A State and Local Government Guide to Environmental Program Funding Alternatives

Contents

Environmental Program Funding Alternatives

Implementation of environmental protection programs at the state and
local levels often requires nonfederal government funding. 
Traditionally, funding for environmental programs has come from
general revenue funds.  Now that federal, state, and local
governments are facing fiscal constraints, alternative sources of
funding are becoming important options for implementing nonpoint
source pollution controls and other environmental protection
measures.  Traditional sources of funding, such as taxes and bonds,
are being supplemented by innovative funding sources like special
license plates and income tax checkoffs.

There are four basic ways to fund public programs and facilities: 
current revenues (pay as you go), borrowing (bonding),
intergovernmental transfers/assistance (fees or taxes collected by
one level of government and passed on to another in the form of
loans or grants), and public-private partnerships (private sector
involvement in historically public sector activities).  Since not
every financing source or mechanism is appropriate for every state
or local program,  legal, administrative, and political aspects of
financing must be taken into consideration when selecting funding
alternatives.

This booklet provides an overview of traditional funding mechanisms
and introduces state and local governments to innovative
alternatives to traditional funding.  The focus is on nonpoint
source pollution, but funding sources and mechanisms can be applied
to environmental programs in general.  A list of contacts and
references is included at the back of the booklet to answer
questions and provide additional information.



What Are State Revolving Funds?

State Revolving Funds (SRFs) provide long-term, low-interest loans
to local governments or individuals for capital investments.  The
repayment of these loans over time allows the fund to revolve its
lending ability continuously. In other words, through repayments the
number of available loans is increased.  Established by the Clean
Water Act Amendments of 1987, SRFs are intended to be administered
and operated by the states to provide a permanent source of
financing for state and local government water quality projects. 
SRF assistance can be used for the construction of wastewater
treatment plants, the implementation of approved state nonpoint
source management programs and ground-water protection strategies
under section 319 of the Clean Water Act, and the development and
implementation of estuary conservation and management plans under
section 320 of the Clean Water Act.  

EXAMPLE:  California Uses State Revolving Fund to Control NPS Pollution

California uses part of its State Revolving Fund (SRF) for nonpoint
source pollution control.  The fund is administered by the State
Water Board.  The State Water Board has separated the administration
of the fund from the wastewater treatment facilities program and has
developed a flexible program that will evaluate and select for
funding a wide variety of nonpoint source pollution control
projects.  Eligible projects include construction of demonstration
projects, retention/detention basins, wetlands for stormwater
treatment, and a variety of best management practices to reduce or
remove nonpoint source pollutants.  The nonpoint source program for
the SRF also permits the establishment of substate revolving funds
that can provide funding to private individuals to finance new
onsite septic systems, mound systems, leach fields, etc.


What Are Leases?

A lease is a contract that allows another party to use land or a
building for a specified time, usually in return for repayment. 
Leasing obligations aren't considered debt in most states, and voter
approval for financing is not required.

A lease-purchase agreement (municipal lease) grants the party
holding the property lease (the lessee) the option of applying lease
payments to the purchase of the facility.  The lessee is responsible
for paying taxes.  These agreements can be used to finance the
purchase of environmentally sensitive areas, land for wetlands
restoration, or other projects.  

A sale-lease back arrangement allows the owner of a facility to sell
it to another entity and subsequently lease it back from the new
owner.  Under a tax-exempt lease, for example, Town X sells a sewage
treatment plant to Y Corporation in order to finance upgrades and
repays  Y Corporation's investment with lease payments.  These
arrangements can provide alternative financing for a facility and
may limit a government's liability.

EXAMPLE:  Georgia Leases Shellfish Beds to Commercial Fishermen

Georgia promotes oyster management through its innovative Shellfish
Program.  Georgia does not allow open shellfishing. Recreational
harvesting by the general public takes place in designated public
grounds,  and commercial harvesters must obtain a lease for
harvesting shellfish from the Georgia Department of Natural
Resources, Coastal Resources Division.  Leases are awarded on the
basis of bids for a specific shellfish harvesting area.  The bid is
awarded to the most preferable combination of lease payments and the
strongest management plan.  The shellfish resource management plans
are judged on the basis of certain criteria, such as shell
deposition methods.  Funds gained from the lease program are used to
manage the shellfish program.



What Are Grants?

Grants are sums of money awarded to state or local governments or
nonprofit organizations that do not need to be repaid.  Grants are
awarded for the pur-pose of financing a particular activity or
facility.

EPA grants provide funding for state and local governments to meet
national environmental quality goals.  EPA establishes criteria to
receive grant funds, which applicants must  meet before using the
funds for a specific activity or program.  Section 319 of the Clean
Water Act allocates federal funds to states for implementing
approved nonpoint source management programs.  Grant money can also
be used for post-implementation monitoring and groundwater
assessment as part of an approved NPS pollution control program. 
Section 604(b) of the Clean Water Act requires an allotment of funds
to provide grants to states to carry out water quality management
planning.  Section 314 of the Clean Water Act provides funding for
project grants to states for assessing the water quality of publicly
owned lakes, developing lake restoration and protection plans,
implementing the plans to restore and preserve a lake, and
performing post-restoration monitoring to determine the longevity
and effectiveness of the restoration.  Section 106 of the Clean
Water Act provides state and interstate agencies and Indian tribes
with funding to administer programs for the prevention, reduction,
and elimination of water pollution, for example the prevention and
abatement of surface water pollution.  Other grant programs under
the Clean Water Act include section 604(b) (Water Quality Management
Planning), section 320 (National Estuary Program), section 104(b)(3)
(Water Quality Cooperative Agreements), and section 104(g) (Small
Community Outreach).  Section 6217 of the Coastal Zone Act
Reauthorization Amendments of 1990 (CZARA) requires states to
establish Coastal Nonpoint Source Programs, which must be approved
by both NOAA and EPA.  Approved programs will be implemented through
changes to the state nonpoint source management program approved and
funded by EPA under section 319 of the Clean Water Act and through
changes to the state coastal zone management program approved by
NOAA under section 306 of the Coastal Zone Management Act. 

EXAMPLE:  Sea Grant Funded through NOAA 

The Sea Grant College Chesapeake Bay Studies Program is funded
through an environmental research grant financed and administered by
NOAA.  The program provides a focal point for all of NOAA's
Chesapeake Bay efforts.  It funds research on fish populations,
toxic substance transport, fate and effects, and remote sensing, and
it coordinates directly with the state/federal Chesapeake Bay
Program on issues related to living resources, habitat restoration,
and coastal zone management. 



What Are Public-Private Partnerships?

Public-private partnerships can be defined as private sector
involvement in what historically have been public sector activities. 
Private sector investment in capital facilities reduces the burden
on public budgets.  For example, a developer could build a
stormwater facility large enough to also treat the runoff from
nearby public roads.  Partnerships can be used to pay for capital
and/or operating costs, when neither the public nor the private
entity can afford to fund the project alone.  Capital arrangements
involve private ownership and operation of a public facility. 
Private construction and operating costs are often lower than public
costs. 

Private sector wastewater treatment programs have been 15 to 20
percent more cost-efficient than public programs (USEPA,  The Clean
Air Act of 1990: A Guide to Public Financing Options). 
Public-private partnerships often result in higher-quality service
and shorter implementation time, according to a 1991 survey of state
officials.  However, statutory or regulatory changes needed to
arrange public-private partnerships may delay implementation of a
program.  Other issues that may need to be considered include 
government concern over loss of control in a partnership, political
opposition from government workers, and negative public opinion.

EXAMPLE:  Wetlands Mitigation Partnership

The U.S. Army Corps of Engineers issued a permit to some Florida
developers to restore a degraded 345-acre wetland on land owned by
the city of Pembroke Pines. These entrepreneurs, who call themselves
the Florida Wetlandsbank, sell credits to other developers who have
impacted degraded wetlands elsewhere and have gained approval to
satisfy the state's wetlands mitigation requirements through offsite
mitigation. The Florida Wetlandsbank will transform the land into a
public park.


What Are Taxes?

A tax is a charge against income, property, or the sale of goods and
services.  Most jurisdictions do not require that a tax be used for
a specific purpose but instead use the funds to provide a variety of
public services, such as solid waste management, public safety,
education, and environmental programs.  However, taxes can be
targeted to raise funds for a specific activity.

Property and sales taxes are charged as a percentage of property
value or gross sales and are imposed at the state and local levels. 
Revenue from a property or sales tax can be used to fund projects. 
Dare County, North Carolina, for example, has an economy dominated
by seasonal tourism.  The county uses sales taxes on lodging, meals,
and entertainment to obtain funds to finance public facilities that
must accommodate the infrastructure needs of sudden, but temporary,
population in-creases.  Similar local sales taxes could be used by
a state or local gov-ernment to fund nonpoint pollution control
programs at the local level.

Real estate transfer taxes are assessed as a percentage of property
values when property is sold.  These taxes are imposed on property
buyers, sellers, or both.  Funds raised by such taxes could be
dedicated to help purchase environmentally sensitive lands or to
support resource conservation programs.

Commodity taxes are charged on specific items (commodities) such as
gasoline, cigarettes, and hunting or fishing equipment.  The money
raised could be targeted for environmental programs or services. 
The federal gasoline tax, for example, finances highway
improvements.  Since 1981, a tax on the diesel fuel consumed by
tugboats has helped to finance maintenance of the Nation's system of
inland waterways.

Tax surcharges are fees added to established tax rates.  They are
often used for sudden unforeseen events.  A tax surcharge on
residential sewer bills, for instance, might be used to finance the
replacement of stormwater retention basins destroyed during a
hurricane.

Tax incentives and disincentives.  A tax system can be set up to
encourage or discourage certain behaviors by offering tax reductions
or increases.  Incentives often take the form of state tax credits,
deductions, or rebates.  A tax credit for the use of low-flow
plumbing fixtures, for example, can encourage water efficiency. 
Because of the desire to save money, disincentives often take the
form of fees, taxes, or price increases.  A tax or fee can
discourage the inefficient use of a product because of the increased
cost of using more of a product than needed.

Tax differentiation is a tax incentive used to promote the
consumption of environmentally safe products.  This financing
mechanism involves a surcharge added to the cost of a polluting
product to encourage the consumer to purchase a cleaner alternative.

A selective sales tax can be levied either as a retail tax or as an
inspection fee.  Kansas, for example, charges a per-ton fertilizer
inspection fee, with proceeds going to support the State Water Plan. 
A selective sales tax could fund remediation of agricultural
nonpoint source pollution or could fund research on farming
techniques to reduce environmental impacts.  This tax could apply to
pesticides, herbicides, automotive lubricants, etc.

Tax increment financing is the dedication of incremental increases
in real estate taxes to repay an original investment in improved
public facilities, such as stormwater facilities, that resulted in
increased real estate values.  Tax increment financing is
appropriate for areas where substantial new development is
anticipated as a result of public investment in roads, sewers, or
other infrastructure.  A cleaner watershed, for instance, could
boost neighboring property values.  The tax increment created could
be used to support continued environmental protection programs.


EXAMPLE:  Annual NPS Control Tax

A proposal has been developed to charge Puget Sound, Washington,
landowners an annual nonpoint source pollution control tax based on
property size and land use.  Owners with onsite sewage systems,
livestock, and parcels in areas required to develop comprehensive
storm-water management plans would be assessed a surcharge if land
uses are not managed to reduce nonpoint source pollution.

EXAMPLE:  Tobacco Tax Used to Protect Water Quality

A tobacco tax helps finance Washington State's water quality
protection plan.  In 1986, the Washington legislature passed the
Centennial Clean Water Act, which established a sales tax on tobacco
products.  The law dedicates half of the funds raised to the control
of wastewater discharged directly into marine waters and the other
half to water quality initiatives such as ground water protection. 

EXAMPLE:  Duck Stamps Used to Propagate Waterfowl

In 1974, the Maryland General Assembly enacted a bill requiring all
who hunt waterfowl in the state to purchase a $1.10 stamp annually
that must be signed by the hunter, affixed to his/her statewide
license, and carried while hunting.  Funds from the sale of the
stamps are used for the propagation of waterfowl in the state.  The
cost of the stamp has since increased to $6.00, generating nearly
$400,000 a year.  Similar programs can be used to generate funds for
a variety of environmental programs such as the purchase of
environmentally sensitive habitat.

EXAMPLE:  Tax Incentives

Road capacity can be allocated more efficiently by taxing its users
during peak travel times.  This tax takes the form of a "congestion
toll."  It can be used as an incentive to travel before or after
rush hour, take the bus, or carpool.  The resultant decrease in
traffic could reduce capital outlays for highways by making many
expansion projects unnecessary.  In regions facing severe
transportation and air pollution problems, such as southern
California, road-use tolls are being implemented.  A system of
congestion tolls for drivers crossing the San Francisco-Oakland Bay
Bridge began in September 1993.

Water can be allocated more efficiently by imposing higher prices
during peak hours of use or an increased fee for water use above an
allocated amount.  This economic incentive fosters conservation.

EXAMPLE:  Tax Increment Financing Used to Redevelop Depressed Areas

Tax increment financing is appropriate for areas where substantial
new development is probable.  The City of Orlando, Florida, for
example, created a Community Redevelopment Trust  in 1982 to
establish a fund to redevelop depressed areas of the city.  The city
created a series of revenue bonds to finance public housing,
transportation, and other capital investment.  These bonds are not
a general obligation of the trust or the City of Orlando; they are
secured by an irrevocable lien on the increment in property tax
revenues paid into the Trust Fund and interest earned by the Trust
Fund.


What Are Fees?

Fees are charges for services rendered and are one way for
governments to recover the costs of providing certain services to
the public.  Although laws vary widely, many states require that
fees be set at rates that cover only the actual costs of the
services provided, including administrative services.

Plan review fees are assessed by a local government for conducting
a review of development plans to ensure that they meet certain
requirements.  This technical review is used to determine the
adequacy of stormwater management facilities or erosion and sediment
controls and to ensure proper siting of structures or onsite sewage
disposal systems.  These fees help cover the cost of conducting plan
reviews and inspections.
 
Stormwater utility fees are imposed on property owners to pay for
stormwater management.  The charge can be based on the amount of
runoff generated from the property, the amount of impervious area
(hard surfaces) on the property, or the assessed value of the
property.

Impact fees transfer the costs of infrastructure services (roads,
sewers, stormwater treatment, etc.) needed for private development
directly to developers or property owners.  Unlike user fees, which
recover costs over the life of a project, impact fees are usually
collected in one lump sum at the beginning of a project.  These fees
are particularly attractive to local governments because they
relieve up-front financing pressures on local budgets.  In
California, for example, several wastewater treatment plants have
been financed with fees paid by developers based on the projects'
anticipated treatment requirements.  Impact fees can be used to fund
the installation and maintenance of stormwater management facilities
on newly developed sites.

Inspection fees are charged to cover the costs of making sure that
development plans are properly implemented.  These fees may defray
the program costs of erosion and sediment control, septic system
siting and installation inspections, and stormwater treatment
facility operation and maintenance.

User fees are the most common way to recover the costs of providing
a service.  These fees can be tied directly to the use of a resource
or facility (sports fishing and hunting license fees, park entrance
fees, etc.).  User fees are particularly useful at the local level
where user groups are easily identified.

Product charges, similar to commodity taxes, are fees that can be
added to the price of products that could potentially cause
degradation of water quality, such as nonreturnable containers,
batteries, lubricating oil, fertilizers, and pesticides.  These
revenues can be earmarked for environmental programs.

Capacity credits are a form of financing in which private interests
(usually developers) purchase future capacity in a public facility
such as a  stormwater treatment facility.  Applicants are guaranteed
future access to the excess capacity of that particular facility. 
Where project construction hinges on adequate funding, capacity
credits can contribute to project completion.

Effluent discharge fees are levied on an industrial facility by a
government authority, based on the volume of pollutants discharged
into water.  Under an effluent discharge fee system, a discharger is
required to pay a certain amount for every unit of pollution
discharged into surface water.  The system can be based on water
quality objectives, the costs for financing a pollution abatement
scheme, or effluent standards.  The system has several advantages: 
it allows firms to reduce pollution at lower costs than those
incurred under a command-and-control approach; it provides
incentives to firms to invest in pollution control technology; and
it can generate revenue that can be used to fund activities that
promote environmental quality.  The disadvantages of the charge
system are the complex planning, analysis, monitoring, enforcement,
litigation, and interjurisdictional negotiation required by local
authorities.  In addition, assigning monetary values to pollution
damage may be difficult.

EXAMPLE:  Stormwater Utility Fees

There are more than 100 stormwater utilities in the United States. 
Methods of determining stormwater utility charges vary considerably
around the country,  depending on local stormwater management goals
and conditions.  In general, utilitiesare either publicly owned and
operated enterprises or privately owned enterprises whose ability to
profit from providing public services is regulated by a public
agency.  Utility fees provide a more reliable source of funds for
local stormwater management than do property taxes.

EXAMPLE:  Impact Fees for New Development

Carroll County, Maryland, charges an impact fee on new land
development.  The amount of the fee depends on the type of
development (i.e., a single-family home, commercial development,
etc. ). These fees fund a variety of programs ranging from water
supply protection to elementary school education. 

EXAMPLE:  Homeowners Pay Inspection and Operation and Maintenance Fees

Otter Tail County, Minnesota, has developed an onsite utility to
protect its lakes from contamination due to onsite sewage disposal
system failures. All onsite system owners pay a basic fee for
inspections and administration costs and have the option to pay an
additional amount for additional services.  Operation and
maintenance costs are financed by fees paid by homeowners. 

EXAMPLE:  Effluent Discharge Fees for  Industrial and Municipal Sources

Wisconsin has established an unusually comprehensive fee system for
its water program to recover total direct and indirect program
costs.  The state issues general permits and levies permit fees for
discharges based on volume and type of pollutant.  Such pollutants
are associated with various industrial sources or users, such as
concrete products operations; sand, gravel, or crushed stone
operations; swimming pools; petroleum storage terminals; water
treatment plants; and dredging projects involving uncontaminated
sediments.  This effluent discharge fee program generated more than
$7 million in 1993.


What Are Bonds?

Bonds are a mechanism to borrow capital for a project and distribute
the burden of repayment over the life span of the project among
those who benefit from it.  Just as individuals borrow to finance
their homes through bank-issued mortgages, governments borrow funds
from investors by issuing debt in the form of bonds.  Bonds usually
finance capital facilities, such as erosion control structures and
stormwater treatment facilities.  Typically, bonds are used only to
finance projects that have both known and proven life expectancies.

Short-term bonds are usually payable within  1 year.  Establishing
short-term debt provides interim funding of projects waiting to
receive long-term financing.  There are two categories of short-term
bonds:  notes and tax-exempt commercial paper.  Notes are loans
issued in anticipation of grants, bonds, or taxes.  Tax-exempt
commercial paper is a form of unsecured debt backed by a letter or
line of credit. 

Long-term bonds traditionally match the term of financing with the
life expectancy of the project.  A stormwater treatment facility,
for example, might be expected to perform adequately for 30 years;
therefore, the community could issue bonds that have a term of up to
30 years.  There are two categories of long-term bonds.  Term bonds
are loans for which the entire loan amount and interest are payable
on the final maturity date.  Serial bonds are similar to traditional
home mortgages: the principal and interest are repaid in periodic
installments over the life of the bond.  Long-term bonds can be
issued as general obligation bonds or as revenue bonds, as described
below.

General obligation bonds are long-term municipal bonds that are
backed by the full faith and credit of the state or local
government.  This means that the state or local government pledges
to use all of its taxing and other revenue-raising powers to repay
bond holders.  Both state and local governments have used general
obligation bonds to finance capital projects related to
environmental programs, including purchases of environmentally
sensitive lands.

Revenue bonds are long-term municipal bonds guaranteed solely by the
dedication of project income or system funds (e.g., user fees from
the infrastructure where capital costs are covered by the bond)
rather than by a general tax.  Both state and local governments have
used revenue bonds to provide start-up capital for stormwater
utilities and to finance environmental projects, including the
renovation of wastewater treatment plants.

Bond banks, of which there are at least 11 across the country, are
financial institutions created primarily to provide smaller
communities access to the national bond market to finance
infrastructure projects.  Typically, a bond bank either sells bonds
in the bond market and uses the proceeds to purchase bonds from
local communities or buys bonds directly from local communities and
pools several small issues into one large bond issue to be sold in
the bond market.  Small communities could take advantage of bond
banks to finance environmental infrastructure projects.

EXAMPLE:  $75 Million Bond Passed to Protect  Environmentally Sensitive Lands

Broward County, Florida, residents voted to pass a $75 million bond
to purchase environmentally sensitive lands.  The money has been
used to purchase more than 560 acres of wetlands, pristine uplands,
endangered  species habitat, and lands necessary for maintaining the
integrity of the Everglades ecosystem.  Initial site maintenance
(exotic plant removal, fencing, etc.) will be paid for with bond
money.  Long-term maintenance will be funded as part of the county
parks department's operating budget.



Look to the Future ... Pollutant Trading

Point and nonpoint source pollutant trading involves financing
reductions in nonpoint source pollution in lieu of undertaking more
expensive point source pollution reduction efforts.  A trading
program is intended to produce cost savings to point source
dischargers while improving water quality.  Implementing a trading
program requires a waterbody identifiable as a watershed or segment,
as well as a measurable combination of point sources and
controllable nonpoint sources.  There must be significant load
reductions for which the cost per pound reduced for nonpoint source
controls is lower than the cost for upgrading point source controls. 
Lastly, point source dischargers must face requirements to either
upgrade facility treatment capabilities or trade for nonpoint source
reductions in order to meet water quality goals.

Such a program allows the private sector to allocate its resources
to reduce pollutants in the most cost-effective manner, and it
encourages the development of a watershed-wide or basin-wide
approach to water quality protection.  Such a program also entails
cooperation between agencies, however, and requires a system to
arrive at trading ratios between point and nonpoint source controls.

EXAMPLE:  Pollutant Trading for Nutrients

In a North Carolina watershed, the Tar-Pamlico Basin Association (a
coalition of point source dischargers) and state and regional
environmental groups have proposed a two-phased nutrient management
strategy that incorporates point and nonpoint source pollutant
trading.  The plan requires association members to finance nonpoint
source reduction activities in the basin if their nutrient
discharges exceed a base allowance.  



Be Creative!

The State of Maryland has been imaginative in its acquisition of
funding to restore the Chesapeake Bay.  The Chesapeake Bay Trust was
created in 1985 to bring the financial support of the business
community and private donors together with the many community groups
and educators that need financial assistance for their Bay projects. 
Maryland's programs exemplify successful implementation of
innovative funding alternatives.

State lotteries are becoming a potential source of revenue for
environmental programs.  For example, Kansas and Minnesota use
lottery receipts to help finance natural resource management
programs.

EXAMPLE:  License Plates to Save the Bay

The State of Maryland has implemented a license plate program to
fund its Chesapeake Bay Trust.  More than 400,000 "Treasure the
Chesapeake" license plates have been sold, raising more than $4
million.  In the Baltimore area,  automobile dealers offered Bay
license plates at no cost to their new car and truck customers by
paying the $10 fee in June and July 1992,  raising $20,000 for the
Trust.

EXAMPLE:  Tax Checkoff to Fund Restoration and Conservation Programs

Maryland's tax checkoff for the Chesapeake Bay and Endangered
Species Fund is included on the standard tax form. Taxpayers can
contribute a portion of their taxes to the fund,  which yielded a
record $1.1 million in 1992.  Divided equally between the Chesapeake
Bay Trust and the Department of Natural Resources' Endangered
Species Fund, the checkoff funds a variety of Bay restoration and
conservation programs. 

EXAMPLE:  Lottery Revenues

Kansas uses a portion of its lottery receipts to help finance its
water resource management programs, including wetland protection
activities.  Kansas created the State Water Plan Fund in 1989, for
which half of the revenues are derived from the state general fund
and state lottery funds.  The other half are derived from a system
of fees on municipal water use, industrial water use, stockwater
use, pesticides, fertilizers, and pollution fines and penalties.  In
Minnesota, voters approved state constitutional amendments
establishing the Environmental and  Natural Resources Trust Fund and
a state lottery to finance the fund.




Comparing Your Options

Several funding alternatives may be available for a particular
project.  For example, the following four funding strategies to
control solid waste could easily be adapted to fund nonpoint source
programs: property taxes, tax incentives/disincentives, user fees,
or tax surcharges.   Funding for regional stormwater management
facilities or a shoreline erosion control project could be obtained
in similar ways. 

Capital and operating costs and cost-effectiveness must be carefully
analyzed before choosing a funding alternative.  Legal,
administrative, and political aspects and impacts of each
alternative need to be considered.  One must consider the legal
workability and political attractiveness of a financing mechanism;
the effort needed for implementation, including start-up costs and
costs for ongoing collection and management of funds; the fairness
of distribution of the funding burden among individuals; and the
public's willingness to pay or to make a particular sector pay.


Four Funding Strategies to Control Solid Waste

EXAMPLE:  Tax Incentive/Disincentive 

Estherville, Iowa, uses the pay-by-the-bag approach to trash
collection.  This system gives households an incentive to recycle,
compost, and change their buying habits to reduce the volume of
waste they  generate. 

EXAMPLE:  Property Tax

Fairfax City, Virginia, uses property taxes to finance trash
collection.  Residents are charged a flat annual amount  that is not
related to the volume or type of trash they discard.

EXAMPLE:  User Fee

Hollywood, Florida, charges residents a standard monthly "fee" for
solid waste management services.  This establishes a direct link
between those who use the services and those who pay for them.

EXAMPLE:  Tax Surcharge

Oregon funds solid waste management through proceeds from the Bottle
Bill, a law that requires consumers to pay a deposit on each
container purchased.  The deposit is refunded when the container is
returned for recycling.



For Further Information . . .

BONDS

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program, Office of
Administration and Resources Management.

USEPA.  1988.  Financing Marine and Estuarine Programs:  A Guide to
Resources.  Office of Marine and Estuarine Protection.  EPA Document
No. 503-8-88-001.

For more information about Broward County Bond Issue, contact: 
Broward County Administrator's Office, 115 South Andrews Avenue, Rm
409, Ft. Lauderdale, FL  33301,  ph. (305) 357-7354.

BOTTLE BILLS

For more information on bottle bills, contact:  The Public Interest
Research Group (PIRG) in your area, or PIRG National Headquarters,
215 Pennsylvania Avenue, SE, Washington, DC  20003,  ph. (202)
546-9707. 

CONGESTION TOLLS

World Resources Institute.  1992.  Green Fees: How a Tax Shift Can
Work for the Environment and the Economy.  

For more information on congestion tolls, contact:  World Resources
Institute, 1709 New York Avenue, NW, Washington, DC  20006, ph.
(202) 638-6300.

DUCK STAMPS

For more information on duck stamps, contact:  Duck Stamp Program
Manager, Maryland Department of Natural Resources, Public
Communications Office (D-4), Tawes State Office Building, Annapolis,
MD  21402, ph. (410) 774-2035.

EFFLUENT DISCHARGE FEES

Bernstein, J. Undated.  Alternative Approaches to Pollution Control
and Waste Management.  The World Bank, Urban Management Program.

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program, Office of
Administration and Resources Management.

Washington State Department of Ecology.  1993.  A Summary of Other
States' Wastewater Discharge Permit Fees.  Document No. 93-63.

For more information about Wisconsin's effluent discharge fee
program, contact:  Fee Program Manager, Wisconsin Department of
Natural Resources, P.O. Box 7921, 101 South Webster Street, Madison,
WI  53707, ph. (608) 267-7638.

FEES 

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program, Office of
Administration and Resources Management.

USEPA.  1992.  State and Local Funding of Nonpoint Source Control
Programs.  Office of Water.  EPA Document No.  EPA-841-R-92-003.

Zachmann, B.  1990.  A Nonpoint Source Pollution Control Fee
Proposal.

For more information on fees, contact:  The Environmental Financial
Advisory Board, c/o USEPA, Office of Administration and Resources
Management (3304), 401 M Street, SW, Washington, DC  20460, ph.
(202) 260-1020, fax (202) 260-0710. 

For more information about Maryland's impact fee, contact:  
Director, Chesapeake Bay Local Government Advisory Committee, 777
North Capitol Street, NE, Suite 300, Washington, DC  20002, 
ph. (800) 446-5422.

For more information about Minnesota's onsite utility fee, contact: 
District Officer, Route 2, Box 319, Battle Lake, MN  56515, 
ph. (212) 864-5533.  

For more information about the State of Washington's nonpoint source
pollution control fee, contact:  Shellfish Protection Team,
Washington Department of Ecology, P.O. Box 47600, Olympia, WA
98504-7600, ph. (206) 459-6836.

GRANTS

Government Printing Office.  1991.  Catalog of Federal Domestic
Assistance.

USEPA.  1993.  Watershed Protection:  Catalog of Federal Programs. 
Office of Water.  EPA Document No. 841-B-93-002.

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program, Office of
Administration and Resources Management.

For more information about the Chesapeake Bay Studies Program grant,
contact:  Chesapeake Bay Division, National Marine Fisheries Office
of Habitat Protection, NOAA Chesapeake Bay Office, 410 Severn
Avenue, Suite 107A, Annapolis, MD  21403, 
ph. (410) 280-1871.

LEASING/SELLING

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program, Office of
Administration and Resources Management.
USEPA.  1988.  Financing Marine and Estuarine Programs:  A Guide to
Resources.  Office of Marine and Estuarine Protection.  EPA Document
No. 503-8-88-001.

For more information on leasing/selling, contact:  The Environmental
Financial Advisory Board, c/o USEPA, Office of Administration and
Resources Management (3304), 401 M Street, SW, Washington, DC 
20460, ph. (202) 260-1020, fax (202) 260-0710.

For more information about Georgia's Shellfish Program, contact: 
The Shellfish Program, Georgia Department of Natural Resources, 1200
Glynn Avenue, Brunswick, GA  31523-9990,  ph. (912) 264-7218.

LOTTERY REVENUES

Apogee Research, Inc. 1990.  Financing State Wetlands Programs. 
Office of Wetlands Protection, U.S. Environmental Protection Agency.

For more information on lottery revenues, contact:  Wetlands
Strategies and State Programs Branch, Office of Wetlands, Oceans and
Watersheds, Wetlands Division (4502F), 401 M Street, SW, Washington,
DC  20460, ph. (202) 260-7791.

PAY-BY-THE-BAG HOUSEHOLD COLLECTION

World Resources Institute.  1992.  Green Fees: How a Tax Shift Can
Work for the Environment and the Economy.  

For more information about Iowa's system, contact:  World Resources
Institute, 1709 New York Avenue, NW, Washington, DC  20006, ph.
(202) 638-6300.

POLLUTION TRADING

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program,   Office of
Administration and Resources Management.  

USEPA.  1992.  Incentive Analysis for Clean Water Act
Reauthorization:  Point Source/Nonpoint Source Trading for Nutrient
Discharge Reductions.  Office of Water, Office of Policy, Planning
and Analysis.

PUBLIC-PRIVATE PARTNERSHIPS

USEPA.  1992.  The Clean Air Act of 1990:  A Guide to Public
Financing Options.  Office of Air and Radiation.

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs. Final draft.  Environmental Finance Program, Office of
Administration and Resources Management.  

For more information on the wetland mitigation bank program in
Broward County, contact:  Broward County Department of Natural
Resources Protection, 218 SW 1st Avenue, Fort Lauderdale, FL 33301,
ph. (301) 519-1230.

SPECIAL LICENSE PLATES

Maryland Office of the Governor.  1992.  1992 Chesapeake Bay
Progress Report.

For more information on special license plates, contact:  Office of
the Governor, Governor's Chesapeake Bay Communications Office, State
House, Annapolis, MD  21401, ph. (410) 974-5300, or Chesapeake Bay
Trust, 60 West Street, Suite 200A, Annapolis, MD 21401, ph. (410)
974-2941.

STATE REVOLVING FUNDS

USEPA.  1992.  State and Local Funding of Nonpoint Source Control
Programs.  Office of Water.  EPA Document No.  
841-R-92-003.

USEPA.  1990.  Funding of Expanded Uses Activities by State
Revolving Fund Programs:  Examples and Program Recommendations. 
Office of Water.  EPA Document No.  430-09-90-006.

USEPA.  1988.  SRF Initial Guidance.  Office of Municipal Pollution
Control.

For more information on state revolving funds, contact:  Chief,
Nonpoint Source Loan Unit, Division of Water Quality, State Water
Resources Control Board, 901 P Street, P.O. Box 100, Sacramento, CA 
95801, ph. (916) 657-1043.

STORMWATER UTILITIES

Maryland Department of the Environment.  1991.  Potential Revenues
From Stormwater Utilities in Maryland.  

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs.  Final draft.  Environmental Finance Program,  Office of
Administration and Resources Management.

USEPA.  1992.  State and Local Funding of Nonpoint Source Control
Programs.  Office of Water.  EPA Document No. 841-R-92-003.

USEPA.  1992.  Storm Water Utilities:  Innovative Financing for
Storm Water Management.  Draft final report.  

For more information on stormwater utilities, contact:  Water Policy
Branch, Office of Policy Analysis, Office of Policy, Planning and
Evaluation, USEPA (2121), 401 M Street, SW, Washington, DC  20460,
ph. (202) 260-2756.

For more information on stormwater utilities, contact:  The
Environmental Financial Advisory Board, c/o USEPA, Office of
Administration and Resources Management (3304), 401 M Street, SW,
Washington, DC  20460, ph. (202) 260-1020, fax (202) 260-0710.

TAX CHECKOFFS

Maryland Office of the Governor.  1992.  1992 Chesapeake Bay
Progress Report.

For more information on tax checkoffs, contact:  Office of the
Governor, Governor's Chesapeake Bay Communications Office, State
House, Annapolis, MD  21401, ph. (410) 974-5300, or Chesapeake Bay
Trust, 60 West Street, Suite 200A, Annapolis, MD  21401, ph. (410)
974-2941.

TAXES

Government Accounting Office.  1993.  Implications of Using
Pollution Taxes to Supplement Regulation.  Document No.
GAO/RCED-93-13.

USEPA.  1992.  Alternative Financing Mechanisms for Environmental
Programs.  Final draft.  Environmental Finance Program,  Office of
Administration and Resources Management.

USEPA.  1992.  Protecting Coastal and Wetlands Resources:  A Guide
for Local Governments.  Office of Water.  EPA Document No.
842-R-92-002.

USEPA.  1988.  Financing Marine and Estuarine Programs:  A Guide to
Resources.  Office of Marine and Estuarine Protection.  Document No.
503-8-88-001.

For more information about the State of Washington's tobacco tax,
contact:  House Office of the Budget, Second Floor, House Office
Building, MS AS33, Olympia, WA  98504, ph. (206) 786-7107, or House
Ways and Means Committee, MS AS33, Olympia, 
WA 98504, ph. (206) 786-7136.



Additional Information on Selected Reference Materials

USEPA.  1992.  Alternative Financing Mechanisms 
for Environmental Programs. Final draft.  Office of 
Administration and Resources Management.

This report provides information to resolve two types of funding
shortfalls:  state capacity (program personnel) and capital
infrastructure needs.  This comprehensive encyclopedia of
alternative financing mechanisms can be used as an information
resource for states and local governments.  It is intended to
provide information about principal features of alternative
financing mechanisms, their relative advantages and disadvantages
(with particular attention given to administrative considerations),
and some of the key questions and issues associated with their use.

For more information contact:  U.S. EPA, Office of Administration
and Resources Management, Office of the Comptroller, Resource
Management Division (3304), 401 M Street, SW, Washington, DC  20460,
(202) 260-1020.

U.S. EPA's Environmental Financing Information Network (EFIN)

EPA's Environmental Finance Program manages the Environmental
Financing Information Network (EFIN) to disseminate financial
information to public entities.  This electronic on-line database
provides information on financing alternatives for state and local
environmental programs and projects.  You can use EFIN to search for
environmental financing approaches, publications, and activities. 

For more information contact:  U.S. EPA, EFIN Center, Environmental
Finance Program, Office of the Comptroller (3304), 401 M Street, SW,
Washington, DC  20460, (202) 260-0420.



Document Distribution Centers

There are five national sources for the distribution of  
EPA publications:

EPA's Public Information Center (PIC)
Phone:  (202) 260-7751  Fax:  (202) 260-6257
The PIC provides the main contact between the public and EPA with a
visitor's center featuring environmental videos, photographic
displays, and databases.

Center for Environmental Research Information (CERI)
Phone:  (513) 569-7562  Fax:  (513) 569-7566
CERI is the focal point for the exchange of scientific and technical
environmental information produced by EPA.  It supports the
activities of the Office of Research and Development, its
laboratories, and associated programs nationwide.

National Center for Environmental Publications and 
Information (NCEPI)
Phone:  (513) 891-6561  Fax:  (513) 569-6685
The central dissemination point for EPA is NCEPI, which has 4,200
current titles and more than 9 million copies of publications and
multimedia products.  NCEPI has an electronic ordering and inventory
system available on EPA's mainframe for EPA staff.  The system links
EPA regions, program offices, and field offices.

National Technical Information Service (NTIS), 
U.S. Department of Commerce
Phone:  (703) 487-4650  Fax:  (703) 321-8547

U.S. Government Printing Office (GPO)
Phone:  (202) 783-3238  Fax:  (202) 512-2250

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