[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Rules and Regulations]
[Pages 56461-56470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27849]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[AZ 58-1-7131-a; FRL-5634-4]


Arizona Redesignation of the Yavapai-Apache Reservation to a PSD 
Class I Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The purpose of this action is to approve the request by the 
Yavapai-Apache Tribal Council to redesignate the Yavapai-Apache 
Reservation (``the Reservation'') as a non-Federal Class I area under 
the Clean Air Act program for prevention of significant deterioration 
of air quality. The Class I designation will result in lowering the 
allowable increases in ambient concentrations of particulate matter, 
sulfur dioxide, and nitrogen dioxide on the Reservation.

EFFECTIVE DATE: December 2, 1996.

ADDRESSES: The public docket for this rulemaking, which includes 
additional information related to the final rule and materials 
submitted to EPA, is available for public inspection and copying during 
normal business hours. Please contact the EPA official listed below at 
the given address. A reasonable fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: Jessica Gaylord, Air and Toxics 
Division (A-5-1), U.S. EPA Region 9, 75 Hawthorne Street, San 
Francisco, CA 94105-3901, (415) 744-1290. An electronic copy of this 
Federal Register notice and other pertinent information is available on 
the World Wide Web at this Internet address: http://www.epa.gov/
region09/air/yavapai/

SUPPLEMENTARY INFORMATION:

I. The Clean Air Act's Program to Prevent Significant Deterioration 
of Air Quality (PSD)

A. Background

    The genesis of the PSD program under the Clean Air Act (CAA) was a 
lawsuit brought by the Sierra Club to enjoin EPA's approval of state 
implementation plans that allowed air quality degradation in areas 
having air quality better than the national ambient air quality 
standards. Sierra Club v. Ruckelshaus, 344 F. Supp. 253 (D.D.C. 1972), 
aff'd per curiam, 4 Env't Rep. Cases 1815 (D.C. Cir. 1972), aff'd by an 
equally divided court, sub. nom. Fri v. Sierra Club, 412 U.S. 541 
(1973). The district court granted the injunction reasoning that the 
stated purpose of the Clean Air Act in section 101(b)(1) to ``protect 
and enhance'' the quality of the nation's air embodied a non-
degradation policy. Sierra Club at 255-56.
    In response to the Sierra Club decision EPA adopted a PSD program. 
See 39 FR 42510 (Dec. 5, 1974). The administrative program was 
superseded by a congressionally-crafted program in the 1977 amendments 
to the Clean Air Act. Pub. L. No. 95-95, 91 Stat. 685; see generally 
Alabama Power v. Costle, 636 F.2d 323, 346-52 (D.C. Cir. 1979) 
(recounting history of PSD program preceding and including the adoption 
of the 1977 amendments). EPA presently has two sets of regulations 
implementing the 1977 statutory PSD program: (1) 40 CFR 51.166 
establishes the requirements for state-administered PSD programs, and 
(2) 40 CFR 52.21 provides for Federal implementation of PSD 
requirements to address programmatic gaps.1
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    \1\  The regulations have not been revised to conform with 
changes made in the 1990 Clean Air Act amendments. Pub. L. No. 101-
549, 104 Stat. 2399.
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B. PSD Areas and Classifications

    EPA establishes national ambient air quality standards (NAAQS) 
under the CAA. See 40 CFR Part 50. Areas nationwide are ``designated'' 
under section 107 of the CAA based on their air quality status relative 
to the NAAQS. The PSD program applies to areas designated 
``attainment'' and ``unclassifiable'' under section 107 of the CAA--
areas that meet the NAAQS, or areas that cannot be determined on the 
basis of available information as meeting or not meeting the NAAQS. 
These areas are often referred to as ``PSD areas.''
    PSD areas are further categorized as Classes I, II or III. The 
classification of an area determines the amount or ``increment'' of air 
quality deterioration that is allowed over a baseline level. Class I 
areas have the smallest increments and therefore allow the least amount 
of air quality deterioration. Conversely, Class III areas have the 
largest air quality increments and allow the greatest deterioration. In 
all instances, the NAAQS represent the overarching ceiling that may not 
be exceeded in a PSD area, notwithstanding any increment.
    There are PSD increments for particulate matter, sulfur dioxide and 
nitrogen dioxide. EPA's PSD regulations establish the incremental 
amount of air quality deterioration of these pollutants that is allowed 
in Class I, II and III areas. See 40 CFR 52.21(c).
    When Congress enacted the PSD program in 1977 it provided that 
specified Federal lands, including

[[Page 56462]]

certain national parks and wilderness areas, must be designated as 
Class I areas and may not be redesignated to another classification. 
See section 162(a) of the CAA. These areas are called mandatory Federal 
Class I areas. The statute also carried forward as Class I areas any 
areas redesignated as Class I under EPA's pre-1977 regulations. The 
Northern Cheyenne reservation was a redesignated Class I area affected 
by this provision. See Nance v. EPA, 645 F.2d 701 (9th Cir. 1981), cert 
denied, Crow Tribe of Indians v. EPA, 454 U.S. 1081 (1981). In the 1977 
amendments Congress provided that all other PSD areas of the country 
would be designated as Class II areas. See section 162(b) of the CAA.

C. PSD Class I Redesignation Requests and Procedural Requirements

    As noted, Congress designated all PSD areas of the country as Class 
II, except for special Federal lands and pre-existing redesignated 
Class I areas. At the same time, Congress gave States and Indian Tribes 
broad authority to redesignate Class II areas as Class I. See section 
164 of the CAA.
    Section 164(c) of the CAA expressly provides for PSD redesignations 
by Federally recognized Indian Tribes:

    Lands within the exterior boundaries of reservations of 
Federally recognized Indian tribes may be redesignated only by the 
appropriate Indian governing body.

The Department of the Interior periodically publishes a list of Tribes 
officially recognized by the Federal government. See 60 FR 9250 (Feb. 
16, 1995) (identifying Yavapai-Apache Nation of the Camp Verde 
Reservation, Arizona).
    Congress has generally established a narrow role for EPA in 
reviewing State and Tribal PSD redesignations. Under EPA's pre-1977 
regulations, EPA would disapprove a redesignation submittal if the 
requesting State or Tribe arbitrarily and capriciously disregarded the 
following considerations: (1) growth anticipated in the area, (2) the 
social, environmental, and economic effects, or (3) any impacts on 
regional or national interests. See 39 FR at 42515.
    By contrast, the PSD program enacted by Congress in 1977 provides 
that EPA may disapprove a redesignation request only if it finds, after 
notice and opportunity for public hearing, that the request does not 
meet the applicable procedural requirements. See section 164(b)(2) of 
the CAA. The legislative history indicates that Congress's 1977 
amendments were intended to curtail EPA's authority to disapprove a 
redesignation request under its pre-1977 regulations, giving States and 
Tribal governments greater discretion in this area:

    The intended purposes of [the congressional 1977 PSD program] 
are . . . (3) to delete the current EPA regulations and to 
substitute a system which gives a greater role to the States [, 
Tribal,] and local governments and which restricts the Federal 
Government in the following ways: . . . (b) By eliminating the 
authority which the Administrator has under current EPA regulations 
to override a State's [or Tribe's] classification of an area on the 
ground that the State [or Tribe] improperly weighed energy, 
environment, and other factors.

See H.R. Rep. No. 294, 95th Cong., 1st Sess. 7-8 (1977) reprinted in 
Senate Comm. on the Environment and Public Works, 95th Cong., 2d Sess., 
A Legislative History of the Clean Air Act Amendments of 1977, vol. 4 
at 2474-75 (1978) (hereafter ``1977 CAAA Legislative History'').2
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    \2\  While this language refers only to states, both the statute 
and the legislative history make it clear that the discussion 
applies equally to redesignations by tribes. See, e.g., S. Rep. No. 
127, 95th Cong., 1st Sess. 9 (1977) reprinted in 1977 CAAA 
Legislative History, vol. 3 at 1383.
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    Accordingly, EPA's current regulations provide for EPA disapproval 
of a redesignation only if the requesting State or Tribe did not meet 
the applicable procedural requirements in adopting its proposed 
redesignation:

    The Administrator shall disapprove, within 90 days of 
submission, a proposed redesignation of any area only if he finds, 
after notice and opportunity for public hearing, that such 
redesignation does not meet the procedural requirements of [40 CFR 
52.21(g)].

See 40 CFR 52.21(g)(5). In adopting the regulatory revisions to reflect 
the statutory provisions, EPA explained that in light of section 
164(b)(2) of the CAA it ``will no longer be able to base a disapproval 
of a proposed redesignation on a finding that the State [or Tribal] 
decision was arbitrary or capricious.'' See 42 FR 57479, 57480 (Nov. 3, 
1977). Thus, so long as the applicable procedures are met, the statute 
and implementing regulations generally leave the decision to constrict 
or expand the amount of allowable air quality deterioration to the 
State or Tribal authority requesting the redesignation.
    Several Indian Tribes have had lands within reservation boundaries 
redesignated as Class I areas. The EPA has previously approved Class I 
redesignation requests for the Northern Cheyenne Indian Reservation, 
the Flathead Indian Reservation, the Fort Peck Indian Reservation and 
the Spokane Indian Reservation. See 40 CFR 52.1382(c) and 52.2497(c).
    The procedural requirements for a Class I redesignation by an 
Indian Governing Body are as follows:
    (1) At least one public hearing must be held in accordance with 
procedures established in 40 CFR 51.102;
    (2) Other States, Indian Governing Bodies, and Federal Land 
Managers whose lands may be affected by the proposed redesignation must 
be notified at least 30 days prior to the public hearing;
    (3) At least 30 days prior to the Tribe's public hearing, a 
discussion of the reasons for the proposed redesignation including a 
satisfactory description and analysis of the health, environmental, 
economic, social and energy effects of the proposed redesignation must 
be prepared and made available for public inspection, and the public 
hearing notice must contain appropriate notification of the 
availability of such discussion;
    (4) Prior to the issuance of the public notice for a proposed 
redesignation of an area that includes Federal lands, the Tribe must 
provide written notice to the appropriate Federal Land Manager and an 
adequate opportunity for the Federal Land Manager to confer with the 
Tribe and submit written comments and recommendations;
    (5) Prior to proposing the redesignation, the Indian Governing Body 
must consult with the State(s) in which the Reservation is located and 
that border the Reservation. See 40 CFR 52.21(g)(4).

II. Yavapai-Apache Tribe Request to Redesignate its Reservation 
From Class II to Class I

    On December 17, 1993, the Yavapai-Apache Tribal Council (``the 
Tribal Council'' or ``the Tribe'') submitted to EPA a request to 
redesignate the Yavapai-Apache Reservation from Class II to Class I. 
The Tribe's submittal explains that its redesignation request is to 
protect its air quality for its citizens:

    The Yavapai-Apache Tribe desires to maintain high quality air 
standards for its citizens by redesignating Reservation lands as a 
Class I Clean Air area.

    See Yavapai-Apache Tribe Air Quality Redesignation Plan, Sept. 
1993, at p. 1.
    The Yavapai-Apache Reservation is located in the State of Arizona. 
The Reservation is comprised of five land parcels which total 
approximately 635 acres. The Tribe's redesignation request includes its 
entire Reservation. Maps of the Reservation are included as appendices 
to the Tribe's September 1993 Air Quality Redesignation Plan, which is 
available at the public docket identified at the beginning of this 
document.

[[Page 56463]]

    The Reservation is approximately 90 miles north of Phoenix in the 
Verde Valley of central Arizona. The Verde Valley is situated near the 
``red rock'' country of Sedona and Oak Creek Canyon. Nearby national 
forests include the Coconino National Forest, the Kaibab National 
Forest and the Prescott National Forest. The Montezuma Castle, 
Montezuma Well and Tuzigoot National Monuments are located within the 
Verde Valley in the vicinity of the Reservation. In addition, the 
Sycamore Canyon Wilderness Area, designated a mandatory Federal Class I 
area under the CAA, is located a few miles north of the Town of 
Clarkdale. See 40 CFR 81.403.
    EPA reviewed the Tribe's request and preliminarily determined that 
it met the applicable procedural requirements of 40 CFR 52.21(g)(4). On 
April 18, 1994, EPA published a notice of proposed rulemaking in the 
Federal Register proposing to approve the request and announced a 30-
day period to receive public comment regarding whether the Tribe had 
met the procedural requirements. See 59 FR 18346.
    At the request of the Town of Clarkdale, which is located adjacent 
to the Clarkdale parcel of the Yavapai-Apache Reservation, EPA held a 
public hearing on the proposed redesignation on June 22, 1994. EPA's 
public hearing notice provided that the scope of the public hearing 
would be limited to whether the Tribe has satisfied the redesignation 
procedural requirements. EPA indicated that only comments which address 
this issue would be considered in EPA's final decision to approve or 
deny the redesignation request. EPA's public hearing notice also 
indicated that EPA would allow until July 6, 1994 for the submittal of 
written comments. In order to facilitate public understanding about 
EPA's proposed action, EPA indicated that it would begin the public 
hearing with an explanation of the Class I redesignation process and 
the PSD program.
    Following the public hearing, the Town of Clarkdale requested an 
extension of the public comment period. On July 20, 1994, EPA published 
a Federal Register document announcing an extension of the public 
comment period, providing the public until August 22, 1994 to submit 
written comments addressing whether the Tribe has met all of the 
procedural requirements of 40 CFR 52.21(g). See 59 FR 37018-19.
    The Governor of Arizona submitted a letter dated August 22, 1994, 
to EPA indicating that ``[t]he effects of the proposed redesignation 
are not apparent to all of the stakeholders, and confusion exists about 
the potential impacts of the Agency's proposed action.'' The Governor's 
letter requested that EPA initiate dispute resolution of the matter 
pursuant to section 164(e) of the CAA.
    In brief, section 164(e) of the CAA provides that if a State 
affected by the redesignation of an area by an Indian Tribe disagrees 
with the redesignation, the Governor may request EPA to enter into 
negotiations with the parties involved to resolve the dispute. Section 
164(e) further provides that if the parties do not reach agreement, EPA 
shall resolve the dispute.

III. Today's Action

A. EPA's Final Decision to Approve the Tribe's Class I Redesignation 
Request

    In today's document, EPA is announcing its decision to approve the 
Yavapai-Apache Tribe's December 17, 1993 request to redesignate its 
reservation from Class II to Class I for PSD purposes. The approval 
means that Class I PSD increments will apply within the reservation's 
boundaries, allowing a smaller amount of allowable air quality 
deterioration within the reservation than as a Class II area. See 40 
CFR 52.21(c). In addition, a new major source or major modification 
which would construct within 10 km of the Reservation will be subject 
to review under PSD if emissions would have an impact on the 
Reservation equal to or greater than one microgram per cubic meter 
(g/m\3\), (24-hour average). See 40 CFR 52.21(b)(2), 40 CFR 
52.21(b)(23), and 40 CFR 52.21(i).
    EPA received a number of comments on its April 18, 1994 proposal to 
approve the Tribe's Class I redesignation. EPA has carefully reviewed 
and considered comments received during the public comment period in 
making its decision to approve the redesignation request. A number of 
the commenters raised issues outside the scope of EPA's review. As 
previously discussed, generally EPA may disapprove a redesignation 
request only if EPA finds that the redesignation does not meet the 
applicable procedural requirements. See 40 CFR 52.21(g)(5). EPA's 
review of the Tribe's request in light of the comments revealed no 
procedural error by the Tribe. Thus, EPA is finalizing its April 18, 
1994 preliminary judgment that the Tribe met the procedural 
requirements.
    In a separate document published in today's Federal Register, EPA 
explained the section 164(e) dispute resolution process, and addressed 
the issues presented. EPA's notice settles the dispute, as the State 
and the Tribe were unable to resolve their disagreements about the 
proposed redesignation. Once dispute resolution has been initiated, the 
CAA provides in section 164(e) that EPA ``consider the extent to which 
the lands involved are of sufficient size to allow effective air 
quality management * * *.'' The State thus argued that the five 
separate parcels that comprise the Yavapai-Apache Reservation are too 
small and scattered to allow for effective air quality management. 
Among the principal issues, the State also emphasized its concern 
regarding public understanding of the possible effects of this 
redesignation and issues related to potential future requests for 
redesignation by other Tribes. In settling the dispute, EPA disagreed 
with the State's conclusion that effective air quality management would 
be adversely affected by the redesignation. In addition, EPA has 
pledged its continuing commitment to facilitating public understanding 
of the effects of the redesignation. Moreover, each redesignation 
request must be evaluated on its merits, and concerns relating to 
potential future requests do not provide a basis for the denial of the 
Yavapai-Apache request. EPA's resolution of the dispute is consistent 
with the decision announced here, to approve the Tribe's Class I 
redesignation request. The reader is referred to the separate document 
published in today's Federal Register for more information on EPA's 
decision making in resolving the intergovernmental dispute.

B. Public Comments

    As noted, EPA received many comments on its April 18, 1994 proposal 
to approve the Yavapai-Apache Tribe's Class I redesignation request. 
Many commenters, including local residents who are not Tribal members, 
supported EPA's proposal. Other commenters identified alleged 
procedural errors or objected to the Class I redesignation for other 
reasons. EPA also received comments questioning whether all of the land 
parcels identified by the Tribe are part of the Tribe's reservation.
    While EPA has reviewed all comments received, only those comments 
identifying potential procedural errors and claiming that the Tribal 
submittal includes lands outside the reservation are relevant in 
determining whether EPA should modify its proposal and disapprove the 
request, in part or full. As noted, EPA may disapprove a redesignation 
request only if EPA finds that it does not meet the applicable 
procedural requirements. See section 164(b)(2) of the CAA & 40 CFR 
52.21(g)(5). In addition to pertinent procedural issues, the question

[[Page 56464]]

regarding the affected land parcels is relevant because the underlying 
statutory authority for Tribal redesignations only includes lands 
within reservation boundaries. See section 164(c) of the CAA.
    All other public comments objecting to the redesignation do not 
provide a basis for EPA disapproval. In the discussion that follows, 
EPA has nevertheless addressed many such comments contesting the 
redesignation, for the sole purpose of facilitating the public's 
understanding of today's action. EPA is providing separate responses to 
the remaining comments in the Technical Support Document (TSD) 
available in the public docket for this action, identified at the 
beginning of this document.
1. Scope of Yavapai-Apache Reservation
    As noted, the Yavapai-Apache Tribe redesignation request 
encompassed five separate land parcels that collectively comprise the 
Tribe's reservation. EPA received comments questioning whether two of 
the parcels included in the redesignation request, the parcel near the 
Montezuma Castle National Monument and the Clarkdale parcel, were 
actually encompassed in the Yavapai-Apache Reservation and therefore 
allowed to be redesignated under the Act.
    The Clean Air Act provides that lands within the exterior 
boundaries of reservations of federally recognized Indian tribes may be 
redesignated by the appropriate Indian governing body. See section 
164(c) of the CAA. The PSD regulations define ``Indian Reservation'' as 
``any federally recognized reservation established by Treaty, 
Agreement, executive order, or act of Congress.'' See 40 CFR 
52.21(b)(27). In addition to lands formally designated as 
``reservations,'' EPA considers trust land validly set apart for use of 
a tribe to be an ``Indian Reservation.'' See Oklahoma Tax Commission v. 
Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505, 511 
(1991); United States v. John, 437 U.S. 634, 648-49 (1978); 59 FR 
43956, 43960 (Aug. 25, 1994); 56 FR 64876, 64881 (Dec. 12, 1991). EPA 
has indicated that it will be guided by relevant case law in 
interpreting the scope of ``reservation'' under the Clean Air Act. See 
59 FR 43960.
    The Bureau of Indian Affairs (BIA) has certified by letter to EPA, 
dated May 13, 1994, that all five parcels identified in the 
redesignation request are lands held in trust by the U.S. government 
for the beneficial use of the Tribe, including the parcels near 
Montezuma Well National Monument and Clarkdale. The BIA certification 
was accompanied with an abstract of the various title documents and BIA 
and U.S. Geological Survey quadrangle maps showing the parcels. The BIA 
certification is available for inspection at the public docket 
identified at the beginning of this document. EPA therefore concludes 
that all of the lands included in the Tribe's redesignation submittal 
are lands encompassed within its reservation.
2. Analysis of Health, Environmental, Economic, Social and Energy 
Effects
    EPA's regulations require that a ``satisfactory description and 
analysis of the health, environmental, economic, social and energy 
effects of the proposed redesignation'' must be available for public 
inspection 30 days prior to the public hearing held by the Tribe. See 
40 CFR 52.21(g)(2)(iii). (The public hearing held by the Tribe is 
separate from the one conducted by EPA.)
    EPA did not receive public comments that the Tribe failed to follow 
proper procedures by failing to conduct a public hearing, by failing to 
have the analysis available prior to the hearing, by failing to provide 
timely notice of the hearing, or by failing to consult with the State 
prior to proposing the redesignation. See 1977 CAAA Legislative 
History, vol. 3 at 373 (colloquy between Senators Garn and Muskie, 
during the Senate's consideration of the Conference report, about the 
types of procedural error that might trigger a disapproval). EPA, 
however, has received comments alleging that the Tribe's analysis of 
health, environmental, economic, social and energy effects was 
inadequate.
    A threshold question is the level of scrutiny EPA should apply to 
the Tribe's analysis in the face of claims that it is inadequate. As 
previously discussed, section 164(b)(2) of the CAA and the implementing 
regulations at 40 CFR 52.21(g)(5) provide that EPA may disapprove a 
redesignation request only if it finds that the request does not meet 
the procedural requirements. EPA believes that the availability of a 
satisfactory effects analysis is central to meaningful notice and 
public hearing and therefore a relevant procedural consideration. At 
the same time, there is considerable discretion involved in determining 
what is ``satisfactory.''
    The specific use of the word ``satisfactory'' in the statute and 
implementing regulations suggests a relatively low threshold. Congress, 
by contrast, did not dictate that the analysis be comprehensive or 
exhaustive. Further, the statutory language does not assign any 
specific weight to the consideration of health, environmental, 
economic, social or energy effects, or suggest that one consideration 
should be given priority over another. The commenters objecting to the 
Tribe's analysis appeared to assume that the Tribe had to justify its 
redesignation. These commenters suggested that potential adverse 
effects, particularly possible economic impacts, should be disabling. 
These comments are discussed further below. In any event, EPA's 
implementing regulations do not elaborate what constitutes a 
``satisfactory'' description and analysis, nor do the regulations 
specify to what extent this discussion should focus on the lands being 
proposed for redesignation or surrounding areas.
    The legislative and regulatory history generally indicate that 
EPA's review of the analysis should be deferential. The legislative 
history accompanying the 1977 amendments, described previously, 
provides that Congress intended to eliminate EPA's authority to 
override a redesignation on the grounds that energy, environment and 
other factors were improperly weighed. See H.R. Rep. No. 294 at 7-8. 
The resulting 1977 amendments supplanted EPA's administrative scheme 
with provisions that limited EPA to a procedural review. See section 
164(b)(2). In developing subsequent regulations, EPA indicated that EPA 
would no longer be able to disapprove a redesignation based on its 
finding that the State or Tribal decision was arbitrary or capricious. 
See 42 FR at 57480.
    EPA's decision to approve a redesignation by the Northern Cheyenne 
Tribe was upheld under the pre-existing regulatory regime that 
expressly provided for an analysis that included consideration of 
growth anticipated, regional impacts, and social, environmental and 
economic effects as well as stricter EPA scrutiny of the analysis. The 
petitioners claimed that the Tribe's analysis was inadequate in several 
respects. The reviewing court affirmed EPA's approval, rejecting the 
claim that the Tribe was required to meet exacting analysis 
requirements and holding that the Tribe had considered the factors 
identified in EPA's regulations. Nance v. EPA, 645 F.2d at 712. The 
court further reasoned that the Tribe's decision was bolstered by the 
policy for maintaining clean air embodied in the CAA:

    [T]he Clean Air Act contains a strong presumption in favor of 
the maintenance of clean air, and the nature of a decision which 
simply requires that the air quality be maintained at a certain 
level prevents any exact prediction of its consequences. The Tribe 
has considered the factors enumerated in EPA regulations, and its 
choice in favor of the certainty of clean air is a choice

[[Page 56465]]

supported by the preferences embodied in the Clean Air Act.

Nance v. EPA, 645 F.2d at 712.

    Accordingly, EPA generally has a limited role in reviewing the 
Class I redesignation requests. The emphasis is on assuring that there 
are no procedural defects. At the same time, EPA must refrain from 
substituting its judgment for that of the state or tribe requesting the 
redesignation. Thus, EPA must balance reviewing the Tribe's analysis to 
ensure that relevant considerations were examined without 
inappropriately ``second-guessing'' the Tribe's judgment.
    EPA finds the Yavapai-Apache Tribe's analysis of the required 
factors to be satisfactory. The Tribe's submittal describes and 
analyzes the environmental, health, economic, social and energy effects 
of the proposed redesignation, including present conditions, the 
effects of redesignating to Class I and the effects of remaining a 
Class II area. The submittal describes the Tribe's reasons for 
proposing the redesignation as well as alternatives to the 
redesignation and the potential impacts of the redesignation. See 
generally Yavapai-Apache Tribe Air Quality Redesignation Plan, Sept. 
1993.
    The Town of Clarkdale commented that the Tribe failed to provide an 
accurate assessment and description of the health, environmental, 
economic, social and energy effects of the proposed redesignation on 
off-reservation areas including particularly Clarkdale. The Town of 
Clarkdale commented that it would be seriously and adversely affected 
by the redesignation of a reservation parcel near the Town. Another 
commenter asserted that the Tribe's analysis is incomplete and 
inadequate because the requirement to perform a description and 
analysis ``implies that the Tribe must weigh all relevant 
considerations and then justify its request.'' The commenter stated 
that the analysis must include adverse economic impacts on the 
surrounding areas and activities. The commenter stated that the Tribe 
may not take action ``that will inflict economic harm on off-
Reservation landowners, communities, and citizens, just because the 
Tribe believes that the action will benefit the Tribe.'' The commenter 
was concerned about increased regulation, increased costs to industry 
and negative economic impacts on future mining activities outside the 
reservation.
    EPA disagrees that the Tribe must justify its redesignation request 
in the manner suggested. A description and analysis of factors does not 
dictate calculating and demonstrating that certain factors outweigh 
others. Moreover, the fact that no weight or priority is assigned to 
any particular consideration, taken together with the broad 
redesignation discretion conferred on States and Tribes, indicates that 
the Tribe does not have to justify or overcome a balancing test in its 
redesignation request or show that a proposed redesignation will have 
no impact on the surrounding community. The Tribe's responsibility is 
to perform a ``satisfactory discussion and analysis'' of health, 
environmental, economic, social and energy effects.
    The Tribe's request contained an analysis of health, environmental, 
economic, social and energy effects, including an examination of 
effects on conditions within the reservation. As noted, EPA's 
regulations do not prescribe whether or to what extent impacts outside 
the area being requested for redesignation must be examined. 
Nevertheless, the Tribe's submittal addressed impacts to housing, 
roads, public services, and general impacts to tourism and jobs in the 
surrounding areas, as well as a more detailed discussion of the impacts 
to the reservation lands. The Tribe's description of potential effects 
includes a discussion of the jobs related to tourism in comparison with 
those related to industrial expansion, and the potential effects on 
certain types of facilities located outside the Reservation boundaries. 
The Tribe noted that some industries may incur the cost of additional 
pollution controls to reduce impacts on the Class I area. The Tribe's 
submittal also identified the presence of mineral resources off 
reservation.
    The Tribe's request to redesignate its reservation as Class I would 
limit the amount of future air quality deterioration within the 
reservation's boundaries. While the Tribe described and analyzed 
relevant effects, specific prospective impacts are speculative and 
would depend on the nature of future activities and their particular 
ambient air quality impacts. It is difficult to assess such impacts 
because ``the nature of a decision which simply requires that the air 
quality be maintained at a certain level prevents any exact prediction 
of its consequences.'' Nance v. EPA, 645 F.2d at 712.
3. Concern About Potential Impacts
    Much of the concern about the potential off-reservation impacts 
stems from misimpressions about the scope of the PSD program and the 
protection of a non-Federal Class I area under the program. To 
facilitate public understanding, EPA has addressed the concerns about 
off-reservation impacts in the ensuing discussion.
    a. Concern About Increased Regulation. Some commenters were under 
the misimpression that a Class I redesignation would place the 
residents of the Verde Valley ``under the strictest air control 
measures of the Federal law.'' These commenters expressed concerns that 
redesignation would activate restrictions on wood burning and any form 
of earth movement in order to curtail dust and smoke, as well as 
requiring vehicle smog inspections.
    The residents of the Verde Valley will not be brought under the 
strictest air control measures of Federal law as a result of a Class I 
redesignation. As discussed in the proposal (59 FR 18346, April 18, 
1994) and at EPA's presentation during the public hearing, the Verde 
Valley and the Reservation are currently subject to the PSD program. As 
noted, the PSD program applies to the following areas: (1) 
``attainment'' areas that meet the NAAQS and (2) ``unclassifiable'' 
areas that cannot be classified as meeting or not meeting the NAAQS.
    The Class I designation does not change which sources on or off the 
reservation are subject to PSD. In all instances, only ``major'' 
stationary sources in PSD areas are subject to the PSD program. See, 
e.g., 40 CFR 52.21(b)(1)(i). Major stationary sources are relatively 
large industrial sources. The PSD provisions do not apply to mobile 
sources, such as cars. Major stationary sources are sources that emit, 
or have the potential to emit, over 250 tons per year (tpy) of a 
regulated air pollutant, or 100 tpy if the source is one of the 28 
source categories listed in 40 CFR 52.21(b)(1). Iron and steel mills 
are an example of a listed source category that would be subject to PSD 
if the facility has the potential to emit more than 100 tpy of a 
regulated air pollutant. Particulates from unpaved roads could be 
affected by the redesignation only insofar as they occur at a major 
stationary source. Redesignation will not limit the home use of wood-
burning stoves, nor will it create restrictions on controlled forest 
burning, as commenters suggested.
    Further, PSD applies prospectively to proposed new major stationary 
sources or to proposed major modifications of existing major stationary 
sources. Very generally, major modifications are changes at an existing 
major stationary source that result in a significant net increase of 
regulated air pollutants. See 52.21(b)(2).
    The central change resulting from the Class I redesignation 
approved today is that it allows for less air quality deterioration on 
the reservation than would have been allowed under its

[[Page 56466]]

Class II designation. The area around the reservation will continue to 
maintain its Class II designation. EPA's PSD regulations establish the 
incremental amount of air quality deterioration that is allowed for 
Class I, II and III areas for particulate matter, sulfur dioxide and 
nitrogen dioxide. See 40 CFR 52.21(c). In addition, a new major 
stationary source or major modification which would construct within 10 
km of a Class I area is subject to review under the PSD regulations if 
emissions from the source would have an impact on the Class I area 
equal to or greater than the 1 g/m3 significance level. 
See 40 CFR 52.21(b)(2), 40 CFR 52.21(b)(23), and 40 CFR 52.21(i).
    There is another program under separate provisions of the Clean Air 
Act that imposes more stringent requirements in nonattainment areas, or 
so called ``dirty air'' areas, in which air quality does not meet the 
NAAQS. Under the nonattainment area requirements, states may need to 
develop more stringent or broader requirements; these may affect 
smaller stationary sources than would be regulated under the PSD 
program, or in some instances necessitate vehicle inspection and 
maintenance (smog-check) programs. Such a program would not go into 
effect in the Verde Valley as a result of the redesignation. In fact, 
one of the primary objectives of the PSD program is to prevent air 
quality in attainment areas from deteriorating such that they fail to 
meet the NAAQS, become ``nonattainment'' and necessitate more stringent 
air pollution control measures.
    Commenters also expressed concern that the redesignation would 
place additional burdens on local regulatory agencies, as well as the 
Arizona Department of Environmental Quality (ADEQ) to apply the Class I 
increments to off-reservation sources. As the PSD permitting authority 
for the lands outside the reservation in the Verde Valley, ADEQ would 
be the only agency affected by the redesignation. Air quality modeling 
to assess potential impacts on PSD increments is currently required for 
Class II areas, and performed by a PSD permit applicant. In certain 
circumstances, a proposed source may now also have to assess its impact 
on the Class I increment in effect on the Reservation.
    Any additional administrative resources which would be required as 
a result of the Class I designation would not be substantial. ADEQ must 
currently review a permit applicant's analysis of the amount of 
increment that is consumed (if any) when a major source or major 
modification is constructed in a PSD Class II area near any existing 
Federal Class I area in Arizona. In the Verde Valley, for example, a 
major source locating near the Sycamore Canyon Wilderness Area--a 
Federal Class I area--would already be required to perform a Class I 
increment analysis. The redesignation of the Yavapai-Apache Reservation 
may increase the likelihood that a source must perform an increment 
analysis for nearby Class I areas. While the total number of such Class 
I analyses may increase, the Class I analysis is only one component of 
an analysis which sources are already required to submit. The 
responsibility to review the adequacy of any Class I increment analyses 
resulting from the redesignation does not pose substantial additional 
burdens for ADEQ in the review of PSD permit applications.
    b. Concern About Increased Costs to Industry. Some commenters 
expressed concern that the redesignation would significantly increase 
the cost of complying with the PSD requirements.
    EPA does not expect significant additional delay or cost for 
companies attempting to comply with the Class I requirements. As noted, 
the only types of industrial development affected by the Class I 
designation would be major stationary sources of air pollution. The 
permit applicant for a major stationary source in the Verde Valley 
subject to PSD is currently required to perform a modeling analysis to 
ensure that the Class II increments are protected. The applicant would 
therefore have to gather the necessary data, and conduct studies on air 
quality for the Class II analysis. The Class I designation may simply 
require in certain circumstances that additional receptor points be 
added to the model in order to simulate the effect of potential 
emissions on the Class I area to ensure that the Class I increments are 
protected. The cost of this additional component of an increments 
analysis is not expected to be substantial.
    Further, every major stationary source proposing to locate in a PSD 
area, irrespective of the area's classification, must employ best 
available control technology (BACT). See sections 165(a)(4) and 169(3) 
of the CAA. Thus, every major source locating in a Class II area is 
required to utilize state-of-the-art air pollution controls and 
proximity to a Class I area generally would not affect the level of 
control required. Thus, as a general rule, a source would not incur 
additional control costs due to the redesignation. However, it is 
possible that in some instances impacts on a Class I area would require 
further decreases in emissions. A source could choose to achieve such 
emission reductions in a number of ways, including restrictions on 
hours of operation or throughput, additional emission controls or 
obtaining emission reductions from other sources in the area. In such a 
case a source would likely incur additional costs.
    c. Concern About Impacts on Development. Some commenters expressed 
concern that the redesignation would hinder all future economic 
development in the Verde Valley. Others stated that it would place a 
significant economic and regulatory burden on future economic 
development in general, and on the development of hardrock mining 
resources in particular.
    The commenters cited increased costs and increased regulatory 
burdens as the bases for the alleged impacts on development. As 
discussed above, EPA believes that significant increases in cost will 
be rare and generally unlikely to affect development in the area. As 
noted, the redesignation does not affect which sources will be subject 
to PSD. In all instances, ``major stationary sources'' in PSD areas are 
subject to PSD. The Verde Valley area outside the reservation is a PSD 
area and its PSD classification is unaffected by EPA's approval of the 
Class I designation for the Tribe.
    There are many Class I areas located adjacent to communities that 
are Class II areas. For example, the Saguaro National Park, a Federal 
Class I area, is adjacent to the eastern and western boundaries of 
Tucson, Arizona. Tucson has a population size and economic activity 
level that far exceeds that presently found in the Verde Valley.
    EPA performed a modeling analysis to assess the potential impact of 
some ``typical'' major sources proposing to locate near the Yavapai-
Apache Reservation, to facilitate the public's understanding about the 
implications of the redesignation. This analysis suggests that while 
the Class I redesignation will protect existing air quality on the 
Reservation by limiting the amount of deterioration allowed, major 
stationary sources with well-controlled emissions locating near the 
Reservation should not exceed the Class I increment. More detailed 
information about EPA's analysis is available for public review in the 
docket listed at the beginning of this document.
    As noted, commenters expressed specific concerns about the effect 
of the redesignation on development of mining resources in the area, 
noting that ore bodies cannot be relocated. One commenter argued that 
any conventional mining operation requiring crushing and concentration

[[Page 56467]]

would fall well within the category of a new major stationary source.
    The discussion above regarding economic and regulatory effects of 
the redesignation in general also applies to mining operations. In 
addition, whether proposed mining activity would even be subject to PSD 
depends on the quantity and type of expected emissions. As noted, to be 
subject to PSD a facility must have the potential to emit more than 250 
tpy of a regulated air pollutant, or more than 100 tpy if the facility 
is included in one of the 28 listed source categories. Mining 
operations are not included in the list of 28 source categories, and 
therefore the 250 tpy threshold applies. See 40 CFR 52.21(b)(1)(i). In 
addition, for many types of mining operations, fugitive emissions 
(emissions which could not reasonably pass through a stack, chimney, 
vent or other functionally equivalent opening) make up a majority of 
pollutants emitted. See 40 CFR 52.21(b)(20). Fugitive emissions, such 
as dust, are counted towards the 250 tpy threshold for determining 
whether PSD applies only for specified source categories, which do not 
include most mining activities. See 40 CFR 52.21(b)(1)(c)(iii). Thus, 
the exclusion of fugitive emissions and the higher pollutant threshold 
may exclude mining activity from PSD review.
4. Disperse Reservation Lands and Character of Reservation Lands.
    Some commenters stated that they were opposed to the redesignation 
because the reservation is comprised of five distinct land parcels. The 
commenters were concerned about the small size (i.e., 635 acres) and 
dispersed nature of the reservation lands and the impact on effective 
air quality management. As noted, EPA may disapprove a redesignation 
only if the Tribe did not follow the applicable procedures in adopting 
its redesignation. Because these comments do not relate to any alleged 
procedural transgression, they are not a basis for disapproval in this 
action.
    However, section 164(e) calls for EPA to consider ``the extent to 
which the lands involved are of sufficient size to allow effective air 
quality management'' in resolving intergovernmental disputes about 
redesignations. Thus, EPA has fully assessed this consideration in 
addressing the State of Arizona's objection to the Tribe's Class I 
redesignation. As noted, EPA's resolution of the intergovernmental 
dispute is addressed in another notice in today's Federal Register and 
the reader is referred to that notice.3
---------------------------------------------------------------------------

    \3\  Responses to these comments are also contained in the TSD 
for this rulemaking action, available in the public docket 
identified at the beginning of this notice.
---------------------------------------------------------------------------

    Another commenter stated that the Class I redesignation is 
inappropriate because Class I status is intended for the protection of 
truly unique areas of national or regional significance because of 
their natural, scenic, recreational, or historic values, and that the 
Yavapai-Apache Reservation no more reflects any of these 
characteristics than any neighborhood in the Verde Valley or the 
country.
    Congress made specified Federal lands, including certain national 
parks and wilderness areas, mandatory Class I areas that may not be 
redesignated. See section 162(a) of the CAA. This is consistent with 
one of the purposes of the PSD program to preserve, protect, and 
enhance the air quality in national parks, national wilderness areas, 
national monuments, national seashores, and other areas of special 
national or regional natural, recreational, scenic or historic value. 
See section 160(2) of the CAA.
    However, Congress did not restrict redesignation of additional 
Class I areas by States and Tribes to lands deemed meritorious by the 
Federal government. Rather, Congress gave States and Tribes broad 
latitude to redesignate additional areas within their jurisdiction as 
Class I. Congress generally limited EPA's authority to disapprove the 
proposed redesignation of ``any'' area to circumstances where the 
redesignation does not meet procedural requirements. See section 
164(b)(2) of the CAA
    There may be a variety of reasons for a State or Tribe to propose 
redesignation of an area as Class I. One purpose of the PSD program is 
to protect health and welfare from actual or potential adverse effects, 
notwithstanding attainment of the national ambient air quality 
standards. See section 160(1) of the CAA.
    Another purpose of the PSD program is to assure that economic 
growth will occur in a manner consistent with the preservation of 
existing clean air resources. See section 160(3) of the CAA.
    The Tribe's redesignation request provides as follows:

    The Tribe is not seeking to change its air quality status to 
prevent development on or around the reservation * * *. The Tribe is 
against increased air pollution from industrial activity that could 
cause serious health problems for the people living on or near the 
Reservation * * *.
    People are concerned about the increase in pollution under Class 
II because of its anticipated effects on their most vulnerable age 
groups: the very young and the elderly people on the Reservation. * 
* *
    The uncertainty that surrounds these absolute [NAAQS] leads the 
Tribe to seek additional protection for the People and their finite 
resources through the maintenance of the lowest levels of pollution 
currently allowable: a Class I air quality designation.

See Yavapai-Apache Tribe Air Quality Redesignation Plan, Sept. 1993 at 
ps. 27, 30 and 40. The Tribe's request also examines the natural 
resource and cultural benefits of the proposed redesignation as well as 
the unique nearby natural resources.
    In the final analysis, it is generally inappropriate for EPA to 
substitute its judgment for that of the Tribe's in these circumstances. 
As discussed, Congress generally placed only procedural restrictions on 
a Tribe's redesignation of non-Federal lands as Class I areas. The 
legislative history indicates that limited Federal review was a 
deliberate congressional decision.
5. Applicable Implementation Plan.
    Some commenters stated that a redesignation cannot be approved 
under section 164 of the CAA until there is an applicable state 
implementation plan for the reservation. These commenters do not 
believe that such a plan exists for this area, and therefore the 
Tribe's request cannot be approved. The commenters reason that the 
State does not have jurisdiction over the reservation, therefore no 
applicable State implementation plan exists on the reservation and the 
absence of an applicable State implementation plan precludes approval 
of any Tribal redesignation.
    Section 164 of the CAA makes no reference to an ``applicable state 
implementation plan.'' Section 164(e), the dispute resolution 
provisions, refers only to the ``applicable plan,'' providing that 
EPA's decision resolving the dispute shall become part of the 
applicable plan and shall be enforceable as part of such plan. Section 
302(q) of the CAA in turn defines applicable implementation plan to 
include a plan approved under section 110 of the CAA, a plan Federally-
promulgated under section 110(c) of the CAA or a plan approved or 
promulgated under section 301(d) of the CAA. Thus, a redesignation 
could be part of a state implementation plan (SIP), a Federal 
implementation plan (FIP), or eventually, a tribal implementation plan 
in accordance with sections 110(o) and 301(d) of the CAA. See 59 FR 
43956.
    The PSD regulations, however, provide that redesignations may be

[[Page 56468]]

proposed by states or tribes, ``subject to approval by the 
Administrator as a revision to the applicable State implementation 
plan.'' See 40 CFR 52.21(g)(1). At the time this language was 
promulgated, the Agency had not clearly focused on the complex issues 
of tribal sovereignty as it relates to States. Compare 59 FR 43956.
    The PSD rules at 40 CFR part 52 establish a Federal PSD program, or 
Federal implementation plan, where there would otherwise be gaps in 
programmatic coverage.4 The Federal implementing rules expressly 
apply to Indian reservations. See 40 CFR 52.21(a) (``the provisions [of 
this section] shall also be applicable to all * * * Indian 
Reservations). The Federal implementing regulations also expressly 
provide for redesignations by Indian Tribes. See 40 CFR 52.21(g)(4).
---------------------------------------------------------------------------

    \4\ See section 110(c)(1) of the CAA; see also Phillips 
Petroleum Co. v. EPA, 803 F.2d 545, 555-56 (10th Cir. 1986) 
(affirming EPA's authority to directly implement Safe Drinking Water 
Act Underground Injection Control program on Indian lands in 
Oklahoma where concluding otherwise would contradict the meaning and 
purpose of the Act by creating ``a vacuum of authority over 
underground injections on Indian lands, leaving vast areas of the 
nation devoid of protection from groundwater'').
---------------------------------------------------------------------------

    Based on the language in section 164(c) of the CAA and 40 CFR 
52.21(g)(4) of the regulations expressly authorizing Tribes to 
redesignate lands within reservation boundaries, it could not have been 
EPA's intent at the time it promulgated the language in 40 CFR 
52.21(g)(1) to frustrate the ability of Tribes to redesignate their 
lands, and render meaningless the statutory and regulatory Tribal 
redesignation authority, by requiring that there be an applicable State 
implementation plan. Further, requiring that a State implementation 
plan apply on a reservation before EPA would approve a Tribal 
redesignation would be inappropriately treating Tribes as subdivisions 
of States instead of relating to Tribes on a ``government-to-
government'' basis as called for by Federal policy. See part III.B.6, 
below.
    Thus, EPA interprets the regulatory provision to have the same 
meaning as the statutory provision on which it is based, and to require 
that redesignations become part of the applicable implementation plan. 
Accordingly, for States, the applicable plan is the State 
implementation plan as specifically recognized in the regulations. 
Because Indian Tribes do not yet have authority to administer Tribal 
implementation plans, the Federal PSD rules issued at 40 CFR 52.21 
establish, pursuant to section 110(c)(1) of the CAA, the Federal 
implementation plan as the applicable plan for the Tribe. See section 
302(q) of the CAA. Thus, the redesignation approved today will become 
part of the Federal implementation plan for the reservation.
6. Additional Public Comments.
    One commenter expressed concern that the redesignation could be 
detrimental to the economic well-being of the community. The commenter 
also asserted that it appears to be ``both unnecessary and possibly 
immoral'' to allow ``an extremely small minority of the population to 
impose a significantly higher level of bureaucratic regulation.'' The 
commenter encouraged EPA to suggest to the Tribe that it could pursue 
more ``meaningful and productive opportunities.''
    In the preceding discussion, EPA has attempted to address concerns, 
and misimpressions, about potential economic impacts. Also as addressed 
previously, the PSD program gives States and Federally recognized 
Indian Tribes broad authority to redesignate lands within their 
jurisdictional boundaries. That authority is not limited by the size of 
population the requesting governmental entity represents or its 
population relative to the surrounding jurisdictions.
    EPA is also guided by Federal and Agency Tribal policy in making 
decisions affecting Tribes. Washington Department of Ecology v. EPA, 
752 F.2d 1465, 1471 & n. 5 (9th Cir. 1985). As outlined below, these 
policies direct EPA to treat Tribes as sovereign governments.
    On January 24, 1983, the President issued a Federal Indian Policy 
stressing two related themes: (1) That the Federal government will 
pursue the principle of Indian ``self-government'' and (2) that it will 
work directly with Tribal governments on a ``government-to-government'' 
basis. An April 29, 1994 Presidential Memorandum reiterated that the 
rights of sovereign Tribal governments must be fully respected. 59 FR 
22951 (May 4, 1994).
    EPA's Tribal policies commit to certain principles, including the 
following:

    EPA recognizes Tribal Governments as sovereign entities with 
primary authority and responsibility for the reservation populace. 
Accordingly, EPA will work directly with Tribal Governments as the 
independent authority for reservation affairs, and not as the 
political subdivisions of States or other governmental units.
* * * * *
    In keeping with the principal of Indian self-government, the 
Agency will view Tribal Governments as the appropriate non-Federal 
parties for making decisions and carrying out program 
responsibilities affecting Indian reservations, their environments, 
and the health and welfare of the reservation populace. Just as 
EPA's deliberations and activities have traditionally involved 
interests and/or participation of State Governments, EPA will look 
directly to Tribal Governments to play this lead role for matters 
affecting reservation environments.

See November 8, 1984 ``EPA Policy for the Administration of 
Environmental Programs on Indian Reservations''; Policy Reaffirmed by 
Administrator Carol M. Browner in a Memorandum issued on March 14, 
1994.
    Congress further enhanced Tribal sovereignty under the CAA in the 
1990 amendments. The 1990 amendments added sections 110(o) and 301(d) 
to the CAA, which provide for administration of specified CAA programs 
in the same manner as States. These provisions further evidence strong 
Congressional commitment to tribal sovereignty and the desire to put 
tribes on an equal footing with states with regard to managing air 
quality resources. See 59 FR 43956.
    The United States also has a unique fiduciary relationship with 
Tribes, and EPA must consider Tribal interests in its actions. Nance v. 
EPA, 645 F.2d at 710.
    It would be inappropriate, under Federal law and policy, for EPA to 
disapprove the Tribe's request to seek additional protection of the 
reservation environment for the reasons suggested by the commenter.
    EPA also received a comment from the attorney for the Town of 
Clarkdale objecting ``to the lack of procedural due process in the 
conduct of the Public Hearing held by EPA on * * * June 22, 1994.'' The 
commenter alleged that the EPA hearing officer was unfair and impartial 
because the Hearing Officer asked the attorney to conclude his comments 
when a five-minute time limit had been exceeded, some proponents of the 
project who spoke exceeded the five-minute time limit without 
interruption from the hearing officer, and the hearing officer failed 
to control applause and verbal expressions by members of the audience 
supporting the request which had the effect of a ``chilling process'' 
on any person in attendance intending to make public comment in 
opposition. The commenter therefore alleged that the entire EPA review 
process is tainted.
    An opportunity for a public hearing is expressly provided for in 
conjunction with EPA disapproval of a redesignation request. Section 
164(b)(2) of the CAA provides that EPA may disapprove an area 
redesignation request only if it finds ``after notice and opportunity 
for public hearing,'' that the redesignation

[[Page 56469]]

does not meet the applicable procedural requirements. EPA's 
implementing regulations similarly provide that EPA shall disapprove, 
within 90 days of submission, a redesignation request only if it finds 
``after notice and opportunity for public hearing'' that the 
redesignation does not meet the applicable procedural requirements. See 
40 CFR 52.21(g)(5).
    On April 18, 1994, EPA published a notice of proposed rulemaking in 
the Federal Register proposing to approve the Tribe's Class I 
redesignation request based on EPA's preliminary determination that it 
met the applicable procedural requirements, and announced a 30-day 
public comment period. See 59 FR 18346. EPA subsequently held the June 
22, 1994 public hearing in question to be responsive to a request for a 
public hearing from the Town of Clarkdale attorney. In the announcement 
of the public hearing, EPA indicated that it would allow until July 6, 
1994 for the submittal of written comments following the public 
hearing.
    To facilitate the public's understanding of the issues, EPA began 
the public hearing with an informational discussion of the Class I 
redesignation process and an overview of the PSD permit program. 
Subsequently, a panel of EPA officials, including a presiding hearing 
officer, heard oral presentations from members of the public.
    In her introductory remarks the presiding officer made the 
following statement:

    Please make your oral comments brief so that everyone has an 
opportunity to speak. To assist in this effort, please limit your 
comments to five minutes. If you have lengthier comments or comments 
that contain a significant amount of technical detail, I would ask 
that you submit them in writing before the end of the comment 
period. If you brought a written copy of your remarks with you 
today, you may hand it to the reporter after your testimony for 
inclusion in the record of the hearing.

See Hearing Transcript at p. 6.
    The Town of Clarkdale attorney was the first speaker at the public 
hearing. After he spoke for approximately 10 minutes, the presiding 
officer asked him to conclude his comments in order to ensure that 
everyone would have time to speak. After providing those who expressed 
an interest in making an oral presentation with an opportunity to 
speak, EPA provided time for any additional comment including 
supplementary statements by those who had previously spoken.
    EPA has reviewed the transcript and a videotape of the public 
hearing. The Town of Clarkdale attorney had a fair and reasonable 
opportunity to express his views at the public hearing during his 
statements at the outset of the hearing and again at the end of the 
hearing when EPA provided an opportunity for additional statements. 
Everyone present was afforded an equal opportunity to speak. While some 
members of the audience did applause and comment in response to the 
statements of others, their conduct did not create an intimidating or 
``chilling'' atmosphere.
    Further, EPA provided additional opportunities for submission of 
views to the Agency. As noted, in its announcement of the public 
hearing, EPA stated that it would consider post-hearing written 
comments submitted by July 6, 1994. Following the public hearing, the 
Town of Clarkdale requested an extension of the public comment period 
``[t]o allow additional time for the public to respond to information 
presented by EPA and the public comment at the Public Hearing'' and 
``[t]o allow for public comment not made at the Public Hearing of June 
22, 1994, by reason of curtailment of opposing viewpoints.'' On July 
20, 1994, in response to the Town of Clarkdale's request, EPA published 
a Federal Register document announcing an extension of the public 
comment period, providing the public until August 22, 1994 to submit 
written comments. See 59 FR 37018. The Town of Clarkdale submitted 
public comments dated August 22, 1994, in addition to several other 
written communications with EPA both preceding and following the EPA 
public hearing.
    EPA has satisfied the procedures required by law, and arguably 
more, in reviewing the Tribe's PSD redesignation request. EPA has 
provided ample opportunity for public participation and has fully 
considered the resulting public comments in taking today's final 
action. EPA has acted well within its lawful discretion. See Vermont 
Yankee Nuclear Power Co. v. NRDC, 435 U.S. 519 (1978).

IV. Administrative Review

A. Executive Order 12866

    The Office of Management and Budget has exempted this rulemaking 
action from centralized regulatory review pursuant to section 6 of 
Executive Order 12866.

B. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. Section 600 et seq., 
EPA must prepare a regulatory flexibility analysis describing the 
impact of a final rule on small entities. See 5 U.S.C. sections 603 and 
604. Alternatively, EPA may certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small not-for-profit 
enterprises and government entities with jurisdiction over populations 
of less than 50,000. This final rulemaking action to approve the 
Tribe's PSD redesignation request does not impose new requirements on 
small entities and may only potentially have an impact on major 
stationary sources, as defined by 40 CFR 52.21. Therefore, I certify 
that this action will not have a significant economic impact on a 
substantial number of small entities.

C. Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 205 allows EPA to adopt an alternative 
other than the least costly, most cost-effective or least burdensome 
alternative if EPA publishes with the final rule an explanation why 
that alternative was not adopted.
    EPA has determined that this final rulemaking action to approve the 
Tribe's PSD redesignation request does not contain Federal mandates 
that may result in expenditures of $100 million or more for State, 
local, and tribal governments, in the aggregate, or the private sector 
in any one year. Thus, this action is not subject to the requirements 
of sections 202 and 205 of the UMRA.

D. Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule

[[Page 56470]]

and other required information to the U.S. Senate, the U.S. House of 
Representatives and the Comptroller General of the General Accounting 
Office prior to publication of this rule in today's Federal Register. 
This rule is not a ``major rule'' as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
oxides.

    Dated: October 2, 1996.
Felicia Marcus,
Regional Administrator.

    40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart D--Arizona

    2. Subpart D is amended by adding Sec. 52.150 to read as follows:


Sec. 150   Yavapai-Apache Reservation.

    (a) The provisions for prevention of significant deterioration of 
air quality at 40 CFR 52.21 are applicable to the Yavapai-Apache 
Reservation, pursuant to Sec. 52.21(a).
    (b) In accordance with section 164 of the Clean Air Act and the 
provisions of 40 CFR 52.21(g), the Yavapai-Apache Indian Reservation is 
designated as a Class I area for the purposes of preventing significant 
deterioration of air quality.

[FR Doc. 96-27849 Filed 10-31-96; 8:45 am]
BILLING CODE 6560-50-P