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On June 29, environmental advocates filed petitions for review of the U.S. Environmental Protection Agency’s (EPA) promulgation of two related final air-quality rules under the federal Clean Air Act, 42 U.S.C. 7401 et. seq., in the U.S. Circuit Court for the District of Columbia. These rules designate and classify certain areas as being in nonattainment for the 8-Hour Ozone National Ambient Air Quality Standards (NAAQS), 69 Fed. Reg. 23858 (April 30, 2004). They also implement Phase I of the 8-Hour Ozone NAAQS, 69 Fed. Reg. 23951 (April 30, 2004). Together, these final rules set forth the first steps in implementation of the new eight-hour NAAQS for ozone. Maximum allowable concentrations of ground-level ozone in ambient air are established by the EPA under the act because of adverse effects that high levels of ozone have on human health and the environment. The EPA formally created early-action compacts (EACs) for the first time as part of these final rules, although EACs have been in existence through informal agency initiatives for more than two years. The creation of EACs has been controversial in the environmental community, and the legality of EACs will be a likely component of the recently filed challenges in the D.C. Circuit. On July 18, 1997, the EPA revised the ozone NAAQS to 0.08 parts per million over an eight-hour period. 40 C.F.R. 50.10. The EPA issued a proposed rule to implement the eight-hour ozone standard on June 2, 2003. 62 Fed. Reg. 32802 (June 2, 2003). The EPA promulgated the final rule making nonattainment designations (conclusions drawn by states establishing what areas do not meet the eight-hour ozone standard) on April 15, 2004, pursuant to a consent degree between the EPA and nine environmental groups. The Phase I Implementation Rule was issued on the same date. In a novel approach to bring nonattainment areas into compliance with the new ozone standard, the EPA has allowed 33 communities around the country to participate in voluntary EACs to reduce ground-level ozone. Communities that have chosen to enter into an EAC are allowed to develop their own approaches for meeting the eight-hour ozone standard as long as they implement control strategies sooner than the recently issued rules would require. Through a 2002 guidance memorandum, the EPA established EAC plan milestones and a schedule of deadlines for EAC plan submittals and plan implementation. Memorandum from Jeffrey R. Holmstead, Assistant Administrator, to EPA Regional Administrators dated Nov. 14, 2002, No. OAR-2003-0090-0003. For example, by March 31, 2004, communities implementing EACs were required to submit plans for meeting the eight-hour ozone standard. Control strategies in these plans must be implemented by Dec. 31, 2005. 69 Fed. Reg. at 23876. EACs must submit reports to the EPA describing progress toward milestones and emission reductions. Id. In exchange for early reductions under EACs, the EPA, in the eight-hour final rule, deferred the effective date of nonattainment designations for the eight-hour ozone standard. 69 Fed. Reg. 23858. The eight-hour rule includes the schedule previously issued by the EPA in the Holmstead memorandum. It states that the EPA plans to issue the first of three deferrals of the date of the designation for any EAC area that exceeds the ozone NAAQS but continues to meet the milestones designated in the EAC. Id. The EPA requires that EACs implement plans for compliance with the eight-hour ozone standard on or before Dec. 31, 2005. EAC areas must be in attainment with the eight-hour ozone standard by Dec. 31, 2007, based upon the most recent three years of air-quality monitoring. During the deferral period, all Clean Air Act requirements that would normally apply to an area designated nonattainment do not apply as long as EAC plan requirements are met. The development of EACs The EPA originally created EACs in response to local communities’ and states’ requests for flexibility in implementing the new eight-hour ozone standard. The EAC program began when the Texas Commission on Environmental Quality (TCEQ) submitted a protocol to the EPA for an EAC that was designed to achieve the necessary nitrogen oxide and volatile organic compound emission reductions to meet the eight-hour standard sooner than required by the Clean Air Act. The TCEQ submitted a proposed protocol to the EPA, which resulted in the development by the EPA of a workable EAC protocol for other communities. Letter from George A. Cooke, EPA Regional Administrator to Robert J. Huston, TCEQ Chairman dated June 19, 2002. The EPA approved the general EAC protocol, and it was finalized in December 2002, thereby setting the precedent for EACs to be voluntarily developed in other areas. Until 2003, EACs were a creation solely of the TCEQ protocol and the Holmstead memorandum, which memorialized the milestones and schedule in the TCEQ protocol. When the EPA promulgated the Proposed Rule to Implement the 8-Hour Ozone NAAQS on June 2, 2003, it mentioned EACs for the first time in a rulemaking setting. 68 Fed. Reg. 32801 (June 2, 2003). Although this proposed rule solicited comments on the framework for implementation of the eight-hour ozone standard, it also included a discussion of the development of EACs and the different deadlines for EACs. However, the proposed rule specifically noted that it was not taking comment on the EAC program. Id. In December 2003, the EPA published a proposed rule deferring the effective date of nonattainment eight-hour ozone designations for EACs. 68 Fed. Reg. 70108 (Dec. 16, 2003). The eight-hour rule makes this proposed rule, and the provisions providing for EACs, final. 69 Fed. Reg. 23858. The legal underpinning for EACs is not entirely clear. The Clean Air Act establishes a schedule for the EPA to promulgate state designations of areas for new or revised NAAQS, which includes the eight-hour ozone standard. Clean Air Act, � 107(d). The EPA also entered into a consent decree with a number of environmental groups that required the promulgation of state designations of areas for the eight-hour ozone standard by April 15, 2004. American Lung Assoc. v. EPA, No. 1:02CV02239 (D.D.C.). The litigation concerning the eight-hour ozone standard caused a departure from the Clean Air Act statutory schedule for NAAQS designations, and the D.C. Circuit put in place the new deadline of April 15, 2004. The Clean Air Act does not specifically provide for the creation of EACs. Section 107 establishes a framework for designation and redesignation of areas for nonattainment. Sections 181 and 182 contain provisions for designation of areas as nonattainment for ozone. Areas implementing EACs may be concerned that a reasonable argument can be made that the deferral of nonattainment designations for EAC areas violates the schedule of requirements in place in the act. The eight-hour rule specifies that the proposed time period for attainment with the Clean Air Act eight-hour ozone standard varies according to the severity of the area. Implementation and attainment deadlines are measured from the date of designation of the area as nonattainment. Since the effective date for nonattainment designations for EACs has been deferred pursuant to 69 Fed. Reg. 23858, Clean Air Act requirements for nonattainment areas will also be deferred, which is likely to be challenged in the D.C. Circuit cases that were just filed. In addition, the creation of EACs may violate the consent decree in American Lung Assoc. v. EPA, specifying that eight-hour ozone NAAQS attainment status designations were to be promulgated no later than April 15, 2004. Id. at � 2. However, the EPA and the petitioners in that case signed a consent order on March 13, 2004, that provided for the extension of this deadline for EAC areas as long as each area met the requirements of the TCEQ Protocol and EPA guidance. 69 Fed. Reg. at 23870. Thus, this forecloses any argument that the petitioners could seek to enforce the consent order to constrain the EPA’s ability to extend the effective dates of the designations. Despite statutory constraints, the EPA does have considerable latitude to interpret and implement the provisions of the Clean Air Act. See Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519, 524-25 (1978); American Lung Assoc. v. EPA, 134 F.3d 388 (D.C. Cir. 1998). Using this discretion, the EPA may argue that it created the EAC guidance and has issued the eight-hour rule that provides a legal foundation for EACs. However, the EPA’s support for the legality of EACs in the preamble to the eight-hour rule could be viewed as tenuous. The EPA has applauded the flexibility of EACs and the local cooperation and commitments made by members of EACs. 69 Fed. Reg. at 23869. It further predicts that the commitments and milestones in EAC plans will be sufficient to bring those areas into attainment sooner than required by the Clean Air Act. Id.; EPA Response to Public Comments, Early Action Compacts for Implementing the 8-Hour NAAQS, OAR-2003-0090-0278 (April 15, 2004), at 31. The EPA thus implies that EACs are legal because no relaxation of Clean Air Act requirements has occurred. Despite these predictions and legal foundation constructed in the eight-hour rule, to date the EPA has failed to clarify the statutory authority supporting the legality of EACs. In short, the EPA may be out on a limb, looking for legal support in the upcoming challenges before the D.C. Circuit. Environmentalists have commented that EACs relieve areas of nonattainment obligations. 69 Fed. Reg. at 23869. The American Lung Association, Environmental Defense, Natural Resources Defense Council and Sierra Club timely petitioned the court for review of the eight-hour rule. These petitioners will likely raise these arguments to challenge the legality of EACs, and practitioners can expect new law from the D.C. Circuit regarding the validity of EACs under the Clean Air Act. Alan H. McConnell is a partner, and Elizabeth C. Williamson is an associate, in the Raleigh, N.C., office of Atlanta’s Kilpatrick Stockton, where they practice in the firm’s environmental practice group. McConnell can be reached at [email protected], and Williamson can be reached at [email protected].

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