantive requirements on the EPA for ac tion 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 th e necessary demonstration that the SIP revision in question would not interfere with any requirement con cerning attainment and reasonable further progress or "any other applic able requirement of" the CAA to meet the requirements of CAA section 110(l). Congress presumably imposed these many exp licit requirements in order to assure that there is adequate public process at bot h the air agency and federal level for any SIP revision, and to assure that any SIP re vision meets the applicable substantive requirements of the CAA. Although no provisi on of the CAA explicitly addresses whether a "director's discretion" provision is acceptable by name, the EPA interprets the

81 

### Section 110(i) of the Act stat es 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 Stat e 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; Revi sions 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 St ates, except in certain limite d circumstances, from taking any action to modify any requirement of a SI P 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 Im plementation 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 unde rlying 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 requiri ng independent EPA approval").This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 105 of 327 statute to prohibit such provisi ons unless they would be consis tent 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 ex isting legal requirements of the SIP with respect to meeting emission lim itations would be tantamount to allowing a revision of the SIP without meeting the applicable procedural and substantive requirements for such a SIP revision. For this reason, the EPA has long discourag ed the creation of new SIP provisions containing an impermissible di rector's discretion feature a nd has also taken actions to remove existing SIP provis ions that it had previo usly 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 discreti on 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 disc retion as a SIP revision. Barring such a later

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 re vision 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.").

83 

### See, e.g. , "Approval and Disapproval and Promul gation of Air Quality Implementation Plans; Colorado; Revisions to Regula tion 1," 76 FR 4540 (Jan. 26, 2011) (partial disapproval of SIP submission ba sed on inclusion of impermissi ble director's discretion provisions); "Correction of Im plementation Plans; American Samoa, Arizona, California, Hawaii, and Nevada State Implementation Plan s; 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; Corre ctions 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).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 106 of 327 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 a pproved by the EPA. The EPA's evaluation of the specific SIP pr ovisions 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 im portantly, however, each of the identified SIP provisions goes far beyond the limits of wh at might theoretically be a permissible director's discretion provision by authoriz ing 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 su ch 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 discreti onary exemptions would not m eet 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. Pursua nt to CAA section 302(k), those emission limitations must be "continuous." Discretionary exemptions from otherwise applicable

emission limitations render those limits le ss than continuous, as is required by CAA sections 110(a)(2)(A) an d 110(a)(2)(C), and thereby inc onsistent with a fundamental requirement of the CAA and thus substantiall y inadequate as contemplated in sectionThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 107 of 327 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 unde rmine 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 gr ant 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 th e CAA to allow SIP provisions that would allow the exercise of di rector'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 consti tute a violation of the SIP would interfere

with effective enforcement of the SIP. Su ch provisions are inconsistent with and

undermine the enforcement structure of th e 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 provi sions that allow discretionary exemptions from applicable SIP emission limitations through the exercise of dir ector's discretion are substantially inadequate to comply with CAA requirements as contemplated in CAA section 110(k)(5).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 108 of 327 4. Substantial Inadequacy of Imprope r Enforcement Discretion Provisions The EPA believes that SIP provisions that pertain to enforcement discretion but could be construed to bar enforcement by th e 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 in cludes an impermissible enfo rcement discretion provision specifies certain parameters for when ai r 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 

### The EPA's longstanding view is that SIP provisions cannot enable an air agency's decision concerning whether or not to pursue en forcement to bar the ability of the EPA or the public to enforce ap plicable 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 ha ve authority to pursue enforcement for a violation even if the air agen cy elects not to do so. The EPA, citizens, and any court in

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 th at information concerning a ma lfunction "shall be used by the executive secretary in determining whether a violation has occurr ed and/or the need of further enforcement action." This SIP langua ge appeared to give the state official exclusive authority to determine whether excess emissions constitute a violation.

85 

### See, 1999 SSM Guidance at 3.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 109 of 327 which they seek to pursue an enforcement cl aim for violation of SIP requirements must retain the authority to evalua te independently whether a sour ce's violation of an emission

limitation warrants enforcement action. Potent ial 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 ag ency elects not to, would undermine the

enforcement structure of the CAA and would t hus be substantially inadequate to meet fundamental requirements in CAA sections 113 and 304. 5. Substantial Inadequacy of Defici ent Affirmative Defense Provisions The EPA believes that SIP provisions th at provide inappropriate affirmative defenses for excess emissions during SSM even ts are substantially inadequate to meet CAA requirements. A typical SIP provision th at includes an impermissible affirmative defense provision could cont ain several deficiencies si multaneously, even though it may superficially resemble such a defense and act ually contain the term "affirmative defense." There are a number of ways in which such provisions can be defi cient, including: (i) extending the affirmative defense to injunctive relief; (ii) not including sufficient criteria to make the affirmative defense appropriate ly narrow; (iii) impos ing the affirmative defense provision on federal technology-based emission limitations in the SIP; and (iv) providing an affirmative defense to start up, 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 thatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 110 of 327 provide relief from injunctive re lief 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 balanci ng the obligations of

sources to meet emission limitations con tinuously as required by CAA section 302(k) with the practical reality that despite the mo st diligent of efforts, a source may violate

emission standards under certain limited circum stances beyond the source's control. For

sources that meet the conditions for an affi rmative 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, pr otection of PSD increments, protection of visibility, and other CAA requirements. By contrast, because SIP provisions are intended to meet fundamental CAA objectives including attain ment 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 reductio ns could be obtained through changes at the source or in source operation s hould that be necessary. In th is 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 provi de relief under appropriate circumstances where the event was entirely beyond the contro l of the owner or operator of the sourceThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 111 of 327 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 conditi ons that it considers appropriate for an approvable SIP provision in order to ensure th at the affirmative defense is available to sources that warrant relief from monetary penalties otherwise required by the CAA. Affirmative defense provisions that are c onsistent with these criteria would be appropriately narrowly drawn. Affirmative de fense provisions that do not address these criteria adequately, however, would potentia lly shield a source from CAA statutory penalties in circumstances that are not warranted. For example, an affirmative defense provision that did no t 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 defe nse provision that failed to impose a burden upon the source to establish that it took all pos sible steps to minimize the effect of the violation on ambient air quality, the environm ent, and human health, would not serve to encourage diligence in rectifying the malfunctio n as quickly and effectively as possible. By addressing the recommended criteria ad equately, a state can develop a narrow provision that appropriately ba lances the requirement for continuous compliance against the reality that there may be limited circumst ances beyond the source's control that justify relief from monetary penaltie s. The EPA believes that failure to have an affirmative defense provision that is su fficiently 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 su fficiently narrow affirmative defense wouldThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 112 of 327 thus be substantially inadequate to meet CAA requirements. Third, the EPA interprets the CAA to pr eclude SIP provisions that would create affirmative defense provisions applicable to federal regulations that an air agency may have copied into its SIP or in corporated by reference in order to take credit for resulting emissions reductions for SIP planning purpos es or to receive delegation of federal authority, such as NSPS or NESHAP. To th e extent that any affirmative defense appropriate for these technol ogy-based standards is warranted, the federal standards contained in the EPA's regulations already sp ecify the appropriate affirmative defense. Creating affirmative defenses that do not exist in such federal technology-based standards, or providing different affirmative de fenses in addition to those that do exist, would be inappropriate. Simila rly, reliance on inappropriate a ffirmative 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 entirel y beyond the control of the owner or operator of the source. Thus, an affirmative defe nse may be appropriate for events like malfunctions, which are sudden and unavoidabl e 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 ma intained, and could not have taken action to prevent the exceedance. Because the qualifyi ng 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 th e concept of an affirmative defense forThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 113 of 327 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 complian ce with, and enforcement of, applicable emission limitations during those periods s hould apply as otherwise applies during a source's normal operations. If ju stified, the state can develop special emission limitations or control measures that appl y 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, how ever, that does not justify th e creation of an affirmative

defense in the case of excess emissions duri ng such periods. Because these events are planned, the EPA believes that sources shoul d be able to comply with applicable emission limitations during thes e periods of time. To provide an affirmative defense for

violations that occu r during planned and predictable ev ents 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 a ffirmative defense provisions that include periods of normal source operation that are with in 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 affirmativ e 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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 114 of 327 B. SIP Call Process Under Section 110(k)(5) Section 110(k)(5) of the CAA provides th e 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 timi ng for such an action. First, th e statute requires the EPA to notify the state of the final finding of substa ntial inadequacy. The EPA typically provides notice to states by a letter from the Assist ant Administrator for the Office of Air and Radiation to the appropriate st ate officials in addition to publ ication of the final action in

the Federal Register

. Second, the statute requires the EPA to es tablish "reasonable deadlines (not to

exceed 18 months after the date of such notic e)" 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 s ubmission of corrective SIP revisions in order to ascertain the appropriate timef rame, depending on the nature of the SIP inadequacy. Third, the statute requires that any finding of substantial inade quacy 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 partic ipate 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 pr ocess as a means of giving clear guidanceThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 115 of 327 concerning SIP provisions rele vant to SSM events that are consistent with CAA requirements.

If the state fails to submit the correctiv e SIP revision by the deadline that the EPA finalizes as part of the SIP call, CAA secti on 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 with in 2 years after the [fi nding] . . . 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 

### The finding of failure to submit a revision in response to a SIP call, or the EPA's disapproval of that corrective SIP revision, ca n 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-m onth 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 th e nonattainment new s ource review program

86 

### CAA section 110(c)(1)(A).

87 

### The 2-year deadline does not necessarily appl y to FIPs following disapproval of a tribal implementation plan.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 116 of 327 and restrictions on highway funding. However, s ection 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 unl ess the state corrects the deficiency before that date. The EPA proposes that the highway funding restri ctions 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 provisi ons in 40 CFR 52.31 regarding staying the sanctions clock and deferring the impositi on of sanctions would also apply. Mandatory sanctions under CAA s ection 179 generally apply only in nonattainment areas. By its definition, the em ission offset sanction applies only in areas required to have a part D NSR program, typically areas desi gnated nonattainment. Section 179(b)(1) expressly limits the highw ay funding restriction to nonattainment areas. Additionally, the EPA interprets the se ction 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 a pplies for all NAAQS pollutants, then the mandatory sanctions would apply in all ar eas designated nonattainment for all NAAQS

88 

### See, "Selection of Sequence of Mandatory Sa nctions for Findings Made Pursuant to Section 179 of the Clean Air Act," 59 FR 39832 (Aug. 4, 1994), codified at 40 CFR 52.31.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 117 of 327 within the state. In this case, the EPA w ill evaluate the geographic scope of potential

sanctions at the time it makes a final determin ation whether the state's SIP is substantially inadequate and issues a SIP call, as this ma y 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 secti on 110(k)(5), the EPA ha s authority to set a SIP submission deadline up to 18 months fr om the date of the final finding of inadequacy. The EPA is proposing that if it promulga tes a final finding of inadequacy and a SIP call for a state, the EPA will establis h 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 pe rmissible 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 allo w states sufficient time to make SIP revisions following thei r own SIP development process. The EPAThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 118 of 327 considers this a reasonable time period for the affected states to revise their state regulations, provide for public input, process the SIP revi sion through the state's own procedures, and submit the SIP revision to th e 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 a pplicable 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 th e specific SIP provisions determined to be inconsistent with the requirements of the CAA. To the extent that a st ate 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 mo re stringent than needed to meet the CAA requirements it was intended to address, the EPA anticipate s that the state will revise the emission limitation accordingly, but wit hout the impermissible exemp tion or other feature that

necessitated the SIP call. Finally, the EPA notes that its authority under CAA section 110(k)(5) does notThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 119 of 327 extend to requiring a state to a dopt a particular control measur e in its SIP in response to the SIP call. Under principles of cooperative federalism, the CAA vests air agencies with

substantial discretion to devel op 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 que stion to adopt a particular control measure. The EPA is merely proposing to require that affected states ma ke 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 

### IX. What is the EPA proposing for each of the specific SIP provisions identified

in the Petition? A. Overview of the EPA's Evaluati on 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 acknowle dges in section II.A of this notice, many of these provisions are as old as the origin al SIPs that the EPA approved in the early 1970s, when the states and the EPA had limited experience in evaluating the provisions'

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 measur e 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 dict ating the adoption of a par ticular control measure).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 120 of 327 adequacy, enforceability, and consistency with CAA requirements. In some instances the EPA does not agr ee with the Petitioner's reading of the provision in question, or with th e Petitioner's conclusion that th e 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 solicit s comment on all aspects of this proposal. 1. Automatic Exemption Provisions A significant number of provisions identifie d by the Petitioner pertain to existing SIP provisions that create automatic exemp tions for excess emissions during periods of startup, shutdown, or malfunction. Occasionall y, these provisions also pertain to exemptions for excess emission that occur dur ing maintenance, load change, or other types of normal source operation. These provision s typically provide th at 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 cr eate impermissible automatic exemptions for excess emissions during malfunctions or duri ng startup, shutdown, or other types ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 121 of 327 normal source operation. In those instances wh ere 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 Pe tition and accordingly to issue a SIP call to the appropriate state.

2. Director's Discretion Exemption Provisions Another category of problematic SIP pr ovision identified by the Petitioner is exemptions for excess emissions that, while not automatic, are exemptions for such emissions granted at the discretion of state re gulatory personnel. In some cases, the SIP provision in question may provide some minima l degree of process and some parameters for the granting of such discretionary exem ptions, but the typical provision at issue allows state personnel to decide unilaterally and w ithout meaningful limitations that what would otherwise be a violation of the appli cable 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 a pplicable emission limitation, su ch a decision would transform

the violation into a non-viola tion, thereby barring enforcem ent 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 undermin e 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 revi sions of approved SI P provisions without meeting the applicable statutory substant ive and procedural requirements for SIP revisions. The specific SIP provisi ons at issue in the Petition ( see section IX of thisThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 122 of 327 notice) are especially inappr opriate 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 firs t 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 th at 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 exer cise 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 Petiti oner contains such a discretionary exemption contrary to the requirements of the CAA, the EPA is pr oposing 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 provi sions in many states that ostensibly pertain to parameters for the exercise of enforcement discretion by state personnel for

violations due to excess emissions duri ng 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 cons ider in the event that they elected to formalize their enforcement discretion with pr ovisions 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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 123 of 327 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 se ction 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 rectif y 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 pr eclude enforcement by pa rties other than the state, the EPA is proposing to deny the Peti tion, and the EPA is taking comment on this issue in particular to assure that the stat e and the EPA have a co mmon 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 en sure that there is no misunderstanding in the future that the correct reading of the SI P 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 whic h to eliminate any potential ambiguity about the meaning of these enforcement disc retion provisions would be for the state to revise its SIP to remove the provisions. Becau se these provisions are only applicable to the state, the EPA's current view is that they need not be in cluded within the SIP. Thus, the EPA supports states that elect to revise their SIPs to re move these provisions to avoid any unnecessary confusion. 4. Adequacy of Affirmative Defense ProvisionsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 124 of 327 In addition to its overarching request that the EPA revise its interpretation of the CAA and forbid any form of affirmative defens e, the Petitioner also identified specific existing affirmative defense provisions in SI Ps that the Petitioner contended are not consistent with the EPA's SSM Policy. In gene ral, these provisions are structured as affirmative defense provisions, but the Pet itioner expressed concern that they fail to

address some or all of the criteria for such provisions that the EP A recommended in the

1999 SSM Guidance. In reviewing the claims of the Petitioner w ith 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 provi sions identified by the Petitioner, the EPA proposes to grant or to deny th e Petition, based on the EPA's evaluation as to whether the provision at issue provides ade quate criteria to provide onl y a narrow affirmative defense

for sources under certain circumstances cons istent with the overa rching 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 proposi ng to grant the Petition with respect to any

91 

### By definition, an affirmative defense provision in a SIP provides a source with a defense to assert in an enforcement proceed ing. 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 trie r 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 enumer ated in section VII.B of this notice.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 125 of 327 identified provision that creates an affirma tive defense applicable during planned startup and shutdown events, because such provisions ar e not consistent with the requirements of

the CAA. 5. Affirmative Defense Provisions Appli cable to a "Source or Small Group of

Sources" The Petitioner specifically objected to exis ting provisions in SIPs for a few states

that allow an affirmative defense for certain categories of sources to be based on an afterthe-fact showing that the excess emissions dur ing a particular SSM event did not cause a violation of the NAAQS or PSD increments. Th e 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 de fense 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 

### 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 ex cess emissions during SSM events that could cause a violation of the NAAQS or PSD incr ements. 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

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.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 126 of 327 and circumstances of a particular situation may justify adopting a different approach. The

EPA has evaluated each of the affirmative defe nse provisions identified by the Petitioner on the facts and circumstances of the partic ular provision. For each of these provisions, the EPA proposes to grant or to deny the Pe tition, based on an evaluation of whether the specific provision at issue in an individual SI P contains adequate criteria to achieve the objective of providing only a narrow affi rmative defense for sources under certain

circumstances consistent with the overarch ing CAA objectives, such as attaining and maintaining the NAAQS. The criteria that the EPA recommends for an affirmative defense provision for malfunctions to be cons istent 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 th e 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 othe rwise applicable SIP visible emission limits during startup and shutdown (06-096-101 Me. Code R. § 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

93 

### Petition at 43-44.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 127 of 327 planned shutdown." The Petitioner recognized that this provision might operate as an affirmative defense because the exemption is only available once th e person claiming an "exemption" establishes that the facility was being run to minimize emissions. The provision does not make clear who is aut horized to determine whether the visible emission limits apply. The Petitioner argued that one plausible in terpretation of this provision is that state official s are "authorized to decide th at the exemption applies and therefore preclude enforcement by the EPA and by citizens." 94 

### The Petitioner argued that such an interpretation of this provision pr ecluding enforcement by the EPA or citizens, both for civil penalties and in junctive relief, is forbidden by the EPA's interpretation of the CAA. Accordingly, the Petitioner requested th at this provision be eliminated from the

SIP. Second, the Petitioner objected to a provi sion that empowers th e state to "exempt emissions occurring during periods of una voidable malfunction or unplanned shutdown from civil penalty under section 349, subsect ion 2" (06-096-101 Me. Code R. § 4). The Petitioner noted that the provisi on "clearly provides an exemp tion at the discretion of the department." 95 

### The Petitioner argued that such a pr ovision provides exemptions from the otherwise applicable SIP emission limitations, and such exemptions are inconsistent with the requirements of the CAA and the EPA' s SSM Policy. Further, the Petitioner argued that the provision precludes enforcement by the EPA or citizens, both for civil penalties and injunctive relief, and that the EPA's interpretation of the CAA would forbid such a provision.

94 

### Petition at 44.

95 

### Petition at 44.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 128 of 327 b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations, whether au tomatic or through the exercise of a state

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, or malfuncti ons are not violations of the applicable

emission limitations are incons istent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. Th e EPA believes that inclusion of such an exemption in 06-096-101 Me. Code R. § 3 fr om the otherwise appl icable SIP emission limitation for violations during the first 4 hours following cold startup or planned shutdown of boilers with a rated input capacity of more than 200 million BTU per hour is a substantial inadequacy and renders this specific SIP provision impermissible. With respect to the Petitioner's concer n that this exemption could preclude enforcement by the EPA or citizens, the EPA agrees that this is one of the critical reasons why such a provision is impermissible under the CAA. By having a SIP provision that

defines what would otherwise be violations ofthe applicable emission limitations as nonviolations, the state has effec tively negated the ability of th e EPA or the public to enforce against those violations.

The EPA also believes that even if 06-096- 101 Me. Code R. § 3 is interpreted toThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 129 of 327 allow the source to make the required de monstration only in the context of an enforcement proceeding, the conditions set fo rth in the provision do not render it an acceptable affirmative defense provision. As expl ained in sections IV and VII.C of this notice, the EPA believes that affirmative de fenses are only permissible under the CAA in

the case of events that are be yond the control of the source, i.e. , malfunctions. Affirmative defense provisions are not appropr iate in the case of planned source actions, such as cold startup or planned shutdown, b ecause sources should be expected to comply with applicable emission limitations during those normal planned and predicted modes of source operation. Finally, the EPA believes that 06-096- 101 Me. Code R. § 4 is impermissible under the CAA as interpreted in the EP A's SSM Policy as an unbounded director's discretion provision. The provisi on authorizes a state offici al "to exempt emissions occurring during periods of unavoidable malf unction or unplanned shutdown from civil penalty under section 349, subsection 2." Although the reference to section 349, subsection 2 is to a Maine state penalty provi sion, the EPA believes that the provision is unclear as written. This provisi on could be read to mean that once the state official has exempted excess emissions during malfunctions from otherwise applicable SIP limitations, those excess emissions are not s ubject to any penalties, including penalties

under CAA section 113. As discussed in section VII.A of this notice, such director's discretion provisions are impermissible. Such an interpretation would make the state official the unilateral arbiter of whether the excess emissions in a given event constitute a violation, which could preclude enforcem ent by the EPA or the public who might disagree about whether enforcement action is warranted. Most importantly, however, theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 130 of 327 provision may be read to authorize the state official to create an exemption from the emission limitation, and such an exemption is impermissible in the first instance. The

EPA believes that inclusion of an unbounded director's discretion provision in 06-096- 101 Me. Code R. § 4 is thus a substantial inadequacy and renders this specific SIP provision impermissible for this reason. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to 06-096-101 Me. Code R. § 3. The EPA believes that this provision a llows for exemptions from the otherwise applicable SIP emission limitations, and that su ch exemptions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2 )(A), 110(a)(2)(C), and 302( k). In addition, by creating these impermissible exemptions, the state ha s defined violations in a way that would interfere with effective enforcement by th e EPA and the public for excess emissions during these events as provided in CAA sections 113 and 304. Even if the EPA were to consider 06-096-101 Me. Code R. § 3 to provide an affirmative defense rather than an automatic exemption, the provision is not a permissible affirmative defense provision consistent with the requirements of the CAA as interpreted in the EPA's recommendations in the EPA's SSM Policy. The EPA also proposes to grant the Peti tion with respect to 06-096-101 Me. Code R. § 4. The EPA believes that this provision, as written, applies only to state penalties. However, the EPA is concerned that the provision could cause confusion among the public, the regulated community, and the cour ts, who might interpret the provision as applying to both state and federa l penalties. Of course, such an interpretation would seemThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 131 of 327 to allow for exemptions from otherwise ap plicable emission limitations through a state

official's unilateral exercise of unbounded di scretionary authority and therefore be inconsistent with the fundamental requirement s of the CAA with respect to SIPs and SIP revisions. To avoid any such misunderstanding, the EPA is proposing to find that these provisions are substantially in adequate to meet CAA requirements and thus proposing to issue a SIP call with respect to these provisions. 2. New Hampshire a. Petitioner's Analysis The Petitioner objected to two generally applicable provisions in the New Hampshire SIP that allow emissions in ex cess of otherwise applicable SIP emission limitations during "malfunction or breakdown of any component part of the air pollution control equipment." 96 

### The Petitioner argued that the challenged provisions provide an automatic exemption for excess emissions dur ing the first 48 hours when any component part of air pollution control equipment malfunctions (N.H. Code R. Env-A 902.03) and further provide that "[t]he director may ... grant an extension of time or a temporary

variance" for excess emissions outside of the initial 48-hour time period (N.H. Code R. Env-A 902.04). The Petitioner argued that N.H. Code R. Env-A 902.03 is an impermissible automatic exemption because it "p rovides that if certain conditions existed during a period of excess emissions, then t hose exceedances would not be considered

violations." 97 

### The Petitioner argued that such ex emptions are inconsistent with the requirements of the CAA and the EPA's SSM Policy. The Petitioner argued that the CAA

96 

### Petition at 52-53.

97 

### Petition at 52.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 132 of 327 and the EPA's interpretation of the CAA in the SSM Policy require that all such excess

emissions be treated as violations. The Petiti oner further argued that both N.H. Code R. Env-A 902.03 and N.H. Code R. Env-A 902.04 app ear "to authorize the division to allow [exemptions], which could be interpreted to preclude enforcement by EPA or citizens" 98



### for the excess emissions that would otherwise be violations of applicable SIP emission

limitations. Second, the Petitioner objected to two sp ecific provisions in the New Hampshire SIP which provide source-specific exemptions for periods of startup for "any process, manufacturing and service i ndustry" (N.H. Code R. Env- A 1203.05) and for pre-June 1974 asphalt plants during startup, provided th ey are at 60-percent opacity for no more than 3 minutes (N.H. Code R. Env-A 1207.02). 99 

### The Petitioner recognized that EPA permits source category-specific emission limita tions for startup and shutdown if certain conditions are met. The Petitioner argued, how ever, that "[o]f th e seven criteria EPA considers adequate to justify a source specific emission limit during startup and shutdown, section 1207.02 arguably meets only one of them and section 1203.05 meets

none at all." 100 

### The Petitioner thus requested that EPA require New Hampshire to remove both provisions from the SIP.

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

98 

### Petition at 53.

99 

### Petition at 52-53.

100 

### Petition at 53.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 133 of 327 official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A),

SIPs must contain emission limitations a nd, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, or malfunc tions are not violati ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The first provision identified by the Petitioner, N.H. Code R. Env-A 902.03, explicitly states that "increased emissions shall be allowed" during "malfunction or breakdown of any component part of the ai r pollution control equipment." The third provision identified by the Pe titioner, N.H. Code R. Env-A 1203.05, provides that applicable SIP emission limitations apply "f or any process, manufacturing and service industry" "[e]xcept during periods of start-up s and warm-ups." Both of these provisions allow automatic exemptions during periods of startup from otherwise applicable SIP

emission limitations for excess emissions and t hus are inconsistent with the requirements of the CAA as interpreted in the EPA's SSM Policy. The EPA believes that inclusion of such exemptions from otherwise applicable SIP emission limitations in these provisions is a substantial inadequa cy and renders these SIP provisions impermissible. Similarly, N.H. Code R. Env-A 1203.05 does not appear to comply with the Act's requirements for source category-specific rules for startup and shutdown as interpreted in the EPA's SSM Policy. N.H. Code R. Env-A 1203.05 establishes a visible emissions limit for "any process, manufacturing and service indu stry" but further states that this limitThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 134 of 327 does not apply during startups. Automatic ex emptions from otherw ise applicable SIP

emission limitations for excess emissions durin g periods of startup are not permissible

under the CAA. As discussed in section VII.A of this notice, states may elect to develop

alternative emission limitations or other fo rms of enforceable control measures or techniques that apply during startup or shutdown, but exemptions for excess emissions during such periods are incons istent with the fundamental requirements of the CAA. Similarly, N.H. Code R. Env-A 1207.02 provi ded an alternate opacity limit, "60 percent opacity, No. 3 on the Ringelmann Smoke Chart," for pre-June 1974 asphalt plants during startups. The EPA believes that this alternate emissions limit does not meet the elements of the EPA's SSM Policy interpreti ng the CAA for establishing source-specific startup and shutdown alternative limits. Howe ver, after the Petitio ner filed its Petition,

the EPA acted on a SIP revision from New Ha mpshire correcting N.H. Code R. Env-A 1207.02 and renaming that provision as N.H. Code R. Env-A 2703.02. The N.H. Code R. Env-A 2703.02, as rewritten and submitted by New Hampshire, corrected the deficiencies identified by the Petitioner and removed the alternative limitations applicable during startups for pre-June 1974 asphalt plan ts. The EPA approved New Hampshire's SIP revision with respect to N.H. C ode R. Env-A 2703.02 on August 22, 2012. 101 

### Thus, the Petitioner's objection to th is provision is moot. Finally, the EPA believes that N.H. C ode R. Env-A 902.04 is impermissible under the CAA as interpreted in the EPA's SSM Policy, because it includes an unbounded director's discretion provisi on. The provision authorizes a st ate official to grant "an

101 

### See, 77 FR 50561 at 50608.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 135 of 327 extension of time" to the time-limited exem ption provided by N.H. Code R. Env-A 902.03 or a "temporary variance" to an a pplicable SIP emission limitation during malfunctions of air pollution co ntrol equipment. This provisi on could be read to mean that once the state official has granted a tim e extension or temporary variance for excess emissions during malfunctions from otherwis e applicable SIP limitations, those excess

emissions are not violations. As discussed in se ction VII.A of this notice, such director's discretion provisions are impermissible. Such an interpretation would make the state official the unilateral arbiter of whether the excess emissions in a given event constitute a violation, which could preclude enforcem ent by the EPA or the public who might disagree about whether enforcement action is warranted. Most importantly, however, the provision may be read to authorize the state official to create an exemption from the emission limitation, and such an exemption is impermissible in the first instance. The

EPA believes that inclusion of an unbounded dire ctor's discretion provision in N.H. Code R. Env-A 902.03 is thus a substantial inadequ acy and renders this sp ecific SIP provision impermissible for this reason. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to N.H. Code R. Env-A

902.03 and N.H. Code R. Env-A 1203.05. The EPA believes that both of these provisions allow for automatic exemptions from otherwis e applicable emission limitations and that such outright exemptions are inconsistent wi th the fundamental requirements of the CAA with respect to emission limitations in SI Ps as required by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by crea ting these impermissible exemptions, the state has defined violations in a way that would interfere with effective enforcement byThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 136 of 327 the EPA and citizens for excess emissions during these events as provided in CAA sections 113 and 304. For these reasons, the EPA is proposing to find that these provisions are substantially in adequate to meet CAA requirements and thus is proposing to issue a SIP call with respect to these provisions. The EPA proposes to grant the Petition w ith respect to N.H. Code R. Env-A 902.04. The EPA believes that this provision a llows for exemptions from otherwise applicable emission limitations through a state official's unilateral exercise of discretionary authority that is unbounded. Su ch provisions are inc onsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A ), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to find that this provision is substantiall y inadequate to meet CAA requirements and thus proposing to issue a SI P call with respect to this provision. The EPA proposes to deny the Petition w ith respect to N.H. Code R. Env-A 1207.02. New Hampshire has corrected the inade quacy identified by the Petitioner, and the EPA approved the SIP revision. Therefor e, the Petitioner's objection is moot.

3. Rhode Island a. Petitioner's Analysis The Petitioner objected to a generally a pplicable provision in the Rhode Island SIP that allows for a case-by-case petiti on procedure whereby a source can obtain a variance from state personnel under R.I. Gen. Laws § 23-23-15 to continue to operate during a malfunction of its control equipment th at lasts more than 24 hours, if the source

demonstrates that enforcement would consti tute undue hardship without a correspondingThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 137 of 327 benefit (25-4-13 R.I. Code R. § 16.2). 102,103 

### The Petitioner argued th at if the state grants the source's petition and provides a variance allowing the source to continue to operate, the facility could be excuse d from compliance with otherw ise applicable SIP emission limitations during malfunction periods. The Pet itioner argued that this provision could be read to preclude enforcement by the EPA or c itizens in the event that the state elects not

to treat the event as a violation of SIP em ission limitations. Thus, the Petitioner argued, the provision is inconsistent with the CAA and the EPA's SSM Policy because it allows

the state to make a unilateral decision that the excess emissions were not a violation and thus purports to bar enforcement for the excess emissions by the EPA and citizens.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A),

SIPs must contain emission limitations a nd, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provi sions that create exemptions such that excess emissions

102 

### Petition at 63-65.

103 

### The EPA notes that the Petitioner also id entified several additional provisions, 25-4- 13 R.I. Code R. §§ 13.4.1(a), 27.2.3 and 25-4-39 R.I. Code R. §§ 39.5.4, 39.7.5(a), 39.7.6(b), 39.7.7(e), 39.7.8(f), 39.7.9( e), 39.7.11(c)(2), that it a lleged are inconsistent with the CAA and the EPA's SSM Policy. Howeve r, the Petitioner did not request that the EPA address those provisions in its remedy request, and thus the EPA is not addressing those provisions in this action. The EPA may el ect to evaluate those provisions in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 138 of 327 during malfunctions are not viola tions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs.

The EPA believes that 25-4-13 R.I. Code R. § 16.2 is impermissible under the CAA as interpreted in the EPA's SSM Policy, due to an insufficien tly bounded director's discretion provision. The provisi on specifies a mechanism for a variance to be granted "[i]n the event that the malfunction of an air pollution control system is expected or may reasonably be expected to continue for l onger than 24 hours." This provision could be

read to mean that once a state offici al has exempted excess emissions during malfunctions from otherwise applicable SIP limitations, those excess emissions are not

violations. As discussed in section VII.A of this notice, such director's discretion provisions are impermissible. Such an interp retation would make the state official the

unilateral arbiter of wh ether the excess emissions in a gi ven event constitute a violation, which could preclude enforcement by the EP A or the public who might disagree about

whether enforcement action is warranted. Mo st importantly, howev er, the provision may

be read to authorize the state official to create an exemption from the emission limitation, and such an exemption is impermissible in the first instance. The EPA believes that inclusion of an insufficiently bounded director's discretion provision in 25-4-13 R.I. Code R. § 16.2 is thus a substantial inadequacy and renders this specific SIP provision impermissible for this reason. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to 25-4-13 R.I. Code R. § 16.2. The EPA believes that this provision allows for exemptions from otherwise applicable emission limitations through a state official's unilateral exercise ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 139 of 327 discretionary authority that is insufficien tly bounded. Such provisions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by secti ons 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to find that this provisi on is substantially inad equate to meet CAA requirements and thus proposing to issue a SI P call with respect to this provision. C. Affected States in EPA Region II 1. New Jersey a. Petitioner's Analysis The Petitioner objected to two specific provisions in the New Jersey SIP that allow for automatic exemptions for excess emissions during emergency situations. 104 

### The Petitioner objected to the first provision becau se it provides industrial process units that have the potential to emit sulfur compounds an exemption from the otherwise applicable sulfur emission limitations where "[t]he disc harge from any stack or chimney [has] the sole function of relieving pressure of ga s, vapor or liquid under abnormal emergency conditions" (N.J. Admin. Code 7:27-7.2(k)(2)). The Petitioner argued that such an exemption is inconsistent with the require ments of the CAA and the EPA's SSM Policy. The Petitioner argued that the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such excess em issions be treated as violations. The Petitioner objected to the second provision because it provides electric generating units (EGUs) an exemption from the otherwise applicable NOx emission limitations when the unit is op erating at "emergency capac ity," also known as a "MEG

104 

### Petition at 53-54.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 140 of 327 alert," which is statutorily defined as a period in which one or more EGUs is operating at emergency capacity at the direction of the load dispatcher in order to prevent or mitigate voltage reductions or interrupt ions in electric service, or both (N.J. Admin. Code 7:27- 19.1). The Petitioner argued that this sour ce-specific exemption from the emission limitations "cannot ensure compliance with the NAAQS and PSD increments for NOx because ambient air quality is nowhere mentioned as a relevant consideration." 105



### b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations. In accordan ce with the requirements of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissi ons above the level of the applicable

emission limitation must be considered violatio ns of such limitations, whether or not the

state elects to exercise its enforcement disc retion. SIP provisions that create exemptions such that excess emissions during emerge ncy conditions, however defined, are not

violations are inconsistent w ith the fundamental requirements of the CAA with respect to

emission limitations in SIPs. The first provision identified by the Petitioner explicitly states that emission limitations of sulfur compounds "shall not appl y" to emissions coming from a stack or a chimney during "abnormal emergency conditions," when the discharges are solely to relieve pressure of gas, vapor, or liquid. The EPA believes that inclusion of such an

105 

### Petition at 54.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 141 of 327 exemption from emission limitations in N.J. Admin. Code 7:27-7.2(k)(2 ) is a substantial inadequacy and renders this specific SIP pr ovision impermissible. The EPA notes that this exemption is impermissible even though the state has imposed the limitation that such exemption would apply only during "a bnormal emergency conditions." The core problem remains that the provision provides an impermissible exemption from the sulfur compound emission limitations otherw ise applicable under the SIP. With regard to the second provision rais ed by the Petitioner (N.J. Admin. Code 7:27-19.1), the EPA disagrees that it is a substa ntial inadequacy in the SIP, because the exemption from the NOx emission limitations ce ased to be applicable after November 15, 2005. Because the statute's exemption applies only to those emergency situations, or "MEG alerts," that occur "on or before November 15, 2005" (N.J. Admin. Code 7:27- 19.1), the Petitioner's claim is moot. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to N.J. Admin. Code 7:27- 7.2(k)(2). The EPA believes that this pr ovision allows for an exemption from the otherwise applicable emission limitations, and th at such an exemption is inconsistent with the fundamental requirements of the CAA with respect to em ission limitations in SIPs as required by CAA sections 110(a)(2)(A), 110(a )(2)(C), and 302(k). For this reason, the EPA is proposing to find that this provisi on is substantially inad equate to meet CAA requirements and thus is proposing to issue a SIP call with respect to this provision. The EPA proposes to deny the Petition with resp ect to N.J. Admin. Code 7:27-19.1, because its effectiveness expired on November 15, 2005, and therefore Peti tioner's claim with regard to the impermissibility of this provision is moot.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 142 of 327 2. [Reserved] D. Affected States in EPA Region III

1. Delaware a. Petitioner's Analysis The Petitioner objected to seven provisi ons in the Delaware SIP that provide exemptions during startup and shutdown fr om the otherwise app licable SIP emission

limitations. 106 

### The seven source-specific and polluta nt-specific provisions that provide exemptions during periods of startup and s hutdown are: 7-1100-1104 Del. Code Regs § 1.5 (Particulate Emissions from Fuel Burn ing Equipment); 7-1100-1105 Del. Code Regs § 1.7 (Particulate Emissions from Industrial Process Operations); 7-1100-1108 Del. Code Regs § 1.2 (Sulfur Dioxide Emissions from Fuel Burning Equipment); 7-1100-1109 Del. Code Regs § 1.4 (Emissions of Sulfur Com pounds From Industrial Operations); 7-1100- 1114 Del. Code Regs § 1.3 (Visible Emi ssions); 7-1100-1124 Del. Code Regs § 1.4 (Control of Volatile Organic Compound Emi ssions); and 7-1100-1142 Del. Code Regs § 2.3.5 (Specific Emission Control Requirements) . These provisions provide exemptions to the emission limitations during startup and shutdown when "the emissions . . . during start-up and shutdown are governed by an operation permit issued pursuant to the provisions of 2.0 of 7 DE Admin. Code 1102." ( E.g. , 7-1100-1104 Del. Code Regs § 1.5.) The Petitioner objected to these provisions because they provide a state official with the discretion, through the permitting process, to exempt sources from otherwise applicable SIP emission limitations or to set alternative limitations for periods of startup

106 

### Petition at 28-29.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 143 of 327 and shutdown. The Petitioner argued that such discretion is not permissible because the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such

excess emissions be treated as violations. Moreover, the Petitione r argued that any alternative limits for periods of startup and shutdown created by the state official through the permitting process do not meet the re quirements of the Act and the EPA's SSM Policy, because there is no requirement in the provision that the limits be narrowly tailored, source-specific, created in consu ltation with the EPA, and approved into the Delaware SIP by the EPA.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during startup and shutdown could be deemed not a violation of the applicable

emission limitations are incons istent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The EPA believes that the seven prov isions raised by the Petitioner are impermissible because they are unbounded di rector's discretion provisions, created through the state permitting program, in wh ich state officials are provided unboundedThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 144 of 327 discretion to set alternative limits and could therefore provide an outright exemption from the emission limitations. In each of the provisi ons raised by the Petitioner, an exemption

from the SIP's emission limitations duri ng periods of startup and shutdown is automatically granted if the permit to which the source is subject ha s terms or conditions governing emissions during startup and shutdow n. The SIP provisions th erefore vest state officials with the unilateral power to establish alternative limits, or to create an exemption altogether, in permits by deeming such peri ods of excess emissions during startup and shutdown permissible. Were the state to exer cise its discretion a nd decide on a case-bycase basis that such an event was not a viol ation of the emission limitations, the EPA and citizens could be precluded from enforcemen t. More importantly, however, an exemption from the emission limitations is impermissible in the first instance, and these provisions purport to authorize state officials in the permitting context to grant such exemptions. These provisions therefore undermine the SIP' s emission limitations and the emissions reductions they are intended to achieve and render them less enforceable by the EPA or through a citizen suit. The EPA believes th at the inclusion of insufficiently bounded director's discretion provis ions in 7-1100-1104 Del. Code Regs § 1.5, 7-1100-1105 Del. Code Regs § 1.7, 7-1100-1108 Del. Code Re gs § 1.2, 7-1100-1109 Del. Code Regs § 1.4, 7-1100-1114 Del. Code Regs § 1.3, 7-1100-1124 Del. Code Regs § 1.4, and 7-1100-1142 Del. Code Regs § 2.3.5 is thus a substantia l inadequacy and renders these specific SIP provisions impermissible for this reason. In addition, the EPA agrees w ith the Petitioner that while the CAA, as interpreted in the EPA's SSM Policy, allows states to set source category-specific alternative

emission limitations or other forms of enfor ceable control measures or techniques thatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 145 of 327 apply during periods of startup and shut down, such alternative limitations are only permitted in a narrow set of circumstances and must be accomplished through the appropriate SIP process ( see section VII.A of this notice.) Those alternative limitations must be developed in consultation with the EPA and must be approved by the EPA into the SIP. The provisions of Delaware's SIP ra ised by the Petitioner purport to authorize the

state to establish alternative limitations for excess emissions during periods of startup and shutdown (or to exempt those emissions a ltogether, as discussed above) on a case-bycase basis in the permitting process, and the pr ovisions do not require the state to consult

with the EPA or have those alternative limits approved by the EPA into the SIP. The EPA believes that the inclusion of processes to establish alternative limits for some sources and in regard to some pollutants in a manner that does not conform w ith the requirements of the Act as interpreted in the EPA's SSM Policy in 7-1100-1104 Del. Code Regs § 1.5, 7-1100-1105 Del. Code Regs § 1.7, 7-1100- 1108 Del. Code Regs § 1.2, 7-1100-1109 Del. Code Regs § 1.4, 7-1100-1114 Del. Code Regs § 1.3, 7-1100-1124 Del. Code Regs § 1.4, and 7-1100-1142 Del. Code Regs § 2.3.5 is t hus a substantial inadequacy and renders these specific SIP provisions impermissibl e, in addition to the creation of unbounded

discretion in a state official. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to 7-1100-1104 Del. Code Regs § 1.5, 7-1100-1105 Del. Code Regs § 1.7, 7-1100-1108 Del. Code Regs § 1.2, 7- 1100-1109 Del. Code Regs § 1.4, 7-1100-1114 Del. Code Regs § 1.3, 7-1100-1124 Del. Code Regs § 1.4, and 7-1100-1142 Del. Code Regs § 2.3.5. The EPA believes that these provisions allow for exemptions from otherw ise applicable SIP emission limitations, andThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 146 of 327 that such outright exemptions are inconsistent with the f undamental requirements of the CAA with respect to emission limitations in SIPs in secti ons 110(a)(2)(A), 110(a)(C), and 302(k). In addition, the aforementioned provi sions each allow for such exemptions through a state official's unilateral exerci se of insufficiently bounded discretionary authority in the permitting process, and such provisions are inconsistent with the fundamental requirements of the CAA with re spect to SIPs and SIP revisions. Moreover, the discretion in these provisions also allows state officials to establish alternative emission limitations during periods of start up and shutdown through a process that does not conform to the requirements of the Act or the EPA's SSM Policy with regard to establishing alternative emissi on limitations. For these reasons, the EPA is proposing to find that these provisions are substantially inadequate to meet CAA requirements and thus is proposing to issue a SIP call with respect to these provisions.

2. District of Columbia a. Petitioner's Analysis The Petitioner objected to five provisions in the District of Columbia (D.C.) SIP as being inconsistent with the CAA and the EPA's SSM Policy. 107 

### The Petitioner first objected to a generally applicab le provision in the D.C. SIP th at allows for discretionary exemptions during periods of maintenance or malfunction (D.C. Mun. Regs. tit. 20 § 107.3). The provision provides the Mayor with the authority to permit continued operation of a stationary s ource when air pollution cont rols are shut down due to

maintenance or malfunction. The Petitioner ar gued that this provision could provide an

107 

### Petition at 29-30.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 147 of 327 exemption from the otherwise applicable SIP emission limitations, and such an exemption is impermissible under the CAA because the statute and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be

treated as violations. Moreove r, the Petitioner objected to this discretionary exemption because the Mayor's grant of permission to continue to operate during the period of malfunction or maintenance could be interpreted to excuse excess emissions during such time period and could thus be read to preclud e enforcement by the EPA or citizens in the event that the Mayor elects not to treat th e event as a violation. Thus, in addition to creating an impermissible exemption for the excess emissions, the Petitioner argued, the provision is also inconsistent with the CAA as interpreted in the EPA's SSM Policy because it allows the Mayor to make a unilate ral decision that the excess emissions were not a violation and thus purpor ts to bar enforcement for the excess emissions by the EPA

and citizens. Secondly, the Petitioner object ed to the alternative limitations on stationary sources for visible emissions during peri ods of "start-up, cl eaning, soot blowing, adjustment of combustion controls, or ma lfunction," (D.C. Mun. Regs. tit. 20 § 606.1) and, for fuel-burning equipment placed in initial operation before January 1977,

alternative limits for visible emissions dur ing startup and shutdown (D.C. Mun. Regs. tit. 20 § 606.2). The Petitioner also objected to th e exemption from emission limitations for emergency standby engines (D.C. Mun. Regs. tit. 20 § 805.1(c)(2)). The Petitioner argued that these provisions could provide exem ptions or deviations from the otherwise applicable SIP emission limitations, and such exemptions are impermissible under the

CAA because the statute and the EPA's inte rpretation of the CAA in the SSM PolicyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 148 of 327 require that all such excess emissions be tr eated as violations. Moreover, the Petitioner argued that the alternative limits do not appearto meet the criteria for a source categoryspecific rule as permitted under the EPA's SSM Policy interpreting the Act. Finally, the Petitioner objected to the pr ovision in the D.C. SIP that provides an

affirmative defense for violations of vi sible emission limitations during "unavoidable malfunction" (D.C. Mun. Regs. tit. 20 § 606.4). The Petitioner objected to this provision

because the elements of the defense are not la id out clearly in the SIP, because the term

"affirmative defense" is not defined in the SI P, and finally, the Petit ioner argues, because affirmative defenses for any excess emissions are wholly inconsistent with the CAA and

should be removed from the SIP.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A),

SIPs must contain emission limitations a nd, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whethe r or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, load change , or emergencies are not violations of the applicable emission limitations are inconsiste nt with the fundamental requirements of the CAA with respect to emission limitations in SI Ps. The EPA believes that the inclusion of such an exemption from the emission limitations in D.C. Mun. Regs. tit. 20 § 107.3 isThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 149 of 327 thus a substantial inadequacy and renders this specific SIP provision impermissible. The EPA believes that D.C. Mun. Regs. tit. 20 § 107.3 is also impermissible due to an unbounded director's discretion provi sion that purports to make the Mayor the

unilateral arbiter of wh ether the excess emissions in a gi ven event constitute a violation. In the case of D.C. Mun. Regs. tit. 20 § 107.3, the provision authorizes the Mayor to permit continued operation at stationary sour ces without functioning air pollution control equipment. The Mayor's grant of permission to continue to operate during the period of malfunction or maintenance could be interpre ted to excuse excess emissions from that time period, and it could thus be read to pr eclude enforcement by the EPA or through a citizen suit in the event that the Mayor elects not to treat the even t as a violation. In addition, the provision vests the Mayor with th e unilateral power to grant an exemption from the otherwise applicable SIP emissi on limitation, without any additional public process at the D.C. or federal level, and w ithout any bounds or parameters to the exercise of this discretion. Most importantly, howev er, the provision purports to authorize the Mayor to create an exemption from the emi ssion limitation, and such an exemption is impermissible in the first instance. Such a director's discretion provision undermines the

emission limitations and the emissions reduc tions they are intended to achieve and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that

the inclusion of an unbounded director's discreti on provision in D.C. Mun. Regs. tit. 20 §

107.3 is thus a substantial inadequacy and renders th is specific SIP provision impermissible for this reason, in addition to the creation of an impermissible exemption.

The EPA notes that while the CAA does not allow for exemptions for excess emissions, it does, as discussed in section V II.A of this notice, a llow states to developThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 150 of 327 alternative emission limitations or other fo rms of enforceable control measures or techniques that apply duri ng startup or shutdown. The EPA believes that emission limitations in SIPs should generally be devel oped in the first instan ce to account for the types of normal operation outlined in D.C. Mun. Regs. tit. 20 § 606.1, such as cleaning, soot blowing, and adjustment of combusti on controls. The D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2 do not appear to comply with th e CAA's requirements as interpreted in the EPA's SSM Policy. The alternative limita tions on stationary sources for visible emissions during periods of "start-up, cleani ng, soot blowing, adjustment of combustion controls, or malfunction," (D.C. Mun. Regs. tit. 20 § 606.1) do not comply with the Act and the EPA's policy interpreting the Act, becau se, for instance, they do not apply only to "specific, narrowly-defined source categor ies using specific control strategies." 108 

### The EPA believes that the inclusion of these alternative limitations, which do not comply with the requirements of the Act, in D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2 is thus a substantial inadequacy and renders these specific SIP provisions impermissible. With respect to the Petitioner's objecti on to the exemption for emergency standby engines (D.C. Mun. Regs. tit. 20 § 805.1(c)(2)), the EPA disagrees that this provision applies to an exemption from emission limitations during startup, shutdown, or malfunction periods. Instead, this provision appl ies to a specific s ource category that is not subject to control under the D.C. SIP. At this point in time, the SIP reflects that regulation of this source category is not n ecessary in the SIP in order to meet the applicable reasonably available control t echnology (RACT) require ments or other CAA

108 

### 1999 SSM Guidance Attachment at 4-5.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 151 of 327 requirements in this area. The EPA therefor e disagrees with Petit ioner that D.C. Mun. Regs. tit. 20 § 805.1(c)(2) renders the D. C. SIP substantially inadequate. Finally, the EPA agrees with the Petitione r that the affirmative defense contained in D.C. Mun. Regs. tit. 20 § 606.4 is not an acceptable affirmative defense provision under the CAA as interpreted the EPA's SSM Policy. Although the EPA believes that narrowly drawn affirmative defenses are pe rmitted under the CAA for malfunction events ( see section VII.B of this notic e), the EPA's interpretation of the CAA is that such affirmative defenses can only shield the sour ce from monetary penalties and cannot be a bar to injunctive relief. An affirmative defense provision that purports to bar any enforcement action for injunctive relief for violations of emission limitations is inconsistent with the requirements of C AA sections 113 and 304. Furthermore, the SIP provision is deficient because wh ile it appears to crea te an affirmative defense, it does so

with conditions that are not c onsistent with the criteria that the EPA recommends in the SSM Policy. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP provisions could be consis tent with the requirements of the CAA. Nonetheless, through this rulemaking, the EPA is proposing to determine that D.C. Mun. Regs. tit. 20 § 606.4 does not include criteria th at are sufficiently robust to qualify as an acceptable affirmative defense provision. The EPA believes that the inclusion of the complete bar to liability, including inj unctive relief, and the insufficiently robust qualifying criteria in D.C. Mun. Regs. tit. 20 § 606.4 are substantial inadequacies and render this specific SIP pr ovision impermissible. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to D.C. Mun. Regs. tit. 20 §This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 152 of 327 107.3. The EPA believes that this provision allo ws for exemptions from the otherwise applicable SIP emission limitations, and that su ch exemptions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs in sections 110(a)(2)(A), 110(a)(2)(C), and 302( k). In addition, D.C. Mun. Regs. tit. 20 § 107.3 allows for such an exemption through a state official's unilateral exercise of discretionary authority that is unbounded and includes no additional public process at the D.C. or federal level, and such provisions are inconsistent with the fundamental requirements of the CAA with respect to SIPs and SIP revisions. For these reasons, the EPA is proposing to find that D.C. Mun. Regs. tit. 20 § 107.3 is substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call wi th respect to this provision. The EPA also proposes to grant the Petiti on with respect to D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2. The EPA believes that section 606.1 impermissibly provides an

alternative visible emission limitation to sta tionary sources during periods of malfunction and during planned maintenance events. Fu rthermore, while sections 606.1 and 606.2 appropriately provide alternative visible emission limitations only during periods of startup and shutdown, both sections apply to a broad category of sources and are not narrowly limited to a source category employi ng a specific control strategy, as required by the CAA as interpreted in the EPA's SSM Policy. For these reasons, the EPA is proposing to find that D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2 are substantially inadequate to meet CAA requirements and is thus proposing to issue a SIP call with respect to these provisions. The EPA proposes to deny the Petition with respect to D.C. Mun. Regs. tit. 20 §This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 153 of 327 805.1(c)(2). The EPA disagrees th at this provision applies to an exemption from emission limitations during startup, shutdown, or ma lfunction periods. Rather, this provision applies to a specific source category that is no t subject to control under the D.C. SIP. At this point in time, the SIP reflects that regula tion of this source category is not necessary in the SIP in order to meet the applicable RACT requirements or other CAA requirements

in this area. Finally, the EPA proposes to grant the pe tition with respect to D.C. Mun. Regs. tit. 20 § 606.4 because it is not a permissible affirmative defense provision consistent with the requirements of the CAA and th e EPA's recommendations in the EPA's SSM Policy. By purporting to create a bar to enfo rcement that applies not just to monetary penalties but also to injunctive relief, this pr ovision is inconsistentwith the requirements of CAA sections 113 and 304. By not including su fficient criteria to assure that sources seeking to raise the affirmative defense have in fact been properly designed, maintained, and operated, and to assure that sources have taken all appropriate steps to minimize excess emissions, the provision also fails to be sufficiently narrowly drawn to justify shielding from monetary penalties for viola tions. Thus, this provisi on is not appropriate as an affirmative defense provision because it is inconsistent with fundamental requirements of the CAA. For these reasons, the EPA is proposing to find that this provision is substantially inad equate to meet CAA requirements and thus proposing to issue a SIP call with resp ect to this provision. 3. Virginia a. Petitioner's Analysis The Petitioner objected to a generally applic able provision in the Virginia SIP thatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 154 of 327 allows for discretionary exemptions during pe riods of malfunction (9 Va. Admin. Code § 5-20-180(G)). 109 

### First, the Petitioner objected b ecause this provision provides an exemption from the otherwise applicable SIP emission limitations, and such an exemption is impermissible under the CAA because the statute and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be

treated as violations. The Pe titioner argued that the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as

violations. Second, the Petitioner objected to th e discretionary exemption for excess emissions during malfunction because the pr ovision gives the stat e the authority to determine whether a violation "shall be judge d to have taken place" (9 Va. Admin. Code § 5-20-180(G)). The Petitioner argued that th is provision could be read to preclude enforcement by the EPA or citizens in the event that the state elects not to treat the event as a violation. Thus, in add ition to creating an impermissi ble exemption for the excess emissions, the Petitioner argued, the provision is also inconsis tent with the CAA and the EPA's SSM Policy because it allows the state to make a unilateral decision that the excess

emissions were not a violation and thus purports to bar enforcement for the excess emissions by the EPA and citizens. Third, the Petitioner argued that while the regulation provides cr iteria, akin to an affirmative defense, by which the state must ma ke such a judgment th at the event is not a violation, the criteria "fall fa r short of EPA policy" and the provision "fails to establish

109 

### Petition at 70-71.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 155 of 327 any procedure through which the cr iteria are to be evaluated."

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A),

SIPs must contain emission limitations a nd, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whethe r or not the state elects to exercise its enforcement discretion. SIP provisions such as 9 Va. Admin. Code § 5-20-180(G) that create exemptions by authorizing the state to determine that the excess emissions during startup, shutdown, load change, or emergencie s are not violations of the applicable

emission limitations are incons istent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The EPA believes that the inclusion of such an exemption in 9 Va. Admin. Code § 5-20-180(G) is thus a substantial inadequacy and renders this specific SIP provision impermissible.

The EPA believes that 9 Va. Admin. Code § 5-20-180(G) is also impermissible

due to the inclusion of a dire ctor's discretion provision that purports to make the state

official the unilateral arbiter of whether the excess emissions in a given malfunction

event constitute a violation. In the case of 9 Va. Admin. Code § 5-20-180(G), the provision authorizes the state official to j udge that "no violation" has taken place. The provision therefore vests the state official with the unilateral power to grant an exemption from the otherwise applicable SIP emissi on limitation, without any additional publicThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 156 of 327 process at the state or fede ral level. By deciding that an exceedance of the emission limitation was not a "violation," exercise of th is discretion could pr eclude enforcement by the EPA or the public who may not agree with that conclusion. Most importantly, however, the provision purports to authorize the state official to create an exemption from the otherwise applicable SIP emission limitation, and such an exemption is impermissible

in the first instance. Such a director's discretion provision undermines the emission

limitations in the SIP and the emissions reducti ons that they are intended to achieve and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of a director's discretion pr ovision in 9 Va. Admin. Code § 5-20-180(G) is thus a substantial inadequacy and renders this specific SIP provision impermissible for this reason, in addition to the creatio n of an impermissible exemption. Finally, the EPA agrees with Petitioner that although the exemption requires that certain conditions must be met by the source, the conditions set fo rth in the provision do not render it an acceptable affirmative defense provision. The Petitioner is correct that 9 Va. Admin. Code § 5-20-180(G) is not an acc eptable affirmative defense provision under the CAA as interpreted in the EPA's SSM Policy. Although the EPA believes that narrowly drawn affirmative defenses are pe rmitted under the CAA for malfunction events ( see section VII.B of this notic e), the EPA's interpretation of the CAA is that such affirmative defenses can only shield the sour ce from monetary penalties and cannot be a bar to injunctive relief. An affirmative defense provision that purports to bar any enforcement action for injunctive relief for violations of emission limitations is inconsistent with the requirements of CAA sections 113 and 304. Furthermore, Virginia's SIP provision is deficient because even if it attempts to create an affirmative defenseThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 157 of 327 rather than an automatic exemption from the emission limitations, it does so with

conditions that are not consistent with the criteria that the EPA recommends in the SSM Policy. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP provisions could be consiste nt with the requirements of the CAA. Nonetheless, through this rulemaking, the EP A is proposing to determine that 9 Va. Admin. Code § 5-20-180(G) does not include criteria that are sufficiently robust to qualify as an acceptable affirmative defense provision under the CAA. The EPA believes that the inclusion of the complete bar to li ability, including inj unctive relief, and the insufficiently robust qualifying criteria in 9 Va. Admin. Code § 5-20-180(G) are substantial inadequacies and render this specific SIP provision impermissible. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to 9 Va. Admin. Code § 5- 20-180(G). The EPA believes that this provi sion allows for an exemption from the otherwise applicable SIP emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs in sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, 9 Va. Admin. Code § 5-20-180(G) allows for such an exemption th rough a state official's unilateral exercise of discretionary authority that includes no a dditional public process at the state or federal level, and such provisions are inconsistent with the fundamental requirements of the CAA with respect to SI Ps and SIP revisions. Moreover, even if the EPA were to cons ider 9 Va. Admin. Code § 5-20-180(G) as providing for an affirmative defense rather th an an automatic exemption, the provision is not a permissible affirmative defense provision consistent with the requirements of theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 158 of 327 CAA as interpreted in the EPA's recomm endations in the EPA's SSM Policy. By purporting to create a bar to enforcement that applies not just to monetary penalties but also to injunctive relief, this provision is inconsistent with the requirements of CAA sections 113 and 304. By not including sufficient criteria to assure that sources seeking to

raise the affirmative defense have in fact been properly designed, maintained, and operated, and to ensure that sources have ta ken all appropriate steps to minimize excess emissions, the provision also fails to be su fficiently narrowly drawn to justify shielding from monetary penalties for violations. Thus, this provisi on is not appropriate as an affirmative defense provision because it is in consistent with fundamental requirements of

the CAA. For these reasons, the EPA is proposing to fi nd that this provision is substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call with respect to this provision. 4. West Virginia a. Petitioner's Analysis The Petitioner made four types of objectio ns identifying inadequacies regarding startup, shutdown, and malfunction provi sions in West Virginia's SIP. 110 

### First, the Petitioner objected to three specific provisions in the West Virginia SIP that allow for automatic exemptions from emission lim itations, standards, and monitoring and recordkeeping requirements for excess emi ssion during startup, shutdown, or malfunction (W. Va. Code R. § 45-2-9.1, W. Va. Code R. §45-7-10.3, and W. Va. Code R. §45-40-

110 

### Petition at 72-74.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 159 of 327 100.8). The Petitioner objected because all thr ee of these provisions provide exemptions from the otherwise applicable SIP emissi on limitations, and such exemptions are inconsistent with the requirements of the CAA as interpreted in the EPA's SSM Policy. The Petitioner argued that the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as violations . The Petitioner also objected to all three of these provisions because, by providing an outright exemption from otherwise applicable requirements, the state has defined these excess emissions as not violations, thereby precluding enforcem ent by the EPA or citizens for the excess

emissions that would othe rwise be violations. Second, the Petitioner objected to seve n discretionary exemption provisions because these provisions provide exemptions from the otherwise applicable SIP emission limitations, and such exemptions are impermissible under the CAA because the statute and the EPA's interpretation of the CAA in th e SSM Policy require that all such excess

emissions be treated as violations. The Peti tioner noted that the provisions allow a state official to "grant an excep tion to the otherwise applicable visible emissions standards" due to "unavoidable shortage of fuel" or "any emergency situation or condition creating a threat to public safety or welfare" (W . Va. Code R. § 45-2-10.1), to permit excess

emissions "due to unavoidable malfunctions of equipment" (W. Va. Code R. § 45-3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1, and W. Va. Code R. § 45-10-9.1), and to permit exceedances where the limit cannot be

"satisfied" because of "routine maintenance" or "unavoidable malfunction" (W. Va. Code R. §45-21-9.3). The Petitioner ar gued that these provisions co uld be read to preclude enforcement by the EPA or citizens in the event that the state official elects not to treatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 160 of 327 the event as a violation. Thus, in addition to creating an impermissible exemption for the excess emissions, the Petitioner argued, the SIP' s provisions are also inconsistent with the CAA as interpreted in the EPA's SSM Policy because they allow the state official to

make a unilateral decision that the excess emi ssions were not a viola tion and thus purport

to bar enforcement for the excess em issions by the EPA and citizens. Third, the Petitioner objected to the alte rnative limit imposed on hot mix asphalt plants during periods of startup and shut down in W. Va. Code R. § 45-3-3.2 because it was "not sufficiently justified" under the requ irements of source category-specific rules. The Petitioner argued that this provision could provide an unacceptable deviation during periods of startup and shutdown from the ot herwise applicable SIP emission limitations, and such deviations are impermissible under the CAA because the statute and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as violations. Moreover, the Petitioner argued that the alternative limits do not appear to meet the criteria for a source category-specific ru le as permitted under the Act as interpreted in the EPA's SSM Policy. Fourth, the Petitioner objected to a disc retionary provision allowing the state to approve an alternative visi ble emission standard during startups and shutdowns for manufacturing processes and associated ope rations (W. Va. Code R. § 45-7-10.4). The Petitioner argued that such a provision "allows a decision of the state to preclude enforcement by EPA and citizens."

b. The EPA's Evaluation The EPA agrees that the CAA does not allow for automatic exemptions from otherwise applicable SIP emission limitations . In accordance with the requirements ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 161 of 327 CAA section 110(a)(2)(A), SIPs must contai n emission limitations and, in accordance

with the definition of "emission limitati ons" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be consid ered violations of such limitations, whether

or not the state elects to exer cise its enforcement discreti on. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, or malfunction are

not violations are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. Two of the automatic exemption provisions identified by the Petitioner expl icitly state that the standards shall not apply or that certain operations "shall be exempt" during periods of startup, shutdo wn, malfunction, or maintenance (W. Va. Code R. § 45-2-9.1, W. Va. Code R. § 45-7-10.3). The third automatic exemption states that requirem ents for monitoring, recordkeeping, and reporting will not apply under certain circumstances (W. Va. Code R. § 45-40-100.8). Such an exemption would affect the enforceab ility of the emission limitations and thus adversely affects the approvability of the emission limitations themselves. Moreover, failure to account accurately for excess emi ssions at sources during SSM events has a broader impact on NAAQS implementation and SIP planning, because such accounting directly informs the development of emissi ons inventories and emissions modeling. The exemptions therefore provide that the resul ting excess emissions will not be violations, which is contrary to the requirements of the CAA. The EPA believes that the inclusion of such automatic exemptions from emission limitations in W. Va. Code R. § 45-2-9.1, W. Va. Code R. § 45-7-10.3, and W. Va. Code R. § 45-40-100.8, is thus a substantial inadequacy and renders these specif ic SIP provisions impermissible.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 162 of 327 With respect to the Petitioner's concern that these exemptions preclude enforcement by the EPA or citizens, the EPA agrees that this is one of the critical reasons why such provisions are impermissible under the CAA. By having SIP provisions that

define what would otherwise be violations of the applicable emission limitations as nonviolations, the state has effec tively negated the ability of th e EPA or the public to enforce against those violations. The EPA also agrees that the CAA does not allow for discretionary exemptions from otherwise applicable SIP emission limita tions. As noted above, in accordance with the requirements of CAA sect ion 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whether or not the

state elects to exercise its enforcement discre tion. SIP provisions such as W. Va. Code R. § 45-2-10.1, W. Va. Code R. §45-3-7.1, W. Va. Code R. §45-5-13.1, W. Va. Code R. §45-6-8.2, W. Va. Code R. §45-7-9.1, W. Va. Code R. §45-10-9.1, and W. Va. Code R. §45-21-9.3 that create exemptions by permitting the state to determine that the excess emissions during startup, shutdown, load change , or emergencies are not violations of the applicable emission limitations are inconsiste nt with the fundamental requirements of the CAA with respect to emission limitations in SI Ps. The EPA believes that the inclusion of these discretionary exemptions in the SIP is thus a substantial inadequacy and renders these specific SIP provi sions impermissible. The EPA believes that W. Va. Code R. § 45-2-10.1, W. Va. Code R. § 45-3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1, W.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 163 of 327 Va. Code R. § 45-10-9.1, and W. Va. Code R. § 45-21-9.3 are also impermissible because these provisions purport to make a stat e official the unilateral arbiter of whether the excess emissions in a given malfunction, maintenance, or emergency event constitute

a violation. In the case of W. Va. Code R. § 45-2-10.1, the provision allows the state official to "grant an excep tion to the otherwise applicable visible emissions standards" due to "unavoidable shortage of fuel" or "any emergency situation or condition creating a threat to public safety or welfare." W. Va . Code R. § 45-3-7.1, W. Va. Code R. § 45-5- 13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1, and W. Va. Code R. § 45- 10-9.1 permit excess emissions "due to unavoi dable malfunctions of equipment." The provision at W. Va. Code R. §45-21-9.3 perm its exceedances where the limit cannot be

"satisfied" because of "routine mainte nance" or "unavoidable malfunction." These provisions authorize the state offici al to judge that violations have not occurred even though the emissions exceeded the applicable SIP emission limitations. The SIP's provisions therefore ve st the state official with the unilateral power to grant exemptions from otherwise applicable SIP emission limitations, without any additional public process at the state or federal leve l. By deciding that an exceedance of the emission limitation was not a "violation," exer cise of this discretion could preclude enforcement by the EPA or through a citizen suit. Most importantly, however, the provision purports to authori ze the state official to create an exemption from the otherwise applicable SIP emi ssion limitation, and such an exemption is impermissible in

the first instance. Such a director's di scretion provision undermines the emission limitations and the emissions reductions they are intended to achieve and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusionThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 164 of 327 of director's discretion provi sions in W. Va. Code R. § 45-2-10.1, W. Va. Code R. § 45- 3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7- 9.1, W. Va. Code R. § 45-10-9.1, and W. Va. Code R. § 45-21-9.3 is thus a substantial inadequacy and renders these specific SIP provisions impermissible for this reason, in addition to the creation of an impermissible exemption.

The EPA notes that while the CAA does not allow for exemptions for excess emissions, it does, as discussed in section V II.A of this notice, permit states to develop

alternative emission limitations or other fo rms of enforceable control measures or techniques that apply during startup or shutdown. W. Va. Code R. § 45-3-3.2 and W. Va. Code R. § 45-2-10.2 111 

### do not appear to comply with the Act's requirements as interpreted in the EPA's SSM Policy. The a lternative smoke and/or particulate matter limitation on hot mix asphalt plants that app lies during periods of startup and shutdown (W. Va. Code R. § 45-3-3.2) does not comply with the CAA as interpreted in the EPA's policy because, for instance, it does not apply on ly to "specific, narrowly-defined source categories using specific control strategies." 112 

### W. Va. Code R. § 45-2-10.2, which allows fuel-burning units employing flue gas desul phurization systems to bypass such systems during "necessary planned or unplanned mainte nance" and provides an alternative limit of 20-percent opacity during such periods, also does not comply with the CAA as interpreted in the EPA's SSM Policy. The EPA believes that such special emission limitations or emissions controls may be appropriate during startup or shutdown, but

111 

### The EPA notes that the Petitioner specifica lly focused on concern with W. Va. Code R. § 45-2-10.1, but the same issue affects W. Va. Code R. § 45-2-10.2.

112 

### 1999 SSM Guidance Attachment at 4-5.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 165 of 327 other modes of normal source operation, including maintenance, should be accounted for in the development of the emission limitations themselves. The EPA believes that the

inclusion of alternative limits that do not meet the requirements of the CAA as interpreted in the EPA's SSM Policy in W. Va. Code R. § 45-3-3.2 and W. Va. Code R. § 45-2-10.2 is thus a substantial inadequacy and rende rs these specific SIP provisions impermissible

for this reason. The EPA also agrees that the discretionary provision allowing a state official to approve an alternative visi ble emission standard during startups and shutdowns for manufacturing processes and associated ope rations (W. Va. Code R. § 45-7-10.4) does not comply with the CAA or the EPA's SSM Policy interpreting the CAA. These provisions purport to authorize the state official to establish alternative limits for excess emissions during periods of startup and s hutdown (or, potentially, to exempt those emissions altogether) on a case-by-case basis, and these provisions do not require the

state official to consult with the EPA or to have those alternativ e limits approved by the EPA into the SIP, contrary to the EPA's SSM Policy interpreting the requirements of the

CAA. The EPA believes that the inclusion of these alternative limitations, which do not comply with the EPA's interpretations of the requirements of the CAA, in W. Va. Code R. § 45-3-3.2 and W. Va. Code R. § 45-7-10.4, is thus a substan tial inadequacy and renders these specific SIP pr ovisions impermissible. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to W. Va. Code R. § 45-2- 9.1, W. Va. Code R. § 45-7-10.3, and W. Va. Code R. § 45-40-100.8. The EPA believes that each of these provisions allows fo r automatic exemptions from the otherwiseThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 166 of 327 applicable SIP emission limitations, and that su ch exemptions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2 )(A), 110(a)(2)(C), and 302( k). In addition, by creating these impermissible exemptions, the state ha s defined violations in way that would interfere with effective enforcement by the EPA and citizens for excess emissions during these events as provided in CAA sections 113 and 304. For these reasons, the EPA is proposing to find that these provisions are substantially inadeq uate to meet CAA requirements and thus proposing to issue a SI P call with respect to these provisions. The EPA proposes to grant the Petition w ith respect to W. Va. Code R. § 45-2- 10.1, W. Va. Code R. § 45-3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6- 8.2, W. Va. Code R. § 45-7-9.1, W. Va. Code R. § 45-10-9.1, and W. Va. Code R. § 45- 21-9.3. The EPA believes that these provisions allow for discretionary exemptions from otherwise applicable SIP emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, these provisions allow for exemptions through a st ate official's unilateral exercise of discretionary authority that includes no additi onal public process at the state or federal level, and such provisions are inconsistent with the fundamental requirements of the CAA with respect to SI Ps and SIP revisions. The EPA also proposes to grant the Petiti on with respect to W. Va. Code R. § 45- 3-3.2, W. Va. Code R. § 45-2-10.2, and W. Va . Code R. § 45-7-10.4. The W. Va. Code R. § 45-3-3.2 applies to a broad category of sources and is not narrowly limited to a source category that uses a specific contro l strategy, as required by the EPA's SSM PolicyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 167 of 327 interpreting the CAA. Similarly, W. Va. Code R. § 45-2-10.2 is in consistent with the EPA's SSM Policy interpreting the CAA because it is an alternative limit that applies during periods of maintenance, and such al ternative limits are only permissible during periods of startup and shutdown. The W. Va. Code R. § 45-7-10.4 allows state officials

the discretion to establish alternative visi ble emissions standards during startup and shutdown upon application. This provision is inconsistent with the EPA's SSM Policy and requirements under the Act because, for example, the emission limitations are required to be developed in consultation with the EPA and must be included in the SIP itself. For these reasons, the EPA is proposing to find that W. Va. Code R. § 45-3-3.2, W. Va. Code R. § 45-2-10.2, and W. Va. Code R. § 45-7-10.4 are substant ially inadequate to meet CAA requirements and is thus proposing to issue a SIP call with respect to these provisions. E. Affected States and Local Ju risdictions in EPA Region IV

1. Alabama a. Petitioner's Analysis The Petitioner objected to two generally applicable provisions in the Alabama SIP that allow for discretionary exemptions duri ng startup, shutdown, or load change (Ala Admin Code Rule 335-3-14-.03(1)(h)(1)), a nd during emergencies (Ala Admin Code Rule 335-3-14-.03(1)(h)(2)). 113,114 

### First, the Petitioner object ed because both of these

113 

### Petition at 17-18.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 168 of 327 provisions provide exemptions from the othe rwise applicable emi ssion limitations, and such exemptions are inconsistent with the requirements of the CAA and the EPA's SSM Policy. The Petitioner argued th at the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such exce ss emissions be treated as violations. Second, the Petitioner objected to the discretionary exemptions for excess emissions during startup, shutdown, or load ch ange that are also present in Ala Admin Code Rule 335-3-14-.03(1)(h)(1) because th e emissions during such events can be reasonably avoided. The Petitioner noted that such events are part of normal source operation and that any special treatment of excess emissions during such events must be justified with a showing that the excess em issions could not be avoided through careful planning and design, and that bypassing controls in such events is necessary to prevent loss of life, personal injury, or severe property damage. Third, the Petitioner objected to the disc retionary emergency exemption provision that also is present in Ala Admin Code Ru le 335-3-14-.03(1)(h)(2), because the provision gives the state "sole authority to determine wh ether or not a violati on has occurred." The Petitioner argued that this provi sion could be read to precl ude enforcement by the EPA or

citizens in the event that the state elects not to treat the event as a violation. Thus, in addition to creating an impermissible exemption for the excess emissions, the Petitioner argued that the provision is also inconsistent with the CAA and the EPA's SSM Policy

114 

### The EPA notes that the Petitioner also iden tified several additi onal pollutant-specific and source category-specific provisions in the Alabama SIP that it alleged are inconsistent with the CAA and the EPA's SSM Policy. However, the Petitioner did not request that the EPA address those SIP provisions in its remedy request, and thus the EPA is not addressing those provisions in th is action. The EPA may elect to evaluate those provisions in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 169 of 327 because it allows the state to make a unilateral decision th at the excess emissions were not a violation and thus purpor ts to bar enforcement for the excess emissions by the EPA

and citizens.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A),

SIPs must contain emission limitations a nd, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitations must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, load change , or emergencies are not violations of the applicable emission limitations are inconsiste nt with the fundamental requirements of the CAA with respect to emission limitations in SI Ps. The EPA believes that the inclusion of such exemptions from the emission lim itations in Ala Admin Code Rule 335-3-14- .03(1)(h)(1) and Ala Admin Code Rule 335-3- 14-.03(1)(h)(2) is thus a substantial inadequacy and renders these specif ic SIP provisions impermissible. In addition, the EPA agrees that startup, s hutdown, and load change are all part of normal source operation and that such events ar e usually planned for and predictable, and thus emissions during such events are more controllable than those that might occur during an "emergency" or other form of malfunction. Unlike excess emissions in malfunctions, which are by definition presumed to be beyond the reasonable control ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 170 of 327 the source through proper design, operation, and maintenance, excess emissions that occur during startup, shutdown, or load change can be anticipated and steps can be taken to minimize them. The Petitioner, citing th e 1983 SSM Guidance, argued that the EPA's SSM Policy indicates that there should be "a higher showing to escape enforcement" during such planned events. While such a highe r showing may be relevant in the context

of whether a state elects to exercise its en forcement discretion, it should not be germane

to whether or not the excess emissions constitu te a violation of the applicable emission

limitations. The EPA notes that the CAA does not allow exemptions for excess emissions during startup, shutdown, or load change, just as it does not allow such exemptions during malfunctions. As discussed in section V II.A of this notice, states may elect to develop alternative emission limitations or ot her forms of enforceable control measures or techniques that apply dur ing startup and shutdown, but exemptions for excess emissions during such periods are inconsistent with the fundamental requirements of the

CAA. Finally, the EPA believes that both Al a Admin Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-14-.03(1)(h )(2) are also impermissible as unbounded director's discretion provisions that make a state official th e unilateral arbiter of whether the excess emissions in a given event const itute a violation. In the case of Ala Admin Code Rule 335-3-14-.03(1)(h)(1), the provision authorizes a stat e official unilaterally to "[], in the Air Permit, exempt on a case by cas e basis any exceedances of emission limits which cannot reasonably be avoided, such as during periods of st art-up, shut-down or load change." This provision vests the state o fficial with the unilateral power to grant in a state air permit, which may not provide any additional public process at the state orThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 171 of 327 federal level, an exemption from the otherw ise applicable emission limitations without any bounds or parameters to the exercise of this discretion. By deciding that an exceedance of the emission limitation will not be a "violation," exercise of this discretion could preclude enforcement by the EPA or the public who may not agree that the emissions in question could not "reasonably be avoided." Most importantly, however, the provision authorizes the state official to create an exemption from the emission limitations, and such an exemption is impermissi ble in the first instance. Such a director's discretion provision undermines the SIP emission limitations and the emissions reductions they are intended to achieve and re nders them less enforceable by the EPA or through a citizen suit. As discu ssed in section VII.A of this notice, such provisions are substantially inadequate to meet CAA requirements. Similarly, the EPA believes that Ala Admin Code Rule 335-3-14-.03(1)(h)(2)

authorizes a state official un ilaterally to decide that a given event was an "emergency" and thus to create an exemption from the ot herwise applicable emission limitations. In this case, the provision does c ontain some general parameters for the source to establish that there was an emergency ( e.g. , the source has to "ident ify" the cause of the emergency) but nevertheless empowers the state official to make a unilateral

determination as to whether the event was an emergency. The provision thus vests the official with the power to grant an exempti on from the otherwise applicable SIP emission limitations without any additional public proces s at the state or federal level, and with insufficient bounds or parameters applicable to the exercise of th is discretion. Again, most significantly, this discre tion authorizes the creation ofan exemption on a case-bycase basis that is not permissible in the fi rst instance. Thus, this provision also mayThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 172 of 327 undermine the SIP emission limitations, and the em issions reductions they are intended to achieve, and renders them less enforceable by the EPA or through a citizen suit. The EPA

believes that the inclusion of an insufficien tly bounded director's di scretion provision in Ala Admin Code Rule 335-3-14-.03(1)(h)( 1) and Ala Admin Code Rule 335-3-14- .03(1)(h)(2) is thus a substant ial inadequacy and renders these specific SIP provisions impermissible for this reason, in addition to the creation of impermissible exemptions. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and Al a Admin Code Rule 335-3- 14-.03(1)(h)(2). The EPA believes that both of these provisions allow fo r exemptions from the otherwise applicable emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In a ddition, Ala Admin Code Rule 335- 3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-14-.03(1)(h)(2) both allow for such exemptions through a state official's unilateral exercise of discretiona ry authority that is insufficiently bounded and includes no additional public process at th e state or federal level, and such provisions are inconsistent with the fundamental requirements of the CAA with respect to SIPs a nd SIP revisions. Moreover, th e discretion created by these provisions allows case-by-case exemptions from emission limitations, when such exemptions are not permissible in the firs t instance. For these reasons, the EPA is proposing to find that Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-14-.03(1)(h)(2) are substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call w ith respect to these provisions.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 173 of 327 2. Florida a. Petitioner's Analysis The Petitioner objected to three specific pr ovisions in the Florida SIP that allow for generally applicable automatic exemp tions for excess emissions during startup, shutdown, or malfunction (Fla. Admin. Code Ann Rule 62-201.700(1)), for fossil fuel steam generators during startup and s hutdown (Fla. Admin. Code Ann Rule 62- 201.700(2)), and for such sources during boiler cleaning and load change (Fla. Admin. Code Ann Rule 62-201.700(3)). 115,116 

### The Petitioner objected b ecause all three of these provisions provide exemptions from the ot herwise applicable SIP emission limitations, and such exemptions are inconsistent with the requirements of the CAA and the EPA's SSM Policy. The Petitioner argued that the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all excess emissions be treated as violations. The Petitioner objected to all three of thes e provisions because, by stating that the excess emissions during the relevant events a nd time periods "are permitted," the state

has defined these excess emissions as not vi olations, thereby precluding enforcement by

the EPA or citizens for the excess emissions that would otherwise be violations. The Petitioner also argued that th e provision creating exemptions for excess emissions during boiler cleaning and load change in Fla. Admin. Code Ann Rule 62-201.700(3) is

115 

### Petition at 30-31.

116 

### The EPA notes that the Petitioner also iden tified several additi onal pollutant-specific and source category-specific provisions in the Florida SIP that it alleged are inconsistent with the CAA and the EPA's SSM Policy. Howeve r, the Petitioner did not request that the EPA address those SIP provisions in its re medy request, and thus the EPA is not addressing those provisions in this acti on. The EPA may elect to evaluate those provisions in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 174 of 327 impermissible specifically b ecause it creates an exempti on for excess emissions during normal source operation that "are not eligib le for any relief under EPA guidance." After objecting to the three provisions that create the exemptions, the Petitioner noted that the related provision in Fla. Admin. Code Ann Rule 62-201.700(4) reduces the potential scope of the exemptions in the othe r three provisions if th e excess emissions at issue are caused entirely or in part by things such as poor maintenance but that it does not eliminate the impermissible exemptions. More over, the Petitioner a sserted that none of the four provisions provides any "procedure by which the factual premises of any of these subsections are to be proven."

b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable emission limitations. In accordan ce with the requirem ents of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable SIP

emission limitations must be considered viola tions of such limitations, whether or not the

state elects to exercise its enforcement disc retion. SIP provisions that create exemptions such that the excess emissions during star tup, shutdown, malfunction, boiler cleaning, or load change are not violations are inconsiste nt with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The three provisi ons identified by the Petitioner explicitly state that the excess em issions "shall be permitted" under certain circumstances and thus provide that the resulting excess emissi ons will not be violations contrary to the CAA, as required by secti ons 110(a)(2)(A), 110(a )(2)(C), and 302(k). TheThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 175 of 327 EPA believes that the inclusion of such ex emptions from emission limitations in Fla. Admin. Code Ann Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-201.700(2) and Fla. Admin. Code Ann Rule 62-201.700(3), is th us a substantial inadequacy and renders these specific SIP provi sions impermissible. The EPA notes that these exemptions ar e impermissible even though the state has imposed some factual and temporal limitations on their potential scope. For example, in Fla. Admin. Code Ann Rule 62-201.700(1), th e state has specified that the excess emissions from startup, shutdown, and ma lfunction events "shall be permitted" ( i.e. , allowed and thus not treated as violations) provided: "(1) best operational practices to minimize emissions are adhered to and (2) the duration of excess emissions shall be

minimized but in no case exceed two hours in any 24 hour period unless specifically authorized by the Department for longer dur ation." Similarly, in Fla. Admin. Code Ann Rule 62-201.700(2) with respect to startup and shutdown from certain sources, the state has conditioned the exemption "provided that best operational practices to minimize

emissions are adhered to and the duration of excess emissions shall be minimized." In Fla. Admin. Code Ann Rule 62-201.700(3), the state has imposed much more specific

limits on the duration of the events and some additional limitations on the excess emissions in the form of specified opacity limits that apply during such events. Although these extra limitations on the scope of th e exemptions are helpful features, they

nevertheless constitute a variance at a state official's discretion from the otherwise applicable emissions limitations, and the core problem remains that each of the three provisions provides impermissible exemptions from the emission limitations by defining the excess emissions as "permitted" and thus not violations. The CAA does, as discussedThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 176 of 327 in section VII.A of this notice, allow states to develop alternative emission limitations or

other forms of enforceable control measures or techniques that apply during startup or shutdown. However, the Florida SIP provisions do not appear to comply with the Act's requirements as interpreted in the EPA's SSM Policy because, for instance, they do not apply only to "specific, na rrowly-defined source categor ies using specific control strategies." 117 

### With respect to the Petitioner's concern that these exemptions preclude enforcement by the EPA or citizens, the EPA agrees that this is one of the critical reasons why such provisions are impermissible under the CAA. By having SIP provisions that

define what would otherwise be violations of the applicable emission limitations as nonviolations, the state has effec tively negated the ability of th e EPA or the public to enforce against those violations. In addition, the EPA agrees that the lim iting provision of Fla. Admin. Code Ann Rule 62-201.700(4) that curtails the exempti ons in the prior provisions if the excess emissions are caused "entirely or in part" by fa ctors within the source's control such as "poor maintenance" does not negate the unde rlying problem of providing exemptions for

the excess emissions in the first instance. The EPA acknowledges that this provision would serve to prevent sources that fail to maintain or operate correctly or otherwise to take action reasonably to pr event excess emissions during SSM events from getting the benefits of the exemption. However, the EPA recommends that these are the types of

considerations that should be relevant eith er in the state's exercise of enforcement

117 

### 1999 SSM Guidance Attachment at 4-5.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 177 of 327 discretion for violations, in the state's adoption of a SIP provision concerning that exercise of enforcement discretion by the stat e, or by an appropriately drawn affirmative defense SIP provision for excess emissi ons in the case of malfunctions. Finally, the Petitioner expre ssed concern that the four SIP provisions at issue "do not specify the procedure by which the factua l premises are to be proven." Were these provisions authorizing a state offi cial to make discretionary d ecisions as to whether or not a given event qualified for the (impermissible) exemption, there could be an additional concern that these provisions included a director's discreti on problem as well. However, the EPA believes that these regulations are di rectly enforceable by the state, the EPA, or members of the public in the appropriate forums, and thus the "procedure" for proving the violation would be the normal process in such forums. The fact that the state has established factual requirements that would need to be evaluated in order to prove a violation of the applicable emission limita tions is not itself inconsistent with CAA requirements. The EPA believes that providing requisite factual evid ence to establish a violation in an enforcement proc eeding is entirely appropriate. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Fla. Admin. Code Ann Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-201.700(2), Fla. Admin. Code Ann Rule 62-201.700(3), and Fla. Admin. Code Ann Rule 62-201.700(4). The EPA believes that each of these provisions allows for exemptions from the otherwise applicable emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A), 110( a)(2)(C), and 302(k). In addition, by creating theseThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 178 of 327 impermissible exemptions, the state has define d violations in way that would interfere with effective enforcement by the EPA and citizens for excess emissions during these events as provided in CAA sections 113 a nd 304. For these reasons, the EPA is proposing to find that these provisions are substantiall y inadequate to meet CAA requirements and thus proposing to issue a SIP call with re spect to Fla. Admin. Code Ann Rule 62- 201.700(1), Fla. Admin. Code Ann Rule 62-201.7 00(2), Fla. Admin. Code Ann Rule 62- 201.700(3), and Fla. Admin. C ode Ann Rule 62-201.700(4). 3. Georgia a. Petitioner's Analysis The Petitioner objected to a provision in the Georgia SIP that provides for exemptions for excess emissions during star tup, shutdown, or malfunctions under certain circumstances (Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7)). 118 

### The Petitioner acknowledged that this provision of the Geor gia SIP includes some conditions for when sources may be entitled to seek the exempti on under state law, such as when the source has used "best operational practices" to minimize emissions during the SSM event. First, the Petitioner objected because the provision creates an exemption from the applicable emission limitations by providing th at the excess emissions "shall be allowed" subject to certain conditions, whereas the C AA and the EPA's interpretation of the CAA in the SSM Policy prohibit any such exemp tions. The Petitioner noted that all excess emissions are required to be treated as viola tions of the applicable emission limitations,

118 

### Petition at 32.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 179 of 327 even if they would qualify for some other sp ecial consideration th rough other means such

as enforcement discretion. Second, the Petitioner argued that al though the provision provides some "substantive criteria," the pr ovision does not meet the crit eria the EPA recommends for an affirmative defense provision consistent with the requirements of the CAA in the EPA's SSM Policy. Third, the Petitioner asserted that the provision is not a permissible "enforcement discretion" provision applicable only to state personnel, because it "is susceptible to interpretation as an enfo rcement exemption, precluding EPA and citizen

enforcement as well as state enforcement."

b. The EPA's Evaluation At the outset, the EPA notes that the Petit ioner failed to include any discussion of the extensive prior litigation and administra tive proceedings concerning this specific provision of the Georgia SIP. Nearly 10 years ago, citizen suit plaintiffs including the Petitioner sought to bring an enforcemen t action against a so urce for self-reported

exceedances of emission limitations in the source's operating permit, and the source

asserted that those exceedances were not "v iolations" through app lication of a permit provision that mirrored the underlying SIP provision in Ga. Comp. R. & Regs. 391-3-1- .02(2)(a)(7). 119 

### In that case, the plaintiffs argued that the provision at issue was an "enforcement discretion" provisi on applicable to state perso nnel only and thus that it was

not relevant in the event of enforcement actions by other parties. The District Court agreed and held that the provision was me rely an enforcement discretion provision

119 

### See, Sierra Club, et al. v Georgia Power Co. , 365 F. Supp 1297 (N.D. Ga. 2004).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 180 of 327 applicable to the state and that it provided no affirmative defense in the enforcement action, and thus the court ruled in fa vor of the plaintiffs on this issue. 120 

### On appeal, the Court of Appeals examined the same operating permit language and underlying SIP provision and ca me to a different conclusion. 121 

### The Court of Appeals concluded that the provision does provide an affirmative defense and is not an enforcement discretion provision. Moreover, the C ourt noted that even if the provision is

not consistent with the EPA's guidance on permissible a ffirmative defense provisions in SIPs ( e.g. , because it creates exemptions for exceedances and purports to allow a complete bar to any liability, not just relief from monetary penalt ies), the EPA had not taken action through rulemaking to rectify th at discrepancy. Because the EPA had not called upon the state to revise the SIP to bri ng it into compliance w ith the EPA's current interpretation of the CAA embodied in the 1999 SSM Guidance, the Court held that the exceedances of the applicable emission limitatio ns were not violations and thus ruled against the plaintiffs. Contemporaneously with this litigation, the Petitioner had also filed a May 23, 2005 petition for rulemaking, reques ting that the EPA require th e state to revise its SIP "to correct a significant ambiguity" concerni ng the excess emissions from SSM events. 122

120 

### Id. at 1304. The court also made a series of findings to illustra te that the permit provision was not consistent with the EPA' s interpretation of the CAA requirements concerning excess emissions during SSM events embodied in the 1999 SSM Guidance.

121 

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

122 

### The petition was filed by Richard M. Wats on of the Georgia Center for Law in the Public Interest on behalf of the Ge orgia Chapter of the Sierra Club.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 181 of 327 On July 18, 2007, the EPA denied that petition. 123 

### As a basis for this denial, the EPA reasoned that the opinion of the Court of App eals had rendered the petition moot as to the issues raised therein. Specifically, the EPA stated that the Court's decision that the existing provision did not crea te an "automatic exemption" and did constitute an "affirmative defense" resolved any "ambiguity " about the meaning a nd application of Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7). At this juncture, the EPA believes that the extensive proceedings concerning Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) in whic h plaintiffs, defendant s, courts, and both state and federal agencies examined the same provision and came to different conclusions concerning its meaning illustrates the need to examine this SIP provision again. In particular, the EPA concludes that the provisi on warrants further evaluation on the merits, because the Petition requests that the EPA consider more specific allegations about deficiencies in the provision than did th e 2005 petition. As the 11th Circuit Court of Appeals suggested, the EPA agrees that a formal notice-and-comment rulemaking though CAA section 110(k)(5) is a good mechanism th rough which to evaluate whether or not Ga. Comp. R. & Regs. 391-3-1- .02(2)(a)(7) meets the substa ntive requirements of the CAA. Accordingly, the EPA is reeval uating the provision on the merits. 124 

### The first concern with this provision is that it does create exemptions from the applicable emission limitations. The provision ex plicitly states that the "excess emissions

123 

### See, Letter from Stephen E. Johnson, Administra tor, to Georgia Chapter of the Sierra Club, dated July 18, 2007. A copy of this lett er is in the docket for this action.

124 

### The EPA notes that it is not bound to follow a prior incorrect inte rpretation of its own policy, nor is it precluded from ch anging its policy interpretations. See, e.g. , Luminant Generation Co. v. EPA , 699 F.3d 427 (5th Cir. 2012), and U.S. Supreme Court precedent cited therein for these propositions.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 182 of 327 resulting from startup, shut down, malfunction of any source which occur though ordinary diligence is employed shall be allowed," i.e. , are exempt and not subject to enforcement for either monetary penalties or injunc tive relief. The exemption for these excess emissions is conditioned upon se veral criteria relevant to minimizing emissions during the startup, shutdown, or malfunction event, whic h criteria are helpful and are structured

as a form of affirmative defense. Even if Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) could otherwise qualify as an affirma tive defense provision, however, the EPA's interpretation of the CAA is that such affi rmative defenses can only shield the source from monetary penalties and ca nnot be a bar to injunctive re lief. An affirmative defense provision that purports to ba r any enforcement action for violations of emission

limitations is inconsistent with the re quirements of CAA sections 113 and 304.

The EPA's second concern with Ga. Com p. R. & Regs. 391-3-1-.02(2)(a)(7) is that while the provision appears to create an affirmative defense, it does so with

conditions that are not consistent with the fu ll range of criteria that the EPA recommends in the SSM Policy. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP pr ovisions could be consistent w ith the requirements of the CAA. Nonetheless, through th is rulemaking, the EPA is propos ing to determine that Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) does not include criteria that are sufficiently robust to qualify as an acceptable affirm ative defense provision. In particular, the provision does not limit the type of event that qualifies as a malfunc tion to those that are entirely beyond the control of the source, that were not reasonably foreseeable and avoidable, and that were not part of a recu rring pattern indicative of inadequate design, operation, or maintenance. While the EPA con tinues to believe that affirmative defenseThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 183 of 327 provisions applying to malfunctions can be consistent with the CAA as long as the criteria set forth in the SSM Policy are carefully adhered to, as explai ned in more detail in sections IV.B and VII.B of this notice, the EP A believes that the crit eria in Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) should be augmente d to assure that the affirmative defense is available only in appropria tely narrow circumstances. The EPA's third concern with Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) is that even if the provision were otherwise construed as an affirmative defense, it extends not just to malfunctions but also to startup and shutdown events. As e xplained in sections IV.B and VII.C of this notice, the EPA inte rprets the CAA to allow affirmative defense provisions applicable to malf unctions but not to other normal modes of source operation, including startup and shutdown. Thus, the prov ision is not drawn to assure that the affirmative defense is available only in appropr iately narrow circumstances, as required by the EPA's interpretation of CAA requirements. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7). The EPA believes that th is provision allows fo r exemptions from the otherwise applicable emission limitations , and that such outri ght exemptions for

excess emissions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. Su ch a provision is inconsistent with the requirements of CAA sections 110(a )(2)(A), 110(a)(2)(C ), and 302(k). In addition, Ga. Comp. R. & Regs. 391-3- 1-.02(2)(a)(7) is not a permissible affirmative defense provision consistent with the requirements of the CAA and the EPA's recommendations for such provisions in the EPA's SSM Policy. By creating a bar toThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 184 of 327 enforcement that applies not just to monetary penalties but also to injunctive relief, this provision is inconsistent with the requir ements of CAA sections 113 and 304. By not including sufficient criteria to assure that so urces seeking to raise the affirmative defense have in fact been properly designed, maintain ed, and operated, and to assure that sources have taken all appropriate steps to minimize excess emissions, the provision also fails to be sufficiently narrowly drawn to justify shielding from moneta ry penalties for violations. Moreover, Ga. Comp. R. & Regs. 391-3-1-.02 (2)(a)(7) currently applies not only to

malfunctions but also to start up and shutdown events, contrary to the EPA's interpretation of the CAA. Thus, this provision is not appr opriate as an affirmative defense provision

because it is inconsistent with fundamental requirements of the CAA as interpreted in the EPA's SSM Policy. For these reasons, the EPA is proposing to find that Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7) is substantially inadeq uate to meet CAA requirements and thus proposing to issue a SIP call w ith respect to th is provision. 4. Kentucky a. Petitioner's Analysis The Petitioner objected to a generall y applicable provision that allows discretionary exemptions from otherwise applicable SIP emission limitations in Kentucky's SIP (401 KAR 50:055 §1(1)). 125,126 

### The provision provides that "[e]missions

125 

### Petition at 39-40.

126 

### The EPA notes that the Petitioner also iden tified several additi onal pollutant-specific and source category-specific provisions in Kent ucky's SIP that it alle ged are inconsistent with the CAA and the EPA's SSM Policy. Howeve r, the Petitioner did not request that the EPA address those SIP provisions in its re medy request, and thus the EPA is not addressing those provisions in this acti on. The EPA may elect to evaluate those provisions in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 185 of 327 which, due to shutdown or malfunctions, tempor arily exceed the standard . . . shall be

deemed in violation of such standards unless the requirements of this section are satisfied and the determinations specified in subsection (4) . . . are made." The provision requires sources to notify the director that such violations are going to or have occurred. The provision then provides that "[a] source sha ll be relieved from compliance with the

standards . . . if the director determines" that the source has met a number of enumerated

criteria. The Petitioner argued that this provisi on could provide an exemption from the otherwise applicable SIP emission limitations , and such an exemption is impermissible

under the CAA because the statute and the EP A's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as violations. Moreover, the Petitioner objected to this discretionary ex emption because the director's determination that the source has met the specified criter ia could be interpreted to excuse excess emissions during such time period and could th us be read to preclude enforcement by the

EPA or citizens in the event that the director elects not to treat the event as a violation. Thus, in addition to creating an impermissi ble exemption for the excess emissions, the Petitioner argued, the provision is also inconsis tent with the CAA as interpreted in the EPA's SSM Policy because it allows the direct or to make a unilateral decision that the

excess emissions were not a violation and thus could bar enforcement for the excess emissions by the EPA and citizens.

The Petitioner noted that the criteria that sources must de monstrate to the director in order to qualify for the exemption "resembl e the criteria that ar e supposed to guide a state's enforcement discretion for malfunctions," but that if the provision is not removedThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 186 of 327 from the SIP, it "must stipulate that all exce ss emissions are violati ons and preserve the authority of EPA and citizens to enforce th e SIP standards and limitations." Thus, the Petitioner viewed this provision as either an impermissible discretionary exemption mechanism or an impermissible enforcement discretion provision.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, or malfuncti ons are not violations of the applicable

emission limitations are incons istent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The EPA believes that the inclusion of such an exemption from the emission limitations in 401 KAR 50:055 §1(1) is thus a substantial inadequacy and renders this specif ic SIP provision impermissible. The EPA believes that 401 KAR 50:055 §1( 1) is impermissible as an unbounded director's discretion provision that makes a st ate official the unilateral arbiter of whether the excess emissions in a given event cons titute a violation. In the case of 401 KAR 50:055 §1(1), the provision authorizes the state official to make a determination that the source has met the specified criteria, and such a determination could be interpreted toThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 187 of 327 excuse excess emissions during the event and co uld thus be read to preclude enforcement by the EPA or through a citizen suit. In additi on, the provision vests a state official with the unilateral power to grant an exemption from the otherwise applicable SIP emission limitation, without any additional public proce ss at the state or federal level. Most importantly, however, the provision authorizes a state official to create an exemption from the emission limitation, and such an ex emption is impermissible in the first instance. Such a director's discretion provi sion undermines the SIP emission limitations, and the emissions reductions they are in tended to achieve, and renders them less enforceable by the EPA or through a citizen su it. The EPA believes that the inclusion of an insufficiently bounded director's discreti on provision in 401 KAR 50:055 §1(1) is thus a substantial inadequacy and re nders this specific SIP provision impermissible for this reason, in addition to the creation of an impermissible exemption.

The EPA also notes that after the subm ission of the Petition, there has been a subsequent regulatory action that touched upon this SIP provision tangentially. In connection with a redesignati on of the Kentucky portion of the tri-state CincinnatiHamilton area for the 1997 PM 2.5 

### NAAQS, the state submitted an interpretive letter to the EPA explaining the state's r eading of 401 KAR 50:055 §1(1). 127 

### In this November 4, 2011 letter, the Kentucky Divi sion of Air Quality (KDAQ) st ated that it has "never formally taken the position that excess emissi ons under the regulations are not violations" and that a determination by KDAQ "does not li mit" the authority of the EPA and citizens

127 

### See, "Approval and Promulgation of Implemen tation Plans and Designations of Areas for Air Quality Planning Purposes; Kentucky; Redesignation of the Kentucky Portion of the Cincinnati-Hamilton, OH-KY -IN 1997 Annual Fine Particul ate Matter Nonattainment Area to Attainment," 76 FR 77903 (Dec. 15, 2011).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 188 of 327 to take enforcement action. 128 

### Based on the state's inte rpretation of 401 KAR 50:055 §1(1), the EPA at that time concluded that the provision could be construed not to bar enforcement by the EPA or through a citizen suit if the state elects not to pursue enforcement; i.e. , it could be construed as an enfor cement discretion provision applicable to state personnel. In the context of acting upon the redesigna tion request under CAA section 107(d)(3), this clarif ication from the state was suffi cient to address the concern

raised in comments on that action. Neverthe less, the EPA noted in the redesignation action that it would evaluate 401 KAR 50:055 §1(1) as part of its consideration of issues raised by the Petition. At this juncture, the EPA believes that the difference of views about the correct reading of 401 KAR 50:055 §1(1) illustrates the need to examine this SIP provision again. The EPA appreciates KDAQ's clarification of its read ing of the provision in the November 4, 2011, letter and the EPA considers that interpretation sufficient for purposes of the redesignation action. However, in the c ourse of reevaluating th is provision in light

of the issues raised in the Petition, the EPA believes that the provision contains regulatory language that is pot entially contradictory and re quires formal revision to eliminate significant ambiguities. For example, subsection 1 of the provision states that: "[e]missions which, due to shutdown or malfunc tions, temporarily exceed the standard . .

. shall be deemed in violation of such standa rds unless the requirement s of this section are satisfied." In subsection 4, th e provision states that "a source shall be relieved from compliance with the standards . . . if the director determines, upon a showing by the

128 

### A copy of this letter can be found in the docket for this rulemaking.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 189 of 327 owner or operator of the source, that" cer tain conditions are met. KDAQ has indicated that it reads these provisions not to bar enforcement by the EPA or through a citizen suit

in the event that the state does not pursue enforcement, but the EPA believes that the provision is sufficiently ambiguous on this point th at a revision is necessary to ensure that

outcome in the event of an enforcement action.

As discussed in section VI.B of this notice, the EPA believes that in some instances it is appropriate to clarify provisi ons of a SIP through th e use of interpretive letters. However, in some cases, there may be areas of regulatory ambiguity in a SIP's provisions that are sufficiently significant for which resolution is both appropriate and necessary. Because the text of Kentucky's SIP provision is not clearly phrased in terms of

the state's exercise of enforcement disc retion and could be interpreted to allow discretionary exemptions from the otherwise ap plicable SIP emission lim itations or as an affirmative defense provision inconsistent with the criteria recommended in the EPA's SSM Policy, the EPA believes th at the provision is substantia lly inadequate to meet CAA requirements. c. The EPA's Proposal The EPA proposes to grant the Petiti on with respect to 401 KAR 50:055 §1(1). The EPA believes that this provision requires cl arification to ensure that it meets CAA requirements. The current provision could be read to allow for exemptions from the otherwise applicable SIP emission limitations, and such exemptions are inconsistent with the fundamental requirements of the CAA with respect to em ission limitations in SIPs in sections 110(a)(2)(A), 110( a)(2)(C), and 302(k). In a ddition, 401 KAR 50:055 §1(1) could be read to allow exemptions through a state official's unilateral exercise ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 190 of 327 discretionary authority that is insuffici ently bounded and includes no additional public process at the state or federa l level, and such provisions are inconsistent with the fundamental requirements of the CAA with re spect to SIPs and SIP revisions. Moreover, the provision could be read to create disc retion to allow case-by- case exemptions from emission limitations when such exemptions ar e not permissible in the first instance. In light of the potential conflicts between the provision and the differing interpretations that parties or a court might give the provision in an enforcement action, the EPA is proposing to find that 401 KAR 50:055 §1(1) is substantially inadequate to meet CAA requirements and thus proposing to issue a SIP ca ll with respect to this provision. 5. Kentucky: Jefferson County a. Petitioner's Analysis First, the Petitioner objected to a generally applicable provision in the Jefferson County Air Regulations 1.07 because it provide s for discretionary exemptions from compliance with emission limitations dur ing startup, shutdown, and malfunction. 129,130 

### The provision states that "[e]missions due to startup, shutdown, malfunction, or emergency, that temporarily exceed the standard s . . . shall be deemed in violation of those standards unless, based upon a showing by the owner or operator of the source and an affirmative determination by the Distri ct, the applicable requirements of this regulation are satisfied." The provision requires different de monstrations for exemptions

129 

### The Petitioner noted that this regula tion was approved into Kentucky's SIP in "Approval and Promulgation of Air Quality Im plementation Plans; Kentucky; Approval of Revisions to State Implementation Pl an; Revised Format for Materials Being Incorporated by Reference for Jefferson County, Kentucky," 66 FR 53503 at 53660 (Oct. 23, 2001).

130 

### Petition at 40-42.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 191 of 327 for excess emissions during startup and shutdown (Regulation 1.07 § 3), malfunction (Regulation 1.07 § 4 and § 7), and emer gency (Regulation 1.07 § 5 and § 7). The Petitioner argued that this provis ion could provide exemptions from the otherwise applicable SIP emission limita tions, and that such exemptions are impermissible under the CAA because the stat ute and the EPA's interpretation of the CAA in the SSM Policy require that all exce ss emissions be treated as violations. The Petitioner objected to this pr ovision as allowing discretionary exemptions, because a local

official's determination that the source has me t the specified criteria could be interpreted to excuse excess emissions during such even ts and could thus be read to preclude enforcement by the EPA or citizens if the dist rict elects not to treat the event as a

violation. Second, the Petitioner objected to the a ffirmative defense for emergencies in Jefferson County Air Regulations 1.07. The Petitioner noted that the SIP provision "mirrors the language in 40 C.F.R. § 70.6(g)" in the EPA's own title V regulations. Thus, the Petitioner argued that the provision should not be included in the SIP because it is modeled on the EPA's own title V regulations, and such regulations do not belong in the SIP. The Petitioner also argued that even if the provision were appropriate as a SIP provision, it is deficient because it is not a "true affirmative defense." On the latter point the Petitioner argued that a "true affirmative de fense" is a defense to be asserted by the

source in the context of a judicial or administrative enforcement proceeding. The Petitioner opined that the emergency a ffirmative defense in Jefferson County Air Regulations 1.07 "appears to allow the District to decide whether the defense applies."

b. The EPA's EvaluationThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 192 of 327 The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations, whether automatic or through the exercise of a government official's discretion. In accordan ce with the requirem ents of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissi ons above the level of the applicable

emission limitation must be considered viol ations, whether or not the state elects to

exercise its enforcement discre tion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, load change, or emergencies are not violations of the applicable emission limita tions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The EPA believes that the inclusion of such an exemption fr om the emission limitations in Jefferson County Air Regulations 1.07 is thus a substantial in adequacy and renders this specific SIP provision impermissible. The EPA believes that Regulation 1.07 is al so impermissible as an insufficiently bounded director's discretion provision that makes a local official the unilateral ar biter of whether the excess emissions in a given event constitute a violation. In the case of Regulation 1.07, the provision auth orizes local officials to ma ke a determination that the source has met the specified criteria for each type of event—startup and shutdown (Regulation 1.07 § 3), malfunction (Regula tion 1.07 § 4), emergency (Regulation 1.07 § 5), and extended malfunction or emergency (Regulation 1.07 § 7). The local official's "affirmative determination" that such requi rements have been met has the effect of excusing the excess emissions (Regulation 1.07 § 2.1). This determination could beThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 193 of 327 interpreted to preclude enforcement by the EP A or through a citizen suit. In addition, the provision vests the local official with the unilateral power to grant an exemption from the otherwise applicable SIP emission limitations , without any additional public process at the state or federal level. Most importantl y, however, the provision authorizes the local official to create an exemption from the em ission limitation, and such an exemption is impermissible in the first instance. Such a director's discretion provision undermines the emission limitations, and the emissions reduc tions they are intended to achieve, and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of an insufficiently bounded di rector's discretion provision in Regulation 1.07 is thus a substantial inadequacy a nd renders this specific SIP provision impermissible for this reason, in addition to the creation of an impermissible exemption. The EPA also agrees that Regulation 1.07 provides an impermissible exemption for excess emissions that occur during "emerg encies." The provision uses language that is borrowed from the EPA's title V regulations (Regulation 1.07 § 5) but that is not appropriate for a SIP provision ( see section VII.D of this no tice). In addition, because Regulation 1.07 § 2.1 provides that the district may make a determination of whether "applicable requirements" of the regulation are "satisfied," and the affirmative defense for emergencies is defined as one such "applicab le requirement," the st ructure of Regulation 1.07 could be read as providing the district with the unilateral discreti on to decide that the

source has met the conditions for the affirm ative defense. The EPA agrees with the Petitioner that affirmative defenses are only permitted in the contex t of an enforcement proceeding and cannot be granted unilaterally by a state agency, because this would have the effect of precluding the EPA or th e public from taking enforcement action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 194 of 327 Regulation 1.07 also does not explicitly limit the affirmative defense for emergency events to civil penalties. A lthough the EPA believes that narrowly drawn affirmative defenses are permitted under the CAA for malfunction events ( see sections IV.B and VII.B of this notice), the EPA's interpretation of the CAA is that affirmative defenses can only shield the source from m onetary penalties and cannot be a bar to injunctive relief. An affirmative defense provi sion that purports to bar any enforcement action for injunctive relief fo r violations of emission limitations is inconsistent with the requirements of CAA sections 113 and 304. In addition, the provision does not contain elements for establishing the affirmative defe nse consistent with all of the recommended criteria in the EPA's SSM Policy. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP pr ovisions could be consistent with the requirements of the CAA. Nonetheless, thr ough this rulemaking, the EPA is proposing to determine that Regulation 1.07 does not include criteria that are sufficiently robust to qualify as an acceptable affirmative defense pr ovision for purposes of SIP requirements. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Jefferson County Air Regulation 1.07. 131 

### The EPA believes that this provisi on allows for exemptions from the otherwise applicable SIP emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in

131 

### The EPA notes that Kentucky has recentl y made a SIP submission that includes revisions to the portion of the SIP appli cable to Jefferson Count y that would amend Regulation 1.07. In this action, the EPA is onl y evaluating Regulation 1.07 as currently approved into the SIP. The EPA is not evaluating the more recent SIP submission as part of this action. The EPA will address th e SIP submission in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 195 of 327 SIPs in sections 110(a)(2)(A), 110(a)(2)(C ), and 302(k). In addition, Regulation 1.07 allows for such exemptions through a local offi cial's unilateral exercise of discretionary authority that is insufficien tly bounded and includes no addi tional public process at the state or federal level, and such provisions are inconsistent with the fundamental requirements of the CAA with respect to SIPs and SIP revisions. Moreover, the discretion created by these provisions allows case-by- case exemptions from emission limitations, when such exemptions are not permissible in the first instance. For these reasons, the EPA is proposing to find that Regulation 1.07 is substantially inad equate to meet CAA requirements and thus proposing to issue a SI P call with respect to this provision. The EPA also proposes to grant the Peti tion because Regulation 1.07 contains an impermissible exemption for excess emissi ons during emergency events, conditioned upon an affirmative defense provision that is inconsistent with the criteria recommended in the EPA's SSM Policy. Regulation 1.07 can be r ead to authorize the district to grant an exemption under § 2.1 and § 5, and such an inte rpretation could preclude the EPA and the public from bringing an enforcement acti on. Furthermore, the affirmative defense provision is impermissible because it does not explicitly limit the defense to monetary penalties, and it does not include sufficient criteria to assure that sources seeking to raise

the affirmative defense have in fact been properly designed, maintained, and operated, and to assure that sources have taken all ap propriate steps to minimize excess emissions. The provision therefore also fa ils to be sufficiently narrowly drawn to justify shielding from monetary penalties for violations. For these reasons, the EPA is proposing to find that Regulation 1.07 is substantially inadequa te to meet CAA requirements and proposes

to issue a SIP call with re spect to this provision.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 196 of 327 6. Mississippi a. Petitioner's Analysis The Petitioner objected to two generally ap plicable provisions in the Mississippi

SIP that allow for affirmative defenses fo r violations of otherwise applicable SIP emission limitations during periods of upset, i.e. , malfunctions (11-1-2 Miss. Code R. § 10.1) and unavoidable maintenance (11-1-2 Miss. Code R. § 10.3). 132 

### First, the Petitioner objected to both of these provisions based on its assertion that the CAA allows no affirmative defense provisions in SIPs. S econd, the Petitioner asse rted that even if affirmative defense provisions were permissi ble under the CAA, the affirmative defenses in these provisions "fall far short of the EPA policy." Specifically, the Petitioner argued that the EPA's guidance for affirmative de fenses recommends that they "are not appropriate where a single sour ce or a small group of sources has the poten tial to cause an exceedance of the NAAQS or PSD increments," 133 

### and Mississippi's provisions do not contain a restriction to address this poin t. Further, the Petitioner argued that the affirmative defenses in Mississippi's SIP are not limited to actions seeking civil penalties and that they fail to meet other criteri a "that EPA requires for acceptable defense provisions." 134 

### Finally, the Petitioner argued that the CAA and the EPA's SSM Policy interpreting it do not allow affirmative defens es for excess emissions during maintenance events under any circumstances.

132 

### Petition at 47-49.

133 

### Petition at 48.

134 

### Petition at 47-48.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 197 of 327 The Petitioner also objected to a generall y applicable provision that provides an exemption from otherwise applicable SI P emission limitations during startup and shutdown (11-1-2 Miss. Code R. § 10.2). 135 

### Within that provision, 11-1-2 Miss. Code R. § 10.2(a)(2) specifies that emission limitations apply during startup and shutdown except "when a startup or shutdown is infrequent, th e duration of the excess emissions is brief in each event, and the design of the source is such that the period of excess emissions cannot be avoided without causing damage to the equipment or persons." The Petitioner argued that such an exemption is inconsistent with the requirements of the CAA and the EPA's SSM Policy. The Petitioner argued that the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as

violations.

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

malfunctions. The EPA agrees, however, that the affirma tive defense contained in 11-1-2 Miss. Code R. § 10.1 for upsets is not an accep table affirmative defense provision under the

135 

### Petition at 47-49.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 198 of 327 CAA as interpreted in the EPA's SSM Policy. Section 10.1 provides that "[t]he occurrence of an upset ... constitutes an a ffirmative defense to an enforcement action brought for noncompliance with emission st andards," conditioned upon the source meeting a series of criteria. Although the EP A believes that narrowly drawn affirmative defenses are permitted under the Act for malfunction events ( i.e. , upsets) ( see section VII.B of this notice), the EPA's interpretation of the CAA is that an affirmative defense can only shield the source from monetary pe nalties and cannot be a bar to injunctive relief. The provisions of 11-1- 2 Miss. Code R. § 10.1 applic able to upsets appears to create a bar not just to moneta ry penalties but also to injunctive relief. An affirmative defense provision that purports to bar any enforcement action for injunctive relief for

violations of emission limitations is inconsis tent with the requirements of CAA sections

113 and 204. In addition, the EPA agrees that 11- 1-2 Miss. Code R. § 10.1 creates an affirmative defense for upsets with conditions that are not fully consistent with the criteria that the EPA recommends in the SSM Policy. The EPA acknowledges that the SSM Policy is only guidance concerning what ty pes of SIP provisions could be consistent with the requirements of the CAA. Noneth eless, through this rulemaking, the EPA is proposing to determine that 11-1-2 Miss. Code R. § 10.1 does not include criteria that are sufficiently robust to qualify as an accep table affirmative defense provision. Although this provision does contain many criteria that are comparable to those the EPA recommends, it does not address several that th e EPA believes to be necessary to assure

that the affirmative defense is available onl y in appropriate circum stances. For example, 11-1-2 Miss. Code R. § 10.1 does not contain criteria requiring the source to show thatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 199 of 327 the malfunction event was not part of a recurri ng pattern indicative of inadequate design, operation, or maintenance. In a ddition, as discussed in section VII.B of this notice, the EPA believes that affirmative defense provi sions should address the issue of single sources or groups of sources that have th e potential to have adverse impacts on the NAAQS or PSD increments in one of two recommended ways . On its face, 11-1-2 Miss. Code R. § 10.1 does not appear to address this issue in eith er way. The EPA believes that

the inclusion of the bar to enforcement for in junctive relief and the insufficiently robust qualifying criteria render 11-1-2 Miss. Code R. § 10.1 substantially inadequate to meet CAA requirements. The EPA also agrees with the Petitioner that the affirmative defense for excess emissions during maintenance provided in 11- 1-2 Miss. Code R. § 10.3 is not consistent with CAA requirements. As explained in sec tions IV and VII.C of this notice, the EPA believes that affirmative defenses are only permissible under the CAA in the case of events that are beyond the control of the source, i.e. , malfunctions. Affirmative defense provisions are not appropriate in the case of planned source ac tions, such as maintenance, because sources should be expected to co mply with applicable emission limitations during those normal planned and predicted modes of source operation. Although this provision does contain parameters to limit its availability, it still provides an affirmative

defense that is inconsistent with CAA requirements. The EP A believes that the inclusion

of the affirmative defense for excess emissions during maintenance in 11-1-2 Miss. Code R. § 10.3 renders that provision substantially inadequate to meet CAA requirements. The EPA also agrees that 11-1-2 Miss . Code R. § 10.2(a)(2) contains an exemption for excess emissions during startup and shutdown events th at is inconsistentThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 200 of 327 with CAA requirements. The EPA acknowle dges that the state has imposed some parameters on the scope of the exemption by re quiring that the events be infrequent, of short duration, and required to avoid damage to equipment or people. However, the EPA does not interpret the CAA to allow for exem ptions for excess emissions during startup

and shutdown. As discussed in section VII.A of this notice, the EPA believes that sources should be designed, operated, and maintained so that they can comply with applicable SIP emission limitations during normal modes of source operation. If appropriate, the state may elect to develop special emission limitations or other control measures that apply during startup and shutdown. The EPA beli eves that the inclusion of an exemption for excess emissions during startup and s hutdown in 11-1-2 Miss. Code R. § 10.2 is substantially inadequate to meet CAA requirements. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to 11-1-2 Miss. Code R. § 10.1, 11-1-2 Miss. Code R. § 10.2, and 11-1-2 Miss. Code R. § 10.3. None of these provisions is consistent with the requiremen ts of the CAA as interpreted in the EPA's recommendations in the EPA's SSM Policy. The EPA believes that 11-1 -2 Miss. Code R. § 10.1 and 11-1-2 Miss. Code R. § 10.3 create a ffirmative defenses that are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A ), 110(a)(2)(C), and 302(k). In addition, by purporting to create a bar to enforcement that applies not just to monetary penalties but also to injunctive relief, these provisions are inconsistent with the requirements of CAA sections 113 and 304. By not including sufficient criteria to assure that sources seeking to

raise these affirmative defenses have in fact been properly designed, maintained, andThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 201 of 327 operated, and to assure that sources have ta ken all appropriate steps to minimize excess emissions, 11-1-2 Miss. Code R. § 10.1 also fails to be sufficiently narrowly drawn to justify shielding from monetary penalties for violations. The comparable affirmative

defense for maintenance in 11-1-2 Miss. C ode R. § 10.3 is not consistent with CAA requirements because maintenance is a normal mode of source operation during which the source should be expected to comply w ith the applicable emission limitations. Thus, these provisions are not appropr iate as affirmative defense provisions because they are

inconsistent with fundamental requirements of the CAA. The EPA is proposing to find that 11-1-2 Miss. Code R. § 10.2 is substantially inadequate to meet CAA requirements b ecause it provides an exemption for excess emissions that occur during startup and shutdown, which are normal modes of source operation during which sources should comply with applicable emission limitations. Such an exemption provision is inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SI Ps as required by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to find that these provisions are substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call with respect to these provisions.

7. North Carolina a. Petitioner's Analysis The Petitioner objected to two generally applicable provisions in the North Carolina SIP that provide exemptions for emissions exceeding otherwise applicable SIP

emission limitations at the discretion of the state agency during malfunctions (15A N.C.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 202 of 327 Admin. Code 2D.0535(c)) and during startup and shutdown (15A N.C. Admin. Code 2D.0535(g)). 136 

### The Petitioner argued that both provisi ons allow a state official to exempt sources from compliance with otherwise applicable SIP emission limitations, and therefore both provisions allow a state official to decide whether a violation has occurred. This decision would preclude enforcement action by the EPA and citizens for both civil penalties and injunctive relief, and such an interpretation is inconsistent with the CAA and the EPA's SSM policy interpreting the CAA. The Petitioner noted that the director's discretion provision for malfunctions provide d by 15A N.C. Admin. Code 2D.0535(c) is limited to 15 percent of operating time dur ing each calendar year. According to the Petitioner, this temporal limit does not re nder the provision permissible under the CAA and the EPA's SSM policy interpreting the CAA, because the limit "does nothing to ensure that ambient air quality standards are met." 137



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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitations must be considered violations, whet her or not the state elects to exercise its

enforcement discretion.

136 

### Petition at 57-58.

137 

### Petition at 58.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 203 of 327 The EPA believes that 15A N.C. Admi n. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g) are impermissible as in sufficiently bounded director's discretion provisions. The explicit text of 15A N.C. Admin. Code 2D .0535(c) states that "[a]ny

excess emissions ... are considered a viola tion ... unless the owner or operator of the

source of excess emissions demonstrates to th e Director, that the excess emissions are the result of a malfunction." Similarly, 15A N. C. Admin. Code 2D.0535(g) provides that a state official may determine that excess emissions during startup and shutdown are unavoidable, in which case emissions exceedi ng the otherwise applicable SIP limitations

are not considered violations . These provisions vest the st ate official with unilateral power to grant an exemption from the ot herwise applicable SIP emission limitation, without any public process at th e state or federal level. Su ch a determination that the excess emissions in a given event do not constitute a violation could preclude enforcement by the EPA or through a citizen su it. While both provision s contain a list of

factors that the state official "shall consider" in making th e discretionary determination, they nevertheless empower the state official to create an exemption from the emission limitations, and such an exemption is impermissi ble in the first instance. Such a director's discretion provision undermines the emission li mitations in the SIP, and the emissions reductions they are intended to achieve, and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of an insufficiently bounded director's discretion provision in 15A N. C. Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g) is thus a substantial inadequacy and renders these specific SIP provisions impermissible for this reason.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 204 of 327 Finally, the EPA notes that 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g) contain a number of criteria for consideration by the state official when deciding whether the excess emi ssions should be treated as exempt and thus not as a violation. Superficially, these crit eria are similar to those recommended by the EPA for affirmative defense provisions for ma lfunctions to meet CAA requirements, but they are not presented as criteria for an a ffirmative defense. Instead, each provision is

structured so that if the source has met thes e criteria, the state official will deem the excess emissions not a violation. Moreover, in stead of requiring that the source establish these facts in an administrative or judicial pr ocess, the provision a ppears to authorize the

state official to make a unilateral determina tion whether the emissions are a violation and thus appears to bar enforcement by the EPA or through a citizen suit. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g). The EPA believes that both of these provisions could be read to al low for exemptions from otherwise applicable SIP emission limitations through a state official's unilateral ex ercise of discretionary authority that is insufficiently bounded and includes no additional public process at th e state or federal level. Moreover, the discretion created by this provision could be r ead to allow case-bycase exemptions from emission limitations when such exemptions are not permissible in the first instance. Such exemption provisions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A), 110( a)(2)(C), and 302(k). In addition, by creating these impermissible exemptions, the state has define d violations in a way that would interfereThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 205 of 327 with effective enforcement by the EPA and citizens for excess emissions during these events as provided in CAA sections 113 a nd 304. For these reasons, the EPA is proposing to find 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. Admi n. Code 2D.0535(g) are substantially inadequate to meet CAA requirements and thus is proposing to issue a SIP call with respect to these provisions. 8. North Carolina: Forsyth County a. Petitioner's Analysis The Petitioner objected to two generally applicable provisions in the Forsyth County Code that provide exemptions for em issions exceeding otherwise applicable SIP

emission limitations at the di scretion of a local official during malfunctions (Forsyth County Code, ch. 3, 3D.0535(c)) and startup an d shutdown (Forsyth County Code, ch. 3, 3D.0535(g)). 138 

### The Petitioner argued that these "local regulations have the same problems as the [North Carolina] state-wide regulations" addressed in the previous

section. 139 

### The Petitioner argued that both provisions allow the local official to exempt sources from compliance with otherwise applicable SIP emission limitations, and therefore both provisions allow the local o fficial to decide wh ether a violation has occurred. This decision would preclude acti on by the EPA and citizens for both civil penalties and injunctive relief, and such a provision is inconsistent with the CAA and the EPA's SSM policy interpreting the CAA.

b. The EPA's Evaluation

138 

### Petition at 58.

139 

### Petition at 58.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 206 of 327 The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations, whether automatic or through the exercise of a government official's discretion. In accordan ce with the requirem ents of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissi ons above the level of the applicable

emission limitations must be considered viol ations, whether or not the state elects to

exercise its enforcement discretion. The EPA believes that Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g) are impermissi ble as insufficiently bounded director's discretion provisions. Forsyth County Code, ch. 3, 3D.0535(c) states that "[a]ny excess

emissions ... are considered a violation ... unle ss the owner or operator of the source of excess emissions demonstrates to the Director, that the excess emissions are the result of a malfunction." Similarly, Forsyth County Code , ch. 3, 3D.0535(g) provides that a local official may determine that excess emi ssions during startup and shutdown are unavoidable, in which case emissions exceedi ng the otherwise applicable SIP limitations

are not considered violations . These provisions vest the local official with unilateral power to grant an exemption from the ot herwise applicable SIP emission limitation, without any public process at the local, state, or federal leve l. Such a determination that the excess emissions in a given event do not constitute a violation could preclude enforcement by the EPA or through a citizen su it. While both provision s contain a list of

factors that the local official "shall consider" in making th e discretionary determination, they nevertheless empower the local official to create an exemption from the emissionThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 207 of 327 limitation, and such an exemption is impermissibl e in the first instance. Such a director's discretion provision undermines the emission li mitations in the SIP, and the emissions reductions they are intended to achieve, and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of an insufficiently bounded director's discretion provision in Forsyt h County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g) is thus a s ubstantial inadequacy and renders these specific SIP provisions imper missible for this reason. As with the comparable statewide SIP provisions, the EPA notes that Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g) also would not qualify as affirmative defense provisi ons consistent with CAA requirements. The provisions authorize the local official to deem excess emissions exempt and thus not subject to enforcement for injunctive relief. The provisions also appear to authorize the

local official to make a unilateral determina tion that the emissions are not a violation and thus to bar enforcement by the EPA or through a citizen suit. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g). The EPA believes that both of these provisions could be read to allow for exemptions from otherwise applicable SIP emission limitations through a local official 's unilateral exercise of discretionary authority that is insufficien tly bounded and includes no addi tional public process at the local, state, or federal level. Moreover, the discretion created by this provision could be read to allow case-by-case exemptions from emission limitations when such exemptions are not permissible in the first instance. Such exemption provisions are inconsistent withThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 208 of 327 the fundamental requirements of the CAA with respect to em ission limitations in SIPs as required by sections 110(a)(2 )(A), 110(a)(2)(C), and 302( k). In addition, by creating these impermissible exemptions, the air agen cy has defined viola tions in a way that

would interfere with effectiv e enforcement by the EPA and citizens for excess emissions during these events as provided in CAA s ections 113 and 304. For these reasons, the EPA is proposing to find that Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g) are substantially inadeq uate to meet CAA requirements and thus is proposing to issue a SIP call with respect to these provisions.

9. South Carolina a. Petitioner's Analysis The Petitioner objected to three provisions in the South Carolina SIP, arguing that they contained impermissible source categ ory- and pollutant-specific exemptions. 140 

### The Petitioner characterized these provisions as providing exemptions from opacity limits for fuel-burning operations for excess emissions th at occur during startup or shutdown (S.C. Code Ann. Regs. 61-62.5 St 1(C)), exemptions from NOx limits for special-use burners that are operated less than 500 hours per year (S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14)), and exemptions from sulfur lim its for kraft pulp mills for excess emissions that occur during startup, shutdown, or ma lfunction events (S.C. Code Ann. Regs. St 4(XI)(D)(4)). The Petitioner argued that su ch exemptions violate the fundamental CAA requirement that all excess emissions be consider ed violations and that they interfere with enforcement by the EPA and citizens.

140 

### Petition at 65-66.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 209 of 327 b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations. In accord ance with CAA sections 110(a)(2)(A) and 302(k), SIPs must contain "emission limita tions" and those limitations must be continuous. Thus, any excess emissions above the level of the appl icable SIP emission

limitation must be considered a violation of such limitation, regardless of whether the

state elects to exercise its enforcement disc retion. SIP provisions that create exemptions such that the excess emissions during star tup, shutdown, maintenance, or malfunctions are not violations of the applicable SIP em ission limitations are inconsistent with the fundamental requirements of the CAA. The first provision identified by the Petitione r states that "[t]he opacity standards set forth above do not apply during startup or shutdown." The EPA agrees with the Petitioner that the effect of this language is to exempt excess emissions that occur during startup or shutdown from otherwise applicable opacity standards, essentially treating such

emissions as non-violations. The EPA believe s that such automatic exemptions are impermissible under the CAA. By having SI P provisions that define what would otherwise be violations of the applicable SIP emission limitations as non-violations, the state has effectively negated the ability of th e EPA or the public to enforce against those violations. Therefore, the EPA believes that th e inclusion of such an automatic exemption in S.C. Code Ann. Regs. 61-62.5 St 1(C) is impermissible and re nders the provision a substantial inadequacy under the CAA. With respect to the Petitioner's second objection relating to the exemption for special-use burners, however, the EPA disagree s with the Petitioner's characterization ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 210 of 327 the provision. S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14) provides: "The following sources are exempt from all requirements of this regulation unless otherwise specified: . . . (14) Special use burners, such as start-up/ shut-down burners, that are operated less than 500 hours a year." The Petitioner argued that this provision provides an exemption from otherwise applicable NOx limitations for exce ss emissions that occur during startup or shutdown. Although this provision superficially resembles an exemption for emissions during startup and shutdown, the EPA interprets this provision merely to define a specific source category—special-use burners—that is not subject to control under S.C. Code Ann. Regs. 61-62.5 St 5.2, Control of Oxides of Nitrogen (NOx) . In other words, the provision reflects that regulation of special-use burners is not necessary in order to meet the applicable RACT requirements or any ot her CAA requirements for NOx emissions in this area. Rather than an exemption for NOx emissions during startup and shutdown for a source category that is regulated for NOx, this provision merely reflec ts that this category of source is not subject to regulati on under S.C. Code Ann. Regs. 61-62.5 St 5.2. Therefore, the EPA disagrees with the Peti tioner that S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14) renders the South Caroli na SIP substantially inadequate. Finally, the EPA agrees that S.C. C ode Ann. Regs. St 4(XI)(D)(4) implicitly includes impermissible exemptions for ex cess emissions during startup, shutdown, and

malfunction events for the affected sources. Th e provision states that "[t]he Department will consider periods of excess emissions reported under Subpart D(3) of this section to

be indicative of a violation if" the emissions from the specified source categories exceed certain limits over certain time periods. For example, for recovery furnaces, S.C. Code Ann. Regs. St 4(XI)(D)(4)(b) specifies that excess emissions will be "indicative of aThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 211 of 327 violation" if "(a) the numbe r of 12 hour exceedances from recovery furnaces is greater than 1% of the total number of contiguous 12 hour periods in a quarter (excluding periods of startup, shutdown, or malfunction . . . )." The parenthetical exp licitly excludes the excess emissions that occur during start up, shutdown, and malfunction, automatically treating those emissions as non-violations . The other two source category-specific provisions to be considered in determining whether excess emissions are indicative of a violation contain similar pare nthetical exclusions. Therefor e, these provisions could reasonably be construed to preclude the EPA and the public from enforcing against

violations that occur during these SSM events at these sources. The EPA believes that S.C. Code Ann. Regs. St 4(XI)(D)(4) in cludes automatic exemptions for excess emissions during SSM events for the three categ ories of sources and is thus substantially inadequate to satisfy CAA requirements. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to S.C. Code Ann. Regs. 61- 62.5 St 1(C). The EPA believes that S.C. Code Ann. Regs. 61-62.5 St 1(C) allows for an exemption from otherwise applicable SIP emission limitations and that such exemptions

are inconsistent with the fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). The EPA also proposes to grant the Petiti on with respect to S.C. Code Ann. Regs. St 4(XI)(D)(4). This provi sion appears to define violations at three source categories in a way that excludes ex cess emissions that occur during SSM events.

It is unclear whether this provision is intended only to apply to the exercise of enforcement discretion by state personnel, but the EPA believes that it could reasonably be interpreted to preclude the EPA and citi zen enforcement as well. Because S.C. CodeThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 212 of 327 Ann. Regs. St 4(XI)(D)(4) appears to define violations of the applicable emission limitations in a way that excludes excess emi ssions during SSM events , it is inconsistent with the fundamental requirements of CA A sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposi ng to find that S.C. Code Ann. Regs. 61- 62.5 St 1(C) and S.C. Code Ann. Regs. St 4( XI)(D)(4) are substantia lly inadequate to meet CAA requirements and proposes to issue a SIP call with respect to these provisions. However, the EPA proposes to deny the Pe tition with respect to S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14), which does not exempt excess emissions from an otherwise applicable SIP emission limitati on during startup and shutdown but rather excludes a specific source category from regulation under the South Carolina SIP, because such regulation was deemed unnece ssary to meet other applicable CAA requirements. As a consequence, this provision does not constitute a substantial inadequacy in the SIP.

10. Tennessee a. Petitioner's Analysis The Petitioner objected to three provisions in the Tennessee SIP. 141 

### First, the Petitioner objected to two provisions that auth orize a state official to "excuse or proceed upon" (Tenn. Comp. R. & Regs. 1200-3-20-.07(1)) violations of otherw ise applicable SIP emission limitations that occur during "mal functions, startups, and shutdowns" (Tenn. Comp. R. & Regs. 1200-3-20-.07(3)). The Pe titioner argued that together, these provisions constitute a "blanket exemption from enforcement at the unfettered discretion

141 

### Petition at 67-69.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 213 of 327 of" a state official. Further, the Petitioner contended that once a violation has been "excused" by the state official, that decisi on could preclude enforcement by the EPA or

citizens in violation of the CAA. Second, the Petitioner objected to a provision that excludes excess visible emissions from the requirement that the state automatically issue a notice of violation for all excess emissions (Tenn. Comp. R. & Regs . 1200-3-5-.02(1)). Th is provision states that "due allowance may be made for visible emissions in excess of that permitted in this chapter which are necessary or unavoidab le due to routine startup and shutdown conditions." The Petitioner argued that Tenn. Comp. R. & Regs. 1200-3-5-.02(1) is inconsistent with EPA's interpretation of the CAA because it operates as a blanket exemption for opacity violations.

b. The EPA's Evaluation While the Petitioner suggested that Tenn. Comp. R. & Regs. 1200-3-20-.07(1) and Tenn. Comp. R. & Regs. 1200- 3-20-.07(3) combine to operate as an impermissible discretionary exemption, the EPA believes th at these provisions ar e better understood as attempting to provide the state agency with th e discretion to decide whether to pursue an enforcement action. As discussed more fully in section IX.A of th is notice, the EPA's SSM Policy has consistently encouraged st ates to utilize traditional enforcement discretion within appropriate bounds for violations relating to excess emissions that occur during SSM events. Moreover, the 1982 SSM Guidance explicitly recommended criteria that states might consider in the event that they elected to form alize their enforcement discretion with provisions in the SIP. Howeve r, such enforcement discretion provisions in a SIP must be "state-only," meaning that the provisions apply only to the state's ownThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 214 of 327 enforcement personnel and not to the EPA or to others. Here, the Tennessee SIP goes too far because a court could reasonably conclude that the provisions in question preclude the EPA and the public from enforcing against viol ations that occur during SSM events if the

state official chooses to "exc use" such violations. Therefore, the EPA ultimately agrees with the Petitioner that Tenn. Comp. R. & Regs. 1200-3-20-.07(1) and Tenn. Comp. R. & Regs. 1200-3-20-.07(3) are substa ntially inadequate to sa tisfy CAA requirements. In regard to Tenn. Comp. R. & Regs. 1200- 3-5-.02(1), the EPA agrees with the Petitioner that this provisi on operates as an impermissible discretionary exemption

because it allows a state official to excuse excess visible emissions after giving "due allowance" to the fact that they were emitted during startup or shutdown events. The EPA believes that this provision is impermissi ble because it create s unbounded discretion that purports to make a state offici al the unilateral arbiter of whether the excess emissions in a given event constitute a viola tion of otherwise ap plicable SIP emission limitations. More importantly, the provision purports to authorize the state official to create exemptions from applicable SIP emission limitations when such exemptions are impermissible in the

first instance. As discussed in more de tail in section VII.A of this notice, these types of director's discretion provisions undermine the purpose of emission limitations and the reductions they are intended to achieve, th ereby rendering them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of such a director's discretion provision in Tenn. Com p. R. & Regs. 1200-3-5-.02(1) is therefore a substantial inadequacy that renders the provisi on impermissible under the CAA. c. The EPA's ProposalThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 215 of 327 The EPA proposes to grant the Petition w ith respect to Tenn. Comp. R. & Regs. 1200-3-20-.07(1) and Tenn. Comp. R. & Re gs. 1200-3-20-.07(3). These enforcement discretion provisions could reasonably be interpreted to preclude EPA and citizen enforcement of applicable SIP emission lim itations, in violation of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). The EPA also proposes to gran t the Petition with respect to Tenn. Comp. R. & Regs. 1200-3-5- .02(1). The discretion created by this provision allows for revisions of the applic able SIP emission limitations without meeting the applicable SIP revision requirements of the CAA, and it allows case-by-case exemptions from emission limitations when such exemptions are not permissible in the first instance. Thus, this provision is also inconsistent with CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to find that these provisions are substantially in adequate to meet CAA requirements and proposes to issue a SIP call with respect to these provisions. 11. Tennessee: Knox County a. Petitioner's Analysis The Petitioner objected to a provision in the Knox County portion of the

Tennessee SIP that bars evidence of a viola tion of SIP emission limitations from being used in a citizen enforcement action (Knox County Regulation 32.1(C)). 142 

### The provision specifies that "[a] determination that there has been a violation of these regulations or orders issued pursuant theret o shall not be used in any law suit brought by any private citizen." The Petitioner argue d that this provision woul d prevent reports of SSM

142 

### Petition at 69.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 216 of 327 conditions, which owners and operators are required to submit per Knox County Regulation 34.1(A), from being used as evid ence in citizen suits, thereby undermining the express authorization of citizen enforcement actions under the CAA.

b. The EPA's Evaluation The EPA agrees with the Petitioner that Knox County Regulation 32.1(C) is inconsistent with the fundamental requireme nts of the CAA. Sec tion 113(e)(1) of the CAA requires a court to take into consideration "the dur ation of the violation as established by any credible ev idence" in determining penalt ies in citizen enforcement actions. Moreover, section 114(c) of the CAA states that "[a]ny records, reports or

information" obtained from sources "shall be av ailable to the public . . . ." In accordance with these statutory mandates, the EPA promul gated its "credible ev idence rule" in 1997. That rule states: "[f]or purpose of . . . establis hing whether or not a person has violated or is in violation of any standard . . . , the [SIP] must not preclude the use, including the exclusive use, of any credib le evidence or information, re levant to whether a source would have been in compliance w ith applicable requirements . . ." 143 

### The EPA believes that the Knox County Regulation 32.1(C) runs afoul of these statutory and regulatory provisions. Knox County Regulation 32.1(c) explicitly bars a

state official's determination that there ha s been a violation of a SIP emission limitation from being used as evidence in a citizen enforcement action, even though SIPs are prohibited from precluding the use of such evidence. The provision could also be interpreted to bar citizens from using evidence of a violation used by the state official in

143 

### 51 CFR 31.212(c); see also "Credible Evidence Revisi ons," 62 FR 8155 at 8314 (Feb. 24, 1997).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 217 of 327 making such a determination, including repor ts of SSM conditions. Consequently, Knox County Regulation 32.1(C) is inconsistent wi th the fundamental requirements of CAA sections 113(e)(1) and 114(c) and the credible evidence rule . Moreover, by seeking to restrain the ability of priv ate citizens to pursue enforcem ent actions, the provision is

inconsistent with the fundamental enfor cement structure created by Congress in CAA section 304. As such, the EPA believes that the Knox County Regulation 32.1(C) constitutes a substantial inadequacy in the Tennessee SIP. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Knox County Regulation 32.1(C). This provision precludes the use of a state determination th at a violation has occurred from being used as evidence in a citizen enforcement act ion, in violation of CAA sections 113(e)(1), 114(c), and 304, and th e credible evidence ru le. Therefore, the EPA is proposing to find that this provisi on is substantially inad equate to meet CAA requirements and proposes to issue a SIP call w ith respect to this pr ovision in the Knox County portion of the state's SIP. 12. Tennessee: Shelby County a. Petitioner's Analysis The Petitioner objected to a provision in the Shelby County Code (Shelby County Code § 16-87) that addresses enforcemen t for excess emissions that occur during "malfunctions, startups, and shutdowns" by incorporating by reference the state's provisions in Tenn. Comp. R. & Regs. 1200-3-20. 144 

### Shelby County Code § 16-87

144 

### Petition at 69-70.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 218 of 327 provides that "all such additions, dele tions, changes and amendments as may subsequently be made" to Tennessee's regulations will automatically become part of the Shelby County Code. The Petitioner argued th at once Tennessee changes its regulations, those revised provisions will be effective in the Shelby County Code but will not be effective as part of the SIP until they are submitted to the EPA and approved.

b. The EPA's Evaluation The EPA agrees that because Shelby County Code § 16-87 incorporates by reference provisions in the Tennessee SIP that are substantially inadequate, the Shelby County portion of the Tennessee SI P is likewise substantially inadequate to satisfy the fundamental requirements of the CAA for the same reasons. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Shelby County Code § 16-

87. For the same reasons that the EPA has determined that the Tennessee SIP is substantially inadequate to meet CAA requirements, the EPA believes that the Shelby County portion of the Tennessee SIP is substant ially inadequate as well. Therefore, the EPA proposes to issue a SIP call with respec t to this provision in the Shelby County portion of the state's SIP. F. Affected States in EPA Region V

1. Illinois a. Petitioner's Analysis The Petitioner objected to three generally a pplicable provisions in the Illinois SIP which together have the eff ect of providing discretionary exemptions from otherwise applicable SIP emission limitations, and such exemptions are impermissible under theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 219 of 327 CAA because the statute and the EPA's inte rpretation of the CAA in the SSM Policy require that all such excess emi ssions be treated as violations. 145,146 

### The Petitioner noted that the provisions invite sources to re quest, during the permitt ing process, advance permission to continue to operate during a malfunction or breakdown, and, similarly to request advance permission to "violate" othe rwise applicable emission limitations during startup (Ill. Admin. Code tit. 35 § 201.261). Th e Illinois SIP provision s establish criteria

that a state official must consider before granting the advance perm ission to violate the emission limitations (Ill. Admin. Code tit. 35 § 201.262). However, the Petitioner asserted, the provisions state that, once granted, the advan ce permission to violate the emission limitations "shall be a prima facie defense to an enforcement action" (Ill. Admin. Code tit. 35 § 201.265).

The Petitioner noted that Illinois has cl aimed that its SIP provisions do not provide for advance permission to violate em ission limitations but that its SIP provisions instead authorize "case-by- case claims of exemption." 147 

### The Petitioner argued that despite this explanation, the language in the SIP is not clear and appears to grant advance permission for violations during malfuncti on and startup events . Furthermore, the

145 

### The EPA notes that the Petitioner also iden tified several additi onal pollutant-specific and source category-specific provisions in the Illinois SIP that it alleged are inconsistent with the CAA and the EPA's SSM Policy. Howeve r, the Petitioner did not request that the EPA address those SIP provisions in its re medy request, and thus the EPA is not addressing those provisions in this acti on. The EPA may elect to evaluate those provisions in a later action.

146 

### Petition at 33-36.

147 

### Petition at 35 (citing Ill. Envtl. Prot . Agency, Statement of Basis for a Planned Revision of the CAAPP Permit for U.S. Steel Corp. Granite City Works (Mar. 15, 2011), at 26-27). The EPA notes that the Petitioner a ppears to have cited th e incorrect portion of this document and that the corr ect citation is to pages 36-37.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 220 of 327 Petitioner objected because the effect of gran ting that permission would be to provide the source with an absolute defense to any la ter enforcement action, that is, "a defense [would] attach[] at the state's discretion." Th e Petitioner argued that this approach would violate the fundamental requirement that all excess emissions be considered violations. Finally, the Petitioner objected to the use of the term "pri ma facie defense" in Ill. Admin. Code tit. 35 § 201.265, arguing that the term is "ambiguous in its operation." The Petitioner argued that the provi sion is not clear regarding wh ether the defense is to be evaluated "in a judicial or administrative proceeding or whether the Agency determines its availability." Allowing defenses to be ra ised in these undefined contexts, the Petitioner argued, is "inconsistent with the enforcem ent structure of the Clean Air Act." The

Petitioner asserted that "if . . . the "prima facie defense" is anything short of the "affirmative defense" as contemplated in th e 1999 SSM Guidance, then "it clearly has the potential to interfere with EP A and citizen enforcement."

b. The EPA's Evaluation The EPA agrees that the CAA does not al low for discretionary exemptions from otherwise applicable SIP emission limitations . In accordance with the requirements of CAA section 110(a)(2)(A), SIPs must contai n emission limitations and, in accordance

with the definition of "emission limitati ons" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be consid ered violations, whet her or not the state

elects to exercise its enfor cement discretion. The EPA agrees that together Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 §This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 221 of 327 201.265 148 

### can be read to create exemptions by aut horizing a state official to determine in the permitting process that the excess emissi ons during startup and malfunction will not be considered violations of the applicable emission limitations. The language of the SIP on its face appears to permit the state official to grant advance permission to "continue to operate during a malfunction or breakdown" or "to violate the standard s or limitations . . . during startup" (Ill. Admin. Code tit. 35 § 201.261(a)).

The EPA notes that the Petitioner's charac terization of Illinois' s interpretation of

its SIP is not accurate. While the Petitione r alleged that Illinois believed its SIP provisions to authorize "case-by- case exemptions," Illinois in fact described the effect of the permission granted under these provision s as providing the s ource with the: ...opportunity to make a claim of ma lfunction/breakdown or startup, with the viability of such claim subject to specific review against the requisite requirements. Indeed, 35 IAC 201.265 cl early states that violating an applicable state standard even if consistent with any expression of authority regarding malfunction/breakdow n or startup set forth in a permit shall only constitute a prima facie defense to an enforcement action for violation of said regulation. (Ill. Envtl. Prot. Agency, Statement of Basi s for a Planned Revision of the CAAPP Permit for U.S. Steel Corp. Granite City Works (M arch 15, 2011), at 37.) Thus, the state claimed that under its SIP provisions, any excess em issions during periods of startup or

malfunction would still constitute a "violation" and that the only effect of the permission granted by the state official in the permit woul d be to allow a source to assert a "prima

148 

### The EPA notes that there are a number of other provisions in the same portion of the Illinois SIP that are integral to the regula tion of startups, shutdo wns, and malfunctions. Those provisions include Ill. Admin. Code tit. 35 § 201.149, Ill. Admin. Code tit. 35 § 201.263, and Ill. Admin. Code tit. 35 § 201.264. The Petitioner did not object to these provisions in its Petition, but because they are part of a functional scheme in the SIP, the state may elect to revise these provisi ons in accordance with the EPA's proposal.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 222 of 327 facie defense" in an enforcement action. Even in light of this explanation, the EPA agrees that the plain language of the SIP provisions do not make explicit this limitation on the state official's authorization to grant exemptions. Indeed, by expressly granting "permission," the provisions are ambiguous a nd could be read as allowing the state

official to be the unilateral arbiter of whether the excess emissions in a given malfunction, breakdown, or startup event cons titute a violation. By deciding that an

exceedance of the emission limitation was not a "violation," exercise of this discretion could preclude enforcement by the EPA or through a citizen suit. Most importantly, however, the grant of permission would authoriz e the state official to create an exemption from the otherwise applicable SIP emission limitation, and such an exemption is impermissible in the first instance. Such a director's discretion provision undermines the

emission limitations and the emission reduction s they are intended to achieve and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the

inclusion of director's disc retion provisions in Ill. Ad min. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265 is thus a substantial inadequacy and renders these spec ific SIP provisions impermissible for this

reason. Furthermore, even if the Illinois SI P provisions cited by the Petitioner are intended to provide only an affirmative defens e to enforcement, rather than as advance permission to violate the otherwise applicab le SIP emission limitations, the EPA agrees that the "prima facie defense" mechanism in Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265 is not an acceptable affirmative defense provision under th e CAA as interpreted in the EPA's SSMThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 223 of 327 Policy. Although the EPA believes that narr owly drawn affirmative defenses are permitted for malfunction events ( see section VII.B of this notice), the EPA's interpretation of the CAA is that such affi rmative defenses can only shield the source from monetary penalties and ca nnot be a bar to injunctive re lief. An affirmative defense provision that purports to bar any enforcement action for inj unctive relief for violations

of emission limitations is inconsistent with the requirements of CAA sections 113 and 304. In addition, Illinois's SIP provisions allow sources to obtain a prima facie defense for violations that occurred during startup peri ods, and, as discussed in section VII.C of this notice, the EPA does not believe affirmativ e defenses for violations of the otherwise applicable SIP emission limitations that o ccur during startup or shutdown periods is permissible under the CAA. Significantly, these Illinois SIP provisions are also deficient because, although not defined in the Illinois SIP, a prima facie defense typically would shift the burden of proof to the opposing party, in this case the part y bringing the enforcement action against the source. The EPA's longstanding interpretation of the CAA is that an affirmative defense provision must be narrowly drawn and must re quire the source to establish that it has met the conditions to justif y relief from monetary penalties for excess emissions in a given event. Thus, an acceptable affirmative defense under EPA's interpretation of the CAA places the burden on the source to demonstrate that it has met all the appropriate criteria

before it is entitled to the defense. Lastly, the criteria that the Illinois SIP provisions require be met before advance permission and the prima facie defense may be granted are no t consistent with the criteria that the EPA recommends in the SSM Policy. The EPA acknowledges that the SSMThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 224 of 327 Policy is only guidance concerning what types of SIP provisions could be consistent with the requirements of the CAA. Nonethele ss, through this rulemaking, the EPA is proposing to determine that Ill. Admin. C ode tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265 do not include criteria that are sufficiently robust to qualify as an acceptable affirmative defense provision. The EPA believes that the inclusion of the complete ba r to liability, including injunctive relief, the availability of the defense for violations during startup and shutdown, the burden-shifting effect, and the insufficiently robust qualifyi ng criteria in Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, a nd Ill. Admin. Code tit. 35 § 201.265, are substantial inadequacies and render these specific SIP provisions impermissible. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265. The EPA believes that these provisi ons allow for exemptions from the otherwise applicable emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emi ssion limitations in SIPs. In addition, Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265 potentially allow for such an exemption through a state official's

unilateral exercise of discreti onary authority, and such provi sions are inconsistent with the fundamental requirements of the CAA with respect to SIPs and SIP revisions in sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For thes e reasons, the EPA is proposing to find that Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265 are substantiall y inadequate to meet CAA requirementsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 225 of 327 and thus proposing to issue a SIP call with respect to these provisions. The EPA is proposing to grant the Petition with respect to these provisions even though the state has stated that the effect of these provisions only pr ovides sources with a prima facie defense in an enforcement procee ding. Illinois's SIP provisions do not constitute an affirmative defense provision c onsistent with the EPA's recommendations in the EPA's SSM Policy interpreting the CAA, for a number of reasons: it is not clear that the defense applies only to monetary pena lties, which is inconsistent with the requirements of CAA sections 113 and 304; th e defense applies to violations that occurred during startup periods, which is in consistent with CAA sections 113 and 304; the provisions shift the burden of proof to the enforcing part y; and finally, the provisions

do not include sufficient criteria to assure th at sources seeking to raise the affirmative defense have in fact been properly designed, maintained, and operated, and to assure that sources have taken all appropriate steps to minimize excess emissions. Accordingly, even if Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262, and Ill. Admin. Code tit. 35 § 201.265 are interprete d to provide a defense to enforcement rather than an exemption, the EPA is proposing to find that the provisions are substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call with respect to these provisions.

2. Indiana a. Petitioner's Analysis The Petitioner objected to a generally app licable provision in the Indiana SIP that allows for discretionary exemptions duri ng malfunctions (326 Ind. Admin. Code 1-6-This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 226 of 327 4(a)). 149,150 

### The Petitioner objected to the provisi on because it provides an exemption from the otherwise applicable SIP emissi on limitations, and such exemptions are impermissible under the CAA because the stat ute and the EPA's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as violations. The Petitioner noted that the provision is ambiguous because it states that excess emissions during malfunction periods "shall not be considered a violation" if the source

demonstrates that a number of conditions ar e met (326 Ind. Admin. Code 1-6-4(a)), but the provision does not specify to whom or in what forum such demonstration must be made. If made in a showing to the state, th e Petitioner argued, the provision would give a state official the sole authority to determine that the excess emissions were not a violation and could thus be read to pr eclude enforcement by the EPA or citizens in the event that

the state official elects not to treat the excess emissions as a violation. Thus, in addition to creating an impermissible exemption for the excess emissions, the Petitioner argued that the SIP's provision is also inconsistent with the CAA as interpreted in the EPA's SSM Policy because it allows the state official to make a unilateral decision that the excess

emissions were not a violati on and thus bar enforcement for the excess emissions by the

EPA and citizens. Alternatively, the Petitioner noted, if the demonstration was required to have been

149 

### The EPA notes that the Petitioner also iden tified several additi onal pollutant-specific and source category-specific provisions in the Indiana SIP that it alleged are inconsistent with the CAA and the EPA's SSM Policy. Howeve r, the Petitioner did not request that the EPA address those SIP provisions in its re medy request, and thus the EPA is not addressing those provisions in this acti on. The EPA may elect to evaluate those provisions in a later action.

150 

### Petition at 36-37.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 227 of 327 made in an enforcement context, the provi sion could be interpre ted as providing an affirmative defense. The Petitioner argued th at even if interpreted in this way, the provision is not permissible because it "app ears to confuse an enforcement discretion approach with the affirmative defense approach ." Furthermore, the Petitioner argued that 326 Ind. Admin. Code 1-6-4(a) is not an acceptable affirmative defense provision because it "could be interpreted to preclude EPA and citizen enforcement and shield sources from injunctive relief."

b. The EPA's Evaluation The EPA agrees that the CAA does not al low for discretionary exemptions from otherwise applicable SIP emission limitations . In accordance with the requirements of CAA section 110(a)(2)(A), SIPs must contai n emission limitations and, in accordance

with the definition of "emission limitati ons" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be consid ered violations, whet her or not the state

elects to exercise its enforcement disc retion. SIP provisions such as 326 Ind. Admin. Code 1-6-4(a) that can be interpreted to auth orize a state official to determine unilaterally that the excess emissions during malfunctions are not violations of the applicable

emission limitations are incons istent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The EP A believes that the inclusion of a provision that allows discretionary exemptions in th e SIP is thus a substa ntial inadequacy and

renders 326 Ind. Admin. Code 1- 6-4(a) impermissible.

The EPA believes that 326 Ind. Admin. C ode 1-6-4(a) is al so impermissible because the provision can be inte rpreted to make a state official the unilateral arbiter ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 228 of 327 whether the excess emissions in a given ma lfunction event constitute a violation. The 326 Ind. Admin. Code 1-6-4(a) provides that if a source demonstrates that four criteria are met, the excess emissions "shall not be cons idered a violation." Because the provision

does not establish who is to evaluate wh ether the source has made an adequate demonstration, the provision could be read to authorize a state offi cial to judge that violations have not occurred even though th e emissions exceeded the applicable SIP emission limitations. These provisions therefore a ppear to vest the state official with the unilateral power to grant exemptions from otherwise applicable SIP emission limitations, without any additional public pr ocess at the state or federal level. By deciding that an

exceedance of the emission limitation was not a "violation," exercise of this discretion could preclude enforcement by the EPA or through a citizen suit. Most importantly, however, the provision could be read to authoriz e the state official to create an exemption from the otherwise applicable SIP emission limitation, and such an exemption is impermissible in the first instance. Such a director's discretion provision undermines the

emission limitations and the emissions reduc tions they are intended to achieve and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of a director's discretion provi sion in 326 Ind. Admin. Code 1-6-4(a) is thus a substantial inadequacy and renders these sp ecific SIP provisions impermissible for this

reason.

The EPA believes that even if 326 Ind. Ad min. Code 1-6-4(a) is interpreted to allow the source to make the required de monstration only in the context of an enforcement proceeding, the conditions set fo rth in the provision do not render it an acceptable affirmative defense provision. A lthough the EPA believes that narrowlyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 229 of 327 drawn affirmative defenses are permitted under the CAA for malfunction events ( see section VII.B of this notice), the EPA's interpretation of the CAA is that such affirmative defenses can only shield the source from m onetary penalties and cannot be a bar to injunctive relief. An affirmative defense provi sion that purports to bar any enforcement action for injunctive relief fo r violations of emission limitations is inconsistent with the requirements of CAA sections 113 and 304. Furthermore, Indiana's SIP provision is deficient because even if it were interpreted to create an affirmative defense ra ther than an exemption from the applicable emission limitations, it does so with conditions that are not consistent with the criteria that the EPA recommends in the SSM Policy. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP provisions could be consistent with the requirements of the CAA. Nonethele ss, through this rulemaking, the EPA is proposing to determine that 326 Ind. Admin. Code 1-6-4(a) does not include criteria that are sufficiently robust to qualify as an accepta ble affirmative defense provision under the CAA. The conditions in the prov ision are helpful but are not consistent with all of the

criteria recommended in the EPA's SSM Polic y. For example, this provision does not contain criteria requiring th e source to establish that the malfunction event was not foreseeable and not part of a recurring patte rn indicative of inadequate design, operation, or maintenance. Indeed, the explicit limita tion that the "malfunctions have not exceeded five percent (5%), as a guideline, of the nor mal operational time of the facility" suggests that a source could be granted exempti ons for excess emissions even though it was habitually violating the applicable emissi on limitations over some extended period of

time.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 230 of 327 The EPA believes that the inclusion of the complete bar to liability, including injunctive relief, and the insufficiently r obust qualifying criteria re nder 326 Ind. Admin. Code 1-6-4(a) substantially inade quate to meet CAA requirements. Significantly, the EPA notes that the co rrect meaning of 326 Ind. Admin. Code 1- 6-4(a) has been addressed in the past in conjunction with an interpretive letter from the state in 1984, which characterized the provisi on as an enforcement discretion provision applicable to state personnel rather than as a provision allowing exemptions from the emission limitations. The EPA appreciates Indi ana's clarification of its reading of the provision in the 1984 letter, but at this juncture, in the c ourse of reevaluating this provision in light of the issu es raised in the Petition, the EPA believes that 326 Ind. Admin. Code 1-6-4(a) contains regulatory language that re quires formal revision to eliminate significant ambiguities. For example, the provision states that: "[e]missions temporarily exceeding the standards which are due to malfunctions . . . shall not be considered a violation of the rules provide d the source demonstrates" four criteria. Indiana has acknowledged that it reads these provisions not to bar enforcement by the EPA or citizens in the event that the state does not pursue enforcement, but the EPA believes that the provision is sufficiently ambiguous on this point that a revision is necessary to ensure that outcome in the event of an enforcement action. As discussed in section VI of this notice, the EPA believes that in some instances it is appropriate to clarify pr ovisions of a SIP submission th rough the use of interpretive letters. However, in some cases, there may be areas of regulatory ambiguity in a SIP provision that are significant and for which re solution is both appropriate and necessary. Because the text of 326 Ind. Admin. Code 1-6-4( a) provision is not clea r on its face that itThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 231 of 327 is limited to the exercise of enforcement di scretion by state personnel but rather could be interpreted as a discretionary exemption fr om the otherwise applicable SIP emission limitations or as an inadequate affirmative defense provision, the EPA believes this SIP provision is substantially inadequa te to meet CAA requirements. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to 326 Ind. Admin. Code 1-6- 4(a). The EPA believes that this provision ap pears on its face to allow for discretionary exemptions from otherwise applicable SIP em ission limitations, and that such exemptions

are inconsistent with the funda mental requirements of the CAA with respect to emission limitations in SIPs in sections 110(a)(2)( A), 110(a)(2)(C), and 302(k). This provision allows for exemptions through a state offici al's unilateral exercise of discretionary authority that includes no additional public pro cess at the state or federal level, and such provisions are inconsiste nt with the fundamental requirements of the CAA with respect to

SIPs and SIP revisions. Moreove r, the discretion created by this provision allows caseby-case exemptions from emission limitations when such exemptions are not permissible

in the first instance. Even if the EPA were to interpret 32 6 Ind. Admin. Code 1-6-4(a) to be an affirmative defense applicable in an enforcem ent context, the provisi on is not consistent

with the EPA's recommendations in the EP A's SSM Policy interpreting the CAA. By purporting to create a bar to enforcement that applies not just to monetary penalties but also to injunctive relief, and by including cr iteria inconsistent with those recommended by the EPA for affirmative defense provisions, this provision is in consistent with the requirements of CAA sections 113 and 304. For these reasons, the EPA is proposing toThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 232 of 327 find that 326 Ind. Admin. Code 1-6-4(a) is substantially inadeq uate to meet CAA requirements and thus proposing to issue a SI P call with respect to this provision. 3. Michigan a. Petitioner's Analysis The Petitioner objected to a generally app licable provision in Michigan's SIP that provides for an affirmative defense to moneta ry penalties for violations of otherwise applicable SIP emission limitations du ring periods of startup and shutdown. 151 

### The Petitioner argued that affirmative defenses fo r excess emissions are inconsistent with the CAA and requested that the provision be rem oved from Michigan's SIP. Alternatively, if such a provision were to remain in the SIP, the Petitioner asked that the SIP be amended

to address two deficiencies. First, the Petitioner objected to one of the criteria in the affirmative defense provision, Mich. Admin. Code r. 336.1916, which ma kes the defense available to a single source or small group of sources as long as su ch source did not "cause[] an exceedance of the national ambient air quality standards or any applicable prevention of significant deterioration increment." The Petitioner argued that this criterion of Michigan's affirmative defense provision is contrary to the EPA's SSM Polic y because "[s]ources

with the potential to cause an exceedance should be more strictly controlled at all times

and should not be able to mire enforcem ent proceedings in the difficult empirical questions of whether or not the NAAQS or PSD increments were exceeded as a matter of fact" (emphasis in original).

151 

### Petition at 44-46.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 233 of 327 Second, the Petitioner objected to the av ailability of Michigan's affirmative defense provision, Mich. Admin. Code r. 336.1916, for violations of "an applicable emission limitation," which Petitioner pointed out would include "limits derived from federally promulgated technology based standa rds, such as NSPSs and NESHAPs." The Petitioner argued that accordi ng to the EPA's SSM Policy, sour ces should not be able to

seek an affirmative defense for violations of these federal technology-based standards.

b. The EPA's Evaluation

As discussed in more detail in section IV .B of this notice, the EPA does not agree

with the Petitioner that affirmative defenses should never be permissible in SIPs. The EPA believes that narrowly drawn affirmative defenses can be permitted under the CAA for malfunction events, because where excess emissions are entirely beyond the control of the owner or operator of the source, it can be appropriate to provi de limited relief to claims for monetary penalties ( see section VII.B of this notice) . However, as discussed in section IV.B of this notice, this basis for permitting affirmative defenses for malfunctions does not translate to planned events such as startup and shutdown. By definition, the owner or operator of a source can foresee and plan for star tup and shutdown events, and

therefore the EPA believes that states should be able to es tablish, and sources should be able to comply with, the applicable emissi on limitations or other controls measures during these periods of time. A source can be designed, operated, and maintained to control and to minimize emissions during such normal expected events. If sources in fact cannot meet the otherwise applicable emission limitations during planned events such as startup and shutdown, then a state may elect to develop specific alternative requirements that apply during such periods, so long as th ey meet other applicable CAA requirements.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 234 of 327 The EPA believes that the inclusion of an affirmative defense that applies only to violations that occurred during periods of startup and shutdo wn in Mich. Admin. Code r.

336.1916 is thus a substantial in adequacy and renders this specific SIP provision impermissible. The EPA does not agree with the Petiti oner that affirmative defense provisions

are, per se , impermissible for a "single source or small group of sources." The EPA believes that a SIP provision may meet the overarching statutory requirements through a demonstration by the source that the excess emissions during the SSM event did not in fact cause a violation of the NAAQS. As discus sed in section VII B of this notice, the EPA considers this another means by which to assure that affirmative defense provisions are narrowly drawn to justify relief from m onetary penalties for excess emissions during malfunction events. Through this alternative approach, sources also have an incentive to comply with applicable emission limitations and thereby to support th e larger objective of attaining and mainta ining the NAAQS. The EPA does agree that an approvable affirmative defense provision, consistent with CAA requirements, cannot apply to any federal emission limitations approved into a SIP. Thus, if the state has elected to inco rporate NSPS or NESHAP into its SIP for any purpose, such as to obtain credit for the re sulting emissions reducti ons as part of an attainment plan, the SIP cannot have a pr ovision that would extend any affirmative defense to sources beyond what is othe rwise provided in the underlying federal regulation. To the extent that any affirma tive defense is warranted during malfunctions for these technology-based standards, the fe deral standards cont ained in the EPA's regulations already specify the appropriate affirmative defense. No additional or differentThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 235 of 327 affirmative defense provision applicable through a SIP provision is warranted or appropriate. On its face, Mich. Admin. C ode r. 336.1916 does not explicitly limit its scope to exclude federal emission limitations approved into the SIP. Thus, this would be an additional way in which the provision is substantially inadequate to meet CAA requirements. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Mich. Admin. Code r. 336.1916, which provides for an affirmative defens e to violations of applicable emission limitations during startup and shutdown events. The availability of an affirmative defense for excess emissions that occur during pl anned events is contrary to the EPA's interpretation of the CAA to allow such affirmative defenses only for events beyond the control of the source, i.e., during malfunctions. For this r eason, the EPA is proposing to

find that Mich. Admin. Code r. 336.1916 is s ubstantially inadequate to meet CAA requirements and thus proposing to issue a SI P call with respect to this provision.

4. Minnesota a. Petitioner's Analysis The Petitioner objected to a provision in the Minnesota SIP that provides automatic exemptions for excess emissions resulting from flared gas at petroleum refineries when those flares are caused by startup, shutdown, or malfunction (Minn. R. 7011.1415). 152 

### The provision states that: "The combus tion of process upset gas in a flare, or the combustion in a flare of process gas or fuel gas which is released to the flare as a

152 

### Petition at 46-47.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 236 of 327 result of relief valve leakage is exempt from the standards of performance set forth in this regulation." The Petitioner noted that "process upset gas" is defined in the regulation as "any gas generated by a petroleum refinery proc ess unit as a result of start-up, shutdown, upset, or malfunction" (Minn. R. 7011.1400(12)). The Petitioner argued that such an automatic exemption for emissions during startup, shutdown, or malfunction in a SIP provision is a violation of th e fundamental requirements of the CAA and the EPA's SSM Policy that all excess emissions be considered violations, and that such an exemption interferes with enforcement by the EPA and citizens.

b. The EPA's Evaluation The EPA agrees that the CAA does not allow for automatic exemptions from otherwise applicable SIP emission limitations and requirements. In accordance with the requirements of CAA section 110(a)(2)(A), SI Ps must contain emi ssion limitations and,

in accordance with the definition of "emissi on limitations" in CAA section 302(k), such

emission limitations must be continuous. Thus , any excess emissions above the level of the applicable emission limitation must be considered violations of such limitations,

whether or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the exce ss emissions during startup, shutdown, or

malfunction are not violations are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The automatic exemption provision identifie d by the Petitioner explicitly states that "process upset gas," which is defined as gas generated by the affected sources as a result of start-up, shutdown, upset, or malfunc tion, "is exempt from the standards" (Minn. R. 7011.1415). Any exceedances of the standard s during those periods would thereforeThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 237 of 327 not be considered a violation under this pr ovision. With respect to the Petitioner's concern that these exemptions could interfere with enfor cement by the EPA or citizens, the EPA agrees that this is one of the critical reasons why such provisions are impermissible under the CAA. By having SI P provisions that define what would otherwise be violations of the applicable em ission limitations as non- violations, the state has effectively negated the ability of the EPA or the public to enforce against those

violations. The EPA believes that the inclus ion of such automatic exemptions from SIP requirements in Minn. R. 7011.1415 is thus a su bstantial inadequacy and renders this specific SIP provision impermissible. c. The EPA's Proposal The EPA proposes to grant the Petiti on with respect to Minn. R. 7011.1415. The EPA believes that this provision allows for automatic exemptions from the otherwise applicable SIP emission limitations and requi rements, and that such exemptions are inconsistent with the fundamental requireme nts of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2 )(C), and 302(k). In addition, by creating these imperm issible exemptions, the state has defined violations in a way that would interfere with effective enforcement by the EPA and citizens for excess emissions during these events as provided in CAA sections 113 and 304. For these reasons, the EPA is proposing to find that Minn. R. 7011.1415 is substantially inadequate to meet CAA requirements and thus is proposin g to issue a SIP call with respect to this provision.

5. Ohio a. Petitioner's AnalysisThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 238 of 327 The Petitioner first objected to a generally applicable provision in the Ohio SIP that allows for discretionary exemptions dur ing periods of scheduled maintenance (Ohio Admin. Code 3745-15-06(A)(3)). 153 

### The provision provides the state official with the authority to permit continued operation of a source during sc heduled maintenance "where a complete source shutdown may result in damage to the air pollution sources or is otherwise impossible or impractical." Upon appl ication, the state offici al "shall authorize the shutdown of the air pollution control equi pment if, in his judg ment, the situation justifies continued operation of the sources." The Petitioner also objected to two source category-specific and pollutant-specific pr ovisions that provide for discretionary exemptions during malfunctions (Ohio Ad min. Code 3745-17-07(A)(3)(c) and Ohio Admin. Code 3745-17-07(B)(11)(f)). 154 

### The Petitioner argued that these provisi ons could provide exemptions from the otherwise applicable SIP emission limitations , and such exemptions are impermissible

under the CAA because the statute and the EP A's interpretation of the CAA in the SSM Policy require that all such excess emissions be treated as violations. Moreover, the Petitioner objected to these discretionary exem ptions because the state official's grant of permission to continue to operate during the pe riod of maintenance, or to exempt sources

153 

### Petition at 60-61.

154 

### The EPA notes that Petitioner did not categorize these provisions as discretionary exemptions, but both Ohio Admin. Code 3745-17-07(A)(3)(c) and Ohio Admin. Code 3745-17-07(B)(11)(f) provide for exemptions during malfunctions if sources have complied with Ohio Admin. Code 3745-15-06(C), wh ich allows the director to "evaluate" malfunction reports required by the rule and to "take appropriate action upon a determination." The EPA therefore believes that the mechanism by which exemptions are granted under Ohio Admin. Code 3745-17- 07(A)(3)(c) and Ohio Admin. Code 3745-17- 07(B)(11)(f) is by exercise of th e state director's discretion.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 239 of 327 from otherwise applicable SIP emission limitations during malfunctions, could be interpreted to excuse excess emissions during su ch time periods and could thus be read to preclude enforcement by the EPA or citizens in th e event that the state official elects not to treat the events as violations. Thus, in addition to creating an impermissible exemption for the excess emissions, the Petitioner argued, the provisions are also inconsistent with the CAA as interpreted in the EPA's SSM Polic y because they allow the state official to

make a unilateral decision that the excess em issions were not a vi olation and thus bar enforcement for the excess emissions by the EPA and citizens. The Petitioner also objected to a source category-specific provision in the Ohio SIP that allows for an automatic exempti on from applicable emission limitations and requirements during periods of startup, s hutdown, malfunction, or regularly scheduled maintenance activities (Ohio Admin. C ode 3745-14-11(D)). The Petitioner objected because this provision provides an exemp tion from the otherwise applicable SIP requirements, and such exemptions are incons istent with the require ments of the CAA as interpreted in the EPA's SSM Policy. The Petitioner argued that the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all excess emissions be treated

as violations. The Petitioner also objected to this pr ovision because, by providing an outright exemption from otherw ise applicable requirements, the state has defined these excess emissions as not violations, ther eby precluding enforcement by the EPA or

citizens for the excess emissions that would otherwise be violations. Finally, the Petitioner objected to pr ovisions that contain exemptions for Hospital/Medical/Infectious Waste Incine rator (HMIWI) sources during startup, shutdown, and malfunction (Ohio Admin. Code 3745-75-02(E), Ohio Admin. CodeThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 240 of 327 3745-75-02(J), Ohio Admin. Code 3745-75-03 (I), Ohio Admin. Code 3745-75-04(K), Ohio Admin. Code 3745-75-04(L)). The Petitio ner requested that these exemptions be removed entirely from Ohio's SIP.

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

limitations in SIPs. The EPA believes that th e inclusion of such exemptions from the

emission limitations in Ohio Admin. C ode 3745-15-06(A)(3), Ohio Admin. Code 3745- 17-07(A)(3)(c), Ohio Admin. Code 3745-17-07( B)(11)(f), and Ohio Admin. Code 3745- 15-06(C) is thus a substan tial inadequacy and renders these specific SIP provisions impermissible.

The EPA believes that Ohio Admin. C ode 3745-15-06(A)(3), Ohio Admin. Code 3745-17-07(A)(3)(c), Ohio Admin. Code 3745-17 -07(B)(11)(f), and Ohio Admin. Code 3745-15-06(C) are also impermissible as unbounde d director's discre tion provisions that

make a state official the un ilateral arbiter of whether th e excess emissions in a givenThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 241 of 327 event constitute a violation. In the case of Ohio Admin. Code 3745-15-06(A)(3), the provision authorizes the state official to allow continued operation at sources "during

scheduled maintenance of air pollution control equi pment." The state official's grant of permission to continue to operate during the period of maintenance could be interpreted to excuse excess emissions during that peri od and could thus be read to preclude enforcement by the EPA or through a citizen suit in the event that the state official elects

not to treat the excess emissions as a viola tion. In addition, the provi sion vests the state official with the unilateral power to grant an exemption from the otherwise applicable SIP emission limitations, without any additiona l public process at th e state or federal level. Although the provisi on does require sources to s ubmit a report indicating the expected length of the event and estimated quantities of emissions, among other things, ultimately the state official makes his determ ination "if, in his judgment, the situation justifies continued operation of th e sources." The state official's discretion is therefore not sufficiently bounded and extends to granting a complete exemption from applicable

emission limitations that would be im permissible in the first instance.

The EPA believes that Ohio Admin. C ode 3745-17-07(A)(3)(c), which exempts sources from visible particulate matter lim itations during malfunctions, and Ohio Admin. Code 3745-17-07(B)(11)(f), which exempts sour ces from fugitive dust limitations during malfunctions, also impermissibly provide exempti ons through exercise of a state official's discretion because the provisions authorize ex emptions if the source has complied with Ohio Admin. Code 3745-15-06(C). The Ohio Admin. Code 3745-15-06(C) provides the

state official with the discretion to "eva luate" reports of malfunctions submitted by sources and to "take appropriate action upon a determination" that sources have notThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 242 of 327 adequately met the requirements of the provi sion. Although the Petitioner did not request

that the EPA evaluate Ohio Admin. Code 3745- 15-06(C), it is the regulatory mechanism by which exemptions are granted in the two pr ovisions to which the Petitioner did object. Similar to Ohio Admin. Code 3745-15-06(A)(3 ), which is the director's discretion provision discussed earlier in th is section of the notice, the EPA finds that Ohio Admin. Code 3745-17-07(A)(3)(c) and Ohio Admi n. Code 3745-17-07(B)(11)(f) could be interpreted to excuse excess emissions during malfunction events and could thus be read to preclude enforcement by the EPA or through a citizen suit in the event that the state

official elects not to treat the excess emissi ons as a violation. In addition, the provision

vests the state official with the unilateral power to grant an exemption from otherwise applicable SIP emission limitations, without any additional public process at the state or federal level. Although the provision does require the state official to consider the reports filed by sources before making a determina tion, the provision remains insufficiently

bounded. Most importantly, however, these provisi ons all purport to au thorize the state official to create exemptions from the em ission limitations, and such exemptions are impermissible in the first instance. Such di rector's discretion provisions undermine the

emission limitations and the emissions reducti ons they are intended to achieve and render them less enforceable by the EPA or through a citizen suit. The EPA believes that the

inclusion of an unbounded director's discre tion provision in Ohio Admin. Code 3745-15- 06(A)(3), Ohio Admin. Code 3745-17-07( A)(3)(c), Ohio Admin. Code 3745-17- 07(B)(11)(f), and Ohio Admin. Code 3745-15-06(C ) is thus a substantial inadequacy and renders these specific SIP provisions impermi ssible for this reason, in addition to theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 243 of 327 creation of impermissible exemptions. With regard to the Petitioner's objecti on to the exemption for portland cement kilns from otherwise appli cable requirements at Ohio Admin. Code 3745-14-11(D), the EPA agrees that the CAA does not allow fo r automatic exemptions from otherwise applicable SIP emission limitations and requirements. In accordance with the requirements of CAA section 110(a)(2)(A), SI Ps must contain emi ssion limitations and,

in accordance with the definition of "emissi on limitations" in CAA section 302(k), such

emission limitations must be continuous. Thus , any excess emissions above the level of the applicable emission limitation must be considered violations of such limitations,

whether or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during start up, shutdown, malfunction,

or maintenance are not violations are incons istent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. The automatic exemption provision in Ohio Admin. Code 3745-14-11(D) explicitly states that the regulation's requireme nt that the use of cont rol measures such as low-NOx burners during the ozone season a nd monitoring, reporting, and recordkeeping of ozone season NOx emissions "shall not ap ply" during periods of startup, shutdown, malfunction, and maintenance. The exemptions therefore provide that the excess emissions resulting from failure to run require d control measures will not be violations, contrary to the requirements of the CAA. In addition, exemption from monitoring, recordkeeping, and reporting re quirements during these events affects the enforceability of the emission limitation in the SIP provisi on. Moreover, failure to account accurately for excess emissions at sources during SSM events has a broader impact on NAAQSThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 244 of 327 implementation and SIP planning, because such accounting directly informs the development of emissions inventories and emissions modeling. With respect to the Petitioner's concern that these exemptions preclude enforcement by the EPA or citizens, the EPA agrees that this is one of the critical reasons why such provisions are impermissible under the CAA. By having SI P provisions that define what would otherwise be violations of the applicable em ission limitations as non- violations, the state has effectively negated the ability of the EPA or the public to enforce against those

violations. The EPA believes that the inclus ion of such automatic exemptions from SIP requirements in Ohio Admin. Code 3745-14-11(D) is thus substantially inadequate to meet CAA requirements. Finally, the EPA disagrees that the pr ovisions providing exemptions for HMIWI

must be removed from the SIP. Ohio Ad min. Code 3745-75-02(E) , Ohio Admin. Code 3745-75-02(J), Ohio Admin. Code 3745-75-03 (I), Ohio Admin. Code 3745-75-04(K), and Ohio Admin. Code 3745-75-04(L) are not appr oved into Ohio's SIP, but rather those rules were approved as part of the separate state plan to meet the applicable emissions guidelines under CAA § 111(d) and 40 CFR Part 60. Because those rules are not in the

Ohio SIP and are not related to any provisions in the SI P, they do not represent a substantial inadequacy in the SIP. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Ohio Admin. Code 3745- 15-06(A)(3), Ohio Admin. Code 3745-17-07( A)(3)(c), and Ohio Admin. Code 3745-17- 07(B)(11)(f). The EPA believes that these provisions allow for exemptions from the otherwise applicable SIP emission limitations, and that such exempti ons are inconsistentThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 245 of 327 with the fundamental requirements of the CAA with respect to emission limitations in SIPs. In addition, Ohio Admin. Code 3745- 15-06(A)(3), Ohio Admin. Code 3745-17- 07(A)(3)(c), Ohio Admin. Code 3745-17-07(B)( 11)(f), and by extension, Ohio Admin. Code 3745-15-06(C), allow for such exempti ons through a state official's unilateral exercise of discretionary authority that is insufficiently bounded and includes no additional public process at the state or federa l level, and such provi sions are inconsistent with the fundamental requirements of the CAA with respect to SIPs and SIP revisions. Moreover, the discretion created by these provisions allows cas e-by-case exemptions from emission limitations when such exemptions are not permissible in the first instance.

As described in section VII.A of this notic e, such provisions are inconsistent with fundamental CAA requirements for SIP re visions. For these reasons, the EPA is proposing to find that Ohio Admin. Code 3745-15-06(A)(3), Ohio Admin. Code 3745- 17-07(A)(3)(c), Ohio Admin. Code 3745-17-07( B)(11)(f), and Ohio Admin. Code 3745- 15-06(C) are substantially inadequate to meet CAA requirements and thus is proposing to issue a SIP call with respect to these provisions. The EPA also proposes to grant the Peti tion with respect to Ohio Admin. Code 3745-14-11(D). The EPA believes that this prov ision allows for automatic exemptions from the otherwise applicable SIP emission lim itations and requirements, and that such exemptions are inconsistent with the fundamental requireme nts of the CAA with respect to emission limitations in SIPs as required by CAA sections 110( a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by creating these imperm issible exemptions, the state has defined violations in a way that w ould interfere with effective enforcement by the EPA and citizens for excess emissions during these ev ents as provided in CAA sections 113 andThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 246 of 327 304. For these reasons, the EPA is proposing to find that this provi sion is substantially inadequate to meet CAA requirements and t hus is proposing to issue a SIP call with respect to this provision. The EPA proposes to deny the Petition w ith respect to Ohio Admin. Code 3745- 75-02(E), Ohio Admin. Code 3745-75-02(J), Ohio Admin. Code 3745-75-03(I), Ohio Admin. Code 3745-75-04(K), and Ohio Ad min. Code 3745-75-04(L). These provisions are not part of the Ohio SIP a nd thus cannot represent a substan tial inadequacy in the SIP. G. Affected States in EPA Region VI

1. Arkansas a. Petitioner's Analysis The Petitioner objected to two pr ovisions in the Arkansas SIP. 155 

### First, the Petitioner objected to a pr ovision that provides an au tomatic exemption for excess emissions of volatile organic compounds (VOC ) for sources located in Pulaski County that occur due to malfunctions (Reg. 19.1004(H)). The provision states that excess emissions "which are temporary and result solely from a sudden and unavoidable breakdown, malfunction or upset of process or emission control equipment, or sudden and unavoidable upset or operation will not be considered a violation . . . ." The Petitioner argued that this language is im permissible because the CAA and the EPA's

155 

### Petition at 24. The Petitioner cites to 014-01-1 Ark. Code R. §§ 19.1004(H) and 19.602. The EPA interprets these citations as references to Reg. 19.1004(H) and Reg. 19.602 of the Arkansas Pollution Cont rol & Ecology Commission (APC&EC), Regulation No. 19 – Regulations of the Ar kansas Plan of Implementation for Air Pollution Control, as approved by the EPA on Apr. 12, 2007 (72 FR 18394) (hereinafter referred to as Reg. 19.1004(H) and Reg. 19.602).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 247 of 327 interpretation of the CAA in the SSM Policy require that all excess emissions be treated

as violations. Second, the Petitioner objected to a separa te provision that provides a "complete

affirmative defense" for excess emissions th at occur during emergency conditions (Reg. 19.602). The Petitioner argued that this provi sion, which the state may have modeled after the EPA's title V regulations, is impermi ssible because its application is not clearly limited to operating permits.

b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations. In accord ance with CAA sections 110(a)(2)(A) and 302(k), SIPs must contain "emission limita tions" and those limitations must be continuous. Thus, any excess emissions above the level of the applicable SIP emission

limitation must be considered a violation of such limitation, regardless of whether the

state elects to exercise its enforcement disc retion. SIP provisions that create exemptions from applicable emission limitations dur ing malfunctions or emergency conditions, however defined, are inconsistent with th e fundamental requirements of the CAA. The first provision identified by the Petitioner explicitly states that excess emissions of VOC "will not be considered a violation" of the applicable emission limitation if they occur due to an "unavoi dable breakdown" or "malfunction." This exemption in Reg. 19.1004(H) is impermissible even though the state has limited the exemption to unavoidable breakdowns and malfunctions. The core problem remains that the provision provides an impermissible exem ption from the otherw ise applicable VOC emission limitations. In addition, by having a SIP provision that defines what wouldThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 248 of 327 otherwise be violations of the applicable em ission limitations as non- violations, the state has effectively negated the ability of the EPA or the public to enforce against those

violations. The EPA believes that the inclus ion of such an automatic exemption in Reg. 19.1004(H) is thus a substantial inadequacy a nd renders this SIP provision impermissible

under the CAA. The second provision identified by the Peti tioner defines "emergency" conditions that may cause a source to exceed a tec hnology-based emission limitation under a permit and provides a "complete affirmative defens e" to an action brought for non-compliance

with such limitations if certain criteria are met. The EPA believes that Reg. 19.602 is substantially inadequate for three reasons. Firs t, the provision does not explicitly limit the

affirmative defense to civ il penalties. Although the EPA believes that narrowly drawn affirmative defenses are permitted under the CAA for malfunction events ( see sections IV.B and VII.B of this notice), the EPA's interpretation of the CAA is that such affirmative defenses can only shield the sour ce from monetary penalties and cannot be a bar to injunctive relief. An affirmative defense provision that purports to bar any enforcement action for injunctive relief for violations of emission limitations is inconsistent with the requirements of CAA sections 113 and 304. Second, the provision does not contain elements for establishing the affirmative defense consistent with all of

the recommended criteria in the EPA's SSM Policy for SIP provisions. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP provisions could be consistent with the requi rements of the CAA. Nonetheless, through this rulemaking, the EPA is proposing to determine that Reg. 19.602 does not include criteria that are sufficiently robust to qualify as an acceptable affirmative defenseThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 249 of 327 provision. Finally, the provision can be read to provide a dditional defenses beyond those already provided in federal technology- based standards. The EPA believes that approvable affirmative defenses in a SIP provision cannot oper ate to create different or additional defenses from those that are pr ovided in underlying federal technology-based emission limitations, such as NSPS or NESHAP . For these reasons, the EPA believes that Reg. 19.602 is substantially inadequate to m eet the fundamental requirements of the

CAA. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Reg. 19.1004(H) and Reg. 19.602. The EPA believes that Reg. 19.1004(H) allows for an exemption from otherwise applicable SIP emission limitations and that su ch exemptions are inconsistent with the fundamental requirements of CAA secti ons 110(a)(2)(A), 110(a )(2)(C), and 302(k). Additionally, the EPA believes that Reg. 19.602 is an impermissible affirmative defense provision because it does not explicitly lim it the defense to monetary penalties, establishes criteria that are inconsistent with those in the EPA's SSM Policy, and can be

read to create different or additional defenses from those that are provided in underlying federal technology-based emission limitations . As a consequence, Reg. 19.602 is also inconsistent with CAA sections 110(a)(2 )(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to find that these provisions are substantially inadequate to meet CAA requirements and proposes to issue a SIP call with respect to these provisions.

2. Louisiana a. Petitioner's AnalysisThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 250 of 327 The Petitioner objected to several provisions in the Louisiana SIP that allow for automatic and discretionary exemptions fr om SIP emission limitations during various situations, including startup, shutdow n, maintenance, and malfunctions. 156 

### First, the Petitioner objected to provisions that provide automatic exemptions for excess emissions of VOC from wastewater tanks (LAC 33:III .2153(B)(1)(i)) and exce ss emissions of NOx

from certain sources within the Ba ton Rouge Nonattainment Area (LAC 33:III.2201(C)(8)). 157 

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

as violations.

156 

### Petition at 42-43.

157 

### The EPA interprets the Petitioner’s re ference to La. Adm. Code tit. 33, § III:2153(B)(1)(i) as a citation to LAC 33:III .2153(B)(1)(i), as approved by the EPA on June 20, 2002 (67 FR 41840) (hereinafter refe rred to as LAC 33:III.2153(B)(1)(i)). Similarly, the EPA interprets the Petitione r’s reference to La. Adm. Code tit. 33, § III:2201(C)(8) as a citation to LAC 33:III.2201( C)(8), as approved by the EPA on July 5, 2011 (76 FR 38977) (hereinafter referre d to as LAC 33:III.2201(C)(8)).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 251 of 327 Second, the Petitioner objected to pr ovisions that provide discretionary exemptions to various emission limitations. 158 

### Three of these provisions provide discretionary exemptions from otherwise applicable SO 2 

### and visible emission limitations

in the Louisiana SIP for excess emissions that occur during certain startup and shutdown events (LAC 33:III.1107, LAC 33:III.1507(A)(1 ), LAC 33:III.1507(B)(1)), while the other two provide such exemptions for excess emissions from nitric acid plants during startups and "upsets" (LAC 33:III.2307(C )(1)(a) and LAC 33:III.2307(C)(2)(a)). For example, LAC 33:III.1107, which deals with the control of emissions from flares, states that exemptions "may be granted by the administrative authorit y during startup and shutdown periods if the flaring was not the re sult of failure to maintain and repair equipment." The Petitioner argued that this language effect ively allows a discretionary decision by a state official to exempt exce ss emissions during such events and thereby precludes enforcement by the EPA and citizens for what would otherwise be violations of the applicable SIP emission limitations, cont rary to the requireme nts of the CAA.

b. The EPA's Evaluation The EPA agrees that the CAA does not al low for exemptions for excess emissions from otherwise applicable SIP emission lim itations, whether auto matic or through the

158 

### The EPA interprets the Petitioner’s referen ce to La. Adm. Code tit. 33, § III:1107 as a citation to LAC 33:III.1107(A), as approve d by the EPA on July 5, 2011 (76 FR 38977 (hereinafter referred to as LAC 33:III.1107(A)). Similarl y, the EPA interprets the Petitioner’s reference to La. Ad m. Code tit. 33, § III:1507(A)(1 ) and (B)(1) as citations to LAC 33:III.1507(A)(1) and (B)(1), as appr oved by the EPA on July 15, 1993 (58 FR 38060) (hereinafter referred to as LAC 33: III.1507(A)(1) and (B)(1)). Also, the EPA interprets the Petiti oner’s reference to La. Adm. C ode tit. 33, § III:2307(C)(1)(a) and (C)(2)(a) as a citation to LAC 33:III.2307(C )(1)(a) and (C)(2)(a), as approved by the EPA on July 5, 2011 (76 FR 38977) (hereinaft er referred to as LAC 33:III.2307(C)(1)(a) and (C)(2)(a)).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 252 of 327 exercise of a state official's discretion . In accordance with sections 110(a)(2)(A) and 302(k), SIPs must contain "emission limita tions" and those limitations must be continuous. Thus, any excess emissions above the level of the applicable SIP emission

limitation must be considered a violation of such limitation, regardless of whether the

state elects to exercise its enforcement disc retion. SIP provisions that create exemptions such that the excess emissions during star tup, shutdown, maintenance, or malfunctions are not violations of the applicable SIP em ission limitations are inconsistent with the fundamental requirements of the CAA. The first two SIP provisions identified by the Petitioner explicitly state that

emission limitations for VOC and NOx are eith er "not required" or "exempted" during specified types of SSM events. The EPA belie ves that such automatic exemptions are impermissible under the CAA. By having SI P provisions that define what would otherwise be violations of the applicable SIP emission limitations as non-violations, the state has effectively negated the ability of th e EPA or the public to enforce against those violations. Therefore, the EPA believes that the inclusion of such automatic exemptions in LAC 33:III.2153(B)(1)(i) and LAC 33:III.2201(C )(8) is a substantial inadequacy that renders these SIP provisions im permissible under the CAA. The other five provisions identified by the Petitioner all provide the state with the discretion to "grant," "authori ze," or "extend" exemptions fr om the otherwise applicable SIP emission limitations during various SSM events. The EPA believes that these provisions are impermissible as unbounded dire ctor's discretion provisions that make a

state official the unilateral arbiter of whether the excess emissions in a given event

constitute a violation of othe rwise applicable SIP emission limitations. More importantly,This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 253 of 327 the provisions purport to authorize the state official to create exemptions from applicable SIP emission limitations when such exemptions are impermissible in the first instance.

As discussed in more detail in section VII. A of this notice, these types of director's discretion provisions undermine the purpose of emission limitations and the reductions they are intended to achieve, thereby rendering them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of such a director's discretion provision in LAC 33:III.1107(A), LAC 33:III. 1507(A)(1), LAC 33:III.1507(B)(1), LAC 33:III.2307(C)(1)(a), and LAC 33:III.2307(C)(2)(a) is therefore a substantial inadequacy that renders these specific SIP provi sions impermissible under the CAA. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to LAC 33:III.2153(B)(1)(i) and LAC 33:III.2201(C)(8). The EPA believes that these provisions allow for exemptions from otherwise applicable emission limitations and that such exempti ons are inconsistent with the fundamental requirements of CA A sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). The EPA also proposes to grant the Petition with respect to LAC 33:III.1107(A), LAC 33:III.1507(A)(1) & (B)(1), and LAC 33:III.2307(C)(1)(a) & (C)(2)(a). The discretion created by these provi sions allows for revisions of the applicable SIP emission limitations without meeting the applicable SI P revision requirements of the CAA, and it allows case-by-case exemptions from emission limitations when such exemptions are not permissible in the first instance. Thus, these provisions are also inconsistent with CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For thes e reasons, the EPA is proposing

to find that each of thes e provisions is subs tantially inadequate to meet CAA requirements and proposes to issue a SIP call w ith respect to these specific provisions.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 254 of 327 3. New Mexico a. Petitioner's Analysis The Petitioner objected to three provisions in the New Mexico SIP that provide

affirmative defenses for excess emissions that occur during malfunctions (20.2.7.111 NMAC), during startup and shutdown (20.2.7.112 NMAC), and during emergencies 20.2.7.113 NMAC). 159 

### The Petitioner objected to the incl usion of these provisions in the

SIP based on its view that affirmative defe nse provisions are always inconsistent with CAA requirements. The Petitioner also argued th at each of these affirmative defenses is generally available to all sources, which is in contravention of the EPA's recommendation in the SSM Policy that affirmative defenses shou ld not be available to "a single source or groups of sources that has the potential to cause an exceedance of the NAAQS." Finally, the Petitioner argued that the affirmative defense provision applicable to emergency events is impermissible because it was mode led after the EPA's title V regulations, which are not meant to apply to SIP provisions.

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

159 

### Petition at 54-57. The EPA interprets the Pe titioner’s reference to N.M. Code R. § 20.2.7.111, N.M. Code R. § 20.2.7.112, and N.M. Code R. § 20.2.7.113, as citations to 20.2.7.111 NMAC, 20.2.7.112 NMAC, and 20.2.7.113 NM AC, as approved by the EPA on Sept. 14, 2009 (74 FR 46910) (hereina fter referred to as 20.2.7.111 NMAC, 20.2.7.112 NMAC, and 20.2.7.113 NMAC).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 255 of 327 consistent with the CAA, as recommended in the EPA's guidance for affirmative defense provisions in SIPs, the EPA be lieves that states may elect to have affirmative defense provisions for malfunctions. By contrast, how ever, based on evaluation of the legal and

factual basis for affirmative defenses in SIPs, the EPA now believes that affirmative defense provisions are not appropriate in the case of planned source actions, such as startup and shutdown, because sources should be expected to comply with applicable emission limitations during those normal planned and predicted modes of source operation. Again, as explained in sections IV .B and VII.C of this notice, the EPA is changing its interpretation of the CAA with respect to affirmative defenses applicable during startup and shutdown events. As a result, 20.2.7.112 NMAC, which provides an

affirmative defense to excess emissions th at occur during startup or shutdown, is substantially inadequate to meet the requirements of the CAA. With respect to the Petitioner's second c oncern, the EPA agrees that the state's

inclusion of an affirmative defense for malf unctions that is available to all sources, including single sources or groups of sources with the potential to cause exceedances of the NAAQS or PSD increments, renders the pr ovision inconsistent with the CAA. As explained more fully in section VII.B of this notice, the EPA believes that such affirmative defenses may be permissible if e ither there is no "potential" for exceedances, or alternatively, if the provisi on requires that the source make an affirmative showing that any excess emissions did not in fact ca use an exceedance of the NAAQS or PSD increments. The EPA has previously a pproved such provisions as meeting CAA requirements on a case-by-case basis in spec ific actions on SIP submissions. Here, however, 20.2.7.111 NMAC is not restricted in a pplication to only thos e sources that doThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 256 of 327 not have the potential to cause an exceedance, nor does it contain any criteria requiring an "after the fact" showing that excess emissions from a single source or group of sources did not cause an exceedance. Therefore, the provision is substantially inadequate to satisfy the CAA and EPA's interp retation of CAA requirements. Finally, 20.2.7.113 NMAC provides an affirm ative defense for excess emissions that occur during emergencies, a concept borrowed from the EPA's title V regulations. This provision defines "emergency" conditions that may cause a source to exceed a technology-based emission limitation and provide s a "complete affirmative defense" to an action brought for non-compliance with such li mitations if certain criteria are met. The 20.2.7.113 NMAC is substantially inadequate fo r three reasons. Firs t, the provision does not explicitly limit the affirmative defense to civil penalties. Although the EPA believes that narrowly drawn affirmative defenses are permitted under the CAA for malfunction events ( see sections IV.B and VII.B of this noti ce), the EPA's interpretation of the CAA is that such affirmative defenses can only sh ield the source from monetary penalties and cannot be a bar to injunctive relief. An affi rmative defense provision that purports to bar any enforcement action for injunctive relief for violations of emission limitations is inconsistent with the requirements of CAA sections 113 and 304. Second, the provision does not contain elements for establishing the affirmative defense consistent with all of

the recommended criteria in the EPA's SSM Policy for SIP provisions. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP provisions could be consistent with the requi rements of the CAA. Nonetheless, through this rulemaking, the EPA is proposing to determine that 20.2.7.113 NMAC does not

include criteria that are sufficiently robust to qualify as an acceptable affirmative defenseThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 257 of 327 provision. Finally, the provision can be read to provide a dditional defenses beyond those already provided in federal technology- based standards. The EPA believes that approvable affirmative defenses in a SIP provision cannot oper ate to create different or additional defenses from those that are pr ovided in underlying federal technology-based emission limitations, such as NSPS or NESHAP . For these reasons, the EPA believes that 20.2.7.113 NMAC is impermissible under the CAA. c. The EPA's Proposal The EPA proposes to grant the Petiti on with respect to 20.2.7.112 NMAC, which includes an affirmative defense applicable during startup and shut down events that is contrary to the EPA's interpretation of the CAA. The EPA believes th at this provision is inconsistent with the fundamental requi rements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addi tion, this provision is incons istent with the requirements of CAA sections 113 and 304. The EPA also pro poses to grant the Petition with respect to 20.2.7.111 NMAC, which includes an affirmative defense applicable during malfunction events. This provision is inconsiste nt with the CAA because it neither limits the defense to only those sources that do not have the potential to cause exceedances of the NAAQS or PSD increments nor does it require sources to make an "after the fact" showing that no such exceedances actually occurred. Therefore, the EPA believes that this provision is similarly inconsistent with the funda mental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k) , and with respect to CAA sections 113 and 304. Finally, the EPA proposes to gran t the Petition with respect to 20.2.7.113 NMAC. The EPA believes that this provision is an impermissible affirmative defense because it does not explicitly limit the defens e to monetary penalties, it establishesThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 258 of 327 criteria that are inconsistent with those in EPA's SSM Policy, and it can be read to create

different or additiona l defenses from those that are provided in underlying federal technology-based emission limitations. Thus, this provision too is inconsistent with CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k) , and with respect to CAA sections 113 and 304. For these reasons, the EPA is propos ing to find that these provisions are substantially inadequate to meet CAA requirements and propos es to issue a SIP call with respect to these provisions.

4. Oklahoma a. Petitioner's Analysis The Petitioner objected to two provisions in the Oklahoma SIP that together allow for discretionary exemptions from emi ssion limitations durin g startup, shutdown, maintenance, and malfunctions (OAC 252:100-9-3(a) and OAC 252:100-9-3(b)). 160 

### These provisions state that excess emissions during each of these types of events constitute violations of the applicable SIP emission limitations "unless the owner or operator of the facility has complied with the notification requirements ," which consist of a demonstration to the Director of the Air Qu ality Division that at least one of several criteria have been met. One example of the criteria includes a demonstration that the

excess emissions resulted from "either malfunc tion or damage to the air pollution control or process equipment" or "s cheduled maintenance." The Petitioner argued that these provisions empower the director to excuse violations en tirely and thereby preclude

160 

### Petition at 61-63. The EPA interprets the Pe titioner’s reference to Okla. Admin. Code § 252:100-9-3(a) and Okla. Admin. Code § 252: 100-9-3(b) as citatio ns to OAC 252:100- 9-3(a) and OAC 252:100-9-3( b), as approved by the EPA on Nov. 3, 1999 (64 FR 59629) (hereinafter referred to as OAC 252:100-9-3(a) and (3)(b)).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 259 of 327 enforcement by the EPA or citizens. Specifical ly, if an owner or operator satisfies the director that the regulatory cr iteria under section 3(b) have been met, then the language of section 3(a) creates an exemption for the source and strongly implies that the excess emissions are not a violation of the applicab le SIP emission limitations. Therefore, the Petitioner argued that these provisions are incons istent with the requirements of the CAA.

b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations, even wher e the exemption is only available at the

exercise of a state official's discretion . In accordance with sections 110(a)(2)(A) and 302(k), SIPs must contain "emission limita tions" and those limitations must be continuous. Thus, any excess emissions above the level of the applicable SIP emission

limitations must be considered a violation of such limitati ons, regardless of whether the

state elects to exercise its enforcement disc retion. SIP provisions that create exemptions such that the excess emissions during star tup, shutdown, malfunctions, or maintenance are not violations of the applicable emi ssion limitations are inconsistent with the fundamental requirements of the CAA. The provisions identified by the Petitioner state that excess emissions during SSM

events constitute violations "unless" the Director of the Air Quality Division provides an exemption. The EPA believes that OAC 252: 100-9-3(a) and OAC 252:100-9-3(b) are impermissible, because they are unbounded direct or's discretion provisions that purport to

make a state official the un ilateral arbiter of whether th e excess emissions in a given event constitute a violation. The provisions authorize the state o fficial to create exemptions from applicable SIP emission limitations on a case-by-case basis when suchThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 260 of 327 exemptions are impermissible in the first inst ance. These types of director's discretion provisions undermine the purpose of emission limitations, and the re ductions they are intended to achieve, thereby rendering them less enforceable by the EPA or through a

citizen suit. The EPA believes that the inclusi on of such a director's discretion provision in OAC 252:100-9-3(a) and OAC 252:100-9-3(b) is theref ore a substantial inadequacy and renders these SIP provi sions impermissible. The EPA further notes that the provi sion allowing exemptions for excess emissions that occur during scheduled ma intenance is inconsistent with CAA requirements for the reason that maintenan ce is a normal mode of source operation, during which sources should be expected to meet applicable SIP emission limitations. Since the 1983 SSM Guidance, the EPA has indi cated its view that excess emissions that occur during maintenance should not be excu sed. Similarly, in the 1999 SSM Guidance, the EPA did not recommend any affirmative defense for excess emissions that occur during maintenance. In this action, the EPA is reiterating its view that the CAA does not permit exemptions or affirmative defenses for excess emissions that occur during such planned events. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to OAC 252:100-9-3(a) and OAC 252:100-9-3(b). 161 

### The discretion created by these provisions allows for revisions

161 

### The EPA notes that on July 16, 2010, Oklahoma submitted a SIP revision that would remove OAC 252:100-9-3(a) and OAC 252:100-9-3( b) and replace them with affirmative defense provisions. In this action, the EPA is only evaluating these provisions as they are currently found in the EPA-approved Oklahoma SIP. The EPA is not evaluating the July 16, 2010 SIP revision as part of this acti on. The EPA will address the July 16, 2010 SIP revision in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 261 of 327 of the applicable SIP emission limitations w ithout meeting the app licable SIP revision requirements of the CAA, and it allows case-by-case exemptions from emission limitations when such exemptions are not perm issible in the first instance. As a result, these provisions are inconsistent with th e fundamental requireme nts of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). Theref ore, the EPA is proposing to find that these provisions are substant ially inadequate to meet CA A requirements and proposes to issue a SIP call with respect to these provisions. H. Affected States in EPA Region VII

1. Iowa a. Petitioner's Analysis The Petitioner first objected to a specific provision in the Iowa SIP that allows for automatic exemptions from otherwise appli cable SIP emission limitations during periods of startup, shutdown, or cleaning of cont rol equipment (Iowa Admin. Code r. 567- 24.1(1)). 162 

### The Petitioner noted that Iowa Admi n. Code r. 567-24.1(1) provides that excess emissions from these periods are not vi olations of the emissions standard "if the startup, shutdown or cleaning is accomplished expeditiously and in a manner consistent with good practice for minimizing emissions ." The Petitioner argued that such exemptions are inconsistent with the requirements of the CAA and the EPA's SSM Policy. The Petitioner argued th at the CAA and the EPA's interpretation of the CAA in the SSM Policy require that all such exce ss emissions be treated as violations. Second, the Petitioner objected to a provisi on that empowers the state to exercise

162 

### Petition at 37-38.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 262 of 327 enforcement discretion for violations of the otherwise applicable SIP emission limitations during malfunction periods (Iowa Admin. Code r. 567-24.1(4)). 163 

### The Petitioner noted that this provision—which stat es that "[d]etermination of any subsequent enforcement action will be made following review of [a ] report" (emphasis added by Petitioner) submitted by the owner or operator of the source demonstrating certain conditions— could be interpreted to mean that "no en forcement is warranted at all, by anyone." 164 

### The Petitioner argued that such an interpretation of this provision could preclude enforcement by the EPA or citizens, both fo r civil penalties a nd injunctive relief, and that the EPA's interpretation of the CAA would forbid su ch a provision. The Petitioner thus requested that Iowa revise this provision to eliminat e any confusion that a decision by Iowa state personnel not to enforce against a violation would in any way foreclose enforcement by

the EPA or citizens.

b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations. In accordan ce with the requirements of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissi ons above the level of the applicable

emission limitation must be considered viol ations, whether or not the state elects to

exercise its enforcement disc retion. SIP provisions that crea te exemptions such that excess emissions during startup, shutdown, or control equipment cleaning are not

163 

### Petition at 37-38.

164 

### Petition at 38.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 263 of 327 violations are inconsistent w ith the fundamental requirements of the CAA with respect to emission limitations in SIPs. The first provisi on identified by the Petitioner explicitly states that excess emission during periods of startup, shutdown, and cleaning of control equipment "is not a violation," contrary to the requirements of the CAA. The EPA

believes that the inclusion of such an exem ption from otherwise applicable SIP emission limitations in Iowa Admin. Code r. 567-24.1(1) is thus a substantial inadequacy and renders this specific SIP provision impermissible. The EPA notes that these exemptions ar e impermissible even though the state has imposed some factual limitations on their pot ential scope. In Iowa Admin. Code r. 567- 24.1(1), the state has conditioned the exempti on for excess emissions during periods of startup, shutdown, or cleaning of control equi pment, requiring that such activities be "accomplished expeditiously and in a ma nner consistent with good practice for minimizing emissions." Although this limitati on on the scope of the exemptions is a helpful feature, the core problem remains that the provision provides impermissible exemptions from the otherwise applicable SIP emission limitations by defining the excess emission as "not a violation." Such provisi ons are impermissible under the CAA because the state has effectively negate d the ability of the EPA or th rough a citizen suit to enforce against those violations. However, the EPA disagrees with Petit ioner that Iowa Admin. Code r. 567- 24.1(4) is impermissible under the CAA. The EPA believes that this provision is permissible because it defines parameters fo r the exercise of enforcement discretion by state personnel for violations of emission limitations during malfunctions. According to the EPA's SSM Policy interpreting the CAA, as di scussed in section IX.A of this notice, aThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 264 of 327 state has authority to have a SIP provision that pertains to the exercise of enforcement discretion concerning actions taken by state personnel. The provisi on at issue clearly states that any excess emission during malf unction "is a violation." The rule also

delineates factors that will be considered by state personnel in determining whether to pursue enforcement for those regulatory viol ations that are due to excess emissions during malfunctions. The listing of these factor s does not alter the statement that excess

emissions are violations under the Iowa regulations. The prov isions that describe the factors to be considered by state personnel only require that the state personnel consider such factors. The regulations do not state or imply that if a source makes an appropriate showing of meeting the factors, it is exem pt from penalties or injunctive relief. The provision does not state or imply that any ot her entity, including the EPA or a member of the public, is precluded from taking an enfo rcement action if the state exercises its

discretion not to enforce violations of th e emission limitations during malfunctions. Iowa Admin. Code r. 567-24.1(4) expressly identifies excess emissions described in the rule as

violations and allows for the exercise of enforcement discretion in addressing

malfunctions. This is consistent with the CAA and the EPA's SSM Policy and therefore does not render the SIP provisi on substantially inadequate. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Iowa Admin. Code. R. 567-24.1(1). The EPA believes that this provi sion allows for exemptions from the otherwise applicable SIP emission limitations, and that such exempti ons are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), a nd 302(k). For this reason, theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 265 of 327 EPA is proposing to find that Iowa Ad min. Code. R. 567-24.1(1) is substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call with respect to this provision. The EPA proposes to deny the Petition with respect to Iowa Admin. Code r. 567- 24.1(4). The EPA believes that the provision is on its face clearly applicable only to Iowa state enforcement personnel and that the pr ovision could not reasonably be read by a court to foreclose enforcement by the EPA or through a citizen suit where Iowa state personnel elect to exercise enforcement di scretion. The EPA solicits comments on this issue, in particular from the State of Iowa , to assure that there is no misunderstanding with respect to the correct interpreta tion of Iowa Admin. Code r. 567-24.1(4).

2. Kansas a. Petitioner's Analysis The Petitioner objected to three provisions in the Kansas SIP that allow for exemptions for excess emissions during malf unctions and necessary repairs (K.A.R. § 28- 19-11(A)), scheduled maintenance (K.A.R. § 28 -19-11(B)), and certain routine modes of operation (K.A.R. § 28-19-11(C)). 165 

### The Petitioner objected be cause all three of these provisions "state that excess emissions are not violations (or are permitted)," 166 

### contrary to the fundamental requirement of the CAA that all excess emissions be considered violations. The Petitioner argue d that all three of these pr ovisions would thus appear impermissibly to preclude enforcement by the EPA or citizens for the excess emissions

that would otherwis e be violations.

165 

### Petition at 38-39.

166 

### Petition at 39.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 266 of 327 b. The EPA's Evaluation The EPA agrees that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations, whether au tomatic or through the exercise of a state

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitation must be considered violations, whet her or not the state elects to exercise its enforcement discretion. SIP provisions that create exemptions such that the excess emissions during malfunctions, necessary repa irs, and routine mode s of operation are not violations of the applicable emission limita tions are inconsistent with the fundamental requirements of the CAA with respect to emission limitations in SIPs. Two of the provisions identified by the Petitioner explici tly state that excess emissions under certain circumstances will "not be deemed violations," which is contrary to the requirements of the CAA. The EPA believes that the inclusion of such exemptions from the emission limitations in K.A.R. § 28-19-11(A) and the fi rst part of K.A.R. § 28-19-11(C) is thus a substantial inadequacy and renders these specific SIP provisions impermissible. The EPA notes that these exemptions ar e impermissible even though the state has imposed some factual and temporal limitations on their potential scope. For example, in K.A.R. § 28-19-11(A), the stat e has specified that excess emissions during malfunctions or necessary repairs "shall not be deemed violations provided that: (1) The person responsible ... notifies the department of the occurrence and nature of such malfunctions, breakdowns, or repairs, in writing, within ten (10) days of noted occurrence." Similarly,This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 267 of 327 in the first part of K.A.R. § 28-19-11(C) with respect to "[e] xcessive contaminant emission from fuel burning equipment used fo r indirect heating pur poses resulting from fuel or load changes, start up, soot bl owing, cleaning of fires, and rapping of precipitators," the state has made the exempti on available only in such events that "do not exceed a period or periods aggregating more th an five (5) minutes during any consecutive one (1) hour period." Although these extra limita tions on the scope of the exemptions are helpful features, the core problem rema ins that both of the provisions provide impermissible exemptions from the emission limitations by defining the excess emissions

as non-violations. The EPA believes that both K.A.R. § 28- 19-11(B) and the second part of K.A.R. § 28-19-11(C) are impermissible as unbounded di rector's discretion provisions that purport to make a state official the unilateral arbiter of whet her the excess emissions in a given event constitute a viol ation. In the case of K.A.R. § 28-19-11(B), the provision

authorizes a state official un ilaterally to grant "prior appr oval" to permit "[e]missions in excess of the limitations specified in these emission control regulations resulting from scheduled maintenance of control equipment and appurtenances." The provision vests the

state official with unilateral power to grant an exemption fr om the otherwise applicable emission limitation, without any public process at the state or federa l level. By deciding that an exceedance of the emission limitation is "permitted," exercise of this discretion could preclude enforcement by the EPA or th rough a citizen suit. K.A.R. § 28-19-11(B) does contain a requirement that the source establish that it was not possible for the scheduled maintenance to occur during peri ods of shutdown but nevertheless empowers the state official to create an exemption from the emission limitation, and such anThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 268 of 327 exemption is impermissible in the first inst ance. Such a director's discretion provision

undermines the emission limitations in the SI P, and the emissions reductions they are intended to achieve, and renders them less enforceable by the EPA or through a citizen

suit. Similarly, the EPA believes that the s econd part of K.A.R. § 28-19-11(C) is impermissible because it allows a state offici al unilaterally to "aut horize, upon request of the operator, an adjusted time schedule for permitting ... excessive emissions" if the source can demonstrate that the period of "fue l or load changes, start up, soot blowing, cleaning of fires, and rapping of precipitators" is required to extend longer than the five minutes during a consecutive one-hour period a llowed by the first part of K.A.R. § 28- 19-11(C). Because the K.A.R. § 28-19-11(C) gr ant of an automatic exemption of excess emissions during these events is impermissi ble in the first instance, the provision's

authorization of the state offi cial to extend the period of exemption for an even longer period upon request from a source is also impe rmissible. Moreover, the provision permits the state official to extend the time peri od of exemption without any additional public process at the state or federal level. This discretion authoriz es the creation of an extended exemption on a case-by-case basis, where the ex emption is not permissible in the first instance. Thus, this provision undermines th e SIP emission limitations, and the emissions reductions they are intended to achieve, and renders them less enforceable by the EPA or through a citizen suit. The EPA believes that the inclusion of di rector's discretion provisions in K.A.R. § 28- 19-11(B) and K.A.R. § 28-19-11( C) is thus a substantial inadequacy and renders these specific SIP provisions impermissible for this reason. The EPA notes that K.A.R. § 28-19-11(C) does condition the state official'sThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 269 of 327 authorization of an extended time period in which excess em issions are not considered violations upon a source limiting "visible emissions" to not exceed 60 percent opacity. The CAA does, as discussed in section VII.A of this notice, permit states to develop

alternative emission limitations or other fo rms of enforceable control measures or techniques that apply duri ng startup or shutdown. The EPA believes that emission limitations in SIPs should generally be develope d in the first instance to account for the types of normal operation outlined in K.A.R. § 28-19-11(C), such as cleaning and soot blowing. K.A.R. § 28-19-11(C) doe s not appear to comply with the Act's requirements as interpreted in the EPA's SSM Policy in a numbe r of respects. The provision's exemptions apply to all SIP emission limitations, and th e alternative limitation in K.A.R. § 28-19- 11(C) restricts only visible emissions and t hus, at best, is an alternative emission limitation only for particulate matter. In a ddition, such alternative emission limitations must be developed in consultation with the EPA and must be narrowly drawn to apply to small groups of sources using specific types of control strategy. To the extent that the requirement limiting the opacity of visible em issions during periods of fuel or load changes, start up, soot blowing, cleaning of fire s, and rapping of precipitators in K.A.R. § 28-19-11(C) was intended to function as an al ternative emission limitation rather than as an exemption granted at the state official's discretion from the othe rwise applicable SIP emission limitations, the terms of the alternative limitation are substantially inadequate and do not render this specific SIP pr ovision permissible under the CAA. With respect to the Petitioner's concern th at the challenged exemptions preclude enforcement by the EPA or citizens, the EPA agrees that this is one of the critical reasons why such provisions are impermissible under the CAA. By having SIP provisions thatThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 270 of 327 automatically exempt or allow state offici als to define what would otherwise be violations of the applicable SIP emission limitations as non-violations, the state has effectively negated the ability of the EP A or the public to enforce against those

violations. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to K.A.R. § 28-19-11(A) and the first part of K.A.R. § 28-19-11(C). The EPA believes that both of these provisions allow for automatic exemptions from the ot herwise applicable emission limitations, and that such outright exemptions are inconsistent with the f undamental requirements of the CAA with respect to emission limitations in SIPs as requi red by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by crea ting these impermissible exemptions, the state has defined violations in a way that would interfere with effective enforcement by the EPA and citizens for excess emissions during these events as provided in CAA

sections 113 and 304. The EPA also proposes to grant the Petiti on with respect to K.A.R. § 28-19-11(B) and the second part of K.A.R. § 28-19- 11(C). The EPA believes both allow for exemptions from otherwise applicable emi ssion limitations through a state official's

unilateral exercise of discre tionary authority that is in sufficiently bounded and includes no additional public process at th e state or federal level. Such provisions are inconsistent with the fundamental requirements of the CAA with respect to SIPs and SIP revisions. Moreover, the requirement that visible emi ssions not exceed 60-pe rcent opacity during the periods of operation specified in K.A.R. § 28-19- 11(C) is not a perm issible alternative

emission limitation under the EPA's SSM Policy interpreting the CAA.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 271 of 327 For these reasons, the EPA is proposing to find that K.A.R. § 28-19-11(A), K.A.R. § 28-19-11(B), and K.A. R. § 28-19-11(C) are substant ially inadequate to meet CAA requirements and thus is proposing to issue a SIP call with respect to these provisions.

3. Missouri a. Petitioner's Analysis The Petitioner objected to two provisions in the Missouri SIP that could be interpreted to provide discretionary exemptions. 167,168 

### The first provides exemptions for visible emissions exceeding otherwise applicable SIP op acity limitations (Mo. Code Regs. Ann. tit 10, § 10-6.220(3)(C)). The s econd provides authorization to state personnel to decide whether excess emissions "warrant enforcement action" where a

source submits information to the state s howing that such emissions were "the consequence of a malfunction, start-up or shutdown." (Mo. Code Regs. Ann. tit 10, § 10- 6.050(3)(C)). The Petitioner argued that Mo. Code Regs. Ann. tit 10, § 10-6.050(3)(C)

167 

### Petition at 49-50.

168 

### The EPA notes that the Petitioner also identified additional provisions Mo. Code Regs. Ann. tit 10, § 10-6.200(3)(E)(1), Mo. Code Regs. Ann. tit 10, § 10- 6.200(3)(E)(3)(C)(I), Mo. Code Regs. A nn. tit 10, § 10-6.200(3)(E)(4)(B), Mo. Code Regs. Ann. tit 10, § 10-6.200(3)(E)(5)(E), Mo. Code Regs. Ann. tit 10, § 10- 6.200(3)(E)(6)(F), Mo. Code Regs. Ann. tit 10, § 10-6.200(3)(E)(7)(E), Mo. Code Regs. Ann. tit 10, § 10-6.200(3)(E)(11)(C), which provid e for exemptions to HMIWIs, that it alleged are inconsistent with the CAA and the EPA's SSM Policy. However, the Petitioner did not request that the EPA addre ss these provisions in its remedy request, and thus the EPA is not addressing these provisions in this action. (This is in contrast to the case of a similar HMIWI provision in Nebraska for which the Petition did specifically make such a request.) The EPA further notes that the provisions enumerated above are not part of Missouri's SIP but we re approved as part of the sepa rate state plan to meet the applicable emissions guidelines under CAA § 111(d) and 40 CFR Pa rt 60. Therefore, a SIP call is not appropriate. The EPA may elect to evaluate these provisions in a later action.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 272 of 327 "clearly gives the director the authority to decide whether excess emissions occurred during a malfunction, start-up, or shutdown, a nd whether they 'warrant enforcement

action.'" 169 

### According to the Petitioner, the provisio n could be interpreted to decide that enforcement is not warranted by anybody, whic h could preclude action by the EPA and citizens for both civil penaltie s and injunctive relief, and such an interpretation is

inconsistent with the CAA and the EPA's SSM policy interpreting the CAA. Similarly, the Petitioner argued that Mo. Code Re gs. Ann. tit 10, § 10-6.220(3)(C) could be construed to empower the dire ctor to preclude enforcement by the EPA and citizens. The Petitioner noted that the CAA and the EPA's SSM policy forbid such provisions if they would purport to preclude enforcement by the EPA or citizens.

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

official's discretion. In accordance with th e requirements of section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emi ssion limitations must be continuous. Thus, any excess emissions above the level of th e applicable emission limitations must be considered violations, whether or not the state elects to exercise its enforcement

discretion.

The EPA believes that Mo. Code Regs. Ann. tit 10, § 10-6.220(3)(C) is impermissible as an insufficiently bounded di rector's discretion provision. The provision

169 

### Petition at 50.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 273 of 327 states that "[v]isible emissions over the limitation s . . . of this rule are in violation of this

rule unless the director determines that th e excess emissions do not warrant enforcement action based on data submitted" by sources re garding startup, shutdown, and malfunction events. This provision could be read to mean that once the state official has determined

that excess visible emissions do not warrant enforcement action, those excess emissions

are not violations. Such an interpretation would make the state official the unilateral

arbiter of whether the excess emissions in a given event constitute a violation, which could preclude enforcement by the EPA or the public who might disagree about whether enforcement action is warranted. Most importa ntly, however, the prov ision may be read

to authorize the state official to create an exemption from the emission limitation, and such an exemption is impermissible in the first instance. The EPA believes that the inclusion of an insufficiently bounded director 's discretion provision in Mo. Code Regs. Ann. tit 10, § 10-6.220(3)(C) is thus a substantia l inadequacy and renders this specific SIP provision impermissi ble for this reason.

The EPA believes that Mo. Code Regs. Ann. tit 10, § 10-6.050(3)(C) is permissible because it defines parameters fo r the exercise of enforcement discretion by state personnel for violations of emissi on limitations. According to the EPA's SSM Policy, as discussed in section IX.A of this notice, a state has authority to have a SIP provision that pertains to the exercise of enforcement discretion concerning actions taken by state personnel. The provision only mainta ins that state enforcement personnel "shall

consider" certain factors in determining whether to take an enforcement action under the state statutory enforcement provisions. The re gulations do not state or imply that if a source makes an appropriate showing it is exem pt from penalties or injunctive relief. TheThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 274 of 327 provisions that describe the fact ors to be considered by a state official only state that the official will consider such factors. The pr ovision does not state or imply that any other entity, including the EPA or a member of the public, is precluded from taking an

enforcement action if the stat e exercises its discretion not to pursue enforcement. The EPA believes that Mo. Code Regs. Ann. tit 10, § 10-6.050(3)(C) is consistent with the CAA and the EPA's SSM Policy and theref ore does not render the SIP provision substantially inadequate. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to Mo. Code Regs. Ann. tit 10, § 10-6.220(3)(C). The EPA believes that this provision could be read to allow for exemptions from the otherwise applicable SIP emission limitations through a state

official's unilateral exercise of discretiona ry authority that is insufficiently bounded and includes no additional public pr ocess at the state or federa l level. Such a provision is inconsistent with the fundamental requireme nts of the CAA with respect to SIPs as required by sections 110(a)(2)(A ), 110(a)(2)(C), and 302(k). For these reasons, the EPA is proposing to find Mo. Code Regs. A nn. tit 10, § 10-6.220(3)(C) is substantially inadequate to meet CAA requirements and t hus is proposing to issue a SIP call with respect to this provision. The EPA proposes to deny the Petition w ith respect to Mo. Code Regs. Ann. tit 10, § 10-6.050(3)(C). The EPA believes that the provision is on its face clearly applicable only to Missouri state enforcem ent personnel and that the prov ision could not reasonably be read by a court to foreclose enforcemen t by the EPA or through a citizen suit where Missouri state personnel elec t to exercise enforcement discretion. The EPA solicitsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 275 of 327 comments on this issue, in particular from the State of Missouri, to assure that there is no misunderstanding with respect to the correct interpretation of Mo. Code Regs. Ann. tit 10, § 10-6.050(3)(C).

4. Nebraska a. Petitioner's Analysis The Petitioner objected to two pr ovisions in the Nebraska SIP. 170 

### First, the Petitioner objected to a generally applicable provision that provides authorization to state personnel to decide whether excess emissions "warrant enforcement action" where a source submits information to the state showing that such emissions were "the result of a malfunction, start-up or shutdown" (Ne b. Admin. Code Title 129 § 11-35.001). The Petitioner argued that this provi sion "clearly gives the Direct or the authority to decide whether excess emission occurred during a malfunction, startup or shutdown, and whether they 'warrant enforcement action.'" 171 

### According to the Petitioner, the provision could be interpreted to give a state official the authority to decide that enforcement is not warranted by anybody, which could preclude action by the EPA and citizens for both civil penalties and injunctive relief, and such an interpretation is inconsistent with the CAA and the EPA's SSM policy interpreting the CAA. The Petitioner th us requested that Nebraska revise the provision to elimin ate any confusion that a decision by state personnel not to enforce against a violation would in any way foreclose enforcement by

the EPA or citizens. Second, the Petitioner objected to a specifi c provision in Nebraska state law that

170 

### Petition at 51.

171 

### Petition at 51.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 276 of 327 contains exemptions for excess emissions at HMIWI during startup, shutdown, and malfunction (Neb. Admin. Code Title 129 § 18-004.02). The Petitioner requested that these exemptions be removed entirely from Nebraska's SIP.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitations must be considered violations, whet her or not the state elects to exercise its

enforcement discretion. The EPA believes that Neb. Admin. Code Title 129 § 11-35.001 is permissible because it defines parameters for the exer cise of enforcement discretion by state personnel for violations of emission limitations . According to the EPA's SSM Policy, as

discussed in section IX.A of th is notice, a state has authority to have a SIP provision that pertains to the exercise enforcement di scretion concerning actions taken by state personnel. The provision in question maintain s that state enforcement personnel "shall

consider" certain factors in determining whether to take an enforcement action under the state statutory enforcement provisions. The regulation does not expr essly or implicitly place any limits on the state personnel's ability to exercise discretion, and the enforcement discretion provided by this regu lation is not an exemption to the SIP emission limitations. The provision does not state or imply that any other entity,This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 277 of 327 including the EPA or a member of the pub lic, is precluded from taking enforcement

action if the state exercises its discretion not to pursue enforcement. The EPA believes that Neb. Admin. Code Title 129 § 11-35.001 is consistent with the CAA and the EPA's SSM Policy and therefore does not render the SIP substantially inadequate. The EPA disagrees that th e provisions providing exemptions for HMIWI must be

removed from the SIP. Nebraska Admin. Code Title 129 § 18-004.02 was not approved into Nebraska's SIP, but rather it was approved as part of the separate state plan to meet the applicable emissions guidelines unde r CAA § 111(d) and 40 CFR Part 60. Because

that rule is not in the Nebraska SIP is not re lated to any provisions in the SIP, it does not represent an inadequacy in the SIP. c. The EPA's Proposal The EPA proposes to deny the Petition w ith respect to Neb. Admin. Code Title 129 § 11-35.001. The EPA believes that this prov ision is on its face clearly applicable only to Nebraska state enforcement personnel an d that the provision could not reasonably be read by a court to foreclose enforcemen t by the EPA or through a citizen suit where personnel from Nebraska elect to exercise enforcement discretion. The EPA solicits comments on this issue, in particular from the State of Nebraska, to a ssure that there is no misunderstanding with respect to the corre ct interpretation of this provision. The EPA proposes to deny the Petition w ith respect to Neb. Admin. Code Title 129 § 18-004.02. This regulation is not part of the Nebraska SIP and thus cannot represent an inadequacy in the SIP.

5. Nebraska: Lincoln-Lancaster a. Petitioner's AnalysisThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 278 of 327 The Petitioner objected to a generally applicable provision in the LincolnLancaster County Air Pollution Control Prog ram (Art. 2 § 35), which governs the Lincoln-Lancaster County Air Pollu tion Control District of Nebr aska, that is parallel "in all aspects pertinent to this analysis " to Neb. Admin. Code Title 129 § 11-35.001. 172 

### The Lincoln-Lancaster County provisi on provides authoriza tion to local pers onnel to decide

whether excess emissions "warrant enforcement action" where a source submits information to the county showing that such emissions were "the re sult of a malfunction, start-up or shutdown." The Pe titioner argued that this provision "clearly gives the Director the authority to decide whethe r excess emission occurred during a malfunction, startup or shutdown, and whether th ey 'warrant enforcement action.'" 173 

### According to the Petitioner, the provision could be interpreted to decide that enforcement is not warranted by anybody, which could preclude action by the EP A and citizens for both civil penalties and injunctive relief, and such an interpretation is incons istent with the CAA and the EPA's SSM Policy interpreting the CAA. The Pe titioner thus requested that Nebraska or Lincoln-Lancaster County revise the provision to eliminate an y confusion that a decision by local personnel not to enforce against a violation would in any way foreclose enforcement by the EPA or citizens.

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

official's discretion. In accordance with th e requirements of C AA section 110(a)(2)(A),

172 

### Petition at 51-52.

173 

### Petition at 52.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 279 of 327 SIPs must contain emission limitations a nd, in accordance with the definition of "emission limitations" in CAA section 302( k), such emission limitations must be continuous. Thus, any excess emissions above the level of the applicable emission limitations must be considered violations, whet her or not the state elects to exercise its

enforcement discretion.

The EPA believes that Lincoln-Lancaste r County Air Pollutio n Control Program, Art. 2 § 35 is permissible because it defines parameters for the exercise of enforcement discretion by local personnel for violations of emission limitations . According to the EPA's SSM Policy, as discussed in section IX.A of this notic e, a state has authority to have a SIP provision that pert ains to the exercise enfo rcement discretion concerning actions taken by state personnel. The provi sion in question maintains that local enforcement personnel "shall cons ider" certain factor s in determining whether to take an enforcement action under the local statutory enforcement provisions. The regulation does not expressly or implicitly pl ace any limits on the local personnel's ability to exercise discretion, and the enforcement discretion provi ded by the regulation is not an exemption to the SIP emission limitations. The provision does not state or imply that any other entity, including the EPA or a member of the public, is precluded from taking enforcement action if the county exercises its discretion not to pursue enforcement. The EPA believes that Lincoln-Lancaster County Air Pollution Control Program, Art. 2 § 35

is consistent with the CAA and EPA's SSM Policy and therefore does not render the SIP substantially inadequate. c. The EPA's Proposal The EPA proposes to deny the Petition with respect to Lincol n-Lancaster CountyThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 280 of 327 Air Pollution Control Program, Art. 2 § 35. The EPA believes that this provision is on its face clearly applicable only to Lincoln-La ncaster County enforcement personnel and that the provision could not reasonably be read by a court to foreclose enforcement by the EPA or through a citizen suit where personne l from Lincoln-Lancaster County elect to

exercise enforcement discretion. The EPA solicit s comments on this issue, in particular

from the State of Nebraska and from the Lincoln-Lancaster County Air Pollution Control Program, to assure that there is no mis understanding with respect to the correct interpretation of this provision. I. Affected States in EPA Region VIII

1. Colorado a. Petitioner's Analysis The Petitioner objected to two affirmativ e defense provisions in the Colorado SIP that provide for affirmative de fenses to qualifying sources during malfunctions (5 Colo. Code Regs § 1001-2(II.E)) and during periods of startup and shutdown (5 Colo. Code Regs § 1001-2(II.J)). 174 

### The Petitioner acknowledged that this state has correctly revised its SIP in important ways in or der to be consistent with C AA requirements, as interpreted in the EPA's SSM Policy, including providi ng affirmative defense provisions that are limited to monetary penalties, that do not a pply in actions to enforce federal standards such as NSPS or NESHAP approved into the SI P, and that meet "almost word for word"

the recommendations of the 1999 SSM Guidan ce. Nevertheless, the Petitioner had two concerns with these SIP provisions.

174 

### Petition at 25-27.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 281 of 327 First, the Petitioner objected to both of these provisions based on its assertion that the CAA allows no affirmative defense provisi ons in SIPs. Second, the Petitioner asserted that even if affirmative defense provisions were permissible under the CAA, the state had properly followed EPA guidance in the affi rmative defense provision applicable to startup and shutdown events but failed to do so in the affirmative defense provision applicable to malfunctions. Specifically, the Petitioner argued that the EPA's own guidance for affirmative defens es recommended that they "a re not appropriate where a single source or a small group of sources has th e potential to cause an exceedance of the NAAQS or PSD increments." 175 

### Instead, the state's affirmative defense for malfunction events is potentially available to any source, if it can esta blish that the excess emissions during the event did not result in exceedances of ambient air quality standards that could

be attributed to the source. 176 

### The Petitioner objected to this as not merely inconsistent with the EPA's 1999 SSM Guidance but an approach "that does not have the same

deterrent effect" on sources and that would not have the same effects on sources to assure that they comply at all times in order to avoid violations. As a practical matter, the Petitioner also argued that in cluding this element to the affirmative defense could "mire enforcement proceedings in the question of whether or not the NAAQS or PSD

increments were exceeded as a matter of fact."

b. The EPA's Evaluation The EPA disagrees with the Petitioner's contention that no affirmative defense provisions are permissible in SIPs under the C AA. As explained in more detail in section

175 

### Id. at 25.

176 

### See, 5 Colo. Code Regs §1001-2(II.E.1.j).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 282 of 327 IV.B of this notice, the EPA interprets the CAA to allow affirmative defense provisions for malfunctions. So long as these provisions are narrowly drawn and consistent with the CAA, as recommended in the EPA's guidance fo r affirmative defense provisions in SIPs, the EPA believes that states may elect to have affirmative defense provisions for malfunctions. However, based on evaluation of the legal and factual basis for affirmative defenses in SIPs, the EPA now believes th at affirmative defense provisions are not appropriate in the case of planned source acti ons, such as startup and shutdown, because sources should be expected to comply with applicable emission limitations during those normal planned and predicted modes of source operation. Again, as explained in section IV.B of this notice, the EPA is changing its interpretation with respect to affirmative defenses for startup and shutdown. The EP A acknowledges that at the time of its approval of 5 Colo. Code Regs § 1001-2(II.J) into the SIP in 2006, the state had complied with the EPA's then-applicable interpretation of the CAA and had worked with the EPA to develop that provision. 177 

### However, based on further c onsideration of this issue prompted by the Petition, the EPA is revisi ng its SSM Policy to interpret the CAA to allow affirmative defenses only in the case of events that are be yond the control of the

source, i.e. , malfunctions. With respect to the Petitioner's second c oncern, the EPA disagrees that the state's

inclusion of an affirmative defense availabl e to all sources, includi ng single sources or groups of sources with the "potential" to cause exceedances of the NAAQS or PSD increments, renders the provision inc onsistent with the CAA. The EPA's

177 

### See, "Approval and Disapproval and Promulga tion of Colorado Affirmative Defense Provisions for Startup and Shutdown," 71 FR 8958 (Feb. 22, 2006).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 283 of 327 recommendations for appropriate criteria for affirmative defenses in the SSM Policy are guidance, and as guidance, the EPA believes th at there can be facts and circumstances in which a state may elect to develop a SIP provi sion with somewhat different criteria, so long as they still meet the same statutory objectives. Conditioning the affirmative defense on a factual showing that there was no actual vi olation of air standard s attributable to the excess emissions during the malfunction is an acceptable alternative means to the same end. For example, instead of providing no a ffirmative defense to sources with this "potential" for these impacts on air qualit y, the state could provide the affirmative

defense to sources on the condition that the sour ce must be able to demonstrate that the excess emissions did not have these impacts. The EPA considers this an appropriate means to the same end of providing the affi rmative defense to sources in a way that provides relief from monetary penalties for ev ents that were beyond th eir control, at the same time providing incentive to the source to prevent the violation and to take all practicable steps to minimize the impacts of th e violation in order to qualify for the relief from penalties. As described in more detail in section VII.B of this notice, the EPA is revising its recommendations for affirmative defense provisions for malfunctions with respect to this specific point in this proposal. Finally, the EPA understands the Peti tioner's concern about enforcement proceedings becoming "mired" in various questions of fact that must be established in an enforcement action. However, the EPA notes that all enforcement proceedings turn upon important questions of fact that must be proven, including facts necessary to establish

whether there was a violati on, the extent of the violat ion, and whether there are extenuating circumstances that should be take n into consideration in the assessment ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 284 of 327 monetary penalties or injunctiv e relief for the violation. Inde ed, the statutory factors that Congress provided for the assessment of pena lties in CAA section 113(e) explicitly

include "the seriousness of the violation," which would encompass the extent and severity of the environmental impact of th e violation. Thus, the EPA does not agree that

it is unreasonable to include an affirmative defense element that pertains to whether or not the excess emissions in question cau sed a violation of the NAAQS or PSD

increments. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to 5 Colo. Code Regs § 1001- 2(II.J) because it provides an affirmative defense for violations due to excess emissions applicable during startup and shutdown events, contrary to the EPA's current interpretation of the CAA. The EPA believes that this provision allows for an affirmative

defense that is inconsiste nt with the fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, this provision is inconsistent with the requirements of CAA sections 113 and 304. For these reasons, the EPA is proposing to find that this provision is substantially inadequate to meet CAA requirements and proposes to issue a SIP call with respect to this provision. The EPA proposes to deny the Petition with respect to 5 Colo. Code Regs § 1001- 2(II.E), because this provision includes an affirmative defense applicable to malfunction events that is consistent with the requiremen ts of the CAA, as interpreted by the EPA in the SSM Policy. In particular, the EPA denies the Petition with respect to the claim that this provision is inconsistent with the CAA b ecause it is available to sources or groups of sources that might have th e potential to cause viola tions of the NAAQS or PSDThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 285 of 327 increments. The EPA believes that an acceptabl e alternative approach is to require the source to establish, as an element of the affi rmative defense, that the excess emissions in question did not cause such impacts. Accordi ngly, the EPA is proposing to find that this provision is consistent with CAA requirement s and thus declining to make a finding of substantial inadequacy with respect to this provision.

2. Montana a. Petitioner's Analysis The Petitioner objected to an exemption from otherwise applicable emission limitations for aluminum plants during startup and shutdown (Montana Admin. R 17.8.334). 178 

### The Petitioner argued that an auto matic exemption for emissions during startup and shutdown events is inconsistent with the CAA and the EPA's interpretation of the CAA in the SSM Policy. In addition, the Pe titioner argued that th ese exemptions also could not qualify as source-sp ecific alternative limits applicable during startup and shutdown because there "is nothing to indicate that the State addresse d the feasibility of control strategies, minimization of the fre quency and duration of startup and shutdown modes, worst-case emissions, and impacts on air quality." 179 

### The Petitioner further objected that this provision would be in c ontravention of the EPA's recommendation that source-specific emission limitations for star tup and shutdown would not be appropriate when a single source or small group of sources has the potential to cause an exceedance of the NAAQS or PSD increments.

b. The EPA's Evaluation

178 

### Petition at 50-51.

179 

### Id. at 51.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 286 of 327 The EPA agrees that ARM 17.8.334 (in Admi nistrative Rule of Montana) is inconsistent with the requirements of the C AA. This provision explicitly provides that affected sources are exempted from otherwis e applicable SIP emi ssion limitations during startup and shutdown. The relevant part of th is SIP provision specifies that "[o]perations during startup and shutdown shall not cons titute representative conditions for the purposes of determining compliance with this rule" and further specifies "nor shall emission in excess of the levels requ ired in ARM 17.8.331 and 17.8.332 during periods of startup and shutdown be consider ed a violation of ARM 17.8.331 and 17.8.332." 180 

### The latter regulatory cross-references are to emission limits for fluorides and opacity at the source, both of which relate to the a ttainment and maintenance of the NAAQS and

PSD increments. 181 

### Moreover, the provision in qu estion also contains ambiguous regulatory text that suggests the exempti on extends to other emission limitations applicable to this source category. By stati ng that operations during startup and shutdown are not representative conditi ons for determining compliance with "this rule," the provision appears to provide the same exemp tions from other emission limitations that may apply to aluminum plants with respect to other air emissions as well. The EPA's longstanding interpretation of the CAA is that SIP provi sions containing exemptions during startup and shutdown are not permissible. The EPA also agrees that ARM 17.8.334 does not qualify as a source-specific emission limitation applicable during startup and shutdown, as recommended in the 1999

180 

### See, Montana Admin. R 17.8.334(1).

181 

### The EPA notes that the state has elected to control fluoride emissions as a means of addressing particulate matter fr om the affected sources.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 287 of 327 SSM Guidance. As explained in section VII.A of this notice, the EPA is clarifying that guidance to eliminate any misperception that exemptions from otherwise applicable emission limitations are permissible during startup and shutdown. States can elect to develop appropriate source-specific alternat ive emission limitations that apply during startup and shutdown events. The EPA recomm ended that in order to be approvable ( i.e. , meet CAA requirements), any new special em ission limitations applicable to the source during startup and shutdown should be narrowly tailored and take into account considerations such as the technological li mitations of the specif ic source category and the control technology that is feasible during startup and shutdown. Any such SIP revision that would alter the existing applic able emission limitations for a source during startup and shutdown must meet the same requirements as any other SIP submission, i.e. , compliance with CAA sections 110(a), 110( k), 110(l), and 193, and any other CAA provision substantively germane to the SIP revision. Given the text of ARM 17.8.334, however, the EPA believes the state intended not to create a source-specific emission limitation applicable during st artup and shutdown but instead merely an exemption for such emissions. Likewise, the EPA does not be lieve that the issue of special emission limitations during startup or shutdown for a single source or group of sources was contemplated at the time the state created th is SIP provision. Nevertheless, the EPA notes that its current SSM Policy does not interpre t the CAA to be a bar to special emission limitations in these circumstances, if the st ate addresses the concern about impacts on NAAQS and PSD increments in some other comparable way. c. The EPA's Proposal The EPA proposes to grant the Petiti on with respect to ARM 17.8.334. The EPAThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 288 of 327 believes that this provision allows for ex emptions from otherwise applicable SIP emission limitations during startup and s hutdown and that such exemptions are inconsistent with the fundamental requi rements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). It is not necessary to reach the Petitioner's argument that this provision is not an appropriat e source-specific emission limitation, because the provision at issue instead provides an impermissible exemption for emissions during startup and shutdown. Similarly, it is not necessary to r each the Petitioner's concern with respect to the issue of a single source or group of sources with the potential to cause an exceedance of the NAAQS or PSD increment, becau se the provision at issue provides an impermissible exemption. For these reasons, the EPA is proposing to find that this provision is substantially inad equate to meet CAA requirements and thus proposes to issue a SIP call with resp ect to this provision.

3. North Dakota a. Petitioner's Analysis The Petitioner objected to two provisions in the North Dakota SIP that create exemptions from otherwise applicable emission limitations. 182 

### The first provision creates exemptions from a number of cross-referenced opacity limits "where the limits specified

in this article cannot be met because of operations and processes such as, but not limited to, oil field service and drilling operations, but only so long as it is not technically feasible to meet said specifications" (N .D. Admin. Code § 33-15- 03-04(4)). The second provision creates an implicit exemption fo r "temporary operational breakdowns or

182 

### Petition at 59.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 289 of 327 cleaning of air pollution equi pment" if the source meets certain conditions (N.D. Admin. Code § 33-15-05-01(2)(a)(1)). The Petitioner claimed that both provisions violate the CAA and the EPA's interpretation of the CAA in the SSM Policy because they create exemptions from otherwise applicable emi ssion limitations for excess emissions during these events rather than treating the exce ss emissions as violations, and because the provisions could be construed to preclude enforcement of the emission limitations for these violations by the EPA and citizens.

b. The EPA's Evaluation

The EPA believes that N.D. Admin. C ode 33-15-03-04.4 and N.D. Admin. Code

33-15-03-04.3 183 

### are inconsistent with the require ments of the CAA. These provisions explicitly allow exemptions from the othe rwise applicable emission limitations for opacity in several other regulations: N.D. Admin. Code 33-15-03- 01, N.D. Admin. Code 33-15-03-02, N.D. Admin. Code 33-15-03- 03, and N.D. Admin. Code 33-15-03-03.1. The exemption created by N.D. Admin. Code 33-15-03-04.4 is indefinite in scope and has unclear limits, because it is available whenever a source cannot meet the emission limitations "because of operations or proce sses such as, but not limited to, oil field service and drilling operations," but "only so long as it is not technically feasible to meet said [emission limitations]". It is unclear whet her the provision is intended to apply only to special circumstances, such as malfunctions , or to a broader range of normal source operations. It is also unclear who determ ines what operations or processes make

183 

### The EPA interprets the Petitioner's refere nce to N.D. Admin. Code § 33-15-03-04(4) as a citation to N.D. Admin. Code 33-15-03-04. 4. The EPA notes also that the Petitioner specifically focused on concern with N.D. Admin. Code 33-15-04.4, but N.D. Admin. Code 33-15-03-04.3 also incl udes a related problem.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 290 of 327 compliance impossible or who determines when it again becomes technically feasible to meet the limits. Whatever the parameters of this imprecise provision, however, it is clear that it contemplates outright exemptions from the applicable emission limitations under

certain circumstances and at certain times.

The EPA believes that N.D. Admin. Code 33-15-03-04.3 is impermissible under the CAA as interpreted in the EPA's SSM Po licy as an unbounded director's discretion provision. The provision states that the othe rwise applicable emission limitations for opacity in the several other listed regulations do not apply "where an applicable opacity

standard is established for a specific source." In accordance with this provision, a state official could modify the opacity limits in a permit or other document to allow emissions

in excess of the otherwise a pplicable SIP limitations. As di scussed in section VII.A of this notice, such director's discretion provisions are impermis sible. Such an interpretation

would make the state official the unilateral arbiter of whether the excess emissions in a given event constitute a viol ation, which could preclude enforcement by the EPA or the public who might disagree about whether enforcement action is warranted. Most importantly, however, the provision may be read to authorize the state official to create an exemption from the emission limitation, and such an exemption is impermissible in

the first instance. The EPA believes that the inclusion of an unbounded director's discretion provision in N.D. Admin. Code 33-15-03-04.3 is thus a substantial inadequacy and renders this specific SIP provisi on impermissible for this reason. In accordance with the requirements of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accord ance with the definition of "emission limitations" in CAA section 302(k), such em ission limitations must be continuous. SIPThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 291 of 327 provisions that create exemptions such that the excess emissions during startup, shutdown, or malfunctions are not violations of the applicable emission limitations are inconsistent with the fundamental requireme nts of the CAA with respect to emission limitations in SIPs. The exemptions provide d in N.D. Admin. C ode 33-15-03-04.4 are not consistent with CAA requirements, because they would exempt excess emissions that occur during the periods in question. In additi on, the provision does not operate to create a source-specific emission limitation that app lies during the periods in question, nor does it meet the recommended criteria and parameters for an affirmative defense for violations

that occur as a result of a qualifying malfunction. Moreover, the amorphous nature of the provision, in which it is unclear who makes the determination whether the source should

be excused from the emission limitations and what the precise parameters are for these exemptions, exacerbates the problem. Thus, th e EPA also agrees with the Petitioner's concern that this provision c ould be interpreted to bar en forcement by the EPA or through a citizen suit, not only because it creates im permissible exemptions but also because of the inherent ambiguities about: (i) who ma kes the determination whether the excess emissions are to be considered a violation; and (ii) what constitutes an event during which the excess emissions are to be excused. In its current form, the EPA has concerns not only about the impermissible exemptions created by the provision but also about its practical enforceability as a SIP provision meeting basic CAA requirements for implementation, maintenance, and enforcemen t of the NAAQS as contemplated in CAA

section 110.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 292 of 327 The EPA agrees that N.D. Admin. Code 33-15-05-01.2a(1) 184 

### is also inconsistent with CAA requirements for SIP provisions. Th is provision creates an implicit exemption for "temporary operational breakdowns or clea ning of air pollution equipment" if the

source meets certain conditions. N.D. Admi n. Code 33-15-05-01 in general imposes emission limitations for particulate matter from industrial processes, with the limitations

stated in terms of the maximum amount of particulate matter allowed in any one hour. Notwithstanding these emission limitati ons, however, N.D. Admin. Code 33-15-05- 01.2a(1) provides that: [t]emporary operational brea kdowns or cleaning of air equipment for any process are permitted provided that the owner or ope rator immediately advises the department of the circumstances and outlines an acceptable corrective program and provided such operations do not cause an immediate public health hazard (emphasis added). Although N.D. Admin. Code 33-15-05-01.2a(1) does not explicitly state that the exceedances of the emission limitations are not violations, the EPA believes that this is the most reasonable reading of the provision. Moreover, the title fo r this subsection is "exceptions," and the immediately preceding provisions impose the emission limitations on sources. Thus, the provision creates an im permissible exemption from the otherwise applicable SIP emission limitations. The EPA notes that although the stat e has imposed some conditions on the exemptions, e.g. , the requirement to notify state offici als of occurrence of the event, this provision would not qualify as an affirmative defense consistent with CAA requirements. First, the exemptions would negate the availa bility of monetary pe nalties or injunctive

184 

### The EPA interprets the Petitioner's re ference to N.D. Admin. Code § 33-15-05- 01(2)(a)(1) as a citation to N.D. Admin. Code 33-15-05-01.2a(1).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 293 of 327 relief in any enforcement proceeding. S econd, the conditions for qualifying for the exemption are not consistent with the criteria that EPA recommends for elements of an

affirmative defense for which the source bears th e burden of proof in order to assure that they are narrowly drawn and available onl y in suitable circumstances. Third, the provision extends not just to "breakdowns," which presumably equates to malfunctions, but also extends to "cleaning of air e quipment," which clearly encompasses excess emissions during normal source maintenance—events for which sources should be designed, operated, and maintained to comp ly with emission limitations, and during

which sources should be expected to comply. c. The EPA's Proposal The EPA proposes to grant the Petition w ith respect to N.D. Admin. Code 33-15- 03-04.4 (cited in the Petition as N.D. Admi n. Code § 33-15-03-04(4)). The EPA believes that this provision allows for exemptions from otherwise applicable SIP emission limitations during startup and shutdown and that such exemptions are inconsistent with the fundamental requirements of CAA secti ons 110(a)(2)(A), 110( a)(2)(C), and 302(k). In addition, the EPA believes that this pr ovision is sufficiently ambiguous that it would be difficult for the state, the EPA, or the publ ic to enforce the provi sion effectively in its current form, and that this pr ovision is thus inconsistent with the requirements of CAA section 110(a) on this basis as well. For these reasons, the EPA is proposing to find that this provision is substantia lly inadequate to meet CAA requirements and proposes to issue a SIP call with resp ect to this provision. The EPA also proposes to grant the Peti tion with respect to N.D. Admin. Code 33-15-03-04.3 (cited in the Petition as N. D. Admin. Code § 33-15-03-04(3)). The EPAThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 294 of 327 believes that this provision allows for discretionary exemptions from otherwise applicable emission limitations through a state official's unilateral exercise of discretionary authority that is insufficien tly bounded. Such provisions are inconsistent with the fundamental requirements of the CAA with respect to SIPs and SIP revisions. Moreover, the discretion created by these provisions allows case-by-case exemptions from emission limitations, when such exemptions are not permissible in the first instance. Such exemptions are inconsistent with th e fundamental requirements of the CAA with respect to emission limitations in SIPs as required by sections 110( a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is pr oposing to find that this provision is substantially inadequate to meet CAA requirements and thus proposing to issue a SIP call with respect to this provision. The EPA also proposes to grant the Peti tion with respect to N.D. Admin. Code 33-15-05-01.2a(1) (cited in the Petition as N.D. Admin. Code § 33-15-05-01(2)(a)(1)). The EPA believes that this provision allows for exemptions from otherwise applicable SIP emission limitations during operational breakdowns ( i.e. , malfunctions) or cleaning of air equipment ( i.e ., maintenance) and that such exem ptions are inconsistent with the fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2 )(C), and 302(k). For these reasons, the EPA is also proposing to find that this provision is substantially inadequate to meet CAA requirements and pr oposes to issue a SIP call with respect to this provision.

4. South Dakota a. Petitioner's Analysis The Petitioner objected to a provision in the South Dakota SIP that createsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 295 of 327 exemptions from otherwise applicable SIP emission limitations (S.D. Admin, R. 74:36:12:02(3)). 185 

### The Petitioner asserted that th e provision imposes visible emission limitations on sources but explicitly exclude s emissions that occur "for brief periods during such operations as soot blowing, start-up, shut-down, and malfunctions." The Petitioner argued that such automatic exempti ons for excess emissions is contrary to the requirements of the CAA for SIP provisions, as well as contrary to the EPA's 1982 SSM

Guidance and 1999 SSM Guidance.

b. The EPA's Evaluation The EPA agrees that S.D. Admin. R. 74: 36:12:02(3) is inconsistent with CAA requirements for SIP provisions. This provisi on creates an exemption from applicable visible emission limitations from the generally applicable SIP requirements. The S.D. Admin. R. 74:36:12:01 imposes a generally applicable opacity limit on all sources, measured using the EPA's Method 9. Howe ver, S.D. Admin. R. 74:36:12:02 provides exceptions to these limits and, in particular, in S.D. Admin. R. 74:36:12:02(3) includes an explicit exemption for emissions for "brief periods during such operations as soot blowing, start-up, shut-dow n, and malfunctions." In accordance with the requirements of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accord ance with the definition of "emission limitations" in CAA section 302(k), such em ission limitations must be continuous. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, or malfunctions are not violations of the applicable emission limitations are

185 

### Petition at 66.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 296 of 327 inconsistent with the fundamental requireme nts of the CAA with respect to emission limitations in SIPs. In addition, the EPA's SSM Policy has long interpreted the CAA not to permit exemptions for excess emissions during other modes of normal source operation, such as "soot blowing." The EPA notes that by its terms, S.D. Admin. R. 74:36:12:02(3) implies that it also would ex empt excess emissions during other modes of normal source operation because it explicitly app lies to events "such as" the four listed types, therefore implying it is not an exclus ive list and could extend to other types of events as well. The exemptions provided in S.D. Admin. R. 74:36:12:02(3) are not consistent with CAA requirements, because they would exempt excess emissions that occur during the periods in question. Excess emi ssions must be treated as violations of the applicable emission limitations. c. The EPA's Proposal The EPA proposes to grant the Petiti on with respect to S.D. Admin. R. 74:36:12:02(3). The EPA believes that this provision allows for exemptions from otherwise applicable SIP em ission limitations during star tup, shutdown, and malfunction, as well as during other modes of normal source operations such as "soot blowing." Automatic exemptions from otherwise applicable SIP emission limitations are inconsistent with the fundamental requi rements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). For these reasons, the EPA is also proposing to find that this provision is substantially inad equate to meet CAA requireme nts and proposes to issue a SIP call with respect to this provision. 5. Wyoming a. Petitioner's AnalysisThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 297 of 327 The Petitioner objected to a specific provi sion in the Wyoming SIP that provides an exemption for excess particulate matter em issions from diesel engines during startup, malfunction, and maintenance (ENV-AQ-1 Wyo. Code R. § 2(d)). 186 

### The provision exempts emission of visible air pollutants fr om diesel engines from applicable SIP limitations "during a reasonable period of warmup following a cold start or where undergoing repairs and adjustment following malfunction." The Petitioner argued that this exemption "is contrary to EPA policy for source category-specific rules for startup

and shutdown." 187 

### Accordingly, the Petitioner requested that this provision be eliminated

from the SIP.

b. The EPA's Evaluation The EPA believes that the CAA does not allow for exemptions from otherwise applicable SIP emission limitations. In accordan ce with the requirements of CAA section 110(a)(2)(A), SIPs must contain emission limitations and, in accordance with the definition of "emission limitations" in CAA section 302(k), such emission limitations must be continuous. Thus, any excess emissi ons above the level of the applicable

emission limitation must be considered viol ations, whether or not the state elects to

exercise its enforcement discre tion. SIP provisions that create exemptions such that the excess emissions during startup, shutdown, or malfunctions are not violations of the applicable emission limitations are inconsiste nt with the fundamental requirements of the

186 

### Petition at 74. The EPA notes that the Petitioner appears to have provided an incorrect citation to this provision; accordingly, in this notice, the EPA replaces that citation with the following: "Wyoming Air Quality Sta ndards and Regulations (WAQSR) Chapter 3, section 2(d)."

187 

### Id

.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 298 of 327 CAA with respect to emission limitations in SI Ps. The EPA believes that the inclusion of such an exemption in WAQSR Chapter 3, sect ion 2(d) from otherw ise applicable SIP emission limitations for violations during cold startup or following malfunction of diesel engines is a substantial inadequacy and renders this specific SIP provi sion impermissible. The EPA notes that WAQSR Chapter 3, sect ion 2(d) does not appear to comply with the CAA's requirements for source categor y-specific rules for startup and shutdown as interpreted in the EPA's SSM Policy. Th e provision provides that the otherwise applicable emission "limitation shall not a pply during a reasonable period of warmup following a cold start." Recent court deci sions have made clear that automatic exemptions from otherwise applicable SI P emission limitations for excess emissions during periods of startup are not in fact permissible under the CAA. As discussed in section VII.A of this notice, states may elect to develop alternative emission limitations

or other forms of enforceable control measures or techniques that ap ply during startup or shutdown, but exemptions for excess emissions during such periods ar e inconsistent with the fundamental require ments of the CAA. c. The EPA's Proposal The EPA proposes to grant the Petiti on with respect to WAQSR Chapter 3, section 2(d) (cited as ENV- AQ-1 Wyo. Code R. § 2(d) in the Petition). The EPA believes that this provision allows for exemptions from otherwise applicable SIP emission limitations, and that such exemptions are inc onsistent with the fundamental requirements of the CAA with respect to emission limita tions in SIPs as required by sections 110(a)(2)(A), 110(a)(2)(C), and 302(k). In addition, by creating these impermissible exemptions, the state has defined violations in a way that would inte rfere with effectiveThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 299 of 327 enforcement by the EPA and citizens for excess emissions during these events as provided in CAA sections 113 and 304. For thes e reasons, the EPA is proposing to find that this provision is substantially inad equate to meet CAA requirements and thus proposing to issue a SIP call with respect to this provision. J. Affected States and Local Ju risdictions in EPA Region IX

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

### First, the Petitioner asserted

that all affirmative defenses for excess em issions are inconsistent with the CAA and

should be removed from the Arizona SIP. Additionally, quoting from the EPA's stat ement in the SSM Policy that such

affirmative defenses should not be available to "a single source or small group of sources [that] has the potential to cause an exceed ance of the NAAQS or PSD increments," the

Petitioner contended that "sources with th e power to cause an exceedance should be strictly controlled at all times, not just when they actually cause an exceedance." 189 

### Although acknowledging that R18-2-310 contains so me limitations to address this issue, the Petitioner argued that the limitation in th e SIP provision is not the same as entirely disallowing affirmative defenses for th ese types of sources, which removes the

188 

### Petition at 20-22.

189 

### Petition at 20.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 300 of 327 "incentive" for such sources to emit at levels close to those that would violate a NAAQS or PSD increment. Accordingl y, the Petitioner requested th at the EPA require Arizona either to entirely remove R18- 2-310(B) and (C) from the SIP or to revise the rule so that

affirmative defenses are not available to a single source or any small group of sources that has the potential to cause an exceedance of the NAAQS. Second, the Petitioner asserted that the provision applicable to startup and shutdown periods (R18-2-310(C)) does not incl ude an explicit requirement for a source seeking to establish an affirmative defense to prove that "the excess emissions were not part of a recurring pattern i ndicative of inadequate design, operation, or maintenance." The Petitioner provided a table specifically comparing the provisions in R18-2-310(C) against the EPA's recommended criteria in the 1999 SSM Guid ance to show that R18-2- 310(C) does not contain a speci fic provision to address this recommended criterion and

stated that the rule should be revi sed to require such a demonstration.

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

malfunctions. With respect to the potentia l air quality impacts of a "single source or small group of sources," the EPA believes that R18-2- 310 satisfies the statut ory requirements asThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 301 of 327 interpreted in the EPA guidance. Rule R18-2- 310 specifies five types of standards or

limitations for which affirmative defenses are not available under the rule and includes among those five types: standards or limita tions contained in any PSD or NSR permit issued by the EPA; standards or limitations included in a PSD permit issued by the ADEQ to meet the requiremen ts of R18-2-406(A)(5) (Perm it Requirements for Sources

Located in Attainment and Unclassifiable Ar eas); and standards or limitations contained in R18-2-715(F) ("Standards of Performan ce for Existing Primary Copper Smelters; Sitespecific Requirements") (R18-2-310(A)). Thus, no existing primary copper smelter subject to emission standards or limitations under R18-2-715(F) may seek an affirmative defense for any emissions in excess of those provisions, and likewis e no major stationary source subject to permit conditions designed to protect the PSD increments in a PSD permit issued by ADEQ or the EPA may seek an affirmative defense for any emissions in excess of those permit conditions. Existing copp er smelters are, to the EPA's knowledge, the only sources under ADEQ jurisdiction that have the potential to cause an exceedance of the NAAQS, and requirements to protect th e PSD increments are implemented entirely through PSD permits issued by states and the EPA. Accordingly, the clear exclusion of

these standards and limitations from the affirmative defense provisions in R18-2-310 adequately addresses the EPA' s concerns with respect to potential violat ions of the NAAQS or PSD increments. With respect to other emission standards or limitations ( i.e., those not specifically excluded from coverage under the rule), R 18-2-310 requires each source seeking to

establish an affirmative defense to demonstr ate, among other things, that "[d]uring the period of excess emissions there were no exceedances of the relevant ambient air qualityThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 302 of 327 standards . . . that could be attributed to the emit ting source" (R18-2-310(B)(7), (C)(1)(f)). The state's election to pr ovide such an affirmative defense contingent upon a demonstration by the source that there were no exceedances of the relevant ambient air quality standards during the relevant period th at could be attributed to the emitting source reasonably assures that these affirmative defe nse provisions will not create incentives to emit at higher levels or interfere with a ttainment and maintenance of the NAAQS. As

described in section VII.B of this notice, the EPA considers this type of requirement an acceptable alternative approach to address the concern of sources or small groups of sources that could adversely impact th e NAAQS or PSD increments through excess

emissions. Second, with respect to the Petitioner's a ssertion that R18-2-310 should be revised to require a demonstration that excess emissi ons during startup or shutdown are not part of a recurring pattern indicativ e of inadequate design, operation, or maintenance, it is not necessary to reach this issue. Instead, the EPA is proposing to modify its interpretation of the CAA with respect to affirmative defenses for startup and shutdown to eliminate the recommended criteria for such provisions as articulated in the 1999 SSM Guidance and to find, instead, that all affirmative defense provisions for planned startup and shutdown periods are not appropriate fo r SIP provisions under the CAA. As discussed in sections IV and VII.C of this notice, the EPA believe s that affirmative defense provisions are appropriate in SIPs for malfunctions but not for startup and shutdown. c. The EPA's Proposal The EPA proposes to deny the Petition with respect to the arguments concerning ADEQ's affirmative defense provisions for malfunctions in R18-2-310(B). For theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 303 of 327 reasons provided above and in our previ ous approval of R18-2-310 into the Arizona SIP, 190 

### the EPA believes that these affirmative de fense provisions are consistent with the requirements of the CAA. With respect to the arguments concerni ng ADEQ's affirmative defense provisions for startup and shutdown peri ods in R18-2- 310(C), however , the EPA proposes to grant the Petition, because R18-2- 310(C) is inc onsistent with the requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k), as well as CAA sections 113 and 304. The EPA believes that a SIP provision estab lishing an affirmative defense for planned startup and shutdown periods is substan tially inadequate to comply with CAA requirements. For these reasons, the EPA is pr oposing to issue a SIP call with respect to R18-2- 310(C). 2. Arizona: Maricopa County a. Petitioner's Analysis The Petitioner objected to two provisions in the Maricopa County Air Pollution Control Regulations that provide affirma tive defenses for excess emissions during malfunctions (Maricopa County Air Polluti on Control Regulation 3, Rule 140, §401) and for excess emissions during startup or shut down (Maricopa County Air Pollution Control Regulation 3, Rule 140, §402). 191 

### These provisions in Maricopa County Air Quality Department (MCAQD) Rule 140 are similar to the affirmative defense provisions in ADEQ R18-2-310.

190 

### See, 66 FR 48085 at 48087 (Sept. 18, 2001) (f inal rule approving R18-2-310 into Arizona SIP).

191 

### Petition at 23.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 304 of 327 First, the Petitioner asserted that the a ffirmative defense provisions in Rule 140 are problematic for the same reasons identi fied in the Petition with respect to ADEQ R18-2-310. Specifically, the Petitioner argued that affirmative defenses should not be allowed in any SIP and, alternatively, that to the extent affirmative defenses are permissible, the provisions in Rule 140 a ddressing exceedances of the ambient standards are "inappropriately permissive and do not comply with EPA guidance." 192 

### Accordingly, the Petitioner requested that the EPA require Arizona and/or MCAQD either to entirely remove these provisions from the SIP or to revi se them so that they are not available to a single source or small group of sources that has the potenti al to cause a NAAQS exceedance. Second, the Petitioner asserted th at the provisions for startup and shutdown in Rule 140 do not include an explicit requir ement for a source seeking to establish an affirmative defense to prove that "the exce ss emissions in question were not part of a recurring pattern indicative of inadequa te design, operation, or maintenance." The Petitioner argued that Rule 140 should be re vised to require such a demonstration.

b. The EPA's Evaluation First, with respect to the pot ential air quality impacts of a "single source or small group of sources," the EPA believes that MCAQD Rule 140 satisfies the statutory requirements as interpreted in the EPA's gui dance. Rule 140 specifies four types of

standards or limitations for which affirmative defenses are not available under the rule, including standards and limitations contai ned in any Preventi on of Significant Deterioration (PSD) or New Source Review (NSR) permit issued by the EPA, and

192 

### Petition at 23.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 305 of 327 standards and limitations in cluded in a PSD permit issued by MCAQD to meet the requirements of subsection 308.1(e) of Rule 240 (Permit Requirements For New Major Sources And Major Modifications To Existi ng Major Sources) (Rul e 140, sections 103.3, 103.4). Thus, no major stationary source subject to permit conditions designed to protect the PSD increments in a PSD permit issu ed by MCAQD or the EPA may seek an affirmative defense for any emissions in excess of those permit conditions. These provisions adequately address the EPA's concerns regarding potential violations of the

PSD increments. Rule 140 also requires each source seeking to establish an affirmative defense to demonstrate, among other things, that "[d]uri ng the period of excess emissions there were no exceedances of the relevant ambient air quality standards . . . that could be attributed to the emitting source" (Rule 140, sections 401.7, 402.1(f)). The state's election to provide such an affirmative defense contingent upon a demonstration by the source that

there were no exceedances of the relevant ambient air quality standards during the relevant period that could be attributed to the emitting source r easonably assures that these affirmative defenses provisions will not create incentives to emit at higher levels or

interfere with attainment and maintenance of the NAAQS. As described in section VII.B of this notice, the EPA considers this type of requirement an acceptable alternative approach to address the concern of sources or small groups of sources that could adversely impact the NAAQS or PSD in crements through excess emissions. Second, with respect to the Petitioner' s assertion that MCAQD Rule 140 should be revised to require a demonstration that excess emissions duri ng startup or shutdown are not part of a recurring pattern indi cative of inadequate design, operation, orThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 306 of 327 maintenance, it is not necessa ry to reach this issue. Instead, the EPA is proposing to modify its interpretation of the CAA with resp ect to affirmative defenses for startup and

shutdown to eliminate the recommended criteria for such provisions as articulated in the 1999 SSM Guidance and to find, instead, that all affirmative defense provisions for planned startup and shutdown periods are not appropriate for SI P provisions under the

CAA. As discussed in sections IV and VII. C of this notice, the EPA believes that affirmative defense provisions are appropriate in SIPs for ma lfunctions but not for startup

and shutdown. c. The EPA's Proposal The EPA proposes to deny the Petition with respect to the arguments concerning MCAQD's affirmative defense provisions fo r malfunctions in Rule 140, section 401. For the reasons provided above and in our previo us approval of Rule 140 into the Arizona SIP, 193 

### the EPA believes that these affirmative de fense provisions are consistent with the requirements of the CAA. With respect to the arguments concerni ng ADEQ's affirmative defense provisions for startup and shutdown peri ods in Rule 140, section 402, ho wever, the EPA proposes to grant the Petition, because it is inconsistent with the requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), and 302(k), as well as CAA sections 113 and 304. The EPA believes that a SIP provision establishing an affirmative defense for planned startup and shutdown periods is substantially inadequate to comply with CAA requirements. For these reasons, the EPA is proposing to issue a SIP call with respect to Maricopa County

193 

### See, 67 FR 54957 (Aug. 27, 2002) (final rule ap proving Rule 140 into Arizona SIP).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 307 of 327 Air Pollution Control Regulation 3, Rule 140, §402. 3. Arizona: Pima County a. Petitioner's Analysis The Petitioner objected to a provision in the Pima County Department of Environmental Quality's (PCDEQ) Rule 706 th at pertains to enforcement discretion. 194 

### Quoting from paragraph (D) of Rule 706, whic h provides that "[t]he Control Officer may defer prosecution of a Notice of Violation issu ed for an exceedance of a control standard if . . ." certain conditions are met, the Petit ioner argued that ambigu ity in this provision could be construed to preclude enforcem ent by the EPA or citizens. The Petitioner requested that the EPA require the PCDEQ a nd/or Arizona to revi se this provision to make clear that a decision by the Pima C ounty Control Officer not to enforce under the rule would in no way affect enforcement by the EPA or citizens.

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

Notice of Violation issued for an exceedance of a control standard if" four specific conditions are met (PCDEQ Rule 706, paragr aph (D), emphasis added). Rule 706 does

not address the EPA or citizen enforcement in any way and on its face does nothing to preclude enforcement by the EPA or through a citizen suit. Even w ith respect to the PCDEQ's authorities, the rule authorizes but does not require the Control Officer to defer

194 

### Petition at 23-24.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 308 of 327 prosecution where the identified criteria are met. c. The EPA's Proposal The EPA proposes to deny the Petition with respect to PCDEQ Rule 706. The EPA believes that the provision regarding enfo rcement in paragraph (D) of this rule clearly applies only to the PC DEQ Control Officer and could not reasonably be read by a court to foreclose enforcement by the EPA or through a citizen suit where the PCDEQ

Control Officer elects to exercise enfor cement discretion. The EPA solicits comment on this issue, in particular from the State of Arizona and from the PCDEQ, to assure that there is no misunderstanding with respect to the correct interpretation of Rule 706. K. Affected States in EPA Region X

1. Alaska a. Petitioner's Analysis The Petitioner objected to a provision in the Alaska SIP that provides an excuse

for "unavoidable" excess emissions that occur during SSM even ts, including startup, shutdown, scheduled maintenance, and " upsets" (Alaska Admin. Code tit. 18 § 50.240). 195 

### The provision provides: "Excess emissi ons determined to be unavoidable

under this section will be excu sed and are not subject to pe nalty. This section does not limit the department's power to enjoin the emission or require co rrective action." The Petitioner argued that this provision excuses excess emissions in violation of the CAA and the EPA's SSM Policy, which require all such emissions to be treated as violations of the applicable SIP emission limitations. The Petitioner further argue d that it is unclear

195 

### Petition at 18-20.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 309 of 327 whether the provision could be interpreted to bar enfor cement actions brought by the EPA or citizens, because it is drafted as if the state were the sole enforcement authority. Finally, the Petitioner pointed ou t, the provision is worded as if it were an affirmative defense, but it uses criteria for enforcement discretion.

b. The EPA's Evaluation The EPA interprets Alaska Admin. Code tit. 18 § 50.240 as providing an

affirmative defense under which excess emissi ons that occur during certain SSM events may be "excused" if the requisite showing is made by the source. This provision is substantially inadequate for th ree reasons. First, provisions th at allow a state official's

decision to bar EPA or citizen enforcem ent are impermissible under the CAA. Although Alaska Admin. Code tit. 18 § 50.240 stat es that it "does not limit the department's power to enjoin the emission nor require corrective ac tion" (emphasis added), it also states that "[e]xcess emissions determined to be unavoida ble under this section will be excused and are not subject to penalty." The net effect of this language appears to bar the EPA and the public from seeking injunctive relief. Moreover, the provision is ambiguous as to whether the EPA or the public could pursue an action for civil penalties if they disagreed with the

state official's determination that excess emissions were unavoidable. Second, as explained more fully in secti ons IV.B and VII.C of this notice, the EPA believes that affirmative defense provi sions that apply to startup, shutdown, or

maintenance events are inconsistent with th e requirements of the CAA. Consequently, Alaska Admin. Code tit. 18 § 50.240, which appl ies to excess emissions that occur during startup, shutdown, and scheduled maintenance, is impermissible for this reason as well. Finally, while the EPA conti nues to believe that affirm ative defense provisionsThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 310 of 327 applying to malfunctions can be consistent with the CAA, as long as the criteria set forth in the SSM Policy are carefully adhered to (as explained in more deta il in sections IV.B and VII.B of this notice), the criteria in Alaska Admin. Code tit. 18 § 50.240 are not sufficiently similar to those recommended in the EPA's SSM Policy to assure that the affirmative defense is available only in a ppropriately narrow circumstances. The EPA acknowledges that the SSM Policy is only guidance concerning what types of SIP provisions could be consistent with the requi rements of the CAA. Nonetheless, through this rulemaking, the EPA is proposing to de termine that Alaska Admin. Code tit. 18 §

50.240 does not include criteria that are sufficiently robust to qualify as an acceptable affirmative defense prov ision for malfunctions ( i.e. , upsets). For example, the defense

available in Alaska Admin. Code tit. 18 § 50.240 is not li mited to excess emissions caused by sudden, unavoidable, breakdown of technology beyond the control of the owner or operator. Similarly, the provision co ntains neither a statement that the defense does not apply in situations where a single source or small group of sources has the potential to cause an exceedance of the NAAQS or PSD increments nor a requirement

that sources make an after-the-fact show ing that no such exceedance occurred. Accordingly, the EPA agrees with the Pe titioner's contention that the provision is substantially inadequate to satisfy the requirements of the CAA. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Alaska Admin. Code tit. 18 § 50.240. The provision applies to startup, shutdown, and maintenance events, contrary to the EPA's interpretation of the CAA to allow such affirmative defenses only for malfunctions. Additionally, the section of Alaska Admin. Code tit. 18 § 50.240This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 311 of 327 applying to "upsets" is inadequate because the criteria referenced are not sufficiently similar to those recommended in the EPA's SSM Policy for affirmative defense provisions applicable to ma lfunctions. Thus, the provision is inconsistent with the requirements of CAA sections 110(a)(2)(A) , 110(a)(2)(C), and 302( k). Moreover, the provision appears to bar the EPA and citizen s from seeking penalties and injunctive relief. As a result, Alaska Admin. Code tit. 18 § 50.240 is inconsistent with the fundamental requirements of CAA sections 113 and 304. For these reasons, the EPA is proposing to find that the provi sion is substantially inadequa te to meet CAA requirements and proposes to issue a SIP call w ith respect to the provision.

2. Idaho a. Petitioner's Analysis The Petitioner objected to a provision in the Idaho SIP that appears to grant

enforcement discretion to the state as to wh ether to impose penalties for excess emissions during certain SSM events (Idaho Admin. Code r. 58.01.01.131). 196 

### The provision provides that "[t]he Department shall cons ider the sufficiency of the information submitted and the following criteria to determine if an enforcement action to impose penalties is warranted . . . ." The Petitioner argued that this provision could be interpreted to give the Department authority to decide that enforcement is not warranted by anyone, thereby precluding action by the EP A and citizens for civil penalties or injunctive relief.

b. The EPA's Evaluation The EPA's SSM Policy interprets the CAA to allow states to elect to have

196 

### Petition at 33.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 312 of 327 appropriately drawn SIP provisi ons addressing the exercise of enforcement discretion by state personnel. As the Petitioner rec ognized, Idaho Admin. Code r. 58.01.01.131 appears

to be a statement of enforcement discre tion, and it delineates factors that will be considered by the Department in determ ining whether to pursue enforcement for

violations due to excess emissions. Subsecti on 101.03 of the provision clearly states that "[a]ny decision by the Department . . . shall not excuse the owner or operator from compliance with the relevant emission sta ndard." There is no language suggesting that the Department's determination to forgo stat e enforcement against a source would in any way preclude the EPA or the public from demons trating that violati ons occurred or from taking enforcement action. Consequently, the EPA believes the provision is consistent with the requirements of the CAA. c. The EPA's Proposal The EPA proposes to deny the Petition w ith respect to Idaho Admin. Code r. 58.01.01.131. The EPA interprets this provision to allow both the EPA and the public to seek civil penalties or injunctive relief, regardle ss of how the state chooses to exercise its

enforcement discretion. The EPA solicits comments on this issue, in particular from the State of Idaho, to assure that there is no misunderstanding with respect to the correct interpretation of Idaho Admin. Code r. 58.01.01.131. 3. Oregon a. Petitioner's Analysis The Petitioner objected to a provision in the Oregon SIP that grants enforcement

discretion to the state to pursue violations for excess emissions during certain SSMThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 313 of 327 events (Or. Admin. R. 340-028-1450). 197 

### The provision provides th at "[i]n determining if a period of excess emissions is avoidable, and whether enforcement action is warranted, the Department, based upon information subm itted by the owner and or operator, shall consider whether the following criteria are met . . . ." The Petitioner argued that this provision could be interprete d to give the Department authority to decide that enforcement is not warranted by anyone, thereby precluding ac tion by the EPA and citizens for civil penalties or injunctive relief.

b. The EPA's Evaluation After the Petition was filed, the prov ision of the Oregon SIP cited by the Petitioner was recodified and revised by the state and was submitted to the EPA as part of a SIP revision. The EPA approved th e SIP revision on December 27, 2011. 198 

### The provision has been recodified and revise d at Or. Admin. R. 340-214-0350. The provision as recodified provides that "[i]n determin ing whether to take enforcement action for excess emissions, the Department considers, based upon information submitted by the owner or operator," a list of factors. The EPA's SSM Policy interprets the CAA to allow states to elect to have SIP provisions that pertain to th e exercise of enforcement discretion by state personnel. As revised by Oregon and approved by the EPA in to the SIP, Or. Admin. R. 340-214-0350 is plainly a statement of enforcement discre tion, and it delineates f actors that will be considered by the Department in determin ing whether to pursue state enforcement for violations of the applicable SIP emission lim itations due to excess emissions. There is no

197 

### Petition at 63.

198 

### 76 FR 80725 at 80747.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 314 of 327 language in this provision suggesting that the Department's determination to forgo enforcement against a source would in any way preclude the EPA or the public from demonstrating that violations occurred and taking enforcement action. Consequently, the EPA believes the current SIP provision is consis tent with the requirements of the CAA. c. The EPA's Proposal The EPA proposes to deny the Petition with respect to Or. Admin. R. 340-028- 1450. This provision has since been recodifi ed and approved by the EPA at Or. Admin. R. 340-214-0350. The EPA interprets the recodifi ed provision to allow both the EPA and the public to seek civil penalties or injuncti ve relief, regardless of how the state chooses

to exercise its enforcement discretion. Th e EPA solicits comments on this issue, in particular from the State of Oregon, to assu re that there is no misunderstanding with respect to the correct interpretation of Or. Admin. R. 340-214-0350. 4. Washington a. Petitioner's Analysis The Petitioner objected to a provision in the Washington SIP that provides an

excuse for "unavoidable" excess emissions that occur during certain SSM events, including startup, shutdown, scheduled mainte nance, and "upsets" (Wash. Admin. Code § 173-400-107). 199 

### The provision provides that "[e] xcess emissions determined to be unavoidable under the procedures and criteria un der this section shall be excused and are not subject to penalty." The Petitioner ar gued that this prov ision excuses excess

emissions in violation of the CAA and the EPA's SSM Policy, which require all such

199 

### Petition at 71-72.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 315 of 327 emissions to be treated as violations of the applicable SIP emission limitations. The Petitioner further argued that it is unclear whether the provis ion could be interpreted to bar enforcement actions brought by the EPA or ci tizens, because it is drafted as if the state were the sole enforcement authority. Finally, the Petitioner pointed out, the provision is worded as if it were an affirmative defense, but it uses criteria for

enforcement discretion.

b. The EPA's Evaluation The EPA interprets Wash. Admin. Code § 173-400-107 as an affirmative defense under which excess emissions that occur during certain SSM events can be "excused" if the requisite showing is made by the source. Th is provision is substantially inadequate for four reasons. First, provisions that allow a state official's decision to bar the EPA or citizen enforcement are impermissible unde r the CAA. The Wash. Admin. Code § 173- 400-107 provides that "[t]he owner or opera tor of a source shall have the burden of proving to Ecology or the authority or the deci sion-maker in an enforcement action that

excess emissions were unavoidable." This language makes clear that the state's determination is not binding on the EPA or the public, because it refers to other

authorities and decision-makers besides the state agency. However, the provision also states that "[e]xcess emissions determined to be unavoidable . . . shall be excused and not subject to penalty." This language could be interpreted to preclude those excess emissions deemed "unavoidable" from being considered violations of the applicable SIP emission limitations, and thus it could preclude enfor cement by the EPA or through a citizen suit. Second, it is unclear whether the affirma tive defense applies only to actions for monetary penalties or could also be used to bar actions seek ing injunctive relief.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 316 of 327 Although the EPA believes that narrowly drawn affirmative defenses are permitted under the CAA for malfunction events, as discussed in sections IV.B and VII.B of this notice, the EPA's interpretation is that such affirma tive defenses can only sh ield the source from monetary penalties and cannot be a bar to injunctive relief. Third, as explained more fully in sections IV.B and VII.C of this notice, the EPA believes that affirmative defense provisi ons that apply to st artup, shutdown, or

maintenance events are inconsistent with th e requirements of the CAA on their face. Consequently, Wash. Admin. Code § 173-400- 107, which applies to excess emissions that occur during startup, shutdown, and schedul ed maintenance, is impermissible for this

reason as well. Finally, while the EPA conti nues to believe that affirm ative defense provisions applying to malfunctions can be consistent with the CAA as long as the criteria set forth in the SSM Policy are carefully adhered to, as discussed in sections IV.B and VII.B of this notice, the criteria in Wash. Admin. Code § 173-400-107 are not sufficiently similar to those recommended in the EPA's SSM Policy to assure that the affirmative defense is available only in appropriately narrow ci rcumstances. The EPA acknowledges that the SSM Policy is only guidance concerning what ty pes of SIP provisions could be consistent with the requirements of the CAA. Noneth eless, through this rulemaking, the EPA is proposing to determine that Wash. Admin. C ode § 173-400-107 does not include criteria that are sufficiently robust to qualify as an acceptable affirmative defense provision for malfunctions ( i.e. , "upsets"). For example, the defens e available in Wash. Admin. Code §

173-400-107 is not limited to excess emi ssions caused by sudden, unavoidable, breakdown of technology beyond th e control of the owner or operator. Similarly, theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 317 of 327 provision contains neither a statement that the defense doe s not apply in situations where a single source or small group of sources has th e potential to cause an exceedance of the NAAQS or PSD increments nor a requirement that sources make an after-the-fact showing that no such exceedance occurred. As a result, the EPA believes that the provision is substantially in adequate to satisfy the requirements of the CAA. c. The EPA's Proposal The EPA proposes to grant the Petition with respect to Wash. Admin. Code § 173-400-107. The provision applies to star tup, shutdown, and maintenance events, contrary to the EPA's interpretation of the CAA to allow such affirmative defenses only for malfunctions. Furthermore, the sec tion of Wash. Admin. Code § 173-400-107 applying to "upsets" is inadequate because the criteria referenced are not sufficiently similar to those recommended in the EPA's SSM Policy for affirmative defenses for excess emissions due to malfunctions. Finally, the provision is unclear as to whether the EPA and the public could still seek injuncti ve relief if a state official made a

determination that excess emissions were unavoi dable. As a result, the EPA believes that Wash. Admin. Code § 173-400-107 is inconsistent with the fundamental requirements of CAA sections 110(a)(2)(A), 110(a)(2)(C), a nd 302(k). For these reasons, the EPA is proposing to find that the provi sion is substantially inadequa te to meet CAA requirements and proposes to issue a SIP call w ith respect to the provision. X. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Pl anning and Review and Executive Order 13563: Improving Regulation and Regulatory Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is aThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 318 of 327 "significant regulatory action" because it raises novel legal or policy issues. Accordingly,

the EPA submitted this action to the Offi ce of Management and Budget (OMB) for

review under Executive Orders 12866 a nd 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the

docket for this action. B. Paperwork Reduction Act This action does not impose any new in formation collection burden. The EPA's proposed action in response to the Petition me rely reiterates the EPA's interpretation of the statutory requirements of the CAA and does not require states to collect any

additional information. To the extent that th e EPA proposes to grant the Petition and thus proposes to issue a SIP call to a state unde r CAA section 110(k)(5), the EPA is only proposing an action that requires the state to revise its SIP to comply with existing requirements of the CAA. C. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) gene rally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice-and-comment rulemaking requirements under the Administrative Proce dure Act or any other statute unless theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 319 of 327 agency certifies that the rule will not have a significant ec onomic impact on a substantial

number of small entities. 200 

### After considering the economi c impacts of this proposed rule on small entities, I certify that this action will not have a significant economic imp act on a substantial number of small entities. Courts have interpreted the RFA to require a regulatory flexibility analysis only when small entities will be subject to the requirements of the

rule. See, e.g. , Michigan v. EPA , 213 F.3d 663 (D.C. Cir. 2000); Mid-Tex Elec. Co-op,

Inc. v. FERC , 773 F.2d 327 (D.C. Cir. 1985). This proposed rule will not impose any requirements on small entities. Instead, the pr oposed action merely reiterates the EPA's interpretation of the statutor y requirements of the CAA. To the extent that the EPA proposes to grant the Petition and thus propos es to issue a SIP ca ll to a state under CAA section 110(k)(5), the EPA is only proposing an action that requires the state to revise its SIP to comply with existing requirements of the CAA. The EPA's action, therefore,

would leave to states the choi ce of how to revise the SIP provision in question to make it consistent with CAA requirements and dete rmining, among other things, which of the several lawful approaches to the treatment of excess emissions during SSM events will be applied to particular sources. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comm ents on issues related to such impacts.

200 

### Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this notice on small entities, small entity is defined as: (1) a small business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards (see 13 CFR 121.201); (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; or (3) a small organization that is any not-for-profit ente rprise that is independently owned and operated and is not dominant in its field.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 320 of 327 D. Unfunded Mandates Reform Act

This rule does not contain a federal ma ndate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one year. The action may impose a duty on certain state governments to meet their existing obligations to revise their SIPs to comply with CAA requirements. The direct costs of this acti on on states would be t hose associated with preparation and submission of a SIP revision by those states for which the EPA issues a SIP call. Examples of such costs could incl ude development of a state rule, conducting notice and public hearing, and other costs incurred in conne ction with a SIP submission. These aggregate costs would be far less than the $100-million threshold in any one year. Thus, this rule is not subj ect to the requirements of s ections 202 or 205 of UMRA. This rule is also not subject to the re quirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The regulatory requirements of th is action would apply to the states for

which the EPA issues a SIP call. To the extent that such states allow local air districts or planning organizations to impl ement portions of the state's obligation under the CAA, the regulatory requirements of this action would not significantly or uniquely affect small governments because those governments have already undertaken the obligation to comply with the CAA.

E. Executive Order 13132 – Federalism This action does not have federalism imp lications. It will not have substantial direct effects on the states, on the relations hip between the national government and the states, or on the distribution of power and responsibilities among the various levels ofThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 321 of 327 government, as specified in Executive Order 13132 because it will simply maintain the relationship and the distribution of power betw een the EPA and the states as established by the CAA. The proposed SIP calls are required by the CAA because the EPA is proposing to find that the current SIPs of the affected states are substantially inadequate to meet fundamental CAA requirements

. In addition, the effects on the states will not be

substantial because where a SIP call is finaliz ed for a state, the SIP call will require the affected state to submit only those revisions ne cessary to address the SIP deficiencies and applicable CAA requirements. While this act ion may impose direct effects on the states, the expenditures would not be substantial b ecause they would be far less than $25 million in the aggregate in any one year. 201 

### Thus, Executive Order 13132 does not apply to this

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

F. Executive Order 13175 – Consultation and Coordination with Indian Tribal

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

from tribal officials.

201 

### "EPA’s Action Development Proce ss-Guidance on Executive Order 13132: Federalism," dated November 2008.This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 322 of 327 G. Executive Order 13045 – Protection of Children from Environmental Health Risks and Safety Risks The EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regula tion. This action is not subject to EO 13045 because it merely prescribes the EPA's action for states regarding their ob ligations for SIPs under the CAA. H. Executive Order 13211 – Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This action is not a "significant energy action" as defined in Executive Order 13211 (66 FR 28355(May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distributi on, or use of energy. This action merely prescribes the EPA's action for states regarding thei r obligations for SIPs under the CAA. I. National Technology Transfer and Advancement Act Section 12(d) of the Nati onal Technology Transfer and Advancement Act of 1995 ("NTTAA"), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards in its regulat ory activities unless to do so would be inconsistent with applicable law or otherw ise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs the EPA to provide C ongress, through OMB, explanations when

the EPA decides not to use available and a pplicable voluntary c onsensus standards. This proposed rulemaking does not involve technical standards. Therefore, theThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 323 of 327 EPA is not considering the use of any voluntary consensus standards.

J. Executive Order 12898 – Federal Actions to Address Environmental Justice in Minority Populations and Lo w-Income Populations Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federa l agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, dispr oportionately high and

adverse human health or environmental effect s of their programs, policies, and activities on minority populations and low-inco me populations in the U.S. The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environm ental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. The rule is intended to ensure th at all communities and populations across the affected states, including mi nority, low-income and indige nous populations overburdened by pollution, receive the full human health and environmental prot ection provided by the CAA. This proposed action concerns states’ obligations regarding the treatment they give, in rules included in th eir SIPs under the CAA, to ex cess emissions during startup, shutdown, and malfunctions. This proposed actio n would require 36 states to bring their

treatment of these emissions into line w ith CAA requirements, which would lead to sources' having greater incentives to c ontrol emissions during such events. K. Determination Under Section 307(d)This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 324 of 327 Pursuant to CAA section 307(d)(1)(U), th e Administrator determines that this action is subject to the provisions of secti on 307(d). Section 307( d)(1)(U) provides that the provisions of section 307(d) apply to "s uch other actions as the Administrator may

determine."

L. Judicial Review Section 307(b)(1) of the CAA indicates wh ich Federal Courts of Appeal have venue for petitions of review of final ag ency actions by the EPA under the CAA. This section provides, in part, that petitions for re view must be filed in the Court of Appeals for the District of Columbia Circuit (i) when the agency action consists of "nationally applicable regulations promulga ted, or final actions taken, by the Administrator," or (ii) when such action is locally or regionally applicable, if "such action is based on a determination of nationwide scope or effect a nd if in taking such ac tion the Administrator finds and publishes that such action is based on such a determination." This rule responding to the Petition is "n ationally applicable" within the meaning of section 307(b)(1). First, th e rulemaking addresses a Petition that raises issues that are applicable in all states and territories in th e U.S. For example, the Petitioner requested that the EPA revise its SSM Policy with respect to whether affirmative defense provisions in SIPs are consistent with CAA requirements. The EPA's response is relevant for all states nationwide. Second, the rulemaki ng will address a Petition that raises issues relevant to specific existing SIP provisions in 39 stat es across the U.S. that are located in each of the 10 EPA Regions, 10 different federa l circuits, and multiple time zones. Third, the rulemaking addresses a common core of knowledge and analysis involved in formulating the decision and a common interp retation of the requirements of the CAAThis document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 325 of 327 being applied to SIPs in stat es across the country. Fourth, the rulemaking, by addressing issues relevant to appropriat e SIP provisions in one state, may have precedential impacts upon the SIPs of other states nationwide. Cour ts have found similar rulemaking actions to be of nationwide scope and effect. 202 

### This determination is appropriate beca use in the 1977 CAA Amendments that revised CAA section 307(b)(1), Congress noted that the Administrator's determination

that an action is of "nationw ide scope or effect" would be appropriate for any action that has "scope or effect beyond a single judici al circuit." H.R. Rep. No. 95-294 at 323 - 324, reprinted in 1977 U.S.C.C.A.N. 1402-03. Here, the scope and effect of this rulemaking extends to numerous judicial circuits because the action on the petition extends to states throughout the country. In thes e circumstances, section 307(b )(1) and its legislative history authorize the Administra tor to find the rule to be of "nationwide scope or effect"

and thus to indicate that venue for challenges to be in the D. C Circuit. Thus, any petitions

for review must be filed in the Court of A ppeals for the District of Columbia Circuit. Accordingly, the EPA is proposing to determ ine that this will be a rulemaking of nationwide scope or effect. In addition, pursuant to CAA section 307(d )(1)(V), the EPA is determining that this rulemaking action will be subject to the requirements of section 307(d). XI. Statutory Authority The statutory authority for this action is provided by CAA section 101 et seq. (42

202 

### See, e.g. , State of Texas, et al. v. EPA , 2011 U.S. App. LEXIS 5654 (5th Cir. 2011) (finding SIP call to 13 states to be of nati onwide scope and effect and thus transferring the case to the U.S. Court of Appeals fo r the D.C. Circuit in accordance with CAA section 307(b)(1)).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 326 of 327 U.S.C. 7401 et seq. ).This document is a prepublication version, signed by EPA Assistant Administrator, Gina McCarthy on 2/12/2013. We have taken steps to ensure the accuracy of this version, but it is not the official version. 

### Page 327 of 327 Page 320 of 327 – State Implementation Plans: Response to Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions Du ring Periods of Startup, Shutdown, and Malfunction

List of Subjects in 40 CFR Part 52 Affirmative defense, Air pollution cont rol, Carbon dioxide, Carbon dioxide equivalents, Carbon monoxide, Environmenta l protection, Excess emissions, Greenhouse gases, Hydrofluorocarbons, Intergovernm ental relations, Lead, Methane, Nitrogen dioxide, Nitrous oxide, Ozone, Particulat e matter, Perfluorocarbons, Reporting and recordkeeping requirements, Startup, s hutdown, and malfunction, State implementation plan, Sulfur hexafluoride, Sulfur oxides, Volatile organic compounds.

________________________ Dated:

_________________________ Gina McCarthy, Assistant Administrator.