What’s The Story Behind Section 185 Clean Air Fees?


(Source: www.nwf.org)

For those of us who live in the air quality world, the issue of Section 185 fees in Houston has been a seemingly endless story of passing liability in meeting the 1-hr ozone standard.

Here’s a brief recap of the multi-year history on the issue:

EPA established the first ozone national ambient air quality standard (NAAQS) in 1979; this was a 1-hr ozone standard set at 120 parts per billion (ppb). Regions around the country that exceeded the 1-hr standard were required to attain the standard by specific dates or they would be subject to fees as outlined in Section 185 of the Clean Air Act (CAA).

On June 15, 2005, EPA revoked the 1 hour ozone standard, replacing it with an 8 hour standard deemed to be more health-protective. Though revoked, the DC Circuit ruled in 2007 that the 1-hr ozone standards were still subject to an “anti-backsliding clause”, which means that the region couldn’t roll-back on previously established clean air protections.  Additionally, the DC court ruled that EPA must reinstate the applicability of the CAA 185 fees, the penalty program for Section 185.

The deadline for Houston to attain the 1-hr ozone standard was November 15, 2007. Since the area failed to meet the standard, TCEQ staff developed a proposed failure to attain rule under Section 185 of the Clean Air Act and issued a memorandum related to Houston’s failure to attain rule on October 30, 2009. TCEQ calculated that the revenue generated from the fee collection program would be between $73 million and $124 million in the first year alone.

In 2009, during the 81st session of the Texas legislature, the legislature passed and the Governor signed a bill that would have required all funds collected pursuant to Section 185 to be spent on programs designed to help the state meet federal air quality standards. All Section 185 fees collected would go toward pollution controls.

Texas was ready and TCEQ had put together a plan to collect the fees. Then EPA stepped in and tried unsuccessfully to circumvent the law.

EPA Region VI provided national guidance on the Section 185 fee program on January 25, 2010, explaining that the fee requirements would no longer be necessary if Texas could show that it attained the 1997 8-hour ozone standard based on “permanent and enforceable” reductions.  This meant that Texas would be off the hook for clean air fees if the state could demonstrate that the region consistently met the 8-hr standard. EPA issued this guidance without proper notice and comment rulemaking and contained language that violated the Clean Air Act language.

As a result of EPA’s misguidance, TCEQ submitted a request to be exempt from the fee rule by showing attainment in 2009 of the 1997 8-hour ozone standard in 2010 and alleging “permanent and enforceable” attainment. However, the region fell back out of attainment in 2010 with the 1997 8-hr ozone standard, calling into question the allegation of “permanent and enforceable” progress.

NRDC sued EPA over the Section 185 guidance, and in July of 2011, the DC Circuit court vacated EPA’s guidance, saying that:

On the merits, we conclude that the Guidance 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 Clean Air Act’s plain language. We therefore grant the petition for review and vacate the Guidance.

This brings us to date. Today, EPA issued notice that the Houston/Galveston/Brazoria area did not attain the 1-hour ozone national ambient air quality standard (NAAQS) by its applicable attainment date, November 15, 2007 and that TCEQ’s fee collection program for the Section 185 fees will have to be resurrected.

I encourage you to contact TCEQ and request that they move forward expeditiously with the Section 185 fees program. This program is an opportunity for major sources in Houston to bring cleaner air to the region and will help the area meet federal health-based standards that protect public health.   

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