Case No. 14-60649 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE FIFTH CIRCUIT

_____________________________________________________________________________ 

 

ENVIRONMENTAL INTEGRITY PROJECT, et al., 

 Petitioners, 

 

 v. 

 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, 

 

 Respondent, 

STATE OF TEXAS and BCCA APPEAL GROUP, 

 Respondent-Intervenors. 

______________________________________________________________________________ 

 

On Petition for Review of Final Action of the 

United States Environmental Protection Agency 

______________________________________________________________________________ 

BRIEF OF RESPONDENT U. S. ENVIROMENTAL PROTECTION AGENCY

JOHN C. CRUDEN 

Assistant Attorney General 

 

ALAN D. GREENBERG 

 Attorney, U.S. Department of Justice 

 Environment & Natural Resources Division 

 999 18th Street, Suite 370 

 Denver, CO 80202 

303-844-1366 

alan.greenberg@usdoj.gov 

Of Counsel: Counsel for Respondent 

BRUCE JONES 

Office of Regional Counsel, Region 6 

United States Environmental Protection Agency 

DAVID COURSEN 

Office of General Counsel 

United States Environmental Protection Agency 

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STATEMENT IN SUPPORT OF ORAL ARGUMENT 

 The United States Environmental Protection Agency (“EPA”) requests oral 

argument to assist the Court in understanding the relevant regulatory provisions 

under the Clean Air Act’s New Source Review programs and the State of Texas’s 

Flexible Permit Program, and the basis for the EPA’s decision in the final rule 

subject to judicial review in this case. 

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TABLE OF CONTENTS 

STATEMENT OF JURISDICTION.......................................................................... 1

ISSUES PRESENTED ............................................................................................... 1

STATEMENT OF THE CASE .................................................................................. 3

I. Clean Air Act Background .................................................................... 5

 A. New Source Review ................................................................... 6

 1. New Source Review for Major Sources ............................. 7

 2. New Source Review for Minor Sources ............................. 9

II. The Texas Flexible Permit Program ................................................... 10

SUMMARY OF ARGUMENT ............................................................................... 13

STANDARD OF REVIEW ..................................................................................... 15

ARGUMENT ........................................................................................................... 17

I. The EPA Reasonably Approved the Flexible Permit Program 

Because It Is a Minor NSR Program That Does Not Interfere 

with Major NSR Requirements ........................................................... 17 

A. The EPA’s Determination Is Supported by the 

Regulatory Text of the Flexible Permit Program ..................... 18 

B. The EPA’s Determination Is Supported by This Court’s 

Decision in Flex I. ..................................................................... 24 

C. The EPA Reasonably Relied on Texas’s Representation 

that the Flexible Permit Program Is a Minor NSR 

Program. .................................................................................... 27 

D. The Citizen Groups Fail to Demonstrate that the EPA’s 

Approval of the Program Is Arbitrary or Capricious. ............... 29

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II. The EPA Reasonably Approved the Program Because It Does 

Not Alter Public Participation Opportunities Associated with 

Major Modifications. ........................................................................... 35

III. The EPA’s Responses to the Citizen Groups’ Comments Met 

the Requirements of the Clean Air Act. .............................................. 39

CONCLUSION ........................................................................................................ 44

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TABLE OF AUTHORITIES 

CASES 

Alaska Dep't of Envtl. Conservation v. EPA, 

540 U.S 461 (2004) ................................................................................................ 8 

BCCA Appeal Group v. EPA, 

476 Fed. Appx. 579 (5th Cir. 2012) ..................................................................... 33 

Chemical Mfrs. Ass'n v. NRDC, Inc., 

470 U.S. 116 (1985) ............................................................................................. 17 

Chevron U.S.A., Inc. v. NRDC, Inc., 

467 U.S. 837 (1984) ............................................................................................. 16 

City of Portland, Oregon v EPA, 

507 F.3d 706 (D.C. Cir. 2007) .............................................................................. 40 

CleanCOALition v. TXU Power, 

536 F.3d 469 (5th Cir. 2008) .................................................................................. 7 

Envtl. Def. v. Duke Energy Corp., 

549 U.S. 561 (2007) ........................................................................................ 7, 31 

Int'l Fabricare Inst. v. EPA, 

972 F.2d 384 (D.C. Cir. 1992) .............................................................................. 39 

Louisiana Envtl. Action Network v. EPA, 

382 F.3d 575 (5th Cir. 2004) ................................................................................ 16 

Luminant Generation Co., LLC v. EPA, 

714 F.3d 841 (5th Cir. 2013) ..................................................................... 5, 15, 17 

New York v. EPA, 

413 F.3d 3 (D.C. Cir. 2005) .................................................................................. 32 

Public Citizen, Inc. v. EPA, 

343 F.3d 449 (5th Cir. 2003) ................................................................................ 16 

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Sierra Club v. EPA, 

353 F.3d 976 (D.C. Cir. 2004) .............................................................................. 39 

Texas Oil & Gas Ass'n v. EPA, 

161 F.3d 923 (5th Cir. 1998) ................................................................................ 16 

Texas v. EPA, 

690 F.3d 670 (5th Cir. 2012) ........................................................................ passim 

Thomas Jefferson Univ. v. Shalala, 

512 U.S. 504 (1994) ............................................................................................. 17 

Train v. NRDC, Inc., 

421 U.S. 60 (1975) .............................................................................................5, 6 

Union Elec. Co. v. EPA, 

427 U.S. 246 (1976) ...........................................................................................5, 6 

FEDERAL STATUTES 

5 U.S.C. § 553(c) ..................................................................................................... 39 

5 U.S.C. § 706 .......................................................................................................... 43 

5 U.S.C. § 706(2)(A) ................................................................................................ 15 

42 U.S.C. §§ 7401-7671q ......................................................................................1, 5 

42 U.S.C. § 7407(a) ................................................................................................... 5 

42 U.S.C. § 7407(d) ................................................................................................... 6 

42 U.S.C. § 7408 ........................................................................................................ 5 

42 U.S.C. § 7409 ........................................................................................................ 5 

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42 U.S.C. § 7410(a) ................................................................................................... 5 

42 U.S.C. § 7410(a)(1) ............................................................................................... 6 

42 U.S.C. § 7410(a)(2)(A) ......................................................................................... 6 

42 U.S.C. § 7410(a)(2)(C) ......................................................................................... 9 

42 U.S.C. § 7410(k) ................................................................................................... 5 

42 U.S.C. § 7410(k)(3)............................................................................................. 39 

42 U.S.C. § 7410(l) .................................................................................................... 6 

42 U.S.C. § 7411(a)(4) ............................................................................................... 7 

42 U.S.C. §§ 7470-7492 ............................................................................................ 7 

42 U.S.C. § 7473 ........................................................................................................ 8 

42 U.S.C. § 7475(a) ................................................................................................... 8 

42 U.S.C. § 7475(a)(3) ............................................................................................... 8 

42 U.S.C. § 7475(a)(4) ........................................................................................ 8, 21 

42 U.S.C. § 7476 ........................................................................................................ 8 

42 U.S.C. § 7479(1) ................................................................................................... 8 

42 U.S.C. § 7479(2)(C) .............................................................................................. 7 

42 U.S.C. §§ 7501-7515 ............................................................................................ 8 

42 U.S.C. § 7501(3) ................................................................................................. 21 

42 U.S.C. § 7502 ........................................................................................................ 8 

42 U.S.C. § 7502(c)(5) ............................................................................................... 9 

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42 U.S.C. § 7503 ....................................................................................................8, 9 

42 U.S.C. § 7602(j) .................................................................................................... 8 

42 U.S.C. § 7607(b)(1)............................................................................................... 1 

 FEDERAL REGULATIONS 

40 C.F.R. pt. 50 .......................................................................................................... 5 

40 C.F.R. § 51.100(n) ................................................................................................ 6 

40 C.F.R. §§ 51.160-51.164 ....................................................................................... 9 

40 C.F.R. § 51.160(a) ............................................................................................... 10 

40 C.F.R. § 51.160(b) .............................................................................................. 10 

40 C.F.R. § 51.161 ................................................................................................... 36 

40 C.F.R. § 51.165 ..................................................................................................... 9 

40 C.F.R. § 51.165(a)(1)(iv) ...................................................................................... 8 

40 C.F.R. § 51.166 ..................................................................................................... 9 

40 C.F.R. § 51.166(b)(12) ........................................................................................ 21 

FEDERAL REGISTER NOTICES 

75 Fed. Reg. 19,468 (Apr. 14, 2010) ....................................................................... 33 

79 Fed. Reg. 551 (Jan. 6, 2014) ........................................................................ 37, 38 

79 Fed. Reg. 8,368 (Feb. 12, 2014) ........................................................ 7, 22, 25, 34 

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79 Fed. Reg. 40,666 (Jul. 14, 2014) ................................................................. passim 

79 Fed. Reg. 78,752 (Dec. 31, 2014) ......................................................................... 4 

STATE STATUTE 

Tex. Health & Safety Code § 382.056(g) ................................................................ 38 

STATE REGULATIONS 

30 Tex. Admin. Code § 39.401 ................................................................................ 37 

30 Tex. Admin. Code § 39.402(a)(2) ....................................................................... 37 

30 Tex. Admin. Code § 39.405 ................................................................................ 37 

30 Tex. Admin. Code § 39.411(b) ........................................................................... 37 

30 Tex. Admin. Code § 39.411(c) ........................................................................... 37 

30 Tex. Admin. Code § 39.411(e) ........................................................................... 37 

30 Tex. Admin. Code § 39.418 ............................................................................... 37 

30 Tex. Admin. Code § 39.419 ................................................................................ 37 

30 Tex. Admin. Code § 55.101 ................................................................................ 38 

30 Tex. Admin. Code § 55.152 ................................................................................ 37 

30 Tex. Admin. Code § 55.154(c) ........................................................................... 37 

30 Tex. Admin. Code § 101.1(1) ............................................................................. 11 

30 Tex. Admin. Code §§ 116.10-116.1540 ............................................................. 10 

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30 Tex. Admin. Code § 116.10(4) ........................................................................... 11 

30 Tex. Admin. Code § 116.10(9)(E) ...................................................................... 29 

30 Tex. Admin. Code § 116.10(15) ......................................................................... 11 

30 Tex. Admin. Code § 116.12(20) .................................................................. 31, 32 

30 Tex. Admin. Code § 116.12(20)(A) ................................................................... 31 

30 Tex. Admin. Code § 116.110 .............................................................................. 19 

30 Tex. Admin. Code § 116.110(a) ............................................................ 10, 29, 30 

30 Tex. Admin. Code § 116.116 .............................................................................. 42 

30 Tex. Admin. Code § 116.116(e) .................................................................. 33, 34 

30 Tex. Admin. Code § 116.117 ....................................................................... 33, 34 

30 Tex. Admin. Code § 116.118 ....................................................................... 33, 34 

30 Tex. Admin. Code § 116.150 .............................................................................. 35 

30 Tex. Admin. Code § 116.150(b) ......................................................................... 30 

30 Tex. Admin. Code § 116.150(d)(1) .................................................................... 22 

30 Tex. Admin. Code § 116.151 .............................................................................. 35 

30 Tex. Admin. Code § 116.151(a) ......................................................................... 30 

30 Tex. Admin. Code § 116.160 .............................................................................. 35 

30 Tex. Admin. Code § 116.160(a) .................................................................. 22, 30 

30 Tex. Admin. Code § 116.710(a) .................................................................. 10, 11 

30 Tex. Admin. Code § 116.711(2)(H) ........................................................... passim 

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30 Tex. Admin. Code § 116.711(2)(I) ............................................................. passim 

30 Tex. Admin. Code § 116.711(2)(M)(vi) ............................................................. 20 

30 Tex. Admin. Code § 116.715(b) ......................................................................... 11 

30 Tex. Admin. Code § 116.715(c)(8) ..................................................................... 20 

30 Tex. Admin. Code § 116.715(c)(11) ................................................................... 24 

30 Tex. Admin. Code § 116.716 .............................................................................. 11 

30 Tex. Admin. Code § 116.716(c) .................................................................. 11, 40 

30 Tex. Admin. Code § 116.716(c)(1)(A) ............................................................... 22 

30 Tex. Admin. Code § 116.716(c)(2) ..................................................................... 22 

30 Tex. Admin. Code § 116.718 ....................................................................... 12, 23 

30 Tex. Admin. Code §116.721 ........................................................................ 40, 42 

30 Tex. Admin. Code § 116.721(a) ................................................................. passim 

30 Tex. Admin. Code § 116.740(a) ......................................................................... 38 

STATE REGISTER NOTICE 

35 Tex. Reg. 11,903 (Dec. 31, 2010) ............................................................... passim

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STATEMENT OF JURISDICTION

On July 14, 2014, the EPA issued a final rule entitled “Approval and 

Promulgation of Implementation Plans; Texas; Revisions to the New Source 

Review State Implementation Plan; Flexible Permit Program, 79 Fed. Reg. 40,666 

(July 14, 2014) (the “Final Rule”). The EPA promulgated the Final Rule pursuant 

to its authority under the Clean Air Act, 42 U.S.C. §§ 7401-7671q. 

This Court has subject matter jurisdiction over the petition for review of the 

Final Rule under 42 U.S.C. § 7607(b)(1), because the Final Rule applies to Texas 

and, therefore, this Court of Appeals is an “appropriate circuit.” Seven citizen 

groups that claim to be interested in air quality in Texas (collectively “Citizen 

Groups”) timely filed their petition for review on September 12, 2014. See 42 

U.S.C. § 7607(b)(1) (petitions must be filed within sixty days of notice in the 

Federal Register). 

 ISSUES PRESENTED 

This case raises the general question of whether the EPA properly approved 

the Texas Flexible Permit Program (the “Program”) as a revision to Texas’s Clean 

Air Act state implementation plan because it met the requirements for a minor New 

Source Review program. The Citizen Groups do not argue that the Program fails 

to meet the minor New Source Review requirements. Instead, they argue that the 

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Program can be used to circumvent State rules for permitting major modifications 

to stationary sources associated with major New Source Review requirements. The 

Citizen Groups raise three issues: 

1. Whether the EPA reasonably approved the Program as a minor New 

Source Review state implementation plan revision under the Clean Air Act 

because, consistent with a prior decision of this Court, the EPA determined that the 

Program does not interfere with major New Source Review state implementation 

plan requirements. 

2. Whether the EPA reasonably approved the Program because the Texas 

state implementation plan provides public participation opportunities required by 

the Clean Air Act. 

3. Whether the EPA reasonably responded to the Citizen Groups’ 

significant comments submitted in response to EPA’s proposed approval of the 

Program when EPA addressed the Citizen Groups’ contention that the Program 

would allow sources to evade compliance with major New Source Review 

requirements. 

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STATEMENT OF THE CASE

The Clean Air Act (the “Act”) requires that the construction of new sources 

of emissions of six pollutants, and the modification of existing sources that result 

in increased emissions of these pollutants, obtain permits that limit emissions to 

specified quantities. The applicable permitting program, known as New Source 

Review or “NSR,” differentiates between major sources and modifications – those 

that exceed threshold emission levels – and minor sources and modifications. 

Texas adopted a “Flexible Permit Program” that allows in certain 

circumstances the construction of new sources and modifications of existing 

sources at facilities covered by a flexible permit without further review by the 

State, as long as the change does not result in increased air pollutant emissions 

beyond those set in an emissions cap for the facilities covered by the permit. Texas 

submitted a prior version of the Program to the EPA for approval as a minor New 

Source Review program revision to Texas’s federally-enforceable clean air 

implementation plan. In 2010, the EPA disapproved the Program because the EPA 

determined, among other things, that the Program was ambiguous as to whether a 

facility may use the Program to avoid major New Source Review requirements. 

This Court reviewed the EPA’s disapproval of the Program, and found 

EPA’s explanation that the Program could result in evasion of major New Source 

Review requirements to be arbitrary and capricious. Texas v. EPA, 690 F.3d 670, 

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678 (5th Cir. 2012) (“Flex I”). The Court concluded that the Program does not 

allow evasion of major source requirements “because it affirmatively requires 

compliance with Major NSR.” Id. The Court vacated the EPA’s disapproval of 

the Program and remanded it to the EPA for the EPA’s further consideration. Id. at 

686. 

On remand, the EPA reviewed a revised version of the Program and 

determined that the Program is a minor New Source Review program. The EPA 

conditionally approved the program.1

 The EPA based its approval in part on its 

determination, consistent with this Court’s prior decision, that the revised Program 

does not allow facilities to evade compliance with major New Source Review 

requirements. 

The Citizen Groups challenge the EPA’s approval primarily on the ground, 

previously addressed by this Court, that the Flexible Permit Program enables 

facilities to evade major New Source Review requirements. 

 

1

 The EPA conditioned its approval on a commitment from Texas to adopt 

certain minor clarifications to the Program. 79 Fed. Reg. at 40,670. Texas has 

adopted revisions that it contends meet those commitments, and EPA has proposed 

to convert the conditional approval into a full approval. 79 Fed. Reg. 78,752 (Dec. 

31, 2014). 

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I. Clean Air Act Background 

The Clean Air Act (the “Act”), 42 U.S.C. §§ 7401-7671q, establishes a 

comprehensive program for controlling and improving the nation's air quality 

through a system of shared federal and state responsibility. Luminant Generation 

Co., LLC v. EPA, 714 F.3d 841, 845 (5th Cir. 2013). Among other requirements, 

the Act instructs the EPA to establish National Ambient Air Quality Standards 

(“NAAQS”). NAAQS are nationally applicable standards set by the EPA that 

establish permissible concentrations for certain air pollutants, such as ozone and 

nitrogen oxides, that may endanger public health or welfare. 42 U.S.C. §§ 7408, 

7409; see 40 C.F.R. pt. 50. 

Under the Act, States have the primary responsibility for formulating 

pollution control strategies and ensuring that their ambient air meets the NAAQS. 

42 U.S.C. § 7407(a) (each State shall “specify the manner” in which NAAQS will 

be achieved); see Union Elec. Co. v. EPA, 427 U.S. 246, 256-57 (1976). Each 

State presents its comprehensive approach for attaining the NAAQS and meeting 

other requirements of the Act in a State Implementation Plan (“SIP”). 42 U.S.C. § 

7410(a), 7410(k); see generally Train v. NRDC, Inc., 421 U.S. 60 (1975). SIPs 

include the State’s “control strategy,” which is a combination of emission 

limitations and other measures designed to achieve the reduction of emissions 

necessary for attainment and maintenance of the NAAQS. See 42 U.S.C. § 

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7410(a)(2)(A); 40 C.F.R. § 51.100(n). 

Every SIP or SIP revision must be adopted by the State after reasonable 

notice and hearing, and must be submitted to the EPA for approval. Id. § 

7410(a)(1), (l). The Act grants the states considerable latitude in developing 

emissions limitations, see Train v. NRDC, Inc., 421 U.S. at 79, subject to strict 

minimum compliance requirements as determined by the EPA. Union Elec. Co. v. 

EPA, 427 U.S. 246, 256-57 (1976). The EPA cannot approve a SIP revision if the 

revision would interfere with any applicable requirement of the Act regarding 

attainment, or reasonable further progress towards attainment, or any other 

applicable requirement of the Act. 42 U.S.C. § 7410(l). 

For each air pollutant subject to a NAAQS, a State must identify areas 

within its boundaries as either meeting or not meeting the NAAQS for that 

pollutant. 42 U.S.C. § 7407(d). An area that meets the NAAQS for a particular 

pollutant is classified as an “attainment area”; an area that does not is classified as 

a “non-attainment area.” 

A. New Source Review

The Act contains specific requirements for the permitting of new and 

modified sources of air pollution, which are referred to as “New Source Review” 

or “NSR.” There are three types of New Source Review, one or more of which can 

apply at a given source, depending upon whether the source is minor or major, 

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whether the construction or modification causes an increase in emissions for a 

given pollutant above the significance threshold, and whether the source is located 

in an attainment area or a non-attainment area for the given pollutant. See 79 Fed. 

Reg. 8,368, 8,376/3 (Feb. 12, 2014). 

1. New Source Review for Major Sources

The Act provides two different permitting programs for major sources, and 

their applicability depends on whether the sources are located in an attainment or 

non-attainment area. For major sources in attainment areas, the Prevention of 

Significant Deterioration (“PSD”) program, 42 U.S.C. §§ 7470-7492, is intended to 

give “added protection to air quality in certain parts of the country notwithstanding 

attainment and maintenance of the NAAQS.” CleanCOALition v. TXU Power, 536 

F.3d 469, 472 (5th Cir. 2008) (internal quotation marks omitted); see also Envtl. 

Def. v. Duke Energy Corp., 549 U.S. 561, 567-68 (2007) (describing PSD 

program). A PSD permit must be obtained prior to construction or modification2

 

2

 The Act defines “construction” to include “modification,” which “means any 

physical change in, or change in the method of operation of, a stationary source 

which increases the amount of any air pollutant emitted by such source or which 

results in the emission of any air pollutant not previously emitted.” 42 U.S.C. §§ 

7411(a)(4), 7479(2)(C). 

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of large pollutant-emitting facilities,3 often referred to as “major sources.” 42 

U.S.C. § 7475(a). The applicant for a PSD permit is required, among other things, 

to demonstrate that the proposed new or modified source will not cause a violation 

of the NAAQS or of “PSD increments,” which are limits on increases in ambient 

pollution concentrations over area-specific baseline concentrations. See 42 U.S.C. 

§§ 7473, 7475(a)(3) and 7476. The source must also implement the “best available 

control technology” (or “BACT”) to limit emissions of each pollutant regulated 

under the Act. 42 U.S.C. § 7475(a)(4); see Alaska Dep’t of Envtl. Conservation v. 

EPA, 540 U.S 461, 468 (2004). 

For non-attainment areas, major sources are subject to the more stringent 

non-attainment NSR program, which applies to major new or modified sources of a 

pollutant for which the area is designated non-attainment.4

 42 U.S.C. §§ 7502, 

7503. The non-attainment NSR program serves to improve air quality in areas that 

do not meet the applicable NAAQS. Id. at §§ 7501-7515. For non-attainment 

NSR, a new or modified source must meet the lowest achievable emission rate and 

 

3

 The Act defines a “major emitting facility” for the PSD program as one that 

emits either 100 tons per year or 250 tons per year of any pollutant regulated under 

the Act, depending on the type of facility. Id. § 7479(1). 

4

 For non-attainment NSR, a major source is generally one that emits, or has 

the potential to emit, 100 tons per year or more of a pollutant for which the area in 

which it is located is designated non-attainment. 42 U.S.C. § 7602(j); 40 C.F.R. § 

51.165(a)(1)(iv). 

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must obtain sufficient emission reductions from existing sources to offset its 

increased emissions. Id. §§ 7502(c)(5), 7503.

PSD review and non-attainment NSR are collectively referenced as “Major 

NSR.” 

2. New Source Review for Minor Sources 

Because a State’s SIP must regulate the construction and modification of any 

stationary source as necessary to assure achievement of the NAAQS, all SIPs must 

contain a minor New Source Review program. See 42 U.S.C. § 7410(a)(2)(C). 

Minor NSR programs include new sources and modifications to existing sources 

that have the potential to emit a relevant pollutant below the major source 

thresholds of the PSD and non-attainment NSR programs. 

EPA has promulgated regulations specifying the requirements for minor 

NSR programs. See 40 C.F.R. §§ 51.160-51.164.5

 Each State’s SIP must set forth 

legally enforceable procedures, such as applications from owners or operators of 

sources subject to minor NSR, that will allow the State to determine whether the 

construction or modification of a minor source, or a “minor modification” of an 

 

5

 These requirements apply to all state NSR implementation plans, including 

both major and minor source programs. SIPs for permitting major sources in nonattainment areas must, in addition, meet the requirements of 40 C.F.R. § 51.165, 

and SIPs for major sources subject to PSD review must meet the requirements 40 

C.F.R. § 51.166. 

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existing major source, will (1) result in a violation of applicable portions of the 

State’s control strategy, or (2) interfere with attainment or maintenance of any 

NAAQS in the State or in a neighboring State. Id. at § 51.160(a), (b). 

II. The Texas Flexible Permit Program 

Chapter 116 of the administrative rules promulgated by the Texas 

Commission of Environmental Quality (the “Commission”) contains the State’s 

federally-approved New Source Review provisions. See 30 Tex. Admin. Code §§ 

116.10 – 116.1540 (2015). These rules make any person who plans to construct a 

new facility or modify an existing facility that may emit air contaminants into the 

air of the State subject to the State’s New Source Review permitting requirements. 

 30 Tex. Admin. Code § 116.110(a). The State’s New Source Review regulations 

contain several different permitting options, one of which is the Flexible Permit 

Program. Id. 

The Program provides an alternative to obtaining or amending a traditional 

New Source Review permit when a person is engaged in the construction of a 

minor source or the minor modification of an existing source. Id. § 116.710(a). A 

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flexible permit may be issued for a facility, group of facilities, or an account.6 Id. § 

116.710(a). A flexible permit establishes one or more pollutant-specific emission 

caps for all or a designated group of facilities at an account. See Id. § 116.715(b). 

The flexible permit also includes individual emission limitations for each air 

contaminant for all facilities authorized by the permit and not included under an 

emission cap. Id. §§ 116.715(b), 116.716. 

The emissions cap and individual emission limitations are established by 

calculating emissions for each covered facility based upon an application of either 

BACT, at the expected maximum operating capacity of each facility, or any more 

stringent applicable requirement. Id. at § 116.716(c). The calculated emissions are 

summed to determine the emission cap. Id. However, this cap does not negate 

compliance requirements with any established individual emission limits for 

facilities that may be covered under the cap, including individual BACT emission 

limits established in the PSD permitting process or lowest achievable emission 

 

6

 Texas defines “facility” as “[a] discrete or identifiable structure, device, 

item, equipment, or enclosure that constitutes or contains a stationary source, 

including appurtenances other than emission control equipment. A mine, quarry, 

well test, or road is not a facility.” 30 Tex. Admin. Code § 116.10(4). Texas 

defines “account,” in pertinent part, as “any combination of sources under common 

ownership or control and located on one or more contiguous properties, or 

properties contiguous except for intervening roads, railroads, rights-of-way, 

waterways, or similar divisions.” Id. at § 101.1(1). Texas defines “source” as “[a] 

point of origin of air contaminants, whether privately or publicly owned or 

operated.” Id. at § 116.10(15). 

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rates established under non-attainment NSR. Id. § 116.711(2)(H) and (I) (an 

application for a Flexible Permit must contain information that demonstrates that 

each facility complies with all applicable requirements concerning either nonattainment NSR or PSD review). 

The Flexible Permit Program allows persons to make certain operational or 

physical changes at one or more facilities covered under the flexible permit without 

further regulatory review provided any emission increases do not exceed either the 

emission cap or individual emission limitations and the change meets other 

Program requirements. See id. §§ 116.718, 116.721(a). However, any change that 

varies from the representations made in the flexible permit application or in the 

permit provisions is unlawful if it will cause a change in the method of control of 

emissions or the character of emissions, will relax emission controls, or result in a 

significant increase in emissions. Id. § 116.721(a). In this situation, the permittee 

must seek an amendment of the flexible permit and obtain Commission approval 

before proceeding with the change. Id. 

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13 

SUMMARY OF THE ARGUMENT 

This Court’s review of the Final Rule is governed by the familiar 

Administrative Procedure Act standard: the Citizen Groups must demonstrate that 

the EPA’s approval of the Program was arbitrary, capricious, an abuse of 

discretion, or otherwise contrary to law. The Citizen Groups cannot meet this high 

standard. 

The EPA reasonably approved the Flexible Permit Program as a minor New 

Source Review revision to the Texas SIP. In the Final Rule, the EPA repeatedly 

articulated, for the benefit of the public and future permittees, that the Program is a 

minor NSR program and cannot be used to evade Major NSR requirements. The 

Citizen Groups do not appear to dispute that the Program complies with the 

requirements for a minor NSR program. Rather, the Citizen Groups erroneously 

argue that the Program allows major modifications to circumvent major New 

Source Review. 

The EPA’s approval based on the Program constituting a minor NSR 

program is well-supported by the record. Numerous sections of the Program’s 

rules address the interplay between the Program and New Source Review, limit 

increases under the emission cap to those attributable to new minor sources or 

minor modifications, and prevent circumvention of Major NSR requirements. The 

rules require applicants for a flexible permit to demonstrate compliance with both 

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14 

non-attainment NSR and PSD review, and require any changes in control 

technologies or significant emission increases to comply with both of these Major 

NSR requirements. 

The EPA’s approval is consistent with both the reasoning and conclusion of 

this Court’s prior decision in Flex I holding that the Program does not allow 

sources to evade Major NSR because it affirmatively requires compliance with 

Major NSR. EPA’s determination is also supported by Texas’s characterization of 

the program as a minor NSR program. 

Most of the Citizen Groups’ arguments are based on the incorrect premise 

that the Program does not assure compliance with Major NSR. The Citizen 

Groups’ arguments do not effectively counter the regulatory language in Texas’s 

New Source Review rules or this Court’s decision in Flex I. The Citizen Groups 

do not meet their burden of showing that the EPA’s determination that the Program 

is a minor NSR program is arbitrary or capricious. 

The Citizen Groups’ allegations regarding insufficient public participation 

fails because Texas’s SIP provides the public participation opportunities required 

by the Act. The Citizen Groups do not argue that the Program fails to comply with 

public participation requirements for minor source programs. Rather, they focus 

on public participation for major modifications, but the Texas public participation 

requirements applicable to major New Source Review permits meet Clean Air Act 

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15 

requirements by providing two public notices of the application and the 

opportunity for public comment and a public meeting. The Citizen Groups base 

their argument on statutory and regulatory provisions that the State has not 

submitted to EPA as a SIP revision. These provisions are not part of Texas’s 

approved SIP, and permittees and the State must use the public participation rules 

currently approved into the SIP to meet the requirements of the Act. 

The Citizen Groups’ objections to the adequacy of the EPA’s responses to 

their comments is based on a disagreement with the substance of the EPA’s 

responses, not any failure by the EPA to consider a relevant factor raised by the 

Citizen Groups. The EPA responded to the Citizen Groups’ significant comments, 

as required by the Administrative Procedure Act. Assertions that the EPA 

“misreads Texas’s rules” or that “EPA is wrong,” Citizen Groups Brief at 44-45, 

do not establish a failure to respond. 

STANDARD OF REVIEW

This Court reviews an EPA action that approves a SIP revision under the 

deferential standard of review for agency actions set forth in the Administrative 

Procedure Act, 5 U.S.C. § 706(2)(A). Luminant Generation Co., LLC v EPA, 714 

F.3d 841, 850 (5th Cir. 2013). The Citizen Groups must show that EPA’s final 

action on the Program was “arbitrary, capricious, an abuse of discretion, or 

otherwise not in accordance with law.” Id. (quoting 5 U.S.C. § 706(2)(A)). This 

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highly deferential standard presumes the validity of agency actions and upholds 

them if they satisfy minimum standards of rationality. Texas Oil & Gas Ass’n v. 

EPA, 161 F.3d 923, 933-34 (5th Cir. 1998); see Public Citizen, Inc. v. EPA, 343 

F.3d 449, 455 (5th Cir. 2003). Although this Court must assure itself that the 

agency considered the relevant factors in making the decision, the Court cannot 

substitute its own judgment for that of the agency. Texas Oil & Gas Ass’n, 161 

F.3d at 933-34; Public Citizen, 343 F.3d at 455. 

 Questions of statutory interpretation are governed by the familiar two-step 

test set forth in Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 842-45 (1984). 

See Louisiana Envtl. Action Network v. EPA, 382 F.3d 575, 581-82 (5th Cir. 2004) 

(“We review the EPA’s interpretation of the [Act] under the standards set forth in 

Chevron . . . .”). Under the first step, the reviewing court must determine “whether 

Congress has directly spoken to the precise question at issue.” Chevron, 467 U.S. 

at 842. If Congress’ intent is clear from the statutory language, the Court must 

“give effect to the unambiguously expressed intent of Congress.” Chevron, 467 

U.S. at 843. If, however, the statute is “silent or ambiguous with respect to the 

specific issue,” the Court must decide whether the Agency’s interpretation is based 

on a permissible construction of the statute. Id. To uphold EPA’s interpretation of 

the Act, the Court need not find that EPA’s interpretation is the only permissible 

construction that EPA might have adopted, but rather only that EPA’s 

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interpretation is reasonable. Chemical Mfrs. Ass’n v. NRDC, Inc., 470 U.S. 116, 

125 (1985). 

EPA's interpretations of its own regulations are entitled to even greater 

deference. EPA's interpretation of its own regulations should be given “controlling 

weight unless it is plainly erroneous or inconsistent with the regulation.” Thomas 

Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994); Luminant Generation, 714 

F.3d at 851. 

ARGUMENT 

I. The EPA Reasonably Approved the Flexible Permit Program Because It 

Is a Minor NSR Program That Does Not Interfere with Major NSR 

Requirements. 

 

The Citizen Groups do not dispute that the Flexible Permit Program meets 

the federal minor New Source Review requirements. Their challenge to the 

substance of the Program alleges that persons engaging in major modifications can 

use the Program to circumvent the requirements of Major NSR. That argument 

fails because the Program rules do not allow evasion of Major NSR. 

The EPA approved the Flexible Permit Program only as a minor NSR 

program. 79 Fed. Reg. at 40,668. In the Final Rule, EPA cautioned that permittees 

who use the Flexible Permit Program to circumvent Major NSR will be “violating 

the approved Texas SIP.” Id. The EPA’s approval of the Program as a minor NSR 

program is supported by numerous sections of the Program’s rules that prevent 

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circumvention of Major NSR requirements, this Court’s prior holding that the 

Program does not allow sources to evade Major NSR, and Texas’s characterization 

of the Program as a minor NSR program. Because the Citizen Groups erroneously 

argue that the Program does not assure compliance with non-attainment NSR and 

PSD review, the Citizen Groups’ arguments do not meet their burden of showing 

the EPA’s determination arbitrary or capricious. 

A. The EPA’s Determination Is Supported by the Regulatory Text of 

the Flexible Permit Program. 

 

Numerous provisions of the Program’s rules establish the Program as a 

minor NSR program. Although EPA is approving the Flexible Permit Program as 

a minor NSR program, facilities covered by a flexible permit can include major 

sources and sources undergoing major modifications. Because facilities covered 

by a flexible permit have the potential to undertake activities subject to Major NSR 

requirements, the Program requires the owner or operator to continue to comply 

with Major NSR regulatory provisions when taking actions subject to Major NSR 

requirements. Based on the Program’s rules described below that preclude evasion 

of the Major NSR requirements, the EPA reasonably determined that the Flexible 

Permit Program does not interfere with the requirements of the Clean Air Act or 

attainment or maintenance of NAAQS. 

The Program expressly requires that an application for a flexible permit must 

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demonstrate that the facilities covered by the permit will meet all NSR 

requirements, including Major NSR requirements. A flexible permit application 

must show that, if the proposed facility, group of facilities, or account is located in 

a non-attainment area, each facility complies “with all applicable requirements 

concerning nonattainment review in this chapter.” 30 Tex. Admin. Code § 

116.711(2)(H) (emphasis added). Because “this chapter” – Chapter 116 of the 

Commission’s rules – contains the requirements to meet control technology and 

other requirements of the non-attainment NSR program, an applicant for a flexible 

permit must show compliance with non-attainment NSR. Id. § 116.711(2)(H); see

id. § 116.110. Similarly, if the proposed facility, group of facilities or account is 

located in an attainment area, the applicant for a flexible permit must demonstrate 

that the facility complies “with all applicable requirements in this chapter 

concerning PSD review.” Id. § 116.711(2)(I). Thus, an applicant for a flexible 

permit must demonstrate compliance with both components of Major NSR – the 

non-attainment and PSD requirements – for both new sources and modifications. 

The Citizen Groups apparently agree on this point. Administrative Record 

Document (“AR Doc.”) 46 at 4 of 90 (The Program rules “require flexible permit 

applicants to comply with federal NSR/PSD requirements.”) 

Texas amended the Flexible Permit Program rules in a manner that further 

confirms that sources must comply with Major NSR control technology 

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requirements. The Program rules now require the applicant for a flexible permit to 

identify, for any facility currently authorized by a New Source Review permit, any 

terms, conditions and representations in the New Source Review permit that will 

be superseded by, or incorporated into the flexible permit, and include an analysis 

of how the conditions and control requirements of the New Source Review permit 

will be carried forward in the proposed flexible permit. 30 Tex. Admin. Code § 

116.711(2)(M)(vi). Texas stated that this amendment “addresses the EPA’s 

comment that existing SIP permits’ major and minor NSR terms, limits and 

conditions must be tracked and accounted for.” AR Doc. 20 at 261 of 289 (35 Tex. 

Reg. 11,909, 11,914 (Dec. 31, 2010)). 

Texas’s requirements that an application for a flexible permit demonstrate 

compliance with Major NSR in the application is particularly significant because 

the demonstrations in the application are incorporated into the flexible permit 

issued to a facility and trigger continuing obligations. The Program rules provide 

that “[a]ll representations with regard to construction plans and operation 

procedures in an application for a flexible permit or flexible permit amendment, as 

well as any general and special conditions, become conditions upon which the 

subsequent flexible permit is issued.” 30 Texas Admin. Code § 116.721(a); see id.

§116.715(c)(8) (“The representations with regard to construction plans and 

operation procedures in an application for a permit or permit amendment are the 

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conditions upon which a flexible permit or permit amendment is issued”). The 

Program rules make unlawful any variation from the representations in the permit 

application or flexible permit provisions if the change will cause a change in the 

method of control of emissions or the character of the emissions, will relax 

emission controls, or will result in a significant increase in emissions unless the 

flexible permit is amended. Id. § 116.721(a). As a result, an owner cannot change 

emission controls or increase emissions significantly from those represented in the 

permit application unless the owner seeks to amend the permit through a new 

application, which triggers compliance with Major NSR. 

A facility’s compliance with applicable Major NSR rules is also evidenced 

by the Program’s rules governing determination of the control technologies for 

facilities covered by the flexible permit. As discussed above, supra at 8-9, the Act 

requires major sources or modifications to install emission controls that reflect the 

location of the source, e.g., BACT as required by 42 U.S.C. § 7475(a)(4) and 40 

C.F.R. § 51.166(b)(12) in attainment areas under PSD review, and controls that 

meet lowest achievable emission rates under the non-attainment NSR as defined at 

42 U.S.C. § 7501(3). The Flexible Permit Program incorporates these 

requirements. If the flexible permit is used to authorize a new major source or a 

major modification subject to New Source Review, emissions must be based on 

control technologies determined in accordance with the requirements governing 

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major source non-attainment review or PSD review. 30 Texas Admin. Code § 

116.716(c)(1)(A) (referencing Subchapter B, Division 5 (non-attainment review) 

and Division 6 (PSD review)). The emission limits will be based on expected 

maximum capacity of the facility, which is the same method under which limits are 

set under Texas’s non-attainment NSR and PSD review previously approved by 

EPA. 30 Texas Admin. Code §§ 116.150(d)(1); 116.160(a), (c)(1)(A). In addition, 

the Program requires facilities that must achieve the lowest achievable emission 

rate under non-attainment NSR to be included in a separate emissions cap or listed 

as individual emission limitations, which precludes evasion of those emission 

limits through use of a flexible permit cap. Id. § 116.716(c)(2); see Doc. 20 at 260 

of 289, (35 Tex. Reg. at 11,913). Based on these rules, the EPA reasonably found 

that the Program requires that any facilities subject to Major NSR requirements 

must install the control technologies mandated by Major NSR rules. See 79 Fed. 

Reg. at 8,380/2 (requirement of separate emission cap or individual emission 

limitation “ensures that sources subject to [lowest achievable emission rate] are 

fully controlled as required by federal NSR regulations”). 

The EPA also reasonably determined that the Flexible Permit Program 

maintains compliance with Major NSR throughout the life of the permit because it 

authorizes modifications under the permit emission cap only for changes that 

qualify as minor NSR. Three Program sections address this constraint. First, the 

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Program rules specify that any variation from representations made in the permit 

application or permit provisions that changes the method of control of emissions, 

the character of emissions, relaxes controls, or results in a significant increase in 

emissions must be made through an application to amend the flexible permit that 

meets the flexible permit application requirements. 30 Tex. Admin. Code § 

116.721(a). Second, as discussed above, supra at 18-19, the flexible permit 

application rule requires that applicants demonstrate compliance with nonattainment NSR and PSD review – in other words, compliance with Major NSR. 

Id. § 116.711(2)(H) and (I). Third, when assessing whether an emission increase is 

significant for purposes of requiring an application to amend, only minor NSR 

emission increases are insignificant. The Program rules provide that an increase in 

emissions from an existing facility authorized by a flexible permit “is insignificant, 

for the purposes of minor new source review under this subchapter, if the increase 

does not exceed either the emission cap or individual emission limitation.” Id. § 

116.718 (emphasis added). 

Thus, increases in emissions under the Program can fall into two categories: 

(1) minor NSR emissions that do not exceed either the emission cap or an 

individual emission limitation, in which case the increase is covered under the 

flexible permit, or (2) minor NSR emissions that exceed the emission cap or 

individual emission limitation, and all Major NSR emissions, both of which require 

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an application for a permit amendment and compliance with non-attainment NSR 

and PSD New Source Review. The amendment application process requires the 

permittee to determine whether those changes could ultimately trigger Major NSR 

requirements by performing a Major NSR applicability determination analysis to 

ensure that compliance with Major NSR is not evaded. See id. § 116.711(2)(H), 

(I). 

Finally, the Program rules address any potential conflict between the flexible 

permit conditions and any other applicable state or federal rule. The Program rules 

provide that that “[i]f more than one state or federal rule or regulation or flexible 

permit condition is applicable, then the most stringent limit or condition shall 

govern and be the standard by which compliance shall be demonstrated.” Id.

§116.715(c)(11). To the extent the Program rules contain provisions that are not as 

stringent as applicable non-attainment NSR and PSD review, then the Major NSR 

requirements shall govern and be the standard for compliance. 

In sum, all of these Program rules establish that EPA reasonably approved 

the Program as a minor NSR program that cannot be used to circumvent major 

source permitting requirements.

B. The EPA’s Determination Is Supported by This Court’s Decision 

in Flex I.

 

This Court previously considered and rejected the primary argument raised 

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by the Citizen Groups: the Program allows sources to evade Major NSR review. 

Flex I, 690 F.3d at 677-80. EPA’s approval of the Program is reasonable because 

it is consistent with this Court’s prior decision. 

In Flex I, this Court reviewed EPA’s disapproval of a prior version of the 

Flexible Permit Program. That prior version of the Program is materially similar to 

the version now before the Court. See AR Doc. 20 at 1-2 of 289. EPA 

disapproved the prior version for several reasons, including EPA’s determination 

that the prior version of the Program did not clearly preclude major sources from 

evading Major NSR. See Flex I, 690 F.3d at 677-78. EPA based its determination 

on what it believed to be the absence of any regulatory provision clearly limiting 

the Program to minor NSR and clearly prohibiting the use of the Program from 

circumventing the Major NSR requirements. Id. at 677; see 79 Fed. Reg. at 

8,369/2. 

The Court disagreed with that interpretation of the Program. The Court 

found that the “Flexible Permit Program does not allow Major NSR evasion 

because it affirmatively requires compliance with Major NSR.” Id. at 678. The 

Court quoted the provisions from the Program that require applications to 

demonstrate compliance with all applicable requirements concerning nonattainment review and PSD review. Id. The Court also relied upon the Program 

provision, discussed above, that if more than one state or federal rule is applicable, 

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the most stringent will govern. Id. The Court concluded that EPA’s disapproval of 

the Program based on its potential to allow evasion of Major NSR was arbitrary 

and capricious and in excess of its statutory authority because the Program requires 

compliance with Major NSR. Id. at 679-680. “Major sources cannot use a flexible 

permit to avoid Major NSR without violating the law.” Id. at 686. 

On this Court’s remand of the matter to the EPA, the EPA reasonably 

approved the Program based on its determination that the Program will not allow 

evasion of Major NSR, relying in part on this Court’s decision in Flex I. See 79 

Fed. Reg. at 40,668. 

The Citizen Groups fail to explain persuasively how their arguments – 

almost all of which are based on the Program’s potential evasion of Major NSR – 

can be reconciled with the Program or this Court’s decision in Flex I. The Citizen 

Groups correctly assert that EPA initially disapproved the Flexible Permit Program 

because EPA found its terms ambiguous regarding compliance with Major NSR. 

Citizen Groups Brief at 37. The Citizen Groups emphasize that they do not 

contend the Flexible Permit Program is ambiguous; rather, they assert that the 

program rules “on their face unambiguously eliminate federal permitting 

requirements for Major Modifications.” Citizen Groups Brief at 37 (emphasis 

added). However, this distinction does not free their arguments from the precedent 

of this Court’s Flex I decision. The Court held that the Program “does not, on its 

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face, allow major sources to evade Major NSR.” 690 F.3d at 678 (emphasis 

added). 

The arguments in the Citizen Groups’ brief often mirror the reasons EPA 

previously found the program ambiguous. This Court found those reasons 

arbitrary. The Citizen Groups’ arguments do not provide a basis for this Court to 

reverse its prior decision and now find that the Flexible Permit Program enables 

sources to evade Major NSR. 

C. The EPA Reasonably Relied on Texas’s Representation that the 

Flexible Permit Program Is a Minor NSR Program. 

 

The State has consistently asserted that the Flexible Permit Program is a 

minor New Source Review program. AR Doc. 20, 257 of 289 (35 Tex. Reg. at 

11,910/1) (the “rules created a new type of minor New Source Review (NSR) 

permit called a flexible permit”). During the state rulemaking that resulted in the 

Program EPA approved, the Commission maintained that the Program is a minor 

NSR permit program revision to the Texas SIP. AR Doc. 20 at 257 of 289 (35 

Tex. Reg. at 11,910/2) (“the Texas flexible permit program is a minor NSR permit 

program which requires the application of . . . BACT to minor sources.”); see AR 

Doc. 20 at 258 of 289 (35 Tex. Reg. at 11,911). The Commission asserts that “[n]o 

provision of the Texas flexible permit program rules may be read to circumvent 

major NSR permitting or any state or federal permitting requirements.” AR Doc. 

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20 at 258 of 289 (35 Tex. Reg. at 11,911/2); see AR Doc 20 at 257 of 289 (35 Tex. 

Reg. at 11,910/1) (“The flexible permit is not and has never been a substitute for or 

in lieu of major NSR permitting if major NSR review is triggered.”) The 

Commission commented that if a project is determined to be a major modification 

under non-attainment NSR or PSD rules, the owner or operator must obtain a 

major NSR permit or major modification under the appropriate major NSR permit 

program. AR Doc. 20 at 259 of 289 (35 Tex. Reg. at 11,912); see AR Doc. 20 at 

268-69 of 289 (35 Tex. Reg. at 11,921-22 (emphasizing applicability of major 

NSR requirements in response to EPA comments). 

The Commission further confirmed that the Program does not allow evasion 

of Major NSR through an interpretative letter that responded to several questions 

the EPA posed regarding the Program. AR Doc. 22. The Commission confirmed 

that all facilities subject to PSD or non-attainment NSR review, which include 

major modifications to existing sources, must meet the control technologies 

determined in accordance with Texas’s PSD and non-attainment NSR programs. 

Id. The interpretative letter expressly states that “avoidance or circumvention of 

control equipment is not allowed for facilities subject to PSD or non-attainment 

NSR.” AR Doc. 22 at 5 of 15. 

EPA reasonably relied on Texas’s view of the Program as a minor NSR 

program as additional support for its determination that the Program does not 

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evade Major NSR requirements. 

D. The Citizen Groups Fail to Demonstrate that the EPA’s Approval 

of the Program Is Arbitrary or Capricious.

The EPA agrees with the Citizen Groups that the construction or 

modification of facilities that exceed Major NSR thresholds must comply with the 

permitting and other requirements of the Major NSR. See Citizen Groups Brief at 

29. However, the Flexible Permits Program does not allow evasion of the State’s 

regulations applicable to Major NSR; it requires sources to comply with Major 

NSR rules. The Citizen Groups allege opportunities for major modifications to 

evade Major NSR rules, Citizen Groups Brief at 30-32, but the Citizen Groups’ 

arguments are not based on a correct reading of the Program. 

The Citizen Groups first focus on the definition of “modification of existing 

facility,” but that focus is misplaced. Citizen Groups Brief at 30-31. A person 

engaging in the “modification of any existing facility” must obtain or satisfy the 

conditions of one of various available permits under Texas’s New Source Review 

rules. 30 Texas Admin. Code § 116.110(a). The Citizen Groups highlight the 

clause in the definition of “modification of existing facility” that excludes from the 

definition a “physical change in, or change in the method of operation of, a facility 

where the change is within the scope of a flexible permit.” Id. § 116.10(9)(E) 

(emphasis added); Citizen Groups Brief at 30-31. Relying on this permit 

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exemption for changes “within the scope of a flexible permit,” the Citizen Groups 

erroneously argue that a person does not need to obtain a New Source Review 

permit for major modifications if the facility is covered by a flexible permit. 

Citizen Groups Brief at 30-32; 30 Texas Admin. Code § 116.110(a). 

The Citizen Groups’ contention is flawed because the changes that are 

“within the scope of a flexible permit” are limited to minor modifications under the 

NSR program. See supra at 22-23. Changes that will result in a change in the 

method of control of emissions or significantly increase emissions are not within 

the scope of a flexible permit. Such changes are unlawful under a flexible permit 

unless the owner applies for and obtains approval of a permit amendment, and the 

flexible permit cannot be amended unless the owner complies with major nonattainment NSR and PSD requirements. 30 Texas Admin. Code § 116.721(a).7

 

The definition of “modification of existing facility” does not provide an exemption 

from regulatory requirements associated with major modifications. 

Instead, the relevant definition to determine whether the Citizen Groups’ 

concerns regarding major modifications is valid is the definition of “major 

modification,” and that definition requires compliance with Major NSR for 

 

7

 Both non-attainment review and PSD review require that major 

modifications comply with those Major NSR sections’ permitting, control 

technology and other Major NSR requirements. See 30 Texas Admin. Code §§ 

116.150(b); 116.151(a), 116.160(a). 

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facilities under the Program. Texas defines “major modification,” for purposes of 

non-attainment NSR and PSD review, as any “physical change in, or change in the 

method of operation of a major stationary source that causes a significant project 

emissions increase and a significant net emissions increase for any federally 

regulated new source review pollutant.” Id. § 116.12(20)(A). The definition of 

“major modification” specifies the numeric thresholds of pollutants deemed 

significant. Id. § 116.12(20). If a physical or operational change results in a 

change in emissions that meets the threshold for a major modification, nothing in 

the Program rules or in the definition of major modification enables the owner to 

evade compliance with major NSR. As the Commission explained during its 

rulemaking, Texas’s choice to include both a minor NSR flexible permit and a 

major NSR permit in one permit document does not allow the minor NSR permit to 

remove any major NSR requirements. See AR Doc. 20 at 259 of 289 (35 Tex. Reg. 

at 11,912). Thus, EPA reasonably rejected the Citizen Groups’ argument arising 

from the definition of modification of existing facility. 

The Citizen Groups incorrectly assert that the EPA’s approval does not 

conform to the Supreme Court’s articulation of the Clean Air Act’s new source 

review program. Citizen Groups Brief at 31. The Citizen Groups, citing Envtl. 

Def. v. Duke Energy Corp., 549 U.S. 561 (2007), state that Major NSR is triggered 

by “any physical change in, or change in the method of operation of, a major 

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stationary source that would result in significant net increase of any pollutant 

subject to regulation under the Act.” Citizen Groups Brief at 31. Texas’ definition 

of major modification provides this same trigger for compliance with Major NSR 

for major modifications. See supra at 31; 30 Texas Admin. Code § 116.12(20). 

The Program rules, by mandating compliance with non-attainment NSR and PSD 

review for major modifications, require compliance with the Major NSR 

requirements addressed by the Supreme Court. 

The District of Columbia Circuit’s vacatur of the EPA’s former “Clean 

Unit” program is neither instructive nor persuasive authority here. Cf. Citizen 

Brief at 32- 34. Unlike the Flexible Permit Program, the Clean Unit program 

reviewed by the District of Columbia Circuit exempted operators from certain 

major New Source Review requirements through triggers based on allowable 

rather than actual emissions. New York v. EPA, 413 F.3d 3, 38-40 (D.C. Cir. 

2005). In contrast, the Flexible Permit Program allows a person to over-control 

one facility in order to avoid additional controls attributable to construction of 

minor facilities or minor modifications of other facilities. See AR Doc. 20 at 259 

of 289 (35 Tex. Reg. at 11,912/1). The Program, for the reasons explained above 

and by this Court in Flex I, retains compliance with Major NSR requirements, 

including major modifications triggered by actual emission increases, and does not 

allow evasion of Major NSR requirements. See supra at 18-24. The concerns 

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articulated in New York v. EPA are not relevant here. 

The EPA’s disapproval of a separate Texas air program known as the 

“Qualified Facilities Program,” also fails to provide a basis to find the EPA’s 

decision approving the Flexible Permit Program arbitrary or capricious. See

Citizen Groups Brief at 34-36; 75 Fed. Reg. 19,468 (Apr. 14, 2010) (disapproval of 

Qualified Facilities Program); BCCA Appeal Group v. EPA, 476 Fed. Appx. 579 

(5th Cir. 2012) (unpublished) (affirming the EPA’s disapproval of the Qualified 

Facilities Program).8

 The Qualified Facilities Program disapproved by EPA had 

material differences from the Flexible Permit Program relevant to compliance with 

Major NSR. The disapproved Qualified Facilities Program, unlike the Flexible 

Permit Program, did not require an application to demonstrate compliance with 

applicable requirements concerning non-attainment NSR if the proposed facility is 

located in a non-attainment area. See AR Doc. 10 at 211-13 of 215 (30 Tex. 

Admin. Code §§ 116.116(e), 116.117, 116.118 (1996), establishing the 

disapproved Qualified Facilities Program as adopted by Texas on February 14, 

1996); contra 30 Texas Admin. Code § 116.711(2)(H). The disapproved Qualified 

 

8

 This Court’s rules provide for publication of “opinions that may in any way 

interest persons other than the parties to a case,” including opinions that create or 

resolve a conflict of authority within the circuit. Fifth Circuit Local Rule 47.5.1, 

47.5.1(d). Each member of the panel deciding BCCA Appeal Group determined 

that its publication was neither justified nor required under this Court’s criteria for 

publication. See Fifth Circuit Local Rule 47.5.2 

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34 

Facilities Program, unlike the Flexible Permit Program, did not require an 

application to demonstrate compliance with applicable PSD review requirements if 

the facility is located in an attainment area. See AR Doc. 10 at 211-13 of 215 (30 

Tex. Admin. Code §§ 116.116(e), 116.117, 116.118 (1996), establishing the 

disapproved Qualified Facilities Program); contra 30 Texas Admin. Code § 

116.711(2)(I). The disapproved Qualified Facilities Program did not require 

permittees to submit permit applications to account for changes in emission 

controls or that result in significant emission increases, did not require facilities 

subject to lowest achievable emission rates to be included in a separate emissions 

cap, or require that the most stringent limit or condition shall govern and be the 

standard by which compliance shall be demonstrated. Doc. 10 at 211-13 of 215 

(30 Tex. Admin. Code §§ 116.116(e), 116.117, 116.118 (1996), establishing the 

disapproved Qualified Facilities Program). All of these provisions were cited by 

the EPA or this Court to support the determination that the Flexible Permit 

Program would not evade Major NSR requirements. See 79 Fed. Reg. at 40,668-

69; 79 Fed. Reg. at 8,380; Flex I, 690 F.3d at 678-79. Thus, the EPA’s decision 

disapproving the Qualified Facilities Program, and this Court’s unpublished 

affirmation of the disapproval, was based on materially different permitting 

provisions. 

Finally, the Flexible Permit Program does not enable permittees to avoid 

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35 

applicability determinations associated with major New Source Review. This 

Citizen Groups’ argument, Citizen Groups Brief at 39-40, again relies on the 

incorrect premise that the Flexible Permit Program enables sources to evade Major 

NSR requirements. The Citizen Groups correctly explain that persons undertaking 

a project that will result in an increase in emissions must determine whether the 

modification is classified as a major modification. Citizen Groups Brief at 38. The 

requirements to make this “applicability” determination are found in the Texas’s 

rules for non-attainment review and PSD review located in Divisions 5 and 6 of its 

NSR Rules. 30 Texas Admin. Code §§ 116.150, 116.151, 116.160. The Flexible 

Permit Program requires compliance with Division 5 and Division 6 of the NSR 

rules. 30 Texas Admin. Code § 116.711(2)(H) and (I). Thus, compliance with 

non-attainment NSR and PSD review requires the applicant to make an 

applicability determination, and prevents circumvention of Major NSR.9

 

II. The EPA Reasonably Approved the Program Because It Does Not Alter 

Public Participation Opportunities Associated with Major 

Modifications. 

The Citizen Groups do not assert that the Program fails to meet the public 

 

9

 Simply because certain flexible permits have emission caps that can 

accommodate a major modification beneath the cap does not mean that sources can 

undertake a major modification and utilize the space without first obtaining 

approval of a major modification and complying with applicable Major NSR 

requirements. See Citizen Groups Brief at 40. 

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36 

participation requirements associated with a minor New Source Review program 

that are contained in EPA regulations. See 40 C.F.R. § 51.161. The Citizen 

Groups’ discussion of public participation under the Program does not cite these 

regulations, nor demonstrate that the Program, as a minor New Source Review 

program, violates these requirements such that it was unreasonable for the EPA to 

approve the Program. Thus, they offer no basis for finding that the Program does 

not comply with minor source program public participation requirements. 

Instead, the Citizen Groups make a cursory argument based on the mistaken 

hypothesis that some proposed major modifications to facilities covered under a 

flexible permit will not be subject to major source public participation 

opportunities required by the Act. Citizen Groups Brief at 40-41. The Program 

does not alter the Citizen Groups’ public participation opportunities associated 

with major modifications, and those public participation opportunities meet the 

requirements of the Act. 

 Public participation associated with Major NSR permitting actions in Texas 

is governed by provisions in Chapters 39 and 55 of the Texas Administrative Code 

that EPA has separately approved as part of Texas’s SIP. Chapter 39 explicitly 

requires that “applications for a new major source or a major modification for 

facilities subject to the requirements of Chapter 116, Subchapter B, Division 5 and 

6 (relating to New Source Review Permits, Nonattainment Review Permits and 

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37 

Prevention of Significant Deterioration)” comply with public notice requirements 

of Chapter 39. 30 Tex. Admin Code § 39.402(a)(2). Chapter 39 includes 

requirements to provide two sets of public notice and two opportunities for public 

comment arising from an application for a major modification. An applicant for a 

permit amendment must first provide a notice of the administratively complete 

application that provides basic information regarding the proposed modification. 

Id. §§ 39.405, 39.411(e), 39.418. The applicant must subsequently provide a 

second notice that contains details about the Commission’s preliminary decision 

and the draft permit, and the location where air quality analysis and other technical 

materials may be reviewed. See id. §§ 39.401, 39.419; 79 Fed. Reg. 551, 553 (Jan. 

6, 2014) (describing two rounds of public notice); AR Doc. 3 at 31 of 116 

(describing process). Both notices trigger an opportunity for public comment. Id.

§ 39.411(b), (c). 

Additional requirements for notice, public comment, and public meeting 

opportunities for air permitting actions involving major modifications are provided 

in Chapter 55 of the Texas Administrative Code. This chapter also requires air 

permit applicants to provide the two public notices, a 30-day public comment 

period following the notice of preliminary decision, and holding public meetings 

for the purpose of taking public comment under certain circumstances. Id. §§ 

55.152, 55.154(c). Thus, major modifications, by triggering non-attainment NSR 

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38 

or PSD review, require the applicant to provide public notice of the application, 

solicit public comments, and the opportunity to request a public meeting.10 The 

EPA found these public participation rules consistent with the Act and approved 

them as revisions to the Texas SIP in a separate rulemaking in 2014. 79 Fed. Reg. 

at 570. 

 The Citizen Groups’ challenge relies on limitations on public participation 

found in laws that are independent of the Flexible Permit Program and not part of 

the State’s approved SIP. The Citizen Groups cite to a statute and a rule that Texas 

has not submitted to the EPA for approval as a SIP revision. Tex. Health & Safety 

Code § 382.056(g); 30 Tex. Admin. Code § 55.101; see 79 Fed. Reg. 551 

(approving Texas public participation requirements as SIP revisions, but not this 

statute and regulation). As a consequence, EPA has taken no action regarding 

them and the statute and rule are not part of Texas’s approved SIP. 11 Texas must 

comply with the SIP-approved public participation rules in Chapter 39 and 55 

when acting on applications for major modifications, including major 

 

10 An application to amend a flexible permit triggered by a change that will 

result in a significant increase in emissions requires compliance with this same set 

of public participation procedures. 30 Texas Admin. Code § 116.740(a). 

11 Because Texas has not submitted this statute and regulation for EPA’s 

review for consistency with the Act, EPA does not respond in this brief to the 

Citizen Groups’ interpretation that the statute and rule impermissibly limit public 

participation. 

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39 

modifications at sources with flexible permits, in order to meet the requirements of 

the Act. See 42 U.S.C. § 7410(k)(3) (a plan revision shall not be treated as meeting 

the requirements of the Act until the EPA approves the revision as complying with 

the applicable requirements of the Act). The EPA has determined the SIPapproved rules are consistent with the Act and, therefore, the EPA did not act 

arbitrarily or capriciously in approving the Program. 

 

III. The EPA’s Responses to the Citizen Groups’ Comments Met the 

Requirements of the Clean Air Act. 

 

The Administrative Procedure Act (“APA”) requires the EPA to include in 

its Final Rule a response to each of the significant comments submitted during the 

comment period. 5 U.S.C. § 553(c); Int’l Fabricare Inst. v. EPA, 972 F.2d 384, 

389 (D.C. Cir. 1992) (EPA is required to give reasoned responses to all significant 

comments). An agency’s failure to respond to comments in the course of a 

rulemaking is significant only insofar as it demonstrates that an agency’s decision 

was not based on consideration of relevant factors. Sierra Club v. EPA, 353 F.3d 

976, 986 (D.C. Cir. 2004). 

In this rulemaking, the Citizen Groups’ comments were based primarily on 

their contention that the Program would enable applications for major 

modifications to evade New Source Review. The EPA did not fail to consider this 

relevant factor; it has been a prominent issue associated with the Program for at 

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40 

least four years. As discussed below, the EPA responded to the comments on 

evasion of New Source Review, and the other significant comments presented by 

the Citizen Groups. The Citizen Groups’ disagreement with the substance of 

EPA’s responses to their comments does not make the EPA’s responses 

unreasonable or arbitrary, or constitute grounds for reversing the Final Rule. See 

City of Portland, Oregon v EPA, 507 F.3d 706, 714-15 (D.C. Cir. 2007) (although 

petitioners attacked the merits of EPA’s responses to comments, EPA thought 

about the comments and provided reasoned replies, which is all the APA requires). 

The Citizen Groups first argue that the EPA “failed to explain” how the 

Flexible Permit Program is consistent with the Act when it allegedly has the effect 

of exempting certain projects that result in significant increases in emissions from 

the requirement to determine whether the project is a “major modification,” i.e. the 

applicability determination. Citizen Groups Brief at 42-43. The EPA identified 

this comment as Comment 5 in the Final Rule. 79 Fed. Reg. at 40,668/2 (the 

Citizen Groups “commented that Flexible Permit changes may be made without 

evaluating Major NSR applicability). The EPA responded, stated its disagreement 

with the comment, and cited four different Flexible Permit Program rules to 

support the EPA’s position that all flexible permit applications must comply with 

PSD review and non-attainment NSR requirements, which include applicability 

requirements. Id. at 40,668/2, /3 (citing 30 Texas Admin. Code §§ 116.711(2)(H) 

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41 

and (I), 116.716(c), 116.721). The response to this comment adequately explains 

EPA’s determination. 

 The Citizen Groups’ next two points do not reflect an inadequate EPA 

response, but rather simply illustrate the Citizen Groups’ disagreement with the 

substance of the EPA’s explanation. The Citizen Groups quote their comment 

requesting identification of provisions that assure compliance with Major NSR 

rules after issuance of a flexible permit, and acknowledge that “EPA identified 

provisions in the program that it relied on to find that the program assures 

compliance” with Major NSR. Citizen Groups Brief at 43-44; see 79 Fed. Reg. at 

40,668-69 (identifying provisions). The Citizen Groups complain that the EPA’s 

“response misreads Texas’s rules.” Citizen Groups Brief at 44. The Citizen 

Groups’ disagreement with EPA’s position does not constitute a failure to address 

the issues they raised, and ignores the fact that the EPA’s reading is consistent with 

the Court’s decision in Flex I. 

 Similarly, the Citizen Groups’ comments regarding the distinction between a 

person submitting an application and a person making an alteration represent a 

disagreement regarding substance, not a failure to address an issue. Citizen Groups 

Brief at 44-46. The Citizen Groups posed a comment regarding compliance with 

Major New Source Review requirements for projects “that do not trigger the 

application requirements” of the Flexible Permit Program. Citizen Groups Brief at 

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42 

44. The problem with the comment, as explained in the EPA’s response to 

comments and in this brief, is that a major modification will trigger the application 

requirements of the flexible permit program. See supra at 30-31. The EPA stated 

in its response to comments that if “changes are made to the stationary source that 

vary from the permit application representations, the applicant is required to amend 

or alter the flexible permit in accordance with procedures set out in 30 [Texas 

Admin. Code] Section 116.721,” which would require an application to amend for 

a major modification. 79 Fed. Reg. at 40,668/3. The Citizen Groups’ reply is 

“EPA is wrong.” Citizen Groups Brief at 45. This disagreement, and the Citizen 

Groups’ incorrect explanation of why the EPA is wrong, does not render the EPA’s 

response to comment inadequate.12 

 The EPA’s reference in its response to comments to the State’s Changes to 

Facilities rule was an appropriate response to one of the Citizen Groups’ 

comments. Cf. Citizen Groups Brief at 47. The Changes to Facilities Rule, 30 

Texas Admin. Code § 116.116, is a part of the State’s New Source Review rules at 

Subchapter B, and requires a permit amendment for any physical or operation 

change that increases the emission rate of any contaminant. The Flexible Permit 

 

12 The Citizen Groups’ lengthy discussion of “alterations,” Citizen Groups 

Brief at 44-46, is not relevant because any major modification would result in a 

“significant” increase and, therefore, require a permit amendment, not a permit 

alteration. 

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43 

rules also require an amendment for a change that will result in a significant 

increase in emissions. Contrary to the Citizen Groups’ argument, both rules are 

triggered by increases in actual emissions and require a permit amendment for 

major modifications. Cf. Citizen Groups Brief at 47. Thus, the EPA’s response 

identified an applicable provision of the Texas SIP that applies Major NSR to 

major modifications. Yet again, the real thrust of Citizen Groups’ complaint about 

the adequacy of the EPA’s response to comment is that they disagree with the 

EPA’s assertion that the flexible permit program “is a minor NSR program.” 

Citizen Groups Brief at 48. 

Finally, the Citizen Groups complain that EPA did not respond to comments 

related to public participation. Citizen Groups Brief at 48. Again, this comment is 

based on an incorrect assumption that the Program will allow sources to evade 

Major NSR requirements, including public participation requirements associated 

with major modifications. See AR Doc. 46 at 5 of 90. EPA addressed the alleged 

evasion of Major NSR requirements in its response to comments. 

EPA responded to the Citizen Groups’ significant comments. To the extent 

any inadequacies existed, the Citizen Groups have not shown prejudicial error. See

5 U.S.C. § 706 (due account shall be taken of the rule of prejudicial error). 

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44 

 

CONCLUSION 

For all these reasons, the Court should deny the Petition for Review. 

 Respectfully submitted, 

JOHN C. CRUDEN 

Assistant Attorney General 

 s/ Alan D. Greenberg 

ALAN D. GREENBERG 

United States Department of Justice 

Environment and Natural Resources 

 Division 

999 18th Street, Suite 370 

Denver, Colorado 80202 

(303) 844-1366 

Alan.greenberg@usdoj.gov

OF COUNSEL 

DAVID COURSEN 

EPA Office of General Counsel 

Washington, D.C. 

BRUCE JONES 

EPA Office of Regional Counsel 

Dallas, TX 

Date: March 2, 2015 

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45 

CERTIFICATE OF SERVICE

I hereby certify that on March 2, 2015, I electronically filed the foregoing 

brief with the Clerk of the Court for the United States Court of Appeals for the 

Fifth Circuit by using the appellate CM/ECF system. 

Counsel for the parties in the case are registered CM/ECF users and service 

will be accomplished by the appellate CM/ECF system. 

 

 s/ Alan D. Greenberg 

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46 

CERTIFICATE OF COMPLIANCE WITH 

FEDERAL RULE OF APPELLATE PROCEDURE 32(A) 

1. This brief complies with the type-volume limitation of Fed. R. App. P. 

32(a)(7)(B) because this brief contains 9,248 words, excluding the parts of 

the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). Microsoft Word 

computed the word count. 

2. This brief complies with the typeface requirements of Fed. R. App. P. 

32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because 

this brief has been prepared in a proportionally spaced typeface using 

Microsoft Word in 14-point Times New Roman font. 

 s/ Alan D. Greenberg 

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47 

CERTIFICATE UNDER ECF FILING STANDARD 

In accordance with paragraph A(6) of this Court’s ECF filing standards, I 

hereby certify that (1) required privacy redactions have been made, 5th Cir. R. 

25.2.13; (2) the electronic submission is an exact copy of the paper document, 5th

Cir. R. 25.2.1; and (3) the document has been scanned for viruses with the most 

recent version of a commercial virus scanning program and is free of viruses. 

 s/ Alan D. Greenberg 

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ADDENDUM OF TEXAS REGULATIONS

30 Tex. Admin. Code § 116.710 ........................................................................... A-1 

30 Tex. Admin. Code § 116.711 ........................................................................... A-3 

30 Tex. Admin. Code § 116.716 ........................................................................... A-7 

30 Tex. Admin. Code § 116.718 ........................................................................... A-9 

30 Tex. Admin. Code § 116.721 ......................................................................... A-10 

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§ 116.710. Applicability, 30 TX ADC § 116.710

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Texas Administrative Code

Title 30. Environmental Quality

Part 1. Texas Commission on Environmental Quality

Chapter 116. Control of Air Pollution by Permits for New Construction or Modification

Subchapter G. Flexible Permits

30 TAC § 116.710

Tex. Admin. Code tit. 30, § 116.710

§ 116.710. Applicability

Currentness

(a) Flexible permit. A person may obtain a flexible permit which allows for physical or operational changes as provided by this

subchapter as an alternative to obtaining a new source review permit under § 116.110 of this title (relating to Applicability), or

in lieu of amending an existing permit under § 116.116 of this title (relating to Changes to Facilities). A person may obtain a

flexible permit under § 116.711 of this title (relating to Flexible Permit Application) for a facility, group of facilities, or account

before any actual work is begun, provided however:

(1) only one flexible permit may be issued for an account;

(2) modifications to existing facilities included in a flexible permit may be authorized by the amendment of an existing

flexible permit;

(3) a new facility may be authorized by the amendment of an existing flexible permit; and

(4) a flexible permit may not cover facilities at more than one account.

(b) Change in ownership. The new owner of a facility, group of facilities, or account shall comply with § 116.110(e) of this

title, provided however, that all facilities authorized by a flexible permit must change ownership at the same time and to the

same person, or both the new owner and existing permit holder must obtain a permit alteration allocating the emission caps or

individual emission limitation prior to the transfer of the permit by the commission. After the sale of a facility, or facilities,

but prior to the transfer of a permit requiring a permit alteration, the original permit holder remains responsible for ensuring

compliance with the existing flexible permit and all rules and regulations of the commission.

(c) Submittal under seal of Texas licensed professional engineer. All applications for a flexible permit or flexible permit

amendment shall comply with § 116.110(f) of this title.

(d) Responsibility for flexible permit application. The owner of the facility, group of facilities, or account or the operator of

the facility, group of facilities, or account who is authorized to act for the owner is responsible for complying with this section,

except as provided by subsection (b) of this section.

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§ 116.710. Applicability, 30 TX ADC § 116.710

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Credits

Source: The provisions of this §116.710 adopted to be effective December 8, 1994, 19 TexReg 9360; amended to be effective

July 8, 1998, 23 TexReg 6973; amended to be effective September 4, 2000, 25 TexReg 8668; amended to be effective January

6, 2011, 35 TexReg 11909; amended to be effective July 31, 2014, 39 TexReg 5777.

Current through 40 Tex.Reg. No. 654, dated February 6, 2015, as effective on or before February 13, 2015.

30 TAC § 116.710, 30 TX ADC § 116.710

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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§ 116.711. Flexible Permit Application, 30 TX ADC § 116.711

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Texas Administrative Code

Title 30. Environmental Quality

Part 1. Texas Commission on Environmental Quality

Chapter 116. Control of Air Pollution by Permits for New Construction or Modification

Subchapter G. Flexible Permits

30 TAC § 116.711

Tex. Admin. Code tit. 30, § 116.711

§ 116.711. Flexible Permit Application

Currentness

In order to be granted a flexible permit or flexible permit amendment, the owner or operator of the proposed facility shall submit

a permit application which must include:

(1) a completed Form PI-1 General Application signed by an authorized representative of the applicant. All additional support

information specified on the form must be provided before the application is complete;

(2) information which demonstrates that emissions from the facility, including any associated dockside vessel emissions, meet

all of the following:

(A) Protection of public health and welfare.

(i) The emissions from the proposed facility, group of facilities, or account as determined under § 116.716 of this

title (relating to Emission Caps and Individual Emission Limitations), will comply with all applicable rules of the

commission and with the intent of the Texas Clean Air Act, including protection of the health and physical property

of the people.

(ii) In considering the issuance of a flexible permit for construction or modification of any facility, group of facilities,

or account within 3,000 feet or less of an elementary, junior high/middle, or senior high school, the commission shall

consider any possible adverse short-term or long-term side effects that an air contaminant or nuisance odor from the

facility, group of facilities, or account may have on the individuals attending these school facilities.

(B) Measurement of emissions. The proposed facility, group of facilities, or account will have provisions for measuring

the emission of air contaminants as determined by the executive director. This may include the installation of sampling

ports on exhaust stacks and construction of sampling platforms in accordance with guidelines in the “Texas Commission

on Environmental Quality Sampling Procedures Manual.”

(C) Best available control technology (BACT).

(i) All facilities authorized by the flexible permit shall utilize BACT consistent with the following:

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(I) All new facilities must utilize BACT.

(II) Existing facilities must utilize BACT with consideration given to the technical practicability and economic

reasonableness of reducing or eliminating the emissions. Control technology that is more stringent than BACT

may be used on certain facilities to provide the emission reductions necessary to comply with this requirement

on a group of existing facilities, provided however, that the existing level of control may not be lessened for

any facility from its current authorization.

(ii) For pollutants from new or modified facilities that constitute a new major stationary source or major modification

as defined by § 116.12 of this title (relating to Nonattainment and Prevention of Significant Deterioration Review

Definitions), control technology shall be demonstrated as required by §§ 116.150, 116.151, or 116.160 of this title

(relating to New Major Source or Major Modification in Ozone Nonattainment Areas; New Major Source or Major

Modification in Nonattainment Area Other Than Ozone; and Prevention of Significant Deterioration Requirements,

respectively), as applicable, for each new or modified facility.

(iii) For new facilities and proposed affected sources (as defined in § 116.15(1) of this title (relating to Section

112(g) Definitions)) subject to Subchapter E of this chapter (relating to Hazardous Air Pollutants: Regulations

Governing Constructed or Reconstructed Major Sources (FCAA, § 112(g), 40 CFR Part 63)), the use of BACT shall

be demonstrated for the individual facility or affected source.

(D) New Source Performance Standards (NSPS). The emissions from each affected facility as defined in 40 Code of

Federal Regulations (CFR), Part 60 will meet at least the requirements of any applicable NSPS as listed under Title 40 CFR

Part 60, promulgated by the United States Environmental Protection Agency under authority granted under the Federal

Clean Air Act, § 111, as amended.

(E) National Emission Standards for Hazardous Air Pollutants (NESHAPS). The emissions from each facility subject to 40

CFR Part 61 will meet at least the requirements of any applicable NESHAPS, as listed under 40 CFR Part 61, promulgated

by EPA under authority granted under the FCAA, § 112, as amended.

(F) NESHAPS for source categories. The emissions from each affected facility shall meet at least the requirements of any

applicable maximum achievable control technology (MACT) standard as listed under 40 CFR Part 63, promulgated by

the EPA under FCAA, § 112 or as listed under Chapter 113, Subchapter C of this title (relating to National Emissions

Standards for Hazardous Air Pollutants for Source Categories (FCAA, § 112, 40 CFR Part 63)).

(G) Performance demonstration. The proposed facility, group of facilities, or account will achieve the performance

specified in the flexible permit application. The applicant may be required to submit additional engineering data after a

flexible permit has been issued in order to demonstrate further that the proposed facility, group of facilities, or account will

achieve the performance specified in the flexible permit. In addition, initial compliance testing with ongoing compliance

determined through engineering calculations based on measured process variables, parametric or predictive monitoring,

stack monitoring, or stack testing shall be required as specified in each flexible permit.

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§ 116.711. Flexible Permit Application, 30 TX ADC § 116.711

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(H) Nonattainment review. If the proposed facility, group of facilities, or account is located in a nonattainment area, each

facility shall comply with all applicable requirements concerning nonattainment review in this chapter.

(I) Prevention of Significant Deterioration (PSD) review. If the proposed facility, group of facilities, or account is located

in an attainment area, each facility shall comply with all applicable requirements in this chapter concerning PSD review.

(J) Air dispersion modeling or ambient monitoring. Computerized air dispersion modeling or ambient monitoring may be

required by the commission's Air Permits Division to determine the air quality impacts from the facility, group of facilities,

or account. In conducting a review of a permit application for a shipbuilding or ship repair operation, the commission

will not require and may not consider air dispersion modeling results predicting ambient concentrations of non-criteria air

contaminants over coastal waters of the state. The commission shall determine compliance with non-criteria ambient air

contaminant standards and guidelines at land-based off-property locations.

(K) Federal standards of review for constructed or reconstructed major sources of hazardous air pollutants. If the proposed

source is an affected source (as defined in § 116.15(1) of this title), it shall comply with all applicable requirements under

Subchapter E of this chapter.

(L) Mass cap and trade allocations. If subject to Chapter 101, Subchapter H, Division 3 of this title (relating to Mass

Emissions Cap and Trade Program) the proposed facility, group of facilities, or account must obtain allocations to operate.

(M) Application content. In addition to other requirements of this chapter, the applicant shall:

(i) identify each air contaminant for which an emission cap is desired;

(ii) identify each facility to be included in the flexible permit;

(iii) identify each source of emissions to be included in the flexible permit and for each source of emissions identify

the Emission Point Number (EPN) and the air contaminants emitted;

(iv) for each emission cap, identify all associated EPNs and facilities (including description, common name, and

facility identification number) and provide emission rate calculations based on the expected maximum capacity and

the proposed control technology;

(v) for each individual emission limitation, identify the EPN and provide emission rate calculations based on the

expected maximum capacity and the proposed control technology; and

(vi) if the flexible permit application includes facilities currently authorized by a permit issued under Subchapter

B of this chapter (relating to New Source Review Permits), the applicant shall identify any terms, conditions, and

representations in the Subchapter B permit or permits which will be superseded by or incorporated into the flexible

permit. The applicant shall include an analysis of how the conditions and control requirements of Subchapter B

permits will be carried forward in the proposed flexible permit.

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§ 116.711. Flexible Permit Application, 30 TX ADC § 116.711

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(N) Proposed control technology and compliance demonstration. The applicant shall specify the control technology

proposed for each facility and demonstrate compliance with all emission caps at expected maximum production capacity.

Credits

Source: The provisions of this §116.711 adopted to be effective December 8, 1994, 19 TexReg 9360; amended to be effective

July 8, 1998, 23 TexReg 6973; amended to be effective March 29, 2001, 26 TexReg 2398; amended to be effective September

12, 2002, 27 TexReg 8546; amended to be effective January 6, 2011, 35 TexReg 11909; amended to be effective July 31, 2014,

39 TexReg 5777.

Current through 40 Tex.Reg. No. 654, dated February 6, 2015, as effective on or before February 13, 2015.

30 TAC § 116.711, 30 TX ADC § 116.711

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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 Case: 14-60649 Document: 00512954221 Page: 65 Date Filed: 03/02/2015
§ 116.716. Emission Caps and Individual Emission Limitations, 30 TX ADC § 116.716

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Texas Administrative Code

Title 30. Environmental Quality

Part 1. Texas Commission on Environmental Quality

Chapter 116. Control of Air Pollution by Permits for New Construction or Modification

Subchapter G. Flexible Permits

30 TAC § 116.716

Tex. Admin. Code tit. 30, § 116.716

§ 116.716. Emission Caps and Individual Emission Limitations

Currentness

(a) Emission caps. To establish a cap for a pollutant, the executive director will develop an emission cap for:

(1) all facilities at an account; or

(2) a designated group of facilities at an account.

(b) Notwithstanding subsection (a) of this section, the executive director reserves the right to exclude any facility from an

emissions cap if necessary to ensure compliance with the permit or to ensure the protection of human health and the environment.

(c) Emissions will be calculated for each facility within an emission cap as follows:

(1) Determination of control technology:

(A) if the permit is used to authorize any facility, group of facilities, or account, or any change to existing facilities,

that constitutes a new major stationary source or major modification for the pollutant as defined by § 116.12 of this

title (relating to Nonattainment and Prevention of Significant Deterioration Review Definitions), emissions shall be

based on control technology determined in accordance with Subchapter B, Division 5 or 6 of this chapter (relating

to Nonattainment Review Permits; and Prevention of Significant Deterioration Review, respectively) as applicable,

at expected maximum capacity; or

(B) based on application of best available control technology as defined in § 116.10 of this title (relating to General

Definitions), at expected maximum capacity.

(2) pollutants emitted from facilities subject to lowest achievable emission rate review in accordance with Subchapter B,

Division 5 of this chapter must be included in a separate emissions cap or listed as individual emission limitations.

(3) the calculated emissions for all facilities within an emission cap will be summed.

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§ 116.716. Emission Caps and Individual Emission Limitations, 30 TX ADC § 116.716

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

(4) a lower emission cap than that determined by paragraph (3) of this subsection may be proposed by the permit applicant if

technical information is provided to demonstrate that it is feasible to operate in compliance with the proposed emission cap.

(d) Individual emission limitations. An individual emission limitation will be established in the same permit for each pollutant

not included in an emission cap for facilities authorized by the flexible permit. In addition, an individual emission limitation

may be established for a pollutant included in an emission cap when the expected capacity of a facility is less than the expected

maximum capacity to prevent a facility from exceeding emission levels appropriate for the proposed controls.

(e) The permit shall clearly identify, by a table or other appropriate means, the facilities that are subject to an emission cap,

and the facilities that are subject to individual emission limitations. A facility may be subject to both an emission cap and an

individual emission limitation.

(f) Adjustment of emission cap. The executive director will use the following criteria and procedures for adjustment of a cap.

(1) If a facility subject to an emission cap is shut down for a period longer than six months, the emission cap shall be

adjusted by decreasing the emission cap by an amount that the shut down facility contributed to the original calculation

of the emission cap. If a shut down facility is returned to operation, the emission cap shall be adjusted by increasing

the emission cap by the amount that the facility contributed to the original calculation of the emission cap; however, the

emission cap cannot be increased beyond the original emission cap amount.

(2) If a facility is to be added to the flexible permit, a permit amendment is required to establish a revised emission cap.

If an existing emission cap is to be increased as a result of adding a new facility or the modification of a facility within

the emission cap, an amendment application is required.

(3) An emission cap will be decreased for any facility, group of facilities, or account authorized by a flexible permit if

that facility becomes subject to any new state or federal rule or regulation which would lower emissions or require an

emission reduction. The adjustment will be made the next time the flexible permit is amended or altered. If an amendment

to a flexible permit is not required to meet the new requirement, then within 60 days of making the change, the permittee

must submit a request to alter the permit and include information describing how compliance with the new requirement

will be demonstrated.

Credits

Source: The provisions of this §116.716 adopted to be effective December 8, 1994, 19 TexReg 9360; amended to be effective

January 6, 2011, 35 TexReg 11909; amended to be effective July 31, 2014, 39 TexReg 5777.

Current through 40 Tex.Reg. No. 654, dated February 6, 2015, as effective on or before February 13, 2015.

30 TAC § 116.716, 30 TX ADC § 116.716

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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 Case: 14-60649 Document: 00512954221 Page: 67 Date Filed: 03/02/2015
§ 116.718. Significant Emission Increase, 30 TX ADC § 116.718

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Texas Administrative Code

Title 30. Environmental Quality

Part 1. Texas Commission on Environmental Quality

Chapter 116. Control of Air Pollution by Permits for New Construction or Modification

Subchapter G. Flexible Permits

30 TAC § 116.718

Tex. Admin. Code tit. 30, § 116.718

§ 116.718. Significant Emission Increase

Currentness

An increase in emissions from operational or physical changes at an existing facility authorized by a flexible permit is

insignificant, for the purposes of minor new source review under this subchapter, if the increase does not exceed either the

emission cap or individual emission limitation. This section does not apply to an increase in emissions from a new facility or

to the emission of an air contaminant not previously emitted by an existing facility.

Credits

Source: The provisions of this §116.718 adopted to be effective December 8, 1994, 19 TexReg 9360; amended to be effective

January 6, 2011, 35 TexReg 11909; amended to be effective July 31, 2014, 39 TexReg 5777.

Current through 40 Tex.Reg. No. 654, dated February 6, 2015, as effective on or before February 13, 2015.

30 TAC § 116.718, 30 TX ADC § 116.718

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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 Case: 14-60649 Document: 00512954221 Page: 68 Date Filed: 03/02/2015
§ 116.721. Amendments and Alterations, 30 TX ADC § 116.721

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Texas Administrative Code

Title 30. Environmental Quality

Part 1. Texas Commission on Environmental Quality

Chapter 116. Control of Air Pollution by Permits for New Construction or Modification

Subchapter G. Flexible Permits

30 TAC § 116.721

Tex. Admin. Code tit. 30, § 116.721

§ 116.721. Amendments and Alterations

Currentness

(a) Flexible permit amendments. All representations with regard to construction plans and operation procedures in an application

for a flexible permit or flexible permit amendment, as well as any general and special conditions, become conditions upon

which the subsequent flexible permit is issued. It shall be unlawful for any person to vary from such representation or flexible

permit provision if the change will cause a change in the method of control of emissions or the character of the emissions,

will relax emission controls, or will result in a significant increase in emissions unless application is made to the executive

director to amend the flexible permit in that regard and such amendment is approved by the executive director or commission.

Applications to amend a flexible permit shall be submitted with a completed Form PI-1 and are subject to the requirements of

§ 116.711 of this title (relating to Flexible Permit Application).

(b) Flexible permit alterations.

(1) A flexible permit alteration is for any variation from a representation in a flexible permit application or a general or

special provision of a flexible permit that does not require a flexible permit amendment.

(2) All flexible permit alterations which may involve a change in a general or special condition contained in the flexible

permit, or affect control equipment performance must receive prior approval by the executive director. The executive

director shall be notified in writing of all other flexible permit alterations within ten days of implementing the change,

unless the permit provides for a different method of notification. Any flexible permit alteration request or notification

shall include information sufficient to demonstrate that the change does not interfere with the owner or operator's previous

demonstrations of compliance with the requirements of § 116.711 of this title, including the protection of public health

and welfare. The appropriate commission regional office and any local air pollution program having jurisdiction shall be

provided copies of all flexible permit alteration documents.

(3) Flexible permit alterations shall not be subject to the requirements of Best Available Control Technology identified

in § 116.711(2) of this title.

(c) Changes not requiring an amendment or alteration. The following changes do not require an amendment or alteration, except

that an amendment is required if the change will cause a change in the method of control of emissions or the character of the

emissions, will relax emission controls, will result in a significant increase in emissions as determined under § 116.718 of this

title (relating to Significant Emission Increase), or conflicts with an existing permit condition:

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 Case: 14-60649 Document: 00512954221 Page: 69 Date Filed: 03/02/2015
§ 116.721. Amendments and Alterations, 30 TX ADC § 116.721

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

(1) a change in throughput; or

(2) a change in feedstock.

(d) Permit by rule under Chapter 106 of this title (relating to Permits by Rule) in lieu of permit amendment or alteration.

(1) Notwithstanding subsections (a) or (b) of this section, no permit amendment or alteration is required if the changes to

the permitted facility qualify for a permit by rule under Chapter 106 of this title unless prohibited by permit provision as

provided in § 116.715 of this title (relating to General and Special Conditions). All such changes permitted by rule to a

permitted facility shall be incorporated into that facility's permit at such time as the permit is amended or renewed.

(2) Emission increases authorized by Chapter 106 of this title at an existing facility authorized by a flexible permit shall

not cause an exceedance of the emissions cap or individual emission limitation.

Credits

Source: The provisions of this §116.721 adopted to be effective December 8, 1994, 19 TexReg 9360; amended to be effective

July 8, 1998, 23 TexReg 6973; amended to be effective September 4, 2000, 25 TexReg 8668; amended to be effective January

6, 2011, 35 TexReg 11909; amended to be effective July 31, 2014, 39 TexReg 5777.

Current through 40 Tex.Reg. No. 654, dated February 6, 2015, as effective on or before February 13, 2015.

30 TAC § 116.721, 30 TX ADC § 116.721

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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 Case: 14-60649 Document: 00512954221 Page: 70 Date Filed: 03/02/2015