ENVIRONMENTAL PROTECTION AGENCY
                       40 CFR Part 71
                         [FRL  -  ]
              Federal Operating Permits Program
     
     AGENCY:  Environmental Protection Agency (EPA).
     ACTION:  Proposed rule; notice of opportunity for public
     hearing.
     SUMMARY:  The EPA is proposing a new approach for issuing 
     Federal operating permits to covered stationary sources in
     Indian country, pursuant to title V of the Clean Air Act as
     amended in 1990 (Act).  Consistent with EPA's Indian Policy,
     the Agency will protect air quality by administering a
     Federal operating permits program in areas lacking an EPA-approved or adequately
administered Tribal operating permits
     program.  Implementation of today's proposal would benefit
     the environment by assuring that the benefits of title V,
     such as increased compliance and resulting decreases in
     emissions, would extend to every part of Indian country.
     FOR FURTHER INFORMATION CONTACT:  Candace Carraway
     (telephone 919-541-3189), U.S. Environmental Protection
     Agency, Office of Air Quality Planning and Standards,
     Information Transfer and Program Integration Division, Mail
     Drop 12, Research Triangle Park, North Carolina 27711.  
     DATES:  Comments.  Comments on the proposed regulations must
     be received by EPA's Air Docket on or before [45 days after
     publication in the Federal Register].  
     Public Hearing.  A public hearing is scheduled for
     10:00 a.m., on [30 days after publication in the Federal
     Register] at the address listed below.  Requests to present
     oral testimony must be received by [15 days after
     publication in the Federal Register], and the hearing may be
     canceled if no speakers have requested time to present their
     comments by that date.  Written comments in lieu of, or in
     addition to, testimony are encouraged.  Persons interested
     in attending the hearing or wishing to present oral
     testimony should contact Ms. Pat Finch in writing at the
     U.S. Environmental Protection Agency, Office of Air Quality
     Planning and Standards, Information Transfer and Program
     Integration Division, Mail Drop 12, Research Triangle Park,
     North Carolina 27711.
     ADDRESSES:  Comments should be mailed (in duplicate if
     possible) to:  EPA Air Docket (Mail Code 6102), Attention:
     Docket Number A-93-51, Room M-1500, Waterside Mall, 401 M
     Street SW, Washington, DC 20460.  The public hearing will be
     held in the Waterside Mall auditorium at the U.S.
     Environmental Protection Agency, 401 M Street SW,
     Washington, DC 20460. 
     Docket.  Supporting information used in developing the
     proposed rule is contained in Docket Number A-93-51.  The
     docket is available for public inspection and copying
     between 8:30 a.m. and 3:30 p.m. Monday through Friday, at
     EPA's Air Docket, Room M-1500, Waterside Mall, 401 M Street
     SW, Washington, D.C. 20460.  A reasonable fee may be charged
     for copying.  
     SUPPLEMENTARY INFORMATION:  
     Comments.  The EPA is unlikely to be able to extend the
     public comment period.  Two paper copies of each set of
     comments are requested.  If possible, comments should be
     sent in both paper and computerized form.  Comments
     generated on computer should be sent on an IBM-compatible
     diskette and clearly labeled.  Computer files created with
     the WordPerfect 5.1 software package should be sent as is. 
     Files created on other software packages should be saved in
     an "unformatted" mode for easy retrieval into WordPerfect. 
     Comments should refer to specific page numbers of today's
     proposal whenever possible.
     Regulated entities.  Entities potentially regulated by this
     proposed action are sources (1) that are located in Indian
     country; and (2) that are major sources, affected sources
     under title IV of the Act (acid rain sources), solid waste
     incineration units required to obtain a permit under section
     129 of the Act, and those area sources subject to a standard
     under section 111 or 112 of the Act which have not been
     exempted or deferred from title V permitting requirements. 
          Regulated categories and entities include:
     
     Category
     
     Examples of regulated entities
     
     
     Industry
     located in
     Indian
     country
     Major sources under title I or section 112
     of the Act; affected sources under title IV
     of the Act (acid rain sources); solid waste
     incineration units required to obtain a
     permit under section 129 of the Act; area
     sources subject to standards under section
     111 or 112 of the Act that are not exempted
     or deferred from permitting requirements
     under title V.
     
     
     This table is not intended to be exhaustive, but rather
     provides a guide for readers regarding entities likely to be
     regulated by this proposed action.  This table lists the
     types of entities that EPA is now aware could potentially be
     regulated by this action.  Other types of entities not
     listed in the table could also be regulated.  To determine
     whether your facility is regulated by this action, you
     should carefully examine the applicability criteria in 
     section 71.3(a) of the rule, the definition of "Indian
     country" in section 71.2 of the rule, and section 71.4 of
     the rule.  If you have questions regarding the applicability
     of this action to a particular entity, consult the person
     listed in the preceding "FOR FURTHER INFORMATION CONTACT"
     section or the EPA Regional Office that is administering the
     part 71 permit program for the State or area in which the
     relevant source or facility is located. 
     Outline.  The contents of today's preamble are listed in the
     following outline:
             I.     Background and Purpose
            II.     Proposal Summary
           III.     Federal Authority to Implement Title V in Indian
                         Country 
            IV.     Proposed Changes to Regulatory Language
             V.     Administrative Requirements 
               A.  Reference Documents
               B.  Office of Management and Budget (OMB) Review
               C.  Regulatory Flexibility Act Compliance
               D.  Paperwork Reduction Act
               E.  Unfunded Mandates Reform Act
           I.  Background and Purpose.  Title V of the Act as
     amended in 1990 (42 U.S.C. 7661 et seq.) requires that EPA
     develop regulations that set minimum standards for State
     operating permits programs.  Those regulations, codified in
     part 70 of chapter I of title 40 of the Code of Federal
     Regulations, were originally promulgated on July 21, 1992
     (57 FR 32250).  Title V also requires that EPA promulgate,
     administer, and enforce a Federal operating permits program
     when a State has defaulted on its obligation to submit an
     approvable program within the timeframe set by title V or on
     its obligation to adequately administer and enforce an EPA-approved program.  On April 27,
1995, EPA proposed
     regulations (60 FR 20804) (hereinafter "1995 proposal")
     setting forth the procedures and terms under which the
     Agency will administer a Federal operating permit program in
     a State or in areas over which States do not have
     jurisdiction.  The final rule was published on July 1, 1996
     (61 FR 34202) and will be codified at 40 CFR part 71.  The
     regulations authorize EPA to issue permits when a State,
     local, or Tribal agency has not developed, administered, or
     enforced an acceptable permits program or has not issued
     permits that comply with the applicable requirements of the
     Act.  
           Indian Tribes are not required to develop operating
     permits programs, though EPA encourages Tribes to do so. 
     The EPA expects that most Tribes will not develop title V
     operating permit programs, in part due to the resources
     required to develop a program and in part because for some
     Tribes it will not be practicable to develop a permits
     program for relatively few sources.  Within Indian country,
     EPA believes it is appropriate that EPA promulgate,
     administer, and enforce a part 71 Federal operating permits
     program for stationary sources until Tribes receive approval
     to administer their own operating permits programs.   
           In the 1995 proposal, EPA stated its intention to
     implement part 71 programs to ensure coverage of Tribal
     areas which EPA proposed to define as "those lands over
     which an Indian Tribe has authority under the Clean Air Act
     to regulate air quality."  The final part 71 rule did not
     include provisions relating to the boundaries of part 71
     programs in Tribal areas, pending resolution of
     jurisdictional issues involving Tribes and States that were
     raised in a proposed rule that specified provisions of the
     Act for which EPA believes it is appropriate to treat Indian
     Tribes in the same manner as States, pursuant to section
     301(d)(2).  See 59 FR 43956 (August 25, 1994) ("Indian
     Tribes:  Air Quality Planning and Management," hereinafter
     "proposed Tribal authority rule").
           The EPA now believes that the 1995 proposal's
     definition of "Tribal area," that is to say, the Indian
     lands where EPA would exercise authority to implement a
     Federal permit program, was inappropriate.  The proposal was
     based on the interpretation of Tribal jurisdiction under the
     Act in the proposed Tribal authority rule.  The approach of
     the 1995 proposal would have required Tribes to establish
     their jurisdiction over an area before EPA could implement a
     Federal program for the area.  While in many cases this
     would not present a problem, EPA believes it is more
     consistent with the Act that EPA administer part 71 programs
     for all areas of Indian country without requiring any
     jurisdictional showing on the part of the Tribe. 
     Furthermore, in proposing that EPA implement part 71
     throughout Indian country, today's notice is consistent with
     the Agency's Indian Policy, which provides that EPA
     generally will administer environmental programs on
     reservation lands until a Tribe assumes regulatory
     responsibility.  See, e.g., EPA's 1984 Policy for the
     Administration of Environmental Programs on Indian
     Reservations, reaffirmed by EPA Administrator Browner in
     1994.  
           II.  Proposal Summary.       The EPA's approach for issuing 
     operating permits in Tribal areas outlined in the April 1995
     proposal was modeled on the jurisdictional provisions of the
     proposed Tribal authority rule.  In the proposed Tribal
     authority rule, EPA proposed to interpret the Act as
     granting to Tribes, that are approved by EPA to administer
     programs under the Act in the same manner as States,
     authority over all air resources within the exterior
     boundaries of an Indian reservation.  This would enable
     Tribal-approved programs under the Act to address conduct on
     all lands, including non-Indian owned fee lands, within the
     exterior boundaries of a reservation.  The proposed Tribal
     authority rule would also authorize an eligible Tribe to
     develop and implement programs under the Act for off-reservation lands that are determined
to be within a Tribe's
     own authority to regulate under relevant principles of
     Federal Indian law, generally up to the limits of Indian
     country, as defined at 18 U.S.C. 1151.  The rationale for
     this proposed interpretation of Tribal jurisdiction to
     administer programs under the Act is set out in detail in
     the proposed Tribal authority rule.  See 59 FR 43956, 43958-43961 (August 25, 1994).
           In the 1995 proposal, EPA noted that when EPA is acting
     in the place of a Tribe under the Act, pursuant to Federal
     implementation authority, the responsibilities that would
     otherwise fall to the Tribe would accrue instead to EPA. 
     Thus, under the 1995 proposal, EPA would have authority to
     implement a part 71 program for any lands within the
     exterior boundaries of a reservation and for any off-reservation land over which a Tribe has
demonstrated its own
     authority under Federal Indian law.  Today's notice makes it
     clear that EPA's implementation of part 71 programs in
     Indian country is based on EPA's overarching authority to
     protect air quality within Indian country, not solely on its
     authority to act in the stead of an Indian Tribe.  
           The 1995 proposal used the term "Tribal area" to refer
     to the areas over which Tribes and EPA had jurisdiction. 
     One of the commenters on the 1995 proposal recommended that
     the definition of "Tribal area" encompass Indian country, as
     defined in 18 U.S.C. 1151, noting that this term is used in
     the context of several other EPA environmental programs.  As
     provided in 18 U.S.C. 1151:
           [T]he term "Indian country," as used in this
                chapter, means (a) all land within the limits of
                any Indian reservation under the jurisdiction of
                the United States government, notwithstanding the
                issuance of any patent, and including rights-of-way running through the reservation,
(b) all
                dependent Indian communities within the borders of
                the United States whether within the original or
                subsequently acquired territory thereof, and
                whether within or without the limits of a State,
                and (c) all Indian allotments, the Indian titles
                to which have not been extinguished, including
                rights-of-way running through the same.
           Although a detailed analysis of the cases that have
     interpreted this definition is beyond the scope of this
     notice, it should be noted that the definition of Indian
     country would encompass the land referred to in the 1995
     proposal as "Tribal area," but would not require a
     jurisdictional showing on the part of the Tribe.  Indian
     country includes all of the territory within an Indian
     reservation (even land owned by non-Indians) and
     incorporates "dependent Indian communities" and allotments
     held in trust regardless of whether they are located within
     a recognized reservation.  
           Based on recent Supreme Court case law, EPA has
     construed the term "reservation" to incorporate trust land
     that has been validly set apart for use by a Tribe, even
     though that land has not been formally designated as a
     "reservation."  See 56 FR at 64881 (December 12, 1991); see
     also Oklahoma Tax Commission v. Citizen Band Potawatomi
     Indian Tribe of Oklahoma, 111 S.Ct. 905, 910 (1991).  The
     EPA will be guided by relevant case law in interpreting the
     scope of "reservation" under the Act.  
           The 1995 proposal was designed to authorize EPA to
     directly implement an operating permits program where there
     was a void in program coverage, thus assuring program
     coverage coast to coast.  However, the proposal
     inadvertently created a potential void in coverage, in that
     it would authorize EPA to administer an operating permits
     program only where the Tribe had made a jurisdictional
     showing.  This raised the possibility that neither EPA, the
     Tribe, nor the State would be implementing an operating
     permits program in a given geographic area.  The EPA
     believes that to avoid this result, EPA should exercise its
     authority throughout Indian country.  Thus, consistent with
     the Agency's Indian Policy, EPA will administer title V
     programs within Indian country unless a part 70 program has
     been given full or interim approval.  In addition, EPA
     believes there is no reason to impose on Tribes the burden
     of making a jurisdictional showing prior to EPA
     administering a Federal program.  The EPA solicits comment
     on this approach to describing its exercise of authority to
     issue operating permits under the Federal operating permits
          program.      III.  Federal Authority to Implement Title V in Indian
     Country.  Today, EPA is proposing to implement the Federal
     title V operating permit program throughout Indian country. 
     As discussed in the proposed Tribal authority rule, EPA is
     authorized to protect air quality by directly implementing
     provisions of the Act throughout Indian country (59 FR
     43956, 43958-43960 (August 25, 1994)).  The EPA's authority
     is based in part on the general purpose of the Act, which is
     national in scope.  As stated in section 101(b)(1) of the
     Act, Congress intended to "protect and enhance the quality
     of the Nation's air resources so as to promote the public
     health and welfare and the productive capacity of its
     population" (emphasis added).  It is clear that Congress
     intended for the Act to be a "general statute applying to
     all persons to include Indians and their property
     interests."  See Phillips Petroleum Co. v. United States
     EPA, 803 F.2d 545, 553-558 (10th Cir. 1986) (holding that
     the Safe Drinking Water Act applied to Indian Tribes and
     lands by virtue of being a nationally applicable statute). 
           Section 301(a) of the Act delegates to EPA broad
     authority to issue such regulations as are necessary to
     carry out the functions of the Act.  Further, several
     provisions of the Act call for Federal issuance of a program
     where, for example, a State fails to adopt a program, adopts
     an inadequate program, or fails to adequately implement a
     required program.  See, e.g., sections 110(c) and 502(d),
     (e), (i) of the Act.  It follows that Congress intended that
     EPA would similarly have broad legal authority in instances
     when Tribes choose not to develop a program, fail to adopt
     an adequate program, or fail to adequately implement an air
     program authorized under section 301(d).  In addition,
     section 301(d)(4) of the Act empowers the Administrator to
     directly administer Act requirements so as to achieve the
     appropriate purpose, where Tribal implementation of those
     requirements is inappropriate or administratively
     infeasible.  These provisions of the Act evince
     Congressional intent to authorize EPA to directly implement
     programs under the Act in Indian country until Tribes submit
     approvable programs.
           The EPA believes that under the Act, Congress intended
     to allow eligible Tribes to implement programs under the Act
     generally up to the limits of Indian country and to
     authorize EPA to implement the Act in Indian country where a
     Tribe does not have an approved program.  The Act authorizes
     EPA to treat a Tribe in the same manner as a State for the
     regulation of "air resources within the exterior boundaries
     of the reservation or other areas within the tribe's
     jurisdiction" (section 301(d)(2)(B) (emphasis added)).  The
     EPA believes that this statutory provision, viewed within
     the overall framework of the Act, reflects a territorial
     view of Tribal jurisdiction and authorizes a Tribal role for
     all air resources within the exterior boundaries of Indian
     reservations without distinguishing among various categories
     of on-reservation land.  In the proposed Tribal authority
     rule, EPA stated its proposed interpretation that the Act
     grants to Tribes approved by EPA to administer programs
     under the Act in the same manner as States authority over
     all air resources within the exterior boundaries of a
     reservation for such programs (59 FR at 43958).  In
     addition, based on section 301(d)(2)(B) of the Act, EPA
     proposed that a Tribe may also be able to implement its air
     quality programs on off-reservation lands which are within
     its jurisdiction under Federal Indian law, generally up to
     the limits of "Indian country," as defined in 18 U.S.C.
     1151; id. at 43960.  
           The EPA is proposing to interpret the Act as generally
     authorizing EPA to implement the title V program even in
     areas of Indian country where a State previously may have
     been able to demonstrate jurisdiction.  However, the EPA
     will not administer and enforce a part 71 program in Indian
     country when an operating permits program for the area which
     meets the requirements of part 70 of this chapter has been
     granted full or interim approval unless such approval is
     later withdrawn.  The EPA believes that the provisions of
     the Act discussed above evince a Congressional preference
     that implementation of the Act in Indian country be carried
     out by either EPA or the Tribes.  Even where a State has
     asserted jurisdiction over an area located in Indian country
     under color of a statement of general authorization in
     another Federal statute, the Act would nonetheless generally
     authorize EPA to implement a title V program in such areas. 
     See Adkins v. Arnold, 235 U.S. 417, 420; 59 L. Ed. 294, 295;
     35 S. Ct. 118 (1914) (noting that "later in time" statutes
     should take precedence).
           Today's notice is consistent with long-standing EPA
     policy that the Agency will administer environmental
     programs in Indian country until a Tribe assumes regulatory
     responsibility.  See, e.g., EPA's 1984 Policy for the
     Administration of Environmental Programs on Indian
     Reservations, reaffirmed by EPA Administrator Browner in
     1994.  
           Where there is a dispute as to whether a particular
     area is Indian country, EPA will run the title V program in
     that area until the dispute is satisfactorily resolved.  A
     Tribal or State government that wishes to dispute whether an
     area is or is not within Indian country should submit to the
     appropriate Regional Administrator sufficient information
     that demonstrates to EPA's satisfaction that there is a
     dispute.  The EPA solicits comment on this approach.  
           IV.  Proposed Changes to Regulatory Language.  The EPA
     today proposes to add a definition of the term "Indian
     country" based on the term as defined in 18 U.S.C. 1151. The
     EPA notes that although the definition of Indian country
     appears in a criminal code, it has been extended to civil
     judicial and regulatory jurisdiction (DeCoteau v. District
     County Court, 420 U.S. 425, 427 n. 2 (1975); 40 CFR 144.3). 
           In addition, EPA proposes to delete the definition of
     "Tribal area" because EPA believes it is more consistent
     with other environmental regulations to define EPA's
     jurisdiction in terms of "Indian country."  The use of both
     terms may create confusion as well.  Accordingly, EPA
     proposes to revise several regulatory provisions that
     include the term "Tribal area," including the definition of
     "affected State" in section 71.1, section 71.4(a),
     section 71.4(b), sections 71.4(b)(2)-(4), section 71.4(f),
     section 71.4(h)-(j), section 71.8(a), and section 71.8(d).
           In addition, EPA proposes several regulatory changes
     that result from the new approach that are different than
     the 1995 proposal.  Briefly summarized, these changes
     include the following.  First, proposed section 71.4(b)(1)
     that referred to Tribal assertion of jurisdiction would not
     be finalized and would be deleted in its entirety since a
     Tribe's assertion of jurisdiction is not a relevant
     consideration under today's proposal.  Instead, proposed
     section 71.4(b) would establish EPA's authority to
     administer the part 71 program within Indian country
     irrespective of whether the Tribe established its
     jurisdiction over the area.  Second, consistent with the
     Agency's policy with respect to administering environmental
     programs in Indian country, EPA would not solicit comment on
     the boundaries of the program through a rulemaking.  See,
     e.g., 40 CFR 144.3, 147.60(a) (EPA administers Underground
     Injection Control program on "Indian lands," defined
     equivalent to "Indian country."  Rather, disputes over
     whether a specific source was subject to the part 71 program
     would be resolved in the context of permitting the source. 
     Therefore, provisions from the April 1995 proposal that
     would have required EPA to notify appropriate governmental
     entities of the proposed geographic boundaries of the
     program are inappropriate and will be withdrawn.  The EPA
     solicits comments on this approach.     
           The EPA believes that most sources in Indian country
     are located within reservation boundaries and that these
     sources should not find it difficult to determine that they
     are subject to the part 71 program.  The Agency will rely on
     boundaries as determined by the Bureau of Indian Affairs
     which will provide maps of reservations upon request.  The
     EPA recognizes that some sources may be uncertain as to
     whether they are located within Indian country.  Sources
     that are unsure of whether they are located in Indian
     country should consult the appropriate EPA Regional office. 
     Prior to the effective date of the part 71 program in Indian
     country, the EPA will undertake outreach efforts to notify
     sources that they are subject to the program, in much the
     same way as States have notified sources that they believed
     were subject to the part 70 program.  However, EPA may fail
     to identify some sources within Indian country.  Even as to
     those sources, EPA reiterates that it is the source's
     responsibility to ascertain whether or not it is subject to
     the part 71 program.  
           The Agency will publish in the Federal Register a
     notice of the effective date of the part 71 program in
     Indian country as required by section 71.4(g), even where
     the default effective date of November 15, 1997 has not been
     changed for a given area within Indian country.  The Agency
     solicits comments on what additional information this notice
     should contain that would be helpful to sources.
           The EPA solicits comments on whether EPA should take
     additional steps to provide notice to sources that they are
     located in Indian country and, if so, what those steps would
     be.  At this time, the Agency does not believe there is
     value in publishing maps and boundaries of reservations
     because the Agency will rely on the boundaries recognized by
     the Bureau of Indian Affairs which are available upon
     request from that Agency.  
           In addition, EPA is adding language to clarify section
     71.4(b).  The EPA intended that this section would not only
     authorize early implementation of the part 71 program (in
     advance of the November 15, 1997 default effective date for
     the program), but would also clarify that EPA will
     administer the program unless a part 70 program has been
     given full or interim approval.  Given that the 1995
     proposed language is less than clear on this point, the
     current proposal at section 71.4 explains that EPA will
     administer the program in Indian country. 
           V.  Administrative Requirements
           A.  Docket.  The docket for this regulatory action is
     A-93-51.  All the documents referenced in this preamble fall
     into one of two categories.  They are either reference
     materials that are considered to be generally available to
     the public, or they are memoranda and reports prepared
     specifically for this rulemaking.  Both types of documents
     can be found in Docket Number A-93-51. 
           B.  Executive Order 12866.  Under Executive Order 12866
     (58 FR 51735 (October 4, 1993)), the Agency must determine
     whether the regulatory action is "significant" and therefore
     subject to OMB review and the requirements of the Executive
     Order.  The Order defines "significant" regulatory action as
     one that is likely to lead to a rule that may:
           (1)  Have an annual effect on the economy of
     $100 million or more, adversely and materially affecting a
     sector of the economy, productivity, competition, jobs, the
     environment, public health or safety, or State, local or
     Tribal governments or communities;
           (2)  Create a serious inconsistency or otherwise
     interfere with an action taken or planned by another agency;
           (3)  Materially alter the budgetary impact of
     entitlements, grants, user fees, or loan program or the
     rights and obligation of recipients thereof;
           (4)  Raise novel legal or policy issues arising out of
     legal mandates, the President's priorities, or the
     principles set forth in the Executive Order."
           Pursuant to the terms of Executive Order 12866, it has
     been determined that this proposed rule is not a
     "significant" regulatory action because it does not raise
     any of the issues associated with "significant" regulatory
     actions.  The proposal would have a negligible effect on the
     economy and would not create any inconsistencies with other
     actions by other agencies, alter any budgetary impacts, or
     raise any novel legal or policy issues.  This proposal would
     affect EPA's approach to permitting sources in Indian
     country, assuring that all title V sources located in Indian
     country will be subject to title V permitting requirements. 
     For these reasons, this action was not submitted to OMB for
     review.  
           C.  Regulatory Flexibility Act Compliance.  The
     Regulatory Flexibility Act (5 U.S.C. 601) requires EPA to
     consider potential impacts of proposed regulations on small
     entities.  If a preliminary analysis indicates that a
     proposed regulation would have a significant adverse
     economic impact on a substantial number of small entities,
     then a regulatory flexibility analysis must be prepared. 
           The original part 70 rule and the recently proposed
     revisions to part 70 were determined to not have a
     significant adverse impact on a substantial number of small
     entities.  See 57 FR 32250, 32294 (July 21, 1992), and 60 FR
     45530, 45563 (August 31, 1995).  Similarly, a regulatory
     flexibility screening analysis of the part 71 rule revealed
     that the rule would not have a significant adverse impact on
     a substantial number of small entities, since few small
     entities would be subject to part 71 permitting requirements
     as a result of the rule's deferral of the requirement to
     obtain a permit for nonmajor sources.  See 61 FR 34202,
     34227 (July 1, 1996).   
           The prior screening analyses for the part 70 and part
     71 rule was done on a nationwide basis without regard to
     whether sources were located within Indian country and are,
     therefore, applicable to sources in Indian country. 
     Accordingly, EPA believes that the screening analyses are
     valid for purposes of today's proposal.  And since the
     screening analyses for the prior rules found that the part
     70 and 71 rules as a whole would not have a significant
     impact on a substantial number of small entities, today's
     rule, which may affect a much smaller number of entities
     than affected by the earlier rules, also will not have a
     significant impact on a substantial number of small
     entities.  The reasons for this conclusion are discussed in
     more detail below.
           At this time, no nonmajor sources are required by part
     71 to obtain an operating permit.  The Agency has also
     issued several policy memoranda explaining or providing
     mechanisms for sources to become "synthetic minors" whereby
     the source is recognized for not emitting pollutants in
     major quantities.  The sources thereby avoid the requirement
     to obtain a part 71 permit.  
           Because of the deferral of permitting requirements for
     nonmajor sources, today's proposal would affect only a small
     number of sources.  Although firm figures on the number of
     title V sources in Indian country are not available,
     preliminary estimates suggest that there may be only
     approximately 100 major sources, and 450 nonmajor sources
     (for which permitting requirements would be deferred).  
           Consequently, I hereby certify that today's proposed
     rule would not have a significant impact on a substantial
     number of small entities.     
           D. Paperwork Reduction Act.  The Office of Management
     and Budget (OMB) has approved the information collection
     requirements currently contained in the part 71 requirements
     published July 1, 1996 (61 FR 34202) under the provisions of
     the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and has
     assigned OMB control number 2060-0336.  The additional
     information collection requirements in this proposed rule
     have been submitted for approval to OMB.  An Information
     Collection Request (ICR) document has been prepared by EPA
     (ICR Number 1713.03) and a copy may be obtained from Sandy
     Farmer, Regulatory Information Division, U.S. Environmental
     Protection Agency (2137), 401 M Street, S.W., Washington, DC
     20460, or by calling (202) 260-2740.
           The information is planned to be collected to enable
     EPA to carry out its obligations under the Act to determine
     which sources in Indian country are subject to the Federal
     Operating Permits Program and what requirements should be
     included in permits for sources subject to the program. 
     Responses to the collection of information will be mandatory
     under section 71.5(a) which requires owners or operators of
     sources subject to the program to submit a timely and
     complete permit application, and under sections 71.6(a) and
     (c) which require that permits include requirements related
     to recordkeeping and reporting.  As provided in 42 U.S.C.
     7661(e), sources may assert a business confidentiality claim
     for the information collected under section 114(c) of the
     Act.
            Today's proposal would impose information collection
     request requirements on approximately 100 sources in Indian
     country.  On a per source basis, the burden would be
     identical to the burden for sources currently subject to
     part 71 requirements.  In the current Information Collection
     Request (ICR) document for the part 71 rule, EPA estimates
     that the annual burden per source is 329 hours, and the
     annual burden to the Federal government is 243 hours per
     source.  Therefore, the impact of today's proposal would be
     that sources will incur an additional 32,900 burden hours
     per year, and EPA will incur an additional 24,300 burden
     hours per year.  The total annualized cost would be $18,425
     per source or $1,842,500.
           Today's rule imposes no burden on State and local
     agencies.  Burden means the total time, effort, or financial
     resources expended by persons to generate, maintain, retain,
     or disclose or provide information to or for a Federal
     agency.  This includes the time needed to review
     instructions; develop, acquire, install, and utilize
     technology and systems for the purposes of collecting,
     validating, and verifying information; processing and
     maintaining information, and disclosing and providing
     information; adjust the existing ways to comply with any
     previously applicable instructions and requirements; train
     personnel to be able to respond to a collection of
     information; search data sources; complete and review the
     collection of information; and transmit or otherwise
     disclose the information.  An Agency may not conduct or
     sponsor, and a person is not required to respond to, a
     collection of information unless it displays a currently
     valid OMB control number.  The OMB control numbers for EPA's
     regulations are listed in 40 CFR part 9 and 48 CFR 
     Chapter 15.
           The Agency requests comments on the need for this
     information, the accuracy of the provided burden estimates,
     and any suggested methods for minimizing respondent burden,
     including through the use of automated collection
     techniques.  Send comments on the ICR to the Director,
     Regulatory Information Division, U.S. Environmental
     Protection Agency (2136), 401 M Street, S.W., Washington, DC
     20460, and to the Office of Information and Regulatory
     Affairs, Office of Management and Budget, 725 17th Street,
     N.W., Washington, DC 20503, marked "Attention Desk Office
     for EPA."  Include the ICR number in any correspondence. 
     Since OMB is required to make a decision concerning the ICR
     between 30 and 60 days after [insert date of publication in
     the Federal Register], a comment to OMB is best assured of
     having its full effect if OMB receives it by [insert date 30
     days after publication in the Federal Register].  The final
     rule will respond to any OMB or public comments on the
     information collection requirements contained in this
     proposal.
           E.  Unfunded Mandates Reform Act.  Today's action
     imposes no costs on State, local, and Tribal governments. 
     It changes the Agency's approach to issuing permits to
     sources in Indian country and eliminates the requirement
     that Indian Tribes establish their jurisdiction prior to EPA
     administering the Federal operating permits program in
     Indian country. 
           The EPA has estimated in the ICR document that the
     Federal operating permits program rule promulgated in July
     1996 would cost the private sector $37.9 million per year. 
     See 61 FR 34202, 34228 (July 1, 1996).  In the ICR, EPA
     estimates costs based on sources that would be subject to
     part 71 permitting requirements in eight States, but
     overestimates the number of these sources for purposes of
     simplifying the analysis.  See 61 FR 34202, 34227 (July 1,
     1996).  The overestimate of the number of sources is nearly
     as large as the number of new sources covered in today's
     proposal.  Consequently, EPA believes today's proposal would
     increase the direct cost of the part 71 rule for industry to
     $38.3 million.  This estimate is based on the average cost
     of compliance per source and the number of sources in Indian
     country that were not accounted for in the original
     estimate.  The EPA has determined that today's action does
     not contain a Federal mandate that may result in
     expenditures of $100 million or more for State, local, and
     Tribal governments, in the aggregate, or the private sector,
     in any 1 year.  Therefore, the Agency concludes that it is
     not required by section 202 of the Unfunded Mandates Reform
     Act of 1995 to provide a written statement to accompany this
     regulatory action.
          List of Subjects 40 CFR Part 71
           Operating permits, Indian Tribes.
     
                                                             
     Date                          Carol M. Browner
                                   Administrator
     
     Billing Code:  6560-50-P
               For the reasons set out in the preamble, title 40,
     chapter I of the Code of Federal Regulations is amended as
     set forth below.
     Part 71--[Amended]
          1.  The authority citation for part 71 continues to
     read as follows:
          Authority:  42 U.S.C. 7401 et seq.
     Subpart A--[Amended]
          2.  Section 71.2 is proposed to be amended by revising
     paragraphs (1) and (2) of the definition of "affected State"
     and by adding the definition of "Indian country" as follows:
      71.2  Definitions
     *    *    *    *    *
          Affected States are:
          (1)  All States and areas within Indian country subject
     to a part 70 or part 71 program and that are contiguous to
     the State or the area within Indian country in which the
     permit, permit modification, or permit renewal is being
     proposed; or that are within 50 miles of the permitted
     source.  A Tribe shall be treated in the same manner as a
     State under this paragraph (1) only if EPA has determined
     that the Tribe is an eligible Tribe. 
          (2)  The State or area within Indian country subject to
     a part 70 or part 71 program in which a part 71 permit,
     permit modification, or permit renewal is being proposed.  A
     Tribe shall be treated in the same manner as a State under
     this paragraph (2) only if EPA has determined that the Tribe
     is an eligible Tribe. 
     *  *  *  *  *  
          Indian country means: 
          (1)  All land within the limits of any Indian
     reservation under the jurisdiction of the United States
     government, notwithstanding the issuance of any patent, and
     including rights-of-way running through the reservation; 
          (2)  All dependent Indian communities within the
     borders of the United States whether within the original or
     subsequently acquired territory thereof, and whether within
     or without the limits of a State; and 
          (3)  All Indian allotments, the Indian titles to which
     have not been extinguished, including rights-of-way running
     through the same.
     *  *  *  *  *       
          2.  Section 71.4 is proposed to be amended by revising
     paragraph (a) introductory text, revising paragraph (b),
     revising paragraph (f), revising paragraph (h), revising
     paragraph (i) introductory text, and revising paragraph (j),
     to read as follows:  
      71.4  Program Implementation
          (a)  Part 71 programs for States.  The Administrator
     will administer and enforce a full or partial operating
     permits program for a State (excluding Indian country) in
     the following situations: 
     
     *  *  *  *  *  
          (b)  Part 71 programs for Indian country.  By 
     November 15, 1997, the Administrator will administer and
     enforce an operating permits program in Indian country, as
     defined in  71.2, when an operating permits program for the
     area which meets the requirements of part 70 of this chapter
     has not been granted full or interim approval by the
     Administrator.  The Administrator may administer an
     operating permits program in Indian country in advance of
     that date.     
          (1)  [Reserved] 
          (2)  The effective date of a part 71 program in Indian
     country shall be November 15, 1997.     
          (3)  Notwithstanding paragraph (b)(2) of this section,
     the Administrator, in consultation with the governing body
     of the affected Indian Tribe, may adopt an earlier effective
     date.     
          (4)  Notwithstanding paragraph (i)(2) of this section,
     within 2 years of the effective date of the part 71 program
     in Indian country, the Administrator shall take final action
     on permit applications from part 71 sources that are
     submitted within the first full year after the effective
     date of the part 71 program.
     *  *  * *  * 
          (f)  Use of selected provisions of this part.  The
     Administrator may utilize any or all of the provisions of
     this part to administer the permitting process for
     individual sources or take action on individual permits, or
     may adopt, through rulemaking, portions of a State or Tribal
     program in combination with provisions of this part to
     administer a Federal program for the State or in Indian
     country in substitution of or addition to the Federal
     program otherwise required by this part. 
     *  *  *  *  * 
          (h)  Effect of limited deficiency in the State or
     Tribal program.  The Administrator may administer and
     enforce a part 71 program in a State or within Indian
     country even if only limited deficiencies exist either in
     the initial program submittal for a State or eligible Tribe
     under part 70 of this chapter or in an existing State or
     Tribal program that has been approved under part 70 of this
     chapter.
          (i)  Transition plan for initial permits issuance.  If
     a full or partial part 71 program becomes effective in a
     State or within Indian country prior to the issuance of part
     70 permits to all part 70 sources under an existing program
     that has been approved under part 70 of this chapter, the
     Administrator shall take final action on initial permit
     applications for all part 71 sources in accordance with the
     following transition plan. 
     *  *  * *  *  
          (j)  Delegation of part 71 program.  The Administrator
     may promulgate a part 71 program in a State or Indian
     country and delegate part of the responsibility for
     administering the part 71 program to the State or eligible
     Tribe in accordance with the provisions of  71.10; however,
     delegation of a part of a program will not constitute any
     type of approval of a State or Tribal operating permits
     program under part 70 of this chapter. *  *  * 
     *  *  *  *  *       
          3.  Section 71.8 is proposed to be amended by revising
     the first sentence of paragraph (a) and revising paragraph
     (d) as follows: 
      71.8  Affected State Review
          (a)  Notice of draft permits.  When a part 71 operating
     permits program becomes effective in a State or within
     Indian country, the permitting authority shall provide
     notice of each draft permit to any affected State, as
     defined in  71.2 on or before the time that the permitting
     authority provides this notice to the public pursuant to
      71.7 or 71.11(d) except to the extent  71.7(e)(1) or (2)
     requires the timing of the notice to be different. *  *  *
     *  *  *  *  * 
          (d)  Notice provided to Indian Tribes.  The permitting
     authority shall provide notice of each draft permit to any
     federally recognized Indian Tribe in an area contiguous to
     the jurisdiction in which the part 71 permit is proposed or
     is within 50 miles of the permitted source and whose air
     quality may be affected by the permitting action.
     
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