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Citation: 63 Fed. Reg. 7254 1998

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### Federal Register/Vol. 63, No. 29/Thursday, February 12, 1998/Rules and Regulations

ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 9, 35, 49, 50, and 81 [OAR-FRL-5964-2]
RIN2060-AF79

Indian Tribes: AirQualityPlanning and Management
AGENCY: Environmental Protection Agency (EPA). ACTION: Finalrule.

SUMMARY: The Clean Air Act (CAA) directs EPA to promulgate regulations specifying those provisions ofthe Act for which it is appropriate to treat Indian tribes in the same manner as states. For those provisions specified, a tribe may develop and implement one

or more ofits own air quality programs under the Act. This final rule sets forth the CAA provisions for which itis appropriate to treat Indian tribes in the

same manner as states, establishes the requirements that Indian tribes must meet ifthey choose to seek such treatment, and provides for awards of federal financial assistance to tribes to address air quality problems. EFFECTIVE DATE: March 16, 1998. FOR FURTHER INFORMATION CONTACT: David R. LaRoche, Office ofAir and Radiation (OAR 6102),U.S. Environmental Protection Agency, 401 M Street, S.W., Washington D.C. 20460
at (202) 260-7652. SUPPLEMENTARY INFORMATION: Supporting information used in developing the final rule is contained in Docket No. A-93-3087. The docket is available forpublic 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, D.C. 20460. A reasonable fee may be charged for copying.

This preamble is organized according to the following outline:
I.Background oftheFinal Rule I. Analysis ofMajor Issues Raised by Commenters A. Jurisdiction B. Sovereign Immunity and Citizen Suit C. AirProgram Implementation in Indian

Country D. CAA Sections 110(c)(1) and 502(d)(3)

Authority IIL. Significant Changes from the Proposed Regulations IV. Miscellaneous

A. Executive Order (EO) 12866 B. Regulatory FlexibilityAct (RFA) C. Executive Order (EO) 12875 and the

Unfunded Mandates Reform Act (UMRA) D. PaperworkReduction Act E. Submission toCongress and the General

Accounting Office I. Background ofthe Final Rule Summary ofIssuesRaisedby the Proposal

EPA proposed rules on August 25, 1994 (59 FR43956) to implement section 301(d) ofthe Act. The proposal elicited many comments from state and tribal officials, private industry, and the general public.A total of69 comments

were received, ofwhich 44were from tribes or tribal representatives; 13 from
state and local governments or associations; 10 from industry (primarily utilities and mining); and, 1 from Department ofEnergy (DOE) and 1 from an environmental interest group in Southern California. The tribes and several other commenters generally express support for the proposed rule and the delegation ofCAA authority to eligible tribes to manage reservation air

resources. Tribes especially urge EPA to expedite the finalization ofthis rule to enable tribes to begin to implement their air quality management programs and encourage EPA to recognize that the development oftribal air programs will be an evolving process requiring both time and significant assistance from EPA.

Most ofthe tribal commenters express

concern with the inclusion ofthe citizen suitprovisions which, they believed, effected awaiver oftheir sovereign immunity; they recommend that this provision be deleted in the final rule. This is a major issue for tribes. State and local government and industry
commenters areprimarily concerned that the proposed rule would create an unworkable scheme for implementing tribal air quality programs, and many of these commenters question the scope of tribal regulatoryjurisdiction.

Responses to many ofthe comments related to issues ofjurisdiction and sovereign immunity are included in sections II.A and II.B in the analysis of
comments below. Responses to comments on the issues raised concerning federal implementation in Indian country are addressed in sections II.C and II.D ofthis document. All other
comments are addressed in adocument entitled "response to comments" that

can be found in the docket for thisrule cited above.

II. Analysis ofMajorIssues Raised by Commenters

A. Jurisdiction

1. Delegation ofCAA Authority to Tribes

It is a settled point oflaw that Congress may, by statute, expressly delegate federal authority to a tribe. UnitedStatesv.Mazurie,419 U.S. 544, 554 (1975). See alsoSouth Dakotav. Bourland, 113 S. Ct. 2309, 2319-20 (1993); Brendalev. ConfederatedTribes andBandsofthe Yakima Indian Nation,492 U.S. 408, 426-28 (1989) (White,J., for fourJustice plurality). Such a delegation or grant ofauthority

can provide a federal statutory source of tribal authority over designated areas, whether or not the tribe's inherent authority would extend to all such

areas. In the August 25, 1994 proposed tribal authority rule, EPA set forth its interpretation that the CAA is a delegation offederal authority, to tribes approved byEPA to administer CAA programs in the same manner as states,

over all air resources within the exterior boundaries ofareservation for such programs. Today, EPA is finalizing this approach. This grant ofauthority by Congress enables eligible tribes to address conduct relating to air quality

on all lands, including non-Indianowned fee lands, within the exterior boundaries ofareservation.

EPA's position that the CAA constitutes a statutory grant of jurisdictional authority to tribes is consistent with the language ofthe Act, which authorizes EPA to treat atribe in the same manner as a state for the regulation of "air resources within the exterior boundaries ofthereservation or other areas within the tribe's jurisdiction." CAA section 301(d)(2)(B). EPA believes that this statutory provision, viewed within the overall framework ofthe CAA, establishes a territorial view oftribaljurisdiction and authorizes a tribal role for all air

resources within the exterior boundaries ofIndian reservations without distinguishing among various categories ofon-reservation land. See alsoCAA sections 110(o), 164(c).

In light ofthe statutory language and the overall statutory scheme, EPA is exercising therulemaking authority entrusted to it by Congress to implement the CAA provisions granting approved tribes authority over all air resources within the exterior boundaries ofa reservation. See generally Chevron U.S.A., Inc.v. NRDC,467 U.S. 837, 842- 45 (1984). This interpretation ofthe CAA as generally delegating such authority to approved tribes is also supported bythe legislative history, which provides additional evidence of Congressional intention regarding this issue. See S. Rep. No. 228, 101stCong., 1st Sess. 79 (1989) ("the Act constitutes

an express delegation ofpower to Indian tribes to administer and enforce the Clean Air Actin Indian lands" (citation
to Brendaleomitted)) (hereinafter 

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referred to as "Senate Report").' EPA also believes this territorial approach to air quality regulation best advances rational, sound, air quality management.

(a) Supportforthe delegation approach.Tribal commenters and several industry commenters support EPA's interpretation that the CAA constitutes a delegation of Congressional authority to eligible tribes
to implement CAA programs over their entire reservations. Numerous tribal commenters assert that EPA's territorial delegation approach is consistent with federal Indian law and the intent of Congress as expressed in several provisions ofthe CAA. Several tribal
commenters note that, while tribes have inherent sovereign authority over all air

resources within the exterior boundaries oftheir reservations, EPA should finalize the delegation approach to avoid case-by-case litigation concerning inherent authority and to eliminate the disruptive potential ofa "checkerboarded" pattern oftribal and
statejurisdiction on reservations. Several tribal commenters assert that the delegation approach is compelled by the language ofthe CAA and federal Indian law principles. One tribal commenter states that the delegation approach is consistent with the federal government's trust responsibility to federallyrecognized Indian tribes.

(b) StatutoryInterpretation.Several
state commenters assert that the CAA does not constitute an "express congressional delegation" ofauthority
to tribes as required by the Supreme Court's decisions inMontanav. United States,450 U.S. 544 (1981) and Brendale,492 U.S. 408. Several state and industry commenters dispute EPA's interpretation ofCAA section 301(d)(2)(B), which states thatEPA may treat a tribe in the same manner as a state if, among other things, "the functions to be exercised by the Indian tribe pertain to the management and protection ofair resources within the exterior boundaries ofthe reservation or other areas within the tribe's jurisdiction." One commenter asserts that the "or" in "or other areas within the tribe'sjurisdiction" means that
treatment ofa state is authorized for a tribe as to air resources over which the

1Further, it is a well-established principle of statutory construction that statutes should be construed liberally in favor ofIndians, with ambiguous provisions interpreted in ways that benefit tribes. County ofYakim av. Confederated TribesandBands ofthe Yakima IndianNation, 112 S.Ct. 683, 693 (1992). In addition, statutes should be interpreted so as to comport with tribal sovereignty and the federal policy of encouraging tribal independence. RamahNavajoSchoolBoard, Inc. v. BureauofRevenue of New Mexico, 458 U.S. 832, 846 (1982). 

### tribe hasjurisdiction, whether or not those areas fall within its reservation boundaries. In other words, tribes would not necessarily havejurisdiction

over all sources within reservation boundaries. The commenter states that EPA hasimproperly read the "or" in section 301(d)(2)(B) as an "and."

EPA believes theplain meaning of section 301(d)(2)(B) is that atribe can implement a CAAprogram for air

resources if: (1)the airresources are within areservation; or (2) the air

resources are within a non-reservation

area overwhich thetribe can demonstratejurisdiction. Themost plausible readingofthephrase "within * * * thereservation or other areas within the tribe'sjurisdiction" is that Congress intended to grantto an eligible tribejurisdiction over itsreservation without requiring thetribe to demonstrate itsownjurisdiction, but to require atribe to demonstrate jurisdiction over any other areas, i.e., non-reservation areas, overwhich it seeks to implement a CAAprogram. Under section 301(d)(2)(B), eligible tribes may betreated in the same
manner as states forprotecting "air resources" within "thereservation" or in "other areas within thetribe's jurisdiction." Both the term "reservation" and thephrase "other

areas within thetribe'sjurisdiction" modify the phrase "air resources." In addition, it is clear from the structure of the provision and the CAA and legislative historytaken as awhole that the phrase "within thetribe's jurisdiction" modifies the phrase "other areas" and not theterm "reservation" or the phrase "airresources." IfCongress intended to require tribes to demonstratejurisdiction over reservations, Congress would have simply stated that EPAmay approve a tribal program only forairresources
over which the tribecan demonstrate jurisdiction.2 One commenter states that EPA's interpretation ofCAA section 301(d)(2)(B) has made CAA section 301(d)(4), which allows EPAto administerprovisions oftheAct directly iftreatment ofatribe as identical toa state isfound to be "inappropriate or administratively infeasible," extraneous.

2Contrary to the commenter's assertion, EPA does
not interpret the "or" in this section as an "and". Ifthe "or" were an "and", under section 301(d)(2) EPA would be authorized to approve atribal
program "only if" the functions to be exercised by the tribe pertain to airresources that are both within areservation and within non-reservation

areas over which the tribecan demonstrate jurisdiction. This interpretation is nonsensical. Moreover, nothing in the Act orlegislative history suggests that Congress intended to limit so severely the universe oftribes eligible for CAA programs. The commenter asserts that ifCAA section 301(d)(2)(B) is a delegation of authority to atribe, EPA would never have cause to find treatment ofatribe

as a state "inappropriate or administratively infeasible." EPA disagrees that its interpretation has made section 301(d)(2)(B) superfluous because, even with the delegation of federal authority to tribes for reservation
areas, itis not appropriate or administratively feasible to treattribes

as states for all purposes. In such cases, section 301(d)(4) allows EPA, through rulemaking, to "directly administer such provisions [ofthe Act] so as to achieve the appropriate purpose" either by tailoring the provisions to tribes or conducting a federal program.

An industry commenter states that CAA section 110(o), which provides that when atribal implementation plan (TIP)becomes effective under CAA section 301(d) "the plan shall become applicable to all areas (except as expressly provided otherwise in the plan) located within the exterior boundaries ofthe reservation * * *," does not support EPA's interpretation of the CAA as a delegation because section 110(o) is only applicable to plans EPA approved pursuant to regulations under section 301(d).

EPA believes that section 110(o) recognizes that approved tribes are authorized to exercise authority over all

areas within the exterior boundaries of

areservation for thepurposes ofTIPs. EPA notes that the commenter omitted the following remaining language in the quoted sentence from CAA section 110(o): "located within the exterior boundaries ofthe reservation, notwithstanding the issuance ofany patent and including rights-of-way running through thereservation." EPA believes that this additional language makes clear that TIPs may apply to all

areas within the exterior boundaries of reservations. EPA believes that the phrase "except as expressly provided otherwise in the plan" refers to a situation where a tribe seeks to have its TIP apply onlyto specific areas within

areservation.

An industry commenter states that the CAA does not depart from other Congressional provisions regarding "treatment as a state" in the Clean Water Act (CWA) and the Safe Drinking Water Act (SDWA) and EPAhas already determined that these other statutes do
notconstitute a delegation ofauthority
to tribes. EPA notes that the CAA "treatment as a state" provision is notably different from the SDWA "treatment as a state" provision. CompareCAA § 301(d)(2) ("the functions to be exercised bythe Indian 

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tribe [must] pertain to the management and protection ofair resources within the exterior boundaries ofthe reservation or other areas within the tribe'sjurisdiction") with SDWA § 1451(b)(1)(B) ("the functions to be exercised by the Indian tribes [must be] within the area ofthe Tribal Government's jurisdiction"). In addition, although CWA section 518(e) and CAA section 301(d) both contain language regarding tribal programs over "Indian reservations," EPA believes that the overall statutory scheme and legislative history ofthe CAA represent

aclearer expression than that ofthe CWA that Congress intended to effectuate a delegation to tribes over reservations. 3EPA notes that, except for the provisions in CWA section 518(e) and SDWA section 1451(b)(1)(B), the Water Acts do not otherwise indicate what areas are subject to tribal regulatory authority. By contrast, several provisions ofthe CAA expressly recognize that tribes may exercise CAA authority over all areas within the exterior boundaries ofthe reservation. See CAA sections 110(o) and 164(c).

One industry commenter states that EPA should make clear that the CAA does not supersede other laws that may define or limit the extent oftribal regulatoryjurisdiction.4 The commenter states that, given that the CAA does not supersede allother laws regarding tribal jurisdiction, EPA should follow a caseby-case approach for addressing jurisdiction within reservation boundaries. One state association notes that some states have statutory jurisdiction over non-Indian fee lands located on reservations and EPA does
not address how conflicts between the CAA and these statutes willbe addressed.

3EPA also notes that a federal district courthas stated that CWA section 518(e)may beread as an express delegation ofauthority to tribes over all reservation waterresources. Montanav. U.S. EPA, 941 F. Supp. 945, 951,957 n.10 &n.12 (D.Mont. 1996) citingBrendale,492 U.S. at 428 (White,J.). In the preamble to its 1991 CWA regulation, EPA found the statutory language and legislative history of the CWAtoo inconclusive for theAgency to rely

on the delegation theory, butnoted that "the question ofwhether section 518(e) is an explicit delegation ofauthority over non-Indians is not resolved." 56 FR 64876, 64880 881 (December 12, 1991).

4This commenter also asserts that the Chevron doctrine does not support EPA's interpretation that the CAA settles alljurisdictional issues on lands within reservations. WhileEPA believes that the CAA represents a clear delegation ofauthority to eligible tribes over reservation resources, EPA notes that, to the extent the statute is ambiguous, EPA's interpretation would beentitled to deference. In addition, the Agency has broad expertisein reconciling federal environmental and Indian policies. WashingtonDepartmentofEcology, 752 F.2d 1465, 1469 (9th Cir. 1985). EPA believes that the CAA delegation ofauthority to eligible tribes over reservations represents a more recent expression ofCongressional intent and will generally supersede other federal
statutes. SeeAdkins v.Arnold, 235 U.S. 417, 420 (1914) (notingthat "later in time" statutes should take precedence). There may be,however, rare instances where special circumstances may preclude EPA from approving a tribal program over a reservation area. For example, in rare cases, there maybe another federal statute granting a state exclusivejurisdiction over a reservation

area that may not be overridden by the CAA. There may also be cases where a current tribal constitution may limit tribal exercise ofauthority.5

EPA will consider on a case-by-case basis whether special circumstances exist that would prevent a tribe from implementing a CAA program over its reservation. Appropriate governmental entities will have an opportunity to raise these unique issues on acase-bycase basis during EPA's review ofa tribal application. Where tribes are

aware ofsuch issues, they should bring the issues to EPA's attention by including them in the tribe's "descriptive statement ofthe Indian tribe's authority to regulate air quality" under 40 CFR49.7(a)(3). IfEPA determines that there are special circumstances that would preclude the Agency from approving atribal program
over a reservation area, the Regional Administrator would limit the tribal approval accordingly under 40 CFR 49.9(e) and (g). (c) LegislativeHistory. Several industry and local government commenters assert that the legislative history does not support EPA's interpretation ofthe CAA as a delegation. They state that Senate Report No. 101-228, pp. 78-79, 1990 U.S. Code Cong. &Admin. News at 3464-65 (Senate Report) evidences Congress' intent that the CAA authorizes tribal programs in the same

manner ashad been authorized under the CWA and SDWA, both ofwhich EPA has interpreted to authorize tribal programs onlyin areas over which a tribe can demonstrate inherent jurisdiction. The commenter also states that the Senate Report made clear that
treatment as a state is only authorized for areas within a tribe'sjurisdiction. In addition, one commenter states that Congress in 1990knew how similar

5Among other things, the commenter questions whether pre-existing treaties orbinding agreements may limit the extent ofregulatoryjurisdiction. EPA believes that the CAA generally would supersede pre-existing treaties orbinding agreements that may limit the scope oftribal authority over reservations. provisions ofthe CWA and SDWA had been interpreted and "Congress can normally be presumed to have had knowledge ofthe interpretation given to the incorporated law. * * *" citing St. RegisMohawk Tribe,New York v. Brock, 769 F.2d 37, 50 (2nd Cir. 1985). One commenter further argues that the Senate Report refers to Brendale,which requires a case-by-case approach to tribal inherentjurisdiction.

EPA acknowledges that the summary ofthe treatment as a state provisions in the Senate Report contains ageneral
statement suggesting that tribes areto demonstratejurisdiction for all areas for which they seek a program, including reservation areas. However, the summary is followed by a detailed discussion that makes clear that Congress intended to provide an express delegation ofpower to Indian tribes for allreservation areas and to require a jurisdictional showing only for nonreservation areas. Senate Report at 79.

In addition, the Senate Report cited Brendalefor theproposition that Congress may delegate federal authority to tribes. Moreover, although Brendale does support acase-by-case approach to evaluating tribal inherent authority over non-members ofthe tribe, EPA notes that the Senate Report cites the section ofthe Brendaleopinion (pages 3006-07) in which Justice White recognizes that Congress may expressly delegate to a tribe authority overnon-members. See Brendale, 109 S.Ct. 2994, 3006-07 (1989). EPA believes that this statement in the Senate Report further supports EPA's view that the CAA was intended
to be a delegation. EPA also notes that in 1989, when the Senate Report was written, EPA had not yet finalized its interpretation that Congress, in the CWA, did not clearly intend a delegation to tribes. See 56 FR 64876, 64880-881 (December 12, 1991); see alsoMontanav. EPA, 941 F. Supp. 945, 951, 957 n.10 &n.12 (notingthat the CWA may be read as adelegation of CWA authority to tribes over reservations). Thus, read as a whole, the Senate Report supports EPA's interpretation that the CAA is a delegation.

(d) Limitationson Congressional delegationsofauthority.Several state and municipal commenters state that Montana,Brendale,and Bourland establish that tribes generally do not have authority to regulate the activities ofnonmembers on nonmember-owned fee lands. Several commenters also
assert that tribes generally will not have inherent authority over sources ofair pollution on non-Indian owned fee lands within areservation. As discussed in detail in the preamble to the 

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proposed rule (59FR43958 etseq.), EPA believes that tribes generally will have inherent authority over air pollution sources on fee lands. 59 FRat 43958 n.5; seealsoMontanav. EPA, 941 F.Supp. 945 (D. Mont. 1996)(upholding EPA's determination that the Confederated Salish and Kootenai Tribes possess inherent authority over nonmember activities on fee lands for purposes ofestablishing water quality standards under the CWA). Nonetheless, because the Agency is interpreting the CAA as an explicit delegation offederal authority to eligible tribes, it is not necessary for EPA to determine whether tribes have inherent authority over all

sources ofairpollution on their reservations.

Several commenters state that only delegations over lands and activities subject to inherent tribal power are permissible. One commenter states that the proposed rule should be modified to require tribes to establish preexisting authority for on-reservation CAA programs, at least with regard to fee lands held by nonmembers within reservations. Two commenters, one citing the United States Constitution and the other citing U.S. v.Morgan,614 F.2d 166 (8th Cir. 1980), also assert that

atribe cannot have delegated authority

over nonmembers on fee lands living in

anon-Indian community within a reservation. A state commenter asserts that these two factors, i.e., whether a tribe possesses inherent authority and whether the delegation is over nonmembers living on fee lands within

anon-Indian community, were factors considered by the Supreme Court in Mazuriein evaluating whether Congress had validly delegated federal authority
to tribes to regulate the introduction of alcoholicbeverages into Indian country.

EPA believes that Indian tribes have sufficient independent authority to

assume a Congressional delegation of authority to implement CAA programs. The Supreme Court inMazurie acknowledged that Indian tribes have sovereignty over "both their members and their territory." 419 U.S. at 557. As discussed above, EPA believes that tribes generally will have inherent authority to regulate sources of air pollution on nonmember-owned fee lands within reservations as well. However, EPA notes that the Court in Mazurieheld that it is not necessary for

atribe to have independent authority

over all matters that would be subject to the delegated authority; rather "[i]t is necessary only to state that the independent tribal authority is quite sufficient to protect Congress' decision to vest in tribal councils thisportion of its own authority 'to regulate Commerce * * * with the Indian tribes.'" 419 U.S.
at557 (citation omitted).

In addition, while the Court in Mazurienoted that Constitutional limits

on the authority ofCongress to delegate its legislative power are "less stringent in cases where the entity exercising the delegated authority itselfpossesses independent authority over the subject matter," the Court did not say that some independent source ofauthority was an absolute prerequisite for aCongressional delegation. 419 U.S. at 556-57.6 Even in

acase where aparticular tribe's inherent authority is markedly limited, the detailed parameters outlined in the CAA and EPA's oversight role over tribal exercise ofauthority delegated by the CAA are sufficient to ensure that Constitutional limitations on the delegated authority have not been exceeded.

Furthermore, EPA disagrees with the commenter's assertion that the United States Constitution and federal court precedent prohibit Congress from delegating authority to a tribe over nonmembers on fee land livingin anonIndian community within a reservation. See CityofTimberLake v. Cheyenne RiverSioux Tribe, 10 F.3d 554 (8th Cir. 1993), reh'gen bancdenied, 1994 U.S. App. Lexis 501 (1994), certdenied,512 U.S. 1236 (1994); see alsoRice v. Rehner,463 U.S. 713, 715 (1983) (noting that Congress, in 18 U.S.C. 1161, delegated to tribes authority to regulate liquor throughout Indian country, including in non-Indian communities). The discussion in Morgan and Mazurie about "non-Indian communities" was centered around the specific language of 18 U.S.C. sections 1154 and 1156 regarding introduction ofalcoholic beverages into Indian country, and is
not relevant to an interpretation ofthe CAA. In addition, EPA notes that the Eighth Circuit Court ofAppeals, in City ofTimberLake, 10 F.3d 554, declined
to follow its prior decision inMorgan, and concluded that 18 U.S.C. section 1161 delegated authority to tribes to

6Gne industry commenter asserts that delegations of federal authority from Congress must "clearly delineate" policy and standards to be effective or valid, citingAmericanPower&LightCo. v. SecuritiesandExchange Commission, 329 U.S. 90, 105 (1946). According to this commenter, EPA's proposed interpretation does not meetthis standard. EPA agrees that the non-delegation doctrine does include a limitation on the devolution of legislative power under terms so vague as tobe standardless, butthat limitation has become a very low threshold, seeMistrettav. UnitedStates, 488 U.S. 361 (1989)(Scalia, J., dissenting); IndustrialUnionDep 'tv. American PetroleumInst., 448 U.S. 607 (1980) (Rehnquist, J., concurring in thejudgment), and is easily met by the CAA. The CAA provides detailed direction to tribes on the parameters under which CAA
programs are tobe implemented. regulate liquor in allofIndian country, including non-Indian communities.

One industry commenter asserts that, ifEPA finalizes its position that Congress has delegated federal authority
to tribes, EPA should state explicitly in its rule that the Bill ofRights and other federal protections forregulated entities apply to tribal air programs. EPA notes that the Indian Civil Rights Act imposes

on tribal governments restrictions similar to those contained in the Bill of Rights and the Fourteenth Amendment, including the prohibitions against the denial ofdue process and equal protection, and the taking ofprivate property withoutjust compensation. 25 U.S.C. 1302; Santa ClaraPueblov. Martinez,436 U.S. 49, 57 (1978). These protections extend to allpersons subject
to tribaljurisdiction, whether Indians or non-Indians. IowaMutualInsuranceCo.

v.LaPlante,480 U.S. 9, 19 (1987). EPA believes that whether ornot the Billof Rights applies to tribes implementing the CAA on reservations is an issue for the courts to decide when and ifthe issue arises in a particular case. See Mazurie,419 U.S. at 558 n. 12. (e) Use oftheword "reservation. Several tribal commenters supported EPA's proposal to construe the term "reservation" to include trust land that has been validly set apart for useby a tribe, even though that land has not been formally designated as a "reservation." See 59 FRat 43960; 56 FR at 64881; see also OklahomaTax Comm 'n v. Citizen BandPotawatomi Indian Tribe ofOklahoma, 111 S.Ct. 905, 910 (1991). Some tribal
commenters suggested that the definition of "reservation" in proposed §49.2 be broadened specifically to include "trust land that has been validly
set apart for useby a Tribe, even though the land has not been formally designated as areservation."

A state commenter states that EPA has
notprovided an analysis ofrelevant provisions in the CAA to support its proposition that the term "reservation" includes "trust land that has been validly set apart for the use ofa Tribe." In addition, this commenter questions EPA's reliance on OklahomaTax Comm 'n because that casedeals with trust lands in Oklahoma and may not be universally applicable. Several
commenters express concern that the phrase "exterior boundaries ofthe reservation" could encompass lands held in fee bynonmembers outside of

areas formally designated as "reservations." A state commenter suggests that EPA should require a caseby-case demonstration in cases where non-Indian-owned lands exist which maybe surrounded bythe exterior

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boundaries ofa Pueblo. Thecommenter asserts that in these circumstances there is no evidence that thenon-Indian lands

were "validly set apart fortheuse ofthe Indians as such, under the superintendence ofthe Government." The State ofOklahoma objects to EPA's

use ofthe word "reservation" because, by federal law, theterm "reservation"

can include former reservations in Oklahoma, which include approximately theentire State. See 25 U.S.C. 1425. The State suggests that EPA should limit the term reservation to include only tribal trust land in Oklahoma; lands held in trust for individual Indians, Oklahoma asserts, should not be considered "reservations."

It is the Agency's position that the
term "reservation" in CAA section 301(d)(2)(B) should be interpreted in light ofSupreme Court case law, including OklahomaTax Comm 'n, in which the Supreme Court held that a "reservation," in addition to the

common understanding ofthe term, also includes trust lands thathave been validly set apart for the use ofa tribe

even though the land has notbeen formally designated as areservation. In applying this precedent to construe the term "reservation" in the context ofthe CWA, the Agency has onlyrecognized
two categories oflands that, even though they are not formally designated

as "reservations," nonetheless qualify as "reservations": Pueblos and tribal trust lands. EPA will consider lands held in fee bynonmembers within a Pueblo to be part ofa "reservation" under 40 CFR 49.6(c) and 49.7(a)(3). EPA will consider

on acase-by-case basis whether other types oflands other than Pueblos and tribal trust lands may be considered "reservations" under federal Indian law

even though they are not formally designated as such. Appropriate governmental entities will have an opportunity to comment on whether a particular area is a "reservation" during EPA's review ofatribal application. The Agency does not believe that additional,

more specific language should be added to theregulatory definition of "reservation," because the Agency's interpretation ofthe term "reservation" will depend on theparticular status of the land in question and on the interpretation ofrelevant Supreme Court precedent.

A tribal consortium states that the proposed requirement in §49.7(a)(3) that tribes "must identify with clarity and precision the exterior boundaries of the reservation * * *" precludes Alaska Native villages from applying for EPA-approved CAA programs. The full language ofthe proposed requirement in §49.7(a)(3) is "[flor applications covering areas within the exterior boundaries ofthe applicant's Reservation the statement must identify with clarity and precision the exterior boundaries ofthe reservation * * * ." Ifa tribe is seeking program approval for non-reservation areas, the tribe need not provide a reservation description. As noted below, EPA is finalizing its proposed position, under section 301(d)(2)(B), that an eligible tribe may implement its air quality programs in non-reservation areas provided the tribe

can adequately demonstrate authority to regulate air quality in the nonreservation areas in question under general principles ofIndian law. Thus, if an Alaska Native village can demonstrate authority to regulate air

resources in non-reservation areas, the

areas will be considered "other areas within the tribe'sjurisdiction" under section 301(d)(2)(B) ofthe Act.

(f)PolicyRationales.Industry and municipal commenters state that it is improper forEPA to base its interpretation ofthe CAA regarding tribaljurisdiction on policy arguments seeking to avoid "jurisdictional entanglements" and checkerboarding. A
state comments that given the intense controversy surrounding the issue of authority overthe activities of nonmembers on fee lands, litigation is likely. The commenter states that litigation would cause long-term jurisdictional uncertainties, which will erode effective implementation ofthe Act, and that EPA should address and resolvejurisdictional issues in the reservation program planning stage. One industry commenter asserts that EPA's proposal to interpret the CAA as a delegation is inconsistent with EPA policy statements that EPA will authorize tribal programs only where tribes "can demonstrate adequate jurisdiction overpollution sources throughout thejurisdiction." July 10, 1991 EPA/State/Tribal relations memorandum, signed byAdministrator Reilly.

EPA's interpretation ofthe CAA is based on the language, structure, and intent ofthe statute. The Agency believes that Congress, in the CAA, chose to adopt a territorial approach to the protection ofairresources within reservations-an approach that will have the effect ofminimizing jurisdictional entanglements and checkerboarding within reservations. EPA expects that the delegation approach willminimize the number of case-specific jurisdictional disputes that will arise and enhance the effectiveness ofCAA implementation. EPA notes that its interpretation ofthe CAA does not conflict with the Agency's general Indian policy statements regarding tribal jurisdiction. Under the CAA, EPA will
not approve atribe unless ithas the authority to implement the program either byvirtue ofdelegated federal authority over reservation areas, or a demonstration ofauthority under principles offederal Indian law over other areas on a case-by-case basis.

(g) Currentandhistoricalapplication ofstatelawsonpartsofreservations. State and industry commenters assert that states have historically regulated non-member CAA-related activities on fee lands within reservation boundaries and the proposal ignores this historical
treatment and the transition issues it raises. The commenters suggest that EPA consider changing the proposed regulations to "grandfather" existing facilities subject to state authority, so that states continue to regulate those facilities until the affected parties all agree cooperatively to atransition from
state to tribaljurisdiction. One
commenter states that both the affected state and EPA would need to approve any necessary state implementation plan (SIP) revisions.

It is EPA's position that, unless a state has explicitly demonstrated its authority and been expressly approved by EPAto implement CAA programs in Indian country, EPA is the appropriate entity to be implementing CAA programs prior to tribal primacy. See preamble section II.C. and II.D. for a discussion offederal implementation ofCAA programs in Indian country. EPA will not and cannot "grandfather" any state authority over Indian country where noexplicit demonstration and approval of such authority has been made. EPA, as appropriate, will address any need for SIP revisions on a case-by-case basis.

2. Authority in Non-Reservation Areas Within a Tribe's Jurisdiction

CAA section 301(d)(2)(B) provides that a tribe may be treated in the same
manner as a state for functions regarding air resources "within the exterior boundaries ofthe reservation or other

areas within the tribe's jurisdiction" (emphasis added). In the August 25, 1994 proposed tribal authority rule,EPA
set forth its interpretation that this provision authorizes an eligible tribe to develop and implement tribal air quality programs in non-reservation areas that

are determined to be within the tribe's jurisdiction. Today, EPA is finalizing this approach.

(a) Support forEPA 'sapproach. Several tribal commenters support EPA's interpretation that "other areas within the Tribe'sjurisdiction" in CAA section 301(d)(2)(B) means that a tribe 

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may implement its air quality programs in non-reservation areas under its jurisdiction, generally including all nonreservation areas ofIndian country. One tribal commenter asserts that the "Indian country" standard is the standard consistently used by courts in determining a tribe'sjurisdiction.

(b) Request for Clarification. Several commenters request that EPA clarify what is meantby thephrase "other

areas within a Tribe'sjurisdiction." Some commenters state that thisphrase
must be clarified to avoid conflicts between states and tribes in interpreting their ownjurisdiction and uncertainty for regulated sources. One commenter urges EPA to develop published criteria by which the Agency will decide whether a tribe may develop and implement a CAA program in areas outside the exterior boundaries ofa reservation. Some commenters also request that EPA clarify what is meant by "Indian country."

EPA notes that thephrase "other areas within the tribe'sjurisdiction" contained in CAA section 301(d)(2)(B) and 40 CFR 49.6 is meant to include all non-reservation areas over which atribe

can demonstrate authority, generally including all non-reservation areas of Indian country. As noted above, it is EPA's interpretation that Congress has
not delegated authority to otherwise eligible tribes to implement CAA programs over non-reservation areas as it has done for reservation areas. Rather,

atribe seeking to implement a CAA program over non-reservation areas may do so only ifithas authority over such

areasunder general principles offederal Indian law.

EPA notes that the definition of "Indian country" contained in 18 U.S.C. section 1151, while it appears in a criminal code, provides the general parameters under federal Indian law of the areas over which a tribe mayhave jurisdiction, including civiljudicial and regulatoryjurisdiction. See DeCoteauv. DistrictCounty Court,420 U.S. 425, 427

n. 2 (1975). EPA acknowledges that there may be controversy over whether

aparticular non-reservation area is within atribe'sjurisdiction. However, EPA believes that these questions should be addressed on a case-by-case basis in the context ofparticular tribal applications. EPAhas established a process under section 49.9 for appropriate governmental entities to comment on assertions ofauthority in individual tribal applications. More discussion ofthe parameters of "Indian country" is provided in the detailed response to comment document.

Some tribal commenters object to EPA's description ofthe proposed requirement in §49.7(a)(3)(ii) that, where atribe seeks to have its program
cover areas outside the boundaries ofa reservation, the tribe must demonstrate its "inherent authority" overthose

areas. These commenters assertthat the
term "inherent authority" must be clarified because it may inappropriately limit thepotential sources oftribal authority to regulate non-reservation air

resources. EPA agrees that there may be

cases where atribe has authority to regulate a non-reservation area that derives from a federal statute or some other source offederal Indian law that is not based on "inherent authority." Section 49.7(a)(3)(ii) only asks atribe seeking to implement a CAA program in

anon-reservation area to "describe the basis for the tribe's assertion of authority * * *." Under this provision,

atribe may include any basis for its assertion ofauthority.

Some tribal commenters askEPA to take the position that the phrase "other

areas within the tribe'sjurisdiction"

means that tribes will have control over
sources in close proximity to a reservation. One tribe comments that EPA has atrust responsibility to ensure that tribes have authority to control

sources ofair pollution outside of reservation boundaries that affect the health and welfare oftribal members living within reservation boundaries. One tribe asks whether non-reservation jurisdictional areas include ceded lands where tribes retain the right to hunt and fish.

As noted above, itis EPA's position that, while Congress delegated CAA authority to eligible tribes for reservation areas, the CAA authorizes a tribe to implement a program in nonreservation areas only if itcan demonstrate authority over such areas under federal Indian law. Thus, a tribe may implement a CAA program over

sources in non-reservation areas, including ceded territories, if the tribe

can demonstrate its authority over such

sources under federal Indian law. CAA provisions regarding cross-boundary impacts arethe appropriate mechanisms for addressingcases where sources outside oftribal authority affect tribal health and environments. See, e.g., CAA sections 110(a)(2)(D), 126, and 164(e). The issue ofcross-boundary impacts is discussed further in the response to comments document. (c) Comments challengingEPA 's interpretation ofthe CAA. Some
commenters state that CAA section 110(o) limits thejurisdictional reach of

aTIP to areas located within the boundaries ofareservation. One commenter asserts that since a tribe can only implement its TIP within a 

### reservation, to allow atribe to implement other parts ofthe CAA in non-reservation areas would be unmanageable and unreasonable.

EPA believes that the reference in CAA section 110(o) to "reservation" is simply a description ofthe type ofarea
over which a TIP may apply. EPA does
notbelieve the provision was intended to limit the scope ofTIPs to reservations. CAA section 301(d)(1) authorizes EPA to treat a tribe in the

same manner as a state for any provision ofthe Act (except with regard to appropriations under section 105) as longas the requirements in section 301(d)(2) are met. EPAhas decided to include most ofthe provisions of section 110 in the group ofprovisions for which treatment oftribes in the same

manner as a state is appropriate. Section 301(d)(2) permits EPA to approve eligible tribes to implement CAA programs, including TIPs, over nonreservation areas that are within a tribe's jurisdiction.

An industry commenter asserts that the Senate Report evidences that Congress intended to provide tribes the

same opportunity to adopt programs as provided under the CWA and SDWA. This commenter asserts that tribal jurisdiction under those statutes is limited to reservations. EPA notes that the SDWA does not limit tribal programs to reservations. See 42U.S.C. 300j-1 l(b)(1)(B) (authorizing atribal role "within the area ofthe Tribal Government's jurisdiction."). EPA also
notes that there is evidence in the Senate Report that Congress intended to authorize EPA to approve eligible tribes for CAA programs in non-reservation

areas ofIndian country that are within

a tribe'sjurisdiction. The report states that section 301(d) is designed "to improve the environmental quality of the air wit[h]in Indian country in a

mannerconsistent with EPA Indian Policy and 'the overall Federal position in support ofTribal self-government and the government-to-government relations between Federal and Tribal Governments' * * *." Senate Report at 79 (emphasis added) (citingEPA's 1984 Indian Policy); see also, id. at 80.

3. Other Jurisdictional Issues

Several local governments comment that the final rule should ensure that tribes with very small reservations do
nothave authority under an air program to adversely affect economic development in adjacent areas, intrude upon thejurisdiction oflocal governments, orcreate checkerboarded regulation. One commenter asserts that the proposal would allow for EPA approval of "islands" ofIndian 

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programs and "will create the same problems for states and local governments which EPA believes will be eliminated by granting tribes full regulatory power over all land within reservation borders." In addition, a state commenter states that extending tribal programs to non-reservation areas within the parameters of 18 U.S.C. section 1151 conflicts with EPA's goal under the CAA ofincreasing cohesive air quality management. Several
commenters state that regulation by tribes with very small reservations or other very small areas ofIndian country would be administratively impractical.

Several local governments state that a minimum size should be placed on
areas to be considered for tribal jurisdiction. An industry commenter suggests that the final rule limit nonreservation tribal programs to those

areasunder tribaljurisdiction that are contiguous with reservations. Some local government commenters also state that EPA, instead ofa tribe, should consider enforcing programs on small

areas ofIndian country.

EPA acknowledges that there may be

cases where the Agency may approve a tribe's application to implement a CAA program over arelatively small land

area. EPA also recognizes that approval ofa tribal program over a small area that is surrounded by land covered bya state CAA program could lead to less uniform regulation. However, EPA believes it would be inappropriate to place a blanket limitation on the geographic size ofan approvable tribal program. EPA notes that Congress, in the CAA, authorized the Agency to approve tribal CAA programs when a tribe meets the criteria contained in CAA section 301(d)(2)(B) without regard to size of

area. In addition, it is long-standing federal Indian policy to support tribal self-government and a government-togovernment relationship with federally recognized Indian tribes. See Senate Report at 79; April 29, 1994 Presidential Memorandum, "Government-toGovernment Relations with Native American Tribal Governments," 59 FR 22,951 (May4, 1994). Furthermore,EPA policy favors tribal over federal implementation ofenvironmental programs in areas under tribal jurisdiction. See 59 FR at43962; November 8, 1984 "EPA Policy for the Administration ofEnvironmental Programs on Indian Reservations." EPA also recognizes thatunder the realities offederal Indian law, there are some smallpockets ofIndian country under tribal and federaljurisdiction that lie amonglands under statejurisdiction. While EPA recognizes that its approval oftribal programs over small areas may result in less uniform regulation in some cases, the Agency believes that the approach to tribaljurisdiction outlined in this Tribal Authority Rule best reconciles federal Indian and environmental policies. See Washington Department ofEcology,752 F.2d at 1469. The Agency's overall approach minimizes the potential for checkerboarded regulation within Indian reservations (see preamble at II.A.1.(a)), while promoting tribal sovereignty and self-determination.

One tribal commenter states that pollution from air sources outside a tribe'sjurisdiction must be addressed. This commenter states that section 126 ofthe CAA, while designed to address this issue, is awkward and probably difficult to administer. In addition, local government commenters state that the off-site effect ofapproving tribal programs forIndian lands should be considered. One local commenter states that "mutual protection for air quality goals, health values and customs should be assured for all within any physical air basin to the extent workable."

EPA notes that several provisions of the CAA are designed to address crossboundary air impacts. EPA is finalizing its proposed approach that the CAA protections against interstate pollutant transport apply with equal force to states and tribes. Thus, EPA is taking the position that theprohibitions and authority contained in sections I10(a)(2)(D) and 126 ofthe CAA apply
to tribes in the same manner as states. As EPA noted in the preamble to its proposed rule, section 110(a)(2)(D), amongother things, requires states to include provisions in their SIPs that prohibit any emissions activity within the state from significantly contributing
to nonattainment, interfering with maintenance ofthe national ambient air quality standards (NAAQS), or interfering with measures under the Prevention ofSignificant Deterioration (PSD)or visibility protection programs in another state or tribal area. In addition, section 126 authorizes any state or tribe to petition EPA to enforce these prohibitions against a state containing an allegedly offending source

or group ofsources. The issue ofcrossboundary impacts is discussed further in the response to comment document. Several tribal commenters note that, in the preamble to the proposed rule, EPA misstated the dollar limitation contained in the Indian Civil Rights Act

on criminal fines that may be imposed by tribes. EPA agrees that the dollar limitation in the Indian Civil Rights Act

on criminal fines is $5,000 as opposed
to $500. B. SovereignImmunity and CitizenSuit
1. Section 304

In its August 25, 1994 Notice of Proposed Rulemaking (NPR)EPA proposed, under the CAA's section 301(d) rulemaking authority, that the citizen suit provisions contained in section 304 ofthe Act should apply to tribes in the same manner in which they apply to states. See 59 FR at43978. In today's final action, EPA is declining to

announce aposition, in the context of the rulemakingrequired under section 301(d) ofthe Act, regarding whether tribes are subject to the citizen suit provisions contained in section 304, and therefore is notfinalizing the position stated in the NPR.In order to facilitate tribal adoption and implementation of air quality programs in a manner similar
to state-implemented programs, section 301(d) requires EPA to specify through rulemaking those provisions ofthe Act which the Agency believes are appropriate to apply to tribes. EPA's rulemaking approach hasbeen to deem all CAA provisions appropriate for tribes, except for those provisions specifically listed in the rule regarding which EPA, for various reasons, believes it may be inappropriate for the Agency, solely in the context ofits 301(d) authority, to make such adetermination. Thus, the direct consequence for today's final action ofEPA's decision not to adopt theposition presented in the NPR regarding the provisions ofsection 304 is that section 304 hasbeen added to the list ofthose CAA provisions which, for section 301(d) purposes, EPAhas concluded it is not appropriate to determine that tribes should be treated

as states. That list is contained in section 49.4 oftoday's rule.EPA is also clarifying the relationship ofthis final action regarding section 304 to the right that tribes enjoy, as sovereign powers, to be immune from suit. See SantaClara Pueblov. Martinez,436 U.S. 49, 58 (1978).

The Agency received a number of
comments on the section 304 citizen suit issue. One group ofindustry commenters appears to be in favor of tribes being subject to citizen suits, and is particularly concerned that non-tribal members be provided with similar enforcement opportunities for TIPs as

arerequired for SIPs. The majority of comments received on this issue came from tribal governments, mainly disputingEPA's claim that section 301(d), as a legal matter, provided EPA with the authority to apply the section 304 citizen suitprovisions to tribes since doing so would appear to have the effect ofadministratively waiving tribal sovereign immunity. These commenters 

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argue that only the tribes themselves or Congress may waive tribal sovereign immunity and, further, that Congressional intent to waive tribal sovereign immunity may not be implied but must be express and unequivocal. They do notbelieve that the CAA, including section 301(d), contains such

an express waiver. Several ofthe
commenters also state that because
states are subject to section 304 only "to the extent permitted bythe Eleventh Amendment to the Constitution," applying it to tribes would likely make the requirement more burdensome than it would be for states. Several tribal commenters also express the view that citizen suitrecourse is unnecessary since EPA retains enforcement authority under various other CAA provisions, for example, sections 110(m), 179(a)(4), and 502(i). Finally, concern is expressed that adopting a policy ofsubjecting tribes to citizen suits could hinder development oftribal airprograms because it could add significant resource constraints, financial and otherwise, particularly with respect to potential litigation.

Section 304 ofthe CAA reflects the general principle underlying all environmental citizen suitprovisions, namely that actors who accept responsibility for regulatinghealthbased standards and who voluntarily commit themselves to undertake control programs in furtherance ofsuch goals, ought to be accountable to the citizens those programs are designed to benefit. However, EPA agrees, as several commenters pointed out, that section 304 only applies to states to the extent permitted by the Eleventh Amendment
to the Constitution. The Supreme Court has interpreted the provisions ofthe Eleventh Amendment as generally serving to protect a state from liability
to suit where the state does not consent to be sued. EPAbelieves that,just as states implementing air quality programs are not subject to citizen suits except to the extentpermitted by the Eleventh Amendment ofthe Constitution and theprovisions ofthe Clean Air Act, by analogy, in the context ofairprogram implementation in Indian country, the issue ofcitizen suit liability would be determined based on established principles oftribal sovereign immunity and the provisions ofthe Clean Air Act. This is meant to emphasize that no EPA action in this final rule either enhances or limits the immunity from suit traditionally enjoyed by Indian tribes as sovereign powers.

Because the Eleventh Amendment does not apply to tribes (byits terms, the Eleventh Amendment only addresses suits brought "against one of the United States"), and because the provisions ofsection 304 (and the applicable definitions in section 302) do
not expressly referto tribes, EPAhas been concerned that the action it proposed to take may have subjected tribes to citizen suit liability in situations in which citizens could not

sue states. Because ofthis uncertainty, EPA believes it is not appropriate to attemptto resolve this significant issue in the context ofthe limited scope ofthe rulemaking required under section 301(d).

EPA also notes that courts have long recognized that citizen plaintiffs may bring actions for prospective injunctive relief against state officialsunder the CAA section 304 citizen suitprovisions,

as well as under other environmental
statutes with similar citizen suit provisions. See CouncilofCommuter Organizations v. Metro. Transp.,683 F.2d 663, 672 (2nd Cir. 1982). See also Seminole TribeofFloridav. Florida, 116 S.Ct. 1114, 1133 n.17 (1996) (acknowledging that lower courts have entertained suits against state officials pursuant to citizen suit provisions in environmental statutes substantially identical to CAA section 304(a)(1)). While this raises the question of whether such actions could be brought against "tribal officials," EPA believes this issue is also outside the scope of this rulemaking.

2. Judicial Review Provisions ofTitle V

In its proposed rulemaking, EPA proposed to treat tribes in the exact

same manner as states for purposes of the provisions ofCAA sections 502(b)(6) and 502(b)(7) addressingjudicial review under the Title V Operating Permits Program. 59 FR at43972. For the

reasons discussed below, in today's final action EPA is withdrawing its proposal to treat tribes in the exact same
manner as states forpurposes ofthese judicialreview provisions. As described below, however, tribes that opt to establish aTitle V program will still need to meet all requirements of sections 502(b)(6) and 502(b)(7) except those provisions that specify that review offinal action under the Title V permitting program be "judicial" and "in State court."

As noted above in the discussion regarding the applicability ofCAA section 304 to tribes, tribal commenters express concern over waivers oftribal sovereign immunity tojudicial review. Several tribal commenters also note that requiring tribes to waive sovereign immunity in order to run a Title V program will be a strongdisincentive for tribes to assume these programs. Two industry commenters state that nonmembers that are regulated bytribes musthave access to tribal courts for judicialreview. Several commenters express concern that some tribal governments may lack a distinctjudicial system .7

EPA recognizes the importance of providing citizens the ability to hold accountable those responsible for regulating air resources. Nonetheless, EPA also acknowledges that applying thejudicial review provisions ofTitle V to tribes through this rule would raise unique issues regarding federal Indian policy and law. EPA is mindful ofthe vitalimportance ofsovereign immunity
to tribes. In addition, EPA is aware that in some instances tribes do not have distinctjudicial systems. Finally, EPA has longrecognized the importance of encouraging tribal implementation of environmental programs and avoiding the establishment ofunnecessary barriers to the development ofsuch programs. E.g., EPA's 1984 Indian Policy; see also Senate Report at 8419 (notingthat section 301(d) is generally intended to be consistent with EPA's 1984 Indian Policy). EPA seeks to strike

abalance amongthese various considerations. See Washington DepartmentofEcology v. EPA, 752 F.2d 1465, 1469 (9th Cir. 1985).

In order to ensure a meaningful opportunity forpublic participation in the permitting process, it is EPA's position that some form ofcitizen

recourse be available for applicants and otherpersons affected bypermits issued under tribal Title V programs. One option for review offinal actions taken under atribal Title V program is for tribes to consent to suitthrough voluntary waiver oftheir sovereign immunity in tribal court. EPA supports the continued development and strengthening oftribal courts and encourages those tribes that will implement Title V permitting programs to consent to challenges bypermit applicants and other affected persons in tribal court. For the reasons discussed

7Twoindustry commenters stated that tribal
courts "lack many procedural, substantive law and constitutional protection [s] for non-members." EPA is aware that tribal governments are not subject to therequirements ofthe Bill ofRights and the Fourteenth Amendment ofthe U.S. Constitution, and that review oftribal court decisions in federal
courtmaybe limited. However, EPA notes that the Indian Civil Rights Act requires tribes to provide several protections similar to those contained in the Bill ofRights and the Fourteenth Amendment, including dueprocess oflaw, equal protection of the laws, and the right not to have property taken withoutjust compensation. 25 U.S.C. § 1302; Santa ClaraPueblov. Martinez,436 U.S. 49, 57 (1978). These protections extend to allpersons subject to tribaljurisdiction, whether Indians ornon-Indians. See IowaMutualInsuranceCo. v. LaPlante,480 U.S. 9, 19 (1987). 

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above, however, requiring tribes to provide for review in the exact same

manner as states pursuant to section 502(b)(6) is not appropriate.

In some cases, well-qualified tribes seeking approval ofTitle V programs may not have a distinctjudiciary, but rather may use non-judicial mechanisms for citizen recourse. See Santa Clara Pueblov. Martinez,436 U.S. 49, 65-66 (1978) ("Non-judicial tribal institutions have * * * been recognized as competent law-applying bodies."). In addition, a requirement that tribes waive their sovereign immunity to judicial review, in some cases, may discourage tribal assumption ofTitle V programs. Thus,EPA is willing to consider alternative options, developed and proposed by a tribe in the context ofa tribal CAA Title Vprogram submittal, that would notrequire tribes to waive their sovereign immunity to judicial review but, at the same time, would provide for an avenue for appeal oftribal government action or inaction
to an independent review body and for injunctive-type reliefto which the Tribe would agree to be bound.

EPA has consistently stressed the importance of judicial review under
state Title Vprograms. E.g., Virginiav. Browner,80 F.3d 869, 875 (4th Cir. 1996) ("EPA interprets the statute and regulation to require, at a minimum, that states providejudicialreview of permitting decisions to any person who would have standing under Article III of the United States Constitution. Notice of Proposed Disapproval, 59 Fed. Reg. 31183, 31184 (June 17, 1994)"), cert denied 117 S.Ct. 764 (1997). However, the statutory scheme regarding tribal clean air programs is quite different from that ofstates. Section 301(d)(2) of the Act explicitly provides EPA with the discretion to "specify * * * those provisions for which itis appropriate to treat Indian tribes as States." 42 U.S.C. 7601(d)(1). In addition, section 301(d)(4) ofthe Act states that where EPA "determines that treatment oftribes as identical to states is inappropriate or administratively infeasible, [EPA] may provide, by regulation, other means by which [EPA] will directly administer such provisions so as to achieve the appropriate purpose." 42 U.S.C. 7610(d)(4). As EPA noted in the preamble to theproposed rule, tribes have a "unique legal status and relationship to the Federal government that is significantly different from that ofStates. [C]ongress did not intend to alterthis when it authorized treatment ofTribes 'as States' under the CAA." 59 FR at43962, n.il.

In addition, there is ample precedent for treating tribes and states differently under federal Indian law. E.g., U.S. Const. amend. XIV; Indian Civil Rights Act, 25 U.S.C. 1301 et. seq.;and Santa ClaraPueblov. Martinez,436 U.S. 49 (1978). In Santa Clara,the Supreme Court addressed the availability of federal court review oftribal action under the Indian Civil Rights Act (ICRA), which requires tribal governments to provide several protections similar to those contained in the Bill ofRights and the Fourteenth Amendment. In finding that no additional federal court remedies beyond habeas corpus were provided by Congress for review oftribal compliance with the ICRA, the Court noted that Congress had struck a balancebetween the dual statutory objectives of enhancing individual rights without undue interference with tribal sovereignty. Santa Clara,436 U.S. at 65-66. EPA has concluded that in enacting section 301(d) ofthe Act, Congress provided EPA with the discretion to balance the goals of ensuring meaningful opportunities for public participation under the CAA and avoiding undue interference with tribal sovereignty when determining those provisions for which itis appropriate to treat tribes in the same manner as states. See WashingtonDepartmentofEcology

v. EPA, 752 F.2d 1465, 1469 (9th Cir. 1985) ("it is appropriate for us to defer
to EPA's expertise and experience in reconciling [Indian policy and environmental policy], gained through administration ofsimilar environmental
statutes on Indian lands.").

In addition to the requirement that tribal Title V programsprovide some
avenue for appeal oftribal government action or inaction and for injunctivetype relief,EPA may use several oversight mechanisms to ensure that tribal Title V programsprovide adequate opportunities for citizen recourse. E.g., CAA sections 502(i)(requiring EPA assumption ofstate or tribal Title V programs that EPA finds are not being adequately implemented or enforced), 505(b) (requiringEPA objection to state

or tribal Title Vpermits that EPA finds do not meet applicable requirements).

Thus, under today's final rulemaking, EPA is not requiring tribes to provide forjudicial review in the same manner

as states under CAA section 502(b)(6). EPA will develop guidance in the future

on acceptable alternatives tojudicial review. In reviewing the Title V program submission ofany tribe proposing an alternative tojudicial review, EPA will apply such guidance
to determine, pursuant to its section 301(d) authority, whether the tribe has provided for adequate citizen recourse consistent with the requirement in CAA 

### section 502(b)(6) that there bereview of finalpermit actions and theguidance andprinciples discussed above.

EPA emphasizes thattribes seekingto implement theTitle Vprogram will still need to meet all therequirements of CAA section 502(b)(6), except the requirements that review offinalpermit actions be "judicial" and "in state court." Specifically, tribes seekingto implement theTitle Vprogram, will need toprovide:

[a]dequate, streamlined, and reasonable procedures forexpeditiously determining whenapplications arecomplete, for processing such applications,forpublic notice, includingoffering an opportunity for 

### public comment and ahearing,and for expeditious review ofpermit actions, 

### includingapplications, renewals, or revisions, and including an opportunity for 

### * * *review* * *ofthe finalpermit action by theapplicant, any person who 

### participated in thepublic commentprocess, andany otherperson whocould obtain judicial review ofthat actionunder applicable law. CAA section 502(b)(6). In addition, all provisions ofCAA section 502(b)(7) will apply totribalprograms except the requirements that thereview be "judicial" and in "State court."
C.AirProgramImplementation in Indian Country

The August 25, 1994, proposed tribal authority rule set forth EPA's view that, based onthe general purpose and scope ofthe CAA,the requirements ofwhich apply nationally, and on the specific language ofsections 301(a) and 301(d)(4), Congress intended to giveto theAgencybroad authority toprotect tribal airresources. The proposal went

on to state that EPAintended touse its authority under the CAA "to protect air quality throughout Indian country" by directly implementing theAct's requirements in instances wheretribes choose notto develop aprogram, fail to adopt an adequate program orfail to adequately implement an airprogram." Id. at 43960. Comments on this issue

were received fromtribes, state and localgovernment representatives, and industry.

The comments generally support the discussion ofEPA's authority underthe CAA toprotect airquality throughout Indian country, but, overall, seek specific clarification with respect to the timeframe and scope offederal implementation. In addition, several commenters, although focusing on different aspects ofthe issue, express a general concern thattherebe no diminution orinterruption in tribal air

resource protection while tribal programs arebeingdeveloped. EPA 

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acknowledges the seriousness ofthe

concerns identified by the commenters and agrees that a clearer presentation of the Agency's intentions is appropriate.

Most tribal commenters support establishing federal airprograms under the circumstances outlined in the proposal, but many are concerned with the past lack ofenforcement of environmental programs on tribal lands. Almost all commenters express concern with the lack ofa definite timetable for federal initiation ofair programs to protect tribal airresources and prevent gaps in protection. Tribal commenters generally support the provision in the proposal to develop an implementation strategy and aplan forreservation air program implementation; however, they request that EPA develop time frames and establish dates for developing the implementation strategy. A state commenter argues that the proposal did
not sufficiently allow for state comment

or input in the development ofthe implementation strategy, asserting that both state and tribal involvement willbe necessary to avoid regulatory conflicts. A number ofgovernment and industry
commenters suggest that EPA elaborate

on the process for developing tribal air programs in light ofthe interrelationship between existing air programs and new tribal programs. Another commenter requests that EPA resolve the process for transition from existing programs to tribal programs as part ofthisrulemaking. One state comments that the transfer must be accomplished without leaving sources ofairpollution and the states in air quality "limbo" pending development ofeither tribal orEPA programs to regulate sources under thejurisdiction ofa tribe. Another state argues that if a tribe has no approved program and EPA has noreason for enforcement, section 116 preserves the state's inherent authority to regulate non-member

sources on areservation. One tribe asks that the process for transferring administration ofan EPA-issued permit for a source on tribal lands to the tribe be made more explicit. Many tribal commenters request technical and administrative support in the form of guidance documents, training, sufficient financial resources, and EPA staff assigned to work with tribes on tribal CAA programs who are knowledgeable about tribal law and concerns. These
commenters also express concern that limited resources might prevent EPA from providing this critical support.

As indicated above, EPArecognizes the seriousness ofthe concerns expressed in these comments and has undertaken an initiative to develop a comprehensive strategy for implementing the Clean Air Act in Indian country. The strategy will articulate specific steps the Agency will take to ensure that air quality problems in Indian country are addressed, either by EPA or by the tribes themselves. This strategy [a draft ofwhich is available in the docket referenced above] addresses
two major concerns: (1) Gaps in Federal regulatory programs that need to be filled in orderfor EPA to implement the CAA effectively in Indian country where tribes opt not to implement their

own CAA programs; (2) identifying and providing resources, tools, and technical support that tribes will need to develop their own CAA programs.

EPA believes that the strategy being developed addresses many ofthe

concerns expressed by the commenters. Once tribal programs are approved by EPA, tribes will have authority to regulate all sources within the exterior boundaries ofthe reservation under such programs. One ofthe most prevalent concerns is the status of

sources (current and future) in Indian country not yet subject to the limits of

an implementation plan. Commenters want assurance that EPA would step in to fillthis gap and ensure adequate control. The Agency has consistently recognized the primary rolefor tribes in protecting air resources in Indian country and has expressed its continued commitment to work with tribes to protect these resources in the absence of approved tribal programs. The Agency has issued permits and undertaken the development ofFederal Implementation Plans (FIP)to control sources locating in Indian country. Forexample, the Agency is working with both the Shoshone-Bannock and the Navajo Tribes to address pollution control of major sources on their Reservations. The Agency has also issued PSD preconstruction permits to new sources proposing to locate in Indian country. The Agency has started to explore options for promulgating new measures to ensure that EPA has a full range of programs and Federal regulatory mechanisms to implement the CAA in Indian country. Since the 1994 proposal, EPAhas tried specifically to identify the primary

sources ofair pollution emissions in Indian country, and evaluate the CAA statutory authorities for EPA to regulate those sources pending submission and approval ofa TIP. EPAhas determined that the CAA provides the Agency with very broad statutory authority to regulate sources ofpollution in Indian country, but there are instances in which EPAhas not yetpromulgated regulations to implement its statutory authority. One example is the absence of complete air permitting programs in Indian country. EPAhas promulgated regulations establishing permit requirements for major sources in attainment areas, and issued Prevention ofSignificant Deterioration permits to

new or modifyingmajor sources. See40 CFR 52.21. However, EPAhas not promulgated regulations for a permitting program in Indian country for either minor or major sources ofairpollution emissions in nonattainment areas. Therefore, EPA is currently drafting nationally applicable regulations for such minor and major source permitting programs. The permitting programs are expected to apply to construction or modification ofall minor sources and to major sources in nonattainment areas. In addition, the planned permitting program would allow existing sources to voluntarily participate in thepermitting program and accept enforceable permit limits.EPA regional offices would be the permitting authority for this program. With respect to Title V operating permits, EPA has proposed to include Indian country within the scope of40CFR Part 71. Therefore, the Part 71 regulations would apply to allmajor stationary sources ofair pollution located in Indian country.

Many CAA requirements apply in Indian country without any further action by the EPA. For example, the standards and requirements ofthe Standards ofPerformance forNew Sources, 42 U.S.C. 7411 and 40 CFR Part 60, apply to all sources in Indian country. Similarly, the National Emissions Standards for Hazardous Air Pollutants, 42 U.S.C. 7412 and 40CFR Part 63 apply in Indian country.

EPA has, however, identified categories ofsources ofair pollution, such as open burning and fugitive dust, that are not covered by those regulations. For these categorical
sources, EPA believes that it has the authority to promulgate regulations on a national basis that would apply until a TIPhas been submitted and approved. EPA has also identified anumber of general air quality rules, such asthe prohibition against emitting greater than 20 percent opacity, which could be promulgated nationally for application in Indian country pending TIP approval.

EPA is optimistic that any additional regulations can be promulgated and implemented relatively quickly, since, along with theprotections they would provide, such regulations can also serve

as models which tribes can usein drafting TIPs.

EPA wishes to emphasize that the national rules it intends to promulgate willbe analogous to, but notthe same 

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in all respects, as the types ofrules generally approved into State Implementation Plans. For example, EPA's federal rules are likely to represent an average program, potentially more stringent than some SIPrules and less stringent than others. However, by promulgating such rules, EPA would notbe establishing, and should not be interpreted by States as setting, new minimal criteria or standards that would govern its approval ofSIP rules. EPA encourages and will work closely with all tribes wishing to replace the future federal regulations with TIPS. EPA intends that its federal regulations will apply only in those situations in which a tribe does
not have an approved TIP.

EPA will actively encourage tribes to provide assistance in the development oftheproposed regulations referenced above to ensure that tribal considerations are addressed and development ofthe regulations will be subject to notice and comment rulemaking procedures.

The case-by-case nature ofprogram implementation in Indian country makes itdifficult to address concerns about plans and time lines. The Agency's strategy for implementing the CAA in Indian country proposes a multi-pronged approach, one prong of which is federal implementation described above. The other prongs derive from a "grass-roots" approach in which staffin the EPA regional offices work with individual tribes to assess the air quality problems and develop, in consultation with the tribes, either tribal

or federal strategies for addressing the problems. 1.BuildingTribalCapacity.An essential component ofthe Agency's CAA implementation strategy is to

assess the extent to which tribes have developed an environmental protection infrastructure and determine how best
to build tribal capacity to implement their own CAA programs. The assessment will be done in cooperation with the tribes and may include any or allofthe following:

a.NeedsAssessment. An initial step for effectively implementing the CAA in Indian country is to identify the air quality concerns and determine how well the tribes are able to address them. EPA will work with the tribes to develop emission inventories and air monitoring studies (where appropriate)
to determine the nature oftheproblem and identify a range ofpotential control strategies. From this information, EPA and the tribes willjointly develop, as needed, tribal or federal implementation plans (TIPs/FIPs) to address the problem. These TIPs/FIPs may include, for example, controls on minor sources, categorical prohibitory rules, area

source controls (e.g., vapor recovery, open burning ordinances).

b. Communication.A critical part of the Agency's strategy to build tribal capacity is outreach and communication. Outreach has already begun as EPAregional staffworked with tribes in their service area to draft the Strategy for Implementing the CAA in Indian Country. Outreach will continue with thepromulgation ofthis rule; staff will meet with Tribes in regional meetings held throughout the country to talk about implementing the rule and

answer questions. In follow-up to these initial meetings, EPA will adopt amultimedia approach to communicating with the Tribes and other stakeholders (conferences, conference calls, newsletters, Internet, etc.) to ensure timely access to information and guidance developed in support ofthis rule.

c. Training.The third component for building tribal capacity is training, providing in various forms and through various media the skills and knowledge needed to implement an air quality protection program in Indian country. EPA already supports atraining program atNorthern Arizona University (NAU)that offers basic introductory workshops on air quality program management and administration and a

more in-depth course in air pollution control technology. This program, offered at no cost to tribes, helps tribal environmental professionals develop competence in air quality management. The program also prepares these professionals for enrollment in more advanced courses in EPA's Air Pollution Training Institute (APTI). In addition to these formal training opportunities, EPA offers internships to college students interested in pursuing an environmental

career and supports an outreach program in high schools in Indian country to encourage these students' interest in environmental protection

careers. EPA plans to encourage other options for promotingtribal professional development, including peer-to-peer support, temporary assignments with other government (state, tribal, or federal) environmental programs, and cooperative agreements to provide technical assistance.

As these individual tribal assessments

are completed, the information will be compiled in order to determine to what
extent commonalities exist among the air quality problems that might be amenable to common solutions (e.g., Title V, minor sources, etc.). The Agency will work in concert to develop other common solutions, as needed. At the same time, EPA is developing guidance documents, templates, and model analyses to assist tribes in developing Tribal Air Programs.

Finally, EPArecognizes that air quality problems in Indian country do
notexist in isolation and that often they

arepart ofa broader spectrum of environmental problems, the solutions for which may be best developed through an integrated approach to environmental protection. EPA's Office ofAir &Radiation will continue to work with other media offices to develop overall environmental assessments (through the Tribal/EPA Environmental Agreement process) for Indian country and develop integrated approaches where appropriate. One approach, for example, might be to focus on ways to simultaneously protect air quality, water quality, and other public health and environmental values through control strategies that reduce atmospheric deposition of air pollutants in Indian country.

D. CAA Sections 110(c)(1) and502(d)(3) Authority

In theproposed tribal rule, EPA stated that it was not proposing to treat tribes in the same manner as states under its section 301(d) authority with respect to the specific provision in section 110(c)(1) that directs EPA to promulgate, "within 2 years," aFederal Implementation Plan (FIP) afterEPA finds that a state has failed to submit a required plan, orhas submitted an incomplete plan, or within 2 years after EPA has disapproved all or aportion of

aplan. 59 FR at43965. The proposed exception applied only forthat provision ofsection 110(c)(1) that sets a specified date by which EPA must issue

aFIP. The proposal went on to state that "EPA would continue to be subject to the basic requirement to issue aFIP for affected [tribal] areas within some reasonable time." In today's action, EPA is finalizing the general approach discussed in the proposal, but has altered the method for implementing that approach. Therefore, although the result that was intended bythe proposal remains unchanged, afterfurther review, EPA is modifying the regulatory procedure bywhich it achieves that result, and is also clarifying the statutory basis it is relying upon for doing so.

The proposed rule set forth EPA's view that one ofthe principal goals of the rulemakingrequired under section 301(d) is to allow tribes the flexibility to develop and administer their own CAA programs to as full an extent aspossible, while at the same time ensuring that the health and safety ofthepublic is 

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protected. However, since, among other things, tribal authority for establishing CAA programs was expressly addressed for the first time in the 1990 CAA Amendments, in comparison to states, tribes in general are in the early stages ofdeveloping airplanning and implementation expertise. Accordingly, EPA determined that it would be infeasible and inappropriate to subject tribes to the mandatory submittal deadlines imposed bythe Act on states, and to therelated federal oversight mechanisms in the Act which are triggered when EPA makes a finding that states have failed to meet required deadlines or acts to disapprove a plan submittal. As the proposal noted, section 301(d)(2) provides forEPA to promulgate regulations specifying those provisions for which itis appropriate to treat tribes as states, but does not compel tribes to develop and seek approval ofair programs. In other words, there is no date certain submittal requirement imposed by the Act for tribes as there is for states. Thus, since the FIP obligation under section 110(c)(1) is keyed to plan submission failures by states that are contemplated with respect to "a required submission," and to plan disapprovals that have not been cured within a specified time frame, the discussion in theproposal regarding section 110(c)(1) was consistent with the approach summarized above. However, given that the statutory basisunderlying section 110(c)(1) is either expressly inapplicable
to tribal plans or is linked to submittal deadlines that the Agency is today determining are inappropriate or infeasible to apply to tribal plan submissions, that section as a wholenot merely the provision setting a specific dateby which EPA must issue

aFIP-should have been included on the list ofproposed CAA provisions for which EPA would not treat tribes in the

same manner as states.

Consequently, in this final action, EPA has added section 110(c)(1) in its entirety to the list ofCAA provisions in the rule portion ofthis action (§49.4) for which EPA is not treating tribes in the

same manner as states. However,by including the specific FIP obligation under section 110(c)(1) on the listin section 49.4 ofthis final rule,EPA is not relieved ofits general obligation under the CAA to ensure theprotection ofair quality throughout the nation, including throughout Indian country. In the absence ofan express statutory requirement, EPA may act to protect air quality pursuant to its "gap-filling" authorityunder the Act as a whole. See, e.g., CAA section 301(a). Moreover, section 301(d)(4) provides EPA with discretionary authority, in cases where it has determined that treatment of tribes as identical to states is "inappropriate or administratively infeasible," to provide for direct administration through other regulatory

means. EPA is exercising this discretionary authority and has created

anew section (§49.11) to this final rule which provides that the Agency will promulgate a FIP to protecttribal air quality within a reasonable time if tribal efforts do not result in adoption and approval oftribal plans or programs. Thus, EPA will continue to be subject to the basic requirement to issue a FIP for affected tribal areas within some reasonable time.

The proposal notice made clear that

even while the Agency was proposing
not to treat tribes as states forpurposes ofthe specified date in section 110(c)(1), it was always EPA's intention to retain the requirement to issue aFIP, as necessary and appropriate, for affected tribal areas. The bases and rationale for that determination are thoroughly set forth in 59 FR43956 (especially atpages 43964 through 43966) and remain the

same. The only change between the proposal and this final notice regards the methodology used to achieve the intended result,i.e., using the Agency's section 301(d)(4) discretionary authority in conjunction with its general "gapfilling" CAA authority. Similarly, EPA is taking final action

on its proposal not to treat tribes in a

manner similar to states for the provision ofsection 502(d)(3) which requires issuance by EPA, within two years ofthe statutory submittal deadline, ofa federal operating permit program if EPAhas not approved a state program. The Agency has proposed, pursuant to its section 301(d)(4) authority, to include in its final rule addressing federal implementation of operating permit programs in Indian country a commitment to implement such programs by a date certain in instances where atribe chooses not to implement a program or does not receive EPA approval ofa submitted program. 62 FR 13748. In light ofthis commitment, EPA does not believe itis necessary to retain the text in §49.4(j) acknowledging its federal authority. 

### III. Significant Changes to theProposed Regulations

A. Part35-StateandLocalAssistance
Section 35.205 Maximum Federal Share and Section 35.220 Eligible Indian Tribe. In its proposed rule, EPA sought comment on the appropriate level oftribal cost share for a section 

### 105 grant, from a minimum offive percent to amaximum of40 percent. The proposal also asked for comments

on the establishment ofaphase-in period for tribes to meet whatever match is ultimately required for section 105 grants. Tribes universally comment that the level ofmatching funds should be kept to a minimum, i.e., five percent, if
notwaived altogether, especially during the early stages ofdeveloping an air quality program. One tribe asserts that TitleV cannot be viewed asthe solution to funding tribal air programs; other financial resources must also be made available. In addition, EPA notes that only a smallnumber oftribes have applied for section 105 grants despite being eligible to receive such grants as air pollution control agencies under section 302(b)(5) and section 301(d)(5). EPA attributes much ofthe tribes' reluctance to apply for these grants to the match requirement offorty percent that has been applicable to all section 105 grants.

EPA agrees with the commenters that tribal resources generally are not adequate to warrant the level ofmatch required ofstates and that equivalent

resources are unlikely to become available in the foreseeable future. A high match requirement would likely discourage interested tribes from developing and implementing air programs. Itis not appropriate to compare theresources available for the development ofstate programs to that of tribes because tribes often lackthe

resources or tax infrastructure available
to states for meeting cost share requirements. Furthermore, a low match requirement, with ahardship waiver, is consistent with federal Indian policy which encourages the removal of obstacles to self-government and impediments to tribes implementing theirown programs.

Accordingly, EPA has determined that it is inappropriate to treat tribes identically to states for the purpose of the match requirement ofsection 105 grants. Therefore, pursuant to its authority under section 301(d)(4), EPA willprovide a maximum federal contribution of95 percent for financial assistance under section 105 to those tribes eligible for treatment in the same

manner as states for two years from the initial grant award. After the initial twoyearperiod of5 percent match, EPA will increase each tribe's minimum cost share to 10 percent, as long asEPA determines that the tribe meets certain objective and readily-available economic indicators that would provide

an objective assessment ofthe tribe's ability to increase its share. Within eighteen months ofthepromulgation of 

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this rule, the Agency will, with public input, develop guidance settingforth the precise procedures for evaluating tribal economic circumstances and will identify those economic indicators (for example, tribal per capita income, tribal unemployment rates, etc.) that willbe used to support its determinations.

The tribal match will not be waived unless the tribe can demonstrate in writing to the satisfaction ofthe Regional Administrator that fiscal circumstances within the tribe are constrained to such an extent that fulfilling the match would impose undue hardship. This waiver provision is designed to be very rarely used. The Agency does not foresee any circumstances that wouldjustify eliminating this waiver provision for those eligible tribes that are able to demonstrate that meeting the match requirement would result in undue financial hardship. This waiver provision is not available to tribes that establish eligibility for a section 105 grant pursuant to § 35.220(b).

The EPA will examine the experience ofthisprogram and otherrelevant information to determine appropriate long-term cost share rates within five years ofthe date ofpublication ofthis rule.

Finally, the definition ofIndian Tribe in §35.105 has been changed to make it consistent with the definition found in the CAA at section 302(r) and the definition in §49.2.

B. Title V Operating PermitsProgram: Operational Flexibility
The Agency received comments that objected to theproposed rule's position that tribal part 70 programs would not be required to include the same operational flexibility provisions required ofstate part 70 programs. The proposal preamble suggested that the three operational flexibility provisions
at40 CFR 70.4(b)(12) would be optional for tribes as would 40 CFR 70.6(a)(8), 40 CFR 70.6(a)(10), and 40 CFR 70.6(a)(9). A briefdescription ofeach ofthese provisions follows.

The three operational flexibility provisions in §70.4(b)(12) require permitting authorities to: (1) allow certain changes within a facility without requiring apermit revision; (2) allow for trading increases and decreases in emissions in the facility where the applicable implementation plan provides for such trading; and (3) allow trading ofemissions increases and decreases in the facility for the purposes ofcomplying with a federallyenforceable emissions cap that is established in thepermit. These provisions implement section 502(b)(10) ofthe Act. EPAhas proposed to modify these provisions, bydeleting the first provision and making sometechnical clarifications to the third provision. See 60 FR45529 (August 31, 1995).

Section 70.6(a)(8) requires as a standard condition that permits contain

aprovision statingthat no permit revision shall be required under any approved economic incentives, marketable permits, emissions trading and other similar programs or processes for changes that areprovided for in the permit. Section 70.6(a)(10) requires a standard condition (upon request ofthe applicant) that allows for emissions trading at a source ifthe applicable requirement provides for trading without acase-by-case approval ofeach emission trade. Section 70.6(a)(9) requires as a standard condition (uponrequest ofthe applicant and approval bythe permitting authority) terms that describe reasonably anticipated operating scenarios.

Initially, EPA believed that the technical expertise required to implement operational flexibility provisions would make ittoo difficult for tribal programs to obtain EPA approval. Accordingly, the Agency proposed that,for purposes ofthese provisions, tribes would not be treated in the same manner as states. However, EPA now believes that abetter approach would be to treat tribes in the same

manner as states forpurposes ofthese provisions, while providing sufficient technical assistance, if needed, to enable tribes to issue permits that meet these operational flexibility requirements. Such an approach will assure that

sources will be provided maximum flexibility regardless ofwhether the permitting agency is a tribal or state agency. In addition, it will afford

sources that are subject to tribal part 70 programs the benefit ofstreamlined provisions that have been proposed for part 70.

C.Section49.4 CleanAirAct Provisions for Which Tribes WillNotBe Treatedin theSameManneras States

Based on the comments received regarding tribal sovereign immunity and citizen suits (see discussion at 1I.B), EPA is withdrawing its proposal to treat tribes as states for purposes ofsection 304 and thejudicial review provisions ofsections 502(b)(6) and 502(b)(7) ofthe Act and has revised §49.4 accordingly.

D. Section49.8 Provisions forTribal CriminalEnforcementA uthority

EPA is modifying the language under this provision to clarify the federal role 

### in criminal enforcement oftribal programs. Where tribes are precluded by law from asserting criminal enforcement authority, thefederal government will exercise criminal enforcement responsibility. To facilitate thisprocess, the Criminal Investigation Division office located at the appropriate EPA regional office and thetribe will establish aprocedure by which any duly authorized agency ofthe tribe (tribal environmental program, tribalpolice force, tribalrangers, tribal fish and wildlife agents, tribalnatural resources office,etc.) shall providetimely and appropriate investigative leads to any agency ofthefederal government (EPA, U.S. Attorney, BIA, FBI, etc.) which has authority to enforce the criminal provisions offederal environmental statutes. This procedure willbe incorporated into theMemorandum of Agreement between thetribe and EPA. Nothing inthe agreement shallbe construed to limitthe exercise of criminal enforcement authority by the tribe under any circumstances where thetribe maypossess such authority.
E.Section49.9 EPAReview ofTribal CleanAirActApplications
New Process forDetermining Eligibility ofTribes for CAA Programs

Many state,local government and industry commenters suggest that the proposed 15-day review period provided by EPA to identify potential disputes regarding a tribal applicant's assertion ofreservation boundaries and jurisdiction over non-reservation areas should be extended. Suggested changes to theproposed 15-day review period range from 30 to 120 days. Commenters citethepotential complexity of jurisdictionalissues and the amountof timerequired torespond adequately, especially fornon-reservation areas. Thesecommenters alsoexpress concern thatnotice and an opportunity for commentregarding reservation boundaries and tribaljurisdiction over non-reservation areas isbeinglimited to "appropriate governmental entities." Industry commenters suggest that notice and opportunity for comment alsobe provided to theregulated community, as well as other interested parties (e.g., landowners whose property could potentially fall undertribal jurisdiction). In addition, one industry commenter states that such determinations should be viewed as rulemakings under the Administrative Procedures Act (APA) and, thus, subject topublic notice and comment.

Consistent with the TASprocess which EPAhas historically implemented underthe Clean Water 

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and Safe Drinking Water Acts, the preamble to EPA's proposed rule on tribal CAA programs stated that the CAA TAS process "will provide States with an opportunity to notifyEPA of boundary disputes and enable EPA to obtain relevant information as needed[.]" 59 FR at43963. The proposal also indicated that a principal concern in developing the eligibility process was to streamline the process to eliminate needless delay. Id. In proposing to limit the notice and comment provision to "appropriate governmental entities" and the period within which to respond to 15 days with the possibility ofa onetime extension ofanother 15 days, EPA

was generally affirming prior "treatment

as state" (TAS) practice. EPA notes that neither the Water statutes northe CAA mandates a specificprocess regarding TAS determinations, including jurisdiction. Under CAA section 301(d)(2)(B), EPA must evaluate whether a tribe has demonstrated that the air resource activities it seeks to regulate are either within a reservation
area, or within a non-reservation area
over which the tribe hasjurisdiction. In doing so, the Agency has provided for notice and a limited opportunity for input respecting the existence of competing claims overtribes' reservation boundary assertions and assertions of jurisdiction over nonreservation areas to "appropriate governmental entities," which the Agency has defined as states, tribes and other federal entities located contiguous
to the tribe applying for eligibility. See generally, 56 FR 64876, 64884 (Dec. 12, 1991). This practice recognizes, in part, that to the extent genuine reservation boundary or non-reservation jurisdictional disputes exist, the assertion ofsuch are an inherently government-to-government process. Nonetheless, EPA seeks to make its notification sufficiently prominent to inform local governmental entities, industry and the general public, and will consider relevant factual information from these sources as well, provided (for the reason given above) they are submitted through the identified "appropriate governmental entities." In making determinations regarding eligibility in the context ofthe Water Acts, EPAhas explained that the part oftheprocess that involves notifying "appropriate governmental entities" and inviting them to review the tribal applicant'sjurisdictional assertion is designed to be a fact-finding procedure to assistEPA in making these statutorily-prescribed determinations regarding the tribes' jurisdiction; it is
not in any way to be understood as creating or approving a state or nontribal oversight role for a statutory decision entrusted to EPA. Forthese
reasons, EPA also disagrees with the industry commenter about the status of these decisions under the APA. Given that there is no particular process specified under EPA governing statutes for TAS eligibility determinations, they

are in the nature ofinformal adjudications for APA purposes. As such, EPA does not believe there is a legal requirement for any additional process than what the Agency already provides. By contrast, EPA decisions regarding tribal authority to implement CAA programs generally arerulemaking actions involving public notice and
comment in the Federal Register. The approach in the proposed CAA rule was intended to follow the above process, including its imposed limitations (such

as a 15-day review period), to ensure that overall eligibility decisions should
not be delayed unduly.

In today's rulemaking, EPA recognizes that the potential complexities of reservation boundary and nonreservation jurisdictional issues may require additional review time and is finalizing an initial notice and comment period of 30 days with the option for a one-time extension of30 days for disputes over non-reservation areas, should the issues identified by the
commenters warrant such extension. EPA agrees that in some cases issues regarding tribaljurisdiction over nonreservation areas may be complex and may require more extensive analysis. However, EPA believes that many jurisdictional claims will be noncontroversial and will not elicit adverse comments. In these instances, a comment period in excess of30 days is not warranted. If,however, the tribal claims involve non-reservation areas and require more extensive analysis, an extension to the comment period may be warranted. In allcases, comments from appropriate governmental entities must be offered in a timely manner, and
must be limited to the tribe's jurisdictional assertion. State and industry commenters question the appropriateness ofthe language in §49.9 ofthe regulatory portion ofthe proposal which states that eligibility decisions regarding a tribe's jurisdiction will be made byEPA Regional Administrators, asit appears to imply thatjurisdictional disputes will always be resolvable at the Agency level. EPA continues to believe that the Regional Administrators are the appropriate decision makers for tribal eligibility purposes, including jurisdictional assertions. However, the Agency does agree that the language, as written, mayhave been confusing. Consequently, EPAhas modified the first sentence of§49.9(e). As explained previously, EPA hasbeen making eligibility decisions pursuant to the TAS process under other environmental
statutes for some timenow. The TAS process set forth in this rule, including the process formaking tribal jurisdictional determinations, is consistent with the approach followed by EPA in related regulatory contexts. EPA notes again that it believes that many submissions regarding jurisdiction bytribes requesting eligibility determinations will be noncontroversial.

This final rule allows tribes to submit simultaneously to EPA arequest for an eligibility determination and a request for approval ofa CAA program. In such circumstances, EPA will likely

announce its decision with respect to eligibility and program approval in the

same Federal Register notice, for purposes ofadministrative convenience. However, EPA does notintend this simultaneous decision process ofitself
to be interpreted as altering the Agency's view (described above) regarding APA applicability with respect to notice and review opportunities provided to appropriate governmental entities with respect to tribal reservation boundary and nonreservation jurisdictional assertions.

F. Section49.11 Actions Under Section 301(d)(4)Authority

This section addresses the regulatory provisions being added to this rule pursuant to CAA section 301(d)(4). See discussion at Part II.D above.

IV.Miscellaneous

A. Executive Order(EO) 12866
Section 3(f)ofEO 12866 defines "significant regulatory action" to mean any regulatory action that is likely to result in arule that may: (1) Have an annual effect on the economy of$100 million or more or adversely affect in a material way the economy, a sector ofthe 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

orplanned by another agency;

(3) Materially alter thebudgetary impact ofentitlements, grants, user fees,

or loan programs or therights and obligations ofrecipients thereof; or

(4) Raise novel legal or policy issues arising out oflegal mandates, the President's priorities, or the principles
set forth in this Executive order. 

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This rule was determined to be a significant regulatory action. A draft of this rule was reviewed by the Office of Management and Budget (OMB) prior to publication because ofanticipated public interest in this action including potential interest by Indian tribes and state/local governments.

EPA has placed the following information related to OMB's review of this proposed rule in the public docket referenced at the beginning ofthis notice:

(1) Materials provided to OMB in conjunction with OMB's review ofthis rule; and

(2) Materials that identify substantive changes made between the submittal of
adraft rule to OMB and this notice, and that identify those changes that were made atthe suggestion or recommendation ofOMB.

B. RegulatoryFlexibilityAct (RFA)

Under the RFA, 5 U.S.C. 601-612, EPA must prepare, for rules subject to notice-and-comment rulemaking, initial and final Regulatory Flexibility Analyses describing the impact on small entities. The RFA defines small entities

as follows: -Small businesses. Any business

which is independently owned and operated and is not dominant in its field as defined by Small Business Administration regulations under section 3 ofthe Small Business Act. -Small governmentaljurisdictions.

Governments ofcities, counties, towns, townships, villages, school districts or special districts, with a population ofless than fifty thousand. -Small organizations. Any not-forprofit enterprise which is independently owned and operated and is not dominant in its field. However, the requirement ofpreparing such analyses is inapplicable if the Administrator certifies that the rule will not, ifpromulgated, have a significant economic impact on a substantial number ofsmall entities. 5 U.S.C. 605(b).

The rule will nothave a significant economic impact on a substantial number ofsmall entities. Many Indian tribes may meet the definition ofsmall governmentaljurisdiction provided above. However, the rule does not place any mandates on Indian tribes. Rather, it authorizes Indian tribes at their own initiative to demonstrate their eligibility
to be treated in the same manner as states under the Clean Air Act, to submit CAA programs for specified provisions and to request federal financial assistance as described elsewhere in this preamble. Further, the rule calls for the minimum information necessary to effectively evaluate tribal applications for eligibility, CAA program approval and federal financial assistance. Thus, EPA has attempted to minimize the burden for any tribe that chooses to participate in the programs provided in this rule.

The regulation will not have a significant impact on a substantial number ofsmallbusinesses. Any additional economic impact on the public resulting from implementation of this regulation is expected to be negligible, since tribal regulation of these activities is limited to areas within reservations and non-reservation areas within tribaljurisdiction and, in any event, EPAhas regulated or may regulate these activities in the absence oftribal CAA programs.

The regulation will not have a significant impact on a substantial number ofsmall organizations for the

same reasons that the regulation will not have a significant impact on a substantial number ofsmall businesses.

Accordingly, Icertify that this regulation will not have a significant economic impact on a number ofsmall entities.

C.Executive Order(EO)12875andthe UnfundedMandatesReform Act

EO 12875 is intended to reduce the imposition ofunfunded mandates upon state, local and tribal governments. To that end, it calls for federal agencies to refrain, to the extent feasible and permitted by law, from promulgating any regulation that is not required by
statute and that creates a mandate upon
a state, local, or tribal government, unless funds for complying with the mandate areprovided by the federal government or the Agency first consults with affected state, local and tribal governments.

The issuance ofthis rule is required by statute. Section 301(d) ofthe CAA directs the Administrator to promulgate regulations specifying those provisions ofthe Act for which itis appropriate to treat Indian tribes as states. Moreover, this rule will not place mandates on Indian tribes. Rather, as discussed in section IV.B above, this rule authorizes

or enables tribes to demonstrate their eligibility to be treated in the same

manner as states under the Clean Air Act and to submit CAA programs for the provisions specified by the Administrator. Further, therule also explains how tribes seeking to develop and submit CAA programs to EPA for approval may qualify for federal financial assistance.

Title II ofthe Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 104- 4, signed into law on March 22, 1995, establishes requirements for federal agencies to assess the effects oftheir regulatory actions on state, local, and tribal governments and the private
sector. Under sections 202 and 205 of the UMRA, EPA generally mustprepare

a written statement ofeconomic and regulatory alternatives analyses for proposed orfinal rules with federal mandates, as defined bythe UMRA, that mayresult in expenditures to state, local, or tribal governments, in the aggregate, or to theprivate sector, of $100 million or more in any one year. The section 202 and 205 requirements do not apply to today's action because it is not a "Federal Mandate" and because it does not impose annual costs of$100 million ormore.

Today's rule contains no federal mandates for state, local or tribal governments or the private sector for
tworeasons. First, today's action does
notimpose any enforceable duties on any state, local or tribal governments or the private sector. Second, the Act also generally excludes from the definition ofa "federal mandate" duties that arise from participation in avoluntary federal program. As discussed above and in Section IV.B., the rule that is being promulgated today merely authorizes eligible tribes to seek, attheir own election, approval from EPA to implement CAA programs for the provisions specified by the Administrator. Moreover, EPA has regulated ormay regulate these activities in the absence ofTribal CAA programs.

Even iftoday's rule did contain a federal mandate, this rule will not result in annual expenditures of$100 million

or more for state, local, and tribal governments, in the aggregate, or the private sector. Thisrule only addresses CAA authorizations that pertain to tribal governments, not to state or local governments, and calls for tribal governments to submit the minimum information necessary to effectively evaluate applications for eligibility and CAA program approval. The rule also explains how tribes seeking to develop and submit CAA programs for approval may qualify for federal financial assistance and, thus, minimize any economic burden. Finally, any economic impact on the public resulting from implementation ofthis regulation is expected to be negligible, since tribal regulation ofCAA activities is limited to reservation areas and non-reservation

areas over which a tribe can demonstratejurisdiction.

Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, 

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including tribal governments, section 203 ofthe UMRA requires EPA to develop a plan for informing and advising any small government. EPA consulted with tribal governments periodically throughout the development ofthe proposed rule, and
met directly with tribal representatives
atthree major outreach meetings. Since issuance ofthe proposed rule,EPA also received extensive comments from, and has been in communication with, tribal governments regarding all aspects of this rule. The Agency is also committed
to providing ongoing assistance to tribal governments seeking to develop and submit CAA programs for approval.

D.PaperworkReductionAct

OMB has approved the information collection requirements pertaining to grants applications contained in this rule under the provisions ofthe Paperwork Reduction Act, 44 U.S.C. 3501, etseq. and has assigned OMB control number 2030-0020.

This collection ofinformation pertaining to the grants application process has an estimated reporting burden averaging 29 hoursper response and an estimated annual record keeping burden averaging 3hours per respondent. These estimates include time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection ofinformation.

The Office ofManagement and Budget has also approved the information collection requirements pertaining to an Indian tribe's application for eligibility
to be treated in the same manner as a state or "treatment as state" as provided by thisrule under the Paperwork ReductionAct, 44 U.S.C. 3501, etseq. and has assigned OMB control number 2060-0306. This rule provides that each tribe voluntarily choosing to apply for eligibility is to meet eligibility by demonstrating it: (1) Is a federally recognized tribe; (2) has a governing body carrying out substantial governmental duties and powers; and (3) is reasonably expected to be capable ofcarrying out the program for which it is seeking approval in a manner consistent with the CAA and applicable regulations. Ifa tribe is asserting jurisdiction over non-reservation areas, it must demonstrate that the legal and factual basis for itsjurisdiction is consistent with applicable principles of federal Indian law.

This collection ofinformation for treatment in the same manner as states to carry out the Clean Air Acthas an estimated reportingburden of20 annual responses, averaging 40 hours per response and an estimated annual record keeping burden averaging 800 hours. These estimates include time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection ofinformation. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for afederal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes ofcollecting, 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, acollection ofinformation 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. EPA is amending the table in 40CFR Part 9 ofcurrently approved ICR control numbers issued byOMB for various regulations to list the information requirements contained in this final rule.

E. Submissionto Congressandthe GeneralAccountingOffice

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business Regulatory Enforcement Fairness Act of 1996, EPA submitted areport containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives and the Comptroller General ofthe General Accounting Office prior to publication ofthe rule in today's Federal Register. This rule is not a "major rule" as defined by 5 U.S.C. 804(2).

List ofSubjects

40 CFRPart9

Environmental protection, Reporting and recordkeeping requirements.

40 CFRPart35

Environmental protection, Air pollution control, Coastal zone, Grant programs-environmental protection, Grant programs-Indians, Hazardous waste, Indians, Intergovernmental relations, Pesticides and pests, Reporting and recordkeeping requirements, Superfund, Waste
treatment and disposal, Water pollution control, Water supply.

40 CFRPart 49

Environmental protection, Air pollution control, Administrative practice and procedure, Indians, Intergovernmental relations, Reporting and recordkeeping requirements.

40 CFRPart 50

Air pollution control, Carbon monoxide, Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides.

40 CFRPart 81

Environmental protection, Air pollution control, National parks, Wilderness areas.

Dated:February 3, 1998. CarolM.Browner, Administrator.

For the reasons set out in the Preamble, title 40, chapter I ofthe Code ofFederal Regulations is amended as set forth below:



### PART9-OMB APPROVALS UNDER THE PAPERWORK REDUCTION ACT

1. The authority citation for part 9 continues to read as follows:

Authority: 7U.S.C. 135 et seq., 136 136y; 15 U.S.C. 2001, 2003, 2005,2006,2601 2671; 21U.S.C. 331j, 346a, 348; 31U.S.C. 9701; 33 U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318, 1321, 1326, 1330, 1342, 1344, 1345 (d) and (e), 1361;E.O. 11735, 38 FR21243, 3 CFR, 1971 1975 Comp. p.973;42U.S.C. 241, 242b, 243, 246,300f, 300g, 300g 1,300g 2, 300g 3,300g 4, 300g 5,300g 6,300j 1, 300j 2, 300j 3, 300j 4, 300j 9, 1857 et seq., 6901 6992k,7401 7671q,7542,9601 9657, 11023, 11048.

2. In §9.1 the table is amended by adding aheading and entries in numerical order to read as follows: 

### §9.1 OMBapprovals underthePaperwork Reduction Act.

0MB con- 40CFR citation Ol No. 

### trol No.

Indian Tribes: Air Quality Planning and Management 49.6

............................... 2060-0306 49.7

............................... 2060-0306



### PART35-STATE AND LOCAL ASSISTANCE

3. The authority cite for part 35, subpart a, continues to read as follows: 

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Authority:Secs. 105 and 301(a) ofthe Clean AirAct, as amended (42U.S.C. 7405 and 7601(a)); Secs. 106, 205(g), 205(j), 208, 319, 501(a), and 518 ofthe Clean Water Act,

as amended (33 U.S.C. 1256, 1285(g), 1285(j), 1288, 1361(a) and 1377); secs. 1443, 1450, and 1451 oftheSafe DrinkingWater Act (42 U.S.C. 300j 2, 300j 9and 300j 11); secs. 2002(a) and 3011 ofthe SolidWaste Disposal Act, asamended by theResource Conservation and Recovery Act of 1976 (42 U.S.C. 6912(a), 6931, 6947, and 6949);and

secs. 4, 23, and 25(a)oftheFederal Insecticide, Fungicide and Rodenticide Act,

as amended (7 U.S.C. 136(b), 136(u) and 136w(a)).

4. Section 35.105 is amended by revising the definitions for "Eligible Indian Tribe," "Federal Indian Reservation," and the first definition for "Indian Tribe," and by removing the second definition for "Indian Tribe" to read as follows: §35.105 Definitions.

EligibleIndian Tribemeans: (1) For purposes ofthe Clean Water Act, any federally recognized Indian Tribe that meets the requirements set forth at 40CFR 130.6(d); and

(2) For purposes ofthe Clean Air Act, any federally recognized Indian Tribe that meets the requirements set forth at §35.220.

FederalIndianReservationmeans for purposes ofthe Clean Water Act or the Clean Air Act, all land within the limits ofany Indian reservation under the jurisdiction ofthe United States government, notwithstanding the issuance ofany patent, and including rights-of-way running through the reservation.

IndianTribemeans: (1) Within the context ofthe Public Water System Supervision and Underground Water Source Protection grants, any Indian Tribe having a federally recognized governing body carrying out substantial governmental duties and powers over a defined area.

(2) For purposes ofthe Clean Water Act, any Indian Tribe,band, group, or community recognized bythe Secretary ofthe Interior and exercising governmental authority over afederal Indian reservation.

(3) For purposes ofthe Clean Air Act, any Indian Tribe, band, nation, or other organized group or community, including any Alaskan Native Village, which is federally recognized as eligible for the special programs and services provided by the United States to Indians because oftheir status as Indians.

5. Section 35.205 is amended by addingnew paragraphs (c), (d), and (e)
to read as follows: §35.205 Maximum Federal share.

(c) For Indian Tribes establishing eligibility pursuant to § 35.220(a), the Regional Administrator may provide financial assistance in an amount up to 95 percent ofthe approved costs of planning, developing, establishing, or improving an airpollution control program, and up to 95 percent ofthe approved costs ofmaintaining that program. After two years from the date ofeach Tribe's initial grant award, the Regional Administrator will reduce the maximum federal share to 90 percent, as long as the Regional Administrator determines that the Tribe meets certain economic indicators that would provide

an objective assessment ofthe Tribe's ability to increase its share. The EPA will examine the experience ofthis program and other relevant information
to determine appropriate long-term cost share rates within five years ofFebruary 12, 1998. For Indian Tribes establishing eligibility pursuant to § 35.220(a), the Regional Administrator may increase the maximum federal share ifthe Tribe

can demonstrate in writing to the satisfaction ofthe Regional Administrator that fiscal circumstances within the Tribe are constrained to such

an extent that fulfilling the match would impose undue hardship. This waiver provision is designed to be very rarely used. (d) The Regional Administrator may provide financial assistance in an amountup to 95 percent ofthe approved costs ofplanning, developing, establishing, or approving an air pollution controlprogram and up to 95 percent ofthe approved costs of maintaining thatprogram to an intertribal agency oftwo or more Tribes that have established eligibility pursuant to §35.220(a), which has substantial responsibility for carrying
out an applicable implementation plan under section 110 ofthe Clean Air Act, when such intertribal agency is authorized by the governing bodies of those Tribes to apply for and receive financial assistance. After two years from the date ofeach intertribal agency's initial grant award, the Regional Administrator will reduce the maximum federal share to 90 percent, as long as the Regional Administrator determines that the tribal members of the intertribal agency meet certain economic indicators that would provide

an objective assessment ofthe Tribes' ability to increase the non-federal share. For intertribal agencies made up of Indian Tribes establishing eligibility pursuant to §35.220(a), which have substantial responsibility for carrying out an applicable implementation plan under section 110 ofthe Clean Air Act, the Regional Administrator may increase the maximum federal share if the intertribal agency can demonstrate in writing to the satisfaction ofthe Regional Administrator that fiscal circumstances within the member Tribes are constrained to such an extent that fulfilling the match would impose undue hardship. This waiver provision is designed to be very rarely used.

(e) The Regional Administrator may provide financial assistance in an amountup to 60 percent ofthe approved costs ofplanning, developing, establishing, or improving an air pollution controlprogram, and up to sixty percent ofthe approved costs of maintaining that program to Tribes that have not made ademonstration that they are eligible for treatment in the

same manner as a state under 40 CFR 49.6, but are eligible for financial assistance under §35.220(b).

6. Section 35.210 is amended by addingparagraph (c) to read as follows:
§35.210 Maintenance ofeffort.

(c) The requirements ofparagraphs (a) and (b) ofthis section shall not apply to Indian Tribes that have established eligibility pursuant to § 35.220(a) and intertribal agencies made up ofsuch Tribes.

7. Section 35.215 is revised to read as follows:
§35.215 Limitations.

(a) The Regional Administrator will
not award section 105 funds to an interstate, intertribal or intermunicipal agency which does not provide

assurance that it can develop a comprehensive plan for the air quality controlregion which includes representation ofappropriate state, interstate, tribal, local, and international interests.

(b) The Regional Administrator will
not award section 105 funds to alocal, interstate, intermunicipal, or intertribal agency without consulting with the appropriate official designated by the Governor orGovernors ofthe state or states affected or the appropriate official ofany affected Indian Tribe or Tribes.

(c) The Regional Administrator will
notdisapprove an application for or terminate or annul an award ofsection 105 funds without prior notice and opportunity for apublic hearing in the affected state or area within tribal jurisdiction or in one ofthe affected
states or areas within tribaljurisdiction if several are affected.

8. Section 35.220 is addedjust before the center heading "Water Pollution 

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Control (section 106)" to read as follows: 

### §35.220 EligibleIndian Tribes.

The Regional Administrator may make Clean Air Act section 105 grants to Indian Tribes establishing eligibility under paragraph (a) ofthis section, without requiring the same cost share that would be required if such grants

were made to states. Instead grants to eligible Tribes will include a tribal cost share offive percent for two years from the date ofeach Tribe's initial grant award. After two years, the Regional Administrator will increase the tribal
cost share to ten percent, as longas the Regional Administrator determines that the Tribe meets certain economic indicators that would provide an objective assessment ofthe Tribe's ability to increase its cost share. Notwithstanding the above, the Regional Administrator may reduce the required
cost share ofgrants to Tribes that establish eligibility under paragraph (a) ofthis section ifthe Tribe can demonstrate in writingto the satisfaction ofthe Regional Administrator that fiscal circumstances within the Tribe are constrained to such

an extent that fulfilling the match would impose undue hardship. This waiver provision is designed to be very rarely used.

(a) An Indian Tribe is eligible to receive financial assistance if ithas demonstrated eligibility to be treated in the same manner as a state under 40 CFR49.6.

(b) An Indian Tribe that has not made

ademonstration under 40 CFR49.6 is eligible for financial assistance under 42 U.S.C. 7405 and 7602(b)(5).

(c) The Administrator shall process a tribal application for financial assistance under this section in a timely

manner.

9. Part 49 is added to read as follows:



### PART49-TRIBAL CLEAN AIR ACT AUTHORITY

Sec. 49.1 Program overview. 49.2 Definitions. 49.3 General Tribal Clean AirAct authority. 49.4 Clean AirActprovisions for which it is not appropriate totreat tribes inthe

same manner as states. 49.5 Tribalrequests foradditional Clean Air Actprovisions for which itis not appropriate totreat tribes in thesame
manner as states. 49.6 Tribal eligibility requirements. 49.7 Request by an Indian tribe for eligibility determination and Clean Air Actprogram approval. 49.8 Provisions fortribal criminal enforcement authority. 49.9 EPAreview oftribalClean Air Act applications. 49.10 EPAreview ofstate Clean AirAct programs. 49.11 Actions under section 301(d)(4) authority. Authority: 42 U.S.C. 7401, etseq.
§49.1 Program overview.

(a) The regulations in this part identify those provisions ofthe Clean Air Act (Act)for which Indian tribes are

or may be treated in the same manner

as states. In general, these regulations authorize eligible tribes to have the

same rights and responsibilities as states under the Clean Air Act and authorize EPA approval oftribal air quality programs meeting the applicable minimum requirements ofthe Act. (b) Nothing in this part shall prevent

an Indian tribe from establishing additional or more stringent air quality protection requirements not inconsistent with the Act. 

### §49.2 Definitions.

(a) CleanAirAct orAct means those statutory provisions in the United States Code at 42U.S.C. 7401, etseq. (b) Federal IndianReservation,Indian Reservationor Reservationmeans all land within the limits ofany Indian reservation under thejurisdiction ofthe United States government, notwithstanding the issuance ofany patent, and including rights-of-way running through thereservation. (c) Indiantribeor tribemeans any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village, which is federally recognized as eligible for the special programs and services provided by the United States to Indians because oftheir status asIndians. (d) Indian Tribe Consortiumor Tribal Consortiummeans a group oftwo or

more Indian tribes. (e)State means a State, the District of Columbia, the Commonwealth ofPuerto Rico, the Virgin Islands, Guam, and American Samoa and includes the Commonwealth ofthe Northern Mariana Islands.
§49.3 General Tribal Clean AirAct authority.

Tribes meeting the eligibility criteria of§49.6 shall be treated in the same

manner as states with respect to all provisions ofthe Clean Air Act and implementing regulations, except for those provisions identified in §49.4 and the regulations that implement those provisions. 

### §49.4 Clean AirAct provisionsforwhich itisnotappropriatetotreattribesinthe same manner as states.

Tribes will not be treated as states with respect to the following provisions ofthe Clean Air Act and any implementing regulations thereunder:

(a) Specific plan submittal and implementation deadlines for NAAQSrelated requirements, including but not limited to such deadlines in sections 110(a)(1), 172(a)(2), 182, 187, 189, and 191 ofthe Act.

(b) The specific deadlines associated with thereview and revision of implementation plans related to major fuel burning sources in section 124 of the Act.

(c) The mandatory imposition of sanctions under section 179 ofthe Act because ofa failure to submit an implementation plan or required plan element by a specific deadline, or the submittal ofan incomplete or disapproved plan or element.

(d) The provisions ofsection 110(c)(1) ofthe Act.

(e) Specific visibility implementation plan submittal deadlines established under section 169A ofthe Act. (f)Specific implementation plan submittal deadlines related to interstate commissions under sections 169B(e)(2), 184(b)(1) & (c)(5) ofthe Act. Foreligible tribes participating as members ofsuch commissions, the Administrator shall establish those submittal deadlines that

are determined to be practicable or, as with other non-participating tribes in an affected transport region, provide for federal implementation ofnecessary

measures.

(g)Any provisions ofthe Act requiring as a condition ofprogram approval the demonstration ofcriminal enforcement authority or any provisions ofthe Actproviding forthe delegation ofsuch criminal enforcement authority. Tribes seeking approval ofa Clean Air Actprogram requiring such demonstration may receive program approval if they meet the requirements of§49.8.

(h) The specific deadline for the submittal ofoperating permit programs in section 502(d)(1) ofthe Act.

(i) The mandatory imposition of sanctions under section 502(d)(2)(B) because offailure to submit an operating permit program orEPA disapproval of

an operating permit program submittal in whole or part.



### (J)The "2 years afterthe date required for submission ofsuch aprogram under paragraph (1)" provision in section 502(d)(3) ofthe Act.

(k)Section 502(g) ofthe Act, which authorizes a limited interim approval of

an operating permit program that 

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substantially meets the requirements of Title V, but is not fully approvable.

(1)The provisions of section 503(c) of the Act that direct permitting authorities
to establish a phased schedule assuring that at least one-third ofthe permit applications submitted within the first full year afterthe effective date ofan operating permitprogram (or apartial or interim program) will be acted on by the permitting authority over a period not to exceed three years after the effective date.

(m) The provisions ofsection 507(a) ofthe Act that specify a deadline for the submittal ofplans for establishing a smallbusiness stationary source technical and environmental compliance assistance program.

(n) The provisions ofsection 507(e) of the Act that direct the establishment of

aCompliance Advisory Panel.

(o) The provisions ofsection 304 of the Act that,read together with section 302(e) ofthe Act, authorize any person who provides the minimum required advance notice to bring certain civil actions in the federal district courts against states in their capacity as states.

(p) The provisions ofsection 502(b)(6) ofthe Act thatrequire that review ofa final permit action under the Title V permitting program be "judicial" and "in State court," and the provisions of section 502(b)(7) ofthe Act that require that review ofa failure on thepart ofthe permitting authority to act on permit applications orrenewals by the time periods specified in section 503 ofthe Act be "judicial" and "in State court."

(q) The provision ofsection 105(a)(1) that limits the maximum federal share for grants to pollution control agencies to three-fifths ofthe cost of implementing programs for the prevention and control ofairpollution

or implementation ofnational primary and secondary ambient air quality standards. 

### §49.5 Tribal requestsforadditionalClean AirActprovisionsforwhichit isnot appropriatetotreattribes inthesame manneras states.

Any tribe mayrequest that the Administrator specify additional provisions ofthe Clean Air Act for which itwould be inappropriate to treat tribes in general in the same manner as states. Such request should clearly identify the provisions at issue and should be accompanied with a statement explaining why itis inappropriate to treat tribes in the same

manner as states with respect to such provisions. 

### §49.6 Tribal eligibilityrequirements.

Sections 301(d)(2) and 302(r), 42 U.S.C. 7601(d)(2) and 7602(r), authorize the Administrator to treat an Indian tribe in the same manner as a state for the Clean Air Act provisions identified in §49.3 ifthe Indian tribe meets the following criteria: (a) The applicant is an Indian tribe recognized by the Secretary ofthe Interior; (b) The Indian tribe has a governing body carrying out substantial governmental duties and functions; (c) The functions to be exercised by the Indian tribe pertain to the management and protection ofair

resources within the exterior boundaries ofthereservation or other areas within the tribe'sjurisdiction; and (d) The Indian tribe is reasonably expected to be capable, in the EPA Regional Administrator'sjudgment, of carrying out the functions to be exercised in a manner consistent with the terms and purposes ofthe Clean Air Act and allapplicable regulations. 

### §49.7 Request byan Indiantribefor eligibilitydetermination and Clean AirAct program approval.

(a) An Indian tribe may apply to the EPA Regional Administrator for a determination that it meets the eligibility requirements of§49.6 for Clean Air Act program approval. The application shall concisely describe how the Indian tribe will meet each of the requirements of§49.6 and should include the following information: (1) A statement that the applicant is

an Indian tribe recognized by the Secretary ofthe Interior.

(2) A descriptive statement demonstrating that the applicant is currently carrying out substantial governmental duties and powers over a defined area. This statement should: (i) Describe the form ofthe tribal government; (ii) Describe the types ofgovernment functions currently performed bythe tribal governing body such as,but not limited to, the exercise ofpolice powers affecting (orrelating to) the health, safety, and welfare ofthe affected population; taxation; and the exercise of the power ofeminent domain; and (iii)Identify the source ofthe tribal government's authority to carry out the governmental functions currently being performed. (3) A descriptive statement ofthe Indian tribe's authority to regulate air quality. For applications covering areas within the exterior boundaries ofthe applicant's reservation the statement must identify with clarity and precision the exterior boundaries ofthe reservation including, for example, a map and a legal description ofthe area. For tribal applications covering areas 

### outsidethe boundaries ofa reservation the statement should include:

(i)A map orlegal description ofthe

area overwhich the application asserts authority; and

(ii) A statement bythe applicant's legalcounsel (or equivalent official) that describes thebasis for thetribe's assertion ofauthority (includingthe nature or subject matter ofthe asserted regulatory authority) which may include

a copy ofdocuments such astribal constitutions,by-laws, charters, executive orders, codes, ordinances, and/orresolutions that support the tribe's assertion ofauthority.

(4)A narrative statement describing the capability ofthe applicant to administer effectively any CleanAir Act program forwhich thetribe is seeking approval. The narrative statement must demonstrate the applicant's capability consistent with the applicable provisions ofthe Clean AirAct and implementingregulations and, if requested by theRegional Administrator, may include:

(i)A description ofthe Indian tribe's previous management experience which may include the administration of programs and services authorized bythe Indian Self-Determination and Education Assistance Act (25 U.S.C. 450, etseq.),theIndian Mineral Development Act (25 U.S.C.2101, et seq.),orthe Indian Sanitation Facility Construction Activity Act (42U.S.C. 2004a);

(ii) Alist ofexisting environmental or public health programs administered by thetribalgoverning body and a copyof related tribal laws, policies, and regulations; (iii)A description ofthe entity (or entities) thatexercise the executive, legislative, andjudicial functions ofthe tribal government;

(iv)Adescription ofthe existing,or proposed, agency oftheIndian tribe that will assume primary responsibility for administering a CleanAir Actprogram (includinga description ofthe relationship between the existing or proposed agency and itsregulated entities);

(v) A description ofthetechnical and administrative capabilities ofthe staffto administer and manage an effective air quality program or a plan which proposes how thetribe will acquire administrative and technical expertise. Theplan should address how the tribe will obtain thefunds to acquire the administrative and technical expertise.

(5) A tribe thatis a member ofa tribal consortium may relyon the expertise andresources ofthe consortium in demonstratingunderparagraph (a)(4) of this section thatthetribe isreasonably 

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expected to be capable ofcarrying out the functions to be exercised consistent with §49.6(d). A tribe relying on a consortium in this manner mustprovide reasonable assurances that the tribe has responsibility for carrying out necessary functions in the event the consortium fails to.

(6) Where applicable Clean Air Act or implementing regulatory requirements mandate criminal enforcement authority, an application submitted by

an Indian tribe maybe approved if it
meets the requirements of§49.8.

(7) Additional information required by the EPA Regional Administrator which, in thejudgment ofthe EPA Regional Administrator, is necessary to support an application.

(8) Where the applicant has previously received authorization for a Clean Air Act program or for any other EPA-administered program, the applicant need only identify theprior authorization and provide the required information which has notbeen submitted in the previous application.

(b) A tribe may simultaneously submit

arequest for an eligibility determination and arequest for approval ofa Clean Air Act program.

(c) A request for Clean Air Act program approval must meet any applicable Clean Air Act statutory and regulatory requirements. A program approval request may be comprised of only partial elements ofa Clean Air Act program, provided that any such elements are reasonably severable, that is, not integrally related to program elements that are not included in the plan submittal, and are consistent with applicable statutory and regulatory requirements. 

### §49.8 Provisionsfortribalcriminal enforcement authority.

To the extent that an Indian tribe is precluded from asserting criminal enforcement authority, the federal government will exercise primary criminal enforcement responsibility. The tribe, with the EPA Region, shall develop a procedure by which the tribe will provide potential investigative leads to EPA and/or other appropriate federal agencies, as agreed to by the parties, in an appropriate and timely

manner. Thisprocedure shall encompass allcircumstances in which the tribe is incapable ofexercising applicable enforcement requirements as provided in §49.7(a)(6). This agreement shallbe incorporated into a Memorandum ofAgreement with the EPA Region. 

### §49.9 EPA review oftribalClean AirAct applications. (a) The EPA Regional Administrator shall process arequest ofan Indian tribe submitted under §49.7 in a timely

manner. The EPA Regional Administrator shall promptly notify the Indian tribe ofreceipt ofthe application. (b) Within 30 days ofreceipt ofan Indian tribe's initial, complete application, the EPA Regional Administrator shall notify all appropriate governmental entities.

(1) Fortribal applications addressing air resources within the exterior boundaries ofthe reservation, EPA's notification ofother governmental entities shall specify the geographic boundaries ofthe reservation. (2) Fortribal applications addressing non-reservation areas, EPA's notification ofother governmental entities shall include the substance and bases ofthe tribe'sjurisdictional assertions.

(c) The governmental entities shall have 30 days to provide written
comments to EPA's Regional Administrator regarding any dispute concerning the boundary ofthe reservation. Where a tribe has asserted jurisdiction overnon-reservation areas, appropriate governmental entities may request a single 30-day extension to the general 30-day comment period. (d) In allcases, comments must be timely, limited to the scope ofthe tribe's jurisdictional assertion, and clearly explain the substance, bases, and extent ofany objections. Ifa tribe's assertion is subject to aconflicting claim, the EPA Regional Administrator may request additional information from the tribe and may consult with the Department of the Interior. (e) The EPA Regional Administrator shall decide thejurisdictional scope of the tribe's program. Ifa conflicting claim cannot be promptly resolved, the EPA Regional Administrator may approve that portion ofan application addressing allundisputed areas.

(f) A determination by the EPA Regional Administrator concerning the boundaries ofareservation or tribal jurisdiction overnon-reservation areas shall apply to allfuture Clean Air Act applications from that tribe or tribal consortium and no further notice to governmental entities, as described in paragraph (b) ofthis section, shall be provided, unless the application presents differentjurisdictional issues

or significant new factual or legal information relevant tojurisdiction to the EPA Regional Administrator. (g)Ifthe EPA Regional Administrator determines that atribe meets the requirements of§49.6 for purposes ofa Clean Air Actprovision, the Indian tribe is eligible to be treated in the same

manner as a state with respect to that provision, to the extent that the provision is identified in §49.3. The eligibility will extend to all areas within the exterior boundaries ofthe tribe's reservation, as determined by the EPA Regional Administrator, and any other

areas the EPA Regional Administrator has determined to be within the tribe's jurisdiction. (h) Consistent with the exceptions listed in §49.4, a tribal application containing a Clean Air Act program submittal will be reviewed by EPA in accordance with applicable statutory and regulatory criteria in a manner similar to the way EPA would review a similar state submittal.

(i) The EPA Regional Administrator shall return an incomplete or disapproved application to the tribe with a summary ofthe deficiencies. 

### §49.10 EPAreview ofstate Clean AirAct programs.

A state Clean AirAct program submittal shall not be disapproved because offailure to address air

resources within the exterior boundaries ofan Indian Reservation or other areas within thejurisdiction ofan Indian tribe. 

### §49.11 Actionsundersection 301(d)(4) authority.

Notwithstanding any determination made on the basis ofauthorities granted the Administrator under any other provision ofthis section, the Administrator, pursuant to the discretionary authority explicitly granted to the Administrator under sections 301(a) and 301(d)(4):

(a) Shallpromulgate without unreasonable delay such federal implementation plan provisions as are necessary or appropriate to protect air quality, consistent with the provisions ofsections 304(a) and 301(d)(4), if a tribe does not submit atribal implementation plan meeting the completeness criteria of40 CFRpart 51, Appendix V, or does not receive EPA approval ofa submitted tribal implementation plan.

(b) Mayprovide up to 95 percent of the cost ofimplementing programs for the prevention and control ofair pollution orimplementation ofnational primary and secondary ambient air quality standards. After two years from the date ofeach tribe's initial grant award, the maximum federal share will be reduced to 90 percent, aslong as the Regional Administrator determines that the tribe meets certain economic indicators that would provide an 

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objective assessment ofthe tribe's ability to increase its share. The Regional Administrator may increase the maximum federal share to 100 percent ifthe tribe can demonstrate in writing to the satisfaction ofthe Regional Administrator that fiscal circumstances within the tribe are constrained to such an extent that fulfilling the match would impose undue hardship.


### PART50-NATIONAL PRIMARY AND SECONDARY AMBIENT AIR QUALITY STANDARDS

10. The authority citation for part 50 is revised to read as follows:

Authority: 42U.S.C. 7401, etseq. 11. Section 50.1 is amended by addingparagraph (i) to read as follows: 

### §50.1 Definitions.

(i) Indiancountryis as defined in 18 U.S.C. 1151. 12. Section 50.2 is amended by revising paragraphs (c) and (d) to read

as follows: 

### §50.2 Scope.

(c) The promulgation ofnational primary and secondary ambient air quality standards shall notbe considered in any manner to allow significant deterioration ofexisting air quality in any portion ofany state or Indian country. (d) The proposal, promulgation, or revision ofnational primary and secondary ambient air quality standards shall not prohibit any state or Indian tribe from establishing ambient air quality standards for that state or area under atribal CAA program or any portion thereofwhich are more stringent than the national standards.

PART 81-DESIGNATION OFAREAS FOR AIR QUALITY PLANNING
PURPOSES

13. The authority citation for part 81 is revised to read as follows:

Authority: 42 U.S.C. 7401, etseq. 14. Section 81.1 is amended by revising paragraph (a) and adding new paragraphs (c), (d) and (e) to read as follows:
§81.1 Definitions.

(a)Actmeans the Clean Air Act as amended (42U.S.C. 7401, etseq.).

(c) FederalIndianReservation,Indian ReservationorReservationmeans all land within the limits ofany Indian reservation under thejurisdiction ofthe United States government, notwithstanding the issuance ofany patent, and including rights-of-way running through thereservation. (d) Indiantribe or tribemeans any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village, which is federally recognized as eligible for the special programs and services provided by the United States to Indians because oftheir status asIndians. (e)State means a state, the District of Columbia, the Commonwealth ofPuerto Rico, the Virgin Islands, Guam, and American Samoa and includes the Commonwealth ofthe Northern Mariana Islands.
Subpart C-Section 107 Attainment Status Designations

15. The authority citation for subpart C,part 81 is revised to read as follows:

Authority: 42 U.S.C. 7401, etseq. 

### §81.300 [Amended]

16. Section 81.300(a) is amended by revising the third sentence to read "A state, an Indian tribe determined eligible for such functions under 40CFRpart 49, and EPA can initiate changes to these designations, but any proposed
state or tribal redesignation must be submitted to EPA for concurrence." [FR Doc. 98 3451 Filed 2 11 98; 8:45 am]

BILLING CODE 6560-50-P 

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