1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRI CT OF NORTH CAROLINA WESTERN DIVISION

DONALD van der VAART, in his official capacity as Secretary of the North Carolina Department of Environmental Quality; and the NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY,

Plaintiffs,

v. GINA McCARTHY, in her official capacity as the Administrator of the United States Environmental Protection Agency; HEATHER McTEER TONEY, in her official capacity as Regional Administrator of the Southeast Region of the United States Environmental Protection Agency; and the UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Defendants. Case No. 5:15-cv-593-FL [PROPOSED] CONSENT DECREE

[PROPOSED] CONSENT DECREE WHEREAS, on November 13, 2015, Plai ntiffs Donald van der Vaart in his official capacity as Secretary of No rth Carolina Department of Environmental Quality and the North Carolina Department of Environmental Quality (collectively “NCDEQ”) filed a Complain t for Declaratory and Inj unctive Relief in the abovecaptioned matter against Gina McCarthy, in her official capacity as Administrator of the United States Environmental Protection Agenc y, Heather McTeer Toney, in her official capacity as Regional Administrator of th e Southeast Region of the United States Environmental Protection Agency, and the United States Environmental Protection Agency (collectively “EPA”);

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 1 of 92 WHEREAS, NCDEQ alleges that EPA has failed to undertake certain nondiscretionary duties under the Clean Ai r Act (“CAA”), 42 U.S.C. §§ 7401-7671q, and that such alleged failure is actionable under section 304(a)(2 ) of the CAA, 42 U.S.C. § 7604(a)(2); WHEREAS, pursuant to CAA secti on 166(a), 42 U.S.C. § 7476(a), EPA promulgated a final rule issuing prevention of significant deterior ation (“PSD”) program increments and implementing regulations for the National Ambient Air Quality Standard (“NAAQS”) for particulate matter less than 2.5 microns in diameter (“PM 2.5 ”) on October 20, 2010, Final Rule , Prevention of Significant Deteri oration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)--Increm ents, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC) , 75 Fed. Reg. 64,864 (Oct. 20, 2010) (“PM2.5 Increments Rule”); WHEREAS, pursuant to CAA section 166(b), 42 U.S.C. § 7476(b), state implementation plan (“SIP”) revisions addres sing regulations promulgated pursuant to CAA section 166(a), 42 U.S.C. § 7476(a), are due to be subm itted to the Administrator within 21 months after such date of promul gation. In the case of the PM2.5 Increments Rule, SIP submissions addressing the PM2.5 increments and implementing regulations were due July 20, 2012; WHEREAS, EPA must determine whethe r a state’s submission is complete

within six months after EPA receives the submission. 42 U.S.C. § 7410(k)(1)(B). If EPA does not determine completeness of the plan or revision embodied in the SIP submission within six months, then the subm ission is deemed complete by operation of

law after six months. Id. ; WHEREAS, within 12 months of a determination of completeness or completeness by operation of law, EPA must act on the plan or revision. 42 U.S.C. § 7410(k)(2). EPA must approve, disapprove, or conditionally approve, in whole or in part, the plan or revision. Id. § 7410(k)(3)-(4);

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 2 of 93 WHEREAS, Plaintiffs submitted a SIP revision to address the PM 2.5 PSD increments and implementing regulations to EPA on September 5, 2013; WHEREAS, EPA issued a determination of completeness as to Plaintiffs’ September 5, 2013 SIP revision addressing the PM 2.5 PSD increments and implementing regulations on December 13, 2013; WHEREAS, Plaintiffs allege that EPA has failed to perform a duty mandated by CAA sections 110(k)(2)-(4), 42 U.S.C. §§ 7410(k)(2 )-(4), to take final action to approve, disapprove, or conditionally approve, in whol e or in part, their September 5, 2013 SIP revisions addressing the PM 2.5 PSD increments and implementing regulations; WHEREAS, EPA admits that it has not taken final action on Plaintiffs’ September 5, 2013 SIP revision addressing the PM 2.5 PSD increments and implementing regulations; WHEREAS, the relief request ed in the Complaint includes, among other things,

an order from this Court to establish a date certain by which EPA must fulfill its obligations; WHEREAS, Plaintiffs and EPA have agreed to a settlement of this action without admission of any issue of fact or law, except as expressly provided herein; WHEREAS, Plaintiffs and EPA, by ente ring into this Consent Decree, do not waive or limit any claim, remedy, or defens e, on any grounds, related to any final EPA action; WHEREAS, Plaintiffs and EPA consider th is Consent Decree to be an adequate and equitable resolution of all the claims in th is matter and therefore wish to effectuate a settlement; WHEREAS, it is in the interest of the public, NCDEQ, EPA, and judicial economy to resolve this matter w ithout protracted litigation; WHEREAS, NCDEQ and EPA agree that this Court has jurisdiction over this matter pursuant to the citizen suit provisi on in CAA section 304(a)(2), 42 U.S.C. §

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 3 of 94 7604(a)(2), and that venue is proper in the Ea stern District of North Carolina pursuant to 28 U.S.C. § 1391(e); WHEREAS, the Court, by entering this Consent Decree, finds that the Consent Decree is fair, reasonable, in the public intere st, and consistent with the Clean Air Act; NOW THEREFORE, before the taki ng of testimony, without trial or determination of any issues of fact or law, and upon the consent of NCDEQ and EPA, it is hereby ordered, adjudged and decreed that: 1. The appropriate EPA official sha ll sign a notice of final rulemaking to approve, disapprove, or conditiona lly approve, in whole or in part, pursuant to sections 110(k)(2)-(4) of the CAA, 42 U.S.C. §§ 7410(k) (2)-(4), the portion of North Carolina’s September 5, 2013 SIP revision addressing the PM 2.5 PSD increments and implementing regulations, by no later than September 23, 2016. 2. EPA shall, within 12 business days of signature, deliver notice of each action taken pursuant to Paragraph 1 of this C onsent Decree to the Office of the Federal Register for review and publication. 3. If North Carolina withdraws the submittal described above in Paragraph 1, then EPA’s obligation to take the action re quired by Paragraph 1 with respect to that submittal is automatically terminated. 4. After EPA has completed the action set forth in Paragraph 1 of this Consent

Decree and after notice of the action required by Paragraph 1 has been published in the Federal Register and the issue of costs of litigation, including atto rneys fees, has been resolved, EPA may move to have this D ecree terminated and the action dismissed. Plaintiffs shall have fourteen (14) days in which to respond to such motion, unless the parties stipulate to a longer ti me for Plaintiffs to respond. 5. The deadline established by this Consent Decree may be extended (a) by written stipulation of Plaintiffs and EPA with notice to the Court, or (b) by the Court upon motion of EPA for good cause shown pursu ant to the Federal Rules of Civil Procedure and upon consideration of any respons e by Plaintiffs and any reply by EPA.

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 4 of 95 6. If a lapse in appropriations for EPA occurs within one hundred and twenty (120) days prior to the deadlin e in Paragraph 1 of this Cons ent Decree, that deadline shall be extended automatically one day for each da y of the lapse in appropriations. Nothing in this paragraph shall preclude EPA from s eeking an additional extension pursuant to Paragraph 5. 7. NCDEQ and EPA agree that this C onsent Decree shall constitute a complete and final settlement of all claims NCDEQ asserts against the United States, including EPA, under any provision of law in connection with DONALD van der VAART, et al. v. McCarthy, et al. , Case No. 5:15-cv-593-FL (E.D. N.C. ). NCDEQ therefore discharges

and covenants not to sue the United Stat es, including EPA, for any such claims. 8. In the event of a dispute be tween NCDEQ and EPA concerning the interpretation or implementation of any aspect of this Consent Decr ee, the disputing party shall provide the other party with a written notice outlining the nature of the dispute and requesting informal negotiations. These parties shall meet and confer in order to attempt to resolve the dispute. If th ese parties are unable to resolv e the dispute within ten (10) business days after receipt of the notice, eith er party may petition the Court to resolve the dispute. 9. No motion seeking to enforce this C onsent Decree or for contempt of Court shall be properly filed unless the procedure set forth in Paragraph 8 has been followed, and the non-moving party has been provided with written notice at l east ten (10) business days before the filing of such motion. 10. Upon entry of the Consent Decree, EPA ag rees that Plaintiffs are entitled to recover costs of litigation (including reasonable attorney fees) (“litigation costs”) incurred in this matter pursuant to 42 U.S. C. § 7604(d). The deadline for filing a motion for litigation costs is hereby extended until 120 da ys after entry of this Consent Decree by the Court. During this time, Plaintiffs a nd EPA shall seek to resolve informally any claim for litigation costs, and if they cannot r each a resolution, Plaintiffs may seek such

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 5 of 96 litigation costs from the Court. The Court shall retain juri sdiction to resolve any request for litigation costs.

11. This Court shall retain jurisdiction over this matte r to enforce the terms of

this Consent Decree and to consider any requests for co sts of litigation, including attorney fees. 12. Nothing in the terms of this Consent D ecree shall be construed (a) to confer upon this Court jurisdiction to re view any issues that are within the exclusive jurisdiction

of the United States Courts of A ppeals under CAA section 307(b)(1), 42 U.S.C. § 7607(b)(1), including final action taken pursuant to section 110(k) of the CAA, 42 U.S.C. § 7410(k), appr oving, disapproving, or condi tionally approving in whole or in part the SIP submission; or (b) to waiv e any claims, remedies, or defenses that the parties may have under CAA section 307(b)(1), 42 U.S.C. § 7607(b)(1). 13. Nothing in this Consent Decree sha ll be construed to limit or modify any discretion accorded EPA by the Clean Air Act or by general principles of administrative law in taking the actions that are the s ubject of this Consen t Decree, including the discretion to alter, amend, or revise any final actions pr omulgated pursuant to this Consent Decree. EPA’s obligation to perfor m each action specified in this Consent

Decree does not constitute a limitation or m odification of EPA’s discretion within the meaning of this paragraph. 14. Except as expressly provided herein, not hing in this Consent Decree shall be construed as an admission of any issue of f act or law nor to waive or limit any claim, remedy, or defense, on any grounds, related to any final action EPA takes with respect to

the actions addressed in this Consent Decree. 15. Plaintiffs reserve the right to se ek additional costs of litigation, including reasonable attorney fees, incurred subsequent to entry of this Consent Decree. EPA reserves the right to oppose any such request for additi onal costs of litigation, including reasonable attorney fees.

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 6 of 97 16. It is hereby expressly understood and agreed that this Consent Decree was jointly drafted by NCDEQ and EPA. Accordi ngly, the parties hereby agree that any and

all rules of construction to the effect that ambiguity is cons trued against the drafting party shall be inapplicable in any dispute concerning the terms, meaning, or interpretation of

this Consent Decree. 17. The parties agree and acknowledge that before this Consent Decree can be finalized and entered by the Court, EPA must provide notice of this Consent Decree in the Federal Register and an opportunity for public comment pursuant to CAA section 113(g), 42 U.S.C. § 7413(g). After th is Consent Decree ha s undergone notice and comment, the Administrator and/or the Attorney General, as appropriate, shall promptly consider any written comments in determin ing whether to withdr aw or withhold their

consent to the Consent D ecree, in accordance with CAA section 113(g). If the Administrator and/or the Attorney General do not elect to withdraw or withhold consent, EPA shall promptly file a motion that request s that the Court enter this Consent Decree. 18. Any notices required or provided fo r by this Consent Decree shall be in writing and sent to the following (or to any new address of couns el as filed and listed in the docket of the above-captioned matter, at a future date): For Plaintiff NCDEQ: Sam M. Hayes General Counsel North Carolina Department of Environmental Quality 1601 Mail Service Center Raleigh, North Carolina 27699-1601 Tel. (919) 707-8616 Email: sam.hayes@ncdenr.gov

For Defendant EPA: Debra J. Carfora U.S. Department of Justice Environment & Natural Resources Division Environmental Defense Section 601 D Street N.W., Suite 8000 Washington D.C. 20004 Tel. (202) 514-2640 Email: Debra.Carfora@usdoj.gov

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 7 of 98 19. EPA and NCDEQ recognize and acknowle dge that the obligations imposed upon EPA under this Consent Decree can onl y be undertaken using appropriated funds legally available for such purpose. No pr ovision of this Consent Decree shall be interpreted as or constitute a commitment or requirement that the United States obligate or pay funds in contravention of the Anti-De ficiency Act, 31 U.S.C. § 1341, or any other applicable provision of law. 20. If for any reason the Court should dec line to approve this Consent Decree in the form presented, this agreement is voidable at the sole discretion of either party and the terms of the proposed Consent Decree may not be used as evidence in any litigation between the parties. 21. The undersigned representatives of Plai ntiffs and Defendants certify that they are fully authorized by the party they repres ent to consent to the Court’s entry of the

terms and conditions of this Decree. SO ORDERED on this _____ day of _______, 2016.

________________________________ Louise Wood Flanagan UNITED STATES DISTRICT JUDGE

COUNSEL FOR PLAINTIFF:

Sam M. Hayes, NC Bar No. 25552 General Counsel North Carolina Department of Environmental Quality 1601 Mail Service Center Raleigh, North Carolina 27699-1601 Ph: (919) 707-8616 Fax: (919) 707-8626 sam.hayes@ncdenr.gov Attorney for Plaintiffs

Case 5:15-cv-00593-FL Document 20-1 Filed 03/23/16 Page 8 of 99 COUNSEL FOR DEFENDANT: JOHN C. CRUDEN Assistant Attorney General Environment & Natural Resources Division

Debra J. Carfora Environmental Defense Section 601 D Street N.W., Suite 8000 Washington D.C. 20004 Tel. (202) 514-2640 Email: Debra.Carfora@usdoj.gov Attorneys for Defendant EPA

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