
[Federal Register: April 29, 2008 (Volume 73, Number 83)]
[Rules and Regulations]               
[Page 23111-23114]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ap08-11]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2004-WI-0002; FRL-8557-4]

 
Redesignation of the Forest County Potawatomi Community 
Reservation to a PSD Class I Area; Dispute Resolution With the State of 
Wisconsin

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of dispute resolution.

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SUMMARY: The purpose of this notice is to announce the resolution of an 
intergovernmental dispute over a request by the Forest County 
Potawatomi Community (FCP Community) to redesignate portions of the FCP 
Community reservation as a non-Federal Class I area under the Clean Air 
Act (CAA or Act) program for prevention of significant deterioration of 
air quality. On June 8, 1995, the Governors of Wisconsin and Michigan 
raised concerns about EPA's proposal to approve the request of the FCP 
Community to redesignate portions of its reservation as a non-Federal 
Class I area and asked EPA to initiate the intergovernmental dispute 
resolution process provided for in the CAA. The State of Wisconsin and 
the FCP Community were able to reach an agreement concerning the 
redesignation. After considering the final agreement signed by the FCP 
Community and the State of Wisconsin, EPA finds that this

[[Page 23112]]

agreement resolves the dispute and no further action is required by 
EPA. In a separate rulemaking published in this Federal Register, EPA 
is finalizing its proposed decision to redesignate the FCP Community as 
a non-Federal Class I area. The Class I designation will result in 
lowering the allowable increases in ambient concentrations of 
particulate matter, sulfur dioxide, and nitrogen oxide within the 
reservation.

DATES: This action is effective on May 29, 2008.

FOR FURTHER INFORMATION CONTACT: Constantine Blathras, Air Permits 
Section, Air Programs Branch (AR-18J), Environmental Protection Agency, 
Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604-3507; 
telephone number: 312-886-0671; fax number: 312-886-5824; e-mail 
address: blathras.constantine@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA.

I. General Information

A. Does This Action Apply to Me?

    This action will apply to applicants to the Prevention of 
Significant Deterioration (PSD) construction permit program on Class I 
trust lands of the Forest County Potawatomi Community.

B. How Can I Get Copies of This Document and Related Information?

    1. Docket. EPA has established a docket for this action under 
Docket ID No. EPA-R05-OAR-2004-WI-0002. Publicly available docket 
materials are available either electronically in http://
www.regulations.gov or in hard copy at the U.S. Environmental 
Protection Agency, Air Docket, in the EPA Headquarters Library, Room 
Number 3334 in the EPA West Building, located at 1301 Constitution 
Ave., NW., Washington, DC. The EPA/DC Public Reading Room hours of 
operation will be 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST), 
Monday through Friday, excluding legal holidays. The telephone number 
for the Public Reading Room is (202) 566-1744, and the telephone number 
for the Air Docket is (202) 566-1742. The docket is also available 
during normal business hours for public inspection and copying at the 
Air Programs Branch, Region 5, EPA (AR-18J), 77 West Jackson Boulevard, 
Chicago, Illinois 60604.
    2. Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the Federal Register 
listings at: http://www.epa.gov/fedrgstr/. In addition to being 
available in the docket and on the EPA Federal Register Internet Web 
site, an electronic copy of this notice is also available on the EPA's 
New Source Review (NSR) Web site, under Regulations & Standards, at 
http://www.epa.gov/nsr/actions.html.

C. How Is This Notice Organized?

    The information in this notice is organized as follows:

I. General Information
    A. Does This Action Apply to Me?
    B. How Can I Get Copies of This Document and Related 
Information?
    C. How Is this Notice Organized?
II. This Notice
    A. Area Proposed for Redesignation
    B. Authority for Invoking Dispute Resolution Procedures
    C. Agency Action

II. This Notice

A. Area Proposed for Redesignation

    On February 14, 1995, the FCP Community submitted a request to the 
EPA to approve the redesignation of the air quality status of selected 
parcels of the FCP Community's Reservation from ``Class II'' to ``Class 
I'' under the CAA's PSD regulations. The area of FCP Community 
reservation lands that has been proposed for redesignation to Class I 
comprises 10,818 acres, all of which is located in Forest County, 
Wisconsin.

B. Authority for Invoking Dispute Resolution Procedures

    Section 164(e) of the CAA and 40 CFR 52.21(t) provide the current 
statutory and regulatory framework for resolving disputes between 
states and Tribes over redesignation of an area or for permits for new 
major emitting facilities that may cause or contribute to a cumulative 
change in air quality under the PSD program. Section 164(e) of the CAA 
provides that if the Governor of an affected state or the appropriate 
Indian Governing Body of an affected Tribe disagrees with a request for 
redesignation by either party, then the governor or Indian ruling body 
may request that EPA negotiate with the parties to resolve the dispute. 
Pursuant to the statute and implementing regulations, EPA is not a 
party to the dispute. The Administrator of EPA is, by statute, 
designated as the final arbitrator of the dispute. The statute provides 
that either party can ask the Administrator for a recommendation to 
resolve the dispute, and if the parties fail to reach an agreement 
during the negotiations, ``the Administrator shall resolve the dispute 
and his determination, or the results of the agreements reached through 
other means, shall become part of the applicable plan and shall be 
enforceable as part of such plan.'' Section 164(e), 42 U.S.C. 7474(e).
    Similarly, if a permit is proposed to be issued for any new major 
emitting facility proposed for construction in any state, which the 
Governor of an affected state or the governing body of an affected 
Indian Tribe determines will cause or contribute to a cumulative change 
in air quality in excess of that allowed within the affected state or 
reservation, the Governor or Tribal ruling body may invoke the same 
dispute resolution mechanism. States or Tribes with Class I areas, 
however, cannot ``veto'' permits that may adversely affect those areas.
    While EPA has authority to resolve disputes, this authority is 
exercised only if the parties in dispute do not reach an agreement 
during the dispute resolution process. A discussion of EPA's 
authorities to resolve disputes is found in EPA's notice resolving the 
dispute between the State of Michigan and the FCP Community, published 
in this Federal Register. Where, as here, in the case of Wisconsin and 
the FCP Community, the parties reached their own resolution of their 
issues, EPA believes that the agreement becomes part of the 
``applicable plan'' and the dispute is ended. 42 U.S.C. 7474(e).

C. Agency Action

1. Background on Redesignation Request
    Pursuant to section 164(c), 42 U.S.C. 7474(c), the FCP Community 
Tribal Council formally submitted a proposal to redesignate certain FCP 
Community reservation lands from Class II to Class I to the EPA on 
February 24, 1995. A Class I air quality designation provides greater 
protection for air resources by decreasing the increases allowed in the 
ambient concentrations of particulate matter, sulfur dioxide, and 
nitrogen oxides from any new major stationary sources or major 
modifications to existing sources in the vicinity. The types of 
facilities whose emissions could impact these lower limits are 
generally new or expanding large industrial sources such as electric 
utilities and pulp and paper mills. No new operating permits or 
additional controls would be required for existing sources solely as a 
result of a Class I designation.
    Along with reducing allowable concentrations of key pollutants, 
Class I areas may also include air quality related values (AQRV) which 
are intended to further protect air quality. In the case of the FCP 
Community redesignation, the Tribe has proposed acidic and mercury 
deposition as the

[[Page 23113]]

AQRVs they are seeking to protect. Because state officials were 
concerned about AQRVs and other issues, an intergovernmental dispute 
eventually developed and the parties ultimately sought dispute 
resolution under section 164(e).
    By statute, the Agency must approve or disapprove a request for 
redesignation. Accordingly, on June 29, 1995, EPA published a notice in 
the Federal Register (FR) proposing to approve the redesignation 
request by the FCP Community to Class I area status. The notice 
provided for a 60-day public comment period. However, on June 8, 1995, 
the Governors of Wisconsin and Michigan sent a letter to EPA objecting 
to EPA's proposal to grant the FCP Community request for redesignation 
and requesting dispute resolution. The June 8 letter focused on two 
concerns, first, the states' perception that EPA lacked rules to handle 
such redesignation requests and the implementation of non-federal Class 
I areas, and second, that a non-federal class I area would 
``significantly infringe upon the ability of our state governments to 
manage the natural resources of our states.''\1\
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    \1\ Letter from Governor Tommy G. Thompson and Governor John 
Engler to Carol Browner, June 8, 1995.
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    To address their concerns, the Agency published a FR notice (60 FR 
40139) on August 7, 1995, postponing the scheduled August 2, 1995 
public hearing and extending at the states' request the public comment 
period indefinitely, while the Agency attempted to negotiate with the 
states and respond to the issues they had raised.
    As already noted, section 164(e) of the Act allows either the 
Governor of a state or the Indian ruling body to request to the 
Administrator to enter into negotiations with the parties involved to 
resolve such a dispute. In response to the Governors' letter, EPA 
contracted with a professional mediation service (RESOLVE, Inc.) to 
provide mediation services. RESOLVE discussed the case with EPA and the 
parties, and circulated resumes and a list of potential mediators for 
comment by the parties.
    In the meantime, EPA had formed a senior EPA workgroup to 
cooperatively develop options for consideration by the states and 
Tribes regarding roles and responsibilities of non-Federal class I area 
managers. To gather public comment on different proposals, EPA 
published an advanced notice of proposed rulemaking (ANPR) on May 16, 
1997. 62 FR 27158. EPA held public workshops in Chicago and Phoenix on 
the ANPR, and gathered testimony on the options for proposed 
rulemaking. 62 FR 33786 (June 23, 1997). The ANPR was not finalized 
however, and no new regulations were established.
    In further follow-up to the Wisconsin and Michigan Governor's 
letters invoking dispute resolution, EPA engaged in an extended 
correspondence with Wisconsin and Michigan regarding the relationship 
of the proposed redesignation to proposed rulemaking, which can be 
found in the record for this notice. Following nearly 2 years of 
discussions, however, the states and the Tribe had not reached a 
resolution of the issues that had been raised by the states, nor had 
EPA completed the public notice process on the proposed redesignation. 
Therefore, on July 10, 1997, EPA published notice for two informational 
meetings and public hearings on the FCP Community's redesignation 
request and established a close for the public comment period of 
September 15, 1997. 62 FR 37007 (July 10, 1997). EPA held two public 
hearings on the proposed redesignation on August 12, 1997, in Carter, 
Wisconsin, and August 13, 1997, in Rhinelander, Wisconsin, 
respectively. By the close of the public comment period, EPA had 
received more than 120 comments on the proposed redesignation.
    On April 21, 1998 \2\, Wisconsin requested that EPA reinitiate the 
dispute resolution process under section 164(e). In response, EPA sent 
letters to the State of Wisconsin, the State of Michigan, and the FCP 
Community requesting a meeting to begin the negotiations to resolve the 
dispute. EPA requested that the parties each identify their chief 
negotiator, and that each party submit a written list of issues that 
they wished to resolve through the dispute resolution process. EPA, in 
consultation with the parties, requested RESOLVE to select a mediator, 
and Triangle Associates, Inc., Seattle, Washington, was chosen to 
mediate the discussions.
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    \2\ Letter from Governor Tommy Thompson to Richard Wilson, 
Acting Assistant Administrator for Air and Radiation, April 21, 
1998.
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    Once a mutually acceptable mediator had been agreed upon, EPA 
requested that the mediator establish a formal process for conducting 
compilation of issues, organizing and structuring meetings, and 
communication among the parties.\3\ This included interviews with each 
of the parties, discussions of the issues lists submitted by each 
party, and structuring a series of meetings. Following an initial 
interview, the Agency requested a meeting of all parties to agree upon 
a protocol, establish a list of issues appropriate for discussion under 
section 164(e), and plan a series of further meetings aimed at 
resolving the dispute.
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    \3\ The public docket for this rulemaking contains documents 
relating to the dispute resolution process except those that are 
covered by privilege, such as the federal Alternative Dispute 
Resolution Act. Privileged documents are listed in the index, though 
have not been made available to the public.
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    The first dispute resolution meeting occurred on September 2, 1998, 
at the Region 5 offices in Chicago, Illinois. Both the States of 
Wisconsin and Michigan participated in this meeting, and states and 
Tribe each identified issues of concern and attempted to find areas of 
overlap that could potentially lead to resolution.
    Following this first meeting, the parties requested that EPA 
examine the twenty-one issues submitted for dispute resolution to 
determine which would be appropriate for discussion and resolution 
under section 164(e) of the CAA. EPA Region 5, in consultation with 
EPA's headquarters offices (Office of Air and Radiation, Office of 
General Counsel, and Office of Air Quality Planning and Standards), by 
letter of November 6, 1998, ultimately submitted to the parties a list 
of six suitable topics for further discussion and resolution. These 
issues included: ``(1) Whether the lands proposed for redesignation are 
of sufficient size to allow for effective air quality management; (2) 
the extent to which the lands proposed for redesignation have 
sufficient size to have air quality related values; (3) the off-
reservation impacts of redesignation as discussed in the [FCP 
Community's] Technical Support Document; (4) the Tribe's choice of 
mercury deposition as an AQRV; (5) the Tribe's choice of AQRVs; and (6) 
the roles and responsibilities of the respective parties in the dispute 
resolution discussion on September 2, 1998.'' \4\ The Agency also 
informed the parties that the remaining issues were either unsuitable 
for discussion under the CAA section 164(e), or where wholly within 
EPA's purview as decision maker under CAA section 164(b) and 164(e).
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    \4\ Letter from Stephen Rothblatt, Acting Director, Air and 
Radiation Division, Region 5, to George E. Meyer, Secretary WDNR, 
and Joseph Young, attorney for FCP, November 6, 1998 (cc to Denis 
Drake, MDEQ).
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    On November 16, 1998, the parties held a second dispute resolution 
meeting in Green Bay, Wisconsin. However, the State of Michigan elected 
not to participate in this meeting.\5\

[[Page 23114]]

During the second meeting, the parties discussed each of the six 
issues, with each party having the opportunity to raise their specific 
concerns. The State of Wisconsin and FCP Community exchanged ideas for 
achieving a mutually acceptable resolution, which addressed both 
parties' concerns. The parties scheduled another negotiating session 
for December.
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    \5\ The State of Michigan did not participate in any subsequent 
dispute resolution meetings between Wisconsin and the FCP. The 
Administrator's resolution of the dispute between the State of 
Michigan and the FCP Community is concurrently published in a 
separate FR notice.
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    On December 22, 1998, the parties met in Milwaukee, Wisconsin. As a 
result of further discussions which took place at this meeting, the 
parties developed a draft negotiation concept paper. The parties, as 
well as EPA, agreed to seek concurrence from their respective boards 
and governing bodies. The parties agreed that sufficient progress had 
been made towards resolving the dispute to warrant another meeting in 
February 1999.
    The parties held another dispute resolution meeting on the FCP 
Community reservation in Carter, Wisconsin on February 3, 1999. During 
this meeting, the parties developed specific language that they wished 
to include in a draft agreement in principle. After review by both 
parties, as well as by EPA, the lead negotiators for the State of 
Wisconsin, the FCP Community, and EPA signed the agreement, signifying 
their good faith intent to seek concurrence from their respective 
authorities and management. EPA was not a party to the dispute, and its 
role was to acknowledge the parties' agreement.
    Following the development of the agreement in principle document, a 
drafting team comprised of representatives of the parties and from EPA 
began developing the detailed terms of the final agreement. On April 8, 
1999, the parties held a meeting to work out the language of the final 
agreement. After each of the parties, as well as EPA, had an 
opportunity to review and comment on the draft of the final agreement, 
the parties agreed that another drafting session would be necessary. 
The parties, together with EPA, held a final conference call to 
complete the draft final agreement on June 7, 1999.
2. The FCP Community and the State of Wisconsin Memorandum of Agreement
    The 1999 Memorandum of Agreement between the FCP Community and the 
State of Wisconsin (FCP Community-Wisconsin MOA) fully resolves the 
dispute between the state and the Tribe concerning the FCP Community's 
request for Class I redesignation of its reservation lands. The Class I 
Final Agreement provides a framework for establishing how the state and 
FCP Community will implement the Class I area under their respective 
authorities. The provisions of this agreement become effective upon 
EPA's final action to approve the FCP Community's request for Class I 
redesignation, as published in a separate final rule in the Federal 
Register. While EPA also was a signatory to this agreement, EPA's role 
in the process was to acknowledge the agreement entered into by the 
parties on their own respective authorities.
3. Effect of the FCP Community and State of Wisconsin Memorandum of 
Agreement on the Wisconsin State Implementation Plan (SIP)
    CAA section 164(e) provides that ``the results of the agreements 
reached through other means, shall become part of the applicable plan 
and shall be enforceable as part of such plan.'' CAA section 164(e), 42 
U.S.C. 7474(e). The PSD program is implemented in Wisconsin under an 
EPA approved State Implementation Plan (SIP) which excludes all of 
Indian country within the state. The terms of the FCP Community-
Wisconsin MOA do not apply to the effects of the Class I redesignation 
on the redesignated area, and thus are not appropriate for inclusion in 
the Federal Implementation Plan (FIP) EPA is issuing in a concurrent 
rulemaking, located in this Federal Register publication. Rather, the 
agreement establishes certain special provisions regarding the effects 
of the Class I redesignation on potential sources outside the 
redesignated area. These provisions will need to be implemented by 
revising the Wisconsin SIP and have been summarized by EPA as follows 
in the December 18, 2006, Federal Register proposal:

    [T]he agreement between the FCP Community and Wisconsin subjects 
all major sources in Wisconsin located within a ten (10) mile radius 
of any redesignated Tribal land to performing an increment analysis 
and to meeting consumption requirements applicable to a Class I 
area. Major sources located outside of ten (10) miles are subject to 
increment analysis and consumption requirements applicable to any 
redesignated Tribal land as if it were a Class II area. Also under 
the agreement, all major sources within sixty-two (62) miles are 
subject to an analysis of their impact on AQRVs of the redesignated 
Tribal lands to determine if they will have an adverse impact on 
these AQRVs.

71 FR 75696. As these special provisions differ from Wisconsin's 
currently approved SIP for the PSD program, for this portion of the FCP 
Community-Wisconsin MOA to become enforceable will require revision of 
the Wisconsin SIP, which otherwise would not recognize a limitation of 
the area in which the Class I increment analysis must be conducted.
    EPA takes the position that it generally will not interfere with 
the agreements reached between Tribes and states through the CAA's 
164(e) dispute resolution process. However, to the extent that the 
agreement reached under the terms of the MOA allows for restricting the 
requirements normally associated with Class I areas, as these apply to 
sources located outside a 10-mile radius of the redesignated 
reservation lands, EPA takes the position that a revision of the 
Wisconsin SIP will be necessary to implement this provision to 
potential sources located outside boundaries of the redesignated 
parcels. In the absence of such modification to the Wisconsin SIP, the 
current PSD rules codified at 40 CFR Part 52 will apply to the FCP 
Community's Class I area as approved in EPA's final action published in 
this Federal Register.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate 
matter, Reporting and record keeping requirements, Sulfur dioxides, 
Volatile organic compounds.

    Dated: April 18, 2008.
Stephen L. Johnson,
Administrator.
 [FR Doc. E8-8970 Filed 4-28-08; 8:45 am]

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