WASHINGTON (AP) - The Supreme Court let a lower court decision stand Monday that allowed air pollution standards for Indian land that are tougher than the rules for adjacent state land.

The state of Michigan and a long list of business groups and utilities claimed that applying the strictest standards on Indian lands threatens all manner of environmental, development and energy policies on land outside Indian jurisdiction.

They claimed last year's decision by the U.S. Court of Appeals for the District of Columbia Circuit "has fundamentally rearranged the balance of state and tribal jurisdiction."

The coalition asked the Supreme Court to roll back 1998 Environmental Protection Agency (news - web sites) rules giving tribes air quality jurisdiction over lands held in trust for Indians but not actually part of a reservation.

Trust lands "can include territory within a state that has always previously been within the state's sovereign jurisdiction," lawyer for the coalition wrote.

The Michigan coalition also challenged the EPA's decision to define a reservation by its exterior borders. That ignores the fact that many reservations are checkerboards of control, with non-Indians owning land surrounded by a reservation, the lawyers said.

"The (appeals court) decision ... has thereby exacerbated the tensions that have long existed between states protective of their sovereign authority and tribes anxious to expand the scope of the territory within their control," the coalition lawyers wrote.

The dispute concerns areas with air cleaner than required by national standards first passed with the 1970 Clean Air Act. These areas are regulated to try to prevent significant deterioration in air quality. States and Indian tribes may choose among three classifications for such areas, depending on how much deterioration of air quality the state or tribe will tolerate.

The business-utility coalition claimed that protecting a "class 1" area can end or disrupt business activity some 60 miles away if that activity would harm air quality.

States managing their own air quality classifications would thus be dealt a wild card if a tribe reclassified a less-protected trust area as "class 1," the coalition said. Acting Solicitor General Barbara Underwood, arguing for the EPA, urged the high court to stay out of the case. The appeals court was correct to approve the way the EPA applied clean air rules to Indian lands, the government attorney wrote.

"Reservation" is an ambiguous term, and the EPA rules apply it in the way that makes the most sense, the government said. The government also noted that Congress gave both states and tribes the power to reclassify under the Clean Air Act.

To the extent that Michigan and the others quarrel with that tribal power, "their quarrel is not with the EPA but with Congress," the government wrote. The case is Michigan v. Environmental Protection Agency, 00-746

On the Net: For the appeals court ruling in Arizona Public Service Co. v. Environmental Protection Agency: http://www.uscourts.gov/links.html and click on D.C. Circuit.