Wednesday, November 20, 2013

HBA Sues EPA on Clean Air Act

Your Home Builders Association is part of an industry coalition against the EPA in a case before the Supreme Court. This time the battle has to do with the Clean Air Act. The EPA has certain preconstruction permitting requirements which are designed to lower carbon dioxide emissions, but as you might expect, have unintended consequences.  Click on the link below to watch a report on the lawsuit.

In 2009-2010, EPA issued four separate regulations in order to regulate greenhouse gas (GHG) emissions from motor vehicles. Even though the Auto Rule ostensibly sets standards for motor vehicles only, EPA has interpreted this regulation to trigger requirements for stationary sources as well. Traditionally, "stationary sources" are limited to large industrial factories and utilities. But, because the Clean Air Act contains a numeric triggering threshold for a pre-construction permit known as the "Prevention of Significant Deterioration" program permit, and because the principal GHG emission, carbon dioxide, is emitted by structures in an amount triggering this threshold, stationary sources in this context would include multifamily structures and even some single family homes. This result would bring most multifamily, mixed use, some single-family home, and potentially even master-planned community development to a halt.

One of the four regulations, known as the Tailoring Rule, raises the statutory thresholds that automatically trigger PSD permitting requirements by relying on judicial doctrines such as "absurd results" and "administrative necessity." While raising the statutory thresholds effectively exempts residential construction from PSD permitting obligations, this purported relief is uncertain and temporary. EPA does not provide a permanent exemption for small sources, only a promise to not regulate until 2016. Finally, EPA's interpretation of its ability to ignore the statutory thresholds represents a dramatic expansion of its authority, which if upheld, would make it extremely difficult for the courts and even Congress to limit EPA's actions.

Your Home Builders Association's partner, the National Association of Home Builders, joined an industry coalition to challenge all four regulations on the grounds that EPA misinterpreted its obligations under the Clean Air Act.

On June 26, 2012, the court issued one opinion deciding all four petitions. The court found that EPA's Endangerment Finding and Auto Rule were valid, and that all parties lacked standing to challenge the Tailoring and Timing rules. The industry coalition to which NAHB belongs filed a petition for rehearing on Aug. 10, 2012, and a divided full court issued its decision on Dec. 20, 2012. While a majority of judges voted to deny the petition, two judges took the unusual step of writing detailed dissents to the petition's denial. One dissent in particular supported the industry coalition's arguments.

On April 18, 2013, NAHB as a member of the industry coalition filed a cert petition with the U.S. Supreme Court. EPA filed its opposition to cert on July 22, 2013, and the coalition filed its reply on Aug. 6, 2013.

On Oct. 15, 2013, the Supreme Court agreed to hear this case on the following issue: “Whether EPA permissibly determined that its regulation of greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” Briefing will take place through the winter, and oral argument will occur in February 2014. This marks NAHB's second trip to the Supreme Court as a petitioner.

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