©^MENTAL FINANCIAL ADVISORY BOARD
  Members
                                            AUG  0 8 2013
 Helen Akparanta

 Gavin Ciarkson

  William Cobb

   Eric Draper

 Donna Ducharme

 James Gebhardt

  Rick Giardina

  Ann Grodnik

  Scott Has kins

  Philip Johnson

   Thomas Liu

 Mathilde McLean

  Karen Massey

  Lindene Patton

Sharon Dixon Peay

  Tobias Rittner

  Wayne Seaton

  Blanca Surgeon

  Leanne Tobias

 Steve Thompson

 Chiara Trabucchi

   Eustace Uku

 Cynthia Williams
 Michael Shapiro
   Designated
  Federal Officer
Honorable Michelle DePass
Assistant Administrator
Office of International and Tribal Affairs
U.S. Environmental Protection Agency
Washington, DC 20460-0001

Dear Ms. DePass:

The U.S. Environmental Protection Agency's (EPA) Office of International and
Tribal Affairs (OITA) charged the Agency's Environmental Financial Advisory
Board (EFAB) with identifying successful mechanisms which tribes can use to
sustain financing for program implementation, consistent with EPA capacity
building investments for environmental programs. EFAB was tasked with working
with OITA's American Indian Environmental Office (AIEO)  on identifying and
evaluating approaches for sustainable funding by iribes of tribal environmental
programs.

Our response to the OITA charge has been prepared based on the personal
knowledge and experience of EFAB members working on this charge. A key
challenge associated with this charge is the lack of centralized primary, publically
available data associated with tribal budgets and environmental program financing.
Because of the limited information, and as noted in our report, EFAB was not able
to complete the charge as written. We have, however, identified three options for
addressing the lack of information, specifically:

    •   Consistent with Sections 3 and 4.3 of the May  15, 2013 Guidance on the
       Award and Management of General Assistance Agreements for Tribes and
        intertribal Consortia, we recommend thai financial information relevant to
        sustaining  environmental programs be collected as part of EPA-Tribal
        Environmental Plans and any progress reporting done on those work
        plans. EPA has also advanced the concept of "test drive" work plans that
        are designed to collect information on additional capacity development needs
        and information on funding needed for sustaining environmental programs could
        also be obtained as part of those efforts.
                    Providing Advice on "How to Pay" for Environmental Protection

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   «  As part of the treatment in the similar manner as a state review process when Tribes are
      proposing to have jurisdiction for a particular environmental program, the long-term
      sustaining financial capacity should be considered along with the technical capacity that
      is more commonly reviewed.

   ®  EPA should suggest/sponsor sessions on funding mechanisms for environmental
      programs at future Tribal conferences on a continuing basis. The ability for non-Tribal
      parties to eventually access and review this information would  contribute to improved
      information transparency for stakeholders and likely provide a  better understanding of
      environmental program funding options.

During the course of this project, the Agency expressed further interest in EFAB providing
similar recommendations on financing tribal environmental infrastructure and projects. Prior to
undertaking any further work on tribal financing, EFAB will want to confirm the Agency's
continued interest and the scope of analysis. EFAB also provided an earlier recommendation to
Administrator Jackson supporting a Treasury Department recommendation to Congress
regarding tax law changes that affect Economic Development Bonds issued by tribes. That
recommendation was accepted by OITA  on September 28, 2012.

The Board looks forward to your response to our enclosed  report and recommendations,

                                  Sincerely,         /'""""N
                                                     )
                                  Karen Massey
                                  Interim Chair, EFAB
 Enclosure

 cc:    Gina McCarthy, Administrator
       Environmental Protection Agency

       Michael Shapiro. EFAB Designated Federal Officer

       Maryann Froehlich. Acting Chief Financial Officer
       Office of Chief Financial Officer, EPA

       Joseph Dillon, Director
       Center for Environmental Finance. EPA

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                      ENVIRONMENTAL FINANCIAL ADVISORY BOARD
                            Financing Tribal Environmental Programs
SUMMARY OF EPA CHARGE

     In 201!, the US Environmental Protection Agency's (EPA) Office of International and Tribal
     Affairs (OITA) charged the Environmental Financial Advisory Board (EFAB) with identifying
     successful mechanisms that tribes can use to sustain financing for program implementation,
     consistent with EPA capacity building investments for environmental programs (we are
     specifically focusing on programs and not environmental infrastructure or utilities). EFAB was
     tasked with working with OITA's American Indian Environmental Office (AIEO) on identifying
     and evaluating approaches for sustainable funding by  tribes of tribal environmental programs. A
     key challenge associated with this charge is the lack of centralized primary, publically available
     data associated with tribal budgets and environmental program financing,

     Notwithstanding this limitation and as part of the 2011 charge, OITA requested that the EFAB
     specifically address the following questions:

     m   What are the socio-economic and governance barriers to develop an economic base that both
         requires and supports an environmental regulatory program?

     •   What are the environmental impacts from the likely various economic activities that
         warrant/support specific component of an environmental regulatory program?

     «   In what ways can tribes build on federally funded program capacity and establish sustainably
         funded environmental monitoring, assessment, and regulatory  compliance and enforcement
         programs ('the environmental program continuum")?

     B   Identify select case studies on tribal economic and associated environmental programs across
         the continuum of tribal-implemented environmental programs (none to extremely
         mature/extremely broad),  with a focus on the capacity of economic activity that support a
         tribe in advancing along the environmental program implementation continuum.

     B   How can barriers be reduced or eliminated?

 BACKGROUND INFORMATION

     In its 2011 charge to the Board, OITA lays out a fundamental financial challenge in its work with
     tribes:

            "To date, EPA has not established a clear strategy to help tribal governments become less
            dependent on EPA direct implementation and establish independently financed programs.
            The high dependence  on direct implementation by EPA does not guarantee an adequate
            delivery of EPA program coverage for Indian country due to limited federal resources. It
            has been EPA's experience that tribes often successfully utilize General Assistance

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       Program (GAP) funding to develop needed capacity, only to be stymied by the inability
       to provide funding for the environmental program itself. This can sometimes generate a
       continuing cycle of capacity-building without yielding an operating program,"

EPA published its revised Guidance on the Award of Management of General Assistance
Agreement for Tribes and Intertribal Consortia (hereafter referenced as the "2013 Guidance") on
May 15, 2013  (see www.epa.gov/indian/).  In the cover memo announcing the guidance
document. Michelle DePass, Assistant Administrator for OITA, stated that "this guidance
enhances the successful EPA-tribal partnership by identifying a means for joint strategic planning,
documenting mutual responsibilities for program development and implementation, targeting
resources to build  tribal environmental program capacities that are aligned with the tribe's long-term
goals, and measuring environmental  program development progress over time. Implementing this
guidance will enable EPA  and tribes to allocate GAP resources to the most pressing program
development priorities and improve our ability to demonstrate progress as we establish and grow
successful tribal environmental protection  programs with GAP for more than 520 tribal
governments." The 2013 Guidance was structured "to provide maximum flexibility within a
consistent national framework for building tribal capacity that assures continued improvement and
efficiencies in the  management of GAP resources," The cover memo notes that EPA has not
provided a nationally consistent approach  for building tribal environmental protection program
capacity under GAP or a mechanism to measure the progress tribes are making toward their defined
program development goals. HPA's Office of Inspector General (O1G) concluded in 2008 that the
Agency had "not provided a  framework for tribes to follow or adapt as they develop their capacity to
implement environmental  programs" and that "it is not clear whether GAP funding will result in
tribes being able to operate their own environmental programs."  The OIG recommended that EPA:
(1) Require the American  Indian Environmental Office to develop and implement an overall
framework for achieving capacity, including valid performance measures for each type of tribal
entity, and provide assistance to the regions for incorporating the framework into the GAP work
plans; (2) Require regions to (a) negotiate  with tribes to develop environmental plans that reflect
intermediate and long-term goals, (b) link  those plans to annual GAP work plans, and (c) measure
tribal progress in meeting  plans and goals; and (3) Revise how GAP funding is distributed to tribes to
place more emphasis on tribes' prior progress,  environmental  capacity needs, and long-term goals.
EPA concurred with all OIG recommendations.

In the 2013 Guidance, OITA's AIEO describes the focus of GAP as follows (see pages 1 and
2):

       Federally  recognized tribes and intertribal consortia access the GAP funding to plan,
       develop, and establish the capacity  to implement programs  administered by the  EPA
       and to assist in the development and implementation of solid and hazardous waste
       programs  for Indian lands. In addition, the GAP  was created to provide technical
       assistance from EPA to tribal governments and intertribal consortia in the development
       of multimedia programs to address  environmental issues. EPA recognizes tribal
       governments as the primary parties for setting standards, making environmental policy
       decisions, and managing programs  for reservations, consistent with Agency standards
       and regulations.

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       FPA is committed to using the GAP to help build tribal capacity to administer
       environmental protection programs consistent with the federal laws the EPA is charged
       with implementing. Through the GAP, the EPA also provides technical assistance to
       build environmental protection program capacity for tribes that are not implementing
       federally authorized regulatory programs or that may wish to go beyond federal
       requirements. GAP helps tribes have the opportunity to meaningfully participate in
       policy making, standard setting, and direct implementation activities potentially affecting
       tribal environmental protection interests. The program also provides resources  for tribal
       governments to cooperate with and, when appropriate, enter into intergovernmental
       agreements with federal, state, or local governments in an informed manner.

       In keeping with its federal trust responsibility, EPA works with tribes to ensure that
       BPA's environmental protection programs are implemented throughout the country.
       Depending on the particular federal statute, the Agency has a number of options to
       ensure that regulated facilities, sites, and/or activities are in compliance with federal
       requirements. For example, the Agency can directly administer a federal program,
       approve eligible tribes to administer the program, or work cooperatively with tribes on
       a government-to-government basis to protect human health and the environment. No
       matter which mechanism EPA employs in carrying out its mission, the Agency strives
       to work closely with tribal governments, consider tribal interests, and encourage tribal
       governments' to develop their own environmental protection programs.

As highlighted in  the 2013 Guidance, EPA listed examples of both allowable and restricted
activities under GAP funding (see pages 5 through 7):

Examples of Allowable[.Activities

•  Activities related to planning, developing and establishing tribal capacities for
   implementing environmental protection programs administered by the EPA are
   allowable, including the administrative, technical, legal, communications, outreach,
   compliance assurance,  and enforcement components of a program.
    -   Establishing an environmental protection program may include performing a "test
       drive" of the program to determine whether the tribe is ready to move into the  program
       implementation phase. "Test drives" of capacity to implement are  for evaluating the
       effectiveness of a program and may be funded for up to four years under GAP
       (emphasis added). Work plans containing "test drive" activities should contain activities
       to collect information about program  design and effectiveness and describe how this
       information will be used to identify options for improving the program, including but
       not  limited to:  new or revised environmental protection policies and procedures; more
       stringent standards and/or requirements; and additional capacity development  needs.

•  Activities related to establishing environmental protection programs not administered by
    EPA, but are consistent with those provisions of law for which Congress has given EPA
   authority, are  allowable. For example a tribe could use GAP  funds to develop a climate
   change adaptation plan or to establish environmental protection programs that compliment
    non-environmental protection programs (such as identifying  ambient water and/or air

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   quality parameters that influence exotic plant species threatening the ecosystems or
   influence the reestablishmcnt of culturally significant native plants).

•  Activities related to establishing education, outreach, public participation, compliance
   assistance, and coordination programs for tribal environmental staff to work effectively with
   regulated facilities are allowable. Examples of these programs include: (1) capacity to
   provide compliance assistance to ensure that facilities are aware of and complying with
   federal and/or tribal environmental program requirements; (2) capacity to work jointly with
   other jurisdictions on certain environmental  planning projects such as source water protection
   plans or solid waste management plans; and (3) capacity to provide training to promote best
   management practices or compliance with federal and/or tribal environmental program
   requirements.

•  Activities related to establishing the capacity  indicators contained in Appendix I of the
   guidance are allowable.

«  Activities to implement solid and hazardous waste programs consistent with Appendix 1,
   section  E are allowable.

Restrictions

-  GAP funds cannot be used to fund activities not closely related to planning, developing,
   and establishing tribal environmental protection program capacity consistent with program
   administered by EPA (.e.g., animal husbandry, community gardens; the repatriation of
   Native American cultural items, crop management, and feral animal control).

*  Conducting Natural Resource Damage Assessments are deemed to be part of program
   implementation under Agency policy and should not be funded  under GAP nor should
   planning, developing, or establishing natural  resource management programs that are
   generally not administered by EPA. GAP funds should not be used for development
   activities that primarily support a commercial purchase of land,  other commercial purposes
   such as forestry, fisheries, minerals, water, gaming enterprises, energy resources, or in
   support of current  litigation. GAP funds should not be used for the implementation of
   media-specific environmental protection programs once established, except for solid and
   hazardous waste programs as discussed in Appendix f. section E of the draft guidance.

•  Salaries and expenses of a tribe's chief executive, tribal council, or of the judiciary
   branch  of a  tribal government are unallowable. However, the portion of salaries and
   expenses directly attributable to managing  and operating  federal environmental
   protection programs by a tribe's chief executive and his staff are allowable.

«  General types of government services normally provided to the  general public cannot be
   funded  under GAP (e.g., regular trash collection and disposal services).

-  Goods or services  for personal use are unallowable, regardless of whether the cost is
   reported as taxable income  to the employees.

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     •  GAP funds should not be used for activities that are the inherent responsibility of a state
        or local government.

     •  Planning, designing, constructing, and operating a specific facility is an implementation
        activity; therefore, such costs are not eligible for funding under GAP. Examples of
        construction activities not allowed include, but are not limited to:  landfill construction;
        wastewater treatment facility construction; drinking water system construction; construction
        related to implementation of best management practices for nonpoint source pollution
        control; and purchase of construction equipment such as trucks  or graders. The feasibility
        studies and NEPA reviews associated with such facility construction, including
        environmental impact studies and assessments, are part of the planning phase of facility
        construction; therefore, they are also implementation activities not eligible for funding
        under GAP.

WORK GROUP DISCUSSIONS

     On January 27, 2011, National Congress of American Indians President Jefferson Keel delivered
     the State of Indian Nations Address in Washington, D,C.  In this address (which is summarized in
     the National Tribal Environmental Council's Spring 2011  Insights newsletter), he emphasized
     the opportunities for tribal nations to build their communities, contribute to the national
     economy, and investing in self-reliance. President Keel said that investing in self-reliant Indian
     nations is the right thing to do - Constitutionally and morally; and Indian nations offer a great
     untapped source of economic opportunity for all Americans.

     Building and sustaining capacity for tribal implementation of environmental  programs is
     consistent with tribal sovereignty. EPA's goal is to build tribal regulatory programs that will
     strengthen tribal sovereignty which, in turn, helps tribes to exercise their governance. There will
     be enormous differences  in  financing options available to tribes that have the jurisdictional
     authority which will allow them to take on governmental  functions when compared to those
     tribes that don't have the same or similar jurisdictions.

     Two common scenarios have historically existed. In cases where there is limited federal funding
     available for implementation, two equally unsatisfying options typically emerge. First, funding is
     provided to the first year applicants and then sustained as long as the  appropriation continues. In
     an era of significant fiscal constraints, this can make it difficult to fund new tribes. Second, a
     funding program that tries to "jump-start" program implementation and then quickly moves the
     funding to a new tribe can leave behind a trail of abandoned programs due to lack of alternative,
     continuing funding sources. The 2013 Guidance, with the inclusion of EPA-Tribal
     Environmental Plans (ETEPs) should address these historic scenarios. Furthermore, the ability
     to measure tribal progress against milestones established  in work plans should also provide
     another means of addressing these historic issues.

     EFAB's Tribal Work Group discussed the following factors, as well as potentially available
     public domain information, that could be used to assess how a tribe finances their environmental
     protection programs.

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   ®   Breadth of current economic development projects/business activities on tribal land (i.e. -
       mining or other natural resources, eco-tourism, wind or solar energy facilities, landfills,
       manufacturing plants, aquaculture, agriculture, etc) and what additional economic
       development/business activities on tribal land are likely over the next 10 year period?

   e   Breadth/maturity of current environmental programs and the extent to which they are tied
       to economic development programs.

   »   Sources of funding for environmental program staff, including: environmental planners
       and grant writers; technical staff responsible for writing tribally issued permits, reviewing
       permits issued by neighboring states or federal agencies, environmental data collection,
       data management, and reporting; enforcement staff including inspectors, compliance
       assistance personnel, and enforcement officers; and legal assistance for tribal
       environmental code development  and implementation.

   «   Sources of funding for facility operations, including: salaries for personnel who operate
       drinking water, waste water, and solid waste management facilities; facility maintenance

   o   Degree to which citizens under the tribe's jurisdiction pay for environmental services,
       including fee for service arrangements; permit applications; licensing fees; penalties
       imposed for non-compliance with tribal codes or tribally issued permits; etc.

   •   Degree to which the tribe's environmental programs are dependent on EPA and other
       federal grants.

   •   A comparison of tribal salaries to  those of other non-tribal jurisdictions to determine
       whether the tribe's compensation  is competitive to attract and retain qualified personnel.

The Work Group recognized that most tribes are located  in western states, with a wide  variety of
population, land area (both contiguous and checkerboard), water rights, physical natural
resources, and more importantly a wide variety of economic vitality. The Work Group  also
recognized that there is a breadth in maturity and viability of current environmental programs
being implemented at the tribal level. Findings include the following:

   *   Common regulatory programs being implemented include Clean Water Act (water
       quality monitoring, water quality  standards, and non-point source programs),
       Underground Storage Tanks, and  Resource Conservation and Recovery Act Subtitle  D
       (solid waste landfills).

   o   More advanced programs might include Clean Air Act (air quality monitoring and
       emergency preparedness and response), Resource Conservation and Recovery Act
       Subtitle D  (hazardous waste, including hazardous materials incident response),  Public
       Drinking Water System Supervision  (SDWA), NPDS permitting, wetlands protection
       programs,  recycling programs, pesticide management and noxious weeds programs,

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            water reuse of treated effluent, wellhead protection programs (water supply protection),
            brownficlds site cleanup projects/programs, and abandoned mine reclamation programs.

        <»   Tribal environmental policies and Tribal Environmental Protection Plans are also
            common program components that provide umbrella management structures for the range
            of environmental programs implemented at the tribal level.

WORK GROUP FINDINGS REGARDING INFORMATION

     Since beginning the project, the Work Group has reviewed the information available on
     financing tribal environmental activities and programs The Work Group has had multiple
     conversations with OITA's regional tribal coordinators regarding status of tribal environmental
     activities and programs, as well as the current state of publically available information.  We have
     determined that there is a great deal of existing scholarship on how tribal governments can
     successfully finance the construction and operation and maintenance services of large and small
     scale utility operations. However, these financing arrangements are not relevant to addressing the
     specific questions in EFAB's charge from OITA.

     There are multiple website links that can provide sporadic, but useful, sources of information
     regarding environmental programs and their funding (some of this information is cited in this
     report). For example;

            EPA's OITA tribal portal - conferences: (ww>y.e;pa.gg^p/calendar/cpni'erejQc^.;h.trn)
            Native Tribal Environmental Council (www.ntec.org)
            Native American Community Development Institute (wwwjiacdLora)
            Native American Financial Officers Association (www.nafoa.Qrg)
            National Tribal Operations Committee

     Unfortunately, empirical information is not readily (or continuously) accessible or apparent on
     any of  these websites or in the general public  domain regarding how tribal governments can
     sustain environmental program implementation financing for  monitoring and assessment of
     environmental conditions, permitting, regulatory oversight, compliance assistance, and
     enforcement. This lack of transparency has hindered the ability of stakeholders in maximizing
     access  to information.

PRELIMINARY OPTIONS FOR FUNDING TRIBAL ENVIRONMENTAL PROGRAMS

     Based on Work Group member experience and knowledge, the most likely range of options for
     funding tribal environmental programs can include funding mechanisms used by States as well
     as unique mechanisms that only pertain to Tribes;

        •   Cpjnmonjundjng sources for environmental agencies/programs used by States

               o  Federal funds

               o  Fee for service(s), which can include permitting and oversight fees

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   o  Taxes (state general funds; driven by sales tax, business income tax. individual
       income tax)

   o  Other revenues (such as vehicle emissions testing fees or bottle/plastics recycling
       fees)

EPA funds are used by state environmental agencies to fund a variety of programs;
however, federal funds may not be a dominate source of funds. For example, in Arizona,
federal funds are only 11-12% of the Arizona Department of Environmental Quality
annual budget.  Fees, both for permitting and regulatory oversight/review, represent a
significant component of the Arizona agency's budget. Funding from a slate's general
funds is also a common mechanism although this can be a decreasing component of a
state agency's budget going forward as state revenues decline in relation to rising state
expenditures. The imbalance between state revenues and expenditures can push state
agencies to rely on other sources of revenues such as vehicle emissions testing lees
(which is a source of funds not available to tribes).

The distribution of funding sources at the state level highlights both a current and likely
future funding dilemma for state environmental agencies: What is the sustainability of
the federal funds and what constraints come with those funds? What is the need for new-
permits in the state as a source of fees (in other words, what is the near-term and possible
future level of economic development activity in light of economic uncertainty that is
driving the need for permit renewals or new permits)? WTiat is the need for compliance
oversight as a source of fees? What is the ability to obtain funds from the state's general
budget, particularly if state revenues are declining or not increasing as fast as spending
(in other words, are there available funds for environmental programs versus higher
priority items such as pensions, education (K-12, universities), state health care,
prisons/corrections, debt payments, etc)?

Tribal Councils, similar to state governments,  can access many of these possible funding
sources.  Like state governments, Tribal Councils are facing similar questions about
funding sources in the face of highly uncertain economic conditions. However, as
discussed below. Tribal Councils have access  to additional sources of funds generated
from  Tribal Business Enterprises.  These examples are noted and variations are discussed
in the EPA/DOI/OIG May 2007 report Tribal  Successes: Protecting the Environment and
Natural Resources.

Unique funding sources associated with Tribal Business Enterprises

   o  Lease/royalty revenues for resources such as minerals, water rights, renewable
       energy facilities

   o  Carbon  credits/trading

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   o  Waste and recycling operations including transfer stations and landfills that
       service neighboring non-Tribal communities,

   o  Casino revenues

   o  Tourism

   o  Other Tribal business - campgrounds, hotels, sustainable forestry, agriculture,
       wineries, fishing permits, selling bottled water, etc.

The potential for future renewable energy development, for example, as a source of
leasing and/or royalty revenues is subject to continued subsidies and energy demand. The
Fort  Mohave Indian Tribe is considering a 310 MW solar energy facility on its land near
Laughlin, Nevada,

Leasing water may be a viable source of revenues for a number of Western US tribes as a
result of water rights settlements in various state jurisdictions (for example, the Gila
River Indian Community in Arizona realizes significant funds from various parties for
long-term leases of water).

Casino, hotel, and restaurant revenues, as well as general tourism related revenues, are
likely to be highly variable based on proximity to population and general economic
conditions that affect personal spending habits. All of these options are viable methods
of contributing to Tribal General Funds that might be the primary source of funding for
environmental programs.

In the 2009 determination for Treatment in a Manner Similar as a State (TAS) for
implementing four Clean Air Act programs, the Gila River Indian Community (Arizona)
Department of Environmental Quality was noted as obtaining its funds  from the Tribal
Council as part of the annual budget process that is applied to all departments. The
implication of this statement is that the Tribal budget has a combination of funding
sources including the types of sources that a typical state agency may use as well as
revenues from Tribal Business Enterprises,

However, Tribal Business Enterprises are subject to the same economic development and
revenue uncertainties as state entities. What is the near-term and possible future level of
economic development activity in light of econotnic uncertainty that is  driving the need
for specific environmental programs and their associated permits? What is the ability to
obtain funds for current or possible future  environmental programs from the Tribal
general budget, particularly if revenues are declining (in other words, how do
environmental programs rank against other Tribal priorities such as pensions, education,
health care, safety, debt payments, etc)?

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        •   Shared services between Tribes and/or third-parties to implement environmental
            jDrograrns

            One innovative example of shared services, which is highlighted in the Spring 2012
            National Tribal Environmental Council's "Environmental Insights" newsletter, deals with
            Tribal programs being implemented by another party. In January 2012, the Cabazon
            Band of Mission Indians in California executed an agreement with the South Coast Air
            Quality Management District to implement Clean Air Act regulations on tribal property.
            The agreement specifically focused on activities within the 640-acre Cabazon Resource
            Recovery Park, which is an industrial park. The Tribe gets the economic benefit of
            another party providing the oversight, including access to sampling, of permitted
            facilities. Enforcement  of EPA-issued permits is also part of the agreement, which
            allows for Tribal input into any regulatory  violations/fmes/penalties. The District
            provides input  into permits issued by the Band to non-Tribal businesses. District officials
            believe this is a first time that this type of agreement between a Tribe and an air quality
            district has been executed in the United States.

INFORMATION/TOPICS NEEDING FURTHER STUDY AND EVALUATION

     As previously identified in this  report, the absence of public domain information on the funding
     options for Tribal environmental programs is a key barrier in responding to OITA's original
     charge. Even EPA's determinations of Tribal eligibility for TAS for implementing various
     environmental programs (whether it's a Clean Air Act or Clean Water Act or some other
     program), do not necessarily provide definitive reviews on the sustaining funding for the specific
     program under consideration. Rather, the review of tribal technical and administrative
     capabilities to implement the specific program tends to focus on staff numbers, experience, and
     capabilities/capacity.

     However, the recent publication of the 2013 Guidance could eventually alter the absence of
     public domain information needed to address OTIA's charge (in the 2008 audit, OIG found that
     even for tribes that had work plans in place, EPA historically was not tracking progress against
     goals). Consistent with Section 3 of the 2013 Guidance (Performance Reporting: Indicators of
     Tribal Environmental Program  Capacity), financial information could be gathered when Tribes
     report on progress against GAP-funded work plan goals and milestones. The 2013 Guidance
     identifies that "other indicators of capacity may be identified in GAP assistance agreement work
     plans and in long-term planning agreements as described in Section 4 of this guidance on a iribe-by-
     tribe basis, reflecting the unique  priorities and program development plans of a particular recipient".
     Consistent with Section 4.3 of the 2013 Guidance, Tribes are encouraged to include in their
     El EP the Tribe's plans to manage authorized environmental programs and any type of assistance
     (training, technical assistance, EPA direct implementation actions, financial, etc.) that may be
     needed. The 2013 Guidance acknowledges that tribes may need continued funding support to
     maintain their environmental programs once capacity has been established. Furthermore, EPA
     acknowledges in the 2013 Guidance that EPA will need to continue to work with tribes and tribal
     organizations to identify needed  program implementation Financial assistance. As such, the lack  of
     publically available information on the long-term sustainable financing of tribal environmental
     programs could  be addressed if EPA were to include a detailed review of sustaining funding for
     the identified  environmental program under consideration, either during the TAS process or as

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part of the reporting process for ETEP's work plans being funded under GAP (including work
plans containing "test drive" activities to collect information on additional capacity development
needs where sustaining program financing can be included as a given need).

The Work Group assumes that presentations on implementing environmental programs,
including funding mechanisms, are likely part of various Tribal conferences and Tribal
committees (such as the National Tribal Operations Committee).  However, the material
contained in those presentations is not part of the non-Tribal public domain and therefore cannot
be accessed. Regardless, EPA should suggest/sponsor sessions on funding mechanisms for
environmental programs at future Tribal conferences on a continuing basis.  The ability for non-
Tribal parties to eventually access and review this information would contribute to improved
information transparency for stakeholders and likely provide a better understanding of
environmental program funding options.

The absence of robust public domain information on general Tribal Council budgets, as well as
specific information on environmental program funding, prohibited completion of the initial
OITA charge as it was written.  In addition, the following items that were identified as either part
of the OITA charge or during initial conversations with OITA staff were also not addressed:

   *   What specific policy or process barriers would tribes recommend removing or changing
       as it pertains to EPA funding? As  it pertains to financing environmental programs (versus
       projects)?

   *   What barriers that are unique to Tribes are limiting them from doing what they want to
       do, including barriers to Treatment as State (TAS)?

   e   What socio-economic and governance barriers are there to developing an economic base
       that would support more robust environmental programs?
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\
\       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
?

                             NOV 0 4 2fl13
                                                                               Office of
                                                                            International and
                                                                             Tribal Affairs
 SUBJECT:   EFAB July 2013 Report on Financing Tribal Environmental Programs
 FROM:       Jane Nishida, Acting Assistant
              Office of International and Tribal Affairs  U

 TO:         . Maryann Froehlich, Acting Chief Financial Officer
              Office of the Chief Financial Officer
 Thank you for transmitting the report Financing Tribal Environmental Programs from the
 Environmental Financial Advisory Board (EFAB) to the Office of International and Tribal
 Affairs (OITA). Submission of this report completes the charge from OITA's American Indian
 Environmental Office (AIEO) to identify mechanisms available to tribes to sustainably finance
 tribal environmental programs.

 OITA would particularly like to thank EFAB for working to provide recommendations in spite of
 the lack of centralized primary, publicly available data associated with tribal budgets and
 environmental program financing. The report identifies common funding opportunities available
 to state and tribal, governments, raises many good questions to consider for further study, and
 identifies three options for EPA to obtain information  from tribes that would help inform
 development of new ideas for how to establish sustainable tribal funding of environmental
 programs.

 While OITA currently has no new projects  on the horizon for EFAB, we look forward to
 partnering with EFAB again in the future should new opportunities arise.
 cc:  Gina McCarthy, Administrator
     Bob Perciasepe, Deputy Administrator
     Michael Shapiro, Designated Federal Officer, EFAB
     Karen Massey, Interim Chair, EFAB
                               Internet Address (URL) • http //www.epa.gov
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