[Federal Register Volume 64, Number 33 (Friday, February 19, 1999)]
[Rules and Regulations]
[Pages 8247-8263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3659]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 71

[FRL-6300-9]
RIN 2060-AG90


Federal Operating Permits Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action promulgates regulations setting forth EPA's 
approach for issuing Federal operating permits to covered stationary 
sources in Indian country, pursuant to title V of the Clean Air Act as 
amended in 1990 (CAA). Consistent with EPA's Indian Policy, the CAA 
authorizes the Agency to protect

[[Page 8248]]

air quality in Indian country by administering a Federal operating 
permits program in areas lacking an EPA-approved or adequately 
administered operating permits program. Implementation of today's rule 
will benefit the environment by assuring that the benefits of title V, 
such as increased compliance and resulting decreases in emissions, 
extend to every part of Indian country. This action potentially applies 
to all industry sectors.

EFFECTIVE DATE: March 22, 1999.

ADDRESSES: Supporting information used in developing the promulgated 
rules is contained in Docket No. A-93-51. This docket is available for 
public inspection and copying between 8:30 a.m. and 3:30 p.m., Monday 
through Friday, at EPA's Air Docket, Room M-1500, Waterside Mall, 401 M 
Street SW, Washington, DC 20460. A reasonable fee may be charged for 
copying.

FOR FURTHER INFORMATION CONTACT: Candace Carraway (telephone 919-541-
3189), U.S. Environmental Protection Agency, Office of Air Quality 
Planning and Standards, Information Transfer and Program Integration 
Division, Mail Drop 12, Research Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION:

Background Information Document

    A background information document (BID) for the promulgated rule 
may be obtained from the docket. Please refer to the ``Federal 
Operating Permits Program--Response to Comments.'' The BID contains a 
summary of the public comments made on the proposed Federal Operating 
Permits Program rule published on March 21, 1997 and the public 
comments made on the proposed Federal Operating Permits Program rule 
published on April 27, 1995 that pertain to the subject matter of this 
rulemaking, and EPA responses to the comments. Comments addressed in 
the preamble to this rule are generally not duplicated in the BID.

Regulated Entities

    Entities potentially regulated by this action are stationary 
sources that (1) are located in Indian country or an area for which EPA 
believes the Indian country status is in question; 1 and (2) 
are major sources, affected sources under title IV of the CAA (acid 
rain sources), solid waste incineration units required to obtain a 
permit under section 129 of the CAA, or sources subject to a standard 
under section 111 or 112 of the CAA except those area sources that have 
been exempted or deferred from title V permitting requirements. 
Regulated categories and entities include:
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    \1\ The EPA believes that a few sources that are subject to 
title V requirements may be located in areas where, in the Agency's 
judgment, there is a bona fide question whether the area is Indian 
country within the meaning of 18 U.S.C. Sec. 1151 and as defined in 
this rule. As described more fully elsewhere in this preamble, EPA 
believes the objectives of the Act and protection of air quality 
will be more effectively served if EPA administers a part 71 program 
in such areas. Unless it is otherwise apparent from the context, 
when this preamble uses the term ``Indian country,'' it is intended 
that the term also refer to areas for which EPA believes there is a 
bona fide question about whether the area is Indian country.

------------------------------------------------------------------------
              Category                  Examples of regulated entities
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Air pollution sources in all          Major sources under title I,
 industry sectors located in Indian    section 112, or section 302 of
 country.                              the CAA; affected sources under
                                       title IV of the CAA (acid rain
                                       sources); solid waste
                                       incineration units required to
                                       obtain a permit under section 129
                                       of the CAA; sources subject to
                                       standards under section 111 or
                                       112 of the CAA that are not area
                                       sources exempted or deferred from
                                       permitting requirements under
                                       title V.
------------------------------------------------------------------------

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. This table lists the types of entities that EPA is now aware 
could potentially be regulated by this action. Other types of entities 
not listed in the table could also be regulated. To determine whether 
your facility is regulated by this action, you should carefully examine 
the applicability criteria in section 71.3(a) of the rule, the 
definition of ``Indian country'' in section 71.2 of the rule, and the 
provisions of section 71.4 of the rule. If you have questions regarding 
the applicability of this action to a particular entity, consult the 
person listed in the preceding FOR FURTHER INFORMATION CONTACT section 
or the EPA Regional Office that is administering the part 71 permit 
program for the area in which the relevant source or facility is 
located.

Outline

    The contents of today's preamble are listed in the following 
outline:

I. Background of the Final Rule
II. Summary of the Final Rule
III. Major Issues Raised by Commenters
    A. Scope of the Federal Program
    B. Effect of State Law
    C. Determining Whether Sources Are Subject to the Federal 
Program
IV. Changes from the Proposed Rules and the 1996 Final Rule
    A. Geographic Area Subject to the Part 71 Program
    B. Applicability Determinations
    C. Permit Fee Relief
    D. Duty to Administer the Part 71 Program
    E. Publication of Notice of Final Permitting Actions
    F. Technical Amendment to Sec. 71.4(f)
    G. Effective Date of Program
V. Administrative Requirements
    A. Docket
    B. Executive Order 12866
    C. Regulatory Flexibility
    D. Paperwork Reduction Act
    E. Unfunded Mandates Reform Act
    F. Submission to Congress and the General Accounting Office
    G. Executive Order 13045
    H. Executive Order 12875: Enhancing Intergovernmental 
Partnership
    I. Executive Order 13084: Consultation and Coordination With 
Indian Tribal Governments
    J. National Technology Transfer Advancement Act

I. Background of the Final Rule

    Title V of the CAA as amended in 1990 (42 U.S.C. 7661 et seq.) 
requires that EPA develop regulations that set minimum standards for 
State operating permits programs. Those regulations, codified in part 
70 of chapter I of title 40 of the Code of Federal Regulations, were 
promulgated on July 21, 1992 (57 FR 32250). Title V also requires that 
EPA promulgate, administer, and enforce a Federal operating permits 
program when a State does not submit an approvable program within the 
time frame set by title V or does not adequately administer and enforce 
its EPA-approved program. On April 27, 1995, EPA proposed regulations 
(60 FR 20804) (hereinafter ``1995 proposal'') setting forth the 
procedures and terms under which the Agency would administer a Federal 
operating permits program. The final rule was published on July 1, 1996 
(61 FR 34202) and is codified at 40 CFR part 71. The regulations 
authorize EPA to issue permits when a State, local, or Tribal agency 
has not developed an approved program, has not adequately administered 
or enforced its approved operating permits program, or has not issued 
permits that comply with the applicable requirements of the Act.
    Indian Tribes are not required to develop operating permits 
programs, though EPA encourages Tribes to do so. See, e.g., Indian 
Tribes: Air Quality Planning and Management, 63 FR 7253 (February 12, 
1998) (hereinafter ``Tribal Authority Rule''). The EPA expects that 
most Tribes will not develop title V operating permit programs, in part 
due

[[Page 8249]]

to the resources required to develop such a program. Within Indian 
country, EPA believes it is generally appropriate that EPA promulgate, 
administer, and enforce a part 71 Federal operating permits program for 
stationary sources until Tribes receive approval to administer their 
own operating permits programs.
    In the 1995 proposal, EPA stated its intention to implement part 71 
programs to ensure coverage of Tribal areas which EPA proposed to 
define as ``those lands over which an Indian Tribe has authority under 
the Clean Air Act to regulate air quality.'' The final part 71 rule did 
not include provisions relating to the boundaries of part 71 programs 
in Tribal areas because EPA planned to address these issues in a rule 
that specified provisions of the CAA for which EPA believes it is 
appropriate to treat Indian Tribes in the same manner as States, 
pursuant to section 301(d)(2) of the CAA. See 59 FR 43956 (August 25, 
1994) (``Indian Tribes: Air Quality Planning and Management,'' 
hereinafter ``proposed Tribal Authority Rule'').
    Subsequently, on March 21, 1997, EPA proposed a different approach 
to administering the part 71 program for areas of Indian country that 
are not covered by an approved State or Tribal part 70 program 
(hereinafter ``1997 proposal''). See 62 FR 13748. In the 1997 proposal, 
EPA explained that the 1995 proposal's definition of ``Tribal area'' 
(i.e., the Indian lands where EPA would exercise authority to implement 
a Federal permit program) was inappropriate. The 1995 proposal was 
generally based on two aspects of the proposed Tribal Authority Rule: 
EPA's interpretation of Tribal jurisdiction under the CAA and the 
procedures by which Tribes could demonstrate jurisdiction to implement 
their own programs under the CAA. The approach of the 1995 proposal 
would have required Tribes to establish their jurisdiction over certain 
areas of Indian country before EPA could implement a Federal program 
for those areas. The EPA noted in the 1997 proposal that the approach 
of the 1995 proposal could create gaps in program coverage. The EPA 
believes it is more consistent with the CAA that EPA administer part 71 
programs in Indian country without requiring any jurisdictional showing 
on the part of the Tribe. The Agency's authority under the CAA is not 
premised on Tribal authority. Furthermore, in proposing that EPA 
implement part 71 throughout Indian country, the 1997 proposal was 
consistent with the Agency's general policy of administering 
environmental programs in Indian country until a Tribe assumes 
regulatory responsibility. See, e.g., EPA's 1984 Indian Policy 
(``Policy for the Administration of Environmental Programs on Indian 
Reservations,'' signed by William D. Ruckelshaus, Administrator of EPA, 
dated November 8, 1984), reaffirmed by EPA Administrator Browner in 
1994 (memorandum entitled ``EPA Indian Policy,'' signed by Carol M. 
Browner, Administrator of EPA, dated March 14, 1994); Underground 
Injection Control Programs for Certain Indian Lands, Final Rule, 53 FR 
43096, 43097 (Oct. 25, 1988). The docket for today's rulemaking 
contains copies of these documents.
    In the 1997 proposal, EPA proposed to interpret the CAA as 
authorizing EPA to protect air quality by directly implementing 
provisions of the CAA throughout Indian country. Further, the 1997 
proposal stated EPA's belief that under the CAA, Congress intended to 
allow eligible Tribes to implement programs for all air resources 
within the exterior boundaries of Indian reservations without 
distinguishing among various categories of on-reservation land. In 
light of this territorial view of Tribal jurisdiction, other provisions 
of the CAA, and the legislative history, the proposal asserted EPA's 
belief that Congress preferred that implementation of the CAA in Indian 
country be carried out by either EPA or the Tribes. The bases for this 
interpretation are discussed in detail in the 1997 proposal at 62 FR 
13748, 13750; in section III.A of this preamble; in sections II.A and 
II.B of the preamble to the proposed Tribal Authority Rule at 59 FR 
43956, 43958-61; and in section II.A of the preamble to the final 
Tribal Authority Rule at 63 FR 7254-7260.
    Consistent with the Agency's interpretation of the CAA as described 
above, in the 1997 proposal, EPA proposed to implement the title V 
program even in areas of Indian country where a State previously may 
have been able to demonstrate jurisdiction. The EPA would not implement 
a part 71 program when a part 70 program has been explicitly approved 
by EPA for the area, unless such approval was later withdrawn. Under 
the 1997 proposal, where there was a ``dispute'' as to whether a 
particular area is Indian country, EPA would run the title V program in 
that area until the dispute was satisfactorily resolved. The proposal 
suggested that State or Tribal governments could submit to EPA 
sufficient information to demonstrate to EPA's satisfaction that a 
question exists about whether an area is Indian country.
    In the 1997 proposal, EPA proposed to add a definition of the term 
``Indian country'' as defined in 18 U.S.C. Sec. 1151. In addition, EPA 
proposed to delete the term ``Tribal area'' from the rule.2 
Consistent with the proposal's approach to implementing the title V 
program in Indian country, EPA proposed not to adopt regulatory 
language (from the 1995 proposal) that would have referred to Tribal 
assertions of jurisdiction. Instead, proposed section 71.4(b) would 
establish EPA's authority to administer the part 71 program within 
Indian country even where the Tribe had not demonstrated its 
jurisdiction over the area. Also, unlike the 1995 proposal, the 1997 
proposal did not provide that EPA would solicit comments on the 
boundaries of the program through area-specific rulemakings or that 
governmental entities would be notified of the proposed boundaries. 
Rather, the issue of whether a specific source was subject to the part 
71 program would be resolved in the context of permitting the source.
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    \2\ Note that the final 1996 rule did not adopt a definition of 
``Tribal area.'' The 1995 proposal contained a proposed definition 
for the term which EPA deferred adopting pending today's follow-up 
rulemaking.
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    In the 1997 proposal, EPA stated that sources that are uncertain as 
to whether they are located in Indian country should confer with the 
appropriate Regional office, and that EPA would undertake outreach 
efforts to notify sources that the Agency believes would be subject to 
the program. The proposal stated that even sources that do not receive 
notification would be responsible for ascertaining whether they are 
located in Indian country. In the proposal, EPA solicited comments on 
what steps EPA should take to provide notice to sources that they are 
located in Indian country.
    Finally, EPA proposed to clarify through a proposed revision to 
section 71.4(b) that EPA would administer the part 71 program 
throughout Indian country except where a part 70 program has been given 
full or interim approval.

II. Summary of the Final Rule

    The final rule establishes EPA's approach for issuing part 71 
permits to sources in Indian country. The EPA will administer the part 
71 program within Indian country unless a Tribal or State part 70 
program has been explicitly approved for the area. The EPA will 
administer the program within Indian country even where a Tribe has not 
established its authority to regulate air resources within the same 
area. To assure that there are no gaps in title V coverage for sources 
in Indian country, EPA will also administer the part 71 program within 
areas for which EPA

[[Page 8250]]

believes the Indian country status is in question, until EPA explicitly 
approves or extends approval of a State or Tribal program to cover the 
area.
    The EPA will consult with Tribes, the Department of the Interior 
(DOI), States, and stakeholders as needed to assess whether sources are 
located in Indian country. The EPA will not conduct additional, 
separate notice and comment rulemakings, but will provide notice to 
State and local governments and Tribes each time it notifies sources 
that they are subject to the part 71 program.
    Within a year of the effective date of the program (or some earlier 
deadline set by the EPA Regional Offices), sources that are subject to 
the program must submit a permit application. Sources that become 
subject to the program at a later date must submit permit applications 
within a year of becoming subject to the program.
    Sources are responsible for ascertaining whether they are subject 
to the part 71 program. However, EPA will conduct outreach and provide 
notice to sources that it believes are subject to the part 71 program. 
Further, sources that are uncertain if they are located in an area 
covered by the program or that have other questions concerning whether 
they are subject to the program may informally consult with their EPA 
Regional Office or may formally request EPA to make an applicability 
determination. Submission of a formal request does not stay the permit 
application deadline. The EPA's applicability determinations made 
pursuant to section 71.3(e) are final Agency actions for judicial 
review purposes under CAA section 307(b). The EPA will publish notice 
of final permitting actions (including revision, issuance and denial of 
permits) in the Federal Register.
    Sources that are subject to the program must pay permit fees, but 
EPA may reduce permit fees for sources that are located in areas for 
which EPA believes the Indian country status is in question and that 
have also paid permit fees to a State or local agency that has 
attempted to apply its EPA-approved part 70 program in the area. 
Sources that are explicitly determined to be located in Indian country 
are not eligible for a fee reduction.
    Although EPA does not generally recognize State or local air 
regulations as being effective within Indian country for purposes of 
the CAA, today's rule does not address the validity of State and local 
law and regulations with respect to sources in Indian country or the 
authority of State and local agencies to regulate such sources for 
purposes other than the CAA. Rather, this rule describes the Agency's 
authority to administer the Federal Operating Permits Program and the 
Agency's general position that State and local law do not affect the 
applicability of this program in Indian country.
    The effective date of the part 71 program in Indian country is 
March 22, 1999.

III. Major Issues Raised by Commenters

A. Scope of the Federal Program

    Under today's rule, the part 71 program will be implemented 
throughout Indian country. The Federal program will apply except where 
a part 70 program has been explicitly approved by EPA to cover an area 
of Indian country. The EPA generally will implement the part 71 program 
even in areas of Indian country where a State may be able to 
demonstrate jurisdiction. As explained in detail in section III.A.2 
below, EPA's view of its authority is supported by CAA sections 
301(d)(4) and 301(d)(2)(B) and several other provisions of the CAA as 
well as its legislative history.
1. Comments on the 1997 Proposal
    The EPA received numerous comments regarding the scope of the 
Federal title V program for Indian lands. Several State and industry 
commenters assert that Indian country is not the appropriate scope for 
the part 71 rule and suggest alternatives to using Indian country. 
Several industry commenters believe that the Federal program should be 
limited to ``Tribal areas'' as proposed to be defined in the 1995 
proposal. A State commenter believes ``reservation lands'' would be 
more consistent with the statute. Tribal commenters generally supported 
EPA's approach of implementing part 71 throughout Indian country in the 
absence of approved part 70 programs.
    State and industry commenters assert that EPA does not have 
authority to implement the title V program throughout Indian country. 
Several State and industry commenters state that the 1997 proposal 
ignores State authority, particularly authority over non-Indian-owned 
fee lands (fee lands) within reservations. Citing several cases, 
including Montana v. United States, 450 U.S. 544 (1981), Brendale v. 
Confederated Tribes and Bands of the Yakima Indian Nation, 492 U.S. 408 
(1989), and Strate v. A-1 Contractors, 117 S.Ct. 1404 (1997), these 
commenters assert that States may have authority over fee lands and 
that Tribes generally do not have authority over such lands. One State 
commenter believes that because States may have jurisdiction over fee 
lands, Federal jurisdiction must be determined on a case-by-case basis. 
Several State commenters believe that the language in CAA section 
301(d)(2)(B) that Tribes may be treated in the same manner as States 
for reservations ``or other areas within the Tribe's jurisdiction'' 
means that Tribes must first make a jurisdictional showing before EPA 
may federally implement the CAA in Indian country. One State commenter 
asserts that the Indian country standard in the proposed rule is 
illogical in light of CAA section 301(d)(2)(B), coupled with the 
provision in CAA section 101 ``that air pollution prevention * * * and 
air pollution control at its source is the primary responsibility of 
States and local governments.''
    Several State and industry commenters assert that EPA's authority 
to federally implement the title V program is limited to situations 
where a State fails to adopt or implement an adequate program. One 
industry commenter states that EPA's proposal to extend part 71 
throughout Indian country conflicts with CAA sections 502(i) and 505, 
which specify those actions EPA may take to override a State's part 70 
program and which limit EPA's authority to intervene in an approved 
State part 70 program. Several commenters assert that their States have 
not failed to adopt or adequately implement part 70 programs. Several 
State and industry commenters contend that State programs currently 
cover parts of Indian country, including non-Indian-owned lands within 
reservations. One State commenter believes that EPA's proposed 
interpretation of the CAA as generally authorizing EPA to implement the 
title V program even in areas of Indian country where a State may be 
able to demonstrate jurisdiction may conflict with CAA section 116, 
which the commenter believes establishes that the CAA is not to be 
implemented in derogation of State authority to regulate air quality.
    Some State and industry commenters disagree with EPA's view, as 
described in the 1997 part 71 proposal and the then proposed Tribal 
Authority Rule, that Congress intended a territorial approach to Tribal 
jurisdiction for all air resources within the exterior boundaries of 
Indian reservations without distinguishing among various categories of 
on-reservation land. A Tribal commenter agrees with the view expressed 
by EPA in those proposals that Congress delegated authority to eligible 
Tribes to implement the CAA over all reservation sources. One industry 
commenter argues that EPA's

[[Page 8251]]

interpretation that CAA section 301(d) expressed a Congressional 
preference for either Federal or Tribal implementation in Indian 
country is not correct and that EPA provided no reasonable basis in 
support of this interpretation of the CAA. One industry commenter 
states that there would not be a jurisdictional void if EPA 
administered the program for reservations and a State program is 
available for non-reservation areas of Indian country. Several industry 
commenters believe that there would be no gap in coverage if EPA 
allowed States to implement the title V program over non-Indian-owned 
lands within the reservation.
    A number of State and industry commenters assert that EPA's 
approach of applying the Federal title V program throughout Indian 
country is not the most sensible way of implementing the CAA. One 
industry commenter states that CAA section 301(d) gives EPA authority 
to allow States to provide title V permit coverage over fee lands 
within reservations and other non-Indian-owned lands in non-reservation 
areas of Indian country. This commenter states that nothing in the CAA 
prohibits States from implementing the CAA on non-Indian lands within 
reservations. One commenter believes EPA's approach creates a need to 
resolve jurisdictional questions even in cases where the Tribe may have 
no interest in pursuing jurisdiction. Several commenters state that EPA 
should allow facilities currently operating under a State part 70 
program to continue unless the Tribe shows jurisdiction. Several 
industry commenters express concern that under the proposed approach 
they would have to comply with both State title V programs and EPA 
title V programs.
    State and industry commenters believe there are policy reasons why 
EPA should allow States to implement the title V program in Indian 
country. Commenters assert that State, rather than EPA, implementation 
is more sensible because States have greater experience and resources 
and are physically closer to the regulated sources. These commenters 
also assert that State implementation of the title V program over non-
Indian-owned lands within Indian country would make State-wide and 
interstate planning easier, make State-wide regulation more uniform, 
and avoid piecemeal regulation over small tracts of land. One industry 
commenter asserts that EPA has not demonstrated that it has the 
resources to implement the title V program in Indian country. One 
industry commenter asserts that a cooperative approach involving State-
Tribal cooperative agreements would be more effective than Federal 
implementation and EPA's approach seems to rule these out.
    Some industry commenters believe there is too much uncertainty 
about the status of dependent Indian communities and other non-
reservation categories of Indian country. Some commenters are concerned 
that under the Indian country standard, title V implementation might 
shift among regulators depending on land ownership.
    Finally, several State and industry commenters believe that States 
should implement the title V program in areas where the Indian country 
status is in question. These commenters assert that State 
implementation would be more efficient and avoid confusion, delay, and 
unnecessary expense for permittees. One commenter asserts that no 
environmental benefit would be derived from requiring facilities 
operating under an approved State part 70 program to obtain a Federal 
part 71 permit while jurisdiction is being resolved.
2. Description of Final Rule and EPA's Response to Comments
    Under today's final rule, the Federal title V permitting program 
will apply throughout Indian country except where a part 70 program has 
been explicitly approved by EPA to cover an area of Indian country. The 
EPA's implementation in these areas will continue until EPA explicitly 
approves or extends approval of a part 70 program covering an area of 
Indian country. The Federal program will also apply in areas for which 
EPA believes the Indian country status is in question.
    The CAA provides EPA with the authority to run the title V program 
in Indian country. In light of the statutory language in CAA sections 
101(b)(1), 301(a), 301(d)(2)(B), and 301(d)(4) as well as the overall 
statutory scheme, EPA is exercising the rulemaking authority entrusted 
to it by Congress to directly implement title V programs throughout 
Indian country and in areas for which EPA believes the Indian country 
status is in question. See generally, Chevron U.S.A., Inc. v. NRDC, 467 
U.S. 837, 842-45 (1984). This interpretation of EPA's authority under 
the CAA is based in part on the general purpose of the CAA, which is 
national in scope. As stated in CAA section 101(b)(1), Congress 
intended to ``protect and enhance the quality of the Nation's air 
resources so as to promote the public health and welfare and the 
productive capacity of its population'' (emphasis added). Congress 
intended for the CAA to be a general statute applying to all persons, 
including those within Indian country. See Phillips Petroleum Co. v. 
EPA, 803 F.2d 545, 553-558 (10th Cir. 1986) (holding that the Safe 
Drinking Water Act applied to Indian Tribes and lands by virtue of 
being a nationally applicable statute).
    The CAA section 301(a) provides EPA broad authority to issue 
regulations that are necessary to carry out the functions of the CAA. 
Moreover, several provisions of the CAA call for a Federal program 
where, for example, a State fails to adopt a program, adopts an 
inadequate program, or fails to adequately implement a required 
program. See, e.g., CAA sections 110(c)(1), 502(d)(3), and 502(i)(4). 
These provisions exist in part to ensure that whether or not local 
governments choose to participate in implementing the CAA, the purposes 
of the CAA will be furthered throughout the Nation. Especially in light 
of the problems associated with transport of air pollution across State 
and Tribal boundaries, it follows that Congress intended that EPA also 
would have the authority to operate a Federal program in instances when 
Tribes choose not to develop a program, do not adopt an approvable 
program, or fail to adequately implement an air program authorized 
under CAA section 301(d). Read in the context of the CAA as a whole, 
these provisions authorize EPA to implement the CAA in Indian country, 
without limiting EPA's authority to areas for which Tribes have made a 
jurisdictional showing.
    This interpretation is most evident from Congress' grant of 
authority to EPA under CAA section 301(d)(4). Section 301(d)(4) 
authorizes the Administrator to directly administer provisions of the 
CAA so as to achieve the appropriate purpose, where Tribal 
implementation of those provisions is inappropriate or administratively 
infeasible. EPA has determined that it is inappropriate to subject 
Tribes to the deadlines and sanctions provisions of title V. See 40 CFR 
Sec. 49.4(h) and (i). That determination triggers EPA's 301(d)(4) 
authority to administer the part 71 program for areas over which a 
Tribe may potentially receive CAA program approval. As noted in the 
final Tribal Authority Rule, EPA interprets the CAA as establishing a 
territorial approach to CAA implementation within Indian reservations 
by delegating to eligible Tribes CAA authority over all reservation 
sources without differentiating among the various categories of on-
reservation lands. 63 FR 7253-7258. In addition, the CAA authorizes 
Tribes to implement CAA programs in non-reservation areas over which a 
Tribe has jurisdiction, generally

[[Page 8252]]

including all areas of Indian country. Id. at 7258-7259.
    Under CAA section 301(d)(4), Congress authorized EPA to maintain 
the territorial approach by implementing the CAA throughout Indian 
reservations in the absence of an EPA-approved Tribal program. The EPA 
believes that Congress authorized the Agency, consistent with EPA's 
Indian Policy, to avoid the checkerboarding of reservations based on 
land ownership by federally implementing the CAA over all reservation 
sources in the absence of an EPA-approved Tribal program. See S. Rep. 
No. 228, 101st Cong., 1st Sess. 79 (1989)(implementation of the CAA to 
be in a manner consistent with EPA's Indian Policy). In addition, 
section 301(d)(4) authorizes the Agency to implement the CAA in non-
reservation areas of Indian country in order to fill any gap in program 
coverage and to ensure an efficient and effective transition to Tribal 
programs.
    The EPA's interpretation of CAA section 301(d) as authorizing EPA 
implementation throughout Indian country is also supported by the 
legislative history. S. Rep. No. 228, 101st Cong., 1st Sess. 80 (1989) 
(noting that CAA section 301(d) authorizes EPA to implement CAA 
provisions throughout ``Indian country'' where there is no Tribal 
program); Id. at 80 (noting that criminal sanctions are to be levied by 
EPA, ``consistent with the Federal government's general authority in 
Indian Country''); Id. at 79 (the purpose of section 301(d) is to 
``improve the environmental quality of the air wit[h]in Indian country 
in a manner consistent with the EPA Indian Policy'').
    The EPA believes that it can implement the title V program in 
Indian country without first finding that a State has failed to submit 
a program or that a State's program is inadequate. As noted above, CAA 
section 301(d)(4) authorizes EPA to implement the CAA throughout Indian 
country and does not require a finding of failure to submit or 
inadequacy. No provision in the CAA prohibits EPA from implementing the 
CAA in Indian country absent a finding of failure to submit or 
inadequacy. In fact, CAA section 502(d)(3) requires EPA, by November 
15, 1995, to promulgate, administer and enforce a title V program where 
``a program meeting the requirements of this subchapter has not been 
approved in whole for any State.'' This provision is not conditioned 
upon EPA making a failure to submit or inadequacy determination. While 
EPA's final Tribal Authority Rule makes the November 15, 1995 deadline 
inapplicable in the context of Tribal implementation of the CAA, EPA 
remains under an obligation to implement title V in Indian country. See 
63 FR at 7264-7265.
    Furthermore, Congress could not have intended that EPA must make an 
inadequacy or failure to submit determination before EPA could 
implement the CAA in Indian country because States generally lack 
authority over Indians in Indian country. California v. Cabazon Band of 
Mission Indians, 480 U.S. 202 (1987). In addition, such a determination 
by EPA may result in the application of sanctions against States; it 
would be nonsensical to punish States where they lack authority over 
Indian country since States are powerless to remedy such a 
``deficiency.''
    In response to comments that some States may have authority over 
non-Indian activities on reservation fee lands, EPA believes that in 
the context of regulating air pollution, States generally will not have 
jurisdiction over these lands. See 63 FR at 7256-7257; 53 FR 43080 
(Oct. 25, 1988)(notice of denial of Washington department of Ecology 
UIC Program for Indian lands). Furthermore, as discussed above, EPA 
interprets the CAA as favoring unitary management of reservation air 
resources and delegating Federal authority to eligible Tribes to 
implement the CAA over all sources within reservations, including non-
Indian sources on fee lands. Accordingly, even if a State could 
demonstrate authority over non-Indian sources on fee lands, EPA 
believes that the CAA generally provides the Agency the discretion to 
federally implement the CAA over all reservation sources in order to 
ensure an efficient and effective transition to Tribal CAA programs and 
to avoid the administratively undesirable checkerboarding of 
reservations based on land ownership.
    Federal implementation of the title V program does not conflict 
with CAA sections 101 or 116. Neither of these provisions extends State 
jurisdiction into Indian country where it does not already exist. See 
Washington Department of Ecology v. EPA, 752 F.2d 1465 (9th Cir. 1985). 
The provision of section 101(a) cited by the commenter only expresses 
the general view that air pollution regulation is the primary 
responsibility of the States and localities. Congress has made it clear 
that for reservations and for non-reservation areas over which Tribes 
can demonstrate jurisdiction (generally including all non-reservation 
areas of Indian country), Tribes are the entities with primary 
responsibility to regulate air quality. See CAA section 301(d); S. Rep. 
No. 228, 101st Cong., 1st Sess. 79 (1989). EPA's implementation of the 
CAA where Tribes have yet to develop approvable programs is consistent 
with section 101(a). Furthermore, the approach finalized today does not 
conflict with section 116. Section 116 provides that the CAA does not 
preclude or deny the right of any State to adopt or enforce any 
standard or limitation respecting emissions of air pollutants or any 
requirement respecting control or abatement of air pollution. Broadly 
speaking, section 116 reserves to the States the right to set State 
emission standards and limitations that are more stringent than and/or 
in addition to Federal requirements. Section 116 does not preclude EPA 
from implementing CAA programs. As discussed in detail in section III.B 
below, this rule only addresses Federal implementation of the CAA. For 
purposes of this rulemaking, EPA does not believe it is necessary to 
resolve whether States are precluded from regulating air resources in 
Indian country solely under color of State law or whether the 
reservation of rights embodied in section 116 extends to Indian country 
in some cases.
    The EPA shares the concerns expressed by commenters about fair, 
efficient, and effective implementation of the CAA. In finalizing this 
rule, EPA sought to weigh and balance several objectives including: 
avoiding gaps in title V coverage; minimizing jurisdictional disputes; 
allowing for a smooth transition to Tribal programs; avoiding checker-
boarding of reservations; protecting Tribal sovereignty; minimizing 
uncertainty, delay, and expense for the regulated community; and 
maximizing efficient use of government expertise and resources. The EPA 
believes the approach finalized today best ensures that the CAA is 
implemented fairly, efficiently, and effectively in Indian country. See 
Washington Department of Ecology, 752 F.2d 1465 (9th Cir. 1985).
    The EPA disagrees with commenters who assert that there are policy 
reasons that should compel EPA to allow States to implement the title V 
program over Indian country lands, including non-Indian-owned fee lands 
within Indian reservations. One of EPA's primary policy objectives is 
to avoid gaps in title V coverage. This objective is not served by 
allowing States that generally lack authority to regulate air sources 
in Indian country, including non-Indian lands, to issue permits that 
may not be enforceable under Federal law. In addition, EPA does not 
believe the Agency has the authority to approve a State program in 
Indian country unless the State can demonstrate that it has authority 
over Indian country sources.

[[Page 8253]]

    The EPA's approach also advances the important policies of 
administrative clarity in the operation of the regulatory program, 
effective and efficient environmental management, and support of Tribal 
self-determination. Today's rule makes it clear that from the first day 
of the program in Indian country, EPA would be the relevant permitting 
authority for sources located in Indian country, until a part 70 
program is explicitly approved for the area. Except in rare cases, 
sources would be spared the delay and confusion caused by States 
attempting to construct and support CAA jurisdictional demonstrations 
over Indian country. Further, EPA has sufficient resources to implement 
the program in Indian country. Today's rule also avoids checkerboarding 
of regulatory authority within reservations. As stated above, EPA 
believes that Congress intended that EPA take a territorial view of 
implementing air programs within reservations. The EPA believes that 
air quality planning for a checkerboarded area would be more difficult 
and that it would be inefficient if a Tribe and a State were to 
exercise piecemeal regulation over tracts of land within a reservation, 
possibly with similar reservation sources being subject to different 
substantive requirements. EPA's policy provides for coherent and 
consistent environmental regulation within reservations.
    Today's rule also supports and preserves Tribal sovereignty through 
Federal implementation of the program until Tribes are delegated 
authority pursuant to the Tribal Authority Rule to regulate all air 
sources within their reservations. Consistent with EPA's Indian Policy, 
EPA generally will implement the program in Indian country until Tribal 
governments are willing and able to assume full responsibility for CAA 
programs. See EPA Indian Policy, reaffirmed by Administrator Browner on 
March 14, 1994.
    Today's rulemaking will allow for a smooth transition to Tribal 
implementation of title V programs. Apart from the question of whether 
States could even demonstrate CAA jurisdiction in Indian country, if 
EPA were to allow States to administer the program within reservations 
until Tribal programs were approved, EPA would need to complete two 
rounds of notice and comment rulemaking before taking a third round of 
rulemaking to approve the Tribal program. The first would be to 
explicitly approve State programs as covering reservations, and the 
second would be to subsequently withdraw program approvals for the same 
areas. This approach would be unwieldy as well as inconsistent with the 
Agency's interpretation of the CAA. Further, EPA believes that there 
would be less conflict between States and Tribes that administer title 
V programs if there was not a period of State administration. The EPA, 
nevertheless, strongly encourages Tribal and State cooperation in the 
development of Tribal part 70 programs through sharing technical 
expertise as well as information about sources and air quality issues. 
With the Agency's increasing emphasis on regional solutions to air 
quality issues, EPA supports Tribal and State efforts to jointly plan 
air protection strategies. The EPA believes the most supportive 
environment for collaborative efforts is one in which Tribes and States 
are not adversaries on the issue of who has jurisdiction to administer 
the title V program.
    The EPA understands the strong desire expressed by industry 
commenters to avoid having several regulating entities, e.g., EPA, a 
State, and a Tribe, seeking to assert regulatory authority over them. 
The EPA believes that Federal implementation of the title V program 
throughout Indian country will help provide certainty and clarity to 
regulated entities. While in some cases application of the Indian 
country standard may involve a detailed, case-specific analysis, the 
standard provides certainty. For example, Indian country clearly 
includes all lands within Indian reservations, including fee lands. The 
EPA believes that the vast majority of Indian country sources that are 
subject to the part 71 program are located within reservations. 
Therefore, it will be clear to most Indian country sources that they 
are subject to the part 71 program. In addition, there is a well-
developed body of Federal case law on the Indian country standard, 
including case law on the status of reservations, dependent Indian 
communities, and allotments.
    To provide additional certainty to regulated entities, EPA believes 
it is helpful to clarify the extent to which State title V programs 
have force in Indian country. The EPA makes clear today that the Agency 
interprets past approvals of State title V programs as not extending to 
Indian country unless that State has made an explicit demonstration of 
jurisdiction over Indian country, and EPA has explicitly approved the 
State's title V program for such area. This is consistent with 
Congress' requirement that EPA approve State and Tribal programs only 
where there is a demonstration of adequate authority. See CAA sections 
502(b)(5)(A) and (E) and 40 CFR 70.4(b)(3).3 Since States 
generally lack the authority to regulate air resources in Indian 
country, EPA does not believe it would be appropriate for the Agency to 
approve State CAA programs as covering Indian country where there has 
not been an explicit demonstration of adequate jurisdiction and where 
EPA has not explicitly indicated its intent to approve the State 
program for an area of Indian country. Thus, to the extent States or 
others may have interpreted past EPA approvals that were not based on 
explicit demonstrations of adequate authority and did not explicitly 
grant approval in Indian country, as approvals to operate part 70 
programs in Indian country, EPA wishes to clarify any such 
misunderstanding.4
---------------------------------------------------------------------------

    \3\ To obtain title V program approval, a State must demonstrate 
that it has adequate authority to issue and enforce permits that 
assure compliance by all sources required to have permits under 
title V with each applicable requirement under the CAA. See CAA 
sections 502(b)(5)(A) and (E); 40 CFR 70.4(b)(3). The program 
submission must include a legal opinion from the Attorney General 
from the State or the attorney for those State, local, or interstate 
air pollution control agencies that have independent counsel, 
stating that the laws of the State, locality, or interstate compact 
provide adequate authority to carry out all aspects of the program. 
This statement shall include citations to the specific statutes, 
administrative regulations, and where appropriate, judicial 
decisions that demonstrate adequate authority (40 CFR 70.4(b)(3)).
    \4\ On May 15, 1998, the State of Colorado Department of Law, 
Office of the Attorney General, submitted a document entitled 
``Supplemental Attorney General Opinion--Title V Program'' to the 
Regional Administrator of EPA Region VIII. This document requests 
that EPA extend approval of Colorado's interim approved title V 
program (60 FR 4563, January 24, 1995) to cover non-member-owned 
sources located on fee lands within the exterior boundaries of the 
Southern Ute Reservation. Colorado asserts that its request is 
supported by Public Law 98-290. Colorado did not submit the request 
as a comment on the proposed revisions to part 71 that are the 
subject of today's rulemaking. The EPA will respond to Colorado's 
request in a separate proceeding in accordance with the part 70 
provisions governing EPA review of submitted programs. Today's 
rulemaking does not constitute an EPA final action in response to 
Colorado's request and does not prejudge EPA's consideration of 
Colorado's request in any way.
---------------------------------------------------------------------------

    In State program approvals, EPA generally did not find that States 
had demonstrated authority to regulate sources in Indian country 
pursuant to part 70 programs. Although the language of program 
approvals on this issue varied, approvals of State programs typically 
excluded areas over which a Tribe has jurisdiction. Except where 
expressly noted, at the time EPA issued part 70 approvals, EPA did not 
find that the States whose programs were subject to the approvals had 
made an adequate showing of authority pursuant to CAA sections 
502(b)(5)(A) and (E) to justify approval of their programs in Indian 
country.

[[Page 8254]]

    In the 1997 proposal, EPA proposed to implement the program where 
there is a ``dispute'' as to whether a particular area is Indian 
country. However, EPA now believes the use of the term ``dispute'' may 
be misleading and inappropriate. For purposes of this rule, there may 
be, but need not be, a formal dispute, such as active litigation or 
other form of public disagreement, for EPA to consider the Indian 
country status of the area to be in question. Further, although it may 
be helpful for States and Tribes to submit information to EPA relative 
to their views, this information would not necessarily be dispositive 
as to EPA's judgment about whether the Indian country status of the 
area is in question. The EPA may be aware of questions regarding the 
area's status based on information from other sources such as the 
Department of the Interior (DOI) or other Federal agencies. Also, EPA 
emphasizes that EPA will not consider there to be a question about the 
status of areas that are clearly within the boundaries of an Indian 
reservation.
    The EPA's decision to implement the program in areas for which EPA 
believes there is a question of whether the area is Indian country will 
help achieve a number of important objectives. Federal implementation 
in such areas will ensure no gap in title V coverage. If it is unclear 
whether a Tribe or a State has authority over an area, EPA can ensure 
that the title V program has legal effect by implementing the program 
federally. See Underground Injection Control Programs for Certain 
Indian Lands, Final Rule, 53 FR 43096, 43097 (Oct. 25, 1988) (observing 
that where there is a dispute, both States and Tribes may disagree with 
each other's assertions of jurisdiction, thereby raising doubts as to 
whether either has enforcement authority over the area's sources).
    The EPA notes that disputes and uncertainty could prevent both the 
State and Tribe from effectively implementing the CAA title V program. 
Where a State and Tribe assert jurisdiction over an area whose Indian 
country status EPA believes is in question (and EPA has not resolved 
the question and has not explicitly approved a part 70 program as 
applying in the area), EPA would not view either the State or the Tribe 
as having satisfied the CAA section 502(b)(5) requirements to have 
adequate authority to issue permits that assure compliance with all CAA 
applicable requirements, and enforce such permits, with respect to the 
area. See 42 U.S.C. 7661a(b)(5)(A)-(E). Only when the State or Tribe 
prevails on the Indian country question would EPA then be able to 
conclude that the section 502(b)(5) requirements have been met for the 
area. Until that time, the absence of an approved part 70 program in 
the area necessitates implementation of part 71. By federally 
implementing the title V program in areas for which EPA believes the 
Indian country status is in question, EPA can help avoid jurisdictional 
disputes that might hinder effective implementation of the CAA. 
Furthermore, Federal implementation in such areas will help provide the 
regulated community with certainty as to which entity (EPA, the State 
or the Tribe) will implement the title V program.
    In addition, as discussed in detail below, EPA is providing a 
mechanism under this rule that will allow regulated entities to 
formally seek a determination from EPA as to whether or not they are 
covered by the part 71 program. This mechanism will help provide 
certainty and minimize delay and expense for regulated entities.
    Finally, EPA recognizes that, compared to States, the Agency has 
different expertise, and generally expends fewer resources for direct 
implementation of the CAA than for establishing national programs and 
conducting oversight. However, EPA notes that it has substantial 
experience with developing title V regulations and nationally-
applicable standards, issuing Prevention of Significant Deterioration 
(PSD) and acid rain permits to sources in Indian country, providing 
oversight of State title V and other CAA programs, and reviewing State-
issued title V permits. The EPA has the expertise and is committed to 
ensuring that the CAA is fully implemented in Indian country. In the 
preamble to the final Tribal Authority Rule, EPA outlines its strategy 
for full implementation of the CAA in Indian country. A short summary 
of the strategy is included in section III.B below.
    The EPA notes that the approach finalized today is not intended to 
preclude cooperative approaches between States and Tribes. To the 
contrary, Tribes and States are permitted and encouraged to cooperate 
in the implementation of the title V program, including by sharing 
financial and technical resources and expertise.

B. Effect of State Law

    Several commenters request that EPA clarify the effect of the part 
71 program on permits issued under State law. In general, State and 
industry commenters argue that the Federal operating permits program 
should not alter either the authority of States to regulate non-Indian 
sources operating on fee lands within reservations or the validity of 
permits issued to sources in Indian country under State law. Several 
commenters ask EPA to agree that a facility located in Indian country 
operating under a permit issued by a State agency which purports to 
limit the facility's potential to emit (PTE) to below the part 71 
applicability emission thresholds is a ``synthetic minor'' source that 
does not need to obtain a Federal operating permit.
    As EPA stated in the 1997 proposal, EPA believes that CAA section 
301(d)(2) clearly reflects Congress' decision to grant to eligible 
Tribes the authority to administer programs over all air resources 
within the exterior boundaries of a reservation and within areas 
outside of the reservation that are within a Tribe's jurisdiction. 
Until a Tribal program is approved, EPA believes that it should manage 
air quality in those areas for the reasons discussed in section III.A 
above. Consistent with this preference and the territorial approach 
favored by Congress, it follows that under EPA's approach to 
implementation of the CAA, State or local programs do not affect the 
applicability of Federal Clean Air Act requirements to sources in 
Indian country unless the programs are explicitly approved by EPA under 
the CAA as applying within Indian country. Where such approval is 
lacking, EPA will implement the CAA in Indian country except where a 
Tribal program is approved. It is EPA's position that unless EPA has 
explicitly approved the program as applying in Indian country, State or 
local permits for sources in Indian country (and limitations in such 
permits) are not effective for purposes of limiting PTE of sources such 
that they are not covered by the part 71 program, or for any other 
purpose under the CAA. The EPA is not taking a position in this 
rulemaking on whether State laws regulating air resources have effect 
in Indian country outside of the context of the CAA.
    The EPA also notes that its decisions on whether States have 
demonstrated authority in Indian country have already been made in 
approvals of individual State part 70 programs. Where States have not 
demonstrated authority in Indian country, EPA has limited the scope of 
its approval of the State program accordingly. The fact that a source 
has applied for or obtained a permit from a State or local program that 
has not been explicitly recognized by EPA as extending into Indian 
country but which purports to limit the PTE of the source does not 
alter the requirement under part 71 that the source apply to EPA for a 
Federal operating permit. The EPA expects all sources that meet the 
applicability

[[Page 8255]]

criteria of part 71 to apply to the appropriate EPA Regional Office for 
a Federal operating permit.
    Sources located in Indian country are already subject to applicable 
Federal CAA programs, such as the PSD program, New Source Performance 
Standards (NSPS) and National Emissions Standards for Hazardous Air 
Pollutants (NESHAP) issued under sections 111, 112, and 129 of the CAA, 
the acid rain program under title IV of the CAA, and requirements of 
title VI of the CAA. Nonetheless, EPA is aware that in the short term, 
some of the estimated 100 part 71 sources in Indian country will not be 
subject to substantive requirements that control their emissions. The 
EPA has a number of efforts underway on dual tracks to remedy this 
situation as part of the Agency's initiative to develop a comprehensive 
strategy for implementing the CAA in Indian country. This approach 
relies both on the development of Tribal air programs that will 
establish substantive control requirements and on EPA's direct 
implementation of new Federal requirements.
    For the first track, EPA has been providing technical and financial 
assistance to Tribal governments to build Tribal capacity to run EPA-
approved CAA permits programs and other CAA programs. For example, the 
Agency is working with both the Shoshone-Bannock and the Navajo Tribes 
to address pollution control of major sources on their reservations.
    In terms of Federal implementation, EPA will establish priorities 
for its direct Federal implementation activities by addressing as its 
highest priority the most serious threats to public health and the 
environment in Indian country that are not otherwise being adequately 
addressed.
    The EPA is in the process of developing a regulatory program for 
preconstruction review of minor sources that will establish, where 
appropriate, control requirements for sources that would be 
incorporated into part 71 permits. EPA anticipates that the program 
will offer sources located in Indian country the opportunity to accept 
enforceable limits on their PTE, and possibly thereby avoid the 
requirement to obtain a part 71 operating permit or a pre-construction 
permit under the PSD program. The EPA is also working on nationally 
applicable regulations for major source preconstruction permitting in 
non-attainment areas that would apply to sources in Indian country.
    To establish additional applicable, federally-enforceable emission 
limits, the EPA Regional Offices will promulgate Federal implementation 
plans that will establish Federal requirements for sources in specific 
areas, where appropriate. The Regional Offices will carry out this 
process in a prioritized manner without unreasonable delay, beginning 
with facilities that pose the greatest threat to public health or the 
environment and in instances where the Tribal government raises 
important considerations.
    Further, EPA plans to extend its January 25, 1995 transition policy 
for PTE limits to sources located in Indian country where they maintain 
emissions of less than 50 percent of all applicable major source 
emissions thresholds. Under this policy, sources located in Indian 
country that meet the criteria and record keeping requirements outlined 
in the policy memorandum would not be considered major sources for 
purposes of the part 71 program for an interim period until EPA or a 
Tribe adopts and implements a mechanism that can be used to limit a 
source's PTE. This policy will ensure that early implementation of the 
part 71 program can focus attention on creating high-quality permits 
and Federal implementation plans for higher-emitting part 71 major 
sources.

C. Determining Whether Sources Are Subject to the Federal Program

    The discussion below explains how EPA will decide in particular 
cases whether sources are located in Indian country and communicate to 
sources that they are expected to submit permit applications to their 
appropriate EPA Regional Office. The approach adopted in today's rule 
is essentially the one contained in the March 1997 proposal. In 
addition, today's rule establishes procedures for sources to obtain 
individual determinations from EPA as to whether they are subject to 
the program. Like the permitting procedures themselves, however, these 
procedures are not intended to provide a forum in which the Agency is 
required to resolve all questions about whether an area is Indian 
country. Moreover, a source owner or operator's decision to request 
that the Agency make an applicability determination will not stay the 
effectiveness of the part 71 program for the source.
1. The 1995 Proposal
    Under the 1995 proposal, 90 days prior to the effective date of any 
Federal part 71 program in a ``Tribal area,'' EPA would have notified 
interested governmental entities of the proposed geographic scope of 
the Federal program. Where the program would solely address sources 
within a reservation, the notice would have specified the boundaries of 
the reservation. But where the program would cover off-reservation 
areas, the notice would have relied upon the Tribe's basis for 
asserting jurisdiction. Governmental entities would have had 15 days in 
which to submit written comments to EPA regarding any disagreement 
concerning the boundaries of the reservation, with up to an additional 
15 days to comment regarding disagreements about off-reservation areas 
over which the Tribe had claimed jurisdiction. The EPA would then have 
decided the scope of the Tribe's jurisdiction. Where disputes were not 
resolved, EPA would have implemented part 71 in areas that were not 
subject to competing jurisdictional claims. Final determinations of the 
scope of Tribal jurisdiction would have been published in the Federal 
Register at least 30 days prior to the effective date of the part 71 
program in the ``Tribal area.'' See proposed 71.4(b)(1)(i)-(vi), 60 FR 
20804, 20831-20832 (April 27, 1995). These provisions were not adopted 
in the July 1996 final rule which announced that EPA would revisit in a 
subsequent notice the issue of how EPA would make decisions regarding 
whether sources are located in Indian country and are subject to the 
program.
2. The 1997 Proposal
    The 1997 proposal, in order to be more consistent with EPA's 
general policy on implementing environmental programs in Indian 
country, proposed that EPA would not conduct area-specific rulemaking 
procedures to assess the boundaries of programs in Indian country. 
(See, e.g., 40 CFR 144.3, 147.60(a) regarding EPA implementation of UIC 
programs on ``Indian lands,'' defined equivalently to ``Indian 
country.'') Instead, EPA's action to establish part 71 in Indian 
country would occur through today's generally applicable national 
rulemaking. Specific ``boundary'' questions relating to applicability 
of the program to particular sources would be addressed through a less 
formal consultation process involving, as appropriate, DOI, Tribes, 
States and relevant stakeholders. Rather than requiring the Agency to 
notify interested governmental entities of the proposed geographic 
scope of programs, EPA would make case-specific determinations on 
whether particular sources are in Indian country. Prior to the 
effective date of the part 71 program, EPA would undertake similar 
kinds of outreach efforts as those taken by States and local 
governments under part 70 programs, notifying sources that

[[Page 8256]]

the Agency believed were subject to the program. In addition, under 
section 71.4(g), EPA would publish an informational notice of the 
effective date of the part 71 program for sources in Indian country. 
Finally, EPA proposed that in cases of disagreement about whether an 
area is Indian country, EPA would administer part 71 in the area 
pending resolution of the area's Indian country status, and would, to 
the extent possible, resolve such issues in the context of permitting 
sources. See 62 FR 13748, 13750-13751 (March 21, 1997).
3. Comments on the 1997 Proposal
    The EPA received numerous comments regarding the way the 1997 
proposal addressed how EPA would determine whether sources are subject 
to the Federal program. In general, State and local government 
regulatory agencies and industry commenters favor requiring individual 
notice and comment rulemaking procedures to establish the geographic 
boundaries of each area where the Federal program applies, and prefer 
the approach discussed in the 1995 proposal or procedures similar to 
it. These commenters argue that the boundaries of Federal programs 
should be set through case-by-case notice and comment procedures and 
ascertained with geographical certainty before establishing programs, 
in order to avoid imposing inappropriate costs and undermining clarity 
and certainty for sources. Some argue that EPA's planned reliance on 
Bureau of Indian Affairs (BIA) maps is misplaced due to the alleged 
inaccuracy of this information. These commenters suggest that the 
determination of geographic boundaries is a contested, fact-specific 
inquiry that requires notification of appropriate governmental 
entities, sources and the relevant public. They assert that the rule 
should provide for delay of implementation until such questions are 
resolved. Without this, the commenters argue, EPA would produce poor 
jurisdictional decisions and frustrate title V's goals of clarity and 
certainty for sources.
    These commenters also believe that at the time EPA notifies sources 
that they are subject to part 71, EPA should also notify relevant 
States who may already be attempting to regulate these sources. They 
assert that because of the perceived ambiguity concerning the scope of 
Tribal or EPA authority under the CAA, many States may be implementing 
title V in areas where EPA would consider them not to have 
jurisdiction. This means that States need to be aware of jurisdictional 
issues so that they can work with EPA and Tribes to resolve 
jurisdictional questions without leaving the regulated sources caught 
in uncertainty and having unintended fiscal impacts on States to which 
sources have paid title V fees.
    Several State and industry commenters believe that EPA should 
return to the 1995 proposed rule's approach of requiring Tribes to 
demonstrate jurisdiction before EPA would implement part 71 in off-
reservation areas. These commenters argue that the only clear 
boundaries in Indian country are recognized reservation boundaries. 
They also contend that if Tribes claim jurisdiction beyond the 
reservation, they must provide the factual and legal basis for their 
inherent authority over such resources with clarity and precision 
before the Tribe, and hence EPA, can regulate them. One such commenter 
argues that this approach is required by the language of CAA section 
301(d)(2)(B). Another argues that the shift of jurisdictional proof to 
States regarding non-reservation trust lands results in EPA presuming 
jurisdiction where none may exist. Another commenter asserts that this 
result, as opposed to the approach of the 1995 proposal, is 
inappropriate in light of the long history of competing jurisdictional 
claims concerning current and former Indian lands.
    Some commenters believe that placing the burden on the source to 
assess whether it is in Indian country is unfair, given the 
uncertainties and the costs of applying for permits, and that it will 
therefore be difficult for sources to determine whether they are 
subject to the part 71 program or the corresponding State part 70 
program. Other commenters argue that sources who mistakenly apply for 
State part 70 permits, rather than Federal part 71 permits, should not 
be subject to liability; furthermore, their part 70 permits should be 
deemed valid part 71 permits until the time for permit renewal, at 
least where EPA's initial determinations of geographic borders are 
later found to be incorrect.
    As discussed in Section III.A above, many State and industry 
commenters contend that EPA should run part 71 in areas where the 
Indian country status is in question only if the State has not 
attempted to apply its part 70 program there. These commenters argue 
that this would allow State part 70 programs to be used to resolve 
jurisdictional questions in the permitting process, would avoid 
situations where permitting responsibility shifts back to the State if 
the State prevails in its jurisdictional claim, and would leave the 
``status quo'' in place until a Tribe successfully demonstrates 
jurisdiction in the area. Moreover, these commenters assert that the 
regulation should specify the guidelines EPA will use to review and 
settle questions regarding an area's Indian country status. Due to 
EPA's trust responsibility toward Indian Tribes, these commenters 
believe that EPA may not be able to act as an impartial judge in 
resolving jurisdictional questions. The commenters argue that since EPA 
has limited expertise in defining the scope of Indian country, the 
method EPA develops should afford ample time for States and sources to 
receive notice and present all necessary information before the Agency 
makes a jurisdictional decision.
    Finally, Tribal commenters generally support the 1997 proposal and 
suggest that States and sources should not have difficulty in 
discerning the boundaries of Indian reservations, which are delineated 
on updated BIA maps. Tribes also suggest that EPA could use Tribes to 
give notice to sources on reservations, and that this, in combination 
with publication of a general notice of the effectiveness of part 71 in 
Indian country pursuant to Sec. 71.4(g), would provide sufficient 
notice to sources that they need to submit Federal permit applications 
to EPA.
4. EPA's Responses and Description of Final Rule
    In most cases, determining whether sources are located within 
Indian country will be straightforward and non-controversial. That is, 
in the majority of cases EPA and sources will be able to easily 
determine whether a source is located within the exterior boundaries of 
a reservation or on land that a court or DOI has said is Indian country 
(which could include dependent Indian communities). These assessments 
can be verified through consultation with DOI and will be informed by 
data and materials received from States, surveys, DOI and Tribes. In 
the rarer, more complex factual cases such as those involving pending 
diminishment issues and dependent Indian community issues, EPA in 
appropriate cases will work with DOI, Tribes and stakeholders (e.g., 
States, local governments, sources, and environmental organizations) to 
assess whether sources are located in Indian country or areas for which 
EPA believes the Indian country status is in question. After EPA has 
reviewed the relevant materials, the Agency will send letters to 
sources that EPA believes are located in such areas or in Indian 
country, indicating that they are expected to

[[Page 8257]]

submit a Federal title V permit application within one year of the 
program's effective date (or some earlier time as established by the 
EPA Regional Office). Copies of these notices will be sent to 
interested State, local and Tribal governments. However, if EPA fails 
to notify some sources that are subject to the program, note that it is 
the source's responsibility to ascertain whether it is subject to part 
71 and submit any required permit application. The addition in today's 
rule of provisions allowing sources to request that EPA answer 
applicability questions is designed to make it easier for sources to 
meet this responsibility and essentially can be used to partly shift 
the burden of accurately determining program applicability from the 
source to EPA.
    As a result of today's national rulemaking establishing the part 71 
program throughout Indian country, and in light of the process 
discussed above, EPA has decided that it would be administratively 
unnecessary and infeasible to conduct additional iterative notice and 
comment rulemakings for each case in which EPA is discerning whether 
particular sources or areas fall within the geographic boundaries of 
Indian country. Under other Federal environmental programs, the Agency 
has taken the same basic approach as is being adopted today and has not 
made individual determinations of the boundaries of Indian country 
through case-specific rulemaking actions, beyond generally identifying 
the area of Indian country in which the Federal program was being 
established. See, e.g., Underground Injection Programs for Certain 
Indian Lands, Final Rule, 53 FR 43096 (Oct. 25, 1988).
    Since EPA takes the position that State and local part 70 programs 
do not, for CAA purposes, extend into Indian country unless the Agency 
has explicitly approved the programs as extending into Indian country, 
EPA does not generally expect that sources located in Indian country 
will be confused about whether they are covered by a State part 70 or 
EPA part 71 Clean Air Act program. This is especially true for sources 
located in Indian country that are already covered by EPA-administered 
PSD plans under title I or acid rain programs under title IV of the 
CAA. States should be fully aware of whether EPA has explicitly 
approved their part 70 programs as applying in Indian country.
    In addition, EPA is adding certain provisions to today's final rule 
that will make it easier for sources to learn whether they are subject 
to the Federal program, and that may reduce the expense of the program 
for some sources that have paid permit fees to a State agency. Finally, 
in response to the comments, EPA will notify relevant State, local, and 
Tribal governments at the same time the Agency notifies individual 
sources that they are subject to the Federal program.
    The EPA does not agree with State and industry commenters that the 
1995 proposal took the correct approach of requiring Tribes to 
demonstrate jurisdiction in off-reservation areas before EPA's Federal 
jurisdiction would attach. First, as discussed in section III.A above, 
EPA's authority to administer the part 71 program is based on EPA's 
broad authority to protect air quality within Indian country, and does 
not depend on a jurisdictional showing by a Tribe. In addition, if EPA 
were to administer a part 71 program only where Tribes come to EPA to 
demonstrate jurisdiction, there would be some non-reservation areas of 
Indian country that lack a permitting authority with jurisdiction to 
implement a title V program. The EPA's view is that no State CAA 
programs apply in Indian country unless explicitly approved as such, 
and that a State attempt to regulate under color of the CAA in non-
reservation Indian country during this temporal ``gap'' would result in 
State-issued permits that could not be enforced under the CAA. Only by 
EPA assuming responsibility to issue permits in these situations can 
the gap be filled and national title V coverage be achieved. Finally, 
EPA believes it would be an unnecessary burden on Tribes to require 
that they submit jurisdictional demonstrations over off-reservation 
areas in order to establish EPA's Federal jurisdiction, which can be 
more easily established through today's rule.
    The EPA appreciates that some sources, especially those located in 
areas over which States have attempted to exert regulatory authority, 
may feel burdened by the duty to correctly identify whether they are 
subject to the Federal program. However, as discussed in section III.A 
above, EPA believes that the most appropriate approach to take in order 
to ensure nationwide coverage of title V is to apply the part 71 
program in all areas except where a State or Tribal program has been 
explicitly approved.
    In response to industry comments and in order to minimize 
uncertainty and burden for sources, EPA is adding in today's final rule 
regulatory provisions that will allow sources that are uncertain 
regarding program applicability to submit requests to the Agency for 
applicability determinations. This process would be similar to those 
that exist under other CAA programs, such as NSPS and NESHAP programs 
under sections 111 and 112, and the acid rain program under title IV. 
See, e.g., 40 CFR 60.5, 61.06, 72.6(c). Under today's rule, any source 
operator or owner who is uncertain regarding coverage of part 71 for 
any reason (including, for example, uncertainty regarding whether the 
source is a major source) could request in writing prior to the 
issuance of a part 71 permit that EPA make an applicability 
determination. The request must include an identification of the source 
and relevant and appropriate facts about the source and must be 
certified in accordance with section 71.5(d). Sources should include 
all information that they wish to be part of the record for EPA's 
applicability determination. This could include information provided by 
State, local, and Tribal governments.
    With respect to issues concerning whether a source is in Indian 
country or an area for which EPA believes the Indian country status is 
in question, EPA would evaluate the source's request, along with other 
relevant information that EPA has assembled for the applicability 
determination record. For example, EPA may consider treaties, maps, and 
information submitted by State, local, and Tribal governments. Upon 
request, EPA would make the record available to Tribes, States, and 
relevant stakeholders prior to making the applicability determination. 
The EPA would issue a written determination stating either that the 
source is subject to the part 71 program as of the program's effective 
date because it is located in Indian country or an area for which EPA 
believes the Indian country status is in question, or that the source 
is not located in an area covered by the part 71 program, and thus may 
be subject to the State or local program. The EPA believes that this 
process is consistent with the title V goals of providing clarity and 
certainty for sources and represents a practical method for addressing 
uncertainties regarding boundaries of Indian country. It also affords 
opportunities for sources and other stakeholders to get their views and 
information before the Agency.
    The EPA stresses that any sources that are uncertain regarding part 
71 program applicability should submit timely permit applications since 
submission of a request for an applicability determination will not 
stay the effectiveness of part 71 with respect to the source. In order 
to obtain the ``application shield'' under CAA section 503(d) that 
allows a source to continue to operate after the effective date of the 
Federal title V program, timely

[[Page 8258]]

submission of a Federal permit application is required.
    Moreover, as discussed in detail elsewhere in today's notice, EPA 
is taking another measure in response to industry comments to minimize 
the burden on sources located in areas for which EPA believes the 
Indian country status is in question. For those sources, EPA may reduce 
the Federal title V permitting fee where the sources have paid fees to 
State permitting authorities that have asserted CAA regulatory 
authority over them. This approach will ensure that sources in such 
areas will be issued federally enforceable title V permits, without 
financially overburdening sources that have yielded to State attempts 
to assert jurisdiction under color of a part 70 program.

IV. Changes From the Proposed Rules and the 1996 Final Rule

    Today's final rule is similar to the 1997 proposal in most 
respects. Instances in which the final rule departs from the 1995 and 
the 1997 proposals and the 1996 final rule are noted below.

A. Geographic Area Subject to the Part 71 Program

    The EPA today adds a definition of the term ``Indian country'' as 
it is defined in 18 U.S.C. Sec. 1151. The EPA notes that although the 
definition of Indian country appears in a criminal code, it has been 
extended to civil judicial and regulatory jurisdiction (DeCoteau v. 
District County Court, 420 U.S. 425, 427 n. 2 (1975). See also 40 CFR 
144.3).
    In addition, EPA is not adopting the proposed definition of the 
term ``Tribal area'' (from the 1995 proposal) because the term is not 
relevant to the approach taken in today's rulemaking for defining the 
geographical area for which EPA will administer a part 71 program. 
Accordingly, EPA revised several regulatory provisions that included 
the undefined term ``Tribal area,'' including the definition of 
``Affected State'' in Sec. 71.2, Sec. 71.4(a), Sec. 71.4(b), 
Sec. 71.4(b)(2)-(3), Sec. 71.4(f), Sec. 71.4(h)-(j), Sec. 71.8(a), and 
Sec. 71.8(d), and replaced that term with language to reflect the 
program's applicability in Indian country.
    Also, with respect to section 71.8(d) and the definition of 
``Affected State,'' EPA is adopting language consistent with CAA 
section 505(a)(2) and the 1996 final rule in lieu of the language in 
the 1997 proposal that misstated the criteria for States and Tribes to 
receive notices. The permitting authority will be required to provide 
notices of draft permits to Tribes pursuant to Sec. 71.8(d) and to 
affected States if (1) their air quality may be affected by the 
permitting action and they are contiguous to the jurisdiction in which 
the part 71 permit is proposed or (2) they are located within 50 miles 
of the permitted source.
    In addition, EPA has added language to section 71.4(b) that 
clarifies that for purposes of administering the part 71 program, EPA 
will treat areas for which EPA believes the Indian country status is in 
question as Indian country.
    Proposed Sec. 71.4(b)(1) from the 1995 proposal that referred to 
Tribal assertion of jurisdiction is not adopted since a Tribe's 
assertion of jurisdiction is not a relevant consideration under today's 
rulemaking. Instead, pursuant to Sec. 71.4(b), EPA will administer the 
part 71 program within Indian country even where the Tribe has not 
demonstrated to EPA its jurisdiction over the area.
    Also, as discussed in section III.C of today's notice, provisions 
from the 1995 proposal that would have required EPA to notify State, 
local, and Tribal governmental entities of the proposed geographic 
boundaries of the program are inappropriate and have not been adopted. 
Consistent with the Agency's policy with respect to administering 
environmental programs in Indian country, EPA will not solicit comment 
on the boundaries of the program through subsequent rounds of 
rulemaking. See, e.g., 40 CFR 144.3, 147.60(a) (EPA administers 
Underground Injection Control program on ``Indian lands,'' defined 
equivalent to ``Indian country''). Rather, EPA will determine whether 
specific sources are within Indian country or areas for which EPA 
believes the Indian country status is in question and are therefore 
subject to the part 71 program. The EPA will provide notices to sources 
informing them of the deadline to submit part 71 permit applications 
and will send copies of the notices to State, local and Tribal 
governments.

B. Applicability Determinations

    As discussed in section III.C of today's notice, in response to 
industry concerns that it may be difficult to determine whether a 
source is located in Indian country, the final rule adopts a provision, 
Sec. 71.3(e), that provides that a source may formally request that EPA 
determine whether or not the source is subject to the part 71 program.

C. Permit Fee Relief

    Today's rule adds a section that authorizes EPA to reduce part 71 
fees for sources that are located in areas for which EPA believes the 
Indian country status is in question and that have paid part 70 fees to 
a State or local permitting authority that has attempted to apply its 
part 70 program in the area. A commenter expressed concern about the 
fiscal impact on State part 70 programs that may result when sources 
that have paid fees to the State become subject to the part 71 program. 
In cases where it is not certain that a source is located in Indian 
country, the State may be reluctant to discontinue regulating and 
charging fees to the source. Industry commenters also generally stated 
that where there is disagreement regarding whether a source is subject 
to Federal jurisdiction, it would be burdensome for the source to 
comply with the requirements of two permit programs.
    The EPA's primary goal in regulating sources in areas for which EPA 
believes the Indian country status is in question is to make sure that 
all title V sources are covered by permits enforceable under the CAA. 
The EPA believes that issuing part 71 permits to sources in such areas 
is the only way to assure that all title V sources are subject to 
enforceable permit terms, given that State permit regulations are 
generally unenforceable in Indian country under the CAA. However, EPA 
agrees with the commenters that sources should be afforded some relief 
from the financial hardship that may result while the Indian country 
status of the area is unclear, particularly since relieving sources of 
some of this burden would have no adverse environmental impact provided 
the source is paying an adequate aggregate title V fee. Where the 
Indian country status, in EPA's judgement, is in question, EPA may 
reduce the part 71 permit fee under Sec. 71.9(p), upon application of 
the source. In implementing this section, EPA may reduce the fee the 
source would have owed under Sec. 71.9(c) by the amount of permit fees 
paid to a State or local agency. The fee reduction will cease if the 
area is later determined to be Indian country.

D. Duty to Administer the Part 71 Program

    Today EPA is adopting language in Sec. 71.4(b) to clarify that EPA 
will (instead of ``may'') administer the part 71 program in Indian 
country unless a part 70 program has been given full or interim 
approval. The 1995 proposal and the final rule had used the phrase 
``may administer.'' As explained in the 1997 proposal, EPA had intended 
this language to authorize early implementation of the part 71 program 
(in advance of the November 15, 1997 default effective date for the 
program) and did not mean to imply that the regulation would allow EPA 
to choose to not administer the program in Indian country.

[[Page 8259]]

E. Publication of Notice of Final Permitting Actions

    Today's rulemaking includes a technical amendment to Sec. 71.11 
that adds a provision (Sec. 71.11(l)(7)) requiring EPA to publish 
notice of any final permitting action regarding a part 71 permit in the 
Federal Register. This amendment is to make the rule more consistent 
with the 40 CFR part 124 requirements that apply to EPA issuance of PSD 
permits and to implement the provisions of CAA section 307(b)(1). The 
time period in which petitioners can file petitions for review of final 
permits in the Court of Appeals will run for 60 days from the date of 
publication of the notice of final permit action.
    This amendment is being made without first being proposed because 
it is technical in nature and imposes no new requirements on sources 
and because it is in the public interest to adopt this correction to 
part 71 more quickly than could be achieved by using notice and comment 
procedures, which in this case are impracticable, unnecessary, and 
contrary to the public interest.

F. Technical Amendment to Sec. 71.4(f)

    The EPA intended that this provision would allow EPA the 
flexibility to meld portions of a State or Tribal permit program with 
provisions of part 71 to create a part 71 program that fits the needs 
of the area for which it is being administered, regardless of whether 
the State or Tribal program had gained EPA approval. However, the 
provision as finalized in the 1996 final rule could be read to not 
allow this result. Strictly read, it allows EPA to use portions of a 
``State or Tribal program'' (defined in Sec. 71.2 to mean EPA-approved 
programs) in combination with provisions of part 71 to administer a 
Federal program. To achieve its intended result, EPA is revising the 
regulatory language to refer to a ``State or Tribal permit program.'' 
By avoiding the defined term ``State or Tribal program,'' the provision 
as amended by today's rulemaking authorizes EPA to develop a part 71 
program by combining either an approved or unapproved permit program 
with provisions of part 71.
    This amendment is being made without first being proposed because 
it is technical in nature and imposes no new requirements on sources 
and because it is in the public interest to adopt this correction to 
part 71 more quickly than could be achieved by using notice and comment 
procedures, which in this case are impracticable, unnecessary, and 
contrary to the public interest.

G. Effective Date of Program

    Because today's rulemaking was not finalized prior to November 15, 
1997 as EPA had intended, Sec. 71.4(b)(2) is amended to provide that 
the effective date of a part 71 program in Indian country is 30 days 
following the publication of today's rulemaking. For similar reasons, 
language in Sec. 71.4(b)(3) which allowed EPA to adopt an earlier 
effective date for the program than November 15, 1997 has been deleted. 
Section 71.4(b)(4) has been renumbered as Sec. 71.4(b)(3).
    This amendment is being made without first being proposed because 
it is technical in nature and imposes no new requirements on sources 
and because it is in the public interest to adopt this correction to 
part 71 more quickly than could be achieved by using notice and comment 
procedures, which in this case are impracticable, unnecessary, and 
contrary to the public interest.

V. Administrative Requirements

A. Docket

    The docket for this regulatory action is A-93-51. The docket is an 
organized and complete file of all the information submitted to or 
otherwise considered by EPA in the development of this rulemaking.

B. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant'' regulatory action as 
one that is likely to lead to a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or Tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan program or the rights and obligation of recipients 
thereof;
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is not a ``significant'' regulatory action 
because it does not raise any of the issues associated with 
``significant'' regulatory actions. The rule will have a negligible 
effect on the economy and will not create any inconsistencies with 
other actions by other agencies, alter any budgetary impacts, or raise 
any novel legal or policy issues. For these reasons, this action was 
not submitted to OMB for review.

C. Regulatory Flexibility

    The Regulatory Flexibility Act generally requires an agency to 
conduct a regulatory flexibility analysis of any rule subject to notice 
and comment rulemaking requirements unless the agency certifies 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 small governmental jurisdictions. 
This final rule will not have a significant impact on a substantial 
number of small entities. In developing the original part 70 
regulations and the proposed revisions to part 70, the Agency 
determined that they would not have a significant economic impact on a 
substantial number of small entities. See 57 FR 32250, 32294 (July 21, 
1992), and 60 FR 45530, 45563 (August 31, 1995). Similarly, the same 
conclusion was reached in an initial regulatory flexibility analysis 
performed in support of the 1996 part 71 rulemaking. See 61 FR 34202, 
34227 (July 1, 1996). A small subset of sources subject to the part 71 
rule are affected by today's rulemaking.
    The prior screening analyses for the part 70 and part 71 rules were 
done on a nationwide basis without regard to whether sources were 
located within Indian country and are, therefore, applicable to sources 
in Indian country. Accordingly, EPA believes that the screening 
analyses are valid for purposes of today's final rule. And since the 
screening analyses for the prior rules found that the part 70 and 71 
rules as a whole would not have a significant impact on a substantial 
number of small entities, today's rule, which will affect a much 
smaller number of entities than affected by the earlier rules, also 
will not have a significant impact on a substantial number of small 
entities. The reasons for this conclusion are discussed in more detail 
below.
    At this time, there are very few nonmajor sources that are required 
by part 71 to obtain an operating permit. The Agency has also issued 
several policy memoranda explaining or providing mechanisms for sources 
to become ``synthetic minors'' whereby the source is recognized for not 
emitting pollutants in major quantities. The EPA plans to extend its 
January 25, 1995

[[Page 8260]]

transition policy for PTE limits to sources located in Indian country 
where they maintain emissions of less than 50 percent of all applicable 
major source emissions thresholds. The sources covered by the policy 
thereby avoid the requirement to obtain a part 71 permit.
    Because of the deferral of permitting requirements for nearly all 
nonmajor sources, today's rulemaking would affect only a small number 
of sources. Although firm figures on the number of title V sources in 
Indian country are not available, preliminary estimates suggest that 
there may be only approximately 100 major sources and 450 nonmajor 
sources (with permitting requirements deferred for nearly all nonmajor 
sources).
    The EPA believes that four Tribal governments may own sources that 
could be subject to today's rule and that consequently the rule would 
at most affect four of the more than 500 federally recognized Tribal 
governments or fewer than 1 percent of those governments. The EPA 
estimates that the compliance cost for sources subject to this rule is 
$18,425 per source or $73,700 for the four sources owned by Tribal 
governments.
    Consequently, I hereby certify that this action will not have a 
significant economic impact on a substantial number of small entities.

D. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has approved the 
information collection requirements contained in this rule under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and 
has assigned OMB control number 2060-0336. A copy of the Information 
Collection Request Document may be obtained from Sandy Farmer, OPPE 
Regulatory Information Division (2137), U.S. Environmental Protection 
Agency, 401 M Street, S.W., DC 20460 or by calling (202) 260-2740. The 
information requirements are not effective until OMB approves them.
    The information is planned to be collected to enable EPA to carry 
out its obligations under the Act to determine which sources in Indian 
country are subject to the Federal Operating Permits Program and what 
requirements should be included in permits for sources subject to the 
program. Responses to the collection of information will be mandatory 
under section 71.5(a) which requires owners or operators of sources 
subject to the program to submit a timely and complete permit 
application, and under sections 71.6(a) and (c) which require that 
permits include requirements related to record keeping and reporting. 
As provided in 42 U.S.C. 7661(e), sources may assert a business 
confidentiality claim for the information collected under CAA section 
114(c).
    Today's rulemaking will impose information collection request 
requirements on approximately 100 sources in Indian country. The EPA 
believes that four of these sources may be owned or operated by Tribal 
governments. On a per source basis, the burden will be identical to the 
burden for sources currently subject to part 71 requirements. In the 
Information Collection Request (ICR) document for the July 1996 final 
part 71 rule (ICR Number 1713.02), EPA estimates that the annual burden 
per source is 329 hours, and the annual burden to the Federal 
government is 243 hours per source. Therefore, the impact of today's 
rulemaking will be that sources will incur an additional 32,900 burden 
hours per year, and EPA will incur an additional 24,300 burden hours 
per year. The total annualized cost will be $18,425 per source or 
$1,842,500. Of this amount, the total annualized cost for Tribal 
governments would be $73,700.
    Today's rule imposes no burden on State or local governments and no 
burden on Tribal agencies, except those that happen to own or operate 
sources subject to this rule as noted above. Burden means the total 
time, effort, or financial resources expended by persons to generate, 
maintain, retain, or disclose or provide information to or for a 
Federal agency. This includes the time needed to review instructions; 
develop, acquire, install, and utilize technology and systems for the 
purposes of collecting, validating, and verifying information; 
processing and maintaining information, and disclosing and providing 
information; adjust the existing ways to comply with any previously 
applicable instructions and requirements; train personnel to be able to 
respond to a collection of information; search data sources; complete 
and review the collection of information; and transmit or otherwise 
disclose the information. An Agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number. The OMB 
control numbers for EPA's regulations are listed in 40 CFR part 9 and 
48 CFR Chapter 15.

E. Unfunded Mandates Reform Act

    Today's action imposes no costs on State or local governments and 
no costs on Tribal governments, except those that happen to own or 
operate sources that are subject to this rule, as noted below. This 
rule establishes the Agency's approach to issuing permits to sources in 
Indian country and eliminates the proposed requirement that Indian 
Tribes establish their jurisdiction prior to EPA administering the 
Federal operating permits program in Indian country.
    The EPA has estimated in the ICR document that the Federal 
operating permits program rule promulgated in July 1996 would cost the 
private sector $37.9 million per year. See 61 FR 34202, 34228 (July 1, 
1996). In the ICR, EPA estimates costs based on sources that would be 
subject to part 71 permitting requirements in eight States but 
overestimates the number of these sources for purposes of simplifying 
the analysis. See 61 FR 34202, 34227 (July 1, 1996). The overestimate 
of the number of sources is nearly as large as the number of new 
sources covered by today's rule. Consequently, EPA believes today's 
rule would increase the direct cost of the part 71 rule for industry to 
$38.3 million. This estimate is based on the average cost of compliance 
per source and the number of sources in Indian country that were not 
accounted for in the original estimate.
    The EPA believes that four Tribal governments may own or operate 
sources that could be subject to today's rule. The EPA estimates the 
compliance cost for these governments would be $18,425 per source or 
$73,700 for the four sources owned by Tribal governments.
    The EPA has determined that today's action does not contain a 
Federal mandate 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 1 year. Therefore, the Agency concludes that it 
is not required by section 202 of the Unfunded Mandates Reform Act of 
1995 to provide a written statement to accompany this regulatory 
action.

F. Submission to Congress and the General Accounting Office

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. The EPA will submit a report containing this rule and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal

[[Page 8261]]

Register. This rule is not a ``major rule'' as defined by 5 U.S.C. 
804(2).

G. Executive Order 13045

    Executive Order 13045 ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1977) applies 
to any rule that: (1) is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This final rule is not subject to E.O. 13045 because it is not an 
economically significant rule as defined by E.O. 12866 and because it 
does not involve decisions based on environmental health risks or 
safety risks.

H. Executive Order 12875: Enhancing Intergovernmental Partnership

    Under Executive Order 12875, EPA may not issue a regulation that is 
not required by statute and that creates a mandate upon a State, local 
or Tribal government, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments or EPA consults with those governments. If EPA complies by 
consulting, Executive Order 12875 requires EPA to provide to the Office 
of Management and Budget a description of the extent of EPA's prior 
consultation with representatives of affected State, local and Tribal 
governments, the nature of their concerns, any written communications 
from the governments, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 12875 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of State, local and Tribal governments ``to provide 
meaningful and timely input in the development of regulatory proposals 
containing significant unfunded mandates.''
    The EPA has concluded that this rule will create a mandate on 
tribal governments that happen to own or operate sources that are 
covered by the rule and that the Federal government will not provide 
the funds necessary to pay the direct costs incurred by such Tribal 
governments in complying with the mandate. The EPA believes that there 
are just four sources owned by Tribal governments that will be subject 
to this rule and that must submit permit applications and obtain part 
71 permits. In developing this rule, EPA consulted with Tribal 
governments to enable them to provide meaningful and timely input in 
the development of this rule. Prior to the publication of the 1995 
proposal, EPA shared a summary of the draft proposal and solicited 
input from attendees at a national Tribal environmental conference, as 
well as from approximately 300 Tribal leaders. The EPA mailed the 1995 
and 1997 proposals and fact sheets to Tribal leaders, encouraging 
Tribal comment on the proposals. In addition, EPA discussed the 
proposed rulemaking and sought input from EPA's Tribal Operations 
Committee, composed of Tribal leaders as well as EPA managers.
    Tribes were generally very supportive of the rule and EPA's 
interpretation of the CAA on the issues of Federal authority and Tribal 
authority to regulate air quality in Indian country. The issues raised 
by Tribal commenters did not relate to the mandate imposed by this rule 
on Tribal governments that own or operate sources subject to the rule. 
The major concerns expressed by Tribes related to the need for 
technical assistance to develop their own permit programs and the need 
to receive notice of permitting actions that affect Tribal air quality. 
Tribes requested that EPA work directly with Indian tribal governments 
in a government-to-government relationship in establishing the scope of 
and administering the program. Other concerns were related to the 
effect of the rule on Tribal sovereignty and economic development.
    The EPA continues to provide technical assistance and training for 
Tribes to develop their own programs and is committed to involving 
Tribes in the administration of the Federal program on a government-to-
government basis until Tribes have developed their own operating permit 
programs. The EPA believes that the rule's approach to jurisdictional 
issues is supportive of Tribal sovereignty and that the rule is 
necessary in order to protect air quality in Indian country, absent 
Tribal permits programs.

I. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian Tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the Tribal governments or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected and other representatives of 
Indian tribal governments ``to provide meaningful and timely input in 
the development of regulatory policies on matters that significantly or 
uniquely affect their communities.''
    The EPA believes that four Tribal governments may own sources that 
could be subject to today's rule and that consequently the rule would 
at most affect four of the more than 500 federally recognized Tribal 
governments or fewer than 1 percent of those governments. The EPA 
estimates that the compliance cost for sources subject to this rule is 
$18,425 per source or $73,700 for the four sources owned by Tribal 
governments. The EPA therefore concludes that this rule does not impose 
substantial direct compliance costs on communities of Tribal 
governments. Notwithstanding, EPA has taken numerous steps to involve 
representatives of Tribal governments in the development of this rule. 
The EPA's consultation, the nature of the governments' concerns, and 
EPA's position supporting the need for this rule are discussed above in 
the preamble section that addresses compliance with Executive Order 
12875.

J. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA) directs all Federal agencies to use voluntary 
consensus standards instead of government-unique standards in their 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., material specifications, test methods, 
sampling and analytical procedures, business practices, etc.) that are 
developed or adopted by one or more voluntary consensus standards 
bodies. Examples of organizations generally regarded as voluntary 
consensus standards bodies include the American

[[Page 8262]]

Society for Testing and Materials (ASTM), the National Fire Protection 
Association (NFPA), and the Society of Automotive Engineers (SAE). The 
NTTAA requires Federal agencies like EPA to provide Congress, through 
OMB, with explanations when an agency decides not to use available and 
applicable voluntary consensus standards.
    This action does not involve any new technical standards or the 
incorporation by reference of existing technical standards. Therefore, 
consideration of voluntary consensus standards is not relevant to this 
action.

List of Subjects in 40 CFR Part 71

    Environmental protection, Air pollution, Indian Tribes, Operating 
permits.

    Dated: February 8, 1999.
Carol M. Browner,
Administrator.
    For the reasons set out in the preamble, title 40, chapter I of the 
Code of Federal Regulations is amended as set forth below.

PART 71--[AMENDED]

    1. The authority citation for part 71 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

Subpart A--[Amended]

    2. Section 71.2 is amended by revising paragraphs (1) and (2) of 
the definition of ``Affected States'' and by adding the definition of 
``Indian country'' in alphabetical order to read as follows:


Sec. 71.2  Definitions.

* * * * *
    Affected States are:
    (1) All States and areas within Indian country subject to a part 70 
or part 71 program whose air quality may be affected and that are 
contiguous to the State or the area within Indian country in which the 
permit, permit modification, or permit renewal is being proposed; or 
that are within 50 miles of the permitted source. A Tribe shall be 
treated in the same manner as a State under this paragraph (1) only if 
EPA has determined that the Tribe is an eligible Tribe.
    (2) The State or area within Indian country subject to a part 70 or 
part 71 program in which a part 71 permit, permit modification, or 
permit renewal is being proposed. A Tribe shall be treated in the same 
manner as a State under this paragraph (2) only if EPA has determined 
that the Tribe is an eligible Tribe.
* * * * *
    Indian country means:
    (1) All land within the limits of any Indian reservation under the 
jurisdiction of the United States government, notwithstanding the 
issuance of any patent, and including rights-of-way running through the 
reservation;
    (2) All dependent Indian communities within the borders of the 
United States whether within the original or subsequently acquired 
territory thereof, and whether within or without the limits of a State; 
and
    (3) All Indian allotments, the Indian titles to which have not been 
extinguished, including rights-of-way running through the same.
* * * * *
    3. Section 71.3 is amended by adding paragraph (e) to read as 
follows:


Sec. 71.3  Sources subject to permitting requirements.

* * * * *
    (e) An owner or operator of a source may submit to the 
Administrator a written request for a determination of applicability 
under this section.
    (1) Request content. The request shall be in writing and include 
identification of the source and relevant and appropriate facts about 
the source. The request shall meet the requirements of Sec. 71.5(d).
    (2) Timing. The request shall be submitted to the Administrator 
prior to the issuance (including renewal) of a permit under this part 
as a final agency action.
    (3) Submission. All submittals under this section shall be made by 
the responsible official to the Regional Administrator for the Region 
in which the source is located.
    (4) Response. The Administrator will issue a written response based 
upon the factual submittal meeting the requirements of paragraph (e)(1) 
of this section.
    4. Section 71.4 is amended by revising paragraphs (a) introductory 
text, (b), (f), (h), (i) introductory text, and the first sentence of 
(j), to read as follows:


Sec. 71.4  Program implementation.

    (a) Part 71 programs for States. The Administrator will administer 
and enforce a full or partial operating permits program for a State 
(excluding Indian country) in the following situations:
* * * * *
    (b) Part 71 programs for Indian country. The Administrator will 
administer and enforce an operating permits program in Indian country, 
as defined in Sec. 71.2, when an operating permits program which meets 
the requirements of part 70 of this chapter has not been explicitly 
granted full or interim approval by the Administrator for Indian 
country. For purposes of administering the part 71 program, EPA will 
treat areas for which EPA believes the Indian country status is in 
question as Indian country.
    (1) [Reserved]
    (2) The effective date of a part 71 program in Indian country shall 
be March 22, 1999.
    (3) Notwithstanding paragraph (i)(2) of this section, within 2 
years of the effective date of the part 71 program in Indian country, 
the Administrator shall take final action on permit applications from 
part 71 sources that are submitted within the first full year after the 
effective date of the part 71 program.
* * * * *
    (f) Use of selected provisions of this part. The Administrator may 
utilize any or all of the provisions of this part to administer the 
permitting process for individual sources or take action on individual 
permits, or may adopt, through rulemaking, portions of a State or 
Tribal permit program in combination with provisions of this part to 
administer a Federal program for the State or in Indian country in 
substitution of or addition to the Federal program otherwise required 
by this part.
* * * * *
    (h) Effect of limited deficiency in the State or Tribal program. 
The Administrator may administer and enforce a part 71 program in a 
State or within Indian country even if only limited deficiencies exist 
either in the initial program submittal for a State or eligible Tribe 
under part 70 of this chapter or in an existing State or Tribal program 
that has been approved under part 70 of this chapter.
    (i) Transition plan for initial permits issuance. If a full or 
partial part 71 program becomes effective in a State or within Indian 
country prior to the issuance of part 70 permits to all part 70 sources 
under an existing program that has been approved under part 70 of this 
chapter, the Administrator shall take final action on initial permit 
applications for all part 71 sources in accordance with the following 
transition plan.
* * * * *
    (j) Delegation of part 71 program. The Administrator may promulgate 
a part 71 program in a State or Indian country and delegate part of the 
responsibility for administering the part 71 program to the State or 
eligible Tribe in accordance with the provisions of Sec. 71.10; 
however, delegation of a part of a part 71 program will not constitute 
any type of approval

[[Page 8263]]

of a State or Tribal operating permits program under part 70 of this 
chapter. * * *
* * * * *
    5. Section 71.8 is amended by revising of paragraph (a) and 
revising paragraph (d) to read as follows:


Sec. 71.8  Affected State review.

    (a) Notice of draft permits. When a part 71 operating permits 
program becomes effective in a State or within Indian country, the 
permitting authority shall provide notice of each draft permit to any 
affected State, as defined in Sec. 71.2 on or before the time that the 
permitting authority provides this notice to the public pursuant to 
Sec. 71.7 or Sec. 71.11(d) except to the extent Sec. 71.7(e)(1) or (2) 
requires the timing of the notice to be different.
* * * * *
    (d) Notice provided to Indian Tribes. The permitting authority 
shall provide notice of each draft permit to any federally recognized 
Indian Tribe:
    (1) Whose air quality may be affected by the permitting action and 
is in an area contiguous to the jurisdiction in which the part 71 
permit is proposed; or
    (2) Is within 50 miles of the permitted source.
* * * * *
    6. Section 71.9 is amended by adding paragraph (p) to read as 
follows:


Sec. 71.9  Permit fees.

* * * * *
    (p) The permitting authority may reduce any fee required under 
paragraph (c) of this section for sources that are located in areas for 
which EPA believes the Indian country status is in question and that 
have paid permit fees to a State or local permitting authority that has 
asserted CAA regulatory authority over such areas under color of an 
EPA-approved part 70 program. Upon application by the source, the part 
71 fee may be reduced up to an amount that equals the difference 
between the fee required under paragraph (c) and the fee paid to a 
State or local permitting authority. The fee reduction will cease if 
the area in which the source is located is later determined to be 
Indian country.
    7. Section 71.11 is amended by adding paragraph (l)(7) to read as 
follows:


Sec. 71.11  Administrative record, public participation, and 
administrative review.

* * * * *
    (l) * * *
    (7) Notice of any final agency action regarding a Federal operating 
permit shall promptly be published in the Federal Register.
* * * * * *
[FR Doc. 99-3659 Filed 2-18-99; 8:45 am]
BILLING CODE 6560-50-U