The D.C. Circuit Court of Appeals has vacated EPA guidance allowing some states to avoid collecting emissions fees from stationary sources in areas with severe or extreme ozone problems by using alternative compliance measures. NRDC v. EPA, No. 10-1056 (D.C. Cir. 7/1/11). Agreeing with NRDC, the threejudge panel held that the guidance violated the Administrative Procedure Act (APA) because it “qualifies as a legislative rule that EPA was required to issue through notice and comment rulemaking and that one of its features—the so-called attainment alternative—violates the plain language of the Clean Air Act” (CAA).

Issued in January 2010, the guidance allowed states to waive fees for area sources not meeting the revoked one-hour standard of 0.12 parts per million as they transitioned to the more stringent eight-hour standard of 0.08 ppm. The fees could be waived if the states established alternative programs in compliance with section 185 of the CAA, which requires states to impose fees on all major stationary sources in severe and extreme nonattainment areas that miss their deadlines for meeting national ambient air quality standards for ozone. The court also rejected EPA’s challenge to NRDC’s standing and the agency’s contention that the guidance did not qualify as final agency action.