Western States Petroleum Assn. v. EQC

Under ORS 468A.266(5), in order to adopt a rule, the EQC must evaluate a handful of factors ranging from technical studies to feasibility analysis, and the rule will be invalid under ORS 183.400(4)(c) if it was adopted without compliance with applicable rulemaking procedures.

Pursuant to ORS 183.400(1), Petitioners challenged an administrative rule by the Environmental Quality Commission ("EQC") that is associated with low carbon fuel standards.  Petitioners raised two claims: (1) that EQC failed to evaluate factors required by the Oregon legislature and (2) that the rules violated Article IX, section 3a, of the Oregon Constitution. On appeal, Petitioners argued that EQC violated applicable rulemaking procedures by failing to evaluate factors set out under ORS 468A.226(5). Additionally, Petitioner argued that EQC created a tax on motor vehicles not exclusively used on construction and maintenance of roads in violation of Article XI, section 3a. In response, Respondents argued that the applicable rulemaking procedures referred to the Administrative Procedure Act ("APA") rather than procedures laid out by the legislature. Additionally, Respondents argued that EQC still properly evaluated the factors and that the payment for a low-carbon-fuel credit was a transaction between private parties rather than a tax by the government. Under ORS 468A.266(5), in order to adopt a rule, the EQC must evaluate a handful of factors ranging from technical studies to feasibility analysis, and the rule will be invalid under ORS 183.400(4)(c) if it was adopted without compliance with applicable rulemaking procedures.  The Court concluded that ORS 183.400 showed an intention to include procedures beyond only the APA procedures but nonetheless EQC evaluated the necessary factors and that the credit is not a tax because the money is uninvolved in the collection of state revenue. 

OAR 340-253-0000 to 340-253-8080 held valid.