UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION 5 AIR AND RADIATION DIVISION 77 WEST JACKSON BOULEVARD CHICAGO, IL 60604-3590

REPLY TO THE ATIENTION OF:



### DATE: February 22,2012
SUBJECT: Technical Support Document for Wisconsin's Proposed Revisions to its State Implementation Plan Relating to Redesignation ofForest County Potawatomi Reservation Community as aNon-Federal Class I AreaPursuant to the Prevention ofSignificantDeteriorationProgram FROM: Danny Marcus

# ~(It~**Illrrlev~** Air Permits Section (f 

### Air Programs Branch TO: Files
THRU: Genevieve Damico, Chief Air Permits Section Air Programs Branch

See attached Technical Support DocumentTechnical Support Document for Wisconsin's Proposed Revisions to its State Implementation Plan Relating to Redesignation of Forest County Potawatomi Reservation Community as a Non-Federal Class I Area Pursuant to the Prevention ofSignificant Deterioration Program February 22, 2012

Background: On April 29, 2008, The Administrator grantedthe application ofthe Forest County Potawatomi Community (FCP Community) to obtain Class I redesignation ofcertainreservation lands from "Class II" to "Class I" underthe Clean Air Act's (CAA orthe Act) Prevention ofSignificant Deterioration (PSD) Program. EPA, Final Rule, "Approval and Promulgation ofAir Quality Implementation Plans; Wisconsin; Redesignation ofthe Forest County Potawatomi Community Reservation to a PSD Class I Area," 73 Fed. Reg. 23086 (April 29, 2008). This rulemaking redesignated to Class I status 10,818 acres oflands held in trust for the FCP Community. At the
same time, EPA published two notices resolving disputes with Wisconsin and Michigan under the Act, in which those states had challengedthe FCP Community's application for Class I redesignation. The history ofthese· dispute resolutions is discussed in detail in EPA's notices for the resolution ofthese two matters. EPA, Notice, "Redesignationofthe Forest County Potawatomi Community Reservation to a PSD Class I area; Dispute Resolution with the State of Michigan," 73 Fed. Reg. 23107 (April 29, 2008); Notice, "Redesignation ofthe Forest County Potawatomi Community Reservation to a PSD Class I area; Dispute Resolution with the State of Wisconsin," 73 Fed. Reg. 23111 (April 29, 2008). The dispute resolution reached by Wisconsin and the FCP Community was formalized in a Memorandum ofAgreement (MOA) which was signed in 1999.
1. The FCP Commuuity and the State ofWisconsin Memorandum ofAgreement The 1999 MOA provided a framework for establishing how the state and FCP Community would implementthe Class I areaundertheir respective authorities. The provisions ofthe agreement became effective upon EPA's final action to approve the FCP Community's request for Class I redesignation. While EPA also was a signatory to the agreement, EPA's role in the process was to acknowledge the agreement entered into by the parties on their ownrespective authorities. Section 164(e) ofthe CAAprovides that' 'the results ofthe agreements reached through other means, shall become part ofthe applicable plan and shall be enforceable as part ofsuchplan." CAA § 164(e), 42 U.S.C. § 7474(e). The PSD program is implemented in Wisconsin under an. EPA approved State Implementation Plan (SIP) that excludes all ofIndian country within the state. Because the terms ofthe MOA do not apply to the effects ofthe Class I redesignation on the redesignated area, it was inappropriate to include them in the Federal ImplementationPlan I(FIP) EPA issued rulemaking. Rather, the agreementestablishes certain special provisions regarding the effects ofthe Class Iredesignation onpotential sources outside the redesignated
area. EPA explainedthatthese provisions needed to be implemented through revisions to the Wisconsin SIP. 73 Fed. Reg. 23111 at 23114. These revisions are the subject oftoday's proposal.
Pursuantto the MOA, all major sources in Wisconsin that are located within a 10-mile radius of any redesignated FCP land mustperform a Class I increment analysis and mustmeetthe increment consumptionrequirements applicable to a Class I area. Major sources located beyond the 10-mile distance from redesignated lands mustperform a Class II increment analysis and comply withthe consumptionrequirements applicable to a Class II area. Additionally, all major sources within 62 miles ofthe FCP Community's Class I redesignated areamust conduct
an analysis ofwhether their emissions would have an adverse impact onthose Air Quality Related Values associated withthat Class I area. As these special provisions differ from Wisconsin's currently approved SIP for the PSD program, for this portion ofthe MOA to become enforceable requires revision ofthe Wisconsin SIP, which otherwise would not recognize a limitation ofthe areain which the Class I increment analysis mustbe conducted.
EPA takes the positionthat it generally will not interfere with the agreements reached between tribes and states through the CANs Section 164(e) dispute resolution process. However, to the extent thatthe agreementreached under the terms ofthe MOA allows for restricting the requirements normally associated with Class I areas, as these apply to sources located outside a 10-mile radius ofthe redesignated reservation lands, EPA takes the position that a revision ofthe Wisconsin SIP is necessary to implementthese provisions for potential sources located outside the boundaries ofthe redesignated parcels. In the absence ofsuch modification to the Wisconsin SIP, the current PSD rules codified at 40 CFRPart 52 will apply to the FCP Community's Class I area and the State ofWisconsin as approved in EPA's final action.
Between 2008 and 2010, representatives from the FCP Community, the Wisconsin Department ofNatural Resources, and EPA met and held discussions to determine how to translate the general principles ofthe MOA into implementable regulations. These discussions covered defining the areas within which sources would be required to conduct the Class I and Class II increment analyses, notificationprocedures, and a state-tribal dispute resolution mechanism. Representatives for the FCP Community and WDNRthen worked together to develop the necessary regulatory provisions. 

### Action: On May 12,2011, John Melby, Director, Wisconsin Department ofNatural Resources, submitted arevision request to EPA for its SIP approved PSD rules. The State's submittal includes the following:

2(I) Wis. Admin. Code NR 

### § 400.02(66m) was created to define the "Forest County Potawatomi Community Class I area" and designate a geographic center ofthe reservation. (2) Wis. Admin. Code NR § 405.19 was createdto provide the following (1) the opportunity for the FCP Community to present a demonstration that emissions from aproposed
source would have an adverse impact on AQRVs ofthe FCP Community's Class 1area; (2) thatproposed new major sources or major modifications ofexisting sources locating within 22.25 miles ofthe geographic center ofthe Class I area conduct a Class I increment analysis and be subject to Class I consumption limits; (3) provide that proposed new major sources ormajor modifications ofexisting sources locating outside 22.25 miles ofthe geographic center ofthe Class I areamust conduct a Class II increment analysis and be subjectto Class II consumption limits; (3) Wis. Admin. Code NR 

### § 406.08(4) provides the FCP Community with the opportunity to review best available control technology and maximum achievable control technology determinations made by the State within the areas prescribed in Wis. Admin. Code § NR 405.19, and provide a dispute resolution mechanism for resolving disagreements regarding BACT or MACT determinations for any new or modified sources covered in Wis. Admin. Code § 405.19. The State ofWisconsinpublished a notice ofthese proposed regulatory revisions on April 28, 2010, andheldpublic hearings on June 7 andJune 9, 2010. The Wisconsin Paper Council and the Wisconsin Manufacturers & Commerce group submitted comments questioning the manner in which WDNR establishedthe centerpoint for the radius within which the Class I increment modeling wouldbe implemented, both organizations arguing thatthe dimensions ofthe affected
area for which a Class 1increment analysis is required had beenimproperly expanded beyond the 1O-mile radius (for increment modeling) and 62-mile radius (fornotification) described inthe MOA (Letter from Edward J. Wilusz, Wisconsin Paper Council (WPC), to Steve Dunn, WDNR, June 11,2010; Letter from ScottManley, Wisconsin Manufacturers & Commerce (WMC), to Steve Dunn, June 14, 2010). The State responded that no facility locatedbeyond 62 miles from any portion ofthe FCP Class Iparcels will be subjectto the requirements ofthe revised State rule: Written comments onthe proposed rule were also received from the Wisconsin Paper Council (WPC) and Wisconsin Manufacturers and Commerce (WMC). These comments concernedthe dimensions ofthe "22.25 mile" and "74.25 mile" affected facility circles included in the proposed rule. Both WPC and WMC stated that each ofthe circles encompasses too large ofan area and are not consistentwith the "10 mile" radius and "62-mile" distance contained inthe 1999 Final Agreement betweenthe state and the FCP Community. Inresponse to these comments, a change has been made to the final rule to 3

### clarify thatno facility located further than 62 miles from any portion ofthe FCPC Class I areawill be subjectto the requirements ofthe final rule. The Departmentis notproposing to change the dimensions ofthe "22.25 mile" circle because a drawing ofan essentially identical circle is included inthe Final Agreement. Therefore, the Departmentbelieves thatthe "22.25" mile circle included in the final rule is consistent withthe terms ofthe Final Agreement. (Memorandum from Matt Frank, WDNR, to Natural Resources Board Members, July 12, 2010, at 2.) The MOA specifies that major sources "within aten (l0) mile radius ofthe Reservation will be subjectto the increment analysis and consumption requirements applicable to the Reservation as a Class I area," and that "For all PSD major source permit applications for
sources located within a sixty-two (62) mile radius ofthe Reservation, the state agrees to provide [certain notifications].

..." (MOA §§ 

### ILl; lILA). Pursuantto MOA § 

### II.3, the parties agreed that "Within six months afterthis agreementbecomes effective, the parties will develop a final map that identifies the ten mile radius from the proposed Class I area." EPA's approval ofthe Class I area included the identification ofthose parcels included inthe Class I area. 40 C.F.R. 52.258 1(t)(2). The MOA is silent on whatmethod the parties will use to develop a final map; therefore EPA believes the parties may establishtheir ownmethod ofmaking this determination. Accordingly, EPA believes WDNR's definition ofthe reservation and areas within which Class I modeling and notificationrequirements apply is appropriate. Additionally, WPC commented thatpursuantto the MOA, WDNRmight exceed permit issuance deadlines, otherwise applicable to WDNR's actions onpermit applications. In 

### response to this concern, WDNRexplainedthat, "No portion ofthe proposed rule allows the Departmentto exceed the pennit issuance timelines contained in s. 285.61, WI Stats. (i.e. WI Act 118). Therefore, all statutory permit issuance deadlines will be met for permits for facilities affected by this rule and for facilities not affected by this rule. (Memorandum from Matt Frank, WDNR, to Natural Resources Board Members, July 12, 2010, at 2.) WDNRhas explained that the proposed SIP revision will not alterthe time frames specified for permit issuance in Wis. Admin. CodeNR §§ 

### 285.61 (time frame for WDNRto process major source permits located in an attaimnent area is one year for WDNR "to complete its responsibilities"); 285.62 (WDNRhas eighteen months (with the possibility ofextension) to complete approval or denial on a complete operating permit application)

..EPA does not find the time frames set forth inthese regulations to be inconsistentwiththe time frames provided inthe SIP revision for notification ofand commentby the FCPC. Accordingly, EPA believes WDNR has appropriately addressed the commenter's concern.

4Recommendation: The proposed SIP revision should be approved. EPA's 2008 Redesignation Rulemaking anticipates thatthe PSD portion ofthe Wisconsin SIP mustbe revised to codify and implementthe provisions ofthe MOA.
We do not anticipate thatthis rulemaking will be controversial. The FCP COlmnunity and the State have already agreed to the principles laid out in their original memorandum ofagreement on implementing the PSD program withrespectto a non-Federal Class I area. In 2009, the 7th Circuit upheld EPA's redesignation rulemaking and its unilateral resolution ofthe dispute invoked by Michigan. EPA's resolution ofthe dispute invoked by Wisconsin was notthe subject of judicial challenge. Michigan v. U.S. Envt'l Protection Agency, 581 F.3d 524 (7th CiI. 2009). Attachments: I. Class I Final Agreement Between the State ofWisconsin and the Forest County Potawatomi Community, regarding Class I Designation ofthe Forest County Potawatomi Reservation underthe Clean Air Act," October 12, 1999. 2. EPA, Final Rule, "Approval and Promulgation ofAir Quality ImplementationPlans; Wisconsin; Redesignation ofthe Forest County Potawatomi Community Reservationto a PSD Class I Area," 73 Fed. Reg. 23086 (April 29, 2008). 3. EPA, Notice, "Redesignation ofthe Forest County Potawatomi Community Reservation to a PSD Class I area; Dispute Resolution with the State ofMichigan," 73 Fed. Reg. 23107 (April 29, 2008). 4. Notice, "Redesignation ofthe Forest County Potawatomi Community Reservation to a PSD Class I area; Dispute Resolution with the State ofWisconsin," 73 Fed. Reg. 23111 (April 29, 2008). 5. Letter from Edward J. Wilusz, Wisconsin Paper Council, to Steve Dunn, WDNR, June 11,2010
6. Letter from ScottManley, Wisconsin Manufacturers & Commerce, to Steve Dunn, June 14,2010
7. Memorandum from Matt Frank, WDNR, to Natural Resources Board Members, July 12, 2010. 8. Letter from JolmH. Melby, JI. WDNR, to Susan Hedman, May 12, 2011, enclosing proposed SIP revision package.

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