CHEYENNE, Wyo. (AP) – A bitter dispute pitting Wyoming state government against two Indian tribes goes before a panel of federal judges next week to determine whether the City of Riverton and surrounding lands remain legally Indian Country.

While the legal outcome promises to hinge on how judges interpret treaties and actions Congress made more than a century ago, the fight itself lays bare simmering tensions between the two Indian tribes in Wyoming and non-Indians and, on a larger scale, between the state and federal governments.

In 1905, Congress threw open some 1.4 million acres of the Wind River Indian Reservation to settlement by non-Indians. Private citizens purchased more than 170,000 acres before the sales halted 10 years later.

The U.S. Environmental Protection Agency in 2013 determined that, even though the land was sold, it remained legally part of the reservation. If the decision withstands the legal challenge from the state and local governments, Indians on the disputed lands would not be subject to state taxation or state criminal prosecution.

The EPA addressed the reservation boundary issue in approving an application from the Northern Arapaho and Eastern Shohone tribes, which share the reservation, to be treated in a manner similar under the Clean Air Act.

The federal agency’s decision stung Republican Gov. Matt Mead, as well as officials with Fremont County and the City of Riverton, which has been the site of recent conflicts between Indians and non-Indians – including a killing that prompted tribal officials to call for a federal hate-crimes investigation.

“I firmly believe that a decision of this significance should not come from a regulatory agency, especially when it goes against over 100 years of history, law and practice,” Mead said last year when his administration appealed the EPA ruling to the 10th Circuit Court of Appeals in Denver.

A three-judge panel at the court is set to hear oral arguments Tuesday.

Mead and other state officials have warned that if the EPA’s ruling is allowed to stand, Wyoming would lose jurisdiction over everything in Riverton, a city of 10,000, and the surrounding area, including from law enforcement, taxation authority to school administration and even the right to inspect restaurants.

Wyoming Attorney General Peter Michael declined comment on the case.

Darwin St. Clair, Jr., chairman of the Eastern Shoshone Business Council, said the dispute has caused bad feelings between Indians and non-Indians. He said he doesn’t see why anyone should object to the tribes being more involved in monitoring air quality.

“If the state purchased that land, then we should have a bill of sale, or something to that effect that says that the state purchased that land from us,” St. Clair said.

Dean Goggles, chairman of the Northern Arapaho Business Council, said, “We have been dealing with this issue for decades and have always believed that the lands in the 1905 Act area remained within the boundaries of the reservation.”

If it stands, the EPA’s approval of the tribes’ application to be treated in a manner similar to a state would require that the tribes get notice of activities within 50 miles of the reservation boundary that would affect air quality.

The boundary dispute follows a series of issues. Tribal members achieved a greater say in local government by winning a 2010 federal lawsuit against Fremont County that ended at-large voting for county commissioners.

And Northern Arapaho officials this summer demanded a federal hate-crimes investigation after a Riverton man shot two tribal members at a rehab center, killing one and critically wounding the other.

The boundary dispute spurred a national group dedicated to ending tribal sovereignty to hold a meeting in Riverton last summer. The Citizens Equal Rights Alliance held a meeting that organizers said focused over-reaching by the federal government.

Wyoming State Sen. Eli Bebout, R-Riverton, said his non-Indian constituents are concerned about the prospect that the courts could rule that their homes and businesses are legally in Indian Country.

“Obviously the people feel like a treaty and a deal’s a deal,” Bebout said, adding that people are concerned about their property values.

Bebout said he questions the EPA’s motives.

“You could almost say there’s some kind of agenda that’s anti-West, anti-Wyoming, anti-fossil fuels, obviously,” he said.

Riverton lawyer John Vincent served as mayor of the city from 2003 to 2011. He had proposed agreements that called for the city to negotiate rather than litigate differences with the tribes, but the proposals died in the face of strong opposition from non-Indians.

“I think you have a certain number of people that will contest anything that the Indian tribes do, and really have no interest in trying to resolve things outside of a courtroom,” Vincent said. “And that’s really kind of the position the state has adopted.”