LAW OFFICES

JOHN P. AHLERS PATRICIA B A U O H E R

DAVID E. BRESKIN KERRY S. BUCKLIN BRUCE A. COHEN PAUL R. CRESSMAN, JR. MICHAELJ.CRISER.A PAUL J. DAYTON RICHARD A. DU BEY BRADLEY A, EVENS

SHORT CRESSMAN & BURGESS PLLC

CHRIS FARIAS MICHAEL R. GARNER TATl'ANA A. GIDIRIMSKI DAVIDA. HERRMAN JOHN J. HOULIHAN, JR. DANIEL F. JOHNSON CINDY A. JOHNSON ACEBEDO CLAUDIA KILBREATH JANET S. KIM DAVID R. KOOPMANS

999 THIRD AVENUE, SUITE 3000

SEATTLE, WASHINGTON 98104-4088

FAX: (206)340-8856

(206) 682-3333

www.scblaw.com

August 31, 2004

ANDREW W. MARON CONNIE SUE MANOS MARTIN SCOTT M.MISSALL KENDALL H.MOORE KENNETH L. MYER CHRISTINA GERRISH NELSON JAMES A. OLIVER MICHAEL R. PARKER, M.D., J.D. BETH M. PRIEVE RYAN D. REIN

ALEX J. ROSE JENNIFER L SANSCRAINTE SCOTT R. SLEIGHT SCOTT A. SMITH ROBERT A. STEWART * JOHN D. SULLIVAN SUSAN THORBROGGER AMANDA E. VEDRICH PAUL R. WILLETT LISA A. WOLFARD * OF COUNSEL

VIA FEDERAL EXPRESS

Mony G. Chabria Assistant Regional Counsel Office ofthe Regional Counsel U. S. Environmental Protection Agency Region 5 77 West Jackson Boulevard Chicago, IL 60604

EPA Region 5 Records Ctr.

290445

Re: Applicability ofthe Leech Lake Band of Ojibwe Land Acquisition Policy to the Leech Lake Reservation

Dear Mr. Chabria:

As you know, we represent the Leech Lake Band of Ojibwe (Band), a sovereign Indian Tribe whose government is recognized by the United States. The purpose of this letter is to advise EPA of the Band's Land Acquisition Policy and the federal law and policy in support of the Band's policy. The Band's Land Acquisition Policy is directly applicable to all lands located within the exterior boundaries of the Leech Lake Reservation (Reservation) which includes the area defined by EPA as the St. Regis Paper Company Superfund NPL Site (Site).

Application of the Band's Land Acquisition Policy further supports the Minnesota Pollution Control Agency's (MPCA's) recent determination regarding the appropriate cleanup levels for dioxins at the Site. As you may recall, the MPCA concluded that the Soil Reference Value (SRV) and other human risk-based cleanup concentrations for dioxins should be based on the cancer potency slope factor recommended for human risk assessment by the Minnesota Department of Health (MDH). We understand the MPCA has determined that, for unrestricted land uses, including residential and recreational area uses, the SRV for cleanup of dioxins in soils is 20 picograms per gram (or 20 parts per trillion (ppt)).

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Simply put, for the technical, legal and policy reasons set out below, the Band has determined that although the MPCA standard is moving in the right direction, a more protective cleanup standard is needed to fiilly protect the Band's interests. It is well documented that contamination, at and about the Site, presents a serious health risk to Band members and non-members who either reside on, or do business within, the exterior boundaries ofthe Reservation (the Reservation Population). Contamination remaining at the Site and contamination released from the Site into the environment also presents a serious risk to the quality of the lands, waters, habitat, wild rice beds, fish and wildlife that comprise the Reservation (the Reservation Environment). These same contaminants threaten the Band's off-Reservation hunting, fishing and gathering rights.

Pursuant to the Band's Land Acquisition Policy,' and in accordance with the Band's Hazardous Substances Control Act (HSCA), EPA is legally required to consider the Band's cleanup standard for dioxin as an ARAR for cleanup work performed at the Site. Furthermore, as discussed below, federal law and policy mandates that all lands taken into trust by the federal government, at the request of the Band, be in full compliance with applicable Federal and Tribal environmental law.

Below in Section 1 is a brief review of Federal Indian land acquisition policy, including a discussion of the Federal trust responsibility. In Section II, we review the Band's Land Acquisition Policy and in Section III, review the Band's authority to acquire additional land and to regulate pollution sources that may have an adverse impact on either the health of the Reservation Population or the quality of the Reservation Environment.

Finally, in Section IV, based on our analysis of relevant law and policy, we conclude that the Band's Land Acquisition Policy, when reviewed against the backdrop of federal law and policy, requires EPA to affirmatively adopt the Band's cleanup standards as ARARs for all removal and/or remedial work undertaken at the Site.

A copy of Resolution 05-16, A Resolution Requesting EPA Comply with Federal Policy and the Leech Lake Band's Land Acquisition Policy by Adopting the Leech Lake Band's Cleanup Level for Dioxin Under the Tribal Hazardous Substance Control Act and that EPA Act Consistently with the Trust Obligation Owed to the Band by the United States to Protect the Interests ofthe Leech Lake Bank (July 15, 2004) is attached as Exhibit A. ^ A copy ofthe HSCA is attached as Exhibit B.

A copy ofthe Band's Analysis ofthe Civil Regulatory Authority ofthe Leech Lake Band of Ojibwe to Develop, Enact, and Enforce the Hazardous Substances Control Act, submitted to EPA on April 14, 2003, is attached as Exhibit C.

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I. FEDERAL INDIAN LAND ACQUISITION POLICY

A. Indian Land Acquisition Under the Indian Reorganization Act

Pursuant to the Indian Reorganization Act (IRA), 25 U.S.C. § 465 and the Indian Land Consolidation Act (ILCA), 25 U.S.C. § 2202, the Secretary of Interior, upon the Band's request, is authorized to acquire lands in trust for Indian Tribes and tribal members. See Confederated Salish and Kootenai Tribes of the Flathead Nation v. Northwest Regional Director, Bureau of Indian Affairs, 35 IBIA 226 (2000). Land may be acquired for the Band in trust status under the following circumstances: where the property is located within the exterior boundaries ofthe Reservation or adjacent thereto, or within a Tribal consolidation area; where the Tribe owns an interest in the land; or where the Secretary determines that the acquisition of land is necessary to facilitate Tribal self-determination, economic development, or Indian housing.

The Secretary may, among other things, consider such factors as the Band's need for additional land to diversity its economic development, to expand its trust land base, and to generate income for use in providing services to Band members. See, e.g., South Dakota v. U.S. Department ofthe Interior, 314 F.Supp.2d 935 (D.S.D. 2004).

B. Federal Trust Responsibility in Indian Land Acquisitions

The trust responsibility doctrine derives from the historical relationship between the Federal Government and Indian Tribes as expressed in certain treaties and Federal Indian Law. The doctrine imposes fiduciary standards on the conduct of the Executive Branch, as implemented by executive agencies like EPA. The Executive Branch and its agencies must act with care and loyalty, make property held in trust for Indian Tribes income productive, take action to enforce reasonable claims on behalf of Indians, and take affirmative actions to preserve and acquire trust property.

Accordingly, the trust responsibility requires that EPA give special consideration to the Band's interests and ensure the close involvement of the Band in making decisions regarding land acquisition and the management of environmental programs affecting Indian reservation lands.

25 C.F.R. § 151.3(a)(l)-(3). In addition, land owned by individual Indians or Tribes may be converted into trust status. 25 C.F.R. § 151.4.

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Over twenty years ago, EPA recognized the importance of Tribal Governments in regulatory activities that impact reservation environments. In its written Indian Policy, EPA states:

In carrying out our responsibilities on Indian reservations, the fundamental objective of the Environmental Protection Agency is to protect human health and the environment. The keynote of this effort will be to give special consideration to Tribal interests in making Agency policy, and to insure the close involvement of Tribal Governments in making decisions and managing environmental programs affecting reservation lands.

"Policy for Administration of Environmental Programs on Indian Reservations," signed by William D. Ruckelshaus, Administrator of EPA, dated November 4, 1984), reaffirmed in a 2001 memorandum ("EPA Indian Policy," signed by Christine Todd Whitman, Administrator of EPA, dated July 11, 2001).

To meet its objective, EPA has pledged to pursue various principles. The Indian Policy acknowledges EPA's trust responsibility to Indian Tribes and states that EPA will "endeavor to protect interests of Indian Tribes when carrying out its responsibilities that may affect reservations. Id. It also directs EPA "to view Tribal Governments as the appropriate non-Federal parties for making decisions and carrying out program responsibilities affecting Indian reservations, their environments, and the health and welfare ofthe reservation populace." Id.

Therefore, under the general trust responsibility and the Agency's own policies, EPA has a heightened responsibility to take action on behalf of the Band to protect the health of the Reservation Population and the Reservation Environment.

II. THE BAND'S LAND ACQUISITION POLICIES AND GOALS

A. History of the Band and the Reservation

The Band and its ancestors have inhabited the Leech Lake region for hundreds of years. In the 1600's, the Dakota Indians had communities at Leech Lake. The Ojibwe Bands moved into the region during the mid-to-late 1700's, settling on small islands in Leech Lake. The Leech Lake Reservation was established by Treaty in 1855. The size and configuration ofthe Reservation has changed over time.

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B. Reservation Land Ownership and Use

The Reservation is located in north central Minnesota in the Central Pine-Hardwoods Forest ecoregion, and is a diverse area with a variety of plants and habitat types, including a number of species that are rare, endangered, or threatened. The area provides timber and an abundance of habitat for game and non-game wildlife species, and warm water and cool water fishing.

The Reservation currently comprises some 864,158 acres, including parts of Beltrami, Cass, Hubbard, and Itasca Counties. The major categories of land owners within the Reservation land base are:

Land Owner Acreage

Federal - US Forest Service 285,824 Tribal - Indian lands 29,717 State - State of Minnesota 146,061 County - Cass County 18,170

The 29,717 acres of Indian lands within the Reservation are split among Tribal, Band, and allotted lands. Tribal lands are those trust lands owned by the Minnesota Chippewa Tribe; Band lands are trust lands owned by the Leech Lake Band; and allotted lands are those lands held in trust for individual Indians and their heirs:

Tribal land 13,545 acres Allotments 12,509 acres Band land 3,663 acres

Approximately half of the Leech Lake Reservation is covered by water, including 270 named, fishable lakes totaling 300,000 acres, as well as 162,591 acres of wetlands, forest ponds, ephemeral pools, and 260 miles of rivers and streams. Wild rice, a native grass that is unique to Michigan, Minnesota, Wisconsin and at the lower latitudes in Canada, is abundant on the Leech Lake Reservation.

There are approximately 13,000 acres of natural wild rice stands, some of which are among the largest natural stands in the world. Wild rice plays a very significant cultural and spiritual role in Anishinabe (Ojibwe) culture. The loss of wild rice on many of Minnesota's water bodies is a grave concern of Tribal members, resource managers and researchers. The Band has invested considerable time and expense in sampling and

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monitoring wild rice ecosystems to assure that Leech Lake wild rice productivity does not decline.

C. Band's Commitment to Land Acquisition

Article I, Section 3 ofthe Revised Constitution and Bylaws ofthe Minnesota Chippewa Tribe, approved by the Assistant Secretary ofthe Interior on March 3, 1964, empowers the Band "to conserve and develop Tribal resources and to promote the conservation and development of individual Indian trust property, to promote the general welfare ofthe members ofthe Tribe; (and) to preserve and maintain justice for its members."

Article III, Section 2 provides for the establishment of the Reservation Business Committee ofthe Band to serve as the goveming body ofthe Reservation. The authority of the Business Committee (or Band Council) extends to the boundaries of the Reservation and the Territories ceded by the Treaties of 1837 and 1854 where hunting, fishing, ricing, and gathering rights were reserved to the Band and its members.

Pursuant to its express authority under the Revised Constitution and Bylaws of the Minnesota Chippewa Tribe, its inherent sovereignty, and the powers afforded it under the statutory and common law ofthe United States, the Business Committee has established a long standing Tribal Land Acquisition Policy.

As indicated above, Indian lands comprise only a small portion of the Reservation land base. The Band has determined that it is of critical importance that the Band acquire additional lands to be placed in trust. Such land acquisition is needed for the Band to adequately conserve and develop its resources, to promote the conservation and development of individual Indian trust property, to promote the general welfare of Band members, and to protect the health and welfare of the Reservation Population and the quality ofthe Reservation Environment.

Furthermore, the Band Council has determined that land acquisition is necessary to diversify the Band's economic development, to expand its trust land base, and to generate income for use in providing services to Band members. For the reasons stated, land acquisition by the Band is of paramount importance to the Business Committee.^

The Band's Land Acquisition Policy provides that as the Band acquires additional lands, such lands will be presented to the Secretary of Interior for placement into trust for

The goveming body ofthe Band has recently codified this long standing policy with the adoption of Resolution No. 05-16, a copy of which is attached as Exhibit A.

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the Band. However, if such lands contain levels of contamination in excess of applicable regulatory standards, such as dioxins in soils above the HSCA dioxin standard of 10 picograms per gram (or 10 parts per trillion (ppt)), it is likely that the Secretary will refuse to place the land in trust.

Therefore, for the federal policy to be implemented and targeted fee lands to be placed in trust (so that affirmative action may be taken to preserve trust property), all cleanup work within the Resei-vation boundaries must comply with the Band's environmental regulatory standards. Accordingly, for EPA to act in a manner consistent with its own Indian Policy and avoid delaying the placement of the Band's lands into trust, EPA should adopt the Band's cleanup standards for all removal or remedial work to be performed on the Reservation.

III. THE BAND'S CIVIL REGULATORY JURISDICTION

The Band has authority to acquire land and regulate pollution sources impacting or potentially impacting the health of the Reservation Population or the quality of the Reservation Environment. The Band's authority to regulate activities related to its land base and the past or threatened releases of hazardous substances on the Reservation is derived from two principal sources. One source is the Band's proprietary rights; the Band has all rights and powers of a property owner with respect to Tribal property. Like any property owner, the Band may control activities on lands it owns in fee or which are held by the federal government in trust for the benefit of the Band. See Morris v. Hitchcock, 194 U.S. 384 (1904); Barta v. Oglala Sioux Tribe, 259 F.2d 553, 556 (8th Cir. 1958). The Band's holdings on the Reservation are, consequently, a significant source of regulatory power.

The second more fundamental and pervasive source of such authority is the Band's inherent sovereignty, which includes the power to regulate the use of property on the Reservation. See Powers of Indian Tribes, 55 I.D. 14 (1934), reprinted in I Opinions of the Solicitor 445, 467; Dept. ofthe Interior, Federal Indian Law 440 (1958). "Perhaps the most basic principle of all Indian law" is that the powers of Indian tribes are the "inherent powers of a limited sovereignty which has never been extinguished." Powers of Indian Tribes, I Opinions of the Solicitor at 447; see Washington v. Confederated Tribes of the Colville Reservation, AAl U.S. 134, 152-54 (1980); United States v. Wheeler, 435 U.S. 313, 322-23 (1978); Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 560-61 (1832).

The Band's inherent sovereign powers extend to both its members and its territory. It is one of the most basic incidents of sovereignty that a government has power to

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regulate land use in order to protect the health and welfare of the community. See, e.g., Village of Euclid v. Ambler Realty Co., I l l U.S. 365 (1926).

In his 1934 opinion, the Solicitor asserted that:

[0]ver all the lands of the reservation, whether owned by the tribe, by members thereof, or by outsiders, the tribe has the sovereign power of determining the conditions upon which persons shall be permitted to enter its domain, reside therein, and to do business, provided only such determination is consistent with applicable federal laws and does not infringe any vested rights of persons now occupying reservation land under lawful authority.

Powers of Indians Tribes, I Opinions of the Solicitor at 467. The Solicitor concluded that:

In its capacity as a sovereign, and in the exercise of local self-government, [a Tribe] may exercise powers similar to those exercised by any State or nation in regulating the use or disposition of private property, save insofar as it is restricted by specific statutes of Congress.

Id. at 471. Consequently, the Band retains all aspects of their sovereignty except those withdrawn by Congress or inconsistent with overriding federal interests. Washington v. Confederated Tribes of Colville Reservation, AAl U.S. at 153-54. In April of this year, the United States Supreme Court in U.S. v. Lara, U.S. , 124 S. Ct. 1628, 158 L. Ed. 2d 420 (2004), specifically recognized the continuing vitality of the inherent sovereign authority of Indian Tribal governments in the United States. In Lara, the Supreme Court held that the inherent authority of Tribes has never been extinguished, and that it was only limited when executed in a manner inconsistent with Federal law and policy.

IV. CONCLUSION

On a daily basis, the Reservation Population interacts with and is sustained by the Reservation Environment. Moreover, it is the policy of Band Council that all present and future trust lands should be open to all uses and not restricted in any way by institutional controls. The placement of uncontaminated lands into trust will therefore meet both Federal policy goals and the Band's Land Acquisition Policy.

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The Band's Indian Land Acquisition Policy, applicable Federal law, and current Executive, Judicial, and Legislative policy, all support the Band's exercise of inherent sovereignty. EPA should honor its trust responsibility and commitment to the Band by adopting the Band's HSCA cleanup standards for all on-Reservation cleanup, removal or remedial actions. In particular, EPA should implement and enforce the Band's cleanup standard for dioxins in soil for all removal and remedial activities at the Site.

For all of the reasons set out above, the Band Council respectfully requests that EPA adopt the environmental law of the Band as ARARs so that the Reservation Environment will be a safe place for Band members to live, work, raise their families and maintain their spiritual and cultural connection with Mother Earth.

Very truly yours,

SHORT CRESSMAN & BURGESS PLLC

Richard A. Du Bey —

RAD/vh Enclosures cc: Rich Robinson, Director, DRM (w/encs.)

Shirley Nordrum, DRM (w/encs.) Diane Thompson, DRM (w/encs.) Mike Garbow, Reservation Attorney (w/encs.) Tim Drexler, EPA, Remedial Project Manager (w/encs.)

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E X H I B I T

FROM :LL DIUISION OF RESOURCE MGMT FAX NO. :2183357430 fiug. 06 20B4 08:37fiM PI

Leech Lake Band of Ojibwe George Goggleye Jr., Chairman

Arthur "Archie" La Rose, Sccretary/Iiifasurer

Pistiict 1 RqjrBsentative Burton "Luke" Wilspn

District II Representative Lyman L. Losh

DJBtrict III Representative Dofittld "Mick" firtn

Resolution No, 05 ^ 15

A RESOLUTION REQUESTING EPA COMPLY WITH FEDERAL POLICY AND THE LEECH LAKE BAND'S LAND ACQUISITION POLICY BY ADOPTING THE LEECH LAKE BAND'S CLEA>TUP LEVEL FOR DIOXIN UNDER THE TRIBAL HAZARDOUS SUBSTANCE CONTROL ACT AND THAT EPA ACT CONSISTENTLY WITH THE TRUST OBLIGATION OWED TO THE BAND BY THE UNITED STATES TO PROTECT THE INTERESTS OF THE LEECH LAKE BAND

WHEREAS, Article III, Section 2 of the Revised Constitution and Bylaws of tlie Minnesota Chippewa Tribe provides for the Reservation Tribal Council to serve as the goveming body of the Leech Lake Reservation; and

WHEREAS, Article I, Section 3 of the Revised Constitution and Bylaws of the Mtjinesota Chippewa Tribe empower the Leech Lake Band "to conserve and develop tribal resources and to promote the conservation and development of individual trust property, to promote the general welfare ofthe members ofthe Tribe; [and] to preserve and maintain justice for its members"; and

WHEREAS, the authority ofthe Reservation Tribal Council extends to tlie exterior boundaries ofthe Leech Lake Reservation and the Territories ceded by the Treaties of 1837 and 1855 where* hunting, fishing, ricing, a»id gatliering rights were reserved to the Leecli Lake Band and its members; and

WHEREAS, the Leech Lake Band's land base within the Leech Lake Reservation is limited and liie Leech Lake Band has the authority to acquire additional land pursuant to Federal Indian land acquisition policy as set out in the Indian Reorganization Act, 25, U.S.C. § 465 and the Indian Land Consolidation Act, 25 U.S.C. § 2202; and

WHEREAS, the Reservation Tribal Council finds tliat land acquisition by the Band is necessary to facilitate the Band's self-determination and economic development, to expand its land base, and to generate income for use in providing services to Leech Lake Band members; and

WHEHEAS, the healtli of those who either reside on or do business witiiin the exterior boundaries of the Leech Lake Reservation, including both members of die Band and non-members ("Reservation Population") and the environmental quality of the lands, waters, and resources of the Leech Lake Reservation and off-Reseivation resources, rights, and entitlements ("Reservation Environment"), are of paramount importance to the Leech Lake Band: ai>d

6530 U.S, 2 NW • CBSS LaJce, MinnedotB 56<$33 (218) 335-8200' Fax (318) 339-8309

FROM :LL DIUISION OF RESOURCE MGMT FRX NO, :2183357430 Plug. 0b 2004 08;38m P3

WHEREAS, the Reservation Environment has been a resource of great importance to the Leech Lake Band since time immemorial and the fish, wildlife, and plant materials on the Leech Lake Reservation have always been of central importance to the Leech Lake Band's subsistence and culture; and

WHEREAS, on September 21, 1984, the United Staites Environmental Protection Agency ("EPA") placed on the National Priority List a former wood treatment facility located wholly witliin the exterior boundaries of the Leech Lake Reservation (the "Site") which Site presents serious risks to the health and welfare ofthe Reservation Population and to (he quality ofthe Reservation Envtfonment; and

WHEREAS, from 1957 through 1985, the Site was operated by the St. Regis Corporation after which it was sold to the Champion Intemational Corporation and Champion leased portions ofthe Site to Buriington Northern Railroad and in 1988 quitclaimed portions ofthe Site to the City of Cass Lake and to the Band; and

WHEREAS, in July 2000, Ihteraational Paper Company ("IPC") assumed responsibility for the Site at which the Leech Lake Band understands that a variety of more hazardous substances have been released into the environment, including but not limited to, PCBs, DDTs, morcuty, dioxms, furans and other chemicals of concern; and

WHEREAS, to date, two Five-Year Reviews of the Site have been completed - the first Five-Review was completed by the State of Minnesota in 1995, and the second Five-Year Review was completed by EPA in 2000; and

WHEREAS, the second Five-Year Review included sampling and data assessment indicating the presence of dioxins in excess of EPA action level and EPA is now taking action to assess the Site for removal action; and

WHEREAS, the trust responsibility owed by the Executive Branch ofthe federal government to Indian tribes requires EPA to give special consideration to the Leech Lake Band's interests and ensure the close involvement ofthe Leech Lake Band in making decisions regarding land acquisition and managing environmental programs effecting the Leech Lake Reservation; and

WHEREAS, present to DOI regulations, the Bureau of Indian Affairs ("BIA) must consider proof of compliance with NEPA and other federal hazardous waste and environmental laws when transferring fee land to trust status; and

WHEREAS, the Minnesota Pollution Control Agency ("MPCA") recommended that Soil Roforenco Values ("SRV") and other human risk-based cleanup concentrations for dioxins bo based on the cancer potency slope factor recommended for human risk assessment by the Minnesota Department of Health; for unrestricted land use mcluding residential and

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FROM : L L DIUISION OF RESOURCE MGMT FftX NO. - .2183357430 Rug. 06 2004 08:3aPM P4

recreational areas, the SRV to be used for cleanup is 20 nanograms TEQ per kilograjn of soil (or 20 parts per trillion; ppt); and

WHEREAS, the Reservation Tribal Council desires the Band's cleanup standard for dioxin under the Band's Hazardous Substances Control Act be deemed by EPA to be an ARAR for the Site as the Reservation Tribal Council has determined that the MPCA recommendations do not adequately protect the human health and the quality ofthe natural environment on the Leech Lake Reservation; and

NOW, THEREFORE, the Reservation Tribal Council of the Leech Lake Band resolves as follows:

Sectian. 1. The Reservation Tribal Council by this Resolution hereby confirms its long standing policy regarding land acquisition, which provides that all lands to be acquired by the Band and placed in trust not be impaired by contamination of any kind and be in compliance with the clean up levels (including the Leech Lake Band's cleanup level for dioxin) under the Band's Hazardous Substance Control Act and applicable with Federal and Tribal law and policy on Tribal land acquisition.

Section 2, The Reservation Tribal Council requests that EPA act in compliance with Tribal environmental law and Federal law and policy favoring the Band's re-acquisition of lands with the boundaries of the Leech Lake Reservation by adopting as an ARAR and implementing the Band's dioxin standard of 10 ppt for all removal or remedbl work conducted at the Site and that EPA honor the trust obligation owed to the Tribes by the United States to protect die interests ofthe Leech Lake Band.

Sections. The Reservation Tribal Council authorizes and directs the Leech Lake Division of Resource Management to develop an ordinance to be entitled the Leech Lake Band Land Acquisition Plan, in furtherance of Hie Policy set out in this Resolution to be presented for adoption by the Reservation Tribal Council.

Section 4. The Reservation Tribal Council is authorized and directed to take any and all steps necessary to effectuate the purpose of this Resolution.

RESOLVED this 15_ day of J u l y . 2004, by a vote cff 4 for, 0 against, and Q abstaining.

Geor^ /. Go'ggfey/Jr., Chairman LEECH LAKE TRIBAL COUNCIL

Arthur LaRose, Secretary Treasurer LEECH LAKE TRIBAL COUNCIL

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E X H I B B I T

LEECH LAKE BAND OF OJIBWE HAZARDOUS SUBSTANCES CONTROL ACT

Sections 1. Short title. 2. Declaration of policy. 3. Department' s powers and duties. 4. Standard of liability--Settlement. 5. Enforcement. 6. Judicial review. 7. Hazardous waste account. 8. Private right of action-remedial action costs. 9. Remedial actions-Exemption from procedural requirements. 10. Cleanup standards. 11. Sovereign immunity. 12. Captions. 13. Construction. 14. Effective date. 15. Severability. 16. Definitions.

Section 1. Short title.

This Act shall be known as the "Leech Lake Hazardous Substances Control Act."

Section 2. Declaration of policy.

(1) The beneficial stewardship ofthe land, air, and waters ofthe Leech Lake Reservation is a solemn obligation ofthe present generation for the benefit of fiiture generations.

(2) The main purpose of this Act is to provide for the cleanup of hazardous substances sites and to prevent the creation of future hazards due to improper disposal of hazardous substances on or into the Reservation air, land, surface water and ground waters ("Reservation Environment").

(3) Each person either residing on or doing business within the exterior boundaries ofthe Leech Lake Reservation ("Reservation Population") benefits from a healthfiil enviromnent and each person has a responsibility to preserve and protect the quality ofthe Reservation Enviromnent.

(4) The Tribe finds that an environmental emergency exists that warrants the exercise of Tribal authority and sovereignty to adopt this Act on an emergency basis so that it shall be enforceable immediately upon enactment, and that it shall immediately put

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into force and effect Tribal clean-up standards that are sufficiendy protective ofthe Reservation Population and the Reservation Enviromnent.

(5) The Tribe further finds that this Tribal Hazardous Waste Ordinance will only adequately protect the health ofthe Reservation Population and the quality ofthe Reservation Environment if it applies with equal force to Tribal members and non-members and is a remedial measure that is intended to address both future as well as past releases of hazardous substances that pose a substantial risk to human health and the quality ofthe land, waters and resources ofthe Leech Lake Reservation.

Section 3. Department of Resource Management's powers and duties.

(1) The Department may exercise the following powers in addition to any other powers granted by Tribal or federal law:

(a) Investigate, provide for investigating, or require potentially liable persons to investigate any releases or threatened releases of hazardous substances, including but not limited to inspecting, sampling, or testing to determine the nature or extent of any release or threatened release. If there is a reasonable basis to believe that a release or threatened release of a hazardous substance may exist, the Department's authorized employees, agents, or contractors may enter upon any property and conduct investigations. The Department shall give reasonable notice before entering property unless an emergency prevents such notice. The Department may by subpoena require the attendance or testimony of witnesses and the production of documents or other infonnation that the Department deems necessary;

(b) Conduct, provide for conducting, or require potentially liable persons to conduct remedial actions (including investigations under (a) of this subsection) to remedy releases or threatened releases of hazardous substances. In carrying out such powers, the Department's authorized employees, agents, or contractors may enter upon property. The Department shall give reasonable notice before entering property unless an emergency prevents such notice. In conducting, providing for, or requiring remedial action, the Department shall give preference to pennanent solutions to the maximum extent practicable and shall provide for or require adequate monitoring to ensure the effectiveness ofthe remedial action;

(c) Retain contractors and consultants to assist the Department in carrying out investigations and remedial actions;

(d) Carry out all Tribal programs authorized under the federal cleanup law, the Resource Conservation and Recovery Act 42 U. S.C. § 6901 et seq., as amended, and other federal laws;

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(e) Classify substances as hazardous substances for purposes of Section 15(10) of this Act;

(f) Issue orders or enter into consent decrees or agreed orders that include, or issue written opinions under (i) of this subsection that may be conditioned upon, deed restrictions or other appropriate institutional controls as may be necessary to protect human health and the environment from a release or threatened release of a hazardous substance from a facility. Prior to establishing a deed restriction or other appropriate institutional control under this subsection, the Department shall notify and seek comment from the Tribal Planning Department with jurisdiction over the real property subject to such restriction;

(g) Enforce the application of pennanent and effective institutional controls that are necessary for a remedial action to be protective of human health and the environment;

(h) Require holders to conduct remedial actions necessary to abate an imminent or substantial endangerment pursuant to Section 15(15)(b)(ii)(C);

(i) Provide informal advice and assistance to persons regarding the administrative and technical requirements of this Act. This may include site-specific advice to persons who are conducting or otherwise interested in independent remedial actions. Any such advice or assistance shall be advisory only, and shall not be binding on the Department. As a part of providing this advice and assistance for independent remedial actions, the Department may prepare written opinions regarding whether the independent remedial actions or proposals for those actions meet the substantive requirements of this Act or whether the Department believes further remedial action is necessary at the facility. The Department may collect, from persons requesting advice and assistance, the costs incurred by the Department in providing such advice and assistance; however, the Department shall, where appropriate, waive collection of costs in order to provide an appropriate level of technical assistance in support of public participation. The Tribe, Department, and officers, agents, attorneys and employees ofthe Tribe are immune from all liability, and no cause of action of any nature may arise from any act or omission in providing, or failing to provide, informal advice and assistance; and

(j) Take any other actions necessary to carry out the provisions of this Act, including proposing that the Council amend this Act or adopt additional ordinances.

(2) The Department shall, to the best of its ability, implement all provisions of this Act, including the cleanup standards further described in Section 9 of this Act, and to the maximum extent practicable, institute investigative and remedial actions where appropriate; and the Department shall:

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(a) Provide for public notice of investigative plans, clean up plans, or remedial plans and other significant actions taken under this act;

(b) Require the reporting by an owner or operator of releases of hazardous substances to the environment that may be a threat to human health or the environment within ninety days of discovery, including such exemptions from reporting as the Department deems appropriate, however this requirement shall not modify any existing requirements provided for under other laws;

(c) Establish reasonable deadlines for initiating an investigation of a hazardous waste site after the Department receives infonnation that the site may pose a threat to human health or the environment and other reasonable deadlines for remedying releases or threatened releases at the site; and

(d) Enforce clean-up standards set forth in Section 9 of this Act, and;

(3) The Department may, as available resources permit, establish a program to identify potential hazardous waste sites and to encourage persons to provide information about hazardous waste sites.

Section 4. Standard of liability-Settlement.

(1) Except as provided in subsection (3) of this section, the following persons are liable with respect to a facility:

(a) The owner or operator of the facility;

(b) Any person who owned or operated the facility at the time of disposal or release ofthe hazardous substances;

(c) Any person who owned or possessed a hazardous substance and who by contract, agreement, or otherwise arranged for disposal or treatment of the hazardous substance at the facility, or ananged with a transporter for transport for disposal or treatment of the hazardous substances at the facility, or otherwise generated hazardous wastes disposed of or treated at the facility;

(d) Any Person

(i) Who accepts or accepted any hazardous substance for transport to a disposal, treatment, or other facility selected by such person from which there is a release or a threatened release for which remedial action is required, unless such facility, at the time of disposal or treatment, could legally receive such substance; or

(ii) Who accepts a hazardous substance for transport to such a facility and has reasonable grounds to believe that such a facility is not operated in

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accordance with Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6901 et seq., as amended, and programs appropriately delegated under RCRA; and

(e) Any person who both sells a hazardous substance and is responsible for written instructions for its use if

(i) The substance is used according to the instructions and

(ii) The use constitutes a release for which remedial action is required at the facility.

(2) Each person who is liable under this section is strictly liable, jointly and severally, for all remedial action costs and for all natural resource damages resulting from the releases or threatened releases of hazardous substances. The Department is empowered to recover all costs and damages from persons liable therefor.

(3) The following persons are not hable under this section:

(a) Any person who can establish that the release or threatened release of a hazardous substance for which the person would be otherwise responsible was caused solely by:

(i) An act of God;

(ii) Anactof war; or

(iii) An act or omission of a third party (including but not limited to a trespasser) other than

(A) An employee or agent ofthe person asserting the defense, or

(B) Any person whose act or omission occurs in connection with a contractual relationship existing, directly or indirectly, with the person asserting this defense to liability. This defense only applies where the person asserting the defense has exercised the utmost care with respect to the hazardous substance, the foreseeable acts or omissions ofthe third party, and the foreseeable consequences of those acts or omissions;

(b) Any person who is an owner, past owner, or purchaser of a facility and who can establish by a preponderance ofthe evidence that at the time the facility was acquired by the person, the person had no knowledge or reason to know that any hazardous substance, the release or threatened release of which has resulted in or contributed to the need for the remedial action, was released or disposed of on, in, or at the facility. This subsection (b) is limited as follows:

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(i) To establish that a person had no reason to know, the person must have undertaken, at the time of acquisition, all appropriate inquiry into the previous ownership and uses ofthe property, consistent with good commercial or customary practice in an effort to minimize liability. Any court interpreting this subsection (b) shall take into account any specialized knowledge or experience on the part ofthe person, the relationship ofthe purchase price to the value ofthe property if uncontaminated, commonly known or reasonably ascertainable information about the property, the obviousness ofthe presence or likely presence of contamination at the property, and the ability to detect such contamination by appropriate inspection;

(ii) The defense contained in this subsection (b) is not available to any person who had actual knowledge ofthe release or threatened release of a hazardous substance when the person owned the real property and who subsequently transfened ownership ofthe property without first disclosing such knowledge to the transferee;

(iii) The defense contained in this subsection (b) is not available to any person who, by any act or omission, caused or contributed to the release or threatened release of a hazardous substance at the facility;

(c) Any natural person who uses a hazardous substance lawfully and without negligence for any personal or domestic purpose in or near a dwelling or accessory structure when that person is:

(i) Aresident of the dwelling;

(ii) A person who, without compensation, assists the resident in the use ofthe substance; or

(iii) A person who is employed by the resident but who is not an independent contractor;

(d) Any person who, for the purpose of growing food crops, applies pesticides or fertilizers without negligence and in accordance with all applicable Tribal and federal laws and regulations.

(4) There may be no settlement by the Department with any person potentially liable under this Act except in accordance with this subsection.

(a) The Department may agree to a settlement with any potentially liable person only if the Department finds that the proposed settlement would lead to a more expeditious cleanup of hazardous substances in compliance with cleanup standards under Section 3(2)(d) and with any remedial orders issued by the Department. Whenever practicable and in the public interest the Department may expedite such a settlement with a person whose contribution is insignificant in amount and toxicity.

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(b) A settlement agreement under this subsection shall be entered as a consent decree issued by the Tribal Court.

(c) A settlement agreement may contain a covenant not to sue only of a scope commensurate with the settlement agreement in favor of any person with whom the Department has settled under this section. Any covenant not to sue shall contain a reopener clause which requires the Tribal Court to amend the covenant not to sue if factors not Imown at the time of entry ofthe settlement agreement are discovered and present a previously unknown threat to human health or the environment.

(d) A party who has resolved its liability to the Department under this subsection shall not be liable for claims for contribution regarding matters addressed in the settlement. The settlement does not discharge any ofthe other liable parties but it reduces the total potential liability ofthe others to the Department by the amomit ofthe settlement.

(e) If the Department has entered into a consent decree with an owner or operator under this section, the Department shall not enforce this Act against any owner or operator who is a successor in interest to the settling party unless under the tenns of the consent decree the Department could enforce against the settling party, if:

(i) The successor owner or operator is liable with respect to the facility solely due to that person's ownership interest or operator status acquired as a successor in interest to the owner or operator with whom the Department has entered into a consent decree; and

(ii) The stay of enforcement under this subsection does not apply if the consent decree was based on circumstances unique to the settling party that do not exist with regard to the successor in interest, such as financial hardship. Such unique circumstances shall be specified in the consent decree.

(f) Any person who is not subject to enforcement by the Department under (e) of this subsection is not liable for claims for contribution regarding matters addressed in the settlement.

(5) In addition to the settlement authority provided under subsection (4) of this section, the Department may agree to a settlement with a person not cunently liable for remedial action at a facility who proposes to purchase, redevelop, or reuse the facility, provided that:

cleanup;

Act; and

(a) The settlement will yield substantial new resources to facilitate

(b) The settlement will expedite remedial action consistent with this

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(c) Based on available information, the Department determines that the redevelopment or reuse ofthe facility is not likely to contribute to the existing release or threatened release, interfere with remedial actions that may be needed at the site, or increase health risks to persons at or in the vicinity ofthe site.

(6) The Department does not have adequate resources to participate in all property transactions involving contaminated property. The primary purpose of this subsection (5) is to promote the cleanup and reuse of vacant or abandoned commercial or industrial contaminated property. The Department may give priority to setdements that will provide a substantial public benefit, including, but not limited to the reuse of a vacant or abandoned manufacturing or industrial facility, or the development of a facility by a Tribal entity to address an important public purpose.

(7) Nothing in this Act affects or modifies in any way any person's right to seek or obtain relief under Tribal law, or other applicable laws, including but not limited to damages for injury or loss resulting from a release or threatened release of a hazardous substance. No settlement by the Department or remedial action ordered by the Tribal Court or the Department affects any person's right to obtain a remedy under Tribal law, or other applicable laws.

Section 5. Enforcement.

(1) With respect to any release, or threatened release, for which the Department does not conduct or contract for conducting remedial action and for which the Department believes remedial action is in the public interest, the Director shall issue orders or agreed orders requiring potentially liable persons to provide the remedial action. Any liable person who refuses, without sufficient cause, to comply with an order or agreed order ofthe Director is liable in an action brought by the Department for:

(a) Up to three times the amount of any costs incurred by the Department as a result ofthe party's refusal to comply; and

(b) A civil penalty of up to twenty-five thousand dollars for each day the party refiises to comply.

The treble damages and civil penalty under this subsection apply to all recovery actions filed on or after the date this Act is enacted and adopted by the Department.

(2) The Department shall seek, by filing an action if necessary, to recover the amounts spent by the Department for investigative and remedial actions and orders, including amounts spent prior to the date this Act is enacted and adopted by the Department.

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(3) The Department may request that the Office of Reservation Attorney bring an action to secure such relief as is necessary to protect human health and the environment under this Act.

(4) Civil actions under this section and Section 6 shall be brought in Tribal Court.

Section 6. Judicial review.

The Department' s investigative and remedial decisions under Section 3 and Section 5 and its decisions regarding liable persons under Section 15(19) and Section 4 shall be reviewable exclusively in Tribal Court and only at the following times:

(1) In a cost recovery suit under Section 5(2);

(2) In a suit by the Department to enforce an order or an agreed order, or seek a civil penalty under this Act; and

(3) In a suit by the Department to compel investigative or remedial action.

The court shall uphold the Department's action unless they were arbitrary and capricious.

Section 7. Deposits to hazardous waste account.

(1) There shall be established a hazardous waste account to be administered by the Department.

(2) The following moneys shall be deposited into the hazardous waste account:

(a) the costs of remedial actions recovered under this Act;

(b) penalties collected or recovered under this Act; and

(c) any other money appropriated or transferred to the account by the Department. Moneys in the account may be used only to carry out the purposes of this Act including but not limited to the following activities:

(i) The hazardous waste cleanup program required under this Act;

(ii) Matching funds required under any federal law;

(iii) Tribal programs for the safe reduction, recycling, or disposal of hazardous wastes from households, small businesses, and agriculture;

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(iv) Hazardous materials emergency response training; and

(v) Water and environment health protection and monitoring

programs;

(3) Moneys in the hazardous waste account may be spent only after approval of a budget by the Council. All earnings from investment of balances in the account shall be credited to the account.

Section 8. rivate right of action—Remedial action costs.

(1) A person may bring a private right of action, including a claim for contribution or for declaratory relief against any other person liable under Section 4 for the recovery of remedial action costs, except that no private right of action may be brought against the following:

(a) The Tribe or instrumentalities ofthe Tribe (except where specified provided for by waiver of sovereign immunity); or

(b) As provided in Section 4(4)(d) and (f).

(2) Recovery shall be based on such equitable factors as the Tribal Court determines are appropriate. Natural resource damages paid to the Tribe under this Act may be recovered. Remedial action costs shall include reasonable attorneys' fees and expenses. Recovery of remedial action costs shall be limited to those remedial actions that, when evaluated as a whole, are the substantial equivalent of a Department-conducted or Department-supervised remedial action. Substantial equivalence shall be determined by the Tribal Court with reference to this Act. An action under this section may be brought after remedial action costs are incuned but must be brought within three years from the date remedial action confirms cleanup standards are met. The prevailing party in such an action shall recover its reasonable attorneys' fees and costs.

Section 9. Remedial actions—Exemption from procedural requirements.

(1) A person conducting a remedial action at a facility under a consent decree, order, or agreed order, and the Department when it conducts a remedial action, are exempt from the procedural requirements of all otherwise applicable Tribal laws. The Department shall ensure compliance with the substantive provisions of all otherwise applicable Tribal laws. The Department shall establish procedures for ensuring that such remedial actions comply with the substantive requirements adopted pursuant to such laws. The procedures shall provide an opportunity for comment by the public and by the Tribal agencies that would otherwise implement the laws referenced in this section. Nothing in this section is intended to prohibit implementing agencies from charging a fee to the person conducting the remedial action to defray the costs of services rendered relating to the substantive requirements for the remedial action.

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(2) An exemption in this section or in any other applicable Tribal law shall not apply if the Department determines that the exemption would result in loss of approval from a federal agency necessary for the Tribe to administer any federal law, including the federal resource conservation and recovery act; the federal Clean Water Act the federal Clean Air Act, and the federal Coastal Zone Management Act. Such a determination by the Department shall not affect the applicability ofthe exemptions to other statutes specified in this section.

Section 10. Cleanup standards.

(1) Surface water, groundwater, and soil cleanup standards

The cleanup standards enforced by the Department shall be the standards adopted by the Council as set forth in Appendix A, Appendix B, Appendix C and Appendix D to this Act or, if more stringent, the clean-up standards shall be those set forth in the comparable laws ofthe state of Minnesota (as revised) which by this reference shall be adopted into and made a part ofthe laws ofthe Tribe.

(2) Application of standards

(a) The determination of "commercial" or "industrial" land use status shall be at the Department's discretion in consultation with the Tribal Planning Department. Commercial or industrial land use status shall not be granted in community wellhead protection zones as delineated by the Department nor shall it be granted in cases where in the opinion ofthe Department contamination from the site in question might be captured by a water source used for human consumption including but not limited to wells and springs.

(b) Background level will be detennined by the Department based upon data and tests either obtained by the Department or presented to the Department by the site owner or operator.

(c) In cases involving multiple chemicals with multiple health effects the Department may either develop its own guidelines or use such comparable Miimesota law as it may choose to adopt as Tribal law to detennine aggregate cleanup levels that are protective of human health and the enviromnent. Such standards shall not come into force and effect until proposed to and adopted by the Tribal Council as Tribal law.

(d) The Department may consult with Tribal, state and federal agencies, institutes of higher learning, and other national or intemational entities with expertise in toxic cleanup and human or environmental toxicology in order to detennine clean up levels which are protective of human health and the environment.

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Section 11. Sovereign immunity.

Nothing in this Act shall be construed to constitute a waiver ofthe sovereign immunity ofthe Tribe, or of any instrumentality ofthe Tribe.

Section 12. Captions.

As used in this Act, captions constitute no part ofthe law.

Section 13. Construction.

The provisions of this Act are to be liberally construed to effectuate the policies and purposes of this Act. In the event of conflict between the provisions of this Act and any other act, the provisions of this Act shall govern.

Section 14, Effective date.

The effective date of this Act shall be the date this Act is enacted and adopted by the Council. This Act shall apply retroactively.

Section 15. Severability.

If any provision of this Act or its application to any person or circumstance is held invalid, the remainder ofthe Act or the application ofthe provision to other persons or circumstances is not affected.

Section 16. Definitions.

(1) "Attorney" or "Reservation Attorney" means the attorney authorized by the Council to carry out the duties as described in the Act.

(2) "Agreed order" means an order issued by the Department under this Act with which the potentially liable person receiving the order agrees to comply. An agreed order may be used to require or approve any cleanup or other remedial actions, but it is not a settlement under Section 4(4) and shall not contain a covenant not to sue, or provide protection from claims for contribution.

(3) "Council" means the Tribal Council ofthe Leech Lake Band of Ojibwe.

(4) "Department" means the Division of Resource Management or DRM of the Leech Lake Band of Ojibwe.

(5) "Facility" means (a) any building, structure, installation, equipment, pipe or pipeline (including any pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, vessel, or aircraft, or (b) any site or area where a hazardous substance, other than a

12 285946.4/017582.00002

consumer product in consumer use, has been deposited, stored, disposed of, or placed, or otherwise come to be located.

(6) "Federal cleanup law" means the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. § 9601 et seq., as amended by Public Law 99-499.

(7) "Foreclosure and its equivalents" means purchase at a foreclosure sale, acquisition, or assignment of titie in heu of foreclosure, termination of a lease, or other repossession, acquisition of a right to title or possession, an agreement in satisfaction of the obligation, or any other comparable formal or informal manner, whether pursuant to law or under wananties, covenants, conditions, representations, or promises from the borrower, by which the holder acquires title to or possession of a facility securing a loan or other obligation.

(8) "Hazardous substance" means:

(a) Any "dangerous waste," defined as any discarded, useless, unwanted, or abandoned substances disposed of in such quantity or concentration as to pose a present or potential hazard to human health, wildlife, or the environment because such wastes or constituents or combinations of such wastes:

(i) Have short-lived, toxic properties that may cause death, injury, or illness or have mutagenic, teratogenic, or carcinogenic properties; or

(ii) Are conosive, explosive, flammable, or may generate pressure throughout decomposition or other means.

(b) Any "hazardous waste," defined as any waste which

(i) will persist in a hazardous form for three years or more at a disposal site and which in its persistent form

(A) presents a significant environmental hazard and may be concentrated by living organisms through a food chain or may affect the genetic makeup of people or wildhfe,

(B) is toxic to people or wildlife

(C) adversely affects living organisms in soil, sediment, and water, or air;

(ii) if disposed of at a disposal site in such quantities or concentrations as might present a hazard to people or the environment.

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(c) Any liquid, solid, gas, or sludge, including any material, substance, product, commodity, or waste, regardless of quantity, that exhibits any ofthe characteristics of dangerous waste or extremely hazardous waste.

(d) Any substance that, on March 1, 1989, is a hazardous substance under section 101(14) ofthe federal cleanup law, 42 U.S.C. § 9601(14);

(e) Petroleum or petroleum products; and

(f) Any substance or category of substances, including solid waste decomposition products, determined by the director to present a threat to human health or the enviromnent if released into the enviromnent.

The term "hazardous substance" does not include, any ofthe following when contained in an underground storage tank from which there is not a release: Crude oil or any fraction thereof or petroleum, if the tank is in compliance with all applicable federal and Tribal laws.

(9) "Hazardous waste account" means an account of money set aside for uses described in Section 7.

(10) "Holder" means a person who holds indicia of ownership primarily to protect a security interest. A holder includes die initial holder such as the loan originator, any subsequent holder such as a successor-in-interest or subsequent purchaser ofthe security interest on the secondary market, a guarantor of an obligation, surety, or any other person who holds indicia of ownership primarily to protect a security interest, or a receiver, court-appointed trustee, or other person who acts on behalf or for the benefit of a holder. A holder can be a public or privately owned financial institution, receiver, conservator; loan guarantor, or other similar persons that loan money or guarantee repayment of a loan. Holders typically are banks or savings and loan institutions but may also include others such as insurance companies, pension fiinds, or private individuals that engage in loaning of money or credit.

(11) "Independent remedial actions" means remedial actions conducted without Department oversight or approval, and not under an order, agreed order, or consent decree.

(12) "Indicia of ownership" means evidence of a security interest, evidence of an interest in a security interest, or evidence of an interest in a facility securing a loan or other obligation, including any legal or equitable title to a facility acquired incident to foreclosure and its equivalents. Evidence of such interests includes, mortgages, deeds of trust, sellers interest in a real estate contract, hens, surety bonds, and guarantees of obligations, title held pursuant to a lease financing transaction in which the lessor does not select initially the leased facility, or legal or equitable titie obtained pursuant to

14 285946.4/017582.00002

foreclosure and their equivalents. Evidence of such interests also includes assignments, pledges, or other rights to or other forms of encumbrance against the facility that are held primarily to protect a security interest.

(13) "Operating a facility primarily to protect a security interest" occurs when all ofthe following are met:

(a) Operating the facility where the borrower has defaulted on the loan or otherwise breached the security agreement;

(b) Operating the facility to preserve the value ofthe facility as an ongoing business;

(c) The operation is being done in anticipation of a sale, transfer, or assignment ofthe facility; and

(d) The operation is being done primarily to protect a security interest. Operating a facility for longer than one year prior to foreclosure or its equivalents shall be presumed to be operating the facility for other than to protect a security interest.

(14) "Owner or operator" means:

(a) Any person with any ownership interest in the facility or who exercises any control over the facility; or

(b) In the case of an abandoned facility, any person who had owned, or operated, or exercised control over the facility any time before its abandonment;

The term does not include:

(i) The Tribe or any tribal instrumentality which acquired ownership or control involuntarily through bankruptcy, tax delinquency, abandonment, or circumstances in which the Council involuntarily acquires title. This exclusion does not apply to an instrumentality ofthe Tribe which is subject to a waiver of sovereign immunity, which has caused or contributed to the release or threatened release of a hazardous substance from the facility;

(ii) A person who, without participating in the management of a facility, holds indicia of ownership primarily to protect the person's security interest in the facility. Holders after foreclosure and its equivalent and holders who engage in any of the activities identified in subsection (15)(e) through (g) of this section shall not lose this exemption provided the holder complies with all ofthe following:

(A) The holder properly maintains the environmental compliance measures already in place at the facility;

15 285946.4/017582.00002

(B) The holder complies with the reporting requirements in the rules adopted under this Act;

(C) The holder complies with any order issued to the holder by the Department to abate an imminent or substantial endangerment;

(D) The holder allows the Department or potentially liable persons under an order, agreed order, or settlement agreement under this Act access to the facility to conduct remedial actions and does not impede the conduct of such remedial actions;

(E) Any remedial actions conducted by the holder are in compliance with any preexisting requirements identified by the Department, or, if the Department has not identified such requirements for the facility, the remedial actions are conducted consistent with the rules adopted under this Act; and

(F) The holder does not exacerbate an existing release. The exemption in this subsection (15)(b)(ii) does not apply to holders who cause or contribute to a new release or threatened release or who are otherwise liable under Section 4(l)(b), (c), (d), and (e); provided, however, that a holder shall not lose this exemption if it establishes that any such new release has been remediated according to the requirements of this Act and that any hazardous substances remaining at the facility after remediation ofthe new release are divisible from such new release;

(iii) A fiduciary in his, her, or its personal or individual capacity. This exemption does not preclude a claim against the assets ofthe estate or trust administered by the fiduciary or against a nonemployee agent or independent contractor retained by a fiduciary. This exemption also does not apply to the extent that a person is liable under this Act independently ofthe person's ownership as a fiduciary or for actions taken in a fiduciary capacity which cause or contribute to a new release or exacerbate an existing release of hazardous substances. This exemption applies provided that, to the extent ofthe fiduciary's powers granted by law or by the applicable goveming instmment granting fiduciary powers, the fiduciary complies with all ofthe following:

(A) The fiduciary properly maintains the environmental compliance measures already in place at the facility;

(B) The fiduciary complies with the reporting requirements in the mles adopted under this Act;

(C) The fiduciary complies with any order issued to the fiduciary by the Department to abate an imminent or substantial endangerment;

(D) The fiduciary allows the Department or potentially liable persons under an order, agreed order, or settlement agreement under this Act access

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to the facility to conduct remedial actions and does not impede the conduct of such remedial actions;

(E) Any remedial actions conducted by the fiduciary are in compliance with any preexisting requirements identified by die Department, or, if the Department has not identified such requirements for the facility, the remedial actions are conducted consistent with the mles adopted under this Act; and

(F) The fiduciary does not exacerbate an existing release.

The exemption in this subsection (15)(b)(iii) does not apply to fiduciaries who cause or contribute to a new release or threatened release or who are otherwise liable under Section 4(l)(b), (c), (d), and (e); provided however, that a fiduciary shall not lose this exemption if it establishes that any such new release has been remediated according to die requirements of this Act and that any hazardous substances remaining at the facility after remediation ofthe new release are divisible from such new release. The exemption in this subsection (15)(b)(iii) also does not apply where the fiduciary's powers to comply with this subsection (15)(b)(iii) are limited by a goveming instmment created with the objective purpose of avoiding liability under this Act or of avoiding compliance with this Act; or

(iv) Any person who has any ownership interest in, operates, or exercises control over real property where a hazardous substance has come to be located solely as a result of migration ofthe hazardous substance to the real property through the ground water from a source off the property, if:

(A) The person can demonstrate that the hazardous substance has not been used, placed, managed, or otherwise handled on the property in a manner likely to cause or contribute to a release ofthe hazardous substance that has migrated onto the property;

(B) The person has not caused or contributed to the release ofthe hazardous substance;

(C) The person does not engage in activities that damage or interfere with the operation of remedial actions installed on the person's property or engage in activities that result in exposure of humans or the environment to the contaminated ground water that has migrated onto the property;

(D) If requested, the person allows the Department potentially liable persons who are subject to an order, agreed order, or consent decree, and the authorized employees, agents, or contractors of each, access to the property to conduct remedial actions required by the Department. The person may attempt to negotiate an access agreement before allowing access; and

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(E) Legal withdrawal of groundwater does not disqualify a person from the exemption in this subsection (15)(b)(iv).

(15) "Participation in management" means exercising decision-making control over the borrower's operation ofthe facility, environmental compliance, or assuming or manifesting responsibility for the overall management ofthe enterprise encompassing the day-to-day decision making ofthe enterprise.

The term does not include any ofthe following:

(a) A holder with the mere capacity or ability to influence, or the unexercised right to control facility operations;

(b) A holder who conducts or requires a bonower to conduct an environmental audit or an environmental site assessment at the facility for which indicia of ownership is held;

(c) A holder who requires a bonower to come into compliance with any applicable laws or regulations at the facility for which indicia of ownership is held;

(d) A holder who requires a bonower to conduct remedial actions including setting minimum requirements, but does not otherwise control or manage the bonower's remedial actions or the scope ofthe bonower's remedial actions except to prepare a facility for sale, transfer, or assignment;

(e) A holder who engages in workout or policing activities primarily to protect the holder's security interest in the facility;

(f) A holder who prepares a facility for sale, transfer, or assignment or requires a bonower to prepare a facility for sale, transfer, or assignment;

(g) A holder who operates a facility primarily to protect a security interest or requires a bonower to continue to operate, a facility primarily to protect a security interest; and

(h) A prospective holder who, as a condition of becoming a holder, requires an owner or operator to conduct an enviromnental audit conduct an environmental site assessment, come into compliance with any applicable laws or regulations, or conduct remedial actions prior to holding a security interest is not participating in the management ofthe facility.

(16) "Person" means an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, state government agency, unit of local government, federal government agency or a Tribal instmmentality subject to a waiver of sovereign immunity.

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(17) "Policing activities" means actions the holder takes to insure that the bonower complies with the terms ofthe loan or security interest or actions the holder takes or requires the bonower to take to maintain the value ofthe security. Policing activities include: Requiring the bonower to conduct remedial actions at the facility during the term ofthe security interest; requiring the bonower to comply or come into compliance with applicable federal, state, and local environmental and other laws, regulations, and permits during the term ofthe security interest; securing or exercising authority to monitor or inspect the facility including on-site inspections, or to monitor or inspect the bonower's business or financial condition during the term ofthe security interest; or taking other actions necessary to adequately police the loan or security interest such as requiring a bonower to comply with any wananties, covenants, conditions, representations, or promises from the bonower.

(18) "Potentially liable person" means any person whom the Department finds, based on credible evidence, to be liable under Section 4. The Department shall give notice to any such person and allow an opportunity for comment before making the finding, unless an emergency requires otherwise.

(19) "Prepare a facility for sale, transfer, or assignment" means to secure access to the facility; perform routine maintenance on the facility; remove inventory, equipment, or stmctures; properly maintain environmental compliance measures already in place at the facility; conduct remedial actions to clean up releases at the facility; or to perfonn other similar activities intended to preserve the value ofthe facility where the borrower has defaulted on the loan or otherwise breached the security agreement or after foreclosure and its equivalents and in anticipation of a pending sale, transfer, or assigmnent, primarily to protect the holder's security interest in the facility. A holder can prepare a facility for sale, transfer, or assignment for up to one year prior to foreclosure and its equivalents and still stay within the security interest exemption m subsection (15)(b)(ii) of this section.

(20) "Primarily to protect a security interest" means the indicia of ownership is held primarily for the purpose of securing payment or perfonnance of an obligation. The term does not include indicia of ownership held primarily for investment purposes nor indicia of ownership held primarily for purposes other than as protection for a security interest. A holder may have other, secondary reasons, for maintaining indicia of ownership, but the primary reason must be for protection of a security interest. Holding indicia of ownership after foreclosure or its equivalents for longer than five years shall be considered to be holding the indicia of ownership for purposes other than primarily to protect a security interest. For facilities that have been acquired through foreclosure or its equivalents prior to the date this Act is enacted and adopted by the Council, this five-year period shall begin as ofthe date of enactment and adoption.

(21) "Public notice" means, at a minimum, adequate notice mailed to all persons who have made timely request ofthe Department and to persons residing in the

19 285946.4/017582.00002

potentially affected vicinity ofthe proposed action; published in the Tribal Tribune; and opportunity for interested persons to comment.

(22) "Reservation Environmenf' means the environment within the exterior boundaries ofthe Leech Lake Reservation and other lands held in tmst status by the U.S. Government for the Tribe or its members.

(23) "Reservation Population" means persons residing within the reservation environment.

(24) "Release" means any intentional or unintentional entry of any hazardous substance into the environment, including but not limited to the abandonment or disposal of containers of hazardous substances.

(25) "Remedy" or "remedial action" means any action or expenditure consistent with the purpose of this Act to identify, eliminate, clean up, or minimize any threat of potential threat posed by hazardous substances to human health or the environment including any investigative and monitoring activities with respect to any release or threatened release of a hazardous substance and any health assessments or health effects studies conducted in order to detennine the risk or potential risk to human health.

(26) "Tribe" means the government of the Leech Lake Band of Ojibwe.

(27) "Tribal Instrumentality" means a unit of tribal govemment or a tribal organization that is ultimately responsible to the Leech Lake Business Council.

(28) "Tribal Court" shall mean the Tribal Court System ofthe Leech Lake Band of Ojibwe.

20 285946.4/017582.00002

LEECH LAKE BAND OF OJIBWE HAZARDOUS SUBSTANCES CONTROL ACT

APPENDIX A

Ground Water Cleanup Levels

The following chart indicates the minimum cleanup levels for ground water, in tenns of amount of individual hazardous substance per unit volume, for the hazardous substances listed. These cleanup levels shall remain in effect until the Division of Resource Management ("Department") amends them. The Department may also establish more stringent cleanup levels for a specific site, when, based on a site-specific evaluation, the Department determines that such levels are necessary to protect human health and the environment.

Hazardous Substance

Acenapthylene

Anthracene

Arsenic, Total

Benzene

Benzo(a)Fluoranthene

Benzo(k)Fluoranthene

Benzo(g,h,i)Perylene

Benzo(a)Pyrene

Cadmium

Chromium, Total

Chrysene

Copper

DDT/DDE/DDD (total)

Dichlorophenol

Ethylbenzene

Flouranthene

Indenol(l,2,3-C,D)Pyrene

CAS Number

208968

120127

7440382

71432

191242

50328

7440439

7440473

218019

50293

120832

100414

206440

193395

Cleanup Level

0.40 mg/1

0.00002 mg/1

0.01 mg/1

0.0002 mg/1

3.0E-6 mg/l

1.0E-6mg/l

0.2E-6 mg/1

1.0E-6mg/l

0.0004 mg/1

0.001 mg/1

2.0E-6 mg/1

0.015 mg/1

1.0E-5mg/l

8.0E-5 mg/1

0.0002 mg/1

5.0E-6 mg/1

0.4E-6 mg/1

285946.4/017582.00002 21

Hazardous Substance

Lead

Mercury

Monochlorophenol

Naphthalene

PCBs (total)

PCDDsandPCDFs

Pentachlorophenol

Phenanthrene

Phenol

Pyrene

Tetrachlorophenol

Toluene

Trichlorophenol

Xylene

CAS Number

7439921

7439976

95578

91203

1336363

1746016

87865

85018

108952

129000

58902

108883

95954;88062

1330207

Cleanup Level

0.015 mg/1

5E-5 mg/1

0.00025 mg/1

0.0001 mg/1

1.0E-5mg/l

3.0E-9 mg/1

2.0E-5 mg/1

3.0E-5 mg/1

0.0002 mg/1

0.20 mg/1

1.0E-5mg/l

0.0002 mg/1

2.5E-5 mg/1

0.0002 mg/1

285946.4/017582.00002 22

LEECH LAKE BAND OF OJIBWE HAZARDOUS SUBSTANCES CONTROL ACT

APPENDIX B

Soil Cleanup Levels

The following chart indicates the minimum cleanup levels for soil, in terms of amount of individual hazardous substance per unit mass, for the hazardous substances listed. These cleanup levels shall remain in effect until the Division of Resource Management ("Department") amends them. The Department may also establish more stringent cleanup levels for a specific site, when, based on a site-specific evaluation, the Department determines that such levels are necessary to protect human health and the environment.

Hazardous Substance

Arsenic, Total**

Benzene

Benzo(a)Pyrene

Cadmium

Chromium, Total

Chromium VI

Copper

DDT/DDE/DDD (total)

Dibenz(ah)Anthracene

Dichlorophenol

Ethylbenzene

Lead

Mercury

Methylphenol 2 (o-cresol)

Methylphenol 4 (p-cresol)

Monochlorophenol

PAHs (carcinogenic)+

CAS Number

7440382

71432

50328

7440439

7440473

50293

53703

120832

100414

7439921

7439976

95487

106445

95578

Cleanup Level

0.38 mg/kg

0.05 rag/kg

0.056 mg/kg

0.8 mg/kg

64 mg/kg

0.4 mg/kg

36 mg/kg

0.0025 mg/kg

0.056 mg/kg

0.003 mg/kg

0.05 mg/kg

70 mg/kg

0.3 mg/kg

0.100 mg/kg

0.100 mg/kg

0.0025 mg/kg

0.1 mg/kg

285946.4/017582.00002 23

Hazardous Substance

PCBs (total)

PCDDs and PCDFs

Pentachlorophenol

Phenol

Tetrachlorophenol

Toluene

Trichlorophenol

Xylene

CAS Number

1336363

1746016

87865

108952

58902

108883

95954;88062

1330207

Cleanup Level

0.20 mg/kg

3.8E-6 or l.OE-5 mg/kg*

0.002 mg/kg

0.05 mg/kg

0.001 mg/kg

0.05 mg/kg

0.001 mg/kg

0.05 mg/kg

285946.4/017582.00002 24

LEECH LAKE BAND OF OJIBWE HAZARDOUS SUBSTANCES CONTROL ACT

APPENDIX C

Sediment Cleanup Levels

The following chart indicates the minimum cleanup levels for sediment, in terms of amount of individual hazardous substance per unit mass, for the hazardous substances listed. These cleanup levels shall remain in effect until the Division of Resource Management ("Department") amends them. The Department may also establish more stringent cleanup levels for a specific site, when, based on a site-specific evaluation, the Department determines that such levels are necessary to protect human health and the environment.

Hazardous Substance

Acenapthene

Acenapthylene

Anthracene

Arsenic, Total*+

Benz(a)Anthracene

Benzo(a)Pyrene

Cadmium

Chromium, Total

Chrysene

Copper

DDD+++

DDE+++

DDT+++

Dibenz(ah)Anthracene

Flouranthene

Flourene

Lead

CAS Number

83329

208968

120127

7440382

56553

50328

7440439

7440473

218019

72548

72559

50293

53703

206440

86737

7439921

Cleanup Level

0.00671 mg/kg

0.00587 mg/kg

0.0469 mg/kg

5.9 mg/kg

0.0317 mg/kg

0.0319 mg/kg

0.6 mg/kg

37.3 mg/kg

0.0571 mg/kg

35.7 mg/kg

0.00354 mg/kg

0.00142 mg/kg

0.00119 mg/kg

0.00622 mg/kg

0.111 mg/kg

0.0212 mg/kg

35.0 mg/kg

285946.4/017582.00002 25

Hazardous Substance

Mercury

Methylphenol 2 (o-cresol)

Methylphenol 4 (p-cresol)

Naphthanlene

PCBs (total)

PCBs Aroclor 1016

PCBs Aroclor 1260

PCDDs and PCDFs

Pentachlorophenol

Phenanthrene

Pyrene

CAS Number

7439976

95487

106445

91203

1336363

1746016

87865

85018

129000

Cleanup Level

0.17 mg/kg

0.055 mg/kg

0.110 mg/kg

0.0346 mg/kg

0.023 mg/kg

0.007 mg/kg

0.005 mg/kg

l.OE-6 mg/kg

0.360 mg/kg

0.0419 mg/kg

0.0530 mg/kg

285946.4/017582.00002 26

LEECH LAKE BAND OF OJIBWE HAZARDOUS SUBSTANCES CONTROL ACT

APPENDIX D

Surface Water Cleanup Levels

The following chart indicates the minimum cleanup levels for surface water, in terms of amount of individual hazardous substance per unit volume, for the hazardous substances listed. These cleanup levels shall remain in effect until the Division of Resource Management ("Department") amends them. The Department may also establish more stringent cleanup levels for a specific site, when, based on a site-specific evaluation, the Department determines that such levels are necessary to protect human health and the environment.

Hazardous Substance

Acenapthene

Acenapthylene

Anthracene

Arsenic, Total

Arsenic V

Benzene

Benzo(a)Pyrene

Cadmium

Chromium III

Chromium VI

Copper

DDD

DDE

DDT

Dibenzofiiran

Dichlorophenol

Flouranthene

CAS Number

83329

208968

120127

7440382

7440382

71432

50328

7440439

7440473

7440473

72548

72559

50293

120832

206440

Cleanup Level

0.012 mg/1

0.012 mg/1

2.9E-5 mg/1

0.053 mg/1

0.0081 mg/1

0.70 mg/1

1.4E-5mg/l

0.0011 mg/1

0.207 mg/1

0.011 mg/1

0.012 mg/1

6.0E-5 mg/1

0.1 mg/1

l.OE-6 mg/1

0.020 mg/1

0.365 mg/1

0.020 mg/1

285946.4/017582.00002 27

Hazardous Substance

Flourene

Lead

Mercury

Naphthanlene

PCBs (total)

PCDDs and PCDFs

Pentachlorophenol

Phenanthrene

Phenol

Trichlorophenol

CAS Number

86737

7439921

7439976

91203

1336363

1746016

87865

85018

108952

95954;88062

Cleanup Level

0.0039 mg/1

0.0032 mg/1

1.2E-5mg/l

0.081 mg/1

1.4E-5mg/l

1.0E-9mg/l

0.0055 mg/1 (pH)

0.0021 mg/1

2,56 mg/1

0.063; 0.970 mg/1

285946.4/017582.00002 28

LEECH LAKE BAND OF OJIBWE HAZARDOUS SUBSTANCES CONTROL ACT

FOOTNOTES AND REFERENCES TO APPENDICES A-D

Footnotes

* total congener concentration or toxic equivalency factor (TEQ); TEQ as per the World Health Organization, 1997 (w) + except for individual PAHs listed below ** all soil concentrations in dry weight (dw) *+ all sediment concentrations dw ++ sum of p,p and o, p isomers (pH) hazardous substance concentration in the matrix is directly pH dependent

References

CFR, 1995 (Code of Federal Regulations), Titie 40, Parts 9, 122, 123, 131, and 132. March 23, 1995. Final Water Quality Guidance for the Great lakes System. Final Rule.

CSQG, 1999. Canadian Soil Quality Guidelines for the Protection of Environmental and Human Health, and Canadian Sediment Quality Guidelines for the Protection of Aquatic Life Tables, from Canadian Enviromnental Quality Guidelines, Canadian Council of Ministers ofthe Environment. Winnipeg.

DUTCH, 1994. The New Dutch List for soil and groundwater criteria, from Environmental Quality Criteria in the Netherlands, 1994.

NOAA, 1998. Buchman, M.F., NOAA Screening Quick Reference Tables, NOAA HAZMAT Report 97-2, Seattle, WA, Hazardous Materials Response and Assessment Division, National Oceanic and Atmospheric Administration, 12 p.

USEPA, Region 9, San Francisco; preliminary remedial cleanup goals for soils

USEPA, 1986. Quality Criteria for Water and updates: 1986a, 1986b, 1987. EPA 440/5-86-001.

USEPA, 2000. Browner, Carol: USEPA, Office of Research and Development, 2000 Infonnation Sheet 1, Dioxin: Summary ofthe Dioxin Reassessment Science. June 12, 2000.

Van den Berg, M. et al., 1998. Toxic Equivalency Factors (TEFs) for PCBs, PCDDs, PCDFs for Humans and Wildlife. Environmental Health Perspective, 106 (12), 775-792.

29 285946.4/017582.00002

Reviewed and approved for adoption as Tribal Law on this day of , 2000 by the United States Department of the Interior,

Bureau of Indian Affairs.

30 285946.4/017582.00002

E X H

B I T

ANALYSIS OF THE CIVIL REGULATORY AUTHORITY OF THE LEECH LAKE BAND OF OJIBWE TO DEVELOP, ENACT, AND ENFORCE THE

HAZARDOUS SUBSTANCES CONTROL ACT

Prepared by Richard Du Bey

Connie Sue Martin Jennifer Sanscrainte

Short Cressman & Burgess PLLC

April 14, 20003

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY 4

II. THE LEECH LAKE BAND OF OJIBWE 4

A. History of the Leech Lake Band 4

B. Reservation Land Ownership and Use 5

C. The St. Regis Paper Company Superfund Site 5

III. EPA TRIBAL ARAR POLICY g

IV. THE BAND'S ENACTMENT OF ITS HAZARDOUS SUBSTANCES CONTROL ACT 9

V. THE BAND'S CLEANUP LEVEL FOR DIOXIN IS AN APPLICABLE REQUIREMENT 14

A. The Band has the Authority to Regulate Pollution Sources Impacting or Potentially Impacting the Health ofthe Reservation Population or the Quality of Reservation Environment 14

1. Regulatory Powers Derived from Tribal Property Rights 14

2. Regulatory Powers Derived from Tribal Sovereignty 14

a. Tribal Sovereignty Over Members 15

b. Tribal Sovereignty Over Non-members 17

B. The HSCA Cleanup Level is Legally Enforceable and Generally Applicable 20

1. Legally Enforceable. 20

2. General Applicability. 21

VI. THE BAND'S CLEANUP LEVEL FOR DIOXIN IS A RELEVANT AND APPROPRIATE REQUIREMENT 22

A. Relevant and Appropriate Determination 22

441937.2/9H0101V017582.00001

B. The Band's Standard is Relevant and Appropriate to The St. Regis Sit^3

1. Human Health Considerations Arising from the Uses ofthe Site and the Entities Affected 23

2. The Goals and Objectives ofthe HSCA are to Protect the Health ofthe Reservation Population and Quality ofthe Reservation Environment from Hazardous Substances Such as Those Present at the Site 25

3. EPA's Trust Responsibility to The Band Requires Adoption of the HSCA as an ARAR 25

VII. CONCLUSION 26

441937.2/9H0101 VOl 7582.00001

I. EXECUTIVE SUMMARY

This analysis was prepared at the request ofthe Leech Lake Band of Ojibwe ("Band") and in response to the March 14, 2003 letter from Region 5 ofthe U.S. Environmental Protection Agency ("EPA") to the Band requesting that the Band provide EPA with certain information regarding use ofthe Band's Hazardous Substances Confrol Act ("HSCA") as an ARAR under CERCLA. In particular, EPA requested that the Band articulate the basis of its jurisdiction and authority to adopt, implement and enforce HSCA on all lands, whether in fee or trust status, regardless of the ownership of such lands, located within the exterior boundaries ofthe Leech Lake Reservation. In order for the HSCA and the standards set out therein, to be used as an ARAR, the EPA has asked that the Band provide EPA with certain information so that EPA may determine whether HSCA is an ARAR for the potential removal action.'

Based on the analysis set out below, we have concluded that the HSCA is "Apphcable" to the St. Regis Site, and is "Relevant and Appropriate" at the St. Regis Site. It is therefore the opinion of Special Environmental Counsel that the Leech Lake Band of Ojibwe's Hazardous Substance Confrol Act adopted on August 25, 2002 by Resolution No. 01-29 is both "Applicable" and "Relevant and Appropriate" and should be used as an ARAR for cleanup.^

II. THE LEECH LAKE BAND OF OJIBWE

A. History of the Leech Lake Band

The Leech Lake Band and its ancestors have inhabited the Leech Lake region for hundreds of years. In the 1600's, the Dakota Indians had communities at Leech Lake. The Ojibwe Bands moved into the region during the mid-to-Iate 1700's, settling on small islands in Leech Lake. The Leech Lake Reservation was established by Treaty in 1855, although the size and configuration ofthe Reservation has changed over time.

The Reservation is located in north central Minnesota in the Cenfral Pine-Hardwoods Forest ecoregion, a zone of transition between boreal (conifer) forest

' A copy of the March 14, 2003 EPA letter to the Band is attached as Exhibit A. ^ A copy ofthe HSCA is attached as Exhibit B.

441937.2/9H01011/017582.00001 4

and deciduous (hardwood) forest. The Reservation also reflects characteristics ofthe tall-grass prairie region that begins less than 60 miles to the west, resulting in a diverse area with a variety of plants, wildlife, and habitat types, including a number of species that are rare, endangered, or threatened. The Reservation also has an extensive fire history, which has altered the composition of habitats found here. The area provides timber and other plant resources, an abundance of habitat for game and non-game wildlife species, and warm water and cool water fishing.

B. Reservation Land Ownership and Use

The Reservation currently comprises some 864,158 acres, including parts of Belframi, Cass, Hubbard, and Itasca Counties.^ Within the Reservation land base there are various landholders:

Land Owner US Forest Service State of Minnesota Belframi County Cass County Hubbard County Itasca County Indian lands Other ownership

Acreage 285,824 146,061 3,265

2,107

29,717 130,836

18,170

7,441

The 29,717 acres of Indian lands within the Reservation are split among Tribal, Band and allotted lands. Tribal lands are those trust lands owned by the Miimesota Chippewa Tribe; Band lands are frust lands owned by the Leech Lake Band; and allotted lands are those lands held in trust for individual Indians and their heirs:

Tribal land 13,545 acres Allotments 12,509 acres Band land 3,663 acres

Approximately half of the Leech Lake Reservation is covered by water, mcluding 270 named, fishable lakes totaling 300,000 acres, as well as 162,591 acres

' Based on the 2000 Census, the total Reservation Population numbers 10,205, of which the majority are Indians.

441937.2/9H0101I/017582.00001 5

of wetlands, forest ponds, ephemeral pools, and 260 miles of rivers and sfreams. Wild rice, a native grass that is unique to Michigan, Minnesota, Wisconsin and the lower portions of Ontario, Canada is abundant on the Leech Lake Reservation.

There are approximately 13,000 acres of natural wild rice stands, some of which are among the largest natural stands in the world. Wild rice plays a very significant cultural and spiritual role in Anishinabe (Ojibwe) culture. The loss of wild rice on many of Miimesota's water bodies is a grave concern of Tribal members, resource managers and researchers. The Band has invested considerable time and expense to continue sampling and monitoring of wild rice ecosystems to assure that Leech Lake wild rice productivity does not decline.

The bulk ofthe Reservation's waters are drained by the headwaters ofthe Mississippi River, eventually emptying into the Gulf of Mexico. The northeastern part, however, lies east ofthe Laurentian Divide and drains northward into Canada and Hudson Bay.

C. The St. Regis Paper Company Superfund Site

The St. Regis Corporation operated a wood freatment facility in the town of Cass Lake, located wholly within the exterior boundaries ofthe Leech Lake Reservation, from 1957 to 1985. The Champion Intemational Corporation ("Champion") assumed responsibility for the Site in 1985. Champion leased portions ofthe Site to Burlington Northern Railroad, and quit claimed a large portion ofthe site to the City of Cass Lake and to the Band in 1988. The Intemational Paper Company assumed responsibility for the Site in July of 2000.

Known chemicals used at the Site included creosote, pentachlorophenol ("PCP"), No. 2 fuel oil, ketone, and a chemical for preserving wood referred to as "CCA" comprised of copper, chromium and arsenic as a salt solution. Dioxins and fiirans are also chemicals of concem ("COCs") at this Site, originating as contaminants of indusfrial grade PCP. Additionally, the Band believes that the Site has not adequately been characterized, and other contaminants may be present, including but not limited to PCBs, DDTs, Mercury, Quinolines, and Carbozoles, for which additional work must be done to characterize and determine action levels for cleanup.

On September 21, 1984 EPA placed the St. Regis Paper Company Site (the

441937.2/9H01011/017582.00001

"Site") on the National priority List ("NPL"). The State of Minnesota Pollution Confrol Agency ("MPCA") was the responsible govemment unit ("RGU") for this Site until 1995, when the EPA became the RGU at the request ofthe Band.

The Site, as originally designated, was comprised of four operable units ("OU"). OUl was the Treating Facility; 0U2 was the Cass Lake City Dump; 0U3 was the Extension ofthe Cass Lake Municipal Water System; and 0U4 was the Contammated Soil Vault. In Febmary 1985, the MPCA and Champion Intemational Corporation ("Champion") signed two Response Orders by Consent under the Minnesota Environmental Response and Liability Act of 1983 ("MERLA") to implement an agreed remedial plan for the Site, one for the Wood Treatment Facility Area and one for the City Dump Pit Area at the former Cass Lake City Dump. These Orders provided for a remedial investigation and feasibility study ofthe Site; development and implementation of a Response Action Plan to abate or minimize the release of hazardous substances from the Site; and routine monitoring to determine the effectiveness ofthe response actions.

On March 5,1986, MPCA issued two Minnesota Enforcement Decision Documents ("MEDDs") for the Site, one for the Wood Treatment Facility Area and one for the City Dump Pit Area. The MEDDs called for: (1) the installation of groundwater pump-out wells with granular activated carbon freatment which would pump and freat contaminated groundwater until acceptable levels are reached; (2) constmction of a Resource Conversation and Recovery Act ("RCRA") on-site containment vault for the deposition of hazardous waste sludge and contaminated soil excavated during removal; (3) extension ofthe Cass Lake Community Water System to residents not serviced and potentially affected by groundwater contamination from the Site; (4) long term monitoring ofthe groundwater and surface water to determine the effectiveness ofthe groundwater pump-out system; (5) long term monitoring of the on-site contaminant vault; (6) long term monitoring ofthe treated groundwater discharge and selected fish species to determine the effectiveness ofthe groundwater freatment system; (7) long term operation and maintenance ofthe groundwater pump-out system; and (8) long term operation and maintenance ofthe on-site containment vault.

The response goals and objectives, as stated in the MEDD were to:

1) adequately protect the public against exposure to PCP, polynuclear aromatic hydrocarbons ("PAHs"), hexa hepta

441937.2/9H01011/017582.00001

and octachlorodibenzo-p-dioxin ("PCDD") and polychlorinated dibenzo-p-furans ("PCDF") isomers through direct contact or ingestion of groundwater from private and public water supplies.

2) adequately protect the public against exposure to PCP, PAH, PCDD and PCDF isomers potentially released to surface water from the groundwater.

3) adequately protect and minimize damage to the environment from the migration of PAH, PCDD and PCDF isomers in the groundwater.

See Miimesota Enforcement Decision Document, issued for St. Regis Paper Company, Minnesota Pollution Confrol Agency, p. 10, March 5, 1986.

Constmction ofthe remedial components ofthe selected remedy occurred between 1985 and 1987. Groundwater monitoring and vault operation and maintenance have been carried out since June 1987.

In 1995, the MPCA issued a Level 1 Five Year Site Review (First Review). The Ffrst Review was based upon a review of all documents associated with the removal action, a Site visit, and a limited ecological risk evaluation. On April 6, 1995, EPA approved the MPCA Five-Year Site Report. The First Review made a number of recommendations for further investigation at the Site, including further analysis of dioxin/furans in fish and sediments, and further monitoring to fully characterize Site groundwater contamination. It also concluded that the ground water RA would remain protective with the implementation of new ARARs (which have not been implemented); and that the RA protectiveness for soils could not be determined because concentrations of contaminants in the soils were unknown.

On January 24, 1995 EPA issued a Unilateral Adminisfrative Order (the "106 Order") under Section 106 of CERCLA, 42 U.S.C. Section 9601 etseq to Champion. The 106 Order, among other things, required Champion to continue to perform certain remedial activities originally undertaken pursuant to the two Febmary 26, 1985 MEDDS issued by the MPCA under MERLA to abate an imminent and substantial endangerment to the public health or welfare or the environment. At that

441937.2/9H01011/017582.00001

time, oversight authority changed from state-lead to Federal-lead, at the request ofthe Band.

In the 106 Order, EPA also re-defined the operable units at the Site as follows: OUl or the "Wood Treatment Facility Area" was defined as the portion ofthe Site known as the Wood Treatment Facility Area; 0U2 or the "Containment Vault Area" was defined as the portion ofthe Site known as the Contaminated Soil Containment Vauk Area; and 0U3 or the "City Dump Area" was defined as the portion ofthe Site bordered to the north by the Wood Treatment Facility Area, to the east by Pike Bay, to the south by Fox Creek, and to the west by the Containment Vault Area. The Band and EPA entered into a support agency cooperative agreement ("SACA") for the Site in 1995.

To date, two Five-Year Reviews ofthe Site have been completed. The First Review, was completed by the state of Minnesota in 1995 and the second Five-Year Review was performed by EPA in 2000 (Second Review). The Second Review, conducted after EPA resumed confrol over the remedial activities at the Site, included sampling and data assessment to fill data gaps identified by the first Five Year Review. EPA's recent sampling and data assessment activities indicate the presence of dioxins that exceeded EPA action levels and have resulted in EPA now taking action to assess the Site for a removal action. This legal analysis was requested by EPA as a part ofthe pending removal action at the Site.

III. EPA TRIBAL ARAR POLICY

Under CERCLA, Indian Tribes are to be afforded substantially the same freatment as states regarding consultation for remedial actions. 42 U.S.C. § 9626(a) (freatment of Tribes as states), § 9604(c)(2) (consultation on remedial actions), § 9621 (cleanup standards). This includes the consideration of Tribal criteria and standards as ARARs guiding cleanup levels in its guidance documents.

EPA freats those requirements and standards adopted by Tribal governments that confrol the environmental quality of Tribal lands as potential ARARs for on-site remedial actions on Indian lands provided that such Tribal or Band standards meet certain ARAR eligibility criteria. EPA OSWER Directive 9234.1-02 provides as follows:

CERCLA § 121 provides that for an hazardous substance, pollutant, or

441937.2/9H01011/017582.00001

contaminant that will remain on site, remedial actions undertaken pursuant to § § 104, 106, 120, or 122 must satisfy any applicable or relevant and appropriate Federal requirement and any applicable or relevant and appropriate promulgated State standard, requirement, criterion or limitation under State environmental or facility siting law that is more sfringent than any Federal requirement.

OSWER Dfrective 9234.1-02 at § 7.0.

TV. THE BAND'S ENACTMENT OF ITS HAZARDOUS SUBSTANCES CONTROL ACT

Article I, Section 3 ofthe Revised Constitution and Bylaws ofthe Minnesota Chippewa Tribe, approved by the Assistant Secretary ofthe Interior on March 3, 1964, empowers the Tribe "to conserve and develop Tribal resources and to promote the conservation and development of individual Indian tmst property, to promote the general welfare ofthe members ofthe Tribe; (and) to preserve and maintain justice for its members."

Article III, Section 2 provides for the establishment ofthe Reservation Business Committee ofthe Leech Lake Band to serve as the goveming body ofthe Leech Lake Reservation. The authority ofthe Business Committee extends to the boundaries ofthe Leech Lake Reservation and the Territories ceded by the Treaties of 1837 and 1854 where hunting, fishing, ricing and gathering rights were reserved to the Leech Lake Band and its members.

In 2000, the Business Committee ofthe Leech Lake Band found that an environmental emergency existed and that a Tribal Hazardous Substance Confrol Act should be adopted. The Business Committee (commonly referred to as the "Band Council") also found that the proposed Act should contain hazardous waste clean-up standards that were sufficiently sfringent to protect the health ofthe Reservation Population and the quality ofthe Reservation Environment. Finally, the Business Committee found that the Act should be remedial in nature, so that it could address those past actions that would cause or contribute to present violations ofthe Act.

The Busmess Committee determined that a Tribal Hazardous Substance Control Act would not adequately protect the health ofthe Reservation Population and the quality ofthe Reservation Environment unless it applied with equal force to

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both Band members and non-members, and addressed present releases of hazardous substances in addition to past releases of hazardous substances that continue to pose a substantial risk to human health and the quality ofthe land, waters and resources of the Leech Lake Reservation.

Accordingly, pursuant to its express authority under the Revised Constitution and Bylaws ofthe Minnesota Chippewa Tribe, its inherent sovereignty, and the powers afforded it under the statutory and common law ofthe United States, the Business Committee in 2000 adopted the HSCA as Tribal law.

The declaration ofthe HSCA's purpose and policy, as recited in the text ofthe Act, is as follows:

(1) The beneficial stewardship ofthe land, air, and waters of the Leech Lake Reservation is a solemn obligation ofthe present generation for the benefit of fliture generations.

(2) The main purpose of this Act is to provide for the cleanup of hazardous substances sites and to prevent the creation of future hazards due to improper disposal of hazardous substances on or into the Reservation air, land, surface water and groundwaters ("Reservation Environment").

(3) Each person either residing on or doing business within the exterior boundaries ofthe Leech Lake Reservation ("Reservation Population") benefits from a healthful environment and each person has a responsibility to preserve and protect the quality ofthe Reservation Environment.

(4) The Tribe finds that an environmental emergency exists that warrants the exercise of Tribal authority and sovereignty to adopt this Act on an emergency basis so that it shall be enforceable immediately upon enactment, and that it shall immediately put into force and effect Tribal clean-up standards that are sufficiently protective ofthe Reservation Population and the Reservation Environment.

(5) The Tribe further finds that this Tribal Hazardous Waste Ordinance will only adequately protect the health ofthe Reservation

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Population and the quality ofthe Reservation Environment if it applies with equal force to Tribal members and non-members and is a remedial measure that is intended to address both future as well as past releases of hazardous substances that pose a substantial risk to human health and the quality ofthe land, waters and resources ofthe Leech Lake Reservation.

In addition to any other powers granted by Tribal or federal law, HSCA empowers the Department of Resource Management to do the following:

(a) Investigate, provide for investigatmg, or require potentially liable persons to investigate any releases or threatened releases of hazardous substances, including but not limited to inspecting, sampling, or testing to determine the nature or extent of any release or threatened release. If there is a reasonable basis to believe that a release or threatened release of a hazardous substance may exist, the Department's authorized employees, agents, or confractors may enter upon any property and conduct investigations. The Department shall give reasonable notice before entering property unless an emergency prevents such notice. The Department may by subpoena require the attendance or testimony of witnesses and the production of documents or other information that the Department deems necessary;

(b) Conduct, provide for conducting, or require potentially liable persons to conduct remedial actions (including investigations under (a) of this subsection) to remedy releases or threatened releases of hazardous substances. In carrying out such powers, the Department's authorized employees, agents, or confractors may enter upon property. The Department shall give reasonable notice before entering property unless an emergency prevents such notice. In conducting, providing for, or requiring remedial action, the Department shall give preference to permanent solutions to the maximum extent practicable and shall provide for or require adequate monitoring to ensure the effectiveness of the remedial action;

(c) Retain confractors and consultants to assist the Department in carrying out investigations and remedial actions;

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(d) Carry out all Tribal programs authorized under the federal cleanup law, the Resource Conservation and Recovery Act 42 U. S.C. § 6901 et seq., as amended, and other federal laws;

(e) Classify substances as hazardous substances for purposes of Section 15(10) of this Act;

(f) Issue orders or enter into consent decrees or agreed orders that include, or issue written opinions under (i) of this subsection that may be conditioned upon, deed resfrictions or other appropriate institutional confrols as may be necessary to protect human health and the environment from a release or threatened release of a hazardous substance from a facility. Prior to establishing a deed resfriction or other appropriate institutional control under this subsection, the Department shall notify and seek comment from the Tribal Planning Department with jurisdiction over the real property subject to such resfriction;

(g) Enforce the application of permanent and effective institutional confrols that are necessary for a remedial action to be protective of human health and the environment;

(h) Require holders to conduct remedial actions necessary to abate an imminent or substantial endangerment pursuant to Section 15(15)(b)(ii)(C);

(i) Provide informal advice and assistance to persons regarding the adminisfrative and technical requirements of this Act. This may include site-specific advice to persons who are conducting or otherwise interested in independent remedial actions. Any such advice or assistance shall be advisory only, and shall not be binding on the Department. As a part of providing this advice and assistance for independent remedial actions, the Department may prepare written opinions regarding whether the independent remedial actions or proposals for those actions meet the substantive requirements of this Act or whether the Department believes fiirther remedial action is necessary at the facility. The Department may collect, from persons requesting advice and assistance, the costs incurred by the Department in providing such advice and assistance; however, the Department shall, where

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appropriate, waive collection of costs in order to provide an appropriate level of technical assistance in support of public participation. The Tribe, Department, and officers, agents, attomeys and employees ofthe Tribe are immune from all liability, and no cause of action of any nature may arise from any act or omission in providing, or failing to provide, informal advice and assistance; and

(j) Take any other actions necessary to carry out the provisions of this Act, including proposing that the Council amend this Act or adopt additional ordinances.

The act requires that the Department of Resource Management, to the best of its ability, implement all provisions of this Act, including the cleanup standards described in Section 9 ofthe Act, and to the maximum extent practicable, institute investigative and remedial actions where appropriate; and:

(a) Provide for public notice of investigative plans, clean up plans, or remedial plans and other significant actions taken under this Act;

(b) Require the reporting by an owner or operator of releases of hazardous substances to the environment that may be a threat to human health or the environment within ninety days of discovery, including such exemptions from reporting as the Department deems appropriate, however this requirement shall not modify any existing requirements provided for under other laws;

(c) Establish reasonable deadlines for initiating an investigation of a hazardous waste site after the Department receives information that the site may pose a threat to human health or the environment and other reasonable deadlines for remedying releases or threatened releases at the site; and

(d) Enforce clean-up standards set forth in Section 9 of this Act.

Under HSCA, the cleanup level for dioxin in soil is .01 parts per billion (ppb). This standard is more sfringent than EPA's action levels of 1 ppb in residential areas and 5 to 20 ppb for commercial/indusfrial areas that it is proposing for the proposed removal action for the St. Regis Site. Consequently, the requirement that a standard

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be at least as sfringent as applicable federal standards is met by the HSCA. See 42 U.S.C. §9621(d)(2)(A)(ii).

V. THE BAND'S CLEANUP LEVEL FOR DIOXIN IS AN APPLICABLE REQUIREMENT

A. The Band has the Authority to Regulate Pollution Sources Impacting or Potentially Impacting the Health of the Reservation Population or the Quality of Reservation Environment

The Band's authority to regulate activities related to the past or threatened releases of hazardous substances on the Reservation is derived from two principal sources. One source is the Band's proprietary rights; the Band has all rights and powers of a property owner with respect to Tribal property. A more fundamental and pervasive source, however, is the Band's inherent sovereignty, which includes the power to regulate the use of property on the Reservation. See Powers of Indian Tribes, 55 I.D. 14 (1934), reprinted in I Opinions ofthe Solicitor 445, 467; Dept. of the Interior, Federal Indian Law 440 (1958).

1. Regulatory Powers Derived from Tribal Property Rights

Like any property owner, the Band may control activities on lands it owns in fee or which are held by the federal govemment in tmst for the benefit ofthe Band. See Morris v. Hitchcock, 194 U.S. 384 (1904); Barta v. Oglala Sioux Tribe, 259 F.2d 553, 556 (8th Cir, 1958). The Band's holdings on the Reservation are, consequently, a significant source of regulatory power. As a proprietor, the Band may condition entry upon its lands on compliance with Tribal regulations. To the extent that the Band may choose to permit constmction activities, mineral development, or other pollution-causing conduct to take place upon such lands, the Band may, by confract or otherwise, require compliance with Tribal pollution-confrol regulations.

Thus, if development contracts are entered into, they may include mechanisms to implement pollution-control regulations. For example, the use of best management practices, submission to Tribal inspection and emergency measures, and agreement to pay fines for noncompliance can be made conditions of Tribal leases or other development agreements.

2. Regulatory Powers Derived from Tribal Sovereignty

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In addition to its proprietary rights, the Band derives regulatory powers from its sovereignty. "Perhaps the most basic principle of all Indian law" is that the powers of Indian tribes are the "inherent powers of a limited sovereignty which has never been extinguished." Powers of Indian Tribes, I Opinions ofthe Solicitor at 447. See Washington v. Confederated Tribes ofthe Colville Reservation, AAl U.S. 134, 152-54 (1980); United States v. Wheeler, 435 U.S. 313, 322-23 (1978); Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 560-61 (1832). A Tribe's inherent sovereign powers extend to both its members and its tertitory. In its 1982 decision, in Merrion v. Jicarilla Apache Tribe, holding that a Tribe has the power to levy a severance tax on a non-member, the Supreme Court emphasized the territorial component of Tribal sovereignty:

The power to tax is an essential atfribute of Indian sovereignty because it is a necessary instmment of self-government and territorial management. This power enables a fribal govemment to raise revenues for its essential services. The power does not derive solely from the Indian fribes' power to exclude non-Indians from fribal lands. Instead, it derives from the fribes' general authority, as sovereign, to confrol economic activity within its jurisdiction, and to defray the cost of providing governmental services by requiring contributions from persons or enterprises engaged in economic activities within that jurisdiction.

Merrion v. Jicarilla Apache Tribe, 102 S. Ct. 894, 901 (1982) (emphasis added); see also New Mexico v. Mescalero Apache Tribe, 103 S. Ct. 2378, 2385 (1983).

One ofthe most basic incidents of sovereignty is a government's power to regulate land use in order to protect the health and welfare ofthe community. See, e.g.. Village of Euclid v. Ambler Realty Co., I l l U.S. 365 (1926). In his 1934 opinion, the Solicitor asserted that:

[OJver all the lands ofthe reservation, whether owned by the tribe, by members thereof, or by outsiders, the tribe has the sovereign power of determining the conditions upon which persons shall be permitted to enter its domain, reside therein, and to do business, provided only such determination is consistent with applicable federal laws and does not infringe any vested rights of persons now occupying reservation land

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under lawfiil authority.

Powers of Indians Tribes, I Opinions ofthe Solicitor at 467. The Solicitor concluded that:

In its capacity as a sovereign, and in the exercise of local self-government, [a fribe] may exercise powers similar to those exercised by any State or nation in regulating the use or disposition of private property, save insofar as it is resfricted by specific statutes of Congress.

M a t 471.

Consequently, Tribes retain all aspects of their sovereignty except those withdrawn by Congress or inconsistent with overriding federal interests. Washington V. Confederated Tribes of Colville Reservation, AAl U.S. at 153-54. Even where Congress withdraws some aspect of Tribal sovereignty, it may nevertheless expressly delegate power to Tribes to administer a governmental role that Congress had previously withdrawn. As the Court of Appeals for the Ninth Circuit held in Nance v. EPA:

Just as a tribe has the authority to prevent the entrance of non-members onto the reservation,... a fribe may exercise confrol, in conjunction with the EPA, over the enfrance of pollutants onto the reservation.

Nance v. EPA, 645 F.2d 701, 715 (1981), cert, denied sub nom.. Crow Tribe of Indians v. EPA, 454 U.S. 1081 (1981).

As demonsfrated below. Tribal regulation of conduct creating environmental hazards, whether by Tribal members or by non-members, is consistent with overriding federal interests. In addition. Congress has expressly delegated to Tribes the power to regulate the quality reservation environments.

a. Tribal Sovereignty Over Members

There has been no implicit divestiture of Tribal sovereignty with respect to its own members. Thus, Tribal regulatory authority over member conduct that causes pollution is unquestioned.

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In United States v. Wheeler, 435 U.S. 313, 323 (1978), the Court characterized Indian Tribes as "unique aggregations possessing atfributes of sovereignty over both their members and their territory." Only with respect to non-members have courts indicated that there has been some diminution of Tribal powers:

The areas in which such implicit divestiture of sovereignty has been held to have occtirred are those involving the relations between an Indian fribe and non-members ofthe tribe....

[T]he powers of self-government, including the power to prescribe and enforce criminal laws, are of a different type. They involve only intemal relations among members of a fribe. Thus, they are not such powers as would necessarily be lost by virtue of a fribe's dependent status.

Id.; see also Montana v. United States, 450 U.S. 544, 563-64 (1981); United States v. Mazurie, 419 U.S. 544, 556-58 (1975).

Regulation of Tribal member activities, causing or confributing to pollution, involves intemal relations among members and is thus an aspect of self-government. It is a retained sovereign power.

b. Tribal Sovereignty Over Non-Members

Indian Tribes retain the inherent sovereign power to exercise a broad range of civil jurisdiction over non-members, including non-Indians. Montana v. United States, 450 U.S. at 565-66; Montana v. EPA, 137 F.3d 1136, 1141 (9th Cir. 1998), cert, denied, 525 U.S. 921, 119 S.Ct. 275, (Oct. 5, 1998). Any doubt concerning the exercise of Tribal civil jurisdiction, even over non-members, in order to protect the reservation environment was put to rest in Montana:

To be sure, Indian fribes retain inherent sovereign power to exercise some forms of civil jurisdiction over non-Indians on their reservations, even on non-Indian fee lands. A fribe may regulate, through taxation, licensing or other means, the activities of non-members who enter consensual relationships with the fribe or its members, through commercial dealing, confracts, leases or other arrangements.... A fribe may also retain inherent power to exercise civil authority over the

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conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health and welfare ofthe fribe.

4 Id The Ninth Circuit Court of Appeals held that Tribes have inherent Tribal

sovereignty to exercise jurisdiction over non-consenting non-members within the exterior boundaries ofthe reservation when regulating to secure the health and safety ofthe Tribe. Montana v. EPA, 137 F.3d at 1140-41. Montana v. EPA involved the authority ofthe Salish and Kootenai Tribes to regulate water quality under the Clean Water Act pursuant to an EPA approval program. The state of Montana, and others, argued that the delegated authority permitted the Tribes to exercise a greater level of authority over non-members than recognized in Montana v. United States. See id. at 1138. The Ninth Circuit disagreed with the state and proclaimed that because waters and water rights are integral to the health and welfare ofthe Tribes, the Tribes retained inherent sovereignty over the conduct of non-members that could pose a threat to such waters. See M at 1141.

Because regulation ofthe release or threatened release of hazardous substances on the Reservation is necessary to protect the health and welfare, as well as the economic integrity, ofthe Band, it clearly is a retained sovereign power. Indeed, the Montana court specifically noted that the power to exercise control over reservation environment is a fundamental corollary to the docfrine that Tribes retain the powers necessary to protect the health and welfare ofthe Tribe. Montana, 450 U.S. at 566 n.l5.

Although the Supreme Court redefined it's the Montana mling and scope of inherent Tribal powers in Brendale v. Confederated Tribes & Bands of Yakima, 492

'• In Montana, the Court concluded that the Crow Tribe did not retain power to regulate non-member hunting and fishing on fee lands. This was attributable to certam deficiencies unique to the Crow case. The Tribe estabUshed no relationship between hunting and fishing on fee lands and the interests ofthe Tribe or its members. Non-member hunters and fishers do not enter into agreements for dealings with the Crow Tribe. Nor did the facts ofthe case suggest that such hunting and fishing threatened the Tribe's economic or political security. Moreover, the complaint did not allege that non-Indian hunting and fishing on fee lands imperils the subsistence or welfare ofthe Tribe. 450 U.S. at 566. See New Mexico v. Mescalero Apache Tribe, 103 S.Ct. 2378, 2384 n.l2 (1983) (emphasizing the limited nature ofthe holding va. Montana). Activities causing water pollution yield the kind of direct impact that were lacking in Montana; accordingly, as we discuss in the text, the federal courts have had no difficulty in holding that tribes retain inherent sovereign power to regulate such activities.

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U.S. 937 (1989), the Supreme Court's more recent decisions has made it clear that Brendale did not erode the Montana mle. See Strate v. A-1 Contractors, 520 U.S 438, 117 S.Ct. 1404, 1413-15 {1991); Montana v. EPA, 137Fed.3dat 1140-41. In a unanimous 1997 opinion, the Supreme Court in Strate explained that:

While Montana immediately involved regulatory authority, the Court broadly addressed the concept of "inherent sovereignty." [Montana, 450 U.S.] at 563, 101 S.Ct. at 1257. Regarding activity on non-Indian fee land within a reservation, Montana delineated—in a main mle and exceptions—the bounds ofthe power tribes retain to exercise "forms of civil jurisdiction over non-Indians." Id. at 565, 101 S.Ct. at 1258. As to non-members, we hold, a fribe's adjudicative jurisdiction does not exceed its legislative jurisdiction.

Strate, 520 U.S. at 453; 117 S.Ct. at 1413.

Tribal civil jurisdiction over non-members has been recognized in a wide variety of contexts. Recent decisions uphold the power of Tribes to adjudicate the contractual rights of non-Indians, to impose taxes on the activities of non-Indians, to apply Tribal health and safety codes to non-Indian buildings, to zone non-Indian lands, and to regulate the exercise by non-Indians of self-help remedies. See, e.g., Williams v. Lee, 358 U.S. 217 (1959) (adjudication of contract disputes); Merrion V. Jicarilla Apache Tribe, 102 S.Ct. 894 (1982) (imposition of severance tax); Washington v. Confederated Tribes of Colville Reservation, AAl U.S. 134 (1980) (imposition of sales tax); Snow v. Quinault Indian Nation, 709 F.2d 1319 (9th Cir. 1983) (imposition of business activity tax); Cardin v. DeLa Cruz, 671 F.2d 363 (9th Cir. 1982), cert, denied, 103 S.Ct. 293 (application of fribal building code); Knight v. Shoshone and Arapaho Tribes, 670 F.2d 900 (10th Cir. 1982) (application of fribal zoning ordinance); Babbitt Ford, Inc. v. Navajo Indian Tribe, 710 F.2d 587 (9th Cir. 1983) (regulation of repossession of personal property).

While Oliphant v. Suquamish Tribe of Indians, 435 U.S. 191 (1978) recognized limitations on a Tribe's criminal jurisdiction over non-Indians, this limitation does not apply to the exercise of a Tribe's civil regulatory jurisdiction.

In Confederated Salish and Kootenai Tribes v. Namen, 665 F.2d 951 (9th Cir. 1982), the Court held that the Tribes could regulate the use ofthe bed and banks of Flathead Lake by non-Indian owners of riparian lands. In a footnote, the Court

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disposed ofthe assertion that "preventing intmsions on the non-Indian's personal liberties" or fulfilling their "justifiable expectations" was an overriding federal mterest that divested Tribal power. "The first alleged interest is too broad and vague — it would seem to mle out any exercise by Indians of civil regulatory jurisdiction over non-Indians yet such exercises have been approved." 665 F.2d at 963 n.30. The second interest was outweighed by the Indians' legitimate expectation of retaining jurisdiction over lands on their reservation. "It is difficult to see why there should be an overriding federal interest in vindicating only the [non-Indians'] expectations — especially where the antitribal policy on which they rest was repudiated over 50 years ago." Id.

The judicial branch has long recognized that Tribes may exercise civil jurisdiction over non-members. See, e.g., Strate v. A-I Contractors, 117 S. Ct. 1404 (1997). In Hamilton v. United States, Al Ct. CI. 282 (1907), for example, the Court of Claims rejected a non-Indian's claim for damages based on tribal confiscation of his land, buildings, and personal property. The court reasoned that "the claimant by applying for and accepting a license to trade with the Chickasaw Indians, and subsequently acquiring property within the limits of their reservation, subjected the same to the jurisdiction of their laws." Id. at 287. And, as early as 1879, the Senate Judiciary Committee observed:

We have considered [Indian fribes] as invested with the right of self-government and jurisdiction over the persons and property within the limits ofthe territory they occupy, except so far as that jurisdiction has been resfrained and abridged by freaty or Act of Congress. Subject to the supervisory confrol ofthe Federal Govemment, they may enact the requisite legislation to maintain peace and good order, improve their condition, establish school systems, and aid their people in their efforts to acquire the arts of civilized life; and they undoubtedly possess the inherent right to resort to taxation to raise the necessary revenue for the accomplishment of these vitally important objects — a right not in any sense derived from the Govemment ofthe United States.

S. Rep. No. 698, 45th Cong. 3d Sess. 1-2 (1879) (emphasis added).

The shared view ofthe executive, judicial and legislative branches that Tribes have the sovereign power to regulate land use distinguishes this situation from Oliphant. See Merrion v. Jicarilla Apache Tribe, 102 S.Ct. at 903; Washington v.

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Confederated Tribes of Colville Reservation, AAl U.S. at 153 (distinguishing Oliphant in light ofthe "widely held understanding within the Federal Govemment. . , that federal law to date has not worked a divestiture of Indian taxing powers"); see also Montana v. EPA, 137 F.3d 1135 (9th Cir. 1998).

B. The HSCA Cleanup Level is Legally Enforceable and Generally Applicable

1. Legally Enforceable

The Band's cleanup standard for dioxin must be considered as an ARAR for the St. Regis Site if it is "legally enforceable" and "of general applicability". 53 Fed. Reg. 51394, 51437, In order to be "legally enforceable" the standard must contain specific enforcement provisions or be enforceable by means ofthe general authority in other laws or in state constitutions. The HSCA has such specific provisions. As noted below. Section 5 ofthe HSCA sets out the manner in which the Department of Resource Management is authorized to enforce HSCA.

Section 5. Enforcement.

(1) With respect to any release, or threatened release, for which the Department does not conduct or confract for conducting remedial action and for which the Department believes remedial action is in the public interest, the Director shall issue orders or agreed orders requiring potentially liable persons to provide the remedial action. Any liable person who refuses, without sufficient cause, to comply with an order or agreed order ofthe Director is liable in an action brought by the Department for:

(a) Up to three times the amount of any costs incurred by the Department as a result ofthe party's refusal to comply; and

(B) A civil penalty of up to twenty-five thousand dollars for each day the party refuses to comply.

The freble damages and civil penalty under this subsection apply to all recovery actions filed on or after the date this Act is enacted and adopted by the Department.

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(2) The Department shall seek, by filing an action if necessary, to recover the amounts spent by the Department for investigative and remedial actions and orders, including amounts spent prior to the date this Act is enacted and adopted by the Department.

(3) The Department may request that the Office of Reservation Attomey bring an action to secure such relief as is necessary to protect human health and the environment under this Act.

4) Civil actions under this section and Section 6 shall be brought in Tribal Court.

Enforcement actions undertaken by the Department of Resource Management are subject to judicial review in Tribal Court.

The HSCA adopted numerical standards for cleanup for surface water, sediment, groundwater, and soil, set forth in Appendix A, Appendix B, Appendix C and Appendix D to the Act. Where comparable laws ofthe state of Minnesota (as revised) are more sfringent than the HSCA standards, the state standards are adopted into and made a part ofthe laws ofthe Band by reference.

2. General Applicability

In order to be "of general applicability" the standard must be applicable to all circumstances covered by the requirement, not just Superfund sites. See OSWER 9234.1 -02 at § § 7.1.1 and 7.1.1.1. Therefore, standards that are promulgated specifically for one CERCLA site are not ARARs. The HSCA was promulgated to address past, current and future environmental emergencies wherever they may be located anywhere within the exterior boundaries ofthe Reservation, not just the St. Regis Site.

The Band is a sovereign Tribe that can act through the Business Committee to exercise Tribal police power to protect the health, welfare, and safety ofthe Reservation Population and the quality of the Reservation Environment. The Band's dioxin standard was adopted as part ofthe HSCA and is recognized under Tribal law. The Band's HSCA was legally promulgated in accordance with the Band's legislative procedures. The HSCA contains specific provisions that direct the Band's Division

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of Resource Management to enforce the Act, including but not limited to the imposition of civil penalties. In addition, as noted above, the HSCA applies Reservation-wide and is not limited to the St. Regis Site.

The proprietary rights ofthe Band and its inherent sovereignty provide independent support for the assertion ofthe Band's cleanup standards and goals. The Band's standard for dioxin is legally enforceable under the HSCA and applies to all lands and waters within the exterior boundaries ofthe Reservation. The appropriate cleanup standard for the proposed soil removal action at the St. Regis Site is the Band's .01 ppb dioxin standard for soil.

VI. THE BAND'S CLEANUP LEVEL FOR DIOXIN IS A RELEVANT AND APPROPRIATE REQUIREMENT

A. Relevant and Appropriate Determination

A cleanup standard or requirement that is not applicable for a particular site, or a particular release, may nonetheless be relevant and appropriate based upon the circumstances and nature ofthe site and the release. A relevant and appropriate determination relies on best professional judgment based on a variety of factors. EPA guidance documents describe the process:

Determining whether a requirement is both relevant and appropriate is essentially a two step process. First, the determination focuses on whether a requirement is relevant based on a comparison between the action, location, or chemicals covered by the requirement and related conditions ofthe site, the release, or the potential remedy. ...The second step is to determine whether the requirement is appropriate by further refining the comparison, focusing on the nature/characteristics ofthe substances, the characteristics ofthe site, the circumstances ofthe release, and the proposed remedial action.

OSWER Directive 9234.1-01 at § 1.2.4.3. Additional factors used in considering whether a standard is relevant or

appropriate to a site includes the goals established for the site, the goals and objectives ofthe requirement, the uses ofthe site, and the entities affected.

B. The Band's Standard is Relevant and Appropriate to The St. Regis Site

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The Band's standard for dioxins is relevant to the St. Regis Site because it is a requirement that is legally enforceable by the Band and generally applicable to all land within the Reservation boundaries. The standard is also appropriate for the St. Regis Site, given the history and the uses ofthe Site and the need to protect the health ofthe Reservation Population and the quality ofthe Reservation Environment.

1. Human Health Considerations Arising from the Uses of the Site and the Entities Affected

EPA's National Environmental Justice Advisory Council (NEJAC) recognizes that disadvantaged groups such as Indian Tribes often depend upon healthy aquatic ecosystems and the fish, plants, and wildlife that these ecosystems support. Because of this dependence, Indian communities are particularly prone to environmental harm. In 2002, the NEJAC issued its report entitled "National Environmental Justice Advisory Council Fish Consumption and Environmental Justice, November 2002" (Fish Consumption Report) which provides specific recommendations to EPA to improve the quality of aquatic ecosystems to protect the health of those communities using or consuming fish, aquatic plants and wildlife. The Fish Consumption Report recommends that EPA "[w]ork expeditiously to prevent and reduce the generation and release of those contaminants to the Nation's waters and air that pose the greatest risk of harm to human health and aquatic resources, including...dioxins."

Additional sampling conducted at the St. Regis Site in 2002 shows that dioxin is still present in soils in and around the Site. As indicated in the draft report from the Human Health Risk Assessment Panel ("Health Report"),^ the remedial action previously implemented at the Site fails to protect the health ofthe Reservation Population. In fact, the Health Report recommended that people be kept off and not come into contact with those areas with soils impacted with dioxins and fiirans. Furthermore, the initial goals ofthe remedial action at the Site include protecting the public and the environment from exposure to PCPs, PAHs, PCCD (dioxin) and PCDF through direct contact or ingestion of groundwater and surface water.^ The Band's dioxin standard under the HSCA of .01 ppb will be more effective than EPA's

^ Bartell, S.M., Draft Report from the Human Health Risk Assessment Panel, the Cadmus Group, Inc. (August 12, 2002). The Health Report is the product of a tribal human health risk assessment panel established in 1997 under an EPA Environmental Justice Grant.

* Miimesota Enforcement Decision Document, issued for St. Regis Paper Company, Minnesota Pollution Control Agency, p. 10, March 5, 1986.

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preliminary remediation goal of 1 ppb at meeting these objectives because it is more sfringent.

Contamination from the St. Regis Site presents serious risks to the health and welfare ofthe Reservation Population and to the quality ofthe Reservation Environment. Because Champion did not disclose the environmental hazards present when they quit claimed portions ofthe Site to the City of Cass Lake and the Band, people are now living within the Site and are directly exposed to the dioxin-impacted soils. People may also be indirectly exposed to the dioxins that migrate into the groundwater supply and into the surface water of nearby lakes and streams. Another pathway for risk to human health is the potential that dioxins may be bioaccumulating in fish tissue and in wild rice plants; consequently, the Band has enhanced exposure through these unique pathways associated with Band members' subsistence and cultural uses of natural resources.

The Band is currently participating in pilot program under the EPA's Plan to Enhance the Role of States and Tribes in the Superfund Program (Plan) which will provide the basis for defining risk assessment exposure factors to characterize risk related to Superfund sites. The criteria for determining the exposure factors will take into account the specific uses of reservation resources by and Tribal members' unique exposure pathways, such as subsistence fishing or cultural uses of resources. This program is currently ongoing.

The Band is particularly concerned about the adverse health effects of dioxins on children. Acknowledging that a large body of scientific evidence demonsfrates that children suffer disproportionately from environmental health risks. President Clinton issued Executive Order 13045 which directs each federal agency to "ensure that its policies, programs, activities, and standards address disproportionate risks to children that result from environmental health risks." 62 Fed. Reg. 19885. The Band's sfringent standard will be more protective ofthe health ofthe children dfrectly and indirectly exposed to dioxin from the St. Regis Site.

In addition, the Site is located near a fish hatchery, an area where wild rice is grown and harvested, and habitat for several endangered species including the bald eagle, the red-shouldered hawk, and the pugnose shiner. Cass Lake and Pike Bay are used by the Reservation Population and the general public for boating, sport fishing and other recreation activities. Consequently, dioxins remaining at the Site have the potential to adversely affect a broad population over a significant area.

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2. The Goals and Objectives of the HSCA are to Protect the Health of the Reservation Population and Quality of the Reservation Environment from Hazardous Substances Such as Those Present at the Site

The HSCA was promulgated by the Band following a determination by its Business Committee that an environmental emergency existed as a consequence of known and undiscovered sites where hazardous substances had been released, or where a release was threatened. The goals and objectives ofthe standards contained in the HSCA are intended to provide for the cleanup of hazardous substances sites and to prevent the creation of future hazards due to improper disposal of hazardous substances on or into the Reservation air, land, surface water and groundwaters.

The standards adopted by the Band are more sfringent than federal standards and more protective ofthe Reservation Population and Environment; existing federal standards fail to take into account the special risks of contaminated resources posed to Indian populations with consumptive pattems reflective of their subsistence diets.

3. EPA's Trust Responsibility to The Band Requires Adoption of the HSCA as an ARAR

Finally, the tmst responsibility owed by the Executive branch ofthe federal govemment to the Band requires that EPA give special consideration to the Band's interests and insure the close involvement ofthe Business Committee in making decisions and managing environmental programs affecting Reservation lands. The Business Committee, in enacting the HSCA, has demonsfrated the Band's interests in the protection ofthe health ofthe Reservation Population and quality ofthe Reservation Environment. EPA, in acting to insure the Business Council's close involvement in making decisions affecting Reservation lands, must consider the HSCA as an ARAR.

The tmst responsibility docfrine derives from the historical relationship between the Federal Govemment and Indian Tribes as expressed in certain treaties and Federal Indian Law. The docfrine imposes fiduciary standards on the conduct of the executive, as carried out through executive agencies like the EPA. The executive and its agencies must act with care and loyalty, make property held in tmst for Indian Tribes income productive, enforce reasonable claims on behalf of Indians,

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and take affirmative actions to preserve tmst property.

Since the early days of its establishment, EPA has recognized the importance of Tribal Governments in regulatory activities that impact reservation environments. EPA's Indian Policy states:

In carrying out our responsibilities on Indian reservations, the fundamental objective ofthe Environmental Protection Agency is to protect human health and the environment. The keynote of this effort will be to give special consideration to Tribal interests in making Agency policy, and to insure the close involvement of Tribal Governments in making decisions and managing environmental programs affecting reservation lands.

"Policy for Administration of Environmental Programs on Indian Reservations," signed by William D. Ruckelshaus, Adminisfrator of EPA, dated November 4,1984), reaffirmed in a 1994 memorandum ("EPA Indian Policy," signed by Carol M. Browner, Administrator of EPA, dated March 14, 1994) (Indian Policy).

To meet its objective, EPA pledged to pursue various principles. The Indian Policy acknowledges its tmst responsibility to Indian Tribes and states that the EPA will "endeavor to protect interests of Indian Tribes when carrying out its responsibilities that may affect reservations. Id. It also directs EPA "to view Tribal Governments as the appropriate non-Federal parties for making decisions and carrying out program responsibilities affecting Indian reservations, their environments, and the health and welfare ofthe reservation populace." Id.

Under the tmst responsibility and its own policies, EPA has a heightened responsibility to the Band to protect the health ofthe Reservation Population and the Reservation Environment. Nothing less than adoption ofthe Band's cleanup level for dioxin as an ARAR for the St. Regis Site will meet this obligation. VII. CONCLUSION

As set out above, the weight ofthe common law, as well as executive and legislative policy supports the role of Indian Tribal governments, exercising their inherent sovereign authority, to adopt laws and to protect human health and the quality ofthe natural environment. Such Tribal laws, where not expressly waived, must be recognized by the EPA as ARARs. It is our conclusion that the Leech Lake

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Band has more than met the standards established by CERCLA and embodied in EPA's ARAR policies for establishing that HSCA is Applicable, or Relevant and Appropriate. Consequently, we further conclude that EPA is obligated to consider the HSCA as an ARAR for determining the cleanup standard that will be adequately protective ofthe Reservation Population that depends on the water and natural resources that comprise the Reservation Environment within which they live, work and maintain their connection with Mother Earth.

Respectfully submitted this 14th day of April, 2003.

SHORT CRESSMAN & BURGESS PLLC

Richard A. Du Bey Connie Sue Martin Special Environmental Counsel

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U.S. EfWIROlWlENTAL PROTECTION AGENCY

SEP 0 1 200^

OFFiCE OF REGIONAL COUNSEL