## Facts

- The Clean Air Act (CAA) requires EPA to set National Ambient Air Quality Standards (NAAQS) and requires states to submit state implementation plans (SIPs) to attain the ozone NAAQS in nonattainment areas.
- Texas submitted an attainment demonstration SIP and related control strategy for the Houston–Galveston one-hour ozone “severe” nonattainment area (the Houston SIP).
- The Houston SIP relied on photochemical grid modeling to project attainment and included additional control strategies to secure remaining emission reductions.
- Key SIP elements included Texas’s commitments to adopt additional control measures and achieve specified emission reductions on a fixed schedule, plus programs such as the Texas Emissions Reduction Plan (TERP) and EPA’s Voluntary Mobile Emissions Reduction Program (VMEP).
- EPA approved the Houston SIP by final rule in 2001.
- Multiple petitioners, including industry groups, local governments, and environmental organizations, filed consolidated petitions for direct review of EPA’s SIP approval in the Fifth Circuit under CAA § 307(b)(1).

## Issues

1. Whether EPA may approve a SIP that relies in part on a state’s enforceable commitments to adopt future control measures and achieve quantified emission reductions by specified dates.
2. Whether EPA’s acceptance of incentive-based or voluntary measures (including TERP and VMEP) as part of the attainment strategy is consistent with the CAA’s enforceability and attainment demonstration requirements.
3. Whether EPA’s evaluation of the SIP’s photochemical grid modeling and overall control strategy was arbitrary, capricious, or an abuse of discretion under the APA/CAA review standards.

## Decision

- The Fifth Circuit denied the petitions for review and upheld EPA’s approval of the Houston SIP.
- The court held EPA permissibly approved Texas’s enforceable commitments where the commitments were sufficiently specific, quantifiable, and enforceable, and were tied to a fixed schedule supporting attainment.
- The court upheld EPA’s decision to credit TERP and VMEP measures as part of the control strategy, deferring to EPA’s record-based technical judgments and conditions on allowable credit.
- The court rejected challenges to EPA’s acceptance of the SIP’s photochemical modeling, emphasizing deference to EPA’s scientific and technical expertise absent irrationality or failure to consider important factors.

## Legal Principles

- Final EPA action approving a SIP is reviewable directly in the courts of appeals under CAA § 307(b)(1).
- Under the CAA and APA, courts apply a deferential arbitrary-and-capricious standard to EPA’s SIP approvals, particularly for scientific and technical determinations.
- EPA may approve SIP provisions that include enforceable state commitments to adopt additional controls and achieve specified emission reductions by set deadlines, if the commitments are adequately definite and enforceable within the SIP framework.
- EPA may credit incentive-based or voluntary emissions-reduction programs in an attainment strategy when EPA reasonably explains the basis for credit, limits or conditions the credit as needed, and supports the decision with the administrative record.

## Conclusion

The Fifth Circuit sustained EPA’s approval of Texas’s Houston–Galveston ozone SIP, concluding that EPA reasonably treated enforceable commitments and quantified TERP/VMEP measures as acceptable SIP components and that EPA’s technical modeling and attainment determinations were not arbitrary or capricious.


BCCA Appeal Group v. U.S. EPA, 355 F.3d 817 (5th Cir. 2003)