Opinion ID: 413378
Heading Depth: 3
Heading Rank: 2

Heading: Sources Claiming Compliance with Pending SIP Revisions

Text: 68 Industry petitioners' 16 second major objection to the definition of applicable legal requirements in EPA's regulations implementing section 120 is that it allows penalties to be assessed against a major source in violation of current SIP requirements, despite the fact that revisions to the requirements have been proposed and are under consideration by EPA, and despite the fact that the source is in compliance with the proposed revisions. 40 C.F.R. Sec. 66.3(c)(1) (1981). Under the regulations, current SIP provisions continue to be the standard by which compliance is measured. If and when a proposed revision to a SIP is approved by EPA, it becomes the standard by which compliance is measured. A source which comes into compliance with SIP requirements by virtue of a SIP revision will thus cease to be liable for penalties as of the time the SIP revision becomes effective. See Sec. 120(d)(4). 69 EPA's reason for measuring compliance by existing SIP provisions was simple: Until a SIP revision is formally approved by EPA, the source is under a legal obligation to comply with the SIP that is in effect. 45 Fed.Reg. 50,090 (1980); see also id. at 50,101. Without further explanation, however, EPA also noted that if it determined that a pending SIP revision was likely to be approved, it would assign lower priority to issuing a notice of noncompliance against a source in compliance with the proposed revision. Id. at 50,090. Industry petitioners argue that any definition of applicable legal requirements must exclude SIP provisions for which modification is proposed and under consideration by EPA. They argue that this definition is required in order to give adequate importance to the role of the states under the Act. 70 Under the Act, the states and the federal government are to be partners in the task of improving the nation's air quality. The federal EPA is assigned responsibility for developing uniform standards for ambient air quality, for hazardous pollutants, and for new sources. The states have primary responsibility for translating ambient standards into specific rules governing particular pollution sources, given local conditions and needs. Train v. Natural Resources Defense Council, 421 U.S. 60, 79, 95 S.Ct. 1470, 1481, 43 L.Ed.2d 731 (1975). EPA, however, is the ultimate supervisor, responsible for approving state plans and for stepping in, should a state fail to develop or to enforce an acceptable plan. The states, in sum, are to tailor standards to their own conditions, but EPA is to ensure national uniformity where needed, for example, to ensure that states do not compete unfairly for industry by offering air quality standards that are too lax to bring about needed improvement in the air we breathe. 71 As applied to the development of SIPs, the state and federal partnership works as follows. States are to adopt SIPs and to submit them to EPA for review. Sec. 110(a). EPA is to approve a SIP if it finds both that it was adopted after reasonable notice and hearing and that it is substantively adequate to attain and maintain air quality standards. Sec. 110(a)(2). Strict statutory timetables are set for both the states and EPA: states are given nine months from the promulgation of an ambient air quality standard to develop a SIP for its implementation, Sec. 110(a)(1), and EPA in turn is given four months to approve or disapprove the plan, Sec. 110(a)(2). Should a state fail to submit a SIP, or to correct a SIP found deficient by EPA, EPA is empowered to promulgate a plan for the state. Sec. 110(c). 72 The Clean Air Act recognizes that from time to time SIPs will require revision, either because local conditions change or because experience shows that air quality standards can be better met in a manner other than that provided in the original SIP. The Act thus allows for SIP revisions which, like original SIPs, are subject to EPA approval. Sec. 110(a)(3). These revisions, like the original SIP, must be acted upon within four months by the Administrator, Sec. 110(a)(2), or within three months if they are in relation to fuel burning stationary sources, Sec. 110(a)(3)(B). 73 In defining applicable legal requirements in terms of current SIPs, EPA rested on the ground that current SIPs remain in force until EPA grants formal approval to a revision. EPA is clearly correct as to the legal status of proposed revisions: they are proposals and nothing more. Otherwise, as this court has noted, states could circumvent requirements of the Act by proposing revisions to their SIPs. Metropolitan Washington Coalition for Clean Air, 511 F.2d at 813. We therefore reject the interpretation petitioners would impose upon EPA: that SIP provisions under review should be excluded from the definition of applicable legal requirements. 74 At the same time, however, we are unable to agree with EPA that it may continue to assess section 120 penalties against sources out of compliance with present SIPs, that would be in compliance with a proposed revision, no matter how long EPA takes to act on the proposed revision. Industry petitioners cite examples of delays of over one year by EPA in acting on proposed revisions. Supplemental Brief of Duquesne Light Company and Pennsylvania Power Company on Issues Regarding Revised SIP Provisions at 12. We are not sanguine about the possibility that EPA will act expeditiously on all proposed SIP revisions; for example, we note that although EPA was directed to promulgate the regulations implementing section 120 within six months, Sec. 120(a)(1)(A), it did not do so for nearly three years. See 45 Fed.Reg. 50,086 (1980). 75 Although EPA is correct that a proposed SIP has no legal weight until it is finally approved, the fact that EPA often exceeds the statutory time limit for considering a revision, enabling EPA to collect noncompliance penalties which may be unwarranted, violates congressional intent. Such an inequitable use of the penalty powers is neither called for nor authorized. Nor does the fact that sources can petition under section 304(a) to compel EPA to perform its duties act as a full safeguard. See Sec. 307(g). If the SIP is ultimately approved, the penalty assessed during the period between the end of the statutory time limit and the final approval is the result not of the source's failure to comply but of EPA's failure to act on time. We do not hold, however, as petitioners ask, that the penalty should be tolled once the statutory deadline for acting on revisions has expired. Otherwise, if the SIP were ultimately not approved, the source in noncompliance would benefit undeservedly. 76 We therefore remand EPA regulation 40 C.F.R. Sec. 66.3(c)(1) (1981) to the agency and direct that it develop a new regulation so that once the statutory deadline for acting on a SIP revision passes, the noncompliance penalty is held in abeyance pending final action on the SIP by EPA. Should EPA ultimately reject the SIP, the penalty should be calculated back to the deadline, with interest. Such a regulation will protect a source in compliance with air quality standards from the time EPA should have approved an eventually approved SIP revision and will remove any economic benefit accruing to a source not in compliance with the law if the SIP revision is not approved.