[Senate Hearing 106-919]
[From the U.S. Government Publishing Office]
S. Hrg. 106-919
SUCCESSFUL STATE ENVIRONMENTAL PROGRAMS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
ON
OVERSIGHT OF PROGRAMS DELEGATED BY THE EPA TO STATE DEPARTMENTS OF
ENVIRONMENTAL PROTECTION
__________
MAY 2, 2000
__________
Printed for the use of the Committee on Environment and Public Works
U.S. GOVERNMENT PRINTING OFFICE
68-419 cc WASHINGTON : 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
one hundred sixth congress, second session
BOB SMITH, New Hampshire, Chairman
JOHN W. WARNER, Virginia MAX BAUCUS, Montana
JAMES M. INHOFE, Oklahoma DANIEL PATRICK MOYNIHAN, New York
CRAIG THOMAS, Wyoming FRANK R. LAUTENBERG, New Jersey
CHRISTOPHER S. BOND, Missouri HARRY REID, Nevada
GEORGE V. VOINOVICH, Ohio BOB GRAHAM, Florida
MICHAEL D. CRAPO, Idaho JOSEPH I. LIEBERMAN, Connecticut
ROBERT F. BENNETT, Utah BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas RON WYDEN, Oregon
LINCOLN CHAFEE, Rhode Island
Dave Conover, Staff Director
Tom Sliter, Minority Staff Director
(ii)
C O N T E N T S
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Page
MAY 2, 2000
OPENING STATEMENTS
Baucus, Hon. Max, U.S. Senator from the State of Montana......... 5
Lautenberg, Hon. Frank R., U.S. Senator from the State of New
Jersey......................................................... 8
Smith, Hon. Bob, U.S. Senator from the State of New Hampshire.... 1
Article, There's Smog in the Air, But It Isn't All Pollution. 4
Thomas, Hon. Craig, U.S. Senator from the State of Wyoming....... 7
WITNESSES
Bradford, Brent C., Deputy Director, Utah Department of
Environmental Quality.......................................... 30
Prepared statement........................................... 124
Report, EPA Vision and Operating Principles for Environmental
Management................................................. 126
Resolution, Utah Legislature................................. 135
Responses to additional questions from:
Senator Chafee........................................... 134
Senator Lautenberg....................................... 132
Senator Smith............................................ 127
Grumet, Jason S., executive director, Northeast States for
Coordinated Air Use Management................................. 43
Article, Heavy-Duty Diesel Emission Reduction Project........ 157
Prepared statement........................................... 152
Responses to additional questions from Senator Lautenberg.... 159
Guerrero, Peter F., Director, Environmental Protection Issues,
General Accounting Office...................................... 11
Prepared statement........................................... 61
Report, Collaborative EPA-State Efforts Needed to Improve New
Performance Participation System...........................68-100
Responses to additional questions from:
Senator Chafee........................................... 67
Senator Smith............................................ 66
McCabe, W. Michael, Acting Deputy Administrator, U.S.
Environmental Protection Agency................................ 9
Prepared statement........................................... 50
Responses to additional questions from:
Senator Chafee........................................... 57
Senator Lautenberg....................................... 58
Senator Smith............................................ 54
Olson, Erik D., senior attorney, Natural Resources Defense
Council........................................................ 42
Prepared statement........................................... 147
Scarlett, Lynn, executive director, Reason Public Policy
Institute...................................................... 39
Article, Moving to a New Environmentalism.................... 144
Prepared statement........................................... 136
Responses to additional questions from Senator Smith......... 141
Seif, James, Secretary, Pennsylvania Department of Environmental
Protection..................................................... 28
Letter, supplement to testimony.............................. 122
Prepared statement........................................... 119
Responses to additional questions from:
Senator Chafee........................................... 124
Senator Smith............................................ 122
Shaw, R. Lewis, Deputy Commissioner, Environmental Quality
Control, South Carolina Department of Health and Environmental
Control, and President, Environmental Council of the States.... 19
Article, Role of State Governments in Environmental
Protection Has Increaseed.................................. 102
Prepared statement........................................... 100
Report, State Air Pollution Control Program Survey, 1999..... 104
Responses to additional questions from:
Senator Chafee........................................... 110
Senator Lautenberg....................................... 111
Senator Smith............................................ 106
Senator Voinovich........................................ 110
Varney, Robert W., Commissioner, New Hampshire Department of
Environmental Services......................................... 26
Prepared statement........................................... 112
Responses to additional questions from:
Senator Chafee........................................... 117
Senator Smith............................................ 113
ADDITIONAL MATERIAL
Letter, Georgia Department of Natural Resources.................. 167
Statement, Texas Natural Resource Conservation Commission........ 165
SUCCESSFUL STATE ENVIRONMENTAL PROGRAMS
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TUESDAY, MAY 2, 2000
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 10:05 a.m. in
room 406, Senate Dirksen Building, Hon. Bob Smith (chairman of
the committee) presiding.
Present: Senators Smith, Baucus, Lautenberg, Thomas, and
Chafee.
OPENING STATEMENT OF HON. BOB SMITH,
U.S. SENATOR FROM THE STATE OF NEW HAMPSHIRE
Senator Smith. The Environment and Public Works Committee
hearing will come to order.
I'd like to say good morning, everyone. I'd like to welcome
everyone to today's hearing on successful State environmental
programs, and particularly thank the witnesses for some very
enlightening written testimony. The materials we've received I
think reflect the importance of this issue, as well as the
passion and the innovative spirit that the States are bringing
out to environmental protection.
This is the second in what will be a series of general
oversight hearings that we plan to conduct at the full
committee level.
As I mentioned when the committee held its first oversight
hearing on EPA's proposed budget for 2001, I wanted to step
back a bit and take a look at the big picture of environmental
protection. We will learn about programs that work. We might
hear some about others that don't. But I hope we'll get many
suggestions for some new approaches to some old problems, and
perhaps in so doing not create more in the future.
I hope that we're going to hear about opportunities to
improve environmental protection, providing the States the
flexibility to identify their own priorities and to develop
their own programs, and I believe that's very essential to
improving environmental protection.
It has been said before, but it is worth repeating, that
one size does not fit all. There's no way that we could look at
any agency in Washington and draft an environmental law that
says it applies to every single town, every single community,
every single environmental problem in America. My goal over the
long term will be to develop an EPA authorization bill that can
incorporate some of the concepts that are discussed in these
hearings. Today's hearing is the first step in that very long
process.
Over the past 30 years, Congress and the EPA have taken
what has been called a ``stovepipe approach'' to environmental
protection--one law to address air, one law to address water,
one law to address endangered species, another to address toxic
wastes in the ground, and so forth. The problem is that these
laws often don't connect. There's no connection between the
stovepipes.
That approach, when we first began with environmental
protection, was necessary. We were desperate. We had problems,
and we needed to address them, and we needed to address them in
a hurry. The question is: do we still need to stay with that
kind of focus, or should we do something that connects and
prioritizes these various stove pipes that we talk about.
In the 1970's, we were faced with rivers that were catching
fire, raw sewage being discharged directly into our rivers and
streams, and smokestacks billowing untreated fumes and toxic
wastes, threatening our neighborhoods, so we did have an end-
of-pipe solution, but the environmental problems we face today
have evolved and they are more complex--problems that often
can't be solved by the old approach.
The Clean Air Act amendments of 1990, for example, imposed
a mandatory oxygenate requirement for gasoline. To meet that
mandate, the refiners put MTBE in the gasoline supply. That
same MTBE is now causing serious groundwater contamination
throughout our country in tens of thousands of wells, not to
mention lakes and streams, all over America.
The remedy addressed one problem--air pollution--but it
created another one even greater, contamination of the
groundwater.
The old approach to environmental protection has been
equally ineffective in targeting limited resources on the most
significant environmental problems. Under current law, for
example, a company may be required to spend tens of millions of
dollars on a pump-and-treat system to try to clean up an
aquifer contaminated with DNAPLs--dense, nonaqueous-phase
liquids--just what I always thought I'd be talking about when I
became a U.S. Senator--even though the regulators know that the
cleanup effort will almost certainly not be successful, because
DNAPLs cling to the rocks and cannot be removed usually by
pump-and-treat, as many in the audience know.
But if the laws were more flexible, then those same
resources might be spent on other priorities and we could
contain, if that aquifer could be contained, and we could use
the money somewhere else. It might be better spent, for the
time being, to clean up another problem. So we need to look at
a holistic approach, moving from pipe to pipe.
This point was made very well in a recent article in the
``Washington Post'' just this past Sunday. Let me read a quote
from that. The piece was entitled, ``There's Smog in the Air,
but it isn't all Pollution.'' Jonathan Rauch cited a 1998
``Resources for the Future Assessment of U.S. Environmental
Policy'' that concluded the following: ``Nine major laws and
hundreds of minor ones govern environmental policymaking. The
resulting policies are fragmented, complex, disjointed, beset
by rigidity and lack of coherence. Worse, priorities have
changed little since the EPA was founded in 1970, with a main
focus on water, air, and traditional toxins, even though other
problems, such as radon, are now more pressing.''
Mr. Rauch went on to note in that article that,
``Environmental policy is obsessed with cleanliness and
chemicals, chasing smaller and smaller quantities of less and
less dangerous substances, and that is still what the law is
doing, and in many of the same ways. It is fighting the old war
with the old tactics, but the world has changed.''
I would ask unanimous consent to include a copy of that
article in the hearing.
The point is right now we need new, innovative, flexible,
and more-effective weapons to deal with the environmental
problems. We have to solve the environmental problems we have
today, but we don't want to create more for tomorrow. I think
that's the essence of what we are about here.
The States will be the key to expanding the toolbox and
successfully solving the environmental issues of the 21st
century.
In the ``Almanac of American Politics 2000,'' Michael
Barrone wrote, ``The initiative in shaping public policy is
leaching out of Washington to the States, the localities, and
the private sector.'' I wish it had been flowing out a little
faster than leaching out.
We will hear today from many people that States are taking
the first steps to implement innovative new approaches to
environmental problems. They are setting priorities. They are
developing partnerships with EPA and the private sector. And
they are achieving real results on the ground. They are taking
a holistic approach to the environment. They're making
decisions based on good science, on risk assessment, and other
tools in the box to maximize environmental benefits with
limited resources, and I think not only should we listen to the
States, we ought to encourage and promote these successful
State programs.
Two weeks ago I was in a symposium in New Hampshire
sponsored by the University of New Hampshire on environmental
issues. It brought together some of the best, most creative
minds in the State of New Hampshire, and some even from outside
of the State of New Hampshire. I heard a lot of ideas about how
we in Congress can improve our environmental laws to make them
more effective and achieve better results. It is amazing what
you learn when you listen to people on the job every day out
there on the forefront who are doing the environmental cleanup.
One of the most consistent themes of that conference was
flexibility. ``Give us the flexibility. Give us the
responsibility. Federal funding, yes, where needed. Help us out
with resources when we need it, but let us do the job. Let us
do the job. We'll get it done and we'll do it right.'' And I
believe that the States have a good story to tell in this
regard, and I think it is time we start learning and it is time
we start listening--not just listening with testimony, but
reacting to that testimony and helping them.
So I look forward today to hearing from all the witnesses,
and especially from my friend from New Hampshire, Bob Varney,
on the performance partnership system, which is working so well
in New Hampshire, where New Hampshire has negotiated a
performance partnership agreement with the EPA that allows it,
the State, to identify priorities, and, within certain
parameters, tailor its limited resources to address its own
unique environmental problems and priorities.
So I believe that we should encourage and build upon these
kinds of cooperative agreements that give States flexibility,
while still holding them accountable.
I look forward to hearing about the performance partnership
act agreements, as well as other information and testimony from
the witnesses.
Senator Smith. At this time, I would yield to my colleague,
the ranking member, Senator Max Baucus.
[The article referenced in Senator Smith's statement
follows:]
[From the Washington Post, April 30, 2000]
There's Smog in the Air, But It Isn't All Pollution
(By Jonathan Rauch)
Thirty years ago, President Nixon, who was soon to announce that he
would seek the creation of an Environmental Protection Agency, left
little doubt about what he wanted to protect. ``The 1970's absolutely
must be the years when America pays its debt to the past by reclaiming
the purity of its air, its waters, and our living environment,'' he
said as he signed the National Environmental Policy Act.
Purity; clean air; clean water. Nixon's words aptly framed the
1970's environmental agenda. The good news today is that the country
has succeeded with that agenda beyond most expectations. The bad news
is that most people in the country don't know it. The public's
ignorance is not at all good for the environmental movement.
While activists came together last weekend to celebrate Earth Day
2000, the public celebrated Earth Day 1970 for the 31st time.
American environmentalists have one of the great American success
stories to tell, if only they would tell it. For example, in June 1969
the Cuyahoga River in Cleveland caught fire (not for the first time);
that river burns no longer, and the EPA estimates that the proportion
of major U.S. lakes, rivers and streams that are safe for fishing and
swimming has doubled since 1970, to about 70 percent. Today, the most
toxic thing about the once-foul Potomac River is the view of Rosslyn in
Northern Virginia.
The record on air pollution is more striking still. Since 1970, the
population has grown by almost a third, and both the gross domestic
product and the number of miles we rack up while driving have more than
doubled. The sulfur dioxide and carbon monoxide levels are down by two-
thirds, nitrogen oxide by almost 40 percent, ozone by 30 percent; lead
has effectively been banished from the air. In the cities, unhealthy
air days are down by more than half, just since 1988. All told, the
volume of toxic substances released into the atmosphere has dropped 42
percent since then. ``Pollution in all categories has declined, and
pollution has declined even relative to domestic manufacturing
output,'' says Gregg Easterbrook, whose 1995 book, ``A Moment on the
Earth: The Coming Age of Environmental Optimism,'' was denounced by
some environmental activists as inexcusably cheery.
But here's the really odd thing: Much of the public doesn't believe
it. In March, Environmental Defense (formerly the Environmental Defense
Fund) commissioned an Earth Day poll. A clear majority of the 1,000
adults surveyed, 57 percent, said that U.S. environmental conditions
are worse today than 30 years ago; 67 percent agreed that ``Despite the
Clean Air Act and Clean Water Act, air and water pollution seem to
continue to get worse.'' Young people were even gloomier than older
people.
''We were surprised,'' says Steve Cochran Environmental Defense's
spokesman. ``It's clear that people haven't taken much heart in the
progress that's been made.'' Other surveys confirm the public's gloomy
outlook: A Newsweek poll conducted this month by Princeton Research
Associates found 52 percent saying the country has made only ``minor
progress'' toward solving environmental problems since the first Earth
Day, and 23 percent saying ``no progress'' or that the problems had
gotten worse. Plainly, where the environment is concerned, the public
and reality have parted ways.
Why is the public so unaware of the good news? In part, because
journalists are so reluctant to report it. In a series of studies, the
Washington-based Center for Media and Public Affairs has found that
``the news makes environmental problems look worse than the scientific
experts believe,'' according to Robert Richter, the nonprofit center's
president. Critical stories on governments' and businesses' handling of
environmental problems vastly outnumber positive ones, the center
finds, and stories about impending crises are incessant.
Fueling that tendency are environmentalists themselves. The radical
ones have spent the past 30 years gleefully forecasting one apocalypse
after another. Mainstream groups are calmer, but they don't spend much
time talking about how much cleaner your air is. The environmental
community, notes Environmental Defense's Cochran, has always seen its
main job as pointing out problems.
Fair enough, up to a point; you can't convince people to change the
world by telling them that everything is just fine. But decades of
alarmism have extracted a price. In a roundabout way,
environmentalists' gloom has hobbled environmentalism.
In 1998, Resources for the Future, an environmental think tank,
published an assessment of U.S. environmental policy. The verdict was
quietly scathing Nine major laws and hundreds of minor ones govern
environmental policymaking, the think tank noted; the resulting
policies are ``fragmented,'' ``complex,'' ``disjointed,'' beset by
``rigidity and lack of coherence.'' Worse, priorities had changed
little since the EPA was founded in 1970, with the main focus on water,
air and traditional toxins, even though other problems, such as radon,
are now more pressing. ``The system is not all that different from the
way it was in 1970,'' says Terry Davies of Resources for the Future,
who was an author of the study.
Twentieth-century environmentalism began, under Theodore Roosevelt,
as a brawny conservationism. But its rebirth in the 1960's sprang from
worries about pesticides and carcinogens and smoggy air and burning
rivers. So Congress and the EPA dedicated themselves to eliminating
incremental nanograms of pollutants: ``microenvironmentalism,'' to
borrow a term from Peter Huber of the Manhattan Institute.
Environmental policy became obsessed with cleanliness and chemicals,
chasing smaller and smaller quantities of less and less dangerous
substances.
That is still what the law is doing, and in many of the same ways.
It is fighting the old war with mostly the old tactics. But the world
has changed. ``The threats to health and safety from air and water are
negligible,'' says Robert W. Crandall, an economist at the Brookings
Institution. The environmental movement, unlike the environmental
policy, has evolved in step with that reality. What primarily worries
serious environmentalists these days is not the microcosm but the
macrocosm: big, global issues such as extinction and biodiversity,
depleted stratospheric ozone, urban sprawl, rain forest destruction
and, above all, global warming.
But the public yawns. It stands squarely behind the agenda of the
first Earth Day. In a poll earlier this month, the Gallop Organization
found that the public frets a lot about air and water pollution,
worries much less about ozone depletion, rain forests and habitat loss,
and cares hardly a fig for extinction and urban sprawl. At the bottom
of the list? You guessed it: global warming. The Environmental Defense
poll turned up similar results, with global warming ranked second to
last, ahead of only urban sprawl.
In other words, the public's priorities almost perfectly invert the
environmental movement's priorities. Perversely, the aspirations of
Gore-era environmentalism are now blocked by the public's commitment to
Nixon-era environmentalism.
And who can blame the public? Americans' capacity for worry is
limited, and environmentalists are asking them to worry about
everything at once. Air and water are still dangerous, they tell us,
but global warming is even more dangerous--super-dangerous! Perhaps
inevitably, their message drowns itself out. If, as environmentalists
and the media and the movie ``Erin Brockovich'' remind us, the air and
water are still full of poisons, then the 1970's agenda is as urgent as
ever. And if we're still one breath or sip away from bowel cancer,
global warming will have to wait.
So gloom has propelled environmentalism forward, but at the steep
price of leaving its followers behind. The movement has proved expert
at giving alarm; now, against its every instinct, it needs to learn to
give hope. To get beyond 1970, it must at long last swallow its pride
and concede victory.
OPENING STATEMENT OF HON. MAX BAUCUS,
U.S. SENATOR FROM THE STATE OF MONTANA
Senator Baucus. Thank you very much, Mr. Chairman. I
commend you for holding these hearings. It is always good to
take perspective of where we are and how well these statutes
work. Actually the subject of this hearing does cut to the
heart of one environmental protection. The relationship between
Federal and State environmental programs is the main question.
What do we do about all of this?
The history on this subject, as you know, Mr. Chairman, is
long. The first Federal environmental laws, like the Water
Pollution Control Act of 1956 and the Air Quality Act of 1967,
left the States with the primary responsibility for pollution
control. The Federal Government at that time conducted research
and provided technical assistance, but that was pretty much it.
In the 1970's, under the leadership of this committee,
Congress concluded that those early laws had fallen short, and
a national approach was needed. Bipartisan laws, such as the
Clean Air Act of 1970 and the Clean Water Act of 1972, were
enacted by Congress and signed by President Nixon. They shifted
primary authority for the formulation and enforcement of
environmental standards to the EPA, but also authorized EPA to
delegate that authority to qualified States.
Subsequent environmental laws, like the Safe Drinking Water
Act and RCRA, followed the same model.
This system of Federal standards and State delegation has
had mixed results. On the one hand, it has helped make
environmental protection one of the great success stories of
the post-cold-war era. Since 1970's, our population has
increased by 70 million people, but our air and our water are
definitely cleaner, by a good measure. Clearly, a system of
strong national environmental laws has been a key to this
success.
On the other hand, many people, including many capable and
committed State environmental officials, believe that the
Federal/State relationship is not working as well as it should.
They want more flexibility. They want to be equal partners, not
junior partners.
These are not new issues. We have been wrestling with them
for some time. In fact, in 1993, when I became chairman of the
committee, one of our first hearings was on this very same
subject.
As I said then, I'm prepared to explore reforms in the
Federal/State relationship. I don't believe that the Federal
Government always knows best. But we should explore these
reforms carefully. The current system of national environmental
laws has been, for all of its imperfections, a great success.
We should not make major changes to the current regulatory
system without careful consideration of its implications.
To my mind, there are three issues. First, how does EPA set
the basic criteria to determine whether a State is qualified to
assume primary responsibility for implementing a national
environmental law? In the case of some environmental laws, this
may be no longer a big issue because most States already have
been delegated the necessary authority. In some other cases,
however, it is an issue. For example, as we consider reforms to
Superfund, the Endangered Species Act, and the remediation
waste program, we need to consider appropriate criteria for
increased State roles.
The second issue is the appropriate level of Federal
oversight. We don't want the EPA to micromanage the States. We
don't want people to focus on bean counting rather than on real
environmental performance. However, even in a reformed system,
the Federal Government does have an important role.
A former chairman of this committee, John Chafee--who was
the father of one of our eminent colleagues on this committee--
made this point during a 1993 committee hearing. He noted that
States sometimes need a threat of Federal enforcement in order
to persuade their own legislatures to take necessary action.
Senator John Chafee said, ``I don't know how in Rhode
Island or Montana or any place else we could maintain strong
environmental programs without the assurance that other States
were at least having a minimal environmental protection
standard likewise. We have tremendous competitive pressures
saying, ``You're forcing us to do things that they're not doing
next door.'' I think it is a point well worth remembering.
Which brings me to the third issue, resources. If we move
to a system that is more flexible and that looks at
environmental performance rather than more static measures, we
should understand that the new system will require more
resources than the current one--it will require more people and
more money.
If we are going to allow flexible permits that allow
tradeoffs between, for example, air emissions and water
discharges, they will take time to measure the tradeoffs and
consult with people in the affected community. Then it will
take careful monitoring to assure that the system is delivering
the promised benefits.
Don't get me wrong. I'm all for more-integrated and
flexible approaches. I have proposed multimedia systems of my
own. But I agree with Jason Grumet of NSCAUM who says in his
prepared testimony that ``without increased resources, well-
intentioned efforts toward flexibility will ultimately be
undermined by a small minority of interests who will seek to
exploit this flexibility for private gain.''
With that, Mr. Chairman, I thank you again for taking
another look at this issue. It is one that we should look at,
but it is one that does not have easy answers.
Thank you.
Senator Smith. Thank you, Senator Baucus.
Senator Thomas?
OPENING STATEMENT OF HON. CRAIG THOMAS,
U.S. SENATOR FROM THE STATE OF WYOMING
Senator Thomas. Mr. Chairman, I will just file a short
statement, please.
I am glad, too, that you are holding this hearing. This is
a subject that we all deal with. I've really come to the
conclusion that much of it is a mentality, a culture of sorts.
It is like contracting. If you are going to contract to
someone, then you must have the supervisory capacity to act, or
you should get out of the contract business.
I think a lot of the local people in the agencies do seek
to really have partnerships, but often from the top down they
are not allowed to do that.
There are a lot of successes. Wyoming, for instance, had
some real successes on underground storage tanks, and they did
pretty much themselves.
So I hope that, as we go about talking about partnerships,
that we commit to finding the technique, culture, or mentality
to let that happen. I believe that's what holds us much of the
time.
Thank you, sir.
Senator Smith. Thank you, Senator Thomas.
Senator Lautenberg?
OPENING STATEMENT OF HON. FRANK R. LAUTENBERG,
U.S. SENATOR FROM THE STATE OF NEW JERSEY
Senator Lautenberg. Thank you, Senator Smith, for holding
this hearing.
I've listened carefully to what you had to say, and I agree
that there has to be more cooperation. That seems to be a theme
upon which we can all agree. How do you put that into place
without discriminating against some people who live in States
that aren't performing quite up to the standards that might be
best for their health? Are we to stand by and say, ``There is a
pollution discharge from industrial States of the Midwest and
the air floats over New Jersey, New York, Connecticut, and
Rhode Island. That's that Midwestern State's decision.'' Well,
it's not, because it's not just their air; it is our air, too.
When it comes to rivers and streams, it's not their streams; it
is our streams, too. When it is the Hudson River that separates
New Jersey from New York, it is a jointly owned resource. It
also carries joint responsibility.
So, Mr. Chairman, I think it is a very important subject to
review, but too often there have been differences on how you
get this cooperation done.
I think that to suggest that States should be left out
would be entirely wrong. On the other hand, I think to say the
Federal Government ought to be left out, in my view, would be
entirely wrong.
I think Senator Baucus pointed out that in many cases the
States and the communities were responsible for developing
environmental law that ultimately became Federal law, because
they were working directly with the problem.
My own State of New Jersey is laboring to clean up hundreds
of toxic dump sites. We had an industrial past, and it created
a grim present, and perhaps even a grimmer outlook for the
future when you see that pollution of water and air might be
the result of the pollution.
In Southern California, climate and dependence on
automobiles made it susceptible to smog. It still leads the
Nation in air pollution. Again, an example of what some had to
do in order to clean the air.
The first models for the acclaimed ``right to know'' laws
actually came from cities--Philadelphia and Cleveland, to name
a couple. These States and municipalities could not wait for
the Federal Government to act. They had pollution problems that
needed to be solved, and solved then.
We have always looked to State and local agencies for that
kind of leadership and information and innovation.
At the same time, we've got to maintain a level playing
field nationwide. There is a critical role for the Federal
Government to play in setting minimum standards for
environmental protection. Water pollution--water bodies don't
recognize State boundaries. The beaches legislation that this
committee recently reported out, Mr. Chairman, also deals with
the issue of consistency among States.
So without the Federal Government serving to set a baseline
for what is clean, the public can't be assured that the beaches
will be tested the same way no matter what State they visit.
One could be cavalier about that and say, ``Listen, you've got
to know the State that you're going to. Do they care about the
parasites in the water as much as States A, B, and C?'' Well, I
think the public has really the right to know that.
Even in the international arena, the key to ratifying the
Kyoto Protocol on climate change will be hammered out as a
workable arrangement under which developing countries reduce
their greenhouse gases. It affects all of us.
I remember when some of us were in Brazil, at the first
summit. I talked to an interior minister from Brazil and
complained bitterly about the burning of the Amazon. His
response to me was that, ``Well, one of our farmers burning an
acre of land does substantially less damage to the environment
than one of your chemical workers producing material that works
itself into the air and invades our air and other people's air,
as well.''
So, once again, you are drawn into a cooperative
environment that I think also has to be considered as we write
law and as we hold these hearings.
So, Mr. Chairman, I think you are doing the right thing,
and I hope that we'll have a chance to hear from the witnesses
in full as to what they think about it.
Senator Smith. Thank you, Senator Lautenberg.
Senator Chafee, so you have any opening comments?
Senator Chafee. I thank the chairman for calling the
hearing and look forward to hearing the successful State
stories from the panelists today.
Thank you.
Senator Smith. I'd like to welcome Mr. McCabe and Mr.
Guerrero. Michael McCabe is the Acting Deputy Administrator of
the U.S. EPA, and Mr. Guerrero is the Director of Environmental
Protection Issues at the General Accounting Office.
Gentlemen, as you know, your statements will be made part
of the record. I would appreciate it if you could summarize in
about 5 minutes, because we have two other panels, as well. In
order to get the questions in, we're going to need to kind of
tighten up the time, if we can.
Mr. McCabe, we'll start with you.
STATEMENT OF W. MICHAEL McCABE, ACTING DEPUTY ADMINISTRATOR,
U.S. ENVIRONMENTAL PROTECTION AGENCY
Mr. McCabe. Good morning, Chairman Smith, Senator Baucus,
members of the committee.
I'd like to thank you for the opportunity to speak here
today, to represent the Agency, talk about this important work
that we are, in fact, doing with our partners, the States, to
protect public health and the environment.
As a former Regional Administrator of the mid-Atlantic
States, I saw day-to-day the strengths and frustrations of the
EPA/States partnerships. I am pleased to say that the strengths
far outweighed the frustrations. You will be hearing from some
of my colleagues in the next panel about their perception of
this partnership.
As we approach the 30th anniversary of the creation of the
Environmental Protection Agency in December, Americans have
much to be proud of. As you mentioned, Mr. Chairman, we have
come a long way in our journey as world pioneers in
environmental protection.
The highlights of our 30-year history confirm that the
Nation's environment is safer and the public health is more
secure than it was when EPA began.
At various times, vested interests have sought to derail
and roll back these significant advances. The foundation of
public support built over the years, however, has proven
immovable, and the rallying cry of opponents to strong
protection that environmental protection is incompatible with
economic expansion has been debunked and discredited in the
wake of the strongest economic performance in our Nation's
history.
Under the Nation's environmental laws, EPA and the States
each have important duties. We are coequal and interdependent.
A longstanding division of labor defines our roles. Broadly
speaking, EPA is charged with developing standards that provide
basic protection for all citizens. States are the primary
delivery agents, working directly with businesses, communities,
and concerned citizens.
A number of Federal laws call for EPA to delegate to the
States the primary responsibility for program implementation,
and States have, in fact, now assumed responsibility for
approximately 70 percent of the programs eligible for
delegation. Over nearly three decades, States, localities, and
tribes have developed a strong environmental management
capacity. A number of States have increased their investment in
environmental programs and have adopted environmental standards
that exceed Federal requirements.
During this Administration, we have built on this progress.
We have advanced these partnerships.
Under the unprecedented continuity of leadership provided
by EPA Administrator Carol Browner and senior EPA leadership
with strong State background and experience, new ways of
thinking are reshaping the Agency and transforming the
organizational culture that marked our first two decades.
Nontraditional thinking has strengthened our relationship
with State and local governments, as well as the American
public, as a whole. We are forging a culture of collaboration
rooted in mutual respect, mutual trust, and a shared sense of
obligation to future generations.
State governments have become far more than conduits for
Federal policy. Together, EPA and the States are now developing
new, more-effective, and less-costly ways of achieving
environmental goals. Together, we are testing and retesting
those ideas. Together, we are providing the American people
with the information they need to better understand their local
environment and act to protect it.
In brief, Mr. Chairman, we have laid to rest the ``us
versus them'' approach that characterized EPA's first 20 years.
Five years ago, in recognition of the critical role States
have come to play, EPA joined with our State partners to
establish the National Environmental Performance Partnerships
System, NEPPS. NEPPS is built on our shared commitment to the
continuous improvement of environmental programs. It provides
the foundation for flexible partnerships with the capacity to
adapt to changing priorities. NEPPS focuses us on performance
rather than process, on environmental results rather than
procedural details. In doing so, it frees the States to work
with EPA to target their highest environmental priorities. An
underlying theme of NEPPS is the importance of earning public
trust by achieving measurable environmental results.
I know that you will be talking about some of the
innovations and accomplishments under NEPPS. I won't go into
that in my testimony, but it is in my written statement.
Our progress has been substantial, but more needs to be
done. As the Environmental Protection Agency nears its 30th
anniversary, we are an organization in transition. New ways of
thinking permeate the EPA culture, even as we aggressively meet
our traditional responsibilities.
Innovative ways of protecting the environment are
flourishing at EPA, States, towns, cities, and in businesses
throughout the Nation. So, too, is the spirit of partnership.
These two forces--innovation and collaboration--as you
mentioned, Mr. Chairman, are converging to prepare EPA, in
concert with our State partners, to respond more effectively to
the environmental challenges of this new century. Together, I
am confident we are poised to continue a remarkable record of
remarkable progress.
Thank you.
Senator Smith. Thank you very much, Mr. McCabe.
Mr. Guerrero?
STATEMENT OF PETER F. GUERRERO, DIRECTOR, ENVIRONMENTAL
PROTECTION ISSUES, GENERAL ACCOUNTING OFFICE
Mr. Guerrero. Thank you, Mr. Chairman.
I'm pleased to be here to discuss our recent assessment of
the national environmental performance partnership system, or
NEPPS. NEPPS, as you heard, was established 5 years ago this
month as a framework for improving the EPA/State relationship
and for improving the effectiveness of State environmental
programs.
NEPPS was intended to address longstanding issues affecting
the EPA/State relationship. Among these issues were concerns
that EPA had been inconsistent in its oversight of State
programs, that it had micromanaged State programs, that it had
provided insufficient technical support, and that it had
inadequately consulted the States before making key decisions
affecting them.
One key element of NEPPS is EPA's commitment to give States
with strong environmental performance greater flexibility and
autonomy in running their environmental programs.
A second key element is the agreement among EPA and the
States to develop core performance measures that could be used
to identify whether State programs are achieving their intended
results.
Given the expectation among participants that NEPPS could
deal with many of the issues that have long hampered effective
EPA/State relations, we were asked by the chairman of the House
Subcommittee on VA, HUD and Independent Agencies to examine the
progress made by EPA in the States since the 1995 agreement.
Our analysis, issued last year, addressed four questions.
The first question asked us to identify the status of
grants and agreements made under NEPPS between EPA and the
participating States. When NEPPS was initially tested on a
pilot basis, there were six States that were participating. EPA
and the States viewed the first year as a time to experiment
with the new system in various ways to implement it. The number
of participating States subsequently increased to 45 in fiscal
year 1998, although the extent of program participation varied
widely from State to State. EPA's most recent date show that
State participation in NEPPS has remained about the same since
our report was issued last year.
The second question we were asked was: what progress has
EPA and the States made in developing results-oriented
performance measures for NEPPS and grants? Both EPA and States
agree on the importance of measuring outcomes in environmental
activities rather than just measuring the activities,
themselves. In attempting to develop these types of outcome
measures, EPA and the States have faced a number of challenges.
In particular, it is inherently difficult to quantify
environmental results. Results of activities designed to
improve water quality, for example, can take years to appear,
and the capacity of most States to monitor a significant share
of their waters is limited. And even when environmental
conditions are reliably and consistently measured, it is
difficult to demonstrate the extent to which a particular
environmental regulation or program resulted in the observed
outcome.
These challenges were compounded by disagreements initially
between EPA and the States on such matters as the degree to
which States should be allowed to vary from national measures.
Nonetheless, EPA and State leaders managed to agree on a set of
core measures for fiscal year 2000 that are widely regarded by
EPA and the States as significantly improved from those
negotiated in previous years.
The third question we addressed in our report, and perhaps
the most controversial, involves whether the extent of EPA
oversight is changing in States that are participating in
NEPPS. Overall, the large majority of State officials we
contacted generally maintain that participation in NEPPS has
not yet brought about a significant reduction in EPA oversight,
nor has it resulted in significant opportunities for States to
focus on other priorities or to shift resources to weaker
program areas.
EPA officials generally acknowledged this point, but
provided us specific reasons why oversight of State programs
has not significantly decreased. They pointed out, for example,
that environmental statutes or regulations sometimes prescribe
the level of oversight required which, according to some
headquarters and regional officials, leaves the Agency with
little room to scale it back.
These officials also pointed to the difficulty in scaling
back oversight without measurable assurance that alternative
approaches are achieving the desired results.
At the same time, we found a number of barriers preventing
greater State flexibility that could be more readily addressed.
For example, senior EPA officials in three of the four regional
offices we visited acknowledged that the support for NEPPS
within EPA varies. One senior regional official explained that
many regional managers and staff are often more comfortable
with pre-existing ways of doing business and are unsure of how
they can accomplish their work in the context of the
partnership under NEPPS. He voiced the opinion that there may
be a need for training regional staff.
Another senior official said that some agency staff will
only take NEPPS seriously when EPA's rewards and incentives are
more closely tied to staff performance in implementing the
program.
The last question we addressed dealt with whether the
performance partnership agreements and grants had thus far
achieved the other benefits envisioned.
EPA and State participants cited a number of benefits
associated with NEPPS, widely crediting the process for
improving communications and forging closer working
relationships among EPA and the States.
In addition, NEPPS has provided a means of getting buy-in
for innovative or unique projects and has served as a tool to
divide an often burdensome work load more efficiently between
Federal and State agencies.
Yet, while State participants indicated that their
participation in the voluntary program would probably continue,
they also consistently expressed the view that the benefits of
the program should be greater, that the program has yet to
achieve its potential, and that improvements are needed.
Anticipating the need for continuous improvement of the
NEPPS process, the 1995 agreement called for a joint evaluation
by EPA and the States. In recent months, a number of
assessments have been completed, including our own, that point
the way toward improving the program. Others will soon be
completed.
For the NEPPS process to realize its potential, it will be
critical that EPA and the States respond to these studies in
ways that address the impediments identified. For example, when
we did our work, we recommended that EPA develop a set of
flexible guidelines that could be used to help clarify, among
other things, the conditions that States must meet to achieve
reduced oversight by EPA. We think this would be an important
step in the right direction, and look forward to seeing how
well EPA follows through on our recommendations and those by
the others who are currently studying this issue.
That concludes my remarks, Mr. Chairman. I would be pleased
to answer any questions you may have.
Senator Smith. Thank you very much, Mr. Guerrero.
Mr. McCabe, let me start with your point that a new
relationship is evolving with the States, that it allows EPA to
adapt to changing priorities and experiment with new ideas. I
think that sounds like we are conceptually in agreement.
Can you specifically identify some approaches that EPA has
taken to allow the States to adapt to these new, changing
priorities?
Mr. McCabe. Yes. In fact, some of the results of the NEPPS
framework which I have in my testimony offer some examples. We
have seen in the State of Maryland, for example, that its
administrative reporting requirements have been cut in 13
areas, and the goals that were identified through NEPPS for the
evaluation that was done in conjunction with the State and EPA
are really at the core of these results, but also at the core
of the State's strategic plan.
Florida has developed a new performance measurement and
tracking system that actually received an Innovations in
Government Award from the Ford Foundation and the Kennedy
School of Government at Harvard.
Minnesota has shifted staff resources from the main office
closer to where the real issues are in the State, the district
offices, as a result of the evaluations that they've done.
And the State of Washington has seen a paperwork reduction
associated with its annual work plan for grants falling from 40
pages to four pages.
These are just some of the examples. This doesn't mean that
these are all the examples. I would point to other areas of
State/EPA cooperation as broadly based, perhaps, as the
Chesapeake Bay program, where EPA and three States have a
multimedia outcome-based approach to dealing with this large
estuary.
Senator Smith. The examples that you gave are good, but I
think they may be more process-oriented or paperwork-oriented
than they are really substantive.
Most of the time, in the conversations I have with State
officials and a lot of the testimony we've had here in the past
over the years, the States would say that, although perhaps it
may happen from time to time, the Federal statutes, themselves,
sometimes interfere with what they want to accomplish.
Do you have a specific recommendation on a statutory change
at EPA that would help us enhance the State flexibility and
prioritization?
Mr. McCabe. Well, I would certainly agree, and I think that
both Administrator Browner and I have stated on this issue that
there needs to be more flexibility, there needs to be a review
of our national environmental statutes, many of which were
created 30 years ago. There has not been that discussion, that
broad, public discussion on what the environmental outcomes
ought to be as a result of 30 years of extraordinary progress.
We would encourage that discussion to take place both in
Congress and in the public, in general, to see how we might
reform some of those laws.
Senator Smith. No specific recommendations at this point?
Mr. McCabe. At this point I think we need to look at the
big picture. We need to look at where we are going as a country
from an environmental perspective and also where we have
evolved in the State/Federal relationship.
Senator Smith. Mr. Guerrero, you talk about the inherent
difficulty in ``letting go,'' which is, I think, the term you
used with reference to some regulators. One of your
recommendations is to reduce that resistance toward the
implementation of the NEPPS through training and strategies.
What do you have in mind in regard to that type of strategy
that could produce more cooperation between State and EPA on
these issues?
Mr. Guerrero. Mr. Chairman, there are some things that we
feel can address the cultural issues at EPA--and also at the
State level, too, because this represents a cumulative three
decades of doing business in a particular way that States and
EPA are now trying to change through NEPPS: Training, in terms
of skills and team-building, teaching both State and EPA
regional staff how to productively engage in setting goals,
common goals, and agreeing upon that, providing information,
sharing information, showing what works, what has worked in one
State that could be adopted by other States, success examples.
Most importantly I think is putting in place a set of
incentives and rewards that encourages behavior so that EPA
employees are rewarded for using NEPPS and using it to the
extent that it allows greater flexibility and more cooperative
working arrangement, that they get rewarded, as opposed to
being rewarded for the enforcement bean or the inspection bean
and what traditionally they have been rewarded for. It is going
to be very hard for the culture to change if people continue to
be measured by indicators that measure more traditional kinds
of results that involve the kind of stovepipe approach that you
talked about in your introductory remarks.
Senator Smith. Thank you, Mr. Guerrero.
Mr. Baucus?
Senator Baucus. Thank you, Mr. Chairman.
Tell us what are the keys to success in reaching more
flexibility. Is it an air/water tradeoff or something else?
Remember the Yorktown benzine plant issue a few years ago,
where it turned out that the laws were so specific it required
a result that allowed more benzine to be emitted, whereas if
the company were to look at the whole plant together, including
the loading docks, they would have much less cost to achieve
that result.
The chairman mentioned stovepipe application to our
environmental regulations--Clean Air Act, Clean Water Act, and
so forth--and it is true that a lot of companies find that the
air person comes in or the water person or the waste person
comes into the plant. Some of the stuff they ask for is
contradictory, but with lots of flexibility and coordinating,
as the chairman says, a more holistic approach, you could
arguably achieve a much more efficient result--less pollution
at less cost.
What are the keys to achieving that? Let me ask each of
you, what are three of the main standards, keys, approaches, or
guidelines that come to mind to achieve that?
Mr. McCabe. Well, Senator, I think administratively we have
tried to do as much as we can, given limited resources, because
any time you look at an individual case it requires an
incredible commitment of resources to deal with that individual
situation, as opposed to sort of the broad, generic issue. But
administratively I think that we tried to adapt flexibility
through a number of EPA programs--Project XL, CSI.
Senator Baucus. I'm not really asking what you've done, but
what are three rules of thumb that you use to make this work?
Mr. McCabe. Well, one is what the standard is, what the
requirement is that we are actually looking at.
In the instance of perhaps a manufacturing facility or a
plant, whether it is an emissions standard or an effluent
standard, you look at that standard and work with the facility
to see if they have ways of meeting the standard but in a more
efficient and effective way.
Senator Baucus. So one would be to ask the manager of the
facility or the company for their suggestions?
Mr. McCabe. Often we do that.
Senator Baucus. OK. What are some other ways?
Mr. McCabe. The other ways are better communications, more
frequent communications with our partners, whether they are the
States or the regulated entity, to find out what the issues are
and to avoid any kind of specific problems.
Senator Baucus. I've got a couple of questions here, so we
need to cut it short.
Mr. Guerrero, what do you think?
Mr. Guerrero. Yes, Senator, a couple things. I completely
agree with Mike that improved communications is central. A key
element to----
Senator Baucus. Communications between?
Mr. Guerrero. Between States and EPA regions, and, in
particular, States and EPA's headquarters program managers,
where communications have not always been as good as they can
be. And that's a reflection of the EPA organizational
structure. It is like pushing a string to get things done.
So communications is key, because that builds trust. The
one thing we've heard is, if the NEPPS process to date has been
successful for anything, in particular it is improving
communications and trust.
Senator Baucus. Why is there insufficient communications
and trust? What is the impediment?
Mr. Guerrero. I think it stems from the origin of the
environmental protection program, where the Federal Government
put in place programs, delegated those to the States, and then
held the States accountable and measured what the States were
doing by setting annual targets or goals and measuring those in
terms of outputs, such as numbers of permits issued or
enforcement actions taken.
Senator Baucus. So what would you----
Mr. Guerrero. And it was a very directed kind of process,
and now that has changed significantly. The States are a major
player now in environmental protection. It's where the vast
bulk of the resources are. It is where most of the
responsibilities for carrying out these laws reside. The EPA-
State relationship has to change, as a result. And to make that
change, you have to change the communications and the trust
involved in the process.
Senator Baucus. Very briefly, the three most common
mistakes that we should try to avoid as we strive toward,
generically, flexibility.
Mr. McCabe. I think that we should avoid the one-size-fits-
all approach. I think that we need to develop good information,
because if we don't have good information we don't know what
the baseline is that we are operating from, and effective
measures to figure out whether we have done a good job. In
fact, that is part of what NEPPS has been trying to accomplish
is performance measures.
Senator Baucus. How about enforcement? I mean, there's a
lot of tension between States and EPA over enforcements. In
fact, as I understand it, in your testimony, Mr. Guerrero, you
talk about an audit which State administrators often refer to
as--they say that they don't back off on enforcement, because
audits have shown that State enforcement is perhaps not what it
could and should be.
Mr. McCabe. Right.
Senator Baucus. And there's this over-filing issue, for
example. There is a lot of tension between States and EPA on
enforcement. How do we clear that up?
Mr. McCabe. I think that there was more tension several
years ago between the States and EPA on enforcement than there
is now. I think that it has improved.
In the case of over-filing, in fiscal year 1999 we had
3,935 administrative and judicial actions, and there were only
four instances of over-filing, so it really----
Senator Baucus. So you don't think there is tension----
Mr. McCabe. There is----
Senator Baucus.--so significant today that we should get
worked up about it?
Mr. McCabe. No. I think that there is a tension. Clearly,
there is a tension when the Federal Government feels that the
minimum standards are not being met, or perhaps the States are
not being as aggressive on pushing certain companies, certain
members of the regulated community to meet those standards, and
that is our role. It is our role to----
Senator Baucus. Mr. Guerrero, your thoughts on Federal/
State enforcement tension.
Mr. Guerrero. I think the key is to provide EPA this
measurable assurance that it needs to satisfy the American
public that these laws are being carried out as intended by the
Congress. Ultimately I agree with Mike that what is needed is
better information and better data, especially results-oriented
data that would help address these concerns.
Very often these misunderstandings occur because the data
just are not good, and so focusing on the issue of better data
and data management at EPA is critical.
We also say that the whole process under the Results Act,
where EPA has set some 187 goals and 364 measures to measure
environmental progress in this country is burdensome, and the
core performance measures that EPA has negotiated with the
States need to be integrated with that process. We need to
figure out how to focus on what the key goals are or what the
key kinds of measures are.
Senator Baucus. The core performance provisions in NEPPS I
think is going in the right direction, you are saying?
Mr. Guerrero. I think the assessment that--what we've heard
from both the States and EPA is that they have made progress.
The core performance measures are vastly improved.
Senator Baucus. It sounds like we need more resources,
then.
Mr. Guerrero. And the third point that I would make to
address what are the three things, I would completely agree. I
think there were two comments made in the chairman's opening
remarks and in yours that really fundamentally we need to be
realistic about what NEPPS can accomplish, because it is in the
framework of, as Chairman Smith said, a set of stovepipe laws
that have accrued over time that don't allow the kind of
flexibility that perhaps now we would like to see, and
certainly all of these programs are stressed and taxed and
limited in terms of the resources they have to get the job
done, and those are two fundamental issues.
Senator Baucus. I thank you. I've encroached upon a lot of
time here, and I apologize very much to my colleagues.
Senator Lautenberg. If I may, Mr. Chairman, not meaning to
interrupt the Senator from Rhode Island, I would like to stay.
I can't. I have another committee meeting starting at 11 and
I'm an integral part of that discussion, so I would ask, Mr.
Chairman, that the questions that I will submit in writing be
answered as promptly as we can, to see if there are things that
we can do to make the adjustments that seem to be required to
have this cooperative venture continue and improve.
I thank you very much and I thank the witnesses.
Senator Smith. The record will be left open for questions.
I have some that I will be submitting, as well.
Senator Lautenberg. Thank you very much.
Senator Smith. Senator Chafee?
Senator Chafee. Yes. Thank you, Senator Smith.
My experience in Rhode Island in visiting various Superfund
brownfield sites has been it is a positive relationship with
EPA and the State DEM and on down to the local communities,
and, indeed, the local activists--nothing but positive. So, as
you have said, we've come a long way through the years from
heavy-handed, micromanaging by EPA to the situation we are in.
I am sure that you, as the Regional Administrator in the
mid-Atlantic States, have shared that experience. Is that
accurate, Mr. McCabe?
Mr. McCabe. Yes, it is. In fact, my colleague, Jim Seif,
who represented the biggest State in the mid-Atlantic States,
is here today to talk about some of his experiences.
I truly believe that the relationships between EPA and the
States have improved. I think that it really is based on mutual
respect. I think that the important issues of enforcing Federal
laws uniformly, making sure that there is consistency among the
States, is one of the key roles that the Federal Government can
play, but there needs to be some flexibility above those
minimums for the State to meet them. I think increasingly we
have incorporated that into our collaborative roles and
responsibilities.
Senator Chafee. As long as that flexibility doesn't include
letting off those States that are either upstream or upwind.
Those downstream and downwind see the negative aspects of any
flexibility.
Thank you.
Mr. McCabe. We need to meet the standards.
Senator Smith. Thank you, Senator Chafee and Senator
Baucus. As we said we have no further questions, I think we
will move to the next panel. Thank you, gentlemen, for your
testimony. I know that several members do have questions in
writing to submit, and we'd appreciate as prompt a response as
possible to those questions.
Bring the second panel up: Mr. R. Lewis Shaw is the Deputy
Commissioner of Environmental Quality Control, South Carolina
Department of Health and Environmental Control and the
president of the Environmental Council of the States; Mr.
Robert Varney, Commissioner of New Hampshire Department of
Environmental Services; Mr. James Seif, Secretary of the
Pennsylvania Department of Environmental Protection; and Mr.
Brent C. Bradford, the Deputy Director of the Utah Department
of Environmental Quality.
We'll just move down the panel from left to right.
Gentlemen, the same information as to the last panel--your full
statements will be made part of the record. If you could
summarize in 3 or 4 minutes, it would be appreciated, since we
do have another panel.
Mr. Shaw, we will begin with you.
STATEMENT OF R. LEWIS SHAW, DEPUTY COMMISSIONER, ENVIRONMENTAL
QUALITY CONTROL, SOUTH CAROLINA DEPARTMENT OF HEALTH AND
ENVIRONMENTAL CONTROL, AND PRESIDENT, ENVIRONMENTAL COUNCIL OF
THE STATES
Mr. Shaw. Mr. Chairman, members of the committee, thank you
for the opportunity to appear before you today.
My name is Lewis Shaw. I am the deputy commissioner of the
South Carolina Department of Health and Environmental Control.
I have 29 years of service to my State, with the last 16 of
those in my current position as the State's environmental
director.
Today, however, I am here representing the views of the
Environmental Council of the States, known as ECOS, of which I
am president.
ECOS is the national, nonprofit, nonpartisan association of
the State and territorial environmental agencies. The States
and territories are our members, and the people we represent
are the leaders of the various State environmental agencies.
Other details about our association are provided in the
attachments to this testimony, which I ask be entered into the
record.
I am here to tell you of some of the accomplishments that
States have made in environmental protection--accomplishments
that are not widely known. I will make four main points.
First, States now implement most of the delegable
environmental programs. This is good news, because this is what
Congress had intended when it enacted laws such as the Clean
Air Act and Clean Water Act.
States now have primary responsibility for carrying out
those laws. You heard Mr. McCabe mention that about 70 percent
of the major programs that could be delegated to the States
have been delegated. This means States are running most of the
clean water, clean air, safe drinking water, and waste cleanup
programs that Congress created.
As you can see from chart one, much of this growth was in
the 1990's, and, in particular, between 1993 and 1998, a 5-year
period in which State delegations grew by almost 75 percent.
As part of this responsibility, States are also collecting
most of the environmental quality data. Brent Bradford, my
colleague from the State of Utah, will be speaking more about
this later.
We also conduct most of the environmental enforcement
activities. In recent years, States have averaged between 75
and 80 percent of all enforcement actions taken by EPA and the
States, combined. We conduct at least 97 percent of all
enforcement inspections, but we also conduct many other
enforcement actions and compliance assistance that EPA may not
count for one reason or another.
Last year, Congress directed ECOS to conduct research on
the issues of counting enforcement and compliance activities
and report the results to Congress. We are working on this
project now and expect to report to you early next year.
A second point is that States are paying for most of this
environmental protection. As you can see in chart two, State
spending for environmental protection has grown dramatically
since 1986. In 1986, States spent $5.2 billion on environmental
protection and natural resources. Congress, through EPA,
provided just over $3 billion of that, almost 58 percent. But
by fiscal year 1996, a very different story has emerged. States
spent about $12.5 billion, with the EPA providing about $2.5
billion, or about 20 percent.
During the 10-year period from 1986 to 1996, State spending
on the environment increased about 140 percent, while total EPA
funding to the States decreased about 17 percent. Most of this
decline is attributable to the reduction in the water
infrastructure support programs. In 1996, the States spent
nearly twice as much on environment and natural resources as
the entire EPA budget.
My third point is that States conduct many other
nondelegated programs on their own, and that we are great at
innovation. For example, in South Carolina we have our own
laws, rules, and practices on the protection of shellfish beds
that are not part of the delegated Federal system but are very
important to our State. Obviously, these kinds of laws vary
from State to State, but they show the commitment of the States
to the environment.
According to the National Conference of State Legislators,
States passed into law over 700 environmental bills in 1997,
alone. At least half of these dealt with nondelegated
environmental programs such as pollution prevention and solid
waste management.
As chart No. 3 shows, for example, most of the hazardous
waste sites in the country are actually being regulated and
cleaned up under State authority.
Another study by the Council of State Governments found
that 80 percent of the States had at least one clean air
standard that exceeded the Federal minimum standard. In South
Carolina, for instance, our air toxics list includes 256
constituents, compared to 188 on the Federal list.
States implement most environmental protection programs, so
we are often the first to recognize innovative solutions for
environmental problems.
Each year for the past 3 years, ECOS has compiled State
programs and implementation innovations. These cover the
complete range of environmental protection, including delegated
and nondelegated programs. ECOS has now compiled hundreds of
these innovations. Some of these States' ideas have been
nationally recognized by innovations awards programs such as
those of the Council of State Governments and Harvard
University.
My final point is that States are committed to the State/
Federal partnership in environmental protection. We believe
that the time for command and control, top-down programs has
ended, however. Perhaps it should be replaced by a set of
mutually agreed-upon national goals and standards which would
be achieved by the States in the manner we deem most
appropriate and supplemented by local goals and standards that
meet the specific needs of the States. After all, you are not
likely to see the same environmental problems in South Carolina
as you would in Utah because the States have such different
ecologies.
Our final chart shows some of the differences that we think
will lead to a more harmonious relationship and better
environmental protection.
Some people still believe that it is 1970's and that the
States cannot be trusted to protect the environment. We believe
the facts presented here today give the real story. States are
leaders in environmental protection and are committed to
protecting the health and the environment of the citizens we
serve.
Mr. Chairman, I would be glad to answer any questions.
Thank you for letting me appear here today.
[The charts referenced in Mr. Shaw's statement follow:]
Senator Smith. Thank you, Mr. Shaw.
Mr. Varney, welcome.
STATEMENT OF ROBERT W. VARNEY, COMMISSIONER, NEW HAMPSHIRE
DEPARTMENT OF ENVIRONMENTAL SERVICES
Mr. Varney. Good morning, Mr. Chairman and members of the
committee. My name is Bob Varney. I'm commissioner of the New
Hampshire Department of Environmental Services. I've held that
position for the last 11 years under three different Governors
of both political parties. I am here today as the past
president of the Environmental Council of the States. I am here
to highlight the success of two cooperative programs that ECOS
and EPA have developed jointly, those being the national
environmental performance partnership system, or NEPPS, and the
ECOS EPA regulatory innovations program.
As you know, NEPPS was created 5 years ago and grew out of
an awareness that Federal and State government could be more
effective and efficient if they cooperated as equal partners in
planning, implementing, and reporting environmental protection.
The NEPPS agreements are called ``performance partnership
agreements,'' and in New Hampshire we just signed a performance
partnership agreement with the regional office of EPA. Our
comprehensive agreement sets forth the goals, activities, and
measures of progress for a full range of Federal and State
programs, which represents a comprehensive plan for all of our
agency's programs. Before NEPPS existed, no such document
existed.
I should mention that our full agreement is available to
the public on our department's website, and ECOS is linking its
home page to many other State NEPPS agreements, which are also
available electronically. This means that any member of the
public can review and comment on any of our State's goals,
objectives, and allocation of resources, and so it is truly a
transparent process with the public that emphasizes public
participation.
To date, 38 States have performance partnership agreements
under the NEPPS system. Many have been accompanied by
performance partnership grants, which allow for realignment of
the EPA funds so that limited resources can be used to address
the most pressing State problems facing the individual State.
We recognize, at the same time, that the NEPPS process is
not perfect, and have been working to try to improve the
process.
We had a third national meeting in Baltimore, Maryland,
last fall to further evaluate NEPPS and develop recommendations
for improvement.
ECOS and EPA have recommitted to improving this process by
trying to implement the many recommendations that are in this
plan, and this was further renewed through the adoption of a
resolution at our recent national meeting held in April in
Philadelphia.
We very much appreciate the work of Deputy Administrator
McCabe, who is trying to ensure that all EPA staff understand
and work toward the continuous improvement of the NEPPS
process.
I would like to now talk about another cooperative State/
EPA program designed to stimulate innovative approaches to
regulation. Here I distinguish innovative approaches to
regulation from technical innovation, which will be addressed
by another witness.
The States have been a well-stream for inventiveness. In
dealing with specific circumstances unique to State location or
problem, we are forced to develop innovative approaches. These
documents contain hundreds of State innovations which have been
developed and are shared with other States, are available in
published form and are also available on the ECOS website.
ECOS and EPA recognize that some of these innovations might
be transferrable to other locations with similar issues, and we
wanted to provide a process for dealing with regulatory
innovation by establish a reg innovation agreement, which was
signed in April 1998.
In the words of the agreement, itself, ``This agreement
presumes that EPA and the States will find ways to help good
ideas succeed, and that joint EPA and State efforts to promote
and test new ideas will result in the maximum benefit to the
American people and their environment.''
Texas was the first State to submit a project under the reg
innovation agreement. It involved opacity testing. As a result
of that agreement, they were able to reduce the number of
certified inspectors from 100 to 50 each year, which freed up
more than 75 staff days to do additional facility inspections
and better protect the environment. This innovative tradeoff is
now transferrable to other States who can take advantage of
this idea.
This simple example demonstrates the goal of identifying
innovative approaches to make available faster, cheaper, and
better approaches to environmental protection. It is especially
useful when, as in this instance, the approach can be tailored
by other States to meet their own needs.
At the spring meeting of ECOS, it was reported that, to
date, five proposals have been submitted to EPA. Four out of
the five have been approved, and an additional five or six have
been submitted and are pending approval by EPA.
This fall, EPA and the States will conduct a national
workshop on regulatory innovations, with an emphasis on case
studies presented by the States.
I have provided for the committee's use several other ECOS
publications describing State innovations, and they fully
demonstrate the accomplishments of the States and the ability
of the States to carry out innovations in an appropriate way
and one that is responsive to the needs of the public and is
responsive to the laws that have been set by our legislatures
and by Congress.
Thank you.
Senator Smith. Thank you, Mr. Varney.
Mr. Seif?
STATEMENT OF JAMES SEIF, SECRETARY, PENNSYLVANIA DEPARTMENT OF
ENVIRONMENTAL PROTECTION
Mr. Seif. Good morning. Thank you for this opportunity to
be here. I am the Secretary of environmental protection in
Pennsylvania. I have also been a member of the ECOS board and
was a Regional Administrator in Philadelphia for a number of
years and an environmental prosecutor way back in the 1970's,
when everybody was an environmental prosecutor, because that
was the only tool we had.
I have been before this committee six times now, and with
continued patience I will keep doing it until I get it right.
Senator Smith. Do you think you've taught us anything yet?
Mr. Seif. I always learn more on the way here than I do by
way of teaching.
This morning there are 17,000 Pennsylvanians at work on 650
sites in our States that were, 5 years ago, behind cyclone
fences. Maybe Alan Greenspan gets some credit for that, as
well, but I do believe that a very innovative program, which
many of our States have used, the brownfields program, can also
get some credit.
You'll see in the testimony, and in some materials that I
would be happy to provide, some statistics, lists of awards,
numbers of sites, how many counties, rural, urban, and all of
that. It can get kind of tiresome, I remind myself, but we are
very proud of it.
These are real cleanups, by the way, and not the Secretary
of Commerce trying to build stuff, but the Secretary of the
Environment trying to clean up stuff. That's how many cleanups
we have, with hundreds more in the pipeline.
I would call your attention to four elements of the main
recipe of a successful brownfields bill. One is that you have
uniform and real cleanup standards, standards that you can know
about in advance and don't have to argue ad hoc with the GS-14
at the regional office of EPA. You know what they are: they are
published; the public agreed to them, and they meet Federal
requirements for groundwater, soil, and the like.
Second, rapid, well-known, agreed-upon, simple procedures.
If you are a commercial developer, you know what the pathway is
and you know you can get there before your money runs out.
Third, a liability release. If you don't get a liability
release, you don't have a negotiable asset. You can't sell it.
You can't rent it. You don't want to occupy it. The release
gives you that capacity. It puts the property in play and
unleashes private sector money, which is how we got all those
sites cleaned up.
We do have financial assistance, and that's the fourth
element. We spent about $20 million for site assessments, not
for cleanups. The private sector cleans it up because the
property has value if you can get a real cleanup and a real
release. The $20 million is for assessments for redevelopment
authorities and municipalities to find out what is underneath
the ground in the first place, to see if the property should be
put in commercial play.
Let me talk about some of the lessons that have come out of
what I think we have learned.
We've talked a lot about delegation this morning.
Brownfields are the one major State program that is not
delegated. There is no provision in Superfund to delegate
programs. The fact is, they were born out of necessity to get
around the big gorilla in the closet, Superfund, which is, I
think, the least-successful Federal statute in environmental
history.
And I don't mean to argue the numbers about EPA. ``Only X
number of sites cleaned up, while we cleaned up many more,''
and all that. Those numbers are not the point. I think each of
those two statutes--the State brownfield statutes and the
Superfund--have a role. The sites we cleaned up aren't the big,
messy sites that some Superfund cleanups are designed for.
But the fact is, the uneven borderline between those two
statutes needs to be, and I hope will be cleared up
legislatively.
When Richard Nixon made the choice in December 1970 about
the basic shape of EPA, it was, ``Should it be the National
Institute of Health, a standards-setting organization, or
should it be operational?'' The statutes passed required that
it be operational, and it has been. I think it is time to
revisit that, however.
Second, with respect to the regional offices, we have 10 of
them, each with about 1,000 people, managing programs. I think,
as Lewis Shaw has mentioned, we actually really have 50
regional offices in each of the State capitals and around.
Maybe we don't need to have people patrolling delegation, and
that would be especially true in the brownfield area, where
delegation was not even contemplated.
I want to mention also some unexpected consequences of the
law. Once it became possible to find out what was underneath a
site and you weren't scared to do so because Superfund might
apply, we went looking. What we found was not much. We don't
have pandemonium trichloride and methelethyl megadeath under
every site. You can clean them up, and we do, if you're not
worried about, as a commercial developer, what might happen
under Superfund.
You also have some other developments: the skill mix inside
the agency changes. You get deal-makers, not enforcers. That's
how you get a site cleaned up. You bring money, you bring
scientists, you bring the community, and you get it done--not
an attorney figuring out who he can sue because in 1958 the
predecessor corporation dumped a drum there.
We also saved a lot of greenfields in Pennsylvania. Those
17,000 people would be working somewhere, I assume, instead of
in the inner city, typically, where they are.
Finally, there is the resource issue, which has been much
mentioned here. We do need more resources in some areas. We
probably don't need more resources in the brownfield area. The
economy provides the resource and has provided it well, and it
makes the choices about what sites to clean up, not a 1,200
page National Contingency Plan which ranks every site and gives
a long recipe for what to do next. That's agility. That's what
the States, among other things, are good for.
EPA needs to be there. I say that as a former Regional
Administrator and I say as a proud colleague of Mike McCabe,
who has done a particularly good job at curing a lot of sore
problems. But in this area I think some of the basic
relationships between delegation and between States and the
regions are shown up to be ripe for reexamination.
Thank you.
Senator Smith. Thank you, Mr. Seif.
Mr. Bradford?
STATEMENT OF BRENT C. BRADFORD, DEPUTY DIRECTOR, UTAH
DEPARTMENT OF ENVIRONMENTAL QUALITY
Mr. Bradford. Thank you, Mr. Chairman. I appreciate the
opportunity to appear before you today.
Mr. Chairman and members of the committee, my name is Brent
Bradford. I am the deputy director of the Utah Department of
Environmental Quality. I am here representing the views of the
Environmental Council of the States, of which I am a member,
and immediate past chairman of the State EPA Information
Management Work Group and the current vice chairman of the ECOS
Strategic Planning Committee.
I want to speak to you today regarding State activities and
initiatives in managing environmental information. I'd like to
give you four messages: first, States generate most of the data
in EPA's national data systems; second, States are driven to
manage this data effectively because they must have it to
operate their own programs; third, States have become the
greatest innovators in the management of environmental data;
and, last, States are working with EPA and the public to make
this data available.
First, States collect and provide about 94 percent of the
environmental pollutant information contained in Federal
program data systems. This includes data from the regulated
community and direct measurements of environmental quality,
which include data for air, water, waste, and drinking water.
States provide EPA nearly all the environmental pollutant
and compliance data it uses to manage the environment. Data
that EPA passes on to the public through programs such as
Envirofacts often originates in State environmental agencies.
Second, States use this data, themselves, to manage their
own programs, and so are driven to be sure that the data is
managed appropriately. This became especially true during the
1990's, as States assumed more and more of the delegated
programs from EPA.
More States over the past several years have improved
quality and improved public access to data as they've invested
in information technology and moved toward data integration.
Some States have made significant investments of State
funds, and others have relied heavily on Federal funds coming
through EPA's one-stop program. Such Federal funding has been
particularly helpful to smaller States, such as ours.
My third point is that the conditions I've already
mentioned have led States to become great innovators in
environmental data management. In my home State of Utah, our
agency has developed a standard used by all programs to
identify facilities and link them to program data bases. We've
also established a global data catalog to allow public access
to information contained within our data bases. We've developed
an electronic reporting capability, and we've also developed an
Internet access capability that will allow public access to
information 24 hours a day, 7 days a week.
Other States have also made remarkable progress in this
area. A few examples are Pennsylvania, No. 1. This was one of
the first States to present timely multimedia compliance
information facilities on line to the public. They are now
sharing that system with other States.
The State of Washington led States in developing a de facto
national standard. Its facility identification template for
States is now in its second version and is being used by at
least 25 States to help them jump start their data reinvention
efforts. This saves each State about a $.25 million.
New Jersey's environmental management system fully
integrates all regulatory and permitting systems, one of the
first anywhere to do so. It will be completed later this year.
Virginia's centralized enterprise data system, created in
18 months, merged 77 legacy systems that were not compatible
into a single integrated system. The State, itself, invested
$12 million of its own resources to create this system.
Virginia is now offering that system to other States at no
cost.
New Hampshire is integrating its environmental data bases
by linking facility and site data, and has begun making site
remediation, underground storage tank, and air permitting
information accessible via the Internet.
My fourth and final point is that States are committed to
working with our Federal partners in making our data available
to the public. The States and EPA created the State EPA Data
Management Work Group in January 1998. We developed a vision
statement and a set of operating principles. These define a
framework for a new way for States and EPA to do business
together. They commit States and EPA to a partnership in
building locally and nationally accessible information systems.
Some major accomplishments of the work group include the
creation of the Data Standards Council, the development of a
vision for a national data exchange network, the establishment
of a joint process for addressing burden reduction in data
reporting, and a discussion forum and action plan for public
access to environmental information.
States are making significant accomplishments in
environmental data management, but the cost is high. Currently,
the President's budget proposes $30 million for environmental
information management--$16 million for States and $14 million
for EPA. States believe that this funding is essential in
addressing a new vision of environmental information
management.
Continued Federal investment is critical for this vision to
be realized, and we need to make sure that all States have a
full opportunity to participate. Collective investments and
standards development will be needed to make such a network
viable.
States envision a national environmental information
exchange which recognizes that the agencies that collect
information will be responsible for its stewardship and will
provide access to such information through the network. Such a
network is based on common standards and would provide a common
base of information access, exchange, and use that would allow
flexibility in meeting individual State and EPA needs regarding
data housing and data handling. This would move focus away from
a common national data system toward a focus on data quality
and interpretation.
This will require both State and EPA effort to make such an
exchange work and must be developed in such a way that all
States, both large and small, can participate in the exchange.
Given the impact of decisions made based on environmental
information and the need to assure its accuracy and
accessibility, it is important that States and the Federal
Government continue to work together to develop and utilize
data management technology in a sound, responsible, and
efficient way.
There is a long way to go, but significant progress is
being made. States have provided leadership in this important
effort and are committed to continuing to do so to assure that
the ever-increasing demands for information are met and that
the necessary information is available for responsible
environmental decisionmaking.
Thank you, Mr. Chairman.
Senator Smith. Thank you very much, Mr. Bradford.
Each one of you, in your own way, with a different
perspective, talk about greater control and authority to the
States and the fact that the one-size-fits-all, top-down
approach doesn't work. Let me just ask each one of you for a
real quick response, just go right down the panel from Mr. Shaw
right down. Is this happening in spite of the EPA or are they
working with you to make these things happen?
We hear a lot of stories both way, frankly--a lot of focus
on what the States are doing, successes with the State. If they
are helping you, tell us how they are, briefly. If they are
not, tell me then where you think we need to make a change in
the structure to help us get where we need to get--just
briefly, so I can get a quick response from each one of you.
Mr. Shaw.
Mr. Shaw. Speaking for myself, from my perspective, I do
think that EPA is genuinely interested in having a better
system. We have been working with them in a number of instances
to do just that. However, sometimes they just don't get it.
Now, maybe they just don't get it because the laws don't allow
them to. We have heard some discussion of that. But I do think
there is a genuine interest on their part to do things better
and do them along with the States.
You mentioned the enforcement piece and some of the
problems the State has there. We are very sensitive in South
Carolina to who does enforcement in our State, but we have
worked out an agreement with our EPA regional office to share
some of that enforcement responsibility. Not all States do
that. Not all States wish to do that. But in our case, we saw
it as beneficial to both sides, so we have been doing some
joint enforcement actions in our State. That's an example of
where we have been able to work together.
Senator Smith. Mr. Varney?
Mr. Varney. I would say that there is a period of cultural
change that is taking place, both within EPA and within the
State agencies. I think some of the mid-level managers in our
own agencies, as well as in EPA, don't like change, don't want
to embrace the new way of doing things, don't want us
questioning their prioritization or perhaps considering that
we'll take resources away from this manager and reassign them
to a different manager. That's very threatening to our own
staff and to EPA's staff. So there is this temporal aspect,
this cultural change that is taking place gradually over time.
Let me also say that I think we have to be very careful to
make sure that we do not have regulatory or legislative
barriers in terms of flexibility. An example that I would give
is in the SRF programs. I think there is a lot to be gained by
giving States maximum flexibility in shifting resources within
the State revolving loan fund programs, the SRF for the Clean
Water Act, the SRF for Safe Drinking Water Act, and even
perhaps brownfields SRF funding, so that we can shift the money
around based on the changing needs of the State, and to even
look at innovative approaches, like using SRF money for water
conservation, and water storage to achieve in-stream flow
protections--those kinds of innovative things that may have
obstacles associated with them because of statutory
requirements.
Senator Smith. Moving from one stovepipe to the other?
Mr. Varney. Yes.
Senator Smith. That's what it is.
Mr. Varney. Exactly, Senator.
Senator Smith. Mr. Seif?
Mr. Seif. It's getting better, Mr. Chairman, I think. You
have to remember, though, that the founding fathers set up a
Federal system which is inherently complicated, and when you
add new science, modern industrial organization, and 250
million people, it is never going to run like a Swiss watch. It
will have its rough spots.
I think, in the broad sweep of history, if we take the
Great Society as the height of Federal power, it is moving to
the States. It is leaching, or running, or whatever, to the
States.
We do have two block points. The statutes do freeze
processes in place, and that's one, and the culture on both
sides, as Bob makes a very good point about my own bureaucracy,
as well, do tend to retard growth.
The thing that retards it most--and we can thank Brent for
helping the most with this--is the metrics. Senator Baucus
asked what are the things we really need to do, and metrics is
one of the three things that would really make the system best.
What can we agree on that we should measure? And what makes
a measurement improve or not? And can we alter our resource mix
to go after improvement in that measure? We can't with the
culture, the statutes, and so on, being as they are.
We need from the committee a holistic, integrated
environmental approach--if not a single, big statute, which
some have talked about, certainly a great, wide duct as opposed
to 50 stovepipes.
Senator Smith. But you do believe that some codification
modifications are required, some modifications in the law?
Mr. Seif. Or uncodification.
Senator Smith. Decodification.
Mr. Seif. Right. Yes, sir.
Senator Smith. All right. Mr. Bradford?
Mr. Bradford. Thank you, Mr. Chairman.
In Utah we developed, with EPA and local government, a
southwestern Utah partnership that I believe was probably the
most successful environmental activity that I have seen
undertaken in my 28 years in the State of Utah in environmental
programs, so the system can work, and it worked very well.
There were a couple of key things that made that happen, I
believe. First of all, we used a model that said we were going
to put the problem in the middle of the table and then see what
each of us brings to it. What is the strength that each of us
brings? We're not going to worry about oversight jurisdiction.
We'll just worry about focusing in on the issue.
We were able to do that, and in doing that we got some
local ordinances. We determined that the local ordinance was
the best way to go and the most effective way. We got some
local ordinances in place we had been trying for over 15 years
to get in place relating to individual wastewater and to
drinking water. So the system worked, and it worked very well.
I think this model of performance partnership and State/EPA
partnership can work. It took a great amount of leadership from
the top to do that, and there was a lot of distrust at the
staff level to begin with and real concerns on the part of
those people that somehow their job was going to be impacted
and the traditional role was not going to be in place, and it
wasn't. And once we could change that attitude, some nice
things began to happen.
I think our biggest problem in the State of Utah still
deals with the enforcement, in that the partnership doesn't
seem to carry over into that area, but in the areas of the
program management, itself, it can work and it has worked, and
I think we have actually established somewhat of a national
model relative to this performance partnership agreement, and
it did develop a lot of trust between our agency, the local
government, and the Federal Government. In working that, that
strengthened all three of us, I believe, in that process.
Now we are attempting another partnership right now in
another portion of our State which will involve tribal
governments, also, so it will be a four-way partnership. We'll
see if that one works. It is just underway now. But that one
may be a little bit more difficult.
But the system can work. It does require a lot of attention
and it does require a lot of management in order to make it
work.
Senator Smith. Thank you.
Senator Baucus. Mr. Seif made a point that I think is worth
remembering: we have a messy system in this country. We have a
democracy, and it's just the nature of the beast. Winston
Churchill's oft-repeated statement comes to mind: ``It's the
world's worst form of government, except there is none
better.''
From your testimony I sensed that the drift is going in the
right direction with NEPPS. So how big of a problem do we
currently have? As administrators, do you spend 80 percent of
your time saying, ``My gosh, I can't get my job done because of
``block points'' and the culture.'' Or do you spend 5 percent
of your time saying, ``Gee, this isn't working that great, but
I can do what I need to do without it.'' How big of a problem
are these block points, whether they are cultural or statutory?
Mr. Shaw. Let me maybe start out my comment on that. You
know, in my case it is not the most pressing problem I have. My
legislature is probably the most pressing problem that I have.
[Laughter.]
Mr. Shaw. But, you know, EPA is something that we have to
deal with day in and day out.
Senator Baucus. Yes.
Mr. Shaw. So it does take our attention.
One thing I would like to say is, every time we have had a
State's early involvement in the decisionmaking process with
EPA, we have come out with successes.
Senator Baucus. Yes.
Mr. Shaw. Where we have been blind-sided or surprised by
situations is where we have most of our problems. That's where
I spend most of my time.
Senator Baucus. In an ideal world there would be some
statutory changes, but it is my experience that very often,
with great leadership, a lot of these problems can be dealt
with without changing the law.
Let's take Superfund, for example. I agree with Mr. Seif
that Superfund has its problems, but I think you'll agree that
the EPA, through administrative action, is able to solve some
of those problems. But still, I mean, how much of this can be
relatively solved with the right attitude?
Mr. Seif. I think it is right. College sophomores debate
process versus people, when it turns out people can override
process.
Senator Baucus. Right.
Mr. Seif. And we do every day.
Senator Baucus. Yes.
Mr. Seif. I don't consider the time I'm doing today as the
85 percent worrying about the system. This is part of the
solution--that is, bringing this message, the statistics and
such insight as we have been able to provide, encouraging
devolution, which is, I think, historically inevitable and
appropriate, given the nature of the environmental problems,
which are now much smaller, more retail, and the advance of the
information systems which would give us the metrics which will
eventually get us there.
So I don't consider myself being blocked by all of this.
These are inevitable challenges, but we're going to get there.
The public still believes in the most important message
that we have, which is: let's keep after the environment. I
think environmental mood in the country is as strong as it was
on the first Earth Day. It's just more sophisticated. There are
more tools. There are more problems. But we are going to get
there.
Senator Baucus. The tone of this hearing is constructive
and helpful. The Constitution contains the Supremacy Clause and
I don't think it is going to be repealed soon. I'd like to read
to you some testimony of Mr. Jorling, who was the EPA
administrator in New York, I think, in years past.
Mr. Seif. In the 1980's. Yes, sir.
Senator Baucus. The New York commissioner. In 1993, we held
hearings on roughly the same subject, and this is what he said
at that time: ``It is clear that the three principal
responsibilities of the Federal Government should be: one,
setting national minimum standards for health and technology;
two, being the gorilla in the closet to assure the integrity
and steadfastness of the Federal program; and, three, assuring
there is a level playing field across the States by focusing on
the States that are not performing as well as the other
States.''
I'm curious what reaction you have to each of those three
points.
Mr. Seif. I might mention Mr. Jorling is now senior vice
president for environmental programs at International Paper, a
career progression which is not to be smirked at, frankly. I,
myself, was at Earth Day in 1970 with my beard and the usual
buttons, balloons, and baloney. The movement has matured. It is
integrated. It is people like Jorling who are pioneers in
enforcement now doing it in the private sector, which is where
the real action is going to be in the next generation of
environmental improvement.
He's right. We don't want to compete against the State.
That's cutting corners. We want to have a strong enforcement
program in our State so that the polluter who is cutting
corners isn't an unfair competitor with people who are doing
the right thing. So a floor is important.
But it has been said--and the Benzine study at Yorktown is
an example--in which a modern enterprise is subjected to all of
the environmental laws. If the Baucus Widget Company, for
example, did absolutely everything it was supposed to--no more
and no less--it couldn't operate. It would be like the game of
Twister: randomly you put your hand down on the yellow and your
knee down on the green, and pretty soon you can't move--you
can't make widgets.
We need to get out around these historic 30-year cluster of
constraints--and Jorling has spoken about this very thing
wearing his new hat. The laws were designed to achieve spot
results, and did, and they now are in the way of the broader
result of integration of environmental concerns into everything
we do, as opposed to just being another regulatory headache.
That's the step we need to take.
Consensus is emerging on that, I hope.
Senator Baucus. Well, how do we advance the ball? You
haven't come here with a list--nor were you asked to--of
recommendations to change the statutes.
Mr. Seif. I would be pleased to participate in that
process. But you're right--I don't think the time is
politically ripe to do that.
Senator Baucus. That's my sense.
Mr. Seif. I think that, ironically, EPA is doing a large
number of things that are very good ideas, often in the shadow
of the corporate culture there, which is still in a ``1970
shoot-em-up'' enforcement mode. It's still, ``Roll out the
stats. Get out the press releases.''
The fact is, the bulk of what EPA does makes a lot of
sense, and we're working with them.
It occurs to me that the next President is going to have an
EPA ready to roll into the 21st century and do this stuff. The
irony will be that if Gore does it, everybody will say, ``Boy,
it's about time someone did that,'' and if Bush does the very
same thing, the Beltway environmentalists will scream bloody
murder about backsliding. It will be the same stuff. It will
just be a de-emphasis of the one tool, enforcement, in favor of
the broad number of tools that actually work.
Senator Baucus. I'd like to ask the remaining three for
reactions to Mr. Jorling's statement.
Mr. Shaw. I agree with Mr. Jorling's principal statements.
I do think that the States need to have involvement in all
three of those issues. I mean, we need to have some involvement
in setting the floor. I'd like to have some knowledge of when
the gorilla is coming out of the closet. But I don't disagree
with what he says in principle.
Senator Baucus. Mr. Varney?
Mr. Varney. I'd say I also agree, but would just emphasize
the need for flexibility. Just as if one is cutting a budget
and you say, ``Keep your sights set on the bottom line,'' we
need to keep our sights set on the environmental and public
health outcomes and give EPA and the States maximum flexibility
to achieve those goals.
In the interest of being uniform in our application of
requirements, some of the requirements are overly prescriptive,
which then get in the way of the best solution or the most
cost-effective or environmentally sound solution, and those are
the items that we should be seeking out, identifying, and
addressing.
Senator Baucus. But NEPPS is helping a little bit, isn't
it?
Mr. Varney. Yes, it is.
Senator Baucus. Mr. Bradford?
Mr. Bradford. Yes. I would agree with his statement,
although I think we have evolved in some regard beyond part of
it. The need for national standards is important. There is no
question about that. I think all States have come to a
realization--we certainly have in Utah--that environment and
enforcement is important. There are different ways and
different approaches to get there.
Our State legislature is notorious for saying that we ought
not to treat people like criminals when, in fact, what they're
trying to do is comply in a very complex system, and that we
ought to be providing some assistance to them to try to help
them get there if, in fact, the goal is compliance.
So the need for a gorilla may not be there as much as it
was early on, because there seems to be a recognition, at least
in our State, that environment is important and that we need to
be able to deal with these issues, and there is an honest
attempt to do that.
Senator Baucus. I understand that. I think a subsequent
panelist is going to say something to the effect that 17 or 18
States just do not rise above the minimum. A lot of States have
some environmental standards which are above the Federal
minimums, but for about 17 or 18 just--it's a ceiling. It's not
a floor, it's a ceiling, which may mean that the gorilla is
needed. I'm just speculating. Maybe the administrators in those
States may want the gorilla to tell their legislatures to do a
little more. I don't know.
Mr. Bradford. They may. And there certainly is an
appropriate role for EPA to enforce statutes, but it doesn't
all have to be done the same way.
Senator Baucus. I know. I agree completely.
Mr. Bradford. If we are going to achieve results,
compliance is the goal. There are lots of ways to get there.
Senator Baucus. Yes. My experience, too, is that solutions
generally are reached when so-called ``adversaries'' or
stakeholders are all in the same room talking together, with
some kind of enforcer there as well. It may be a Governor, or
somebody to get them talking and find a solution.
Mr. Bradford. One key point, I think, again coming back to
the experience we had in our State, is that if there is a
recognition on the part of all of the players involved that
each one brings something unique to the table to help solve the
problem--and if we can focus on solving the problem and use the
strengths of each of the players--that is, the States and EPA
and, in our case, local government--you can get there. It's
when one of them tries to say, ``We know how to run this,'' and
the other is not important that you have the problem.
Senator Baucus. Right. Same old story.
Senator Smith. Is there anyone who disagrees with the
statement that State finality would enhance your ability to get
the job done on these various environmental problems that you
face?
Mr. Seif. State finality is always desirable in any given
transaction. As a national policy matter, however, it depends
on what the final outcomes are in aggregate of whether that's a
good thing or not, and so we are back again to who sets
ultimately the standard. I think the Federal Government has
that obligation ultimately. And then finality when the standard
is reached--no second guessing and a lot of things that can
happen--is the key.
Senator Smith. Mr. Varney, one final question. In those
performance partnership agreements that we have in New
Hampshire, what specifically in those agreements allows the
States--in this case, New Hampshire--to prioritize specifically
on its resources? I mean, it might be a good thing to look at.
I know other States have them, as well.
Mr. Varney. Yes.
Senator Smith. But what is the most important of all of
those requirements in those agreements that allow the States to
prioritize their own environmental problems?
Mr. Varney. Well, in the development of our agreement, we
are essentially putting our strategic plan for the agency with
our goals and objectives and action items and then putting our
resources and annual work program in alignment with that
strategic direction for the department, and then forcing a
dialog, which is sometimes somewhat painful, forcing a dialog
internally and with EPA and other stakeholders about what those
priorities ought to be, and seeking feedback so that we can
then make adjustments.
We have seen this process to be extremely beneficial, not
only in terms of developing an annual program but also in the
use of carry-over dollars. For example, we have been able to
reallocate funding to address issues of sprawl, to address
implementation of our mercury strategy for New Hampshire and
actually make sure we implement it to restore shellfish beds
and to address in-stream flow protection requirements in our
State.
Having that kind of flexibility is really critical,
especially to a small State where we have limited resources to
deal with a problem, and that flexibility becomes crucial to us
and enables us to get the biggest bang for the buck and to make
sure that those Federal dollars are used as wisely as possible
and used within the context of this 75 percent of funding which
is State dollars. It is only 25 percent Federal, 75 percent
State, so it enables us to look at the complete picture of
everything that we do and put it all in one document and enable
us to look at it from a strategic direction, standpoint, and to
me that's the right way to allocate resources, it's the right
way to seek public input and involvement, and the right way to
manage an agency.
Senator Smith. Well, I think, as a Congress, I think we are
beginning finally to move in the direction that you are all
advocating; however, it seems like you're moving there fairly
quickly, and then you'll get an issue such as the TMDL issue
which will pop up on the screen, where, again, a rule proposed
with a deadline which stirs everybody up and shows the heavy
hand again without, in my view, at least, the appropriate
cooperation or discussion before doing such a thing, so now
we're faced with an implementation of a rule, I think by June
30th, that everybody is upset about, and meetings all over the
country on these things. There will be a hearing in New
Hampshire next week on it.
In any case, I appreciate your time here.
Does anybody have a final comment on this panel?
[No response.]
Senator Smith. We thank the witnesses for their time.
The committee will take a 5-minute recess as the next panel
comes up.
[Recess.]
Senator Smith. The hearing will reconvene.
I'd like to welcome the third panel: Ms Lynn Scarlett, the
executive director of the Reason Public Policy Institute; Mr.
Erik Olson, the senior attorney for the Natural Resources
Defense Counsel; and Mr. Jason Grumet, the executive director
of the Northeast States for Coordinated Air Use Management.
Welcome each of you. Thank you all for coming.
We'll start with you, Ms. Scarlett.
STATEMENT OF LYNN SCARLETT, EXECUTIVE DIRECTOR, REASON PUBLIC
POLICY INSTITUTE
Ms. Scarlett. Thank you, Senator Smith, for holding these
hearings. I'm delighted to be here.
As indicated, my name is Lynn Scarlett. I am executive
director of Reason Public Policy Institute. We are a Los
Angeles-based policy research organization.
To sort of stitch together some of what you've heard today,
I'd suggest to you that we have four recurring challenges that
confront environmental policymakers in order to get to 21st
century environmental improvement.
First is how can policies better ensure environmental
innovation. Second is how can they better focus on results and
take into account the multiple stovepipes in an integrated way,
as Senator Smith suggested. Third, how can policies better
foster incentives for private stewardship? I think what we are
all after ultimately is a Nation of self-motivated
environmental stewards. Fourth, how might policies better take
into account specific local knowledge--the knowledge of time,
place, and circumstance, those devilish details that vary from
site to site?
There are an array of State initiatives. They, indeed, are
at the forefront of a search for a new environmentalism that
addresses or attempts to address these four questions. There
are four features of these programs. You have heard two of
those features this morning. I want to add two others.
The first feature is flexibility--that is, States moving
toward greater flexibility in the options and ways that they
achieve the goals they are pursuing.
Second is the focus on performance rather than process.
But, third, I want to add an additional element, and that
is the greater use of incentives rather than punishment as the
first order of effort.
And, finally, there is a move toward greater place-based
decisionmaking--that is, looping local folks into decisions at
watersheds and so forth.
Let me just give you a little flavor of some of these
examples and then get to some of the challenges, as I see them.
On the flexibility front, I think it is worth underscoring
this is not about roll-back. Indeed, it is about extending the
performance envelope both upward and outward. Let me give you
an example of Wisconsin. They have a green tier permit program
underway. Firms with high levels of performance qualify, not
just anybody. With this endeavor, they actually develop an
overall performance compact. That compact is a multiple
stovepipe, integrated, facility-wide permit and allows that
firm to look at the entire holistic setting in which they
operate.
Oregon has a green permits program very similar.
Massachusetts has an environmental results program. Frustrated
with simply spending a lot of time issuing permits, they,
instead, developed an industry-wide standard, particularly for
small- and medium-sized businesses--for example, dry cleaners
and photo processors. With this result, they were able to yield
dramatic reductions in emissions--43 percent reductions for the
dry cleaners, 99 percent reductions of silver discharges by the
photo processors.
Incidentally, speaking to something that Senator Baucus
indicated, all of this was done with fewer, not more,
resources--I think this is something worth paying attention to.
On the performance focus front, you've heard mention of
Florida's performance indicators. Let me give you a little
greater sense of what those look like. They are moving away
from the enforcement bean counting and, instead, have three
tiers of indicators. One is the plum--actual ambient ecological
performance.
Second is behavioral, but, rather than simply looking at
compliance, they are also looking at things like how many
voluntary pollution prevention initiatives they there so that
they get beyond simply the rule focus.
And, third, their traditional enforcement tier of
indicators is not simply a bean counting, but rather tied to
effectiveness. That is, are these enforcement endeavors
actually yielding substantial results, and at what cost?
The third type of innovation is incentives. I want to
mention one, but there are many, many programs. Texas has a
clean industries 2000 program--over 140 participating firms
after one year, 43,000 tons of reductions in hazardous waste
that was off the radar chart and not attended to in the more
traditional regulations.
Pennsylvania, Jim Seif, has a pollution prevention site
assessment grant program which helps small businesses and
others actually invest in pollution prevention.
Finally, turn to place-based decisionmaking. One of the
most fertile areas here is in watershed management. There are
literally hundreds of efforts by cooperative State, county,
Federal agencies coming together, bringing all interested
stakeholders to cooperatively determine what priorities for a
watershed will be and how to address those problems in a
nonadversarial fashion.
Minnesota, for example, has one chain of lakes, all brought
under a cooperative management system with multiple
jurisdictions taking part in that multiple problem solving
focus.
Senator Baucus might be interested in the Upper Clark Fork
River, Montana experience. They had an enormous adversarial
situation over in-stream flows, ranchers, and so forth in
contest against the environmentalists on this issue, but,
instead, came to place-based decisionmaking, sat down, and
worked out a plan.
Quickly on the challenges, I think there are three. You've
heard about the technical challenges--that is, simply
developing measurement tools and so forth. Second, there is a
set of challenges regarding fitting the new regulatory
structures in the old context, and perhaps in the questions we
can pursue that a little bit more.
The third set of challenges actually relates to stakeholder
interests and concerns. Who is at the decision table,
particularly in these place-based decisionmaking?
With that, I'll conclude and say that the new
environmentalism is a discovery process. There is no reason to
think we got things just exactly right our first go-round, and
we're now underway trying to figure out ways to do better.
Thank you.
Senator Smith. Thank you.
Mr. Olson?
STATEMENT OF ERIK D. OLSON, SENIOR ATTORNEY, NATURAL RESOURCES
DEFENSE COUNCIL
Mr. Olson. Good morning. My name is Erik Olson. I'm with
the Natural Resources Defense Council. I guess I'll stand
convicted of being a beltway environmentalist.
We believe that it is important that there are millions of
Americans who believe that there is an important Federal role
in environmental protection, and we're glad the committee is
holding this hearing today.
As you know, this debate has been going on for over 30
years, certainly since before the EPA was created. I think that
this committee has struck a bipartisan balance over the last 30
years that has formed a set of laws that are international
models for how environmental protection should work, which is
not to say that changes are unnecessary or that the State/
Federal relations are perfect.
We believe that cooperative federalism is a construct that
is very important and deserves re-evaluation constantly. I
think a lot of what the previous panel said from the States was
very constructive, and we are pleased to hear many of the
comments that were made.
Certainly, the States have an important role. They have
more local information, very often, about the local
environment. They are much more expert on local politics and
what the local situation is very often. In addition, States
have the role of the laboratories of democracy, and they
certainly have a great deal of creativity in many cases to
address local problems.
The Federal Government, however, does have a significant
role that has to be considered. I think Chairman Smith and your
predecessors, including Senator Chafee, Senator Stafford, and
many others have recognized this important Federal role.
First of all, there have been many situations where State
inaction simply necessitated Federal intervention. We know
about many of the rivers catching on fire, and so forth, from
the 1970's, but there still are examples today.
Second, there is, as we've heard States say just moments
ago, a need for a level playing field to avoid the race to the
bottom.
I wanted to read just briefly from page three of my
testimony, which quotes a brief filed by five States in which
they were opposing, strangely enough, a recent court decision
that said that a State can step in and override an EPA
enforcement action. Those five States said that, ``By making it
harder for EPA to maintain a level playing field nationally,
the panel's decision opens up States to risks that they will
suffer the adverse effects of pollution generated in
neighboring States, and that the regulated entities in other
States will gain an unfair competitive advantage over another
State's law-abiding competitors.''
I think that is a significant statement coming from five
States, ranging from the State of Louisiana to the State of New
York and California. They are saying that there is a very
significant, important Federal role to assure that there is a
baseline Federal minimum set of standards.
I think it is also important to note that now 19 States
have adopted ``no more stringent than'' clauses. This shows
that the race to the bottom is not a theoretical problem. In 19
States, at least for one or more environmental programs, the
State is not authorized--in fact, the State legislature has
prohibited the State--to be any more stringent in any
regulation than the Federal Government. That suggests that a
lot of States have their own statutory impediments to creative
activities.
I won't discuss it in detail, but it is mentioned in some
of the law review articles that I cited in my testimony, that
several court decisions that have prohibited States from using
their creative juices to adopt stronger programs than the
Federal Government has, because of these types of clauses.
In addition, very often only the Federal Government has the
resources, including the technical and scientific expertise and
the economies of scale, to address some of the large national
problems that we are addressing.
I want to say briefly that we believe there are
opportunities for more creative and innovative interactions
between State and Federal authorities. In the future, we think
programs like NEPPS, perhaps amended, could provide that kind
of flexibility.
The Federal Government does need to maintain an important
role of setting goals and standards and procedural safeguards
to protect citizens and the environment; however, if the States
show that they have the resources, show that they have agreed-
upon core measures of performance that are adequate through a
public process, show that they have the openness to track those
accomplishments that they are achieving, and are assuring
enforcement of the State and Federal law, that there are
opportunities for greater flexibility at the State level.
We do not believe that there is a need for an overhaul of
all the statutes. In fact, there are many opportunities under
current law to use the flexibility inherent in existing
statutes in order to improve State and Federal relations.
Thank you very much.
Senator Smith. Certainly.
Mr. Grumet?
STATEMENT OF JASON S. GRUMET, EXECUTIVE DIRECTOR, NORTHEAST
STATES FOR COORDINATED AIR USE MANAGEMENT
Mr. Grumet. Thank you, Chairman Smith.
My name, again, is Jason Grumet, and I am the executive
director of the Northeast States for Coordinated Air Use
management, or NSCAUM, which is an association of the air
pollution control agencies representing Connecticut, Maine,
Massachusetts, New Jersey, New York, Rhode Island, Vermont,
and, of course, New Hampshire.
Mr. Chairman, we appreciate the opportunity to address this
committee regarding innovative efforts to reduce air pollution
in our region. I should tell you that my challenge to innovate
begins now, as I try to distill 5,000 words of written
testimony into 5 minutes. But what I'll endeavor to do, Mr.
Chairman, is to start out by posing the challenge to innovate
within our clean air regulatory regime; in the second half of
my testimony I will then focus on some of the exciting projects
that we are undertaking, such as diesel pollution, red light
permitting, Mr. Chairman; and in the ``third half'' of my
testimony I will say a few words about pollution prevention.
As we approach the 30th anniversary of the passage of the
Clean Air Act, it is appropriate, we think, to reflect upon the
tremendous achievements that both government and industry have
made in reducing air pollution and protecting public health and
welfare.
The desire to provide all citizens with minimum standards
of protection and to provide industry with consistent national
obligations compelled Congress in 1970 and in every
reauthorization of the act since to establish substantial
Federal oversight and enforcement of our Nation's clean air
strategy.
At the same time, however, through the creation of State
implementation plans, Congress recognized that States must bear
the ultimate responsibility and, in fact, represent the best
hope to design and implement effective clean air laws.
I think it is useful to reflect upon this most basic
tension between the desires for national consistency, on one
hand, and the desire for State autonomy on the other, when
exploring how to promote and honor effective State innovation.
One of the central challenges, I believe, in a democracy is
to communicate complicated ideas in simple and ultimately
popular terms. In this discussion, the subtle complexities of
federalism are often described as a simple choice between
command and control Federal prescription, on one hand, and
innovation and State flexibility on the other.
This construction, which I often use, results from
frustration that many of us maintain as we watch government
erect seemingly nonsensical barriers to the creative, well-
intentioned efforts of business owners and local officials who
have the courage and the ingenuity to suggest a different
approach or a better way to achieve a clean environment.
Even worse, Mr. Chairman, under the time-honored theme that
no good deed goes unpunished, many of us can cite many examples
of situations where people who have gone beyond requirements
are actually undermined by the very regulatory system they are
trying to improve.
While my members live this frustration each and every day,
we recognize that these are not problems born of incompetence
or malice at any level of government, but rather that these
moments of apparent insanity flow inherently from a regulatory
regime necessarily designed to protect the public in situations
where private economic incentives and volunteerism are
inadequate.
While command and control versus innovation is, we believe,
a rhetorically powerful construct, the polemic in this
description suggests a false choice, and I do believe that a
more productive inquiry will flow from the premise that
national standards, while essential, often fail to capture the
ingenuity of local government and industry.
In this light, improving our environmental regulatory
system is a pursuit to refine and not replace enforceable
Federal requirements.
Let me now transition, if I can, from the abstract to the
particular and touch on two innovative efforts in the
northeast.
The first area I want to discuss are some exciting projects
relating to the retrofit of heavy-duty diesel equipment, and
then I'd like to say a word, if I can, about the innovative
efforts to actually reduce pollution before we ever create it
by employing pollution prevention techniques.
It is also worth noting that, while we have made tremendous
success, we have a lot of work left to do. While we've created
substantial beachheads within the EPA, where there is robust
collaboration, the EPA, like any mega-entity, has a host of
corporate cultures. Suffice it to say that those offices within
EPA charged with the obligation of enforcing the statute and
EPA regulations are struggling--at times awkwardly struggling--
to maintain a coherent regulatory regime that rewards
innovation.
Let me now turn to diesel retrofits. I hope that the pretty
charts and graphs have been submitted to the record. In this
kind of ``boy meets truck'' story, Mr. Chairman, it is a bad
news/good news, bad news/good news story.
The bad news is that diesel engines are, in fact, creating
an assault to public health in this country, and the problem
will actually get worse before it gets better. The good news is
that technology exists today to achieve tremendous
improvements, and, so long as the Administration does not
weaken EPA's proposal to cap diesel sulfur at 15 parts per
million, we will have an opportunity in the future to have the
words ``clean'' and ``diesel'' truly belong together in the
same sentence.
Again, though, the bad news is that the existing fleet of
diesel vehicles will be on the road for 25 years or more,
accumulating up to one million miles a truck, and the current
Clean Air Act and the regulation and litigation that describes
it has erected barriers that actually prevent States from
requiring retrofits.
Without creativity, this would be the end of the story. The
good news, however, is that the Northeast States, working with
the manufacturers and emission controls associations, the
engine manufacturers, and EPA have joined together to create a
strategy that embraces the substantial social desire for
change. The desire to comply with environmental regulations is
being enabled through a project called VMEP, which is enabling
Manchester Airport and the New York City Transit Authority to
achieve substantial SIP credit reductions toward their
conformity obligations. The desire of private developers to
move forward in ways that are socially benign--you are
certainly aware, Mr. Chairman, that we are building the Panama
Canal in downtown Boston with the affectionate title, the ``Big
Dig.'' This project has created a tremendous desire among
corporations in the Boston area----
Senator Smith. Don't say ``you.''
Mr. Grumet. The royal ``we,'' Mr. Chairman. I live the Big
Dig. I just don't have to pay for it.
It is the desire to make sure that that construction
happens in a way that is accepted by the community that has
created a commitment among all those engine manufacturers and
construction companies to retrofit their equipment.
Finally, there is a selfless desire among some to actually
just clean things up. We are working with school districts to
try to retrofit school buses and a host of other efforts.
I will only say about pollution prevention that the
opportunities are robust and so are the barriers.
I will note the one barrier that I think is probably the
paradigm of absurdity, which is the ``once in, always in''
policy. This is a policy, Mr. Chairman, which suggests that if
a facility changes its operation from using hydrochloric acid
to berry juice, they don't get any benefits of reduced
regulatory obligations. The ``once in, always in'' policy
suggests that once you've used a toxic chemical, we will treat
you as if you always use toxic chemicals. That is, of course,
not an incentive for change.
In conclusion, Mr. Chairman, I've spoken a lot about the
States and EPA. There are two roles that Congress can fulfill
to enable this evolution. The first has been mentioned several
times, and that is to provide resources and the flexibility to
use those resources. Change is always held to a higher standard
that the status quo, and we have to take on that test
collectively, with the opportunity to succeed.
Finally, innovation requires trust. We have found that
trust is ample in the face of success. In order for innovation
to flourish, that trust has to be equally dependable in those
rare moments when credible and innovative efforts fall short of
their desired goals.
I want to thank you and the committee staff for initiating
this dialog and welcoming us into it, and certainly hope that
we have opportunities to explore it further in the months
ahead.
Thanks.
Senator Smith. Thank you very much, Mr. Grumet.
Mr. Olson, let me begin with you. In my view, there is no
question that 30 years ago or so, when these laws were put on
the books, they were desperate measures for a desperate
situation. They were needed. It was an end-of-pipe solution, if
you will, for environmental laws, and I think it is obvious
that a lot of the participants were not willing. They were
dragged, kicking and screaming, to the altar of environmental
cleanup.
In some environmental programs, such as the Everglades
restoration plan that we worked on in the committee, the term
``adaptive management'' is used. I might just use that in a
different perspective here to say we need to be able to adapt
to changes.
I think people today--many companies, corporations, States,
other individuals in the private sector from various
environmental groups, to others who may not be considered
``environmental groups,'' have adapted and have changed. They
have realized now that the mess we did create needs to be
cleaned up. We're not there yet.
The question, though, is, as we move into the future, how
do we get it done so that we don't create more 1970's
reactions, necessary reactions?
When you hear about such things as performance partnership
agreements, as you heard Mr. Varney talk about and others--I
think 38 States have similar programs--wouldn't you agree that
these programs and approaches do enhance environmental
protection?
Mr. Olson. Certainly they can, and----
Senator Smith. But do they?
Mr. Olson.--in many cases they have. The question really
is, are there resources there? And we believe that in many
States the resources are there to make this kind of thing work.
Is the commitment there? And do we have a way to measure to
make sure that, as there is greater flexibility, in our view
there is more accountability. As you start to loosen the reins,
you want to make sure the horse is running in the right
direction.
Our concern is that we need to be able to measure that
success is actually occurring, that we're not just devolving
for the purpose of devolving and ending up not gaining the
environmental protection that I think most of us, and virtually
all of us involved in the process, want.
Our concern would be that we make sure that, through an
open process, that we are able to measure the success, and that
we are not simply using this as an excuse to waive standards.
We think that most States really do have much more
commitment than they did 30 years ago. Our concern, as I
mentioned, is that, although that is true of most, perhaps
virtually all States, there are a few stragglers. I cited in my
testimony some States that spend 38 times less per ton of waste
than some of their colleague States.
There are States that are stragglers, and the same is true
in industry, although there has been a corporate culture change
in many companies, and certainly a change in a lot of State
attitudes. There are always the stragglers, and those are the
ones that we worry about.
Senator Smith. I would agree with you, which is one of the
reasons why I don't believe in the one-size-fits-all concept.
There are some States that are better at dealing with these
problems, have been much more innovative than others. I think
that is a good reason to provide programs like the performance
partnership, because it gives a State who deserves it at least
the opportunity to shine, if you will, and to use that kind of
innovation to get things done.
Ms. Scarlett, in your term ``new environmentalism,'' if I
could compare and contrast the testimony from the two of you
here for a moment, I think you might say that in the Federal/
State relationship, maybe it is the Feds that are lagging, that
they have not evolved to the point of where the States are.
Where the States are moving out forward, it is the Federal
Government that is hanging back, not wanting to try innovation:
a new technique, or an opportunity to deal with the current
environmental problems, and to not create more.
Ms. Scarlett. Yes. In fact, as Mr. Olson was speaking, and
particularly his emphasis on measurement and the importance of
measurement, I could not help but think that the last three
decades of environmental performance we have tended to use as a
proxy for success whether someone had a permit or a series of
permits and so forth. What really is happening in the States,
in fact, is to say, ``Well, that might have been OK when we
didn't have really very good ambient air quality measuring
tools. But we really now need to actually measure real
results.'' That's what Florida's performance indicators and
what Oregon's performance indicators are about.
So I think actually U.S. EPA--and they are working
themselves in this direction, but I think they have a page,
something to learn from the States in that regard.
Senator Smith. Any specific changes that you would propose
to bring the Federal role into this new environmentalism you're
talking about?
Ms. Scarlett. Yes. I would put them in three categories:
cultural, regulatory, and resources. On the resources front, I
think one change would be--and you heard some of the State
regulators say this--to allow in the resources that are
allocated to the States for environmental performance, allow
broader latitude in how they expend those.
Right now, there are some quasi-block grants, but they must
be spent within a particular medium or particular problem set.
Give them more latitude to prioritize and direct.
Second, while it is true that States are moving forward
with NEPPS and Project XL and so forth, we have done a lot of
interviewing, both of industry and also of State regulators,
finding out, well, why are there only 8 or 9 of these examples,
or 10 or 12, or, in the case of XL, about 50, when you've got
really thousands of potential facilities that might
participate.
What you hear is really one primary point: if you are a
company in the Midwest and you must sit down and hammer out
with your local regional EPA and with your State a performance
compact for your entire facility, but then you have to justify
with the Federal EPA, say, ``Well, we get to waive this permit
and that permit.'' Then you're really back on a case-by-case
basis and a source-by-source-by-source negotiation and
analysis, which really defeats the purpose.
That has given some industries cold feet in participating,
and it also has been a deterrent to State regulators in also
proceeding.
And the third thing I would do on the performance front is
to actually really work with EPA to develop something much more
like Florida's performance indicators, because it has a way of
changing the internal corporate culture of EPA.
If you are measuring real results, that tends to be what
you spend your time on, rather than on bean counting and so
forth.
Senator Smith. I get the sense that the States--not all--
are not moving as quickly as others. But I think the States may
be way out in front in the sense that they represent the people
who are the closest to the Superfund sites and the dirty air
and the dirty water and the contaminated wells, and so forth. I
think that's why you've seen in the last 25 or 30 years a
tremendous growth in expertise by the Departments of
Environmental Services.
Mr. Grumet, I want to go back to a point you made in your
testimony about trust. It is almost, to me, as if it is
distrust. In the Federal Government, the EPA seems to have some
distrust--Mr. Olson referred to it--in some States, in
fairness, not to all--that they won't have the ability, or
maybe not even the intention, to move forward and resolve some
of these problems. On the other hand, you see the distrust by
the States for the Federal Government, because the EPA doesn't
want to let go.
How do we resolve this? I think we are at a critical point
here. I think we have an opportunity now to break out of the
past and move forward into the future, a bright future, a clean
future, if you will, and we just need to be able to de-couple
here in a way that gets both sides to remove themselves from
the distrust and start trusting one another. How do we do that?
What's your recommendation?
Mr. Grumet. A couple of thoughts, Mr. Chairman.
Obviously, I think the aspiration for the States is that
together we can start to evolve from a bureaucracy to more of a
meritocracy, and for that to work there needs to be, I think,
the old adage of trust, but verify.
I think that we have an obligation to earn the public's
trust by providing a transparency of process and an access to
data so that the public can understand and watch as we make
these transitions and as we ask for these kinds of changes.
Similarly, I would say that my colleague, Mr. Olson, and
many colleagues in the environmental community, with the basis
of that earned trust, have to have the discipline to join us in
not romanticizing the status quo and holding change to a
standard of perfection which, of course, is disabling.
We all have a tendency to think about the good old days,
but I would suggest to you that within our command and control
system there are a lot of loopholes, and those are loopholes
that will only be closed by innovation. Right now, for example,
in every State in the country, if there is a source that in a
year or two is going to close down and there's a new sweep of
environmental laws coming through, those controls don't go on a
source that's got 2 years of life left in them. They basically
get an AEL--an alternative emissions limitation--also known as
a ``free pass.''
With innovative programs like market-based controls, where
people have credit trading and the like, you can ensure that,
while not forcing a facility that's going to go out of business
in 2 years to go out of business right now by spending $100
million on pollution control, you have an option other than
just giving them a free ride by enabling them to offset other
emission increases somewhere else. So there are gaps in the
existing system that I think certainly the environment would
benefit from plugging.
Senator Smith. Sounds like a pretty good commercial for the
bubble bill to me.
Mr. Grumet. I wouldn't call it a bubble bill, necessarily,
but with strong caps not unlike those that I know you are
contemplating for the utility industry, Mr. Chairman, I think
that we then enable a degree of flexibility that is otherwise
not possible.
Senator Smith. Does anyone have a further comment they wish
to make?
Mr. Olson. I'd just like to note one area where I think
distrust has been defused.
We have been involved in a few regulatory negotiations
where EPA brings together State officials, industry people,
environmentalists, others in a room to negotiate a regulation.
Now, this can't be the model for every single rule that is
issued, and it does require much more resources for EPA to go
through that process than it would the traditional rulemaking,
notice and comment rulemaking. I think, however, the end result
of those kinds of negotiations can be that State officials have
their input, industry does, environmentalists do, and you reach
an agreement very often that is much more acceptable to all
parties and often does not end up in litigation, which is
traditionally the way it has been done.
So I think that is certainly one area where the committee
may want to look. If you are looking for ways to defuse the
distrust, certainly the regulatory negotiation process, in some
cases, can make a lot of sense and can be a very effective way
to achieve that goal.
Senator Smith. Well, thank you very much, all of you, for
being here today. I know you had to go out of your way to come.
We appreciate it.
This is, as you know, one of a series of hearings that we
are having on the authorization process with the EPA to try to
look at attempts to coordinate the various environmental laws
that we have in a way that we can prioritize in the various
communities where the impact is the worst, so your testimony
has been very helpful and appreciated.
At this point, I would just announce that a lot of members
had asked about having additional questions, so I'm going to
leave the committee record open until the close of business on
Friday to allow Senators to present questions for the record of
any of the three panels.
With that, the hearing is adjourned.
[Whereupon, at 12:27 p.m., the committee was adjourned, to
reconvene at the call of the Chair.]
[Additional statements submitted for the record follow:]
Statement of W. Michael McCabe, Acting Deputy Administrator, U.S.
Environmental Protection Agency
Good Morning, Chairman Smith, Senator Baucus and members of the
committee. I am Michael McCabe, Acting Deputy Administrator for the
Environmental Protection Agency. Thank you for the opportunity to speak
with the committee about the important work we and our partners, the
States are doing to protect public health and the environment.
Looking back over the last 30 years, we are proud of our strong
track record of achievement. The public widely recognizes our work as
having dramatically improved environmental conditions throughout the
country. Working together, we enabled American towns to improve
wastewater treatment--one of the biggest public works efforts in U.S.
history. We have cleaned up hazardous waste sites and closed unsafe
local garbage dumps all over the nation. Our air, land and water are
safer and visibly cleaner, even with significant economic expansion and
population growth. And U.S. environmental expertise and technology are
in demand worldwide.
Under the nation's environmental laws, EPA and the States each have
important duties. There always has been a division of labor, and a
dynamic, evolving Federal-State relationship. At a minimum, EPA is
charged with developing standards that provide baseline health and
environmental protection for all citizens. States and Tribes, as well
as local governments are the primary delivery agents, working directly
with businesses, communities and concerned individuals.
Many Federal environmental statutes call for EPA to authorize or
delegate to States and Tribes the primary responsibility for
implementing programs and designate them as co-regulators, once EPA has
confirmed that a State or Tribe meets certain qualifying criteria. Over
the last quarter century, most States have assumed responsibility for
implementing many Federal programs, with EPA retaining standard-setting
responsibility and an oversight role to ensure effective
implementation. In assuming responsibility for a delegated program, a
State maintains legal authority, provides its share of program
resources, carries out the work required to implement the program and
is accountable for the Federal funds allocated to support it.
States now have assumed responsibility for approximately 70 percent
of the EPA programs eligible for delegation. For the past three
decades, States have developed strong environmental management
capacity, gained experience and expertise. States have increased their
financial investment in environmental programs, and many have adopted
laws and programs beyond that required by Federal statutes, covering
issues ranging from erosion control to coastal management. Some States
have environmental standards that are more stringent than existing
Federal requirements.
Our challenge now is to build on the progress we have made. But the
problems we face today are much more complex than those of the past.
Though significant, past problems were easier to deal with in some
ways. We could target the ``point sources'' of pollution, and results
from our work were easily identifiable. But that is no longer the case.
For example, polluted runoff--our largest remaining water quality
problem--comes from sources far less evident and greater in number.
Many issues are international in scope, such as depletion of
stratospheric ozone and global climate change.
Under the unprecedented continuity of leadership provided by EPA
Administrator Carol Browner and the new generation of political
leadership with strong State experiences appointed by President Clinton
and Vice President Gore, new ways of thinking about causes of
pollution, and new approaches to controlling them, are reshaping EPA
and transforming the organizational culture that marked our first two
decades. Non-traditional thinking is changing and strengthening our
relationship with regulated businesses, State and local governments and
the American public as a whole.
Because EPA and the States share responsibility for protecting
human health and the environment, a strong partnership between us is
essential. States are strong environmental managers, and a new
relationship with the States is emerging--one that allows us to adapt
to changing priorities and to experiment with new ideas. We each have
important roles to play, and by cooperating and collaborating we are
achieving better results at less cost.
Today, the States and EPA are working hard to make this new
partnership succeed. Our existing regulatory structures--reflecting the
separate laws governing air quality, water quality, and waste
management--present some challenges to our efforts to find new ways of
doing business. But we are moving forward and finding ways to address
environmental problems in more holistic, comprehensive ways. Together,
we are making tough choices about competing priorities in the face of
limited public resources, and we are developing more telling measures
of environmental results.
The National Environmental Performance Partnership System
An important milestone in our collaboration was reached in May
1995, when EPA joined forces with State environmental agency leaders to
establish the National Environmental Performance Partnership Systems
(NEPPS).
Many of the concepts embodied in performance partnerships that had
been discussed for years such as giving States a stronger role in
priority setting, focusing scarce resources on the highest priorities,
and tailoring the amount and type of EPA oversight to an individual
State's performance were pulled together into a workable,
understandable framework.
Performance partnerships between EPA and the States represent a new
working relationship one in which EPA and the States determine together
what work will be carried out on an annual or biannual basis, and how
it will be accomplished.
The centerpiece of NEPPS is a Performance Partnership Agreement
(PPA), which sets expectations for performance yet offers flexibility
in meeting goals. This agreement is an innovative way to identify
priorities, solve problems, and make the most effective use of our
collective resources. It emphasizes performance rather than process and
environmental results rather than administrative details. It gives a
State greater freedom to focus resources on its highest environmental
priorities and to select the best strategies for getting results. Prior
to developing an agreement, a participating State assesses its
environmental problems and conditions, while actively involving
citizens in the process. Based on this information, the State then
proposes environmental and public health objectives along with a plan
of action. This forms the basis for developing the Performance
Partnership Agreement with EPA. To date, 34 States have established
agreements with the Agency.
Another feature of NEPPS is flexibility in administering grants.
States now can consolidate a variety of individual grants into one. A
Performance Partnership Grant (PPG) reduces administrative burdens by
cutting paperwork and simplifying financial management. It also allows
the States more flexibility to use grant money to address their most
pressing environmental problems. Forty-four States have chosen this
option. To enhance flexibility for States, a State can participate with
a PPG without a PPA.
The positive changes resulting from NEPPS can be seen in many
States:
Maryland has seen its administrative reporting
requirements cut in 13 areas, and the goals and objectives identified
through NEPPS serve as the environmental component in the State's
strategic plan.
Florida's emphasis on showing results led them to develop
a new performance measurement and tracking system that received an
``Innovations in Government'' award from the Ford Foundation and
Harvard's Kennedy School of Government.
Mississippi's interest in targeting resources to solve
priority problems resulted in a reorganization around specific
functions, business sectors, and geographic areas.
Minnesota shifted staff and resources from the main State
office closer to where the real problems occur--out in the districts.
Washington saw the paperwork associated with its annual
work plan for grants fall by an order of magnitude--from about 40 to 4
pages.
One of the major components of NEPPS is the use of a common set of
national environmental indicators to measure the performance of our
environmental programs. This limited set of national data, called Core
Performance Measures, is designed to help us better understand the
effectiveness of our actions and gauge progress toward protection of
the environment and public health.
Core Performance Measures, based on data collected and reported
primarily by States, serve the NEPPS objective of managing for
environmental results by:
providing States and the Nation as a whole with the
information and tools to increase accountability and make policy,
resource or other changes to support improvements in environmental
conditions; and
providing a benchmark upon which States and EPA can focus
efforts to reduce high cost/low value reporting for public and private
entities.
Core Performance Measures help paint a national picture of
environmental progress.
Last year EPA and the States took a major step forward in the
development of measures that rely more on environmental indicators and
program outcomes rather than process and outputs by agreeing upon a set
of Core Performance Measures for Fiscal Year 2000 and beyond.
This agreement was the culmination of a 3-year effort which
included the personal involvement of EPA National Program Mangers and
senior State officials. This 1999 agreement demonstrated the broad
support among the leadership of EPA and The Environmental Council of
the States (ECOS) for continuing and improving our joint efforts to
implement the various elements of NEPPS.
Several States and EPA regions are leading the way in developing
even better measures of environmental progress, using environmental
data to drive planning and priority-setting, sharing their findings
with the public, articulating more efficient oversight arrangements and
using grant funds in more efficient ways.
The EPA/State partnership has come a long way, but we have shared
challenges to confront in the near and long term. We need to jointly
focus our concerted efforts on fully accomplishing NEPPS goals.
Recently both EPA and ECOS reaffirmed our commitments to NEPPS. In
March of this year, I signed a memorandum to senior Agency leadership
detailing this reaffirmation and calling upon them to ensure all EPA
employees share our focus on NEPPS. I designated our Associate
Administrator for Congressional and Intergovernmental Relations as the
National Program Manager for NEPPS to secure strong and consistent
leadership in this effort. Last month at its Spring meeting, ECOS
adopted a resolution reaffirming its support for NEPPS and
reinvigorating its NEPPS subcommittee to ensure continuing attention
toward making improvements.
We are developing tools to help clarify appropriate performance
expectations, as well as ensure timely and clear communication in
developing Performance Partnership Agreements. We are identifying what
additional work is needed to move our Core Performance Measures toward
more outcome based measures. We are determining what appropriate steps
should be taken by EPA and the States to allow for greater use by
States of the flexibility envisioned under the Performance Partnership
Grant system to shift resources and funding among media programs.
Together, we are determining how effective public participation in the
NEPPS process can best be ensured. And, we are developing training to
strengthen EPA institutional capacity and remove cultural barriers so
our staff understand how the Performance Partnership System allows them
to be more effective in finding solutions to key environmental problems
and better manage their programs.
Additional Collaborative Efforts
In addition to our joint work through NEPPS, our partnership with
the States is evolving in other areas, leading us to work in a more
collaborative, coordinated manner. Together, we are applying innovate
approaches to traditional environmental problems, and we have begun to
see results. More importantly, we have set the stage for greater
cooperation and progress in the years ahead. We are beginning to
realize the benefits of our new working relationship, and the spirit of
innovation now reflected in so much of our work.
EPA has several other ongoing efforts with our State partners to
address today's top issues. There are on-going high level strategic
interactions with the States on information, enforcement and compliance
assistance, and our media programs.
Environmental Information is the foundation for improving
performance in accomplishing our mission to protect public health and
the environment. Better, more accurate information and the ability to
integrate data across media, as well as exchange data with our State
partners, allows for better decisions on priorities and approaches.
This need for better use of information and for taking advantage of
technological advances led to the creation of the Agency's new Office
of Environmental Information. The fiscal year 2001 President's Budget
proposes $30 million to fund the Office of Environmental Information
(OEI).
OEI is working with the jointly created State-EPA Information
Management Workgroup. This workgroup has developed a set of operating
principles that now govern our data and information management
activities. Recently, the Information Management Workgroup developed an
agreement and charter for a Data Standards Council. Recently adopted by
ECOS membership, the Data Standards Council is tasked to develop data
standards that will ensure that EPA and State environmental programs
can share data meaningfully and efficiently.
In addition, the Agency's Office of Research and Development is
working with the States and Tribes to transfer new methods of measuring
environmental quality and analyzing trends in the performance of their
programs.
EPA's Office of Enforcement and Compliance Assurance and the States
established an EPA/State Enforcement Forum to discuss enforcement and
compliance issues of mutual concern. This group has been successful in
areas such as identifying national priorities, the development of
enforcement policies, and the design of performance measures. Our work
with the Forum complements our work with media-specific State and local
organizations. We look forward to continuing our collaborative
relationship with the States and other Forum members.
EPA's Office of Air and Radiation has partnered with the States on
development of a ``National Air Quality Program: Joint Statement on
Vision and Goals'' which will be published in the near future. In
February 2000, The Office of Air and Radiation convened its first
national State and Local Air Roundtable in Florida. The purpose of this
forum is to bring together leaders in State and local air program
administration three-to-four times per year to assess how we are
working together to achieve air quality goals and to discuss issues of
mutual concern.
epa--states agreement to pursue regulatory innovations
While strengthening our working relationships, NEPPS set the stage
for another important development between the States and EPA--consensus
about how to test new ideas that would still work hand-in-hand with
Federal laws. Based on the States' growing interest in improving
environmental management, we negotiated the EPA/State Regulatory
Innovations agreement that expresses our joint interest in innovation
and specifies how it should occur. It creates a new way for EPA and
States to use the flexibility available in existing regulations--
allowing new ideas to be tested while assuring consistent levels of
environmental and public health protection nationwide. It commits EPA
to promote innovations and gives States room for flexibility at all
levels, which we are doing. And it commits EPA to consider and respond
to these ideas in a timely (90 days) manner.
To date, four Innovations Projects with States have been approved,
eight are under review and more are in the early consultation phase.
The projects that have been approved are:
The Texas Natural Resources and Conservation Commission
and EPA mutually agreed to use existing discretion to lower the
number of trained air opacity inspectors in Texas to align more
closely with the use of opacity as a compliance tool. Texas reduced
the number of opacity certified inspectors from approximately 100
to 50, yet this will provide the TNRCC with a minimum of 75 more
person/days a year to do facility inspections. The savings was
created by using a smaller number of inspectors more often and
savings hundreds of person/years lost for recertification every 6
months.
We agreed to do concurrent State and Federal rulemaking for
Air permits in Michigan.
We have an agreement to do a multi-year experiment
substituting Michigan's Department of Environmental Quality's MS4
program for EPA's proposed ``Phase II'' storm water permits. MDEQ
is going to start its program 2 years before EPA's Phase II storm
water regulations would have gone into effect and Michigan's will
cover a broader range of non-point sources than EPA's proposed
regulations.
EPA and Michigan have agreed to develop a Resource
Conservation and Recovery Act (RCRA) lender liability team to
conduct research on the possibility of providing lenders with
liability protection for RCRA corrective action in cases of
foreclosure. While both EPA and Michigan agree that liability
protection would make clean-ups easier, this agreement is subject
to determining a legal mechanism to allow it.
In another important arena, EPA continues to work with States and
Tribes as key partners in the cleanup of Superfund hazardous waste
sites. During the last 2 years, in fiscal years 1998 and 1999, the
Agency provided approximately $225 million to States and Tribes to help
manage response activities at Superfund sites. In May 1998, EPA
released the ``Plan to Enhance the Role of States and Tribes in the
Superfund Program.'' Seventeen pilot projects with States and Tribes
have been initiated to help provide additional resources and promote
increased State and Tribal involvement in the cleanup of hazardous
waste sites. In addition, EPA provides 42 States approximately $10
million a year to support the development of effective State voluntary
cleanup programs. EPA has entered into 14 Memoranda of Agreement (MOA)
with States regarding these cleanup programs. The MOAs provide a work-
sharing process for the cleanup of hazardous waste sites. The Agency
continues to work with States to negotiate and sign additional MOAs.
EPA also is working closely with State and local governments to
assess, clean up and redevelop contaminated brownfield sites. The
Agency has awarded more than 300 Brownfields Site Assessment Pilots to
help large and small communities and Tribes develop brownfield
programs, assess contaminated properties, and leverage public and
private sector financial resources for cleanup and development. The
pilots have contributed to the assessment of 1933 brownfield
properties, redevelopment of 151 properties, and helped generate more
than 5,800 jobs. Pilot communities have reported a leveraged economic
impact of more than $2.3 billion. EPA also has awarded 68 Brownfield
Cleanup Revolving Loan Fund Pilots (BCRLF) to 88 communities. The BCRLF
pilots complement the Assessment Pilots by providing a source of
cleanup funding for contaminated brownfield sites.
EPA has broadened its impact and effectiveness by reaching out to
work in partnership with public and private sectors. Today, more than
ever, EPA recognizes that it must involve everyone--other government
agencies, businesses, communities, individuals, and especially our
primary partners, the States--to meet environmental goals. The future
will undoubtedly raise other challenging issues, but we are now better
prepared to respond. Environmental solutions through new partnerships
and new tools--that is our expectation for the future. We will meet
that expectation along side our State partners with a spirit of
innovation.
Thank you, Chairman Smith. This concludes my written testimony.
I'll be happy to answer any questions the committee may have.
______
Responses by Michael McCabe to Additional Questions from Senator Smith
Question 1. In its testimony, EPA stated that it is moving forward
and finding ``new approaches to controlling causes of pollution'' and
that a ``new relationship is evolving with the States--one that allows
you to adapt to changing priorities and experiment with new ideas.''
Can EPA provide more specificity on these changes in the Agency? Please
address at least the following: What are some of the ``new approaches''
that EPA has taken? How does EPA allow States to adapt to changing
priorities? Are there changes in the law that would make it easier for
EPA to achieve those kinds of changes?
Response. EPA has placed a strong emphasis on new approaches and
innovation to improve environmental protection. For example, new
approaches are helping make clean air requirements more flexible and
less expensive, while yielding better environmental results. Market-
based trading has been successful in controlling acid rain: between
1995 and 1999, national sulfur dioxide emissions fell by more than 4
million tons annually; rainfall in the eastern United States is now
about 25 percent less acidic; and some New England ecosystems show
signs of recovery. Trading has also successfully reduced emissions of
nitrogen oxide, the prime ingredient in smog formation: by 1999, States
participating in the Ozone Transport Commission had cut nitrogen oxide
emissions 20 percent below levels allowed by law and 50 percent below
1990 levels.
Water quality permitting, monitoring, and reporting are now
integrated into broader strategies that focus on individual watersheds,
a move that brings greater efficiency, more attention to local
priorities, and better understanding of local conditions. Today, all 50
States, 6 territories, and 80 tribal governments have completed
comprehensive watershed assessments, creating the first coordinated
overview of water quality priorities in the nation's history.
New compliance assistance programs and incentives complement strong
environmental enforcement. During the past 4 years, 675 companies have
identified potential environmental violations at more than 2,700
facilities--voluntarily--based on EPA's offer to reduce or eliminate
penalties for facilities that routinely audit their operations,
disclose results, and quickly correct problems. Environmental managers
in different business sectors, local governments, and Federal agencies
can now find information on environmental requirements and pollution
prevention by going online to web-based compliance assistance centers.
The National Environmental Performance Partnership System (NEPPS)
is one innovation that allows States to adapt to changing priorities.
NEPPS is built on founding principles which include joint priority
setting; assessment of environmental conditions and programs;
negotiation of Performance Partnership Agreements (PPAs); outlining
roles and responsibilities between EPA and States; measurement of
environmental performance; and evaluation. Based upon its own
assessment of environmental conditions and program capabilities, a
State is able to propose priorities and corresponding work activities
which may differ from EPA's national program guidance. After consulting
with an EPA National Program Manager, EPA Regional Office leaders can
agree to provide the flexibility a State needs to address its own
priorities, within the boundaries of statutory and regulatory
requirements. In addition to varying from EPA priorities, States may
use this flexibility to further address environmental and public health
protection issues that cross traditional program boundaries, such as
environmental justice or children's health.
Under authority provided by Congress to EPA in 1996, EPA now offers
States the option of combining up to 16 categorical environmental
program grants into a Performance Partnership Grant (PPG). In addition
to gaining administrative cost savings, a State can use a PPG to direct
Federal resources to a negotiated work plan that addresses the State's
priority problems. PPGs can also fund innovative, cross-media
approaches to environmental and public health protection--such as
pollution prevention, community-based environmental management, or
compliance assistance to small business--that are difficult to fund
under traditional categorical grants. Even States that choose to
continue receiving their funds from EPA in categorical grants will soon
have greater flexibility to direct resources to their own priorities.
Under proposed revisions to the Code of Federal Regulations Part 35
rule that governs all EPA State grants, including PPGs, State
priorities must be explicitly considered when EPA and States negotiate
grant work plans. EPA expects to submit the final rule to the Office of
Management and Budget for review in early August.
We continue to work with States in improving environmental
information in order to support additional innovations. Having and
using better environmental data helps ensure that ``new approaches''
are in fact better able to protect the environment and public health.
The joint interest of EPA and States in testing new approaches to
flexibility available within existing statutes has led to an EPA/State
Regulatory Innovations Agreement. This agreement allows new ideas on
environmental management suggested by States to be implemented, while
assuring consistent levels of environmental and public health
protection nationwide. I listed four innovations projects in my written
testimony, and we are considering several more proposals at this time.
We have found some flexibility within the current statutes to
experiment with innovative approaches. In some cases, it has been
necessary to modify our regulations to conduct such experiments, and we
have done so through site-specific rules.
EPA is now going through a fundamental change in thinking about
what we need to make greater progress in implementing innovative
approaches. We believe we have stretched the limits of the law about as
far as we can. The authorities now in place have served us well in the
past; they have allowed us to make extraordinary progress in cleaning
and protecting the environment and public health. However, we recognize
that our laws need to change if we are to meet the remaining
challenges. The Clean Air Act has not changed in 10 years, the Clean
Water Act in 13, and Superfund in 14. These laws need to be improved,
and all of us have ideas on how that could be done. It is time for us
to begin a public, nonpartisan evaluation of the whole legal framework
under which EPA operates and how we can make it better.
Question 2. What specific actions has the Agency taken to reduce
internal resistance toward implementation of the National Environmental
Performance Partnership System (NEPPS)? What results have you seen?
Response. The National Environmental Performance Partnership System
(NEPPS) is a major evolution in how the Agency has interacted with
State environmental agencies. It requires a fundamental change in
approach by Agency employees from one of oversight and command-and-
control to one of partnering with a capable government entity. Three
steps have been taken recently to reinforce the importance of NEPPS: 1)
the Agency has reaffirmed its commitment to NEPPS and to provide
leadership and accountability designated the Associate Administrator
for Congressional and Intergovernmental Relations to as the National
Program Manager for NEPPS; 2) the Agency has tasked its senior career
managers to convey to all employees the value of NEPPS to their work
and the environment; and 3) the Agency is enhancing training to empower
employees to carry out NEPPS and integrate the components of NEPPS into
their daily work. While there are many challenges ahead in making the
transition to a culture of partnership between EPA and States, EPA
employees increasingly see the value that partnership with States
brings to accomplishing our mission of protecting public health and the
environment.
Question 3. EPA, in its testimony, recognized that States need more
flexibility to address their environmental priorities. Performance
Partnership Agreements (PPA) and Performance Partnership Grants (PPG)
seem like a good first step in this direction. Even those tools seem
limited, however. The examples provided in the testimony focus largely
on process and paperwork issues. More substantive steps are needed. For
example, could a State use these programs to implement alternatives to
certain Federal programs, like the TMDL program? What can the EPA do to
make these tools more useful in achieving substantive changes in
programs?
Response. One of the principal benefits of the National
Environmental Performance Partnership System (NEPPS) is that it fosters
joint development of priorities and work-sharing between EPA and
States. As a result of negotiating Performance Partnership Agreements
(PPAs) and Performance Partnership Grants (PPGs) the States and EPA can
work together on difficult issues. For example, PPAs between Region 10
(Seattle) and the States of Oregon and Washington divide up the work
for developing total maximum daily loads (TMDLs) for specific
pollutants under the Clean Water Act. EPA is focusing on developing
TMDLs for high priority interstate waters and for water bodies on
Federal and Tribal lands, while the States are focusing on developing
TMDLs for waters within their States and on State and private lands.
Similarly, Region 4 (Atlanta) and the State of Georgia have used their
PPA/PPG as a vehicle for dividing up work on TMDLs.
In Nebraska, the PPA includes the Nebraska Mandates Management
Initiative (NMMI), an innovative approach to help small and rural
governments cope better with public health and environmental laws and
regulations. The Initiative uses an intergovernmental and
interdisciplinary team process to help local leaders better understand
regulations, analyze local situations and issues to determine which
problems pose the greatest risk, prioritize those risks, and find
technically and financially feasible solutions to the problems. The
Initiative has proven extremely successful, with outcomes including:
significant savings of capital expenditures; coordination of
regulatory, technical, and financial assistance programs; and
empowerment of local leaders and regulatory officials to encourage
flexible, customized, and common-sense solutions.
EPA is working continuously to improve implementation of NEPPS. We
are developing comprehensive training materials based upon our
experience to date as to what works and what does not. We are
constantly analyzing feedback we get from within and outside the
Agency. Through work inside EPA as well as in collaborative efforts
with States, we are addressing barriers and developing tools to make
NEPPS more useful in achieving substantive changes in environmental
protection. Among efforts currently underway we are: more clearly
defining the parameters of available flexibility; improving
environmental information collection and use; and finding ways to
reduce low value, high cost reporting.
Question 4. The GAO Report on EPA-State Collaborations makes the
point that EPA's 1995 Agreement with the States called for a joint
evaluation system for EPA and the States to work together to ensure
continuous improvement in their partnership effort. That evaluation
apparently has never been done. GAO also recommended that a joint
evaluation be conducted. Why hasn't EPA initiated the evaluation? What
will the Agency do in the future to ensure that the evaluation is done
and that any recommended improvements are actually implemented?
Response. EPA and the States have conducted joint workshops to
assess implementation, identify barriers, and work to remove those
barriers. In addition, joint EPA/State work groups have tackled
implementation issues such as core performance measures, information
management, and reporting burden reduction.
Prior to the release of the GAO report in June 1999, EPA and the
Environmental Council of the States (ECOS) met to discuss the
possibility of conducting a more formal joint evaluation of NEPPS.
Because several outside evaluations had been recently conducted (GAO,
EPA Office of Inspector General, and the National Academy of Public
Administration [NAPA] research reports), EPA and the States decided to
use the National EPA-EGOS NEPPS Workshop in the Fall of 1999 to review
the recommendations made in these evaluations. Attendees at the
workshop discussed the evaluation results, as well as their own
experiences within the NEPPS process, to develop recommendations for
action by EPA and the States.
EPA and the States are now following up on these recommendations.
Followup work includes giving increased leadership attention to NEPPS,
developing training for staff so they understand how NEPPS improves
their ability to do their work, improving the quality and usefulness of
PPAs and PPGs, and examining how to accelerate efforts to ``right
size'' State reporting. We also are anticipating the completion of the
NAPA report due in November of this year. EPA and the States will
review this report and the progress made in addressing the various
recommendations before deciding what additional efforts will be
undertaken.
Question 5. EPA acknowledged in its testimony that environmental
problems today are much more complex than those of the past. Would you
agree then that we need a stronger role for States and their
innovations in dealing with these more complex issues today more than
we have in the past?
Response. Over the last 30 years the capacity of the States to play
a pivotal role in environmental and public health protection has
increased dramatically. The States have become important laboratories
where innovative ideas for more effective management can be tested and
proven. EPA and States have collaborated on many innovative ideas with
EPA providing resources, technical assistance, and expertise. Many of
these ideas hold promise for implementation on a ideas wider basis. EPA
will continue working with States to help build their capacity for
innovation so they can assume an even stronger role in generating and
testing many more new ideas.
Question 6. The Environmental Law Institute has recommended that
Congress authorize the flexibility and workload shifting embodied in
the PPA and PPG concepts. Does EPA support this recommendation?
Response. We have found a great deal of flexibility within the
current statutes to implement NEPPS. We are working hard to address the
barriers that have been identified. We believe this is a more
productive allocation of our limited resources than proposing statutory
changes specific to NEPPS or PPGs at this time.
______
Responses by Michael McCabe to Additional Questions from Senator Chafee
Question 1. In your testimony, you state that ``the problems we
face today are much more complex than those of the past.'' and
specifically reference nonpoint source water pollution as an example.
Does the more complicated and site specific nature of many
environmental challenges, such as nonpoint source pollution, argue
moving away from existing ``one-size-fits-all'' regulation toward a
more flexible and locally based approach? How do you envision such a
flexible program working; in what areas do you feel the States should
have greater flexibility?
Response. The Agency has many efforts underway to move away from
the ``one-size-fits-all'' approach toward more flexible and locally
based approaches to environmental protection. The National
Environmental Performance Partnership System (NEPPS), which now serves
as the framework for our partnership with States, is designed to
provide States with greater flexibility in how they solve their most
pressing environmental problems and provides a vehicle for States and
EPA to negotiate innovative approaches. In the regulatory arena,
collaborative efforts such as the EPA/State Regulatory Innovations
Agreement and Project XL are seeking innovative ways to achieve
environmental protection. The Community Based Environmental Protection
program and EPA's Watershed Protection Approach to environmental
management are examples of developing protection efforts based on the
conditions and needs of local geographic areas. Through such
collaborative efforts, EPA, States, local governments, businesses, and
other stakeholders are working to provide greater flexibility in how
environmental problems are solved while ensuring there is continuous
improvement in environmental performance.
NEPPS. The National Environmental Performance Partnerships System
(NEPPS) is the operating framework for EPA's working relationship with
States to accomplish our joint mission of protecting public health and
the environment. Through NEPPS, States can propose alternative
approaches to priority problems and direct Federal funds to
implementing these approaches. Under NEPPS, EPA and States set
priorities jointly based on an assessment of environmental conditions
and program needs as well as consideration of national, Regional, and
State priorities. As a result of these negotiations, States have
greater flexibility to focus environmental protection efforts on their
most pressing environmental priorities. To address the jointly
negotiated priorities, the Performance Partnership Grant (PPG)
authority allows States to combine funds from up to 16 categorical
grants in a single PPG. Another key element of NEPPS is oversight that
is tailored to a level appropriate to the performance of each State. We
continue to work both internally and with States to make the granting
of flexibility more transparent.
Project XL. A good example of the short-term results--and long-term
promise of our search for innovative site specific solutions in
partnership with States, business, and the public can be seen in
Project XL. Launched in 1995, this innovative program tests ideas that
could make the nation's environmental protection system more efficient
and effective.
Through Project XL, participants can reap the benefits of reduced
administrative burdens or increased regulatory flexibility if they take
steps to do more than just comply with regulations--achieving results
that go beyond what the law requires. If a pilot project is successful,
it is evaluated to see if those innovations can be more broadly applied
to other facilities. This willingness to experiment outside the
regulatory arena signifies our emphasis on getting results, not simply
enforcing regulatory requirements. To date, 25 projects are being
implemented under Project XL.
Watershed Protection Approach. EPA's Watershed Protection Approach
is effectively protecting and restoring aquatic ecosystems while
protecting human health. Rather than just addressing an individual
water body or discharger, this strategy has as its premise that many
water quality and ecosystem problems are best solved at the watershed
level. Major features of the Watershed Protection Approach are:
targeting priority problems, promoting a high level of stakeholder
involvement, integrated solutions that make use of the expertise and
authority of our State partners and other agencies, and measuring
success through monitoring and other data gathering.
Question 2. You argue that ``existing regulatory structures. . .
.present some challenges to our efforts to find new ways of doing
business.'' Do you feel that our existing environmental laws such as
the Clean Water Act, provide the necessary flexibility?
Response. As described in my testimony, EPA and State regulators
have successfully tackled and addressed many of the nation's pressing
environmental concerns. Building on these successes, EPA and States are
now recognizing and focusing our attention on problems that are not as
easily targeted by the existing statutory and regulatory structure.
We have found some flexibility within the current statutes to
experiment with innovative solutions to environmental problems. In some
cases, we have made site-specific regulatory changes necessary to carry
out these experiments.
EPA is now going through a fundamental change in thinking about
what we need to make greater progress in implementing innovative
approaches. We believe we have stretched the limits of the law about as
far as they can go. The authorities now in place have served us well in
the past; they have allowed us to make extraordinary progress in
cleaning and protecting the environment. However, we recognize that our
laws need to change if we are to meet the remaining environmental
challenges. The Clean Air Act has not changed in 10 years, the Clean
Water Act in 13, Superfund in 14. These laws need to be improved, and
all of us have ideas on how that could be done. It is time for us to
begin a public, nonpartisan evaluation of the whole legal framework
under which EPA operates, and how we can make it better.
______
Responses by Michael McCabe to Additional Questions from Senator
Lautenberg
Oversight
Question 1. In 1995, the GAO reported that States complain about
excessive EPA oversight. States felt that a highly performing State
should get less oversight than a State that is having difficulty
implementing a program. Is there a method of measuring such a State
performance agreed to by both EPA and the States? Are States providing
and is EPA assembling the information necessary to identify highly
performing States? If so, what are you finding--which States are
performing well and which are not performing well?
Response. EPA Regional Offices work with each of their States to
address State performance. EPA Regional of rices tailor the type and
amount of oversight--as well as the kinds of technical and other
assistance EPA will provide--to the needs and performance of each
State. Agreements between EPA and the State about how EPA will conduct
oversight and what technical assistance EPA will provide are often
incorporated into a Performance Partnership Agreement (PPA) or other
EPA-State agreement. Among the information considered in the
negotiation of these agreements is an assessment of the State's
performance. As envisioned by the National Environmental Performance
Partnership System (NEPPS) that serves as the framework for EPA-State
partnerships, EPA and the State will ideally evaluate the effectiveness
of their efforts jointly.
When EPA was collaborating with the States in the development of
NEPPS, States representatives said they did not want EPA to rank or
compare one State against another. As a result, efforts to develop
criteria for the leadership aspects of NEPPS were dropped. However,
there are some examples where criteria for evaluating States have been
developed, such as Region 8's enforcement oversight model. While
specific approaches to oversight may vary by Region and program, EPA's
oversight efforts are designed to foster continuous improvements in
each State program. In evaluating a State program, EPA considers a
complex set of factors such as: comparisons of current performance
measures against past performance; whether the State is meeting its
program commitments; the quality and adequacy of its program efforts;
and factors outside the control of the State agency that might be
affecting its performance. EPA discusses reasons for any problems and
what could be done to improve with the States, and under NEPPS, a joint
evaluation approach is considered the ideal.
We continue to explore ways that would be acceptable to both EPA
and States to make differential oversight more transparent. The EPA-
State Agreement on Core Performance Measures puts an important tool in
place that should help in measuring individual State environmental and
program performance and form a more solid and equitable basis for
implementing a more formal approach to differential oversight in the
future.
Environmental Reporting Reform
Question 2. As you know, I am drafting a bill to streamline
environmental reporting. The bill will require EPA to give each
business in the U.S. one point of contact for all Federal environmental
reporting requirements. This ``one-stop'' electronic reporting system
will use a common nomenclature throughout and use language
understandable to a business person, as opposed to an environmental
specialist. It will also provide pollution prevention information to
the business. The following questions relate to that bill.
According to Mr. Bradford's testimony, the States and EPA are
working together to accomplish many of the objectives I am pursuing in
drafting my bill. It remains unclear to me, however, which specific
objectives are currently envisioned by the EPA-State partnership; when
we might expect to see them realized, and by what means. Your answers
to the following questions will help clarify my understanding of the
State-EPA partnership.
How long have EPA and State agencies been working to integrate
environmental information management and to streamline environmental
reporting?
Response. EPA began its preliminary integration efforts with States
in 1990 with the development of the Facility Index System, a way of
tracking a facility through different data sets. In the ensuing years,
the efforts expanded to include direct program assistance to States
through the One-Stop Reporting Program; Reinventing Environmental
Information (REI) efforts designed to establish basic data standards
and to implement electronic reporting; and convening in 1998, the
State/EPA Information Management Workgroup to deal with ongoing policy
issues surrounding information management. Each of these efforts
contributed to the development of the Information Integration
Initiative in 1999, the next logical step in developing a comprehensive
data exchange network that will provide a wide-range of shared
information among States, EPA, tribes, localities, the regulated
community, and other data partners.
Question 2a. Which of the following attributes will the integrated
reporting system envisioned by the EPA-State partnership expect to
have.
Will a facility be able to identify, through one point of contact,
all EPA reporting requirements that apply to it? Will a facility be
able to identify as well, through the same point of contact, all State,
tribal, and local environmental reporting requirements that apply to
it?
Response. At present, EPA has not created a single place where a
given facility can identify all reporting requirements that apply to
it. However, EPA is taking steps toward consolidating the availability
of information on Federal regulatory requirements and compliance
assistance such as:
1. placing EPA regulations and guidance on line;
2. providing links to information via sector specific codes;
3. issuing simplified guidance on reporting; and
4. establishing compliance assistance centers in cooperation with
States and industry associations.
EPA views these steps as critical to providing necessary assistance
and guidance. The integration initiative effort to develop a data
exchange network also will be able to provide internet links to State,
Tribal, local, and other Federal agency requirements. These links can
in essence create a ``roadmap'' to information needed by the regulated
community to improve compliance with environmental laws.
Question 2c. Will a facility be able to submit, through the same
point of contact, all information that is normally submitted directly
to EPA programs?
Response. The goal of EPA's Central Data Exchange (CDX) effort is
to centrally process as many of EPA's data collections as possible. For
information security or other reasons, such as protection of
confidential business information, some data collections may remain
independent of CDX.
Question 2d. Will a facility be able to submit as well, through the
same point of contact, all information required under applicable State,
tribal, and local environmental reporting requirements?
Response. Our current efforts focus on centralizing the exchange of
data with our co-regulators, emphasizing data to ensure compliance with
Federal requirements.
Question 2e. Will the reporting system direct the facility to
information on applicable OSHA reporting requirements and environmental
reporting requirements administered by Federal agencies besides EPA?
Response. While our current efforts focus on centralizing the
exchange of data with co-regulators to ensure compliance with EPA's
requirements, it should be possible to create other Federal links as
necessary in the future.
Question 2f. Will the reporting system use data standards for units
of measure, terms for chemicals, pollutants, waste, and biological
material, and methods of identifying reporting facilities, developed in
consultation with industry, environmental groups and other
stakeholders?
Response. Yes. EPA is working to establish, in consultation with
our external partners, both data element and ``format'' standards for
external data reported to EPA. The Environmental Data Standards Council
consists of EPA, State and Tribal members. Its purpose is to jointly
develop and implement standards which facilitate the efficient exchange
and use of environmental information. To date, the Environmental Data
Standards Council has approved standards for facility identification,
date, Standard Industrial Classification/North American Industrial
Classification System (SIC/NAICS), and Latitude/Longitude. The Council
is working aggressively to also standardize chemical identification,
biological taxonomy, and other data sets widely used by EPA programs,
States, and Tribes. Work has been initiated on standards development
for enforcement and compliance, permitting, Tribal identifiers, and
geographic data elements. All of these standards will be provided to
the public for review and comment before they are made final by the
Council.
Question 2g. Will the reporting system use an ``open data format''
that allows facilities to download information from their own internal
data management systems directly to the integrated reporting system?
Response. EPA's Central Data Exchange (CDX) program has the lead
for establishing the ``transmission formats'' which prescribe the
arrangement of standard data elements in reporting transactions. CDX
has recently received approval through the American National Standards
Institute, an industry/government standards setting body, to deploy a
standard data format for exchanging compliance data. This format is
referred to as the ANSI X12 Environmental Compliance Reporting (179)
Transaction Set. CDX is now in the process of deploying the ANSI X12
179 transaction set, and is also in the process of developing
equivalent ``Internet''-based formats, using ``extensible markup
language,'' to allow a broader range of regulated entities to provide
data electronically.
There should be many benefits if facilities connect their internal
management systems to their environmental management and reporting
systems. These benefits could include improved data quality,
identification of pollution prevention and cost-saving opportunities,
and reporting burden reduction. EPA will engage in outreach to
commercial vendors developing enterprise resource planning systems, and
other data management systems for the regulated community, and will
encourage them to include environmental management and reporting
components that are compatible with the integrated reporting network.
Question 2h. To ease reporting by businesses with facilities in
more than one jurisdiction, will EPA and State, tribal, and local
agencies all use the same data format and data standards?
Response. The Environmental Data Standards Council will encourage
States and Tribes to adopt the approved set of data standards and
transmission formats. As currently envisioned, all members of the
integrated reporting network would be required to use approved
standards and formats as a condition of membership in the network.
However, EPA cannot require States or Tribes to adopt content and
format standards, nor can we require these parties to participate in
the integrated information network. Based on our recent work with
States and Tribes, it is clear that many, if not all, of these entities
will partner with EPA in the network.
Question 2i. Will a facility be able to receive information on
pollution prevention technologies and practices through the reporting
system?
Response. The integrated system envisioned by the EPA-State
partnership is one which will allow facilities and government to
exchange a broad range of information such as multimedia environmental
data, geographic data, and facility data in a stewardship environment.
As the network evolves, a wider array of information, including
pollution prevention technology and practices information, may also
ultimately be made accessible.
Question 2k. By what date may we expect the envisioned integrated
reporting system, or aspects of the system, to be in place?
Response. The Agency will begin to see implementation of concrete
integration projects in October, 2000, that directly support the State/
EPA data exchange network. The projects are:
integration of information about regulatory activities
(phase 1);
implementation of a Facility Registry System;
expanded integration and access of geospatial
information; and
initial implementation of an integrated central data
exchange capability.
These projects create new functionality in data base integration,
access/application, and State/external data flows.
EPA also is working closely with our State partners and plans to
use the fiscal year 2001 funding request to:
support collaborative State development and knowledge/
technology sharing;
work with other data partners beyond States; and
coordinate the Agency's other program information efforts
with States to modernize and integrate.
The States and EPA anticipate completion of a fully developed,
nationally integrated Network, used by States, Tribes, localities, the
regulated community, EPA and the public within the next 3 to 5 years.
Are the air, water, and waste programs of EPA and the State
agencies fully participating in the development of the integrated
reporting system?
EPA's information integration effort is, foremost, a partnership
with the States. EPA also has included representatives from every major
Agency program office. These representatives have been organized into a
multi-disciplinary team of technical information experts responsible
for recommending and developing the broad foundation pieces for:
defining and implementing a national network for
environmental data exchange in partnership with States and other
data partners;
assisting EPA's information partners to participate in
the exchange network;
positioning EPA to participate in the network and the
data exchange it will facilitate; and
integrating existing information collection processes
with data standards and a centralized data exchange to streamline
information sharing.
__________
Statement of Peter F. Guerrero, Director, Environmental Protection
Issues, Resources, Community, and Economic Development Division,
General Accounting Office
Mr. Chairman and members of the committee: I am pleased to be here
to discuss our recent assessment of the National Environmental
Performance Partnership System (NEPPS). NEPPS was established by a May
1995 agreement between the Environmental Protection Agency (EPA) and
the States as a new framework for improving their working relationship,
and for improving the effectiveness of States' environmental programs.
Under the program, a State and EPA may enter into a Performance
Partnership Agreement that identifies the State's environmental goals
and priorities, and how both EPA and State officials are to address
them. The two sides may also agree on a Performance Partnership Grant,
which is intended to allow the State greater flexibility in targeting
limited resources to meet its most pressing needs.
Both EPA and the States launched NEPPS to help address long-
standing issues affecting their working relationship. Among these
issues were concerns that EPA (1) is inconsistent in its oversight of
States from one region to another, (2) sometimes micromanages the
States' programs, (3) does not provide sufficient technical support for
the States' programs increasingly complex requirements, and (4) often
does not adequately consult the States before making key decisions
affecting them.
In signing the agreement that established NEPPS, EPA and State
leaders stated that they sought to ``strengthen our protection of
public health and the environment by directing scarce public resources
toward improving environmental results, allowing States greater
flexibility to achieve those results, and enhancing our accountability
to the public and taxpayers.'' Among the key elements of NEPPS were (1)
EPA's commitment to give States with strong environmental performance
greater flexibility and autonomy in running their environmental
programs and (2) the agreement between EPA and the States to develop
effective ``core'' performance measures to better understand whether
the States' programs are achieving their intended results.
Given the expectation among participants that NEPPS could deal with
many of the issues that have long impeded the EPA-State relationship,
the Chairman, Subcommittee on VA, HUD, and Independent Agencies, House
Committee on Appropriations, asked us to examine the progress made by
EPA and the States since the 1995 Agreement. In response to this
request, our June 1999 report (1) identified the status of grants and
agreements made under NEPPS between EPA and participating States, (2)
examined the progress that EPA and the States have made in developing
results-oriented performance measures to be incorporated into NEPPS
agreements and grants to the States, (3) examined how EPA oversight may
or may not have been changing in States that were participating in
NEPPS, and (4) discussed the extent to which the use of these
performance partnership agreements and grants had achieved the benefits
envisioned for the States and the public. \1\
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\1\ Environmental Protection: Collaborative EPA-State Effort Needed
to Improve New Performance Partnership System (GAO/RCED-99-171)
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In summary, Mr. Chairman, we found the following:
State participation in NEPPS grew from 6 pilot States in
its initial year in fiscal year 1996 to 45 States by the end of fiscal
year 1998. Of that number, 31 States had both Performance Partnership
Agreements and Performance Partnership Grants with EPA in 1998; 12
States had grants only; 2 States had Agreements only; and 5 States did
not participate at all.
EPA and the States agree on the importance of measuring
the outcomes of environmental activities rather than just the
activities themselves, in order to help them better understand whether
their programs are achieving their intended results. Despite a number
of technical challenges (e.g., the inherent difficulty in quantifying
certain results, and the difficulty of linking program activities to
environmental results) and disagreements between EPA and the States on
such matters as the degree to which States should be permitted to vary
from the national core measures, EPA and State leaders have managed to
agree on a set of core measures for fiscal year 2000 that are widely
regarded by EPA and State officials as significantly improved from
those negotiated in previous years.
The initial expectation that participation in NEPPS would
be accompanied by reduced Federal oversight of States has thus far been
realized to only a limited degree. We identified a number of instances
among the six States that we visited where oversight reduction did
accompany participation in the system. However, in other cases cited by
both State and EPA regional officials, it was difficult to attribute
reduced oversight directly to NEPPS participation. Other instances were
cited where oversight had either remained the same or had actually
increased.
EPA and State participants cited a number of benefits
associated with NEPPS noting, for example, that participation provided
a means of getting buy-in for innovative and/or unique projects and
served as a tool to divide an often burdensome workload more
efficiently between Federal and State regulators. Yet while
participants from each State indicated that their participation in the
voluntary program would probably continue, they also consistently
expressed the view that the benefits of the program should be greater;
that the program has yet to achieve its potential; and that
improvements are needed. The 1995 Agreement anticipated the
appropriateness of such reflection in calling for ``a joint evaluation
system for EPA and the States to review the results of their efforts to
ensure continuous improvement.'' We recommended in our report that such
a joint evaluation process be initiated, and suggested a number of
issues to be considered for attention during such a process.
Background
Under NEPPS, States may voluntarily enter into ``Performance
Partnership Agreements'' with their EPA regional offices. While there
is considerable flexibility in how the agreements may be designed, they
typically provide a means for EPA and the States to negotiate such
matters as (1) which problems will receive priority attention within
the State programs, (2) what EPA's and the States' respective roles
will be, and (3) how the States' progress in achieving clearly defined
program objectives will be assessed. An important component of the
Partnership Agreements is the use of a common set of national
environmental indicators (called ``Core Performance Measures'') to
measure the effectiveness and success of States' environmental
programs. In their efforts to develop these Performance Measures, EPA
and State officials have sought to move beyond counting the number of
actions (such as the number of inspections conducted or environmental
enforcement actions taken), and increasingly toward evaluating the
impact of programs on the environment.
While NEPPS provides the overarching framework for developing
partnership agreements, Performance Partnership Grants, authorized by
the Congress in April 1996, serves as a major tool to implement them.
This program allows States to request that funds from 2 or more of the
15 eligible categorical grants be combined to give governmental
entities greater flexibility in targeting limited resources to their
most pressing environmental needs. These grants are also intended to be
used to better coordinate existing activities across environmental
media and to develop multimedia programs. While the Partnership
Agreements are designed to complement the Partnership Grants, States
are free to negotiate both agreements and grants or to decline
participation in NEPPS altogether.
Growth of State Participation in NEPPS
In fiscal year 1996, NEPPS was initially tested on a pilot basis
with six participating States. EPA and the States viewed the first year
as a time to experiment with the new system and various ways to
implement it. The number of participating States subsequently increased
to 45 States in fiscal year 1998, although the extent of participation
varied widely. For example, half the States have negotiated both
Partnership Agreements and Partnership Grants through their lead
environmental agencies that cover most EPA programs; other States have
substantially limited their participation and cover fewer programs.
States have also varied considerably in the detail and content of
their Agreements. Senior officials in EPA's Office of State and Local
Relations explained that the agency has not attempted to impose
uniformity on the development of Partnership Agreements at this early
stage of the NEPPS process, and has therefore refrained from issuing
guidance on how the agreements should be structured. Hence, the
agreements vary widely in content and emphasis, reflecting each
individual State's conditions and priorities and reflecting the results
of negotiations with their respective EPA regional offices.
Progress in Developing Results-Oriented Measures
Both EPA and the individual States have had a number of efforts
underway to develop effective performance measures to better understand
whether their programs are achieving their intended results. Their
collective efforts to develop such measures for NEPPS has centered
around the Performance Measures that were negotiated between EPA and
the Environmental Council of the States during the past several years
(The Council is a national nonpartisan, nonprofit association of State
and territorial environmental commissioners.). The effort faced a
number of technical challenges inherent in developing defensible
results-oriented measures. The results of activities designed to
improve water quality, for example, can take years to appear, and the
capability of many States to monitor a significant share of their
waters is limited. Moreover, even if environmental conditions could be
reliably and consistently measured, it may be particularly difficult to
demonstrate the extent to which a specific government program affected
that condition. Officials from Florida (which has made a significant
commitment to measuring compliance rates and environmental indicators),
for example, explained that such factors outside their control as
economic activity and weather conditions, make it particularly
difficult to link program activities with changes in environmental
conditions.
In addition to these technical challenges in developing results-
oriented measures, the effort was also challenged by disagreements
between EPA and the States on issues such as (1) the degree to which
States should be permitted to vary from the national Performance
Measures and (2) the composition of these measures, particularly
regarding the degree to which pre-existing output measures should be
retained as newer outcome measures are added. Overall, however, the
States and EPA made progress in meeting these challenges. For example,
officials in four of the six States whose programs we examined had
developed and implemented their own measures to address their own
priorities. At the same time, program officials in each of the six
States also agreed to report information required for the national
Performance Measures agreed upon between the Environmental Council of
the States and EPA. In addition, while they maintained that further
refinement will still be needed, EPA and State officials agreed on a
set of fiscal year 2000 measures that, by most accounts, is a
substantial improvement over those measures negotiated from previous
years in that they are fewer in number (i.e., better targeted to
address key goals) and generally more outcome-oriented.
Reductions in Oversight Attributable to NEPPS Have Thus Far Been Modest
Instances of greater State flexibility and reduced EPA oversight
tended to focus on reducing the frequency of reporting and, in some
cases, the frequency of onsite reviews. Maine environmental officials,
for example, noted that more frequent, and less formal, dialog between
the program staff and regional staff had replaced written reports,
saving time and improving the level of cooperation between EPA and
State staff. While Maine program officials attributed the reductions in
part to the assignment by EPA's Boston regional office of a liaison for
each State's delegated programs, they credited NEPPS with formalizing
or legitimizing the changes. Likewise, Florida program officials
identified sizable reporting reductions in its waste program as a
result of a joint effort with EPA included in the Partnership
Agreement. Other instances were cited by officials in Georgia and
Minnesota.
Aside from such individual instances of streamlining reporting
requirements and similar tracking efforts, the large majority of the
State officials we contacted generally maintained that participation in
NEPPS had not yet brought about significant reductions in reporting and
other oversight activities by EPA staff, nor had it resulted in
significant opportunities for them to focus on other priorities or to
shift resources to weaker program areas. EPA officials generally
acknowledged this point, but they provided specific reasons why the
agency's oversight of State programs has not significantly decreased as
a result of NEPPS--and in some cases has actually increased. In this
connection, we noted that environmental statutes or regulations
sometimes prescribe the level of oversight required of EPA which,
according to some headquarters and regional officials, leaves the
agency with little room to scale it back. These officials also pointed
to (1) audits that identified problems in some States' enforcement
programs (such as the underreporting by States of significant
violations and precipitous decreases in the number of State enforcement
actions taken), which they believed called for greater oversight, and
(2) the difficulty in scaling back oversight without measurable
assurances that the States' programs experimenting with alternative
compliance strategies are achieving their desired results.
At the same time, EPA officials cited a number of barriers
preventing greater State flexibility that could be more readily
addressed. For example, senior EPA officials in three of the four
regional offices that we visited acknowledged that support for NEPPS
within EPA varies. One senior regional official explained that many
regional managers and staff are often more comfortable with pre-
existing ways of doing business and are unsure as to how they can
accomplish their work in the context of the partnership approach under
NEPPS. He voiced the opinion that there may be a need for training EPA
regional staff in NEPPS implementation. Another senior regional
official said that some agency staff will only take NEPPS seriously
when EPA's reward system is more closely tied to their performance in
implementing the program. Headquarters officials also acknowledged
another problem cited by many of the State officials we contacted--that
headquarters guidance, initiatives, and special requests sometimes
arrived at the regions too late to be used effectively in regional-
State Partnership Agreement negotiations, and that they were working to
address the problem.
Benefits of NEPPS Participation Cited, But Full Potential Has Yet to be
Realized
Senior officials and program managers from each of the six States
in our review agreed that NEPPS has provided their programs with
worthwhile benefits, and that its potential for achieving a more
effective partnership between EPA and the States was still worth
pursuing. Among the examples cited were instances in which Partnership
Agreements were used to more efficiently divide a heavy workload
between regional and State staff, and in which States were able to take
at least limited advantage of the flexibility in their Partnership
Grant agreements to shift resources among their media programs.
Overall, however, the most frequently cited benefit among both State
and EPA regional participants was that the two-way negotiation process
inherent in NEPPS has fostered more frequent and effective
communication between regional and State participants and improved
their overall working relationship.
At the same time, State officials almost unanimously expressed the
view that the benefits from their investment of time and resources into
NEPPS should be greater; that it has yet to achieve its potential; and
that improvements are needed. Of particular note, almost all of the
State officials we interviewed cited progress in achieving reduced
oversight and greater autonomy as critical to the future success of
NEPPS. They also cited the need to continue improving performance
measures; address the barriers impeding greater acceptance of NEPPS
among staff within both EPA and State agencies; determine how to make
greater use of the flexibility under Partnership Grants to shift
resources and funding to address higher priorities; and improve how
EPA's headquarters offices provide their input into State-regional
NEPPS negotiations.
These concerns pose challenges for the future of NEPPS--challenges
that were anticipated by the 1995 Agreement that launched the program
which called for a joint evaluation system for EPA and the States to
review the results of their efforts to ensure continuous improvement.
On the basis of the information that can be gleaned from the
experiences to date of participating States and regional offices, we
concluded that it was now appropriate to undertake such a joint
evaluation process. We recommended that EPA work with senior-level
State officials to initiate a joint evaluation process that (1) seeks
agreement on the key issues impeding progress in developing a more
effective National Environmental Performance Partnership System and (2)
develops mutually agreeable remedies for these issues. Among the issues
we suggested that such a process could focus on were the following:
Developing a set of flexible guidelines, to be used as a
tool by State and EPA regional NEPPS negotiators, that could help to
clarify the appropriate performance expectations and other conditions
that States must meet to achieve reduced oversight in carrying out
their environmental programs, and the type of reduced oversight (e.g.,
reduced frequency of reporting, greater autonomy in setting program
priorities) that could be achieved.
Identifying what additional work is needed to improve the
national Core Performance Measures recently negotiated by EPA and State
representatives for fiscal year 2000.
Alleviating the resistance among some staff (both within
EPA offices and among participating State agencies) toward implementing
NEPPS through training efforts and other strategies.
Determining what appropriate steps should be taken by EPA
and the States to allow for greater use by States of the flexibility
envisioned under the Performance Partnership Grant system to shift
resources and funding among their media programs.
Determining how effective public participation in the
NEPPS process can best be ensured.
Developing ways to improve communication among EPA's
headquarters and regional offices and participating States to ensure
that States are given clear and timely information on whether key
elements of their NEPPS-related agreements have the full buy-in of key
EPA offices.
In response to this recommendation, EPA pointed out that in March
1999, EPA and the Environmental Council of the States agreed in
principle to conduct such a joint evaluation and that it would review
many of the issues cited in our recommendation. Since that time,
however, progress has been limited. According to an official with the
agency's Office of State and Local Relations, EPA and the Council have
yet to agree on such basic issues as who should undertake the
evaluation and what its scope should be. Furthermore, it is unclear
when final resolution will be reached. Our findings suggest that future
support for this program will depend heavily on the timely resolution
of many of the barriers that have thus far impeded its effectiveness.
Therefore, we believe timely efforts by EPA and the Council to identify
what specific issues are to be addressed, and to identify a timetable
for addressing them, would be important steps in expanding both the
participation in, and effectiveness of, this important program.
This concludes my prepared statement, Mr. Chairman. I would be
pleased to address any questions that you or other members of the
committee may have.
______
Responses by Peter Guerrero to Additional Questions from Senator Smith
Question 1. GAO stated in its report that Federal oversight of
States participating in the National Environmental Performance
Partnership System (NEPPS) was not reduced as expected. Among the
factors GAO cited are: (a) the inherent difficulty in ``letting go'' on
the part of some regulators and (b) EPA's multi-level organizational
structure which complicates things. One of GAO's recommendations is to
reduce the resistance toward implementation of NEPPS through training
and other strategies. What are some of those strategies that GAO
believes can produce a more cooperative agency?
Response. One key step would be for the agency to achieve a shared
understanding, both within EPA and between EPA and the States, on the
core measures that articulate the goals and objectives all key parties
are trying to achieve. In this connection, the agency needs to
reconcile the differences that still exist between its GPRA measures,
and the core performance measures it has negotiated with the
Environmental Council of the States.
Once this agreement is achieved, NEPPS goals and objectives need to
be incorporated into performance expectations among EPA employees
throughout the agency (and, ideally, among their State counterparts).
Until this occurs, the responsibilities for which EPA staff are
currently being held accountable will tend to supercede NEPPS-related
activities in priority.
NEPPS must be approached with strong communication skills and an
open mind as to how environmental problems can best be addressed. Such
attributes are important for all NEPPS participants, but particularly
for those at the EPA regional level, where managers and staff sometimes
have to balance conflicting headquarters and State priorities. This
makes their role particularly important in helping to forge consensus
under challenging circumstances. Our interviews with both EPA and State
environmental managers suggest that training to develop these skills
would be a good investment in helping NEPPS to succeed.
In the past, Headquarters offices have been criticized for not
providing States and regions with timely input needed to facilitate
their NEPPS negotiations. In particular, States have complained that
headquarters sometimes imposes new requirements on State programs
during the year--after the States and their corresponding EPA regional
offices have already agreed on the work to be done for the following
year. In an effort to be responsive to this issue, headquarters offices
have attempted to issue 2-year guidance to regions and States to allow
them greater continuity in carrying out their agreements. We believe
this is a step in the right direction.
Question 2. In your opinion, what leadership qualities are needed
to best overcome those barriers to fully implement the NEPPS program?
The most important step that senior EPA and State managers can take
to promote NEPPS' full implementation is to send an unambiguous message
to the staff in their agencies that they fully support the program.
Visibility of support and interest from the top levels of EPA and the
States are critical if mid-level managers and other staff are to treat
NEPPS as a priority.
Many EPA staff still tend to view environmental programs with a
separate, media-specific focus. States, on the other hand, increasingly
find that they must make tradeoffs among their individual media
responsibilities to ensure that their most important environmental
priorities are adequately addressed. EPA leadership needs to advocate
among its staff a broader, multi-media focus that recognizes the need
for these tradeoffs, within the constraints posed by the framework of
existing laws and regulations.
Question 3. Are there any statutory changes that would make
Performance Partnership Agreements (PPAs) or Performance Partnership
Grants (PPGs) more attractive to States?
Response. As a program promoting a new way of doing business, NEPPS
bears similarity to many of EPA's and States' ``reinvention'' programs.
In fact, many States are trying to use their Performance Partnership
Agreements under NEPPS to accelerate and institutionalize their
reinvention efforts. In this regard, we agree with the Chairman's
observation at the hearing that EPA's stove-piped structure has
complicated the efforts of environmental regulators and the regulated
community to adopt more flexible and innovative approaches to
environmental protection. At the request of Congressmen Boehlert,
Dooley, and Greenwood, we have recently initiated an evaluation of the
extent to which laws, regulations, and agency policies inhibit
innovation, and would be pleased to share our findings with the
committee when they are available.
Question 4. What should the relationship be between Core
Performance Measures (CPMs) and EPA's obligations under the Government
Performance and Results Act (GPRA)?
Response. CPMs are generally a subset of the agency's GPRA
measures, and EPA maintains that there is a close relationship between
the two. However, there is a substantial difference in that the GPRA
measures are far more numerous and, as a group, tend to be more
``output'' oriented than the more results-oriented CPMs.
EPA needs to make more progress in aligning its GPRA measures with
the CPMs it has negotiated with the States by (1) reducing the overall
number of GPRA measures to focus on the most significant measures and
(2) continue to shift the relative balance between output and outcome
measures to place increasingly greater emphasis on outcome measures.
______
Responses by Peter Guerrero to Additional Questions from Senator Chafee
Question 1. One of your findings is that the ``initial expectation
that participation in National Environmental Performance Partnership
System would be accompanied by reduced Federal oversight of States has
thus far been realized to only a limited degree.'' Yet in your report
you note that EPA and the States agree that ``a formal system for
implementing differential oversight . . . would be controversial and
difficult to implement.'' Do you believe that EPA and the States can
agree on which programs should be considered ``strong'' environmental
programs?
Response. For years, EPA has essentially made decisions as to which
State environmental programs were strong and which weaker. These
decisions, however, tended to be informal and were used to support
annual grant agreement negotiations by identifying areas in which EPA
would provide additional support to States.
An additional issue is the complication that arises among States'
environmental programs in publicly identifying which among them are
strong performers and which are weak performers. For this reason, the
effort to formalize such a ``differential oversight'' process through
NEPPS was discontinued.
Nevertheless, EPA's Denver region is attempting to develop such a
formal system of ranking their States to identify stronger and weaker
States for purposes of focusing attention where it is most warranted.
This system, called the ``Unified Oversight System,'' is designed to
evaluate State enforcement and compliance program performance. The
objective of this system is to strengthen State programs and reward
strong programs with reduced oversight. The system, which will employ
both quantitative scoring and narrative feedback, will be used to
conduct annual joint planning with States and to manage the limited
oversight resources of EPA. Time will tell whether the Denver region's
experiment will succeed.
Question 2. Given the absence of formal criteria for determining
what constitutes a good program, how can one distinguish between good
programs that deserve reduced oversight and inadequate programs that
require additional attention?
Response. There are a number of factors that have historically
served as indicators of the strength of State programs. Examples
include:
Various measures of enforcement activity, such as the
number of inspections conducted, violations disclosed, fines
levied/collected, etc.;
Adequacy of staffing of State programs;
Results of periodic EPA audits of State programs;
The challenge in recent years has been to move away from activity
measures and toward outcome measures, such as the extent to which the
efforts of programs are resulting in improved compliance or
improvements in environmental quality. The Core Performance Measures
negotiated between EPA and the Environmental Council of States are a
key step in that direction in that they are increasingly designed to
emphasize measures of the impact of environmental activities on the
environment, as opposed to measuring the number of activities
conducted.
As noted above, the Denver region's experience with its Unified
Oversight System should be instructive to future efforts to
systematically assess States' programs, and to practice differential
oversight on the basis of performance and capability. While the
measures to be used in the System are initially weighted toward
outputs, it is anticipated that outcome measures will be relied upon
increasingly over time.
______
[Report by the General Accounting Office]
Environmental Protection: Collaborative EPA-State Effort Needed to
Improve New Performance Partnership System
U.S. General Accounting Office,
Resources, Community, and Economic Development Division,
Washington, D.C. 20548, June 21, 1999.
The Honorable James T. Walsh, Chairman,
Subcommittee on VA, HUD, and Independent Agencies
Committee on Appropriations House of Representatives.
Dear Mr. Chairman: As requested, we are reporting on the Environmental
Protection Agency's (EPA) and the States' progress in implementing the
National Environmental Performance Partnership System.
As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report until
7 days from the date of this letter. At that time, we will send copies
to the appropriate congressional committees; the Honorable Carol
Browner, Administrator, EPA, and the Honorable Jacob Lew, Director,
Office of Management and Budget. We will also make copies available to
others upon request.
Please call me at (202) 512-6111 if you or your staff have any
questions. Major contributors to this report are listed in appendix II.
Sincerely yours,
Peter F. Guerrero, Director,
Environmental Protection Issues Executive Summary Purpose.
______
Executive Summary
Purpose
The Environmental Protection Agency (EPA) has had long-standing
difficulties in establishing effective partnerships with the States,
which generally have the lead responsibility in implementing many
environmental programs. Among the key issues affecting EPA-State
relationships have been concerns that EPA (1) is inconsistent in its
oversight across regions, (2) sometimes micromanages State programs,
(3) does not provide sufficient technical support for State programs'
increasingly complex requirements, and (4) often does not adequately
consult the States before making key decisions affecting them. To
address these problems and improve the effectiveness of environmental
program implementation, EPA's Administrator and leaders of State
environmental programs established the National Environmental
Performance Partnership System (NEPPS) in May 1995. In signing the
agreement that established NEPPS, EPA and State leaders said that the
system is designed to strengthen protection of public health and the
environment by directing scarce public resources toward improving
environmental results, allowing States greater flexibility to achieve
those results, and enhancing accountability to the public and
taxpayers. A key element of NEPPS was EPA's commitment to give States
with strong environmental performance greater flexibility and autonomy
in running their environmental programs.
Given the expectation among participants that NEPPS could deal with
many of the issues that have long impeded EPA-State relationships, the
Chairman, Subcommittee on VA, HUD, and Independent Agencies, House
Committee on Appropriations, asked GAO to examine the progress made by
EPA and the States since the 1995 agreement. Specifically, as agreed
with the Chairman's office, this report (1) identifies the status of
grants and agreements made under NEPPS between EPA and participating
States, (2) examines the progress that EPA and the States have made in
developing results-oriented performance measures to be incorporated
into NEPPS agreements and grants to the States, (3) examines how EPA
oversight may or may not be changing in States that are participating
in NEPPS, and (4) discusses the extent to which the use of these
Performance Partnership Agreements and Grants has achieved the benefits
envisioned for the States and the public.
Background
Under NEPPS, States may voluntarily enter into ``Performance
Partnership Agreements'' with their EPA regional offices. While there
is considerable flexibility in how the agreements may be designed, they
typically provide a means for EPA and the States to negotiate such
matters as (1) which problems will receive priority attention within
the State programs, (2) what EPA's and the States' respective roles
will be, and (3) how the States' progress in achieving clearly defined
program objectives will be assessed. An important component of the
Partnership Agreements is the use of a common set of national
environmental indicators (called ``Core Performance Measures'') to
measure the effectiveness and success of States' environmental
programs. In their efforts to develop these performance measures, EPA
and State officials have sought to move beyond counting the number of
actions (such as the number of inspections conducted or environmental
enforcement actions taken) and increasingly toward evaluating the
impact of programs on the environment.
While NEPPS provides the overarching framework for developing
Partnership Agreements, the Performance Partnership Grants Program,
authorized by the Congress in April 1996, is used by many States as a
major tool to implement them. This program allows States to request
that funds from 2 or more of the 15 eligible categorical grants be
combined to give governmental entities greater flexibility in targeting
limited resources to their most pressing environmental needs. These
grants are also intended to be used to better coordinate existing
activities across environmental media and to develop multimedia
programs. While the Partnership Agreements are designed to complement
the Partnership Grants, States are free to negotiate agreements and/or
grants or to decline participation in NEPPS altogether.
Results in Brief
State participation in the National Environmental Performance
Partnership System grew from 6 pilot States in its initial year in
fiscal year 1996 to 45 States by the end of fiscal year 1998. Of that
number, 31 States had both Performance Partnership Agreements and
Performance Partnership Grants with EPA in 1998; 12 States had grants
only; 2 States had agreements only; and 5 States did not participate at
all. Nationwide, for that year, $217 million of $745 million in State
environmental program grants was consolidated into Performance
Partnership Grants-an increase of 28 percent from the previous year.
EPA and the States agree on the importance of measuring the
outcomes of environmental activities rather than just the activities
themselves. However, the development of these measures has been impeded
by a number of technical challenges, including (1) an absence of
baseline data against which environmental improvements could be
measured, (2) the inherent difficulty in quantifying certain results,
(3) the difficulty of linking program activities to environmental
results, and (4) the considerable resources needed for high-quality
performance measurement. In addition, EPA and the States have had to
resolve fundamental disagreements over a number of issues, including
(1) the degree to which States should be permitted to vary from the
national core measures and (2) the composition of the measures-
particularly regarding the degree to which preexisting output measures
are to be retained as newer outcome measures are added. Despite these
barriers, EPA and State leaders have managed to agree on a set of core
measures for fiscal year 2000 that are widely regarded by EPA and State
officials as significantly improved from those negotiated in previous
years.
The initial expectation that participation in NEPPS would be
accompanied by reduced Federal oversight of States has thus far been
realized to a limited degree. A number of instances were identified
among the six participating States GAO visited where oversight
reduction did accompany participation in the system. \1\ However, in
other cases cited by both State and EPA regional officials, (1)
decreased oversight could either not be linked directly to NEPPS
participation or (2) oversight had either remained the same or
increased. Among the factors cited by these officials as complicating
reduced EPA oversight were (1) statutory and/or regulatory requirements
that in some cases prescribe the kind of oversight required of States
by EPA; (2) reluctance by EPA regulators to reduce oversight without
the measures in place to ensure that environmental quality would not be
compromised; (3) the inherent difficulty in ``letting go'' on the part
of some regulators that have implemented the existing EPA-State
oversight arrangement for several decades; and (4) EPA's multi-level
organizational structure, which complicates efforts to identify whether
all key agency decisionmakers among the agency's headquarters and
regional offices are in agreement on key oversight-related questions.
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\1\ The six States were Connecticut, Florida, Georgia, Maine,
Minnesota, and Oregon.
---------------------------------------------------------------------------
EPA and State participants nonetheless cited a number of benefits
associated with NEPPS, noting in particular that participation (1)
provided a means of getting buy-in for innovative and/or unique
projects, (2) allowed States the option to shift resources and funds
under the Performance Partnership Grants Program, (3) served as a tool
to divide an often-burdensome workload more efficiently between Federal
and State regulators, and (4) improved communication and increased
understanding among EPA and State program participants about program
priorities and other key matters. Yet while participants from each
State indicated that their participation in the voluntary program would
probably continue, they also consistently expressed the view that the
benefits of the program should be greater; that the program has yet to
achieve its potential; and that improvements are needed. The 1995
agreement anticipated the appropriateness of such reflection in calling
for ``a joint evaluation system for EPA and the States to review the
results of their efforts to ensure continuous improvement.'' GAO
recommends in this report that such a joint evaluation process be
initiated and suggests a number of issues to be considered for
attention during such a process.
Principal Findings
Growth of State Participation in NEPPS
NEPPS was initially tested on a pilot basis in fiscal year 1996
with six participating States. This first year was viewed by EPA and
the States as a time to experiment with the new system and various ways
to implement it. The number of participating States has increased since
that time to 45 States in fiscal year 1998, although the extent of
their participation has varied widely. For example, half the States
have negotiated both Partnership Agreements and Partnership Grants
through their lead environmental agencies that cover most EPA programs;
other States have thus far limited their participation to a Partnership
Grant, such as one administered by their agriculture agency that, for
example, addresses only pesticide programs. States have also varied
considerably in the detail and content of their agreements. Senior
officials in EPA's Office of State and Local Relations explained that
the agency has not attempted to impose uniformity on the development of
Partnership Agreements at this early stage of the NEPPS process and
has, therefore, refrained from issuing guidance on how the agreements
should be structured. Hence, the agreements vary widely in content and
emphasis, reflecting individual States' conditions and priorities and
reflecting the results of negotiations with their respective EPA
regional offices.
While Performance Partnership Grants allow eligible States to
request that funds from two or more categorical grants (such as those
authorized under the Clean Water Act or those used to implement the
Clean Air Act) be combined to allow for greater flexibility in
targeting limited resources to States' most pressing environmental
needs, the percentage of eligible grant funds consolidated under these
Grants is less than one-third. For fiscal year 1998, $217 million (29
percent) of eligible grants was consolidated among the participating
States, while $528 million (71 percent) remained as categorical grants.
This level of consolidation represents an increase of 28 percent over
the $169 million that was consolidated the previous year.
Progress in Developing Results-Oriented Measures
Both EPA and individual States have a number of efforts under way
to develop effective performance measures to better understand whether
their programs are achieving their intended results. Their collective
effort to develop such measures for NEPPS has centered on the ``Core
Performance Measures'' that have been negotiated between EPA and the
Environmental Council of the States during the past several years. \2\
The effort has faced a number of technical challenges inherent in
developing defensible results-oriented measures. The results of
activities designed to improve water quality, for example, can take
years to appear, and the capability of many States to monitor a
significant share of their waters is limited. Moreover, even if
environmental conditions could be reliably and consistently measured,
it may be particularly difficult to demonstrate the extent to which a
government program affected that condition. Officials from Florida (a
State that has made a significant commitment to measuring compliance
rates and environmental indicators), for example, explained that
factors outside their control, such as economic activity and weather
conditions, make it particularly difficult to link program activities
with changes in environmental conditions.
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\2\ The Environmental Council of the States is a national
nonpartisan, nonprofit association of State and territorial
environmental commissioners.
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In addition to these technical challenges in developing results-
oriented measures, the effort has also been challenged by disagreements
between EPA and the States on a number of issues, including (1) the
degree to which States should be permitted to vary from the national
core measures and (2) the composition of the measures, particularly
regarding the degree to which preexisting output measures are to be
retained as newer outcome measures are added. Overall, however, the
States and EPA have made progress in meeting these challenges. For
example, officials in four of the six States whose programs GAO
examined have developed and implemented their own measures to address
their own priorities. At the same time, program officials in each of
the six States have also agreed to report information required for the
national core measures agreed upon between the Environmental Council of
the States and EPA. In addition, while they maintain that further
refinement will still be needed, EPA and State officials have agreed on
a set of fiscal year 2000 measures for use in negotiating EPA-State
partnership agreements that, by most accounts, are a substantial
improvement over those negotiated from previous years in that they are
fewer in number (i.e., better targeted to address key goals) and
generally more outcome-oriented.
Reductions in Oversight Attributable to NEPPS Have Thus Far Been Modest
Instances of greater State flexibility and reduced EPA oversight
tended to focus on reducing the frequency of reporting and, in some
cases, the frequency of onsite reviews. Maine environmental officials,
for example, noted that more frequent, and less formal, dialog between
the program staff and regional staff had replaced written reports,
saving time and improving the level of cooperation between EPA and
State staff. While Maine program officials attributed the reductions in
part to the assignment by EPA's Boston Regional Office of a liaison for
each State's delegated programs, they credited NEPPS with formalizing
or legitimizing the changes. Florida program officials identified
sizable reporting reductions in its waste program as a result of a
joint State-EPA effort included in the Partnership Agreement. Other
instances were cited by officials in Georgia and Minnesota.
Yet aside from such individual instances of streamlining reporting
requirements and similar tracking efforts, the large majority of the
State officials GAO contacted generally maintained that participation
in NEPPS has not yet brought about significant reductions in reporting
and other oversight activities by EPA staff, nor has it resulted in
significant opportunities for them to focus on other priorities or to
shift resources to weaker program areas. EPA officials generally
acknowledged this point, but provided specific reasons why oversight of
State programs has not significantly decreased as a result of NEPPS-and
in some cases has actually increased. Some headquarters and regional
officials, for example, noted that environmental statutes or
regulations sometimes prescribe the level of oversight required of EPA,
leaving little room for EPA to scale it back. The officials also
pointed to (1) audits that identified problems in some State
enforcement programs (such as the underreporting by States of
significant violations and precipitous decreases in the number of State
enforcement actions taken) that they believed called for greater
oversight and (2) the difficulty in scaling back oversight without
measurable assurances indicating that State programs experimenting with
alternative compliance strategies are achieving their desired results.
At the same time, EPA officials cited a number of barriers
preventing greater State flexibility that could be more readily
addressed. For example, senior EPA officials in three of the four
regional offices that GAO visited acknowledged that support for NEPPS
within EPA varies. One senior regional official explained that many
regional managers and staff are often more comfortable with preexisting
ways of doing business and are unsure as to how they can accomplish
their work in the context of the partnership approach under NEPPS. The
official also said that there may be a need for training EPA regional
staff in NEPPS implementation. Another senior regional official said
that some agency staff will only take NEPPS seriously when their reward
system is more closely tied to their performance in implementing the
program. Headquarters officials also acknowledged another problem cited
by many of the State officials GAO contacted-that headquarters'
guidance, initiatives, and special requests sometimes arrive at the
regions too late to be used effectively in regional-State Partnership
Agreement negotiations and that they have taken steps to address the
problem.
Benefits of NEPPS Participation Cited, But Full Potential Has Yet To Be
Realized
Despite their disappointment at the rate of progress in achieving
greater autonomy and greater emphasis on State priorities, senior
officials and program managers from each of the six States in GAO's
review agreed that NEPPS has provided their programs with worthwhile
benefits, and that its potential for achieving a more effective
partnership between EPA and the States is still worth pursuing. Among
the examples cited were instances in which Partnership Agreements were
used to more efficiently divide a heavy workload between regional and
State staff, and in which States were able to take at least limited
advantage of the flexibility in their Performance Partnership Grant
agreements to shift resources among their media programs. Overall,
however, the most frequently cited benefit among both State and EPA
regional participants was that the two-way negotiation process inherent
in the program has fostered more frequent and effective communication
between regional and State participants and improved their overall
working relationship.
At the same time, State officials almost unanimously expressed the
view that the benefits from their investment of time and resources into
NEPPS should be greater; that the program has yet to achieve its
potential; and that improvements are needed. Of particular note, almost
all of the State officials GAO interviewed cited progress in achieving
reduced oversight and greater autonomy as critical to the future
success of the program. Also cited was the need to continue improving
performance measures; addressing the barriers impeding greater
acceptance of NEPPS among staff within both EPA and State agencies;
determining how to make greater use of the flexibility under
Performance Partnership Grants to shift resources and funding to
address higher priorities; and improving the manner in which
headquarters offices provide their input into regional-State NEPPS
negotiations.
These concerns pose challenges for the future of NEPPS-challenges
that were anticipated by the 1995 agreement that launched the program,
which called for a joint evaluation system for EPA and the States to
review the results of their efforts to ensure continuous improvement.
On the basis of the considerable information that can be learned from
the experiences to date of participating States and regional offices,
GAO believes that it is now appropriate to undertake such a joint
evaluation process, with the goals of (1) identifying best practices
among participating States for dealing with the most challenging
problems facing the program and (2) eventually obtaining agreement on
actions that will improve and expand the program. EPA officials and
representatives of the Environmental Council of the States have, in
fact, recently agreed upon the basic outline of such a joint evaluation
process. Further progress (including decisions on the specific issues
to address and a timetable for addressing them) would be important
steps in expanding both the participation in, and effectiveness of,
this important program.
Recommendations
GAO recommends that the Administrator, EPA, work with senior-level
State officials to initiate a joint evaluation process that (1) seeks
agreement on the key issues impeding progress in developing a more
effective National Environmental Performance Partnership System and (2)
develops mutually agreeable remedies for these issues. Among the issues
such a process could focus on are these:
Developing a set of flexible guidelines, to be used as a
tool by State and EPA regional NEPPS negotiators, that could help to
clarify the appropriate performance expectations and other conditions
that States must meet to achieve reduced oversight in carrying out
their environmental programs and the type of reduced oversight (e.g.,
reduced frequency of reporting, greater autonomy in setting program
priorities) that could be achieved.
Identifying what additional work is needed to improve the
Core Performance Measures recently negotiated by EPA and State
representatives for fiscal year 2000.
Alleviating the resistance among some staff (both within
EPA offices and among participating State agencies) toward implementing
NEPPS, through training efforts and other strategies.
Determining what appropriate steps should be taken by EPA
and the States to allow for greater use by States of the flexibility
envisioned under the Performance Partnership Grant system to shift
resources and funding among their media programs.
Determining how effective public participation in the
NEPPS process can best be ensured.
Developing ways to improve communication among EPA's
headquarters and regional offices and participating States to ensure
that States are given clear and timely information on whether key
elements of their NEPPS-related agreements have the full buy-in of key
EPA offices.
Agency Comments
GAO provided a draft of this report for review and comment to EPA
and the Environmental Council of the States. EPA said that ``the Report
describes, in a fair and balanced manner, the progress EPA and the
States have made through performance partnerships.'' EPA also agreed
with the report's recommendation that agency and State efforts to
improve NEPPS should include training and other efforts to achieve the
cultural change necessary for greater success.
EPA also commented on GAO's recommendation that EPA and State
environmental leaders should agree on guidelines that would help to
clarify, for EPA and State negotiators, the appropriate performance
expectations that States must meet to achieve reduced oversight in
carrying out their environmental programs and the type of reduced
oversight that could be achieved. EPA noted that while it agreed with
this recommendation in principle, EPA and the States believe that each
State's Performance Partnership Agreement should specify the degree of
oversight necessary to accommodate the unique environmental problems
and varied program capabilities of that State. GAO agrees that
oversight arrangements should be negotiated between each State and its
corresponding regional office in a manner that accounts for that
State's unique circumstances, and that these arrangements should be
specified in the Performance Partnership Agreement. GAO continues to
believe, however, that nonbinding national guidance-to be agreed upon
in advance by EPA and State environmental leaders-would be useful in
introducing objective parameters to be considered by regional and State
negotiators as they seek agreement over this sensitive issue.
In addition to these comments, EPA provided updated information and
comments on several other issues (discussed at the end of chs. 3, 4,
and 5). EPA's comments, together with GAO's detailed responses, are
included in appendix I.
Representatives of the Council provided a number of suggested
clarifications. They cautioned that since their comments had not been
reviewed by the Council's membership, they should be viewed as informal
suggestions to enhance the accuracy and completeness of the report. GAO
made revisions as appropriate to incorporate these comments.
______
Introduction
The Environmental Protection Agency (EPA) has had long-standing
difficulties in establishing effective partnerships with the States.
Among the key issues affecting EPA-State relationships have been
concerns that EPA (1) is inconsistent in its oversight across regions,
(2) sometimes micromanages State programs, (3) does not provide
sufficient technical support for State programs' increasingly complex
requirements, and (4) often does not adequately consult the States
before making key decisions affecting them.
In an effort to address these problems and improve the
effectiveness of environmental program implementation, EPA and State
environmental agencies established the National Environmental
Performance Partnership System (NEPPS). Under this system, strong State
programs were to be given more leeway to set environmental priorities,
design new strategies for addressing these priorities, and manage their
own programs-allowing EPA to concentrate more effort, oversight, and
technical assistance on weaker programs. A major component of the
system is the development of Performance Partnership Agreements. These
agreements are to provide a means for EPA and the States to negotiate
such matters as (1) which problems will receive priority attention
within State programs, (2) what EPA's and the States' respective roles
will be, and (3) how the States' progress in achieving clearly defined
program objectives will be assessed. States may also establish
Performance Partnership Grants, which allow them to consolidate grants
as a way of providing more flexibility in managing their environmental
grant funds, and to cut paperwork and simplify financial management.
For example, a State that would otherwise have separate water, air, and
pesticide grants can now combine the funds from some or all of these
grants into one or more performance partnership grants.
Given the expectation among participants that NEPPS could deal with
many of the issues that have long impeded the EPA-State relationship,
the Chairman, Subcommittee on VA, HUD, and Independent Agencies, House
Committee on Appropriations, asked us to examine the progress made by
EPA and the States since the 1995 agreement. Specifically, as agreed
with the Chairman's office, this report (1) identifies the status of
grants and agreements made under NEPPS between EPA and participating
States, (2) examines the progress that EPA and the States have made in
developing results-oriented performance measures to be incorporated
into NEPPS agreements and grants to the States, (3) examines how EPA
oversight may or may not be changing in States that are participating
in NEPPS, and (4) discusses the extent to which the use of these
performance partnership agreements and grants has achieved the benefits
envisioned for the States and the public.
NEPPS Was Designed to Improve the Effectiveness of the EPA-State
Working Relationship
Most of the nation's environmental statutes envision a strong role
for the States in implementing and managing environmental programs.
Toward this end, in 1993, a joint State/EPA task force recommended that
EPA and the States adopt a more systematic approach to manage
environmental programs in a way that allows each level of government to
contribute according to its respective strengths. In May 1993, the EPA
Administrator established a State/EPA Steering Committee to oversee the
implementation of the task force's recommendations. Subcommittees were
established to pursue work on oversight reform, with the goal of
increasing State participation in EPA decisionmaking, developing
national environmental goals and measures, allowing flexible funding
across programs, and improving communications between EPA and States.
As a result of these efforts, on May 17, 1995, the EPA
Administrator and the leaders of State environmental programs formally
agreed to implement a new environmental partnership entitled the
National Environmental Performance Partnership System. This agreement,
entitled the Joint Commitment to Reform Oversight and Create a National
Environmental Performance Partnership System, stated that the long-
range goal of NEPPS was ``to provide strong public health and
environmental protection by developing a system where EPA and the
States work together for continuous gains in environmental quality and
productivity.'' In establishing NEPPS, EPA and the leaders of State
environmental programs indicated the system is designed to strengthen
protection of public health and the environment by directing scarce
resources toward improving environmental results, allowing States
greater flexibility to achieve those results, and enhancing
accountability to the public and taxpayers. The seven principle
components of NEPPS are:
increased use of environmental goals and indicators in
order to measure the effectiveness and success of environmental
programs;
a new approach for conducting assessments of
environmental programs, which will include a greater reliance on annual
environmental and programmatic self-assessments conducted by each State
and sharing with the public information about environmental conditions,
goals, priorities, and achievements;
the development of environmental performance agreements
that outline environmental priorities and goals agreed to jointly by
EPA and the States;
a reduction in oversight for those States with strong
environmental programs, which will enable EPA to focus resources on
States that need more assistance;
the designation of strong State environmental programs as
``leadership programs'' that are afforded minimal oversight;
increased opportunity for constructive public involvement
in the management of environmental programs through a program that
encourages regulated entities and the general public to review and
comment on environmental issues; and
the development of a joint system evaluation for EPA and
the States to review the results of their efforts to ensure continuous
improvement.
As we reported in May 1998, NEPPS is intended to strengthen the
effectiveness of the nation's environmental programs by redefining the
Federal and State roles to ensure that public resources are used
efficiently to address the most important environmental problems. \3\
According to EPA, NEPPS is based on a shared recognition that continued
environmental progress can be achieved most effectively by working
together as partners. Accordingly, the effort is designed to promote
joint planning and joint priority-setting, which takes into account
each State's environmental conditions and objectives. A key element of
this program is EPA's commitment to give States with strong
environmental performance greater flexibility and autonomy in running
their environmental programs. To help document this capability, a
primary objective of the program is the measuring and reporting of
EPA's and States' progress toward achieving their environmental and
programmatic goals.
---------------------------------------------------------------------------
\3\ Environmental Protection: EPA's and States' Efforts to Focus
State Enforcement Programs on Results (GAO/RCED-98-113, May 27, 1998).
---------------------------------------------------------------------------
Negotiation of Performance Partnership Agreements and Performance
Partnership Grants
Under NEPPS, States and their corresponding EPA regional offices
are expected to reach an understanding of the State's environmental
conditions and to agree on appropriate environmental goals and
priorities and on program performance indicators to measure progress.
The results of these negotiations are documented in Performance
Partnership Agreements and/or Performance Partnership Grants.
Partnership Agreements are comprehensive agreements that are expected
to be used as the principal mechanism for implementing NEPPS. According
to EPA, the agreements are derived from joint discussions by EPA and
the State on their interests, concerns, choices, and commitments for
sound environmental performance.
While NEPPS provides the overarching framework for developing
partnership agreements, the Performance Partnership Grants Program
serves as a major tool to implement them. Performance Partnership
Grants are intended to allow States greater flexibility in deciding how
Federal grant funds can best be spent to achieve their environmental
goals. Under these grants, which were authorized by the Congress in
April 1996, eligible States and tribes may request that funds from two
or more categorical grants (such as those authorized under the Clean
Water Act or those used to implement the Clean Air Act) be combined
into one or more grants to give governmental agencies greater
flexibility in targeting limited resources to their most pressing
environmental needs. These grants are also intended to be used to
better coordinate existing activities across environmental media and to
develop multimedia programs.
Importantly, State participation in NEPPS is voluntary. In
particular, while Partnership Agreements are designed to complement
Partnership Grants, States are free to negotiate both agreements and
grants or to decline participation in NEPPS altogether.
Development of Performance Measures Is a Key Component of NEPPS
A key component of the 1995 NEPPS agreement was the commitment by
EPA and the Environmental Council of the States to identify a common
set of national environmental indicators to measure the effectiveness
and success of States' environmental programs. \4\ In an effort to
fulfill this commitment, on August 20, 1997, EPA and the Council agreed
on a set of ``Core Performance Measures'' for EPA and States to use in
measuring progress toward the achievement of environmental and program
goals. This first set was used to measure progress in fiscal year 1998
and, with some minor revisions, was used again in fiscal year 1999.
---------------------------------------------------------------------------
\4\ The Environmental Council of the States is a national
nonpartisan, nonprofit association of State and territorial
environmental commissioners.
---------------------------------------------------------------------------
In their efforts to develop these performance measures, EPA and
State officials have sought to move beyond counting the number of
actions and increasingly toward evaluating the impact of programs on
the environment. Traditionally, performance measures have focused on
tracking ``outputs,'' such as the number of inspections conducted and
enforcement actions taken. Such actions are easiest to count, and they
provide a useful measure of the level of agency activity. On the other
hand, measuring the actual results a program is intended to achieve,
such as the degree to which progress is made in achieving air or water
quality standards, is more difficult but provides information on
whether the goals of the regulatory program are being achieved. \5\
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\5\ Thus, for example, one outcome-oriented core measure in the air
program tracks overall emission reductions for key pollutants over
time.
---------------------------------------------------------------------------
In order to strike a better balance between output measures and
measures of program results, EPA and the Council developed a tiered
approach, shown in table 1.1, to better account for program results. As
the table indicates, an output measure considers numbers of actions
taken, demonstrating the level of a particular activity or how
resources are used. An outcome, on the other hand, can measure the
results associated with a particular policy, such as the percent of
facilities in environmental compliance. Finally, environmental
indicators demonstrate whether overall, long-term agency objectives are
being achieved, such as the trend in the number of bodies of water
meeting clean water standards.
Table 1.1: Categories of Environmental Performance Measurement
----------------------------------------------------------------------------------------------------------------
Measure Characteristic Examples Purpose
----------------------------------------------------------------------------------------------------------------
Output............................... Numbers of actions..... Number of penalty Demonstrates level of
dollars collected; activity; demonstrates
number of violations how resources are used
discovered.
Outcome.............................. Environmental or Tons of pollution Demonstrates results of
programmatic results reduced or percent of specific initiatives
associated with a facilities in or policies
particular program or environmental
policy. compliance.
Environmental indicator.............. Indicators associated Trend in number of Demonstrates whether
with overall bodies of water overall, long-term
environmental or meeting clean water agency objectives are
program objectives. standards. being achieved
----------------------------------------------------------------------------------------------------------------
Note: In its efforts to develop overall performance measures for the Government Performance and Results Act of
1993, EPA uses slightly different terms: ``outputs,'' ``intermediate outcomes,'' and ``long-term outcomes.''
In its guide to implementing the act, the Office of Management and Budget distinguishes between ``output
goals'' and ``outcome goals'' and calls on Federal agencies to measure progress toward both. Other experts in
the field of government performance measurement labeled the three tiers ``outputs,'' ``policy or behavioral
outcomes,'' and ``program outcomes.'' See for example, Sparrow, Malcolm, ``Regulatory Agencies, Searching for
Performance Measures That Count,'' and Greiner, John M., ``Positioning Performance Measurement for the Twenty-
first Century, ``Organization Performance and Measurement in the Public Sector, Quorum Books, (1996).
Source: Environmental Protection: EPA's and States' Efforts to Focus State Enforcement Programs on Results (GAO/
RCED-98-113, May 27,1998).
NEPPS' emphasis on performance measurement also provides a critical
link to the Congress' intent in passing the Government Performance and
Results Act of 1993. The Results Act requires agencies to clearly
define their missions, establish long-term strategic goals (and annual
goals linked to them), measure their performance against the goals they
have set, and report this information to the Congress. Importantly,
rather than focusing on the performance of prescribed tasks and
processes, the statute emphasizes the need for agencies to focus on and
achieve measurable program results.
Objectives, Scope, and Methodology
Our objectives in this review were to (1) identify the status of
grants and agreements made pursuant to NEPPS between EPA and
participating States, (2) examine the progress that EPA and the States
have made in developing results-oriented performance measures to be
incorporated into NEPPS agreements and grants to the States, (3)
examine how EPA oversight may or may not be changing in States that are
participating in NEPPS, and (4) discuss the extent to which the use of
performance partnership agreements and grants has achieved the benefits
envisioned for the States and the public.
For the first objective, we reviewed EPA documents describing the
overall status of performance partnership grants and agreements made
between EPA and States. We also interviewed officials from EPA's Office
of State and Local Relations to obtain the latest data and related
information on the status of Partnership Agreements and Partnership
Grants signed by the States and EPA.
For the remaining objectives, we first contacted EPA (headquarters
and regional) officials to identify appropriate State environmental
programs for detailed study. In selecting States, we were primarily
concerned with the degree of State participation in this voluntary
program, the length of time they have been participating, and the
desirability of examining States with different experiences and
geographical locations.
On the basis of these criteria, we visited six States that have
experience with NEPPS for detailed study-Connecticut, Florida, Georgia,
Maine, Minnesota, and Oregon. In each case, we interviewed officials in
the States' lead environmental agency. For each State, we first
discussed the program with officials that have overall responsibility
for NEPPS. To get insights into the status of NEPPS at the program
level, we interviewed program managers from each of three environmental
programs: the Resource Conservation and Recovery Act, the Clean Water
Act, and the Clean Air Act. We also interviewed program officials in
the EPA regional office with jurisdiction for each State we visited.
After these visits, we conducted telephone interviews with
environmental officials from two States that have limited their
participation in NEPPS-Michigan and Pennsylvania-to determine their
views of NEPPS and the reasons why they chose not to participate more
fully.
At EPA headquarters, we contacted officials from the various
offices with NEPPS responsibilities, including the Offices of Air and
Radiation; Water; Solid Waste and Emergency Response; Enforcement and
Compliance Assurance; Reinvention; and State and Local Relations, to
discuss our objectives as well as the results of our specific work at
the States and EPA regional offices.
We also gathered information on our objectives through interviews
with officials from other organizations with an interest in NEPPS,
including the Association of State and Interstate Water Pollution
Control Administrators, Association of State and Territorial Solid
Waste Management Officials, Environmental Council of the States,
National Academy of Public Administration, National Governors
Association, and State and Territorial Air Pollution Program
Administrators. Regarding the second objective, we interviewed
officials from the Green Mountain Institute for Environmental
Democracy, which participated in studies of issues related to the
development and/or use of core performance measures.
We conducted our work from June 1998 through April 1999 in
accordance with generally accepted government auditing standards. We
provided copies of this report to EPA and the Environmental Council of
the States for their review and comment. EPA's comments and our
responses are included in appendix I. The Council indicated that since
its response had been prepared without the benefit of review by Council
membership, its comments should be viewed not as reflecting the
Council's positions, but rather as informal suggestions to enhance the
accuracy and completeness of the report. We made revisions as
appropriate to incorporate these comments. We also provided relevant
sections of the draft to representatives of the eight States included
in our review to verify statements attributed to them, and to verify
other information they provided, and have made revisions as appropriate
to incorporate their comments.
______
Growth of State Participation in NEPPS
State participation in the National Environmental Performance
Partnership System has grown significantly in the 4 years since the
system was created, increasing from 6 pilot States in fiscal year 1996
to 45 States by the end of fiscal year 1998. \6\ However, the extent of
participation among these 45 States varied considerably: 31 States had
both performance partnership agreements and grants; 12 States had
grants only; 2 States had agreements only; and 5 States did not
participate at all. Moreover, while some States included a full range
of environmental programs under their agreements, others included only
one or two programs (such as pesticide or drinking water programs).
---------------------------------------------------------------------------
\6\ For this report, NEPPS participation is defined as
participation in Performance Partnership Agreements, Performance
Partnership Grants, or both.
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Initial Implementation Was Devoted to Experimentation
NEPPS was initially tested on a pilot basis in fiscal year 1996
with 6 participating States. This first year was viewed as a time to
experiment with the new system and various ways to implement it.
According to a 1996 study of five of the six pilot efforts conducted by
the Environmental Law Institute with funding from EPA, \7\ although the
pilot States shared ideas during the process of developing their
agreements, the States deliberately avoided discussing some of the
specifics of their approaches so as to ensure diversity.
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\7\ An Independent Review of the State-Federal Environmental
Partnership Agreements for 1996, Environmental Law Institute, (1996).
The Performance Partnership Agreement between EPA and the sixth State
was signed after the Institute completed its review and analysis of the
other five agreements and thus was not covered by this study. The
Institute's study did not include a review of Performance Partnership
Grants since the authority for these grants was not provided by the
Congress until the middle of fiscal year 1996.
---------------------------------------------------------------------------
The Environmental Law Institute's study focused on whether, and
how, the pilot performance partnership agreements achieved and measured
environmental results, how flexibility was exercised under the program,
and how accountability was ensured. Based on the experiences of the
pilot States, the Institute's study concluded that NEPPS showed great
promise for improving the relationship between EPA and the States and
for improving the administration of the environmental statutes.
However, the study cited a number of issues that would need to be
addressed as the program evolved. It stated, for example, that while
States and EPA had made progress toward the goal of increasing the use
of environmental indicators (measures of overall progress in achieving
environmental objectives), much remained to be done to develop
appropriate measures. The study also concluded improvements were needed
to (1) clarify the relationship between Performance Partnership
Agreements and Grants, (2) more effectively communicate EPA's national
priorities to EPA regions and States in time to impact State and EPA
regional office negotiations on Performance Partnership Agreements, and
(3) increase public participation in the program.
State Participation Expanded Rapidly Since Initial Implementation
State participation in Performance Partnership Agreements and
Grants expanded rapidly after the first year. In fiscal year 1997,
States and regional offices were expected by EPA headquarters to build
on the prior year's experiences and work on areas that needed
additional clarification or where barriers needed to be removed.
Participation grew that year to 44 States and to 45 States in fiscal
year 1998.
Of the 45 States participating in fiscal year 1998, 31 had both
Performance Partnership Agreements and Grants, 12 States had grants
only, 2 States had agreements only, and 5 States did not participate at
all. (See fig. 2.1.) Since States can have multiple Performance
Partnership Agreements and Grants, depending on which State agencies
handle the different environmental programs, the 45 States accounted
for a total of 38 agreements and 52 grants.
According to EPA, States vary in the extent of their participation,
with half the States participating broadly by negotiating both
Performance Partnership Agreements and Performance Partnership Grants
that cover most EPA programs through their State environmental
agencies, while other States limit their participation by negotiating,
for example, a partnership grant through their agricultural agency that
covers pesticide programs. As shown in figure 2.2, of those States that
participated in NEPPS through their lead environmental agencies in
fiscal year 1998, 25 had both Performance Partnership Agreements and
Grants, 4 had grants only, and 6 had agreements only.
States also vary considerably in terms of the detail and content of
their partnership agreements. Senior officials in EPA's Office of State
and Local Relations explained that the agency has not attempted to
impose uniformity on the development of partnership agreements at this
early stage of the NEPPS process and has, therefore, refrained from
issuing guidance on how partnership agreements should be structured.
Hence, the agreements vary widely in content and emphasis, reflecting
individual State's conditions and priorities, and their negotiations
with their respective EPA regional offices.
Most States Have Performance Partnership Grants , but Few Take Full
Advantage of the Flexibility Offered
As discussed in chapter 1, allow eligible Performance Partnership
Grants States to request that funds from two or more categorical grants
(such as those authorized under the Clean Water Act or those used to
implement the Clean Air Act) be combined into one or more grants to
give greater flexibility in targeting limited resources to their most
pressing environmental needs. Thus far, however, the States have
consolidated less than one-third of the eligible categorical grant
funds under partnership grants. Of the eligible grants, 29 percent, or
$217 million, was consolidated in fiscal year 1998, while 71 percent,
or $528 million, remained as categorical grants. This represents an
increase of 28 percent over the $169 million that was consolidated the
previous year.
______
EPA and States Have Made Progress in Developing Results-Oriented
Performance Measures
Both EPA and individual States have a number of efforts underway to
develop effective performance measures to better understand whether
their programs are achieving their intended results. Their collective
effort to develop such measures for NEPPS has centered on the ``Core
Performance Measures'' that have been negotiated between EPA and the
Environmental Council of the States during the past several years.
These measures are intended to be used in tracking States' progress
toward achieving the most important goals of the nation's environmental
programs.
In developing the performance measures, EPA and the States have
retained a number of the traditional output measures they have used in
the past but have attempted to focus increasingly on measuring desired
environmental outcomes. However, overcoming a number of technical
challenges, and reaching agreement on the most important environmental
outcomes and on the methodologies to measure progress toward those
outcomes, has been difficult. Nevertheless, considerable progress has
been made in developing and improving the performance measures-as
evidenced by agreement on a set of measures for fiscal year 2000 that
are widely regarded as improved measures from previous years.
Developing and Agreeing on Core Performance Measures Has Been Difficult
EPA and State officials agree on the importance of measuring the
outcomes of environmental activities rather than just the activities
themselves. However, developing such measures has faced a number of
challenges. Outputs, by their nature, are inherently easier to measure,
report, and understand than outcomes and environmental results.
Compared to output measures, developing defensible results-oriented
measures has proven to be substantially more difficult. In addition to
these technical challenges, EPA and the States have differed on what
the measures should look like (particularly regarding the relative
emphasis of output versus outcome measures) and on the degree of
flexibility with which they should be implemented.
Technical Challenges
EPA and State officials identified several key technical challenges
that they have had to address in their efforts to focus performance
measurement on desired results. These include (1) an absence of
baseline data against which environmental improvements could be
measured, (2) the inherent difficulty in quantifying certain results,
(3) the difficulty of linking program activities to environmental
results, and (4) the considerable resources needed for high-quality
performance measurement.
Need for Baseline Data to Measure Progress
As noted in our May 1998 report on EPA's enforcement program, \8\
the absence of adequate baseline data for comparison is a common
problem among many organizations engaged in performance measurement,
including Federal and State agencies. Measuring environmental
improvements requires a starting point against which to measure
changes. Without such a baseline, any environmental measurement system
can only provide a snapshot in time; it cannot tell whether conditions
are getting better or worse.
---------------------------------------------------------------------------
\8\ Environmental Protection: EPA's and States' Efforts to Focus
State Enforcement Programs on Results (GAO/RCED-98-113, May 27, 1998).
---------------------------------------------------------------------------
Federal and State agencies have therefore frequently had to build
entirely new data systems and ways of collecting data because the old
systems are of limited use in analyzing programs' performance. Our 1998
report noted that compliance data are especially scarce for small
businesses that historically received few inspections. Consequently,
State programs that are just now attempting to measure results have
limited data with which to compare them. Florida officials, for
example, told us that their recent environmental reports showing
industry-wide compliance rates generally have a baseline of 1997 or
1998, because past information is unavailable or unreliable. An EPA
official responsible for NEPPS implementation also noted that the
scarcity of baseline information by which to measure program
improvements attributable to NEPPS is a particular challenge and a
major concern to the agency.
Inherent Difficulty in Quantifying Data
Generating relevant and accurate data is a challenge under the best
of circumstances. Not only do appropriate measures need to be defined,
methodologies need to be established to develop the necessary data. In
enforcement programs, for example, it is difficult to determine the
impact on the overall environment from individual inspections conducted
or enforcement actions taken. In addition, as officials told us during
our review of enforcement programs, quantifying industry-wide
compliance rates and other outcomes has been complicated by the
difficulty of deciding both how to define a compliance rate and how to
calculate it. As another example, the results of activities designed to
improve water quality can take years to appear, and the capability of
many States to monitor a significant share of their waters is limited.
These challenges have led some State officials to note that it may
be exceedingly difficult to achieve comparability from State to State,
both in what is being measured and the methodology used in gathering
data. In particular, a State with more complete data may appear to have
greater environmental problems than a State with poor data. Minnesota
officials, for example, told us that their data base for ``impaired
waters'' (waters that do not meet State water quality standards)
includes waters that have undergone far more rigorous analysis than
that performed by other States. Consequently, according to these
officials, Minnesota's impaired waters may appear to be far more severe
than those of another State that does not subject its waters to such
rigorous analysis.
Similar findings were reached in a 1998 study evaluating an effort
where six New England State environmental management agencies and EPA's
Boston office collaborated on a menu of environmental indicators
intended to measure (1) the status and trends of the quality of the New
England environment and (2) program accomplishments toward reaching
State and regional environmental goals. \9\ The findings of the study
were based on an evaluation of data availability and quality for 12
example indicators, which included 6 specific performance measures. A
key finding of this effort was that the level of consistency required
for regional indicators is difficult to achieve given (1) a lack of
clarity in terms of what the indicators intend to measure and for what
purpose and (2) a lack of consistency across States in both the type of
data collected and methodology used.
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\9\ Green Mountain Institute for Environmental Democracy,
``Indicator Data Catalog, An Evaluation of Data Issues Related to the
Development of Core Performance Measures and Regional Environmental
Indicators,'' (Nov. 1998).
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Challenges in Linking Program Activities to Environmental Outcomes
Assuming environmental conditions could be reliably and
consistently measured, it may still be difficult to demonstrate the
extent to which a government program affected that condition. As we
noted in a 1997 report on the complexities associated with performance
measures, ``Separating the impact of [a] program from the impact of
other factors external to the program was cited by government agency
officials as the most difficult challenge in analyzing and reporting
government performance.'' \10\
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\10\ Managing for Results: Analytic Challenges in Measuring
Performance (GAO/HEHS/GGD-97-138, May 30, 1997).
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Even in the case of the Florida Department of Environmental
Protection's significant commitment to measuring compliance rates and
environmental indicators, regulators made a conscious decision not to
link their enforcement programs with trends in environmental indicators
or outcomes like compliance rates. The regulators explained that the
causes of these trends are subject to other influences outside their
control, such as the state of the economy, the weather, and other
departmental actions besides enforcement. The Department's consultant
agreed, noting, for example, that ``If and when the scallop population
in Tampa Bay is restored to healthy levels, Florida's Department of
Environmental Protection . . . would be hard pressed to prove beyond
doubt that their interventions actually produced this result, no matter
how compelling their scientific analyses and explanations.'' \11\
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\11\ Malcolm Sparrow, ``Regulatory Agencies, Searching for
Performance Measures That Count,'' (June 9, 1997).
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Determining causality has proven to be particularly difficult among
pollution prevention programs. According to EPA headquarters officials,
EPA and the States have not yet been able to determine how to establish
a cause and effect relationship to measure the impacts on the
environment from many activities that prevent pollution from occurring.
Resource Limitations
Another barrier, which essentially flows from the others, relates
to the significant resources and expertise required for identifying and
testing potential results-oriented performance measures. Once measures
are in place, gathering and analyzing the data can also be resource-
intensive and can take years to show environmental improvements. In
addition, several program officials of the States we visited told us
that some Federal and State data bases will require significant
improvement in order to track the new information to support results
measures. A member of the Environmental Council of the States'
Information Management Workgroup agreed, noting that this is an issue
EPA and the States still need to address.
Two States that have developed systems to measure the results of
selected enforcement efforts found that considerable resources are
needed to do quality performance measurement. The Florida Department of
Environmental Protection hired a consultant to assist them in
developing their new performance measurement system and dedicated
several of its own staff to this effort. A Massachusetts environmental
official found that monitoring the results of even a single program can
require considerable resources. The former Deputy Commissioner said
that in a pilot test of its new Environmental Results Program, the
agency had to invest a great deal of time and energy to work with the
facilities and measure the ultimate results, even though the test
involved only 18 participating companies. Officials from these and
other States noted that it is difficult to commit resources to the
development and implementation of new results-oriented performance
measures while still meeting other program requirements.
Results-Oriented Measures Easier to Develop for Some Programs Than
Others
As challenging as the exercise may be for all programs, we found
that developing results-oriented performance measures has been easier
in the case of some programs than others. Air programs, for example,
have long had a monitoring network in place to measure ambient air
quality throughout the country. Accordingly, as officials of EPA's
Office of Air and Radiation told us, the air program has had
considerable background with results-oriented performance measures, and
that this experience has limited both the burden of developing specific
performance measures and the burden on the States of implementing these
measures. Officials of the States we visited generally confirmed this
assessment. A senior official in Georgia's environmental protection
division, for example, told us that developing results-oriented
measures is easiest for the air program, more difficult for the water
program, and most difficult for the waste program. The Georgia official
attributed the differences to the extensive historical experience of
the air program with results-oriented measures, the length of time it
takes to see measurable results in the water program, and the
difficulty in identifying suitable measures for the waste program.
Similar comments were made by a Florida air program official that noted
that States and EPA have been monitoring air quality for some time,
have good data, and can show results.
Challenges in Obtaining Agreement Between EPA and the States on the
Measures
In addition to these technical challenges, EPA and States have had
to resolve fundamental disagreement over (1) the degree to which States
should be permitted to vary from the national core measures and (2) the
composition of the measures, particularly regarding the degree to which
pre-existing output measures are to be retained as newer outcome
measures are added.
Extent to Which States Can Vary From the Core Measures
EPA's goal to use the performance measures to provide a national
picture of environmental progress necessitates a degree of consistency
among the States in what is being measured. To achieve consistency, the
May 1995 NEPPS Agreement provides that EPA and the States will ``. .
.develop a limited number of program and multi-media performance
measures that each State will report so that critical national program
data is collected.'' However, recognizing that a set of national
measures may not necessarily address individual States' priorities (or
represent what individual States consider to be the best measures for
their State-specific situations), the agreement further provides that
States may develop other goals and performance indicators that will
present a more meaningful picture of their State's environmental
quality. This apparent need was further recognized in the August 1997
joint statement by EPA and the Environmental Council of the States,
which accompanied the release of the measures for fiscal year 1998. The
statement indicated that where a particular performance measure does
not fit a State's situation, that measure may be modified, substituted,
or eliminated if mutually agreed to by both the State and EPA.
Deviations could be warranted, for example, where (1) there may not be
adequate data to report on the measure, (2) alternative measures may
work better, or (3) there may be higher priorities in a State.
According to Council officials, in the first year of the
performance measures, EPA regions were inconsistent in implementing the
performance measures across the country: some EPA staff in regional
offices allowed States flexibility in implementing performance measures
(as intended by the 1997 joint statement) while staff in other regions
tried to portray the national performance measures as mandatory and
inflexible. In June 1998, the president of the Council wrote to the
Deputy Administrator of EPA, asking that the agency reaffirm its
support for the flexibility provisions of the joint statement. Noting
that one of the most challenging aspects of implementing the
performance measures is balancing the need for uniform national
measures with the need to accommodate the circumstances of individual
States, the Deputy Administrator's September 1998 response reaffirmed
that under certain circumstances, EPA regions can adjust a measure that
is inappropriate for a particular State. Updated EPA-Council joint
guidance on the use of performance measures, issued in April 1999 as an
addendum to the 1997 Joint Statement along with the release of the
fiscal year 2000 measures, reiterates EPA's commitment to allow
flexible implementation of the measures in specific situations and with
approval of both the State and EPA. \12\
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\12\ Specifically, the addendum states that a State and EPA may
jointly agree to deviate from particular performance measures where (1)
the measure does not apply to a State's or region's physical setting or
environmental condition; (2) the State does not have authority for the
program to which the measure applies; (3) data for the measure are not
available or alternative data are more relevant in painting a picture
of environmental progress; (4) the State and EPA agree that the measure
or the work associated with it are not a high priority in the State.
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States Have Implemented Both Core Performance Measures and Their Own
Measures
As permitted by the 1995 NEPPS agreement, four of the six States
that we visited have developed some performance measures on their own,
separately from the national core measures. These States use their own
measures to track priority issues in their respective States and to
report environmental progress to their State legislatures and the
public. Florida environmental officials developed their separate
measures in conjunction with the NEPPS program, and they continue to
use them because they believe they are better measures of results than
the Core Performance Measures. Georgia and Minnesota officials
developed measures that focus on specific State priorities, and Oregon
officials developed measures that were specifically tailored to the
State's strategic plan. While environmental program officials in
Connecticut and Maine have not developed performance measures apart
from the core measures, they told us that they believed State-specific
rather than national measures would be more useful to them and more
appropriate to measure the results of environmental programs in their
States.
Regardless of whether a State developed its own performance
measures, each of the States we visited also agreed to report on the
national core measures. Normally, the States did not adopt the core
performance measures verbatim; they made minor changes where
appropriate to meet State-specific situations. In each case, however,
the States' changes to the national Core Performance Measures were
reviewed and approved by the appropriate EPA regional office to ensure
that they were compatible with the national measures. EPA officials
told us that they were aware of only one State (New Jersey) that had
deviated significantly from the national Core Performance Measures, and
in that instance, the deviation was reviewed and approved by the
appropriate EPA headquarters program office.
Concerns About Applying Core Performance Measures to Nonparticipating
States
NEPPS is a voluntary program and not all States have chosen to
participate. Because core performance measures are a component of
NEPPS, environmental officials in many States initially presumed that
they did not apply to nonparticipating States. EPA's intent to use
performance measure data to present a national environmental picture,
however, led the agency to request this type of data from all states--
not just NEPPS participants. Accordingly, in an October 1998 internal
memorandum on EPA implementation of core performance measures, the
Acting Deputy Administrator stated that: ``The Regions are responsible
for obtaining data on the Core Performance Measures from all States
(whether or not they have a Performance Partnership Agreement with EPA)
because these measures are intended to paint a picture of environmental
and program progress across the nation.''
At the Environmental Council of the States' October 1998 annual
conference, States expressed concern that EPA's policy of seeking to
make performance measures applicable to all States is inappropriate and
in conflict with the voluntary concept of the NEPPS program.
Subsequently, joint EPA-Council guidance was issued with the fiscal
year 2000 performance measures which stated that ``[Core Performance
Measures] as such only apply to States participating in NEPPS,'' but
added that ``States not participating in NEPPS will continue to provide
key information needed by EPA through State/EPA Agreements, grant work
plans, or other operating agreements.''
Relative Emphasis on Outputs Vs. Outcomes
Among Federal and State officials, there is a broad agreement in
principle on the importance of measuring outcomes rather than just
outputs. A major concern among State officials, however, has been a
continued emphasis on output measures by EPA. Ironically, many State
officials maintain that much of EPA's continued emphasis on outputs
stems from the agency's implementation of the Results Act.
The Results Act requires agencies to clearly define their missions,
establish long-term strategic goals, measure their performance against
the goals they have set, and report this information to the Congress.
The statute emphasizes the need for agencies to focus on and achieve
measurable program results, rather than focusing on the performance of
prescribed tasks and processes. Thus, EPA's goals under NEPPS and the
Results Act would appear to share the same focus on environmental
results. However, as we noted in a 1998 report on the first set of
performance measures EPA prepared pursuant to the Results Act, the
overwhelming share of measures were heavily weighted toward numerical
targets and other outputs. \13\
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\13\ Observations on EPA's Annual Performance Plan for Fiscal Year
1999 (GAO/RCED-98-166R, Apr. 28, 1998).
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Broad concern was expressed among the States that we interviewed
about the impact that EPA's implementation of the Results Act has had
on core performance measures. To varying degrees, senior level and
program management officials in five States we visited, and EPA program
officials in two regions, expressed concern about the apparent conflict
between the results-oriented performance measures being developed under
NEPPS and the generally output-oriented performance measures EPA has
thus far used to report on the Results Act. The officials were
concerned that EPA's implementation of the Results Act is (1)
maintaining an emphasis on output rather than outcome measures and (2)
adding new measures on top of existing measures, leading to an overall
increase in the amount of data States must gather and report.
EPA's enforcement program was illustrative of States' concerns
about the difficulty in moving toward outcome-oriented performance
measures. Performance measures from an enforcement standpoint have
tended to focus heavily on outputs, such as the number of inspections
conducted, the number of significant violations detected, and how
violations are handled. Senior and program management level officials
in half the States and EPA regional offices we visited specifically
cited the relatively heavy focus of EPA's enforcement program on such
outputs as a barrier to achieving greater progress in developing
outcome-oriented performance measures. This view echoed those expressed
by State officials in our May 1998 report on EPA enforcement efforts,
which relayed concerns among most of the State officials interviewed
that EPA's Office of Enforcement and Compliance Assurance
overemphasizes output measures. We recommended at that time that EPA
ensure that the enforcement-related provisions of EPA's Performance
Plan, prepared pursuant to the Results Act, focus on outcomes in a
manner consistent with that of the Core Performance Measures developed
under NEPPS.
In a November 1998 response to our enforcement report, EPA
emphasized a number of initiatives underway, most notably its National
Performance Measures Strategy, to build in more outcome measures in its
own enforcement program and to assist States in doing so for their
programs. \14\ The Office also acknowledged the need to reorient its
performance plan increasingly toward outcomes and signaled its intent
to integrate some outcome measures into the fiscal year 2000 core
performance measures. The Office's fiscal year 2000 measures list seven
measures, four of which are identified as providing outcome measures.
The implementation approach for three of the four measures is to work
with volunteer States to test the measures. In this connection, the
Office has recently announced the availability of funds for States for
projects that will improve the design and use of performance measures
for enforcement and compliance/assistance activities. In evaluating
project proposals, the Office plans to give priority to projects
designed to develop outcome measures.
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\14\ Among the outcome measures the Office has already implemented
under this strategy are measures of improvements resulting from EPA
enforcement actions. Outcome measures currently being implemented
include (1) the average number of days for significant violators to
return to compliance or enter enforceable plans or agreements and (2)
the percentage of significant violators with new or recurrent
significant violations within 2 years of receiving previous enforcement
action. Outcome measures targeted for implementation in October 1999
include assessments of the levels of compliance among selected
regulated populations.
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Progress has also been made in other EPA programs in reorienting
the agency's Results Act measures toward outcomes. Specifically, we
found that EPA's fiscal year 2000 annual Performance Plan, which
contains the measures to be used to track progress toward achieving its
programs' goals, demonstrated some progress since the performance plan
of the previous year. \15\ Further progress in coming years would help
to reduce the disparity between the generally output-oriented focus of
EPA measures prepared pursuant to the Results Act and the efforts by
EPA regions and States to focus their negotiations under NEPPS
increasingly on achieving results.
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\15\ Observations on the Environmental Protection Agency's Annual
Performance Plan For Fiscal Year 2000 (draft). Specifically, we noted
that among the improvements in the fiscal year 2000 plan are goals and
measures of generally better quality, and we note some additional
efforts to implement outcome measures. Overall, however, we found that
the plan still focuses heavily on output measures.
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Status of Core Performance Measures
Notwithstanding concerns among State and some regional officials
about the potential impact of EPA's implementation of the Results Act
on their efforts to orient their NEPPS-related activities toward
outcomes, EPA and the Environmental Council of the States have managed
to agree on a third set of Core Performance Measures for use in fiscal
year 2000 and beyond which, by most accounts, are a significant
improvement over the 1998 and 1999 measures. As both EPA and Council
officials have noted, one of the most apparent differences between the
new measures and those of past years is that the fiscal year 2000
measures are significantly fewer in number. Specifically, as shown in
table 3.1, data provided by EPA show that the number of Core
Performance Measures has been reduced from an initial set of 104
measures for fiscal year 1998 to 37 measures for fiscal year 2000. \16\
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\16\ Such a sizable reduction reflects the efforts by EPA and the
Council to focus Core Performance Measures on what they agreed are the
most important measures. The magnitude of the reduction, however,
should be interpreted with caution for several reasons. First, the
figures reflect the temporary deletion of all 25 measures for the
Pollution Prevention and Toxic Substances Program. Work is currently
underway to develop new measures for pollution prevention and toxic
substances, which are expected to be ready for use in fiscal year 2001.
Second, the dropping of a measure as a Core Performance Measure does
not necessarily mean that data will not be gathered in response to that
measure. Rather, the inclusion or exclusion of the measure as a core
measure is an expression of its relative importance to the national
environmental picture. Third, some core measures have multiple parts,
such as ``trends in air quality for each of the six criteria air
pollutants'' (actually six measures) or ``trends in emissions of toxic
air pollutants'' (189 hazardous air pollutants the Clean Air Act
identifies). The discrete data that are necessary to report under such
measures may be aggregated or disaggregated depending on the amount of
detail used to measure performance. Disaggregating the data increases
the number of perceived performance measures.
Table 3.1: Number of Core Performance Measures, Fiscal Years 1998
Through 2000
------------------------------------------------------------------------
Fiscal Fiscal Fiscal
Program Year 1998 Year 1999 Year 2000
------------------------------------------------------------------------
Air and radiation...................... 23 16 10
Water.................................. 31 31 13
Hazardous waste........................ 17 17 7
Pollution prevention and toxic 25 25 0
substances............................
Enforcement and compliance............. 8 8 7
--------------------------------
Totals............................. 104 97 37
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Source: EPA's Office of State and Local Relations.
In addition to reducing the number of measures to provide greater
focus on what are perceived as the most important measures, progress
was also made in shifting the proportion of fiscal year 2000 measures
increasingly toward outcomes and environmental indicators.
Specifically, according to EPA, while about 40 percent of the measures
focused on outcomes or environmental indicators in fiscal year 1998,
about 60 percent of the measures focus on outcomes and environmental
indicators in fiscal year 2000. Moreover, while EPA and Council
officials are not expected to formally vote on a comprehensive set of
new measures each year, the fiscal year 2000 measures are to be
periodically updated as deemed appropriate by EPA and the Council. In
this connection, EPA program officials, told us that they have a number
of projects currently under way (in addition to those in the
enforcement program discussed earlier) that are specifically designed
to develop additional results-oriented performance measures.
Finally, EPA and the States have also made progress addressing the
States' concern that EPA had required additional reporting by the
States to help the agency meet its data requirements under the Results
Act. Under the April 1999 Addendum to the Joint Statement, co-signed by
EPA and the Environmental Council of the States, Core Performance
Measures and other current reporting requirements will be relied upon
to satisfy EPA's Results Act-related data needs.
Conclusions
There is broad agreement among Federal and State officials on the
importance of measuring the outcomes of environmental activities. While
considerable progress has been made in developing and implementing
results-oriented Core Performance Measures, a number of challenges
involving technical and policy issues have complicated the process.
Progress has nonetheless been made in developing fiscal year 2000
measures which, by most accounts, are a significant improvement over
measures used in previous years. Continued progress in developing the
measures-and the data systems needed to support the measures-will be
critical to States' and EPA's efforts to demonstrate the efficacy of
their programs under NEPPS. In the past, it has been difficult for
States to achieve the flexibility they desire without the performance
measures in place to demonstrate that their environmental goals are
being achieved, and it will likely continue to be so in the future.
Agency Comments
Citing our observations that (1) EPA has focused on outputs to meet
its obligations under the Results Act while supporting a transition to
outcome-based management under NEPPS and (2) these conflicting
priorities have led to confusion that hinders performance partnerships,
EPA said that, to the contrary, both the Results Act and NEPPS
encourage the development of outcome measures and outcome-based
management. We acknowledge the shared objective of NEPPS and the act in
focusing on results. The key word, however, is implementation: as we
have documented in other recent work, the measures EPA has used in its
implementation of the Results Act have thus far been heavily output-
oriented and, therefore, convey priorities that are often in conflict
with the more outcome-oriented measures being employed under NEPPS.
We acknowledge EPA's ongoing efforts to orient its Results Act-
related measures increasingly toward outcomes and believe that further
progress toward this end will help to alleviate this problem. In
addition, we modified our discussion of this issue to reflect the
progress made by EPA and the States in addressing the States' complaint
that EPA had required additional reporting by the States to help the
agency meet its data requirements under the Results Act. The chapter
notes that pursuant to the April 1999 Addendum to the Joint Statement,
co-signed by EPA and the Environmental Council of the States, Core
Performance Measures and other current reporting requirements will be
relied upon to satisfy EPA's Results Act-related data needs.
______
Reductions in EPA's Oversight Attributable to NEPPS Have Thus Far Been
Modest
As originally envisioned, the principle of differential oversight
was a key element of NEPPS. Under this principle, States with stronger
environmental programs would be accorded reduced oversight and greater
autonomy over delegated programs, thereby allowing these States greater
flexibility to manage their programs, and providing EPA the opportunity
to shift greater attention of its own resources toward weaker programs.
An important component of the concept of differential oversight was
that programs eligible for reduced oversight would meet certain
criteria and that the EPA and States would work together to choose a
group of measures to use in assessing State performance.
In the years immediately following the 1995 agreement, EPA and many
States agreed that a formal system implementing differential oversight,
whereby the merits of a State program would be evaluated based on
certain standards or criteria to determine whether it qualifies for
reduced oversight, would be both controversial and difficult to
implement. Nonetheless, the original concept of reduced EPA oversight
in exchange for acceptable State environmental performance remains an
important goal for both EPA and participating States.
Among the six States we visited, we found instances in which some
oversight reduction was successfully negotiated between States and
their corresponding EPA regions. Such instances, however, have thus far
been limited in both scope and frequency. A number of interrelated
factors were cited as limiting the reduction of EPA oversight,
including (1) statutory and/or regulatory requirements that specify
State reporting requirements and other methods of ensuring State
accountability to EPA; (2) EPA's reluctance to reduce oversight without
measurable assurances that environmental goals are still being
achieved; (3) the inherent difficulty in ``letting go'' on the part of
some regulators that have implemented the existing EPA-State oversight
arrangement for several decades; and (4) the challenge faced by EPA of
communicating to States through a complex, multilevel organization
involving both headquarters and regional offices.
Initial Expectations Concerning EPA Oversight of Participating States'
Programs
The May 1995 joint agreement between EPA and the Environmental
Council of the States stated that ``a differential approach to
oversight should provide an incentive for State programs to perform
well, rewarding strong State programs and freeing up Federal resources
to address problems where State programs need assistance.'' It added
that ``after agreement is reached, EPA will focus on program-wide,
limited after-the-fact reviews rather than case-by-case intervention
and will work with States to identify other ways to reduce oversight.''
Accompanying differential oversight was the concept of
``performance leadership,'' whereby qualifying programs having a record
of strong performance would be nationally recognized with
``leadership'' status. In such instances, the leadership programs would
be afforded minimum allowable oversight based on the belief that they
``deserve to be treated with deference whenever possible and do not
need Federal oversight on a routine basis.''
In subsequent years, however, both EPA and the States found it
difficult to implement both a formal differential oversight process and
to formally designate certain State programs as performance leadership
programs. One key problem was the inability of EPA and the States to
agree on criteria to use in making such determinations. EPA officials
responsible for NEPPS noted that because the capacity of a State
program can change depending upon circumstances, the proper level of
oversight should be determined on a State-by-State basis by EPA
regional managers-not on the basis of specific criteria that would be
universally applied to all States. In addition, as noted by the
Environmental Council of the State's Executive Director, many State
environmental leaders expressed concern that formal designations of
such programs as performance leaders could be interpreted by EPA, State
legislatures, and the public as a ``report card'' of good and bad
performers. Such designations would probably be challenged,
particularly given the difficulty of developing and applying specific
criteria to use in making these determinations.
Nonetheless, the concept of differential oversight, albeit in a
less structured and visible form, remained an important component of
State and EPA regional NEPPS negotiations. Officials in the six States
told us that their early expectations for NEPPS were that the program
would help them to reduce their oversight workload in some well-run
program areas and to allow them a stronger focus on State priorities
and problem areas. Officials in three States noted in particular that
they believed the NEPPS framework would better allow them to identify
and address opportunities for multimedia projects, rather than
continuing to expend time and resources only on the traditional, single
media air, water, and waste programs.
States and Regional Offices Report Limited Oversight Reduction Thus Far
Directly Attributable to NEPPS
State officials cited a number of instances in which they
negotiated some reduction in regional oversight of their programs.
These efforts tended to focus on reducing the frequency of reporting,
and in some cases the frequency of conducting onsite reviews, in
situations where both sides agreed such activities were duplicative or
otherwise of limited value. However, most State program officials
indicated that the extent of reporting required has either remained the
same or actually increased in spite of NEPPS, and that few instances
were identified where States obtained more significant independence in
operating their programs (e.g., focusing their resources on State
priorities). Most regional staff we interviewed generally agreed that,
to date, oversight reduction attributable to NEPPS has been limited.
Instances of Reduced Oversight Cited by States and Regions
Officials in Maine, Florida, Georgia, and Minnesota cited specific
instances in which reporting requirements were scaled back, at least in
part as a result of their participation in NEPPS. Maine environmental
officials, for example, noted that more frequent dialog and less formal
reporting between the program staff and regional staff had replaced
written reports, saving time and improving the level of cooperation
between EPA and State staff. While Maine program officials attributed
the reductions in large part to the assignment by EPA's Boston Regional
Office of a liaison for each State's delegated programs, they credited
NEPPS with formalizing or legitimizing the changes. Florida program
officials identified sizable reporting reductions in its Resources
Conservation and Recovery Act program as a result of a joint State/EPA
effort included in the Performance Partnership Agreement. The Chief of
Florida's Bureau of Water Facilities also noted that under the
agreement, the State was able to streamline oversight of its
pretreatment program through reduced reporting and by negotiating with
the EPA Atlanta office a shifting of resources from the conduct of
routine annual inspections and audits to other priority areas in the
program. \17\
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\17\ Under EPA's Pretreatment Program, wastewater treatment plants
are charged with monitoring and regulating contaminant discharges by
industrial users into their sewer systems.
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In some cases, regional and State officials indicated that
oversight had been scaled back, but that such efforts could not be tied
directly to a State's participation in NEPPS. Connecticut officials
reported that quarterly reporting had been eliminated in recent years
for some of their air, water and waste programs, but attributed the
change solely to EPA regional efforts that preceded NEPPS. Similarly,
program officials in EPA's Boston, Chicago, and Seattle offices each
cited instances in which quarterly reviews and file reviews were
eliminated, but indicated that such efforts often preceded
independently of the signing of a NEPPS agreement.
Few Instances of Significant Oversight Reduction Under NEPPS
Notwithstanding the streamlining of reporting requirements and
similar tracking efforts, the large majority of the State officials we
interviewed generally maintained that participation in NEPPS has not
yet brought about significant reductions in reporting and other
oversight activities by regional program and audit level staff, nor has
it resulted in significant opportunities to focus on other priorities
or shift resources to weaker program areas. Oregon officials, for
example, explained that their initiatives to focus on the State's
highest priorities are having difficulty competing with their
obligations to track and report on the national core performance
measures and to comply with other EPA reporting requirements. Program
managers in Connecticut, Florida, Georgia, Maine, and Minnesota
conveyed similar experiences, indicating that the addition of new core
measures to preexisting reporting requirements had increased their
reporting workload, or that they are likely to do so in the future.
Program managers in three of these States indicated they will need to
develop the data and systems to report on the new measures.
Oregon officials also pointed to a significant increase in EPA
oversight by the regional enforcement officials of its air, water, and
waste programs. EPA Seattle officials told us that the enforcement
reviews in Oregon were the outcome of nationwide enforcement reviews by
both the Office of Enforcement and Compliance Assurance and of EPA's
Office of the Inspector General, which raised concerns about whether
and how States were bringing enforcement actions against violators.
Georgia officials also said that oversight of their hazardous waste
program has increased, noting that regional enforcement officials were
making regular monthly visits to review program records.
EPA regional program and enforcement officials generally
acknowledged that oversight of State programs has not significantly
decreased as a result of NEPPS, and that in some cases, has increased.
Officials in the Atlanta and Chicago Regional Offices noted in
particular that it may have been unrealistic to assume, as many States
had at the outset of NEPPS, that States' participation in the program
would necessarily lead quickly to reduced EPA oversight. Moreover,
regional officials point to specific reasons why it has been difficult
to scale back EPA oversight-and why oversight has actually increased in
certain instances.
Factors Affecting Potential to Reduce Oversight Under NEPPS
We asked both State and regional officials to identify what they
believed to be the most important considerations affecting the extent
to which NEPPS has provided States with reduced oversight, greater
program autonomy, and the flexibility to emphasize their highest
priorities. There was considerable consistency on the factors
identified by both State and EPA officials, although there was some
variation on the degree to which various factors were emphasized. The
key factors include (1) statutory and/or regulatory requirements that
in some cases prescribe the kind of oversight required of States by
EPA; (2) reluctance by EPA regulators to reduce oversight without
measurable assurances that environmental protection will not be
compromised; (3) the inherent difficulty in letting go on the part of
some regulators that have implemented the existing EPA-State oversight
arrangement for several decades; and (4) EPA's multilevel
organizational structure, which complicates efforts to identify whether
all key decisionmakers among the agency's headquarters and regional
offices are in agreement on key oversight-related questions.
Statutory or Regulatory Requirements May Limit Options to Reduce
Oversight
In some cases, statutory and/or regulatory requirements may
prescribe certain types of EPA oversight, limiting the extent to which
further streamlining can be negotiated. EPA headquarters officials in
the Office of Air and Radiation noted that some of the core performance
measures for the air program are driven by statutes and thus are non-
negotiable. The officials noted, for example, that dates by which areas
in ``non-attainment'' with air quality standards must come into
compliance are driven by the Clean Air Act and that EPA accordingly has
no flexibility to alter them. Similarly, a regional official cited the
Clean Water Act's requirement under section 305(b) that a Water Quality
Inventory Report be issued every 2 years. One State requested an
alternative schedule in which the State would submit its information
for the report every 5 years for each watershed area. EPA denied the
request as contradicting the 2-year frequency required by the act.
In addition, EPA Atlanta and Boston regional staff pointed out that
they have a responsibility to ensure that new regulations, which
sometimes pose particular challenges for both Federal and State
regulators, are properly implemented. EPA headquarters officials cited
as an example their new regulations concerning fine particulate matter,
which required significant EPA action during the middle of the fiscal
year. Regional staff said that such actions may inevitably require
greater EPA oversight and more detailed reporting. Officials in EPA's
Atlanta Regional Office cited another example where, in the middle of
the year, headquarters implemented a new initiative that required the
region to ask the States to do additional inspections of metal
finishing plants that went beyond the commitment made by States in
their Performance Partnership Agreements.
State program managers acknowledged that statutory and regulatory
requirements do in fact sometimes limit the potential to reduce EPA
oversight. In addition, while welcoming the administrative relief and
flexibility allowed under the Performance Partnership Grant Program,
several noted that the implementation of these grants is still governed
by certain statutory and regulatory requirements. For example, the
grants are still subject to certain grant administrative requirements
and cost accounting standards applicable to Federal grants generally.
Specifically, while the Partnership Grants do not require the detailed
accounting required of categorical grants, States must still report to
EPA on how funds have been spent under the broader categories.
Furthermore, like other Federal grants, the EPA grant agreements are
supposed to include adequate oversight procedures to provide EPA
assurance that Federal funds are used efficiently and effectively.
Perhaps more significantly, both State and regional officials added
that the State programs are still held accountable for accomplishing
program commitments outlined in their work plans and that base program
requirements under the various statutes must still be met. Such
competition for limited resources to meet the requirements of
individual statutes has, in fact, been a long-standing issue that has
complicated efforts to shift attention and resources to what are
perceived as the highest environmental priorities. We noted in our 1988
general management review of EPA, for example, that the objective of
setting risk-based priorities across environmental media has been
complicated by the fact that each statute prescribes certain activities
to deal with its own medium-specific problems. \18\ In 1991, we touched
on the issue again noting, for example, that numerous legislative
mandates have led to the creation of individual EPA program offices
that tended to focus solely on reducing pollution within the particular
environmental medium for which they have responsibility, rather than on
reducing overall emissions. \19\ More recently, in testifying on
efforts by EPA to improve its working relationship with the States and
to provide them with additional flexibility, \20\ we concluded that as
long as environmental laws are media-specific and prescriptive and EPA
personnel are held accountable for meeting the requirements of the
laws, it will be difficult for the agency to fundamentally change its
relationships with the States to reduce day-to-day control over program
activities.
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\18\ Environmental Protection Agency: Protecting Human Health and
the Environment Through Improved Management (GAO/RCED-88-101, Aug. 16,
1988).
\19\ Environmental Protection: Meeting Public Expectations With
Limited Resources (GAO/RCED-91-97, June 18, 1991).
\20\ Environmental Protection: Status of EPA's Initiatives to
Create a New Partnership With States (GAO/T-RCED-96-87).
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EPA Reluctance to Reduce Oversight Without Measurable Assurances That
Environmental Protection Will Not Be Compromised
Program managers and staff in all four of the EPA regional offices
we visited questioned the extent to which the agency can reduce
oversight without measurable assurances that program requirements, and
environmental objectives, will be achieved. The issue has become
particularly pronounced in the enforcement program, where some States
have taken issue with what they perceive to be heavy-handed oversight
by EPA. Among State officials' complaints are that EPA enforcement
officials inappropriately hold States accountable for the number of
enforcement actions (outputs) taken rather than achieving better
environmental compliance (outcomes). Some States have also cited the
prospect of EPA taking direct enforcement action in States where the
lead State environmental agency has primary enforcement authority, or
of ``overfiling'' with an EPA action in instances where a State
enforcement action was determined by EPA to be insufficient. State
officials have also maintained that such a posture is inconsistent with
the philosophy under NEPPS that EPA should focus its oversight on
results and should provide States with greater flexibility as to how to
achieve those results.
EPA Seattle regional officials, however, have cited the Office of
Enforcement and Compliance Assurance's recent reviews and those of the
Office of Inspector General, which have concluded that (1) many States
have underreported violations by dischargers of pollutant limitations
and other environmental requirements and (2) the numbers of enforcement
actions taken by State enforcement officials has declined. These
reports, the officials contend, raised questions about the ability of
States to achieve compliance by the regulated community without
vigilant Federal oversight. Moreover, according to the officials,
States presently do not have the data to support their contentions that
environmental compliance is still being achieved in cases where their
enforcement activity has been curtailed.
State officials told us, both during this review as well as during
our 1998 review of State enforcement programs, \21\ that the absence of
measurable results complicates efforts to use more flexible approaches-
not just because it is harder to get EPA approval, but also because it
is harder to obtain the confidence of the media and the general public.
Florida officials, for example, told us that the number of penalties
assessed, and dollar value of penalties collected, under its federally
delegated programs decreased from 1994 to 1996, and that questions were
raised as to whether these decreases resulted, at least in part, from a
greater emphasis on the use of assistance to achieve compliance. In
fact, newspapers in the State subsequently published articles
questioning whether the State was letting violators continue to pollute
without fear of punishment. Florida officials told us that their major
investment in measuring the results of their enforcement and compliance
assistance efforts was undertaken, in part, to determine whether these
concerns were well-founded.
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\21\ Environmental Protection: EPA's and States' Efforts to Focus
State Enforcement Programs on Results (GAO/RCED-98-113, May 27, 1998).
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The Office of Enforcement and Compliance Assurance points out that
it is addressing the problem through its National Performance Measures
Strategy and by collaborating on the development of enhanced outcome-
oriented performance measures with a number of States. In addition to
helping States develop outcome measures, enforcement officials also
pointed to recently issued guidance that encourages EPA regional
offices to be more flexible in considering States' preferences when
negotiating regulatory priorities. \22\ Specifically, the guidance
calls on regions to ``develop their priorities in partnership with
their States . . .'' and notes, ``States are not required to adopt
EPA's national priorities . . . This guidance provides flexibility for
both regions and States to identify and implement their own
priorities.'' The guidance further states that EPA is ``addressing
States' concerns about joint planning and priority-setting, work
sharing, and oversight responsibilities by identifying this as a
management focus area to be addressed by each region in the fiscal year
2000/2001 [memorandum of agreement] process.''
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\22\ EPA Office of Enforcement and Compliance Assurance, Final
fiscal year 2000/2001 OECA Memorandum of Agreement (MOA) Guidance (Apr.
1999).
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Resistance to Change at Lower Levels Within Both EPA and Among State
Agencies
Our 1997 report on EPA's efforts to ``reinvent'' environmental
regulation observed the widely held view, both within and outside EPA,
that achieving a full commitment to reinvention by EPA staff will be
difficult and will take time. \23\ The report further identified
widespread agreement among EPA officials, State officials, and others
that the agency has a long way to go before reinvention becomes an
integral part of its staff's everyday activities, and cites a senior
EPA reinvention official as noting that ``many staff are comfortable
with traditional ways of doing business and consider their program-
specific job responsibilities as their first priority and reinvention
projects as secondary.''
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\23\ Environmental Protection: Challenges Facing EPA's Efforts to
Reinvent Environmental Regulation (GAO/RCED-97-155, July 2, 1997).
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Many of the State officials we interviewed contended that comfort
level among some EPA staff with the preexisting oversight arrangement-
which has generally been in place for many years-helps to explain the
reluctance by many of them to provide States with greater flexibility
and reduced oversight. Program officials in five of the six States
provided examples where they believed that regional program staff
(tasked with the day-to-day implementation of specific programs) asked
for information that was not included in the Partnership Agreement or
that they had previously agreed with the region to drop. Minnesota
officials said that EPA regional waste officials were asking for
predictive or target numbers (such as the number of inspections the
State intends to pursue during the coming year)-information, they said,
that was not required nor included in their Partnership Agreement.
Similarly, Georgia program officials said that EPA enforcement
officials requested additional information after their Partnership
Agreement had been negotiated and was ready to be signed. Georgia's
Assistant Director and the Atlanta Deputy Regional Administrator,
recognizing that the difficulty was due in part to different targets
and schedules for enforcement and the media programs, set up an
enforcement planning work group consisting of State and regional
representatives from enforcement and the media programs to study and
resolve the problem so that they could avoid last minute changes in the
future. Other State officials told us that EPA has recently requested
information related to the Results Act which, they believed, was
outside the scope of their agreements. Several State officials
commented that an openness toward seeking ways to reduce such
information requests appears to be greater among senior EPA regional
managers than among lower-level staff.
It is possible that what State officials may view as an
``resistance to change'' could be regarded by EPA staff as a well-
founded concern that program requirements be implemented properly and
in accordance with laws and regulations. However, officials in three of
the four EPA regions we visited nonetheless acknowledged that support
for NEPPS within EPA varies. One senior regional official said that
managers and staff are often more comfortable with the preexisting way
of doing business and are unsure as to how they can accomplish their
work in the context of the partnership approach under NEPPS. He voiced
the opinion that there may be a need for training in NEPPS
implementation among regional staff. Another senior regional official
said that some staff will only take NEPPS seriously when their salaries
are tied to their performance in implementing the program.
By the same token, our interviews with senior State officials
suggest that cultural change is also needed at the State level if NEPPS
is to achieve its full potential. Specifically, several State officials
said that State program managers may not always be well-versed in
recognizing opportunities that would allow them to exercise their
responsibilities with greater flexibility. Some of them indicated that
there is resistance to NEPPS at the State program manager and staff
level because of the perceived threat to their programs. In one State,
in order to get the program directors' support for participating in
NEPPS, senior management made a commitment not to make any large-scale
shift of funds among or between programs. Some regional staff and
managers also commented that States have not taken advantage of
opportunities to seek more flexibility under NEPPS, noting in
particular that none of the States in their regions attempted to move
significant amounts of funds among programs or across media lines.
Challenges in Communicating Requirements Through a Multi-Level EPA
Organizational Structure
EPA's organizational structure poses additional challenges in
negotiating agreements that have the full buy-in of all key EPA
decisionmakers. Headquarters interaction with the States is generally
conducted indirectly through the regional offices. National Program
Managers set national strategic direction, and core program
requirements and priorities, for each of their environmental programs.
The managers establish overall national goals for their respective
programs based on a variety of factors, including the underlying
statutory mandates, congressional directives, administration/
administrator priorities, and their own view of programs and policies
that their programs should focus upon. The managers also must develop
an accountability system to ensure program delivery by EPA's regions.
The regional offices consult with managers in determining national
priorities and communicate these priorities to the States. As such, the
regional offices serve as the key EPA focal point in negotiating with
States on program priorities and oversight arrangements to be reflected
in NEPPS agreements. Importantly, the States generally have little
direct communication with the managers. Thus, for example, if States
wish to deviate from a national core performance measure or priority,
it is the regions that consult with the managers.
Buy-in by Key Decision Makers and Mixed Messages Confuse States
As a consequence of this structure, according to the majority of
State program managers we interviewed, it is not always clear that a
Partnership Agreement between the State and the region has the full
buy-in of EPA's key headquarters managers. A senior official with
Florida's Department of Environmental Protection cited the example of
the State's ``Joint Compliance and Enforcement Plan,'' negotiated under
the State's 1998-1999 Performance Partnership Agreement. Under the
plan, State and regional officials enter into a process that seeks
agreement, on the basis of industry compliance data, on what the
State's most important compliance problems are and which methods (e.g.,
enforcement action, technical assistance) are most appropriate to
address them. The official said that while the State has already
invested significant time and effort into the plan, and has had
expressions of strong support from EPA's Atlanta Regional Office, it
does not know the extent to which EPA's headquarters Office of
Enforcement and Compliance Assurance supports the effort or whether
that office will ultimately give its approval.
Similar observations were made by other States' officials, who
indicated that provisions were sometimes added at the request of EPA
headquarters to Partnership Agreements after they were negotiated. The
timing of headquarters guidance and special requests for input into
Partnership Agreements was cited by some State and regional officials
as a key factor: final headquarters guidance, or specific requests in
some cases, often come too late to be included in regional and State
negotiations, causing the need for some agreements to be renegotiated.
\24\
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\24\ In response to a 1997 survey by the Environmental Council of
the States, participating States commented that headquarters guidance
should be finalized by February of each year so that States and regions
can meet in March to set joint priorities and begin the Performance
Partnership Agreement process for the following fiscal year.
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State officials also indicated that some headquarters requirements
are negotiated separately from the overall Partnership Agreement
negotiations. Officials with the Minnesota Pollution Control Agency
told us that after successfully negotiating its agreement with regional
program officials, the Office of Enforcement and Compliance Assurance
requested separate measures and a separate section apart from the media
programs in the Partnership Agreement. In the opinion of the State
officials, this process illustrated the difficulty in getting all
headquarters interests incorporated into the agreement in a timely
fashion. Officials in several other States cited similar circumstances
where enforcement provisions had to be negotiated outside the scope of
the Performance Partnership Agreement, making it difficult to develop
the kind of integrated environmental program NEPPS is intended to
encourage.
EPA Officials Acknowledge Need for Clearer and More Consistent
Communication
Officials in the four regional offices we visited told us that
sometimes there are inconsistencies between headquarters and regional
offices, which complicates the message the agency sends to the States.
Boston regional officials cited one instance in which Maine and
Connecticut had proposed to consolidate funds for their wetlands
programs (1 of the 15 eligible programs) under a performance
partnership grant and were initially told by the regional office that
the arrangement would be acceptable. However, EPA's headquarters Water
Office subsequently objected to allowing all funds to be shifted from a
categorical grant to a Performance Partnership Grant on the basis that
a portion of the funds were supposed to be used in a competitive bid
process for nonprofit organizations (and other eligible parties) to
propose special projects. According to State and EPA Boston regional
program managers, EPA's Boston Regional Office resolved the resulting
confusion by brokering an agreement to allow for some funding from each
of the New England States' wetlands grant programs to be set aside for
special regional wetlands pilots.
Many EPA regional officials said that headquarters officials
sometimes view NEPPS negotiations as a regional-State matter, and that
headquarters offices do not view themselves as ``signatories'' to the
process. The officials noted that it is only when there is a
significant deviation on the part of the State from a national priority
that headquarters may become involved with decisions related to NEPPS
agreements.
Most of the headquarters managers that we interviewed acknowledged
that EPA headquarters input into the NEPPS negotiation and agreements
process is primarily left for the regions, to convey to the States,
with headquarters primarily engaged in setting the national priorities
and issuing national program guidance. These headquarters managers
acknowledged that headquarters input into the NEPPS process can be
improved, noting in particular that headquarters guidance, initiatives,
and special requests sometimes arrive at the regions too late to be
useful. In April 1999, headquarters managers issued 2-year program
guidance to help address some of the problems related to untimely
requests. EPA intends that this guidance will allow the regions and
States to include national program priorities earlier in the
negotiating process for Performance Partnership Agreements. At the same
time, however, the managers said certain circumstances that could
affect a signed agreement, such as those dealing with new regulations,
are sometimes out of their control.
Agency Comments
EPA provided updated information about the concern that
headquarters program guidance often arrived too late to be of use in
Performance Partnership Agreement negotiations between States and their
EPA regional offices. Specifically, the agency noted that in April
1999, its headquarters National Program Managers issued 2-year program
guidance to the regional offices simultaneously and on schedule, so
that the information would be available prior to Performance
Partnership Agreement negotiations. EPA said that the new procedure has
been well received by the regional offices, and that the introduction
of 2-year guidance will allow regional offices and States to extend
their planning horizon without fear that the priorities of the National
Program Managers will change dramatically on an annual basis. We have
amended this chapter to reflect this progress. At the same time, the
chapter still conveys agency officials' views that the guidance will
not necessarily prevent other circumstances, which are out of EPA's
control, from necessitating the reopening of an agreement.
EPA also cautioned that the report should more clearly distinguish
between the terms burden reduction and differential oversight. Burden
reduction, according to EPA, applies to activities, particularly
information exchanges, that both EPA and a State agree are unnecessary,
duplicative, or inefficient. In such cases, EPA believes that all State
programs should benefit from burden reduction. The term differential
oversight, according to EPA, means that oversight may vary depending on
how effectively a State program meets performance expectations. The EPA
comment draws a clear distinction between issues associated with
reporting burdens and other issues that are more appropriately viewed
as related to EPA's oversight of State environmental programs. We
acknowledge that there are circumstances, separate and apart from EPA
oversight, in which EPA and a State collaboratively pursue strategies
to reduce reporting requirements that they both agree are unnecessary,
duplicative, or inefficient. However, the distinction between this
activity and oversight is not always so clear. Specifically, in cases
where States and EPA have disagreed on the need for data not required
by statute and viewed by States as extraneous, and EPA has continued to
require reporting of such data, States have often characterized the
issue as, in their view, a questionable exercise of EPA oversight.
______
Benefits of NEPPS Participation Cited, But Full Potential Has Yet To Be
Realized
State participants' expectations for reduced EPA oversight and
greater program flexibility-major anticipated benefits at the outset of
NEPPS in 1995-have thus far met with some disappointment. Yet while
these participants expressed disappointment at the rate of progress in
achieving greater autonomy and greater emphasis on State priorities,
senior officials and program managers from each of the six States that
we reviewed agreed that NEPPS has provided their programs with
worthwhile benefits. Among the benefits most frequently cited were that
NEPPS (1) provided a means of getting buy-in for innovative and/or
unique projects, (2) allowed States the option to shift resources and
funds under the Performance Partnership Grants Program, (3) served as a
tool to divide a burdensome workload more efficiently between Federal
and State regulators, and (4) improved communication and increased
understanding among EPA and State program participants about each
other's program priorities and other key matters. Officials in each of
the four regions visited substantially agreed with many of the benefits
of NEPPS participation cited by State officials.
Yet while participants from each State indicated that their
participation in the voluntary program would probably continue, they
also shared a consistent opinion that the benefits of the program
should be greater, that the program has yet to achieve its potential,
and that improvements are needed. To some extent, such an outcome
should not be surprising, given that the program (1) has been in place
for just a few years and (2) began as an experiment in which
participants were encouraged to try different tools and techniques. Yet
these early years of the program have also provided a wealth of
experiences as to what has worked well, what has not worked, and how
the program can be improved. The 1995 agreement anticipated the
appropriateness of such reflection in calling for a joint evaluation
system for EPA and the States to review the results of their efforts to
ensure continuous improvement. On the basis of our work, we believe
that it is now appropriate to begin such a joint evaluation process.
Program Improvements Attributed to NEPPS
State officials in each of the six States we visited identified a
number of benefits to their air, water, and waste programs, but
frequently spoke of some benefits, such as the ability to move funds
toward the State's highest priorities, as potential future benefits
rather than as benefits already realized. EPA regional staff
acknowledged many of the benefits identified by State participants, but
were often cautious in stating that additional flexibility could be
exercised only so long as States continue to meet the statutory and
regulatory requirements associated with their base programs. Benefits
identified related to the flexibility to work on innovative and special
projects; to use resources and gain administrative efficiencies through
the consolidated environmental grant; to more efficiently divide the
workload among EPA and State regulators; and as a means of improving
public outreach and involvement in environmental policies and programs.
The additional benefit most frequently cited by State officials is
perhaps the most intangible one-that it helped to encourage a more
systematic and effective communication between EPA and State officials
on key issues and priorities, leading to increased mutual understanding
and improved relations. Although many of these officials acknowledged
that this progress has not yet resulted in the more equal partnership
with EPA to the extent hoped for, the collaboration and negotiation
fostered by the process was viewed as a definite step in the right
direction.
NEPPS Provides a Means of Getting Buy-in for Innovative And/or Unique
Projects
The majority of EPA regional and State officials we contacted cited
the ability to work on, and get buy-in for, innovative and/or unique
projects (such as those dealing with cross-cutting issues or multimedia
projects) as a tangible benefit under NEPPS. Among the examples cited
was a Quality Assessment Management Plan included in Florida's fiscal
year 1999 Performance Partnership Agreement, signed between the State's
Department of Environmental Protection and EPA's Atlanta Regional
Office. Once fully developed and implemented, the plan is expected to
provide the State with the ability to identify and improve the quality
of data provided by private laboratories. The Florida project director
spearheading the effort on behalf of the State said that elevating the
project as a priority in the Partnership Agreement legitimized the
concept and gained the support of key EPA and State decisionmakers. The
prototype or model of the plan has been completed and submitted to
State and regional officials with the expectation that the project
staff will next move on to issues related to implementation. According
to the project director, the Partnership Agreement-as a document signed
by the senior officials at both the State and Federal level-was crucial
in conveying top management buy-in. The project director observed that
the Agreement, in effect, provided the ``impetus to innovate'' whereby
State and regional leadership formally endorsed a new way of doing
business. Environmental officials in Minnesota recently reorganized the
State's pollution control agency to eliminate its media-specific
structure. The new organization has three geographic divisions to
handle most environmental issues and two divisions to handle
environmental planning and outcomes. The reorganization was undertaken
because they believed that an integrated approach to environmental
management was needed and because many problems transcend media
boundaries. Agency officials noted that the Performance Partnership
Agreement between the State and EPA's Chicago Regional Office was key
to establishing a new working relationship with EPA and to Minnesota's
efforts to find a better way to plan and carry out their work. They
added that the Partnership Agreement provides the State the flexibility
to go beyond reporting on media-based program outputs toward linking,
tracking, and measuring agency activities with actual environmental
results. Among other examples cited, a program manager in EPA's Atlanta
Regional Office pointed to North Carolina's effort to use its
Performance Partnership Agreement to pursue a multimedia inspection
project for metal finishing plants. The inspections are conducted
jointly from an air, water, and waste perspective so that each media
program does not have to do its own separate inspection. The
Partnership Agreement provided program managers in the State
environmental agency with a recognized vehicle to propose and implement
the inspection initiative to share resources across media lines by
getting a formal buy-in from State and EPA officials through a signed
agreement.
Flexibility to Shift Resources and Funds Under NEPPS Grant
As noted earlier in this report, Performance Partnership Grants
allow States the opportunity to combine individual categorical grant
funds into a consolidated grant. Once included in the consolidated
grant, the funds Agreements essentially lose their category-specific
identity and can be used with considerably greater flexibility.
Environmental agencies within four of the six States included in
our review (Maine, Connecticut, Georgia, and Minnesota) have
Partnership Grants with their corresponding EPA regional offices.
Importantly, officials in these States told us that they have not been
able to take greater advantage of the ability to shift funds, primarily
because the programs covered by the Partnership Grant each have their
own base program requirements that must be funded. \25\ However,
several of the officials told us that the flexibility allowed under a
Partnership Grant to move funds where they are most needed remains an
important potential benefit of the program. For example, a Georgia
official said that they hoped to shift funds sometime in the future to
address nonpoint sources of water pollution and air quality in
metropolitan Atlanta. This official added that if an emergency were to
arise, the Partnership Grant would allow the State to move funds and
staff quickly from various programs to address the problem. A grant
official with EPA's Boston office noted that prior to the Partnership
Grant program, States in the region often complained about their
inability to shift funds from programs that had excess funds to other
programs that were short of funds. He noted that such complaints have
declined with the inception of the program.
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\25\ At a workshop sponsored in July 1997 by the Environmental
Council of the States, two States reported plans to shift between 5 and
15 percent of the funds under their Performance Partnership Grants to
address priorities such as pollution prevention. Also, one State in a
1997 Council survey of the Performance Partnership Agreement process
reported setting aside 5 percent of its funds from water grants to
address wetlands lakes and a new Performance Partnership Grant
coordinator position.
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Program officials in all four of the case study States having
Partnership Grants also cited administrative efficiencies from the
ability to consolidate their categorical grants. The officials noted
that the grants have allowed States to condense individual work plans
into a single consolidated work plan, and States have gained additional
flexibility in the way they account for staff time. State environmental
agency officials noted that they were able to reduce the number of
grant applications, budget documents, and work plans required. Some
added that they gained administrative relief from not having to track
staff time and charges on a detailed, grant-by-grant basis. A Maine
official, for example, noted that under the traditional categorical
grant process, staff positions funded by multiple categorical grants
required controls to be in place to ensure that employees charge their
time to specific grants and budget categories. The Partnership Grants
provide the flexibility to accomplish necessary work without worrying
about which tasks are funded by which categorical grants.
EPA regions' responses to this increased flexibility have been
mixed. Regional program managers in the four regions visited expressed
concern about the flexibility of the NEPPS agreement and grants process
and said that there is a need to retain or develop new State reporting
requirements if EPA is to retain proper program oversight. These
program managers commented that eliminating reporting requirements
results in EPA losing its ability to hold States accountable and argued
for States to provide predictive annual targets as to what they plan to
accomplish and to develop short-term or interim measures for reporting
States' progress toward measuring environmental results. Several
managers said that it is important for the States to prove that work is
actually being done and cited the consolidation of grant funds under a
Partnership Grant as an example where EPA loses a level of control.
Other regional program managers, however, were more optimistic and
comfortable with the fact that States provide year-end reports on what
they have done.
A Tool to Divide a Burdensome Workload Efficiently Between Federal and
State Regulators
In 1997, we reported on EPA's and States' efforts to improve their
management of Superfund site cleanups, \26\ and cited innovative
efforts in Minnesota and Washington where State and regional officials
experienced substantial efficiencies through work-sharing agreements.
In Washington, State and EPA officials reported that under a formal
written agreement signed by officials in EPA's Seattle office and the
State's Department of Ecology, responsibility was formally divided for
cleaning up the State's National Priority List sites between the two
agencies. Both EPA and State officials reported that the formal,
clearly articulated division of responsibility between the two parties
helped to reduce both the acrimony and the duplication of effort that
characterized their past relationship. The State official reported a
strong consensus among the staff that the changes contributed to a
significant reduction in the number of staff resources needed to
oversee cleanups at NPL sites. Minnesota officials and Superfund
officials with EPA's Chicago office reported similar success with such
a work-sharing agreement.
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\26\ Superfund: Stronger EPA-State Relationship Can Improve
Cleanups and Reduce Costs (GAO/RCED-97-77, Apr. 24, 1997).
---------------------------------------------------------------------------
State and EPA regional officials cited similar benefits of
Partnership Agreements, as formal documents that clearly articulate the
obligations of both parties to the agreement. State officials noted
that in some instances in the past, communication seemed to be one of
EPA conveying its expectations of the State, rather than the two-way
communication embodied in many Partnership Agreements. Even where the
concept of dividing responsibilities and identifying work-sharing
opportunities has been used, State officials indicated that a formal
Partnership Agreement brings a commitment and focus to the need to
share scarce resources and to formalize stated commitments.
Program managers in several of the regions and States we visited
cited a number of examples that illustrated the benefits associated
with the formal division of labor memorialized in a Partnership
Agreement. Connecticut's NEPPS coordinator, for example, said that the
Connecticut Department of Environmental Protection negotiated with
EPA's Boston Regional Office to pick up some of the State's training
work load, because EPA could provide joint training for all the New
England States at a lower cost than would be the case if each State
provided training individually. The Connecticut Partnership Agreement
specifically States that EPA agrees to assist with training in several
areas, such as measuring and documenting the success of the State's
compliance assistance and enforcement activities. The State's fiscal
year 1999 agreement also documents coordination with the Boston office,
indicating that the region agrees to work with the State on helping to
reduce the State's reporting burden. According to the agreement, the
region was to assume some of the State's inspection workload or
streamline inspection requirements in order to free up State staff
resources for compliance assistance activities.
Georgia's Partnership Agreement includes provisions for EPA's
Atlanta office to assist the State in training, enforcement, and
inspection activities generally on an ``as requested'' basis. For
example, the region provided some expertise to the State and committed
to dedicating EPA resources to the training of compliance officers
within the State. Oregon's Partnership Agreement was similarly used to
address unmet needs in the State's water program. Officials with EPA's
Seattle Regional Office and the State's Department of Environmental
Quality agreed that the State's program to identify and remediate
heavily polluted waters was understaffed and underfunded. Under the
agreement, the regional office agreed to provide the State with two
staff to assist in the program.
Opportunity to Improve Public Outreach and Involvement
A key intended benefit and one of the seven principal components of
NEPPS in its May 1995 joint agreement is the opportunity to share
information with the public on State environmental conditions,
objectives, and performance. Officials with the Environmental Council
of the States commented that public participation is a strong point of
the NEPPS program-something that rarely occurred under the formal
traditional system where public comment was generally sought on
specific facilities or sites only. At the time of the 1995 agreement,
some States had begun to share such information through their annual
State of the environment reports. The NEPPS process, however, offered
greater opportunities for constructive public involvement.
EPA and State officials told us that increased public participation
and involvement remains a principle benefit of the EPA-State NEPPS
process, but its full potential is largely unmet. State officials have
found that public interest and input into the NEPPS process has varied
but that, overall, it has thus far tended to be limited. Minnesota
officials, for example, said that they sent out a press release and
copies of their Partnership Agreement to about 400 entities comprised
of industry, environmental, community, and tribal groups and received
only a handful of comments. Georgia sought comments on its Partnership
Agreement at a public meeting and received limited comments, and
Connecticut held an evening meeting with an advisory board consisting
of representatives for the different media and similarly obtained
little feedback. In general, regional and State officials said that it
will take time to increase the public's understanding and interest in
focusing on the States' and EPA's long-term environmental goals and
performance, rather than only on specific activities or conditions of
more immediate concern.
Improved Communication Among Participants About Program Priorities and
Other Key Matters
Nearly all EPA regional and State officials that we interviewed
said that a key benefit of NEPPS has been improved communications among
program participants and the fostering of a better Federal-State
working relationship. Members of the EPA Chicago Regional Office's
NEPPS coordinating committee (which represents all media and
enforcement programs), said that NEPPS has provided the region with a
better understanding of States' strategic plans, which has assisted the
States when negotiating a change with the region. In addition, NEPPS
has encouraged regional and State staff of all media programs to
discuss their programs jointly, a practice that has helped program
officials at both the State and regional level gain a better
understanding of each other's needs. According to State and regional
officials, this higher level of understanding has been a major factor
that has helped them to improve the way they set priorities across
programs.
Headquarters enforcement officials also point to regional efforts
to try to use NEPPS as a vehicle to more actively engage the States in
joint enforcement planning and priority-setting. EPA's Boston Regional
Office, for example, systematically arrayed a number of multimedia
enforcement and compliance assistance programs for discussion and
possible incorporation in States' fiscal year 2000 Performance
Partnership Agreements. In each case, the priority the agency attaches
to the program is indicated as well as the type of collaboration EPA
anticipates having with the States. \27\ Similarly, the officials cited
as another example a Chicago Regional Office's analysis of its
Performance Partnership Agreement with Minnesota which describes, on a
media-specific basis, the State's and EPA's commitments to participate
in mutually agreed-upon enforcement and compliance assurance activities
to realize jointly determined environmental objectives.
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\27\ EPA's Boston Regional Office, ``Assistance and Pollution
Prevention Programs & Priorities For Fiscal Year 2000 State/EPA
Performance Partnership Agreement (PPA) & Compliance Strategy
Discussions''
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Senior officials and program managers in all six States we visited
also agreed that the NEPPS process has improved EPA-State communication
and overall relations. Many also noted that NEPPS highlights and
enhances communication among their own State media programs, as well as
among EPA regional media programs. Noting that improved communications
can solve 95 percent of their State-regional problems, Minnesota
officials have instituted routine monthly conference calls with EPA's
Chicago Regional Office to address waste issues and are considering
implementing the same process for their other media programs. EPA
Chicago Regional Office officials told us that they are also relying
increasingly on oral communications with their States in an effort to
encourage a more collegial and efficient approach to resolving
problems.
Future Prospects for Success Depend on Further Progress
Officials in each of the case study States that we interviewed
agree that the concept behind NEPPS, and its potential for achieving a
more effective partnership between EPA and the States, is worth
pursuing. Yet while acknowledging some benefit from their
participation, they also consistently expressed the view that the
benefits should be greater; that the program has yet to achieve its
potential; and that improvements are needed. Of particular note,
providing States with the incentives envisioned initially under NEPPS,
including the differential oversight as discussed in chapter 4, was
seen by almost all of the State officials we interviewed as critical to
the future success of the program.
This view is reinforced by the resource commitment that some States
feel has been required to take part in the program. Oregon officials,
for example, said that they invested a significant amount of their
resources in conducting a State environmental self assessment and other
activities to participate in the NEPPS-Performance Partnership
Agreement process. To date, however, these officials noted that they
have not gained the advantages of reduced oversight leading to
increased self management of their delegated programs and greater
autonomy to focus on State priorities. Similarly, in explaining a major
reason for their decision not to participate in the program, the Deputy
Director of Michigan's Department of Environmental Quality noted that
the heavy investment cited by participating States and the modest
benefits achieved by those States has led to the Department's decision
to wait and see how NEPPS evolves. The Deputy Secretary of
Pennsylvania's Department of Environmental Protection had similar
reasons for that Department's nonparticipation, noting that the
department had several State initiatives underway that were important
and, therefore, they would be reluctant to shift resources to NEPPS.
The Deputy Secretary said that Pennsylvania is reserving judgment as to
its future participation in NEPPS, noting that if greater progress and
benefits under NEPPS accrue over time, it may become advantageous for
the State to participate.
For their part, EPA officials acknowledge the States' desire for
greater program flexibility and autonomy, but believe they are not in a
position to grant it unconditionally. Specifically, the officials
maintain that additional program flexibility will have to be
accompanied by demonstrated, measurable assurances that statutory and
regulatory requirements and program objectives will still be met.
As we noted in chapter 4, both EPA and State officials have pointed
to the difficulty of developing specific, nationwide criteria to be
used in determining the appropriate level of regional oversight of
State programs under NEPPS. However, given the importance to the
program's future of making progress on this issue, it may be helpful
for EPA and State officials to collaborate in developing some type of
non-binding guidance that could be used in guiding the negotiations of
individual regions and States on this sensitive issue.
In addition to this overriding concern about oversight, NEPPS
participants believe that the benefits that have accrued from their
participation in NEPPS have not reached their full potential. For
example, many participants have noted improvements in communication
under NEPPS, but said that further improvements are needed to ensure
that all key EPA offices provide timely input into Partnership
Agreement and Partnership Grant negotiations to help State agencies
understand whether their agreements have full buy-in of all EPA
offices. Similarly, while Partnership Grants allow for greater
flexibility in shifting funds among media programs, States have thus
far taken advantage of this opportunity to only a limited degree. To
some extent, the base program requirements under individual programs
combined with financial constraints have limited States' flexibility in
shifting funds as freely as they would like. However, other factors may
explain the problem as well, including specific grant regulations,
resistance by EPA headquarters and/or regional staff, or similar
resistance among State agencies themselves.
Joint EPA-State Evaluation Process Needed to Improve NEPPS
These concerns pose challenges for the future of the program.
However, we believe such challenges are to be expected in the context
of a new program that strives to chart a new direction in the EPA-State
relationship. Importantly, the need to address such challenges was
anticipated by the 1995 Agreement that launched the program, which
called for a joint evaluation system for EPA and the States to review
the results of their efforts to ensure continuous improvement.
To some extent, such a joint evaluation process was undertaken to
produce the core performance measures. The intergovernmental committees
that developed these measures, composed of representatives of EPA and
State agencies, produced an initial set of measures for fiscal year
1998 that was modified and improved in subsequent years. As noted in
chapter 3, the measures approved for fiscal year 2000 are widely viewed
as substantially improved by both EPA and State officials.
EPA's and States' recent efforts to improve their working
relationship in cleaning up priority Superfund sites may offer another
useful precedent for such an effort. Reflecting a growing consensus
among many in the administration, State government, and the Congress
that States should take on more responsibilities for leading priority
site cleanups, EPA and representatives from different States formed a
number of intergovernmental workgroups to recommend ways to overcome
the key barriers toward this goal. \28\ For example, a ``State
Readiness Workgroup,'' composed of representatives of EPA headquarters
and regional offices and State agencies, was charged with clarifying
the requirements and circumstances under which States could be granted
additional responsibilities to clean up these priority sites.
Similarly, an intergovernmental ``Assistance Workgroup'' was also
established to identify the technical financial, administrative, and
legal assistance needs of the States in their efforts to take a lead
role in successfully cleaning up Superfund sites. According to the
Director of the State, Tribal, and Site Identification Center (within
the Office of Solid Waste and Emergency Response), the workgroups were
particularly useful in fostering collaboration among representatives of
EPA's headquarters and regional offices involved in the cleanups in a
manner that helped to identify where the key problems were and what
practices worked well to address them. The Director said that the
results of the workgroups have since been incorporated into pilot
projects in seven States (and their corresponding regional offices)
designed to increase States' responsibilities in leading cleanups of
these sites.
---------------------------------------------------------------------------
\28\ State and EPA efforts to augment States' roles in leading
Superfund cleanups are discussed in our 1997 report, Superfund:
Stronger EPA-State Relationship Can Improve Cleanups and Reduce Costs
(GAO/RCED-97-77, Apr. 1997).
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Conclusions
On the basis of information that can be learned from experiences to
date of a number of States and their corresponding EPA regional
offices, we believe the systematic joint evaluation process called for
by the 1995 Joint Commitment to Reform Oversight and Create a National
Environmental Performance Partnership System should be initiated. The
goals of this effort should be to (1) identify best practices among
participating States for dealing with the most challenging problems
facing the program and (2) eventually obtain agreement on actions that
will improve and expand the program.
Such a process has already been used to develop and improve the
Core Performance Measures used in the NEPPS program, and has served as
a successful model elsewhere in EPA where new ideas have been developed
and tested, and agreement among diverse parties on their implementation
has been reached. We believe a similar effort, which targets key issues
affecting NEPPS progress and which involves representation from EPA
headquarters offices, EPA regional offices, and participating State
agencies, could similarly help to expand both the participation in, and
effectiveness of, this important program. The precise format to be used
for this process (e.g., whether individual working groups should be
established or whether a single committee composed of senior State and
EPA officials should be used) should be determined by EPA and State
environmental leaders.
Recommendations
We recommend that the Administrator of EPA work with senior-level
State officials to initiate a joint evaluation process that (1) seeks
agreement on the key issues impeding progress in developing a more
effective National Environmental Performance Partnership System and (2)
develops mutually agreeable remedies for these issues. Among the issues
such a process could focus on are:
developing a set of flexible guidelines, to be used as a
tool by State and EPA regional NEPPS negotiators, that could help to
clarify the appropriate performance expectations and other conditions
that States must meet to achieve reduced oversight in carrying out
their environmental programs and the type of reduced oversight (e.g.,
reduced frequency of reporting, greater autonomy in setting program
priorities) that could be achieved;
identifying what additional work is needed to address the
challenges in implementing the Core Performance Measures recently
negotiated by EPA and the Environmental Council of the States for
fiscal year 2000, including how these measures can best be reconciled
with the measures adopted by EPA under the Results Act;
alleviating the resistance among some staff (both within
EPA offices and among participating State agencies) toward implementing
the National Environmental Performance Partnership System, through
training and other strategies;
determining what appropriate steps should be taken by EPA
and the States to allow for greater use by States of the flexibility
envisioned under the Performance Partnership Grant system to shift
resources and funding among their media programs;
determining how effective public participation in the
NEPPS process can best be ensured;
and developing ways to improve communication among EPA's
headquarters and regional offices and participating States to ensure
that States are given a clear and timely indication on whether key
elements of their agreements pursuant to the system have the full buy-
in of major EPA offices.
Agency Comments
EPA agreed with the report's recommendation that EPA and State
efforts to improve NEPPS should include training and other efforts to
achieve the ``cultural change'' necessary for greater success. The
agency also pointed out that it recently agreed with representatives of
the Environmental Council of the States on a basic outline of a joint
evaluation process. We acknowledge this milestone and note that further
progress on the details of such a process, including the specific
issues to be addressed and a timetable for addressing them, will be
important steps toward improving NEPPS.
EPA also commented on our recommendation that EPA and State
environmental leaders should develop guidelines that would help to
clarify, for EPA and State negotiators, the appropriate performance
expectations that States must meet to achieve reduced oversight in
carrying out their environmental programs and the type of reduced
oversight (e.g., reduced frequency of reporting, greater autonomy in
setting program priorities) that could be achieved. EPA noted that
while it agreed with this recommendation in principle, the agency and
the States believe that each State's Performance Partnership Agreement
should specify the degree of oversight necessary to accommodate the
unique environmental problems and varied program capabilities of that
State. We agree that oversight arrangements should be negotiated
between each State and its corresponding regional office in a manner
that accounts for that State's unique circumstances, and that these
arrangements should be specified in the Performance Partnership
Agreement. We continue to believe, however, that nonbinding national
guidance-to be agreed upon in advance by EPA and State environmental
leaders-would be useful in introducing objective parameters to be
considered by regional and State negotiators as they seek agreement
over this sensitive issue.
______
Appendix I
Comments from the Environmental Protection Agency and Our Evaluation
The following are GAO's comments on the Environmental Protection
Agency's (EPA) letter dated May 20, 1999.
1. We have clarified, in the executive summary and chapter 5, that
EPA officials and representatives of the Environmental Council of the
States have recently agreed to certain characteristics of a joint
evaluation process, and that further progress (including decisions on
the specific issues to address and a timetable for addressing them)
would be important steps in improving NEPPS.
2. We have amended the report to reflect the agency's expectation
that its April 1999 2-year guidance should allow the regions and States
to consider national program priorities earlier in their partnership
agreement negotiations, and thus limit the need to renegotiate
priorities that had been previously established. At the same time, the
report still conveys agency officials' views that the guidance will not
necessarily prevent other circumstances, which are out of EPA's
control, from necessitating the reopening of an agreement.
3. Citing the observation in chapter 3 that (1) EPA has focused on
outputs to meet its obligations under the Results Act while supporting
a transition to outcome-based management under NEPPS and (2) these
conflicting priorities have led to confusion that hinders performance
partnerships, EPA stated that, to the contrary, both the Results Act
and NEPPS encourage the development of outcome measures and outcome-
based management. We acknowledge the shared objective of NEPPS and the
act in focusing on results. The key word, however, is implementation:
as we have documented in other recent work, the measures EPA has used
in its implementation of the Results Act have thus far been heavily
output-oriented and therefore convey priorities that are often in
conflict with the more outcome-oriented measures being employed under
NEPPS. We acknowledge the agency's ongoing efforts to orient its
Results Act-related measures increasingly toward outcomes, and believe
that further progress toward this end will help to alleviate this
problem. In addition, we modified our discussion of this issue in
Chapter 3 to note that the April 1999 Addendum to the Joint Statement,
co-signed by EPA and the Environmental Council of the States, States
that core performance measures and other current reporting requirements
will be relied upon to satisfy EPA's Results Act-related data needs.
4. We agree that oversight arrangements should be negotiated
between each State and its corresponding regional office in a manner
that accounts for that State's unique circumstances, and that these
arrangements should be specified in the State's Performance Partnership
Agreement. We continue to believe, however, that nonbinding national
guidance-to be agreed upon by EPA and State environmental leaders-would
be useful in introducing objective parameters to be considered by
regional and State negotiators as they seek agreement over this
sensitive issue.
5. EPA's comment draws a clear distinction between issues
associated with reporting burdens and other issues related to EPA's
oversight of State environmental programs. We acknowledge circumstances
in which EPA and a State collaboratively pursue strategies to reduce
reporting requirements that both agree are unnecessary, duplicative, or
inefficient; and that such circumstances could be viewed as outside the
two parties' oversight arrangement. However, the distinction between
this activity and oversight is not always so clear. Specifically, where
States and EPA have disagreed on the need for data not required by
statute and viewed by States as extraneous, and EPA has continued to
require reporting of such data, States have often characterized the
issue as, in their view, a questionable exercise of EPA oversight.
__________
Statement of R. Lewis Shaw, Deputy Commissioner, South Carolina
Department of Health and Environmental Control and President,
Environmental Council of the States (ECOS)
Mr. Chairman and members of the committee, thank you for the
opportunity to appear before you today. My name is R. Lewis Shaw, and I
am the Deputy Commissioner of the South Carolina Department of Health
and Environmental Control. I have 29 years of service to my State with
the last 16 of those in my current position as the State environmental
director. Today, however, I am here representing the views of the
Environmental Council of the States (ECOS) of which I am the President.
ECOS is the national, non-profit, non-partisan association of the
State and territorial environmental agencies. The States and
territories are our members and the people we represent are the leaders
of the various State environmental agencies. Our mission is to:
1.Champion the cause of States, and
2.Provide for the exchange of ideas, views and experiences among
the States, and
3.Foster cooperation and coordination in environmental management,
and
4.Articulate State positions to Congress, Federal agencies and the
public on environmental issues.
Other details about our association are provided in the attachments
to this testimony, which I ask be entered into the record.
I am here to tell you of some of the accomplishments that States
have made in environmental protection--accomplishments that are not
widely known. I will make four main points:
1)States now implement most of the delegable environmental
programs, gather most environmental data, and conduct most enforcement
and compliance actions;
2)States are paying for the largest share of environmental
protection;
3)States implement many of their own environmental programs, and
have become the chief architects of and advocates for innovations; and
4)States are committed to an environmental partnership with the
Federal Government, but have suggestions for how to improve that
relationship.
I'd like to now expand on those four points:
First, States now implement most of the delegable environmental
programs. This is good news, because that is what Congress intended
when it enacted laws such as the Clean Air and Clean Water Acts. States
now have primary responsibility for carrying out those laws. As of
1999, about 70 percent of the major programs that could be delegated to
States had been delegated. This means States are running most of the
clean water programs, clean air programs, drinking water programs, and
waste clean up programs that Congress created. As you can see from
Chart 1 (on display and attached), much of this growth was in the
1990's, and in particular between 1993 and 1998 a 5-year period in
which State delegations grew by almost 75 percent.
As part of this responsibility, States are also collecting most of
the environmental quality data. Brent Bradford, my colleague from the
State of Utah will be speaking more about this today.
We also conduct most of the environmental enforcement activities.
In recent years, States have averaged between 75 and 80 percent of all
enforcement actions taken by EPA and the States combined. We conduct at
least 97 percent of all enforcement inspections. But we also conducted
many other enforcement actions and compliance assistance that EPA may
not count for one reason or another. Last year, Congress directed ECOS
to conduct research on the issue of counting enforcement and compliance
activities and report back to Congress. We are working on this project
now and expect to report to you early next year.
My second point is that States are paying for most of this
environmental protection. As you can see in chart 2 (on display and
attached), State spending for environmental protection has grown
dramatically since 1986. In 1986 States spent about $5.2 billion on
environmental protection and natural resources. Congress, through EPA,
provided just over $3 billion of that, almost 58 percent. But by fiscal
1996, a very different story had emerged. States spent about $12.5
billion, with the EPA providing about $2.5 billion, or about 20
percent. During the 10-year period from 1986 to 1996, State spending on
the environment increased about 140 percent, while total EPA funding to
the States decreased about 17 percent. Most of the decline is
attributable to reductions in water infrastructure support programs. In
1996 the States spent nearly twice as much ($12.5 billion) on
environment/natural resources as the entire EPA budget ($6.5 billion).
My third point is that States conduct many other non-delegated
programs on their own, and that we are great at innovation. For
example, in South Carolina, we have our own laws, rules and practices
on the protection of shellfish beds that are not part of the delegated
Federal system, but are very important to our State. Obviously, these
kinds of laws vary State to State, but they show the commitment of the
States to the environment. According to the National Conference of
State Legislatures, the States passed into law over 700 environmental
bills in 1997 alone. At least half of these dealt with non-delegated
environmental programs such as pollution prevention and solid waste
management (chart 3 on display and attached). As the chart shows, for
example, most of the hazardous waste sites in the country are actually
being regulated and cleaned up under State authority. Another study by
The Council of State Governments found that 80 percent of the States
had at least one Clean Air Standard that exceeded the Federal minimum
standards. In South Carolina, for instance, our toxics list includes
258 constituents, compared to 188 on the Federal list.
States implement most environmental protection programs, so we are
often the first to recognize innovative solutions for environmental
problems. Each year for the past 3 years, ECOS has compiled State
program and implementation innovations. These cover the complete range
of environmental protection, including delegated and non-delegated
programs. ECOS has now compiled hundreds of these innovations. Some of
these State ideas have been nationally recognized by Innovations Awards
programs such as those of The Council of State Governments and Harvard
University.
States are committed to the State-Federal partnership in
environmental protection. But we believe that the time for command-and-
control, top-down programs has ended. Perhaps it should be replaced by
a set of mutually agreed upon national goals and standards, which would
be achieved by the States in the manner we deem most appropriate, and
supplemented by local goals and standards that meet the specific needs
of the States. After all, you are not likely to see the same
environmental problems in South Carolina as you would in Utah because
the States have such different ecologies. Our final chart shows some of
the differences that we think will lead to a more harmonious
relationship and better environmental protection (see display chart and
attached).
Some people still believe that it's 1970 and that the States can't
be trusted to protect the environment. We believe the facts presented
here today give the real story States are leaders in environmental
protection and committed to protecting the health and environment of
the citizens we serve.
Mr. Chairman, thank you again for the opportunity to appear before
you today. I am happy to take any questions.
______
The Role of State Governments in Environmental Protection Has Increased
Dramatically Over the Last 10 Years.
(by R. Steven Brown)
A remarkable, and largely unnoticed, change in environmental
protection has occurred over the past five to 10 years. The States have
become the primary environmental protection agencies across the nation.
Much has been written about EPA's role, or about State-EPA
partnerships. This article seeks to tell the States' story.
Over the past year with help from other State- based organizations
(many of which have articles in this issue), ECOS compiled a set of
data that shows a remarkable maturation of the policymaking and
regulatory capabilities of the State environmental agencies. This
article presents those data in five categories: delegation, fiscal,
enforcement, information gathering and policymaking.
Delegation
Congress intended for the States to administer most Federal
environmental programs. \1\ Generally, a State petitions the EPA to
administer one of the delegable programs. This process is commonly
known as ``delegation,'' or more legally as ``assumption,'' or
``primacy.'' The Governor files a petition after the legislature has
passed authorizing legislation that must be at least as stringent as
the Federal standard and after the State has shown that it has adequate
resources.
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\1\ ECOS has prepared two papers detailing the legislative history
of the Clean Air Act and the Clean Water Act. We expect to publish
these in early summer 1999.
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Most Federal programs are actually delegated in a piecemeal
fashion, however. For example, a State may have created a program for
new source performance standards, but may not have everything in place
yet to run the hazardous air pollutant part of the Clean Air Act. Such
a system aids the States in that it allows a State to proceed
incrementally, but it complicates the discussion about what is
delegated and which level of government runs which program.
Nevertheless, it has become clear that the delegation of
environmental programs to the States has increased dramatically in the
past 5 years. In the summer of 1998, ECOS completed a delegation study
for 22 of the programs from most of the major delegable Federal acts.
\2\ This study showed the number of States with delegated programs for
the following:
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\2\ Currently presented on the ECOS u eb page at: http://
www.sso.org/ecos/states.htm
Clean Air Act: 42 States \3\
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\3\ These are averages for the delegable programs under each Act
for which ECOS has information.
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Clean Water Act: 34 States
Waste (RCRA): 37 States
Drinking Water: 39 States
Pesticides (FIFRA): 39 States
The overall delegation rate to the States in mid-1998 was about 65
percent, and about 74 percent for the major environmental programs.
This means, for example, that of the portions of these Acts that could
be delegated, about 74 percent had been delegated.
Contrast this delegation rate to that of 1993, when EPA had
delegated 39.5 percent of 22 environmental programs to the 50 States.
By 1998, EPA had delegated 757 of 1,166 possible Federal environmental
programs to 53 States and territories, nearly a 75 percent increase
from 5 years prior. States also operate many of their own, nondelegated
environmental programs. Some of the rapid increase was attributable to
programs like the wellhead protection program of the Safe Drinking
Water Act (from 8 to 36 States) and the New Source Review program of
the Clean Air Act (from 15 to 42 States).
Fiscal
With such an increase in delegated programs, one might expect a
parallel increase in both EPA and State funding to support the new
programs. Starting with fiscal 1986, the Council of State Governments
periodically researched each State's budget to compile total State
spending for environmental protection and natural resources for each
State. Data exists for 1986, 1988, 1991, 1994 and 1996. This State
spending can be coupled with EPA and U.S. Office of Management and
Budget data on funds supplied to the States to present a picture of the
source of environmental protection funds in the States.
In 1986 States spent about 55.2 billion on environmental protection
and natural resources. \4\ The EPA provided just over $3 billion of
that, almost 58 percent. \5\ But by fiscal 1996, a very different story
had emerged. States spent about $12.5 billion, \6\ with the EPA
providing about $2.5 billion, or about 20 percent. \7\ During the 10-
year period from 1986 to 1996, State spending on the environment
increased about 140 percent, while total EPA funding to the States
decreased about 17 percent. \8\ Most of the decline is attributable to
reductions in water infrastructure support programs. In 1996 the States
spent nearly twice as much ($12.5 billion) on environment/ natural
resources as the entire EPA budget ($6.5 billion).
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\4\ R. Steven Brown, et al., Tile Resource Guide to State
Environmental Protection. Lexington, Kentucky: The Council of State
Governments, 1988. Page 93.
\5\ ECOS calculation, based on U.S. Office of Management and Budget
data. Some funding is also provided to the State environment/natural
resource agencies by other Federal agencies, but ECOS' preliminary
research indicates that most Federal funds are from EPA.
\6\ Karen Marshall, et al. The Resource Guide to State
Environmental Protection Fifth Edition. Lexington, Kentucky: The
Council of State Governments, 1999. p.32
\7\ As per footnote 4.
\8\ EPA believes it has ``held the States harmless'' by protecting
the State categorical grant budgets during times of budget cuts. EPA
has stated to ECOS that these grants are about S850 million per year.
ECOS has used OMB numbers (which are higher) to reflect total EPA
funding provided to the States for any purpose. Thus, total EPA funding
to States has decreased, while categorical grants are reported to have
increased over the past 10 years.
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It should come as no surprise that the States have also increased
the size of their environmental staff over this 10-year period. In 1986
the State agencies expended about 38,000 work-years, but by 1996 that
effort had increased to about 61,000 work-years, almost a 60 percent
increase.
Enforcement
States are the primary enforcers of environmental law for delegated
programs. The States also enforce many State environmental laws that
are not related to the national laws. EPA tracks and reports the
enforcement actions that it and the States take each year, but only for
delegated programs--enforcement actions that the State takes on non-
delegated programs are not counted. Furthermore, EPA may not count some
State enforcement actions for a variety of other reasons, such as
differences in data management. Even with those limitations, over the
past 10 years the States have consistently conducted about 75 percent
of the enforcement actions \9\ taken, with EPA doing the rest. \10\ In
recent years, the State workload has risen to 80 percent of the actions
\11\.
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\9\ Administrative actions and judicial referrals.
\10\ US EPA, Office of Enforcement and Compliance Assurance;
February 18,1998, web page:http://es.epa.gov/oeca/96accomp/appa6.html.
\11\ EPA has told ECOS that it is more likely to spend its time on
large, complex enforcement cases, which it believes have a significant
qualitative impact, if not a quantitative one.
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Many States have also emphasized ``compliance'' over
``enforcement.'' Methodologies for counting compliance assistance
activities appear to still be inadequate and are a matter of current
research by EPA and the States. As a result, it appears EPA and many
States themselves do not track compliance assistance efforts that the
States undertake. Unfortunately, this means that States and EPA may not
be able to count some of the most important ``enforcement actions''
that States undertake. While EPA data shows that States perform most of
the administrative enforcement actions, we know the number to be even
higher because compliance assistance activities are not part of the
enforcement action count.
Information
One of the most visible ``products'' of any environmental
protection agency, State or Federal, is information. Each State agency
gathers, compiles, houses and analyzes a great deal of environmental
information, both for delegated programs and for other environmental
purposes important to them. When a State is delegated a program, it
usually agrees to forward key information to EPA to one or more of 13
national environmental data bases that EPA maintains. Six of these
national data bases house environmental quality data (the others have
toxicology information, or information about regulated facilities). In
the summer of 1999, ECOS and EPA expect to jointly publish a report
that describes the source of the data in these six national data bases
\12\. For example:
---------------------------------------------------------------------------
\12\ Environmental Reporting Data in EPA's National Systems: Data
Collection by State Agencies. EGOS/EPA, 1999. In press.
---------------------------------------------------------------------------
Air data: >99 percent of EPA's data comes from States
\13\
---------------------------------------------------------------------------
\13\ Aerometric Information Retrieval System (AIRS) and AIRS
Facility Subsystem (AFS). Essentially, AIRS/ AFS is states' data base.
---------------------------------------------------------------------------
Water data: ?91 percent of EPA's data comes from States
\14\
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\14\ Safe Drinking Water Information System (SDWIS), 99 percent;
Permit Compliance System (PCS--a component of the National Pollution
Discharge Elimination System), 83 percent of major sources and 94
percent of minor sources; and STORET, 90 percent.
---------------------------------------------------------------------------
Hazardous waste data: >92 percent of EPA's data waste data
comes from States \15\.
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\15\ Biennial Reporting System (BRS), 92 percent.
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That is, over 94 percent of all the environmental quality data in
EPA's national data bases was first collected and compiled by State
environmental agencies. The States and EPA share this data for a
variety of purposes (for example, environmental performance measures).
The States also collect additional environmental quality data that
is not contained in national data bases. Some of this data is collected
for delegated programs, but is not usually forwarded to EPA because EPA
does not require it (for example, water quality reports from minor
point sources).
Some data is collected because of environmental laws that States
have that are not related to delegated programs (for example, most
solid retaste, water quantity, natural resource management, growth
management or land use planning data). ECOS has not yet assessed the
amount of this other data that States collect, but w e believe it to be
a significant amount, perhaps even exceeding the environmental data
reported to EPA.
Policy Making
States implement most environmental protection programs, so they
often see innovative solutions for environmental problems first. Each
year since ECOS began its annual meetings (starting in 1994), it has
compiled the program and implementation innovations that ECOS' members
have presented. These cover the complete range of environmental
protection, including delegated and non-delegated programs. ECOS has
now compiled hundreds of these innovations. . \16\ Some of these State
ideas have been nationally recognized by Innovations Awards programs
such as those of The Council of State Governments and Harvard
University. Our members have consistently rated this kind of peer-
sharing as one of the most important benefits of ECOS.
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\16\ 1998 State Environmental Innovations. Washington, DC: ECOS,
1998.
---------------------------------------------------------------------------
However creative and inventive State agency solutions can be, from
time to time legislative solutions are more appropriate. States have
not shied affray from implementation of new environmental laws.
According to the National Conference of State Legislatures, the States
passed over 700 environmental bills in 1997 alone. \17\ At least half
of these dealt with non-delegated environmental programs such as
pollution prevention and solid waste management.
---------------------------------------------------------------------------
\17\ George Hagevik and C. Kohler, ``Trends in State Environmental
Law 1997,'' NCSL Report, 1998.
---------------------------------------------------------------------------
Conclusion
States have proven to be serious about their responsibilities as
stewards of the environment, and have more than fulfilled the
expectations of the 1972 Congress that drafted some of the original
legislation envisioning the State role in the Federal environmental
protection system. In fact, almost 30 years later, the States are
leaders in environmental protection. Whether the yardstick is
delegation, fiscal, enforcement, information gathering or policymaking,
the States are responsible for an increasing, and perhaps increasing,
and perhaps surprising, amount of the work done to protect the nation's
environment.
__________
State Air Pollution Control Program Survey 1999
The Council of State Governments, Lexington, Kentucky
http://www.csg.org
Executive summary
From the lofty heights of Capitol Hill in Washington D.C., it may
appear that the Federal Government makes all the important decisions
about clean air policy. After all, U.S. EPA regulations and the
detailed provisions of the 1990 Clean Air Act regulate pollutants that
float in the air, pollutants released by industrial and mobile sources
(cars and trucks), and the type of fines and sanctions levied against
violators. From the Capitol Hill perspective, all these national
standards and regulations are absolutely necessary. According to the
cynics, if left to their own devices the States would adopt weaker and
weaker environmental protection laws, creating a ``race to the bottom''
in which States compete for economic growth by enticing industry with
less stringent--and less costly--regulations. regulations.
Reality, however, is often at odds with popular perception. In
1998, the Environmental Policy Group at The Council of State
Governments and the University of Kentucky Martin School of Public
Policy and Administration conducted a survey to review State clean air
programs, funding and regulations. Overall, the study found that the
Capitol Hill perspective on clean air programs can be misleading. These
days, the States conduct most of the important clean air activities,
provide the bulk of air program funding and oversee a diverse array of
air pollution control activities. Most importantly, despite perceptions
to the contrary many States have adopted clean air standards and
programs that are more stringent than U.S. EPA requirements due to each
State's unique interests. So much for a ``race to the bottom.''
US EPA and the States
The States and the U.S. EPA share responsibility for nearly all air
pollution control activities in the nation. Each State submits a State
Implementation Plan to the U.S. EPA outlining its clean air program.
For each major clean air activity--setting air quality and emissions
standards, monitoring emissions and ambient air, enforcing policy, and
issuing permits--the U.S. EPA sets minimum criteria for State programs.
If the U.S. EPA determines that a State's program meets these
standards, it approves the SIP and grants the State full regulatory
authority. If the plan does not meet the minimum criteria, the U.S. EPA
can preempt the State program and create its oven air pollution program
for the State. The U.S. EPA can preempt all or part of the State
program, depending on how adequately it addresses the minimum criteria.
Setting Clean Air Standards
The CSG survey asked respondents to indicate whether their States'
clean air standards exceeded the U.S. EPA minimum criteria in a variety
of areas, from ambient air quality to emission limits for new sources.
Ambient air quality standards are target levels which govern pollutant
concentrations in the air that people breathe outdoors. The U.S. EPA
has set National Ambient Air Quality Standards for six ``criteria''
pollutants that pose significant health hazards if people breath enough
of them. The NAAQS pollutants are ozone, particulate matter, carbon
monoxide, sulfur dioxide, nitrogen dioxide and lead.
The States can expand on U.S. EPA criteria by setting more
stringent ambient standards for criteria pollutants and by establishing
ambient standards for pollutants not listed in the NAAQS. Of the 38
States responding to the CSG sure ey, six ( 16 percent) reported that
their standards for one of the NAAQS pollutants exceeded the U.S. EPA's
minimum criteria, and six more (16 percent) reported that their
standards exceeded the criteria for two or more pollutants. Only two
States--Michigan and Illinois--indicated that they did not have U.S.
EPA authority to implement the NAAQS program, but they expected
authorization in the near future. Surprisingly, 24 of the 38 responding
States (63 percent) have set ambient standards for pollutants other
than those regulated by the U.S. EPA's NAAQS standards. These States
have set standards for pollutants such as hydrogen sulfide, calcium
oxide and odors.
The survey shows that States are exceeding U.S. EPA standards in
other areas. Eight of the 38 responding States (21 percent) reported
that their emissions standards for new sources were more stringent than
the U.S. EPA's New Source Performance Standards. And 25 States (66
percent) reported that their programs for monitoring ambient air
quality exceeded Federal minimum requirements.
The States have also made considerable progress regulating
hazardous air pollutants, which are thought to pose public health
risks. The U.S. EPA has long sought to improve HAP regulations, and the
1990 Clean Air Act created an entirely new regulatory regime for 189
identified hazardous air pollutants. Thirty-three of the 38 responding
States (87 percent) have received authority from the U.S. EPA to
administer the hazardous air pollutant program, with some States again
exceeding Federal requirements. Eighteen States (47.4 percent) regulate
hazardous air pollutants in addition to those listed by U.S. EPA and
another 18 regulate additional sources of hazardous air pollutants.
In a true ``race to the bottom,'' no State would voluntarily enact
stricter NAAQS standards or regulate nonmandatory pollutants because
doing so would risk losing economic growth to States with more lenient
regulations. The CSG study, however, shows that in many different areas
of clean air policy States have adopted standards and programs that are
more stringent than what the U.S. EPA requires for SIP approval.
Funding State Clean Air Programs
Title V of the 1990 Clean Air Act mandated important changes in how
States fund their clean air programs. Title V requires States to issue
operating permits for every major emissions source specifying allowable
levels of pollutant concentrations and the applicable emission control
strategies. Title V also requires States to charge a fee of at least
S25 for each ton of pollutants emitted to help States fund their clean
air programs. The goal of Title V is to facilitate enforcement by
centralizing regulations that apply to each source of pollution.
The major categories of funding sources for State air quality
programs are State general funds, dedicated State funds (such as
lottery proceeds or special environmental taxes), fees (including Title
V permit fees), enforcement (fines and penalties), EPA/Federal grants,
and other (usually mobile source) income. Title V permit fees have
become the most important source of State air program funding,
accounting for 57 percent of the total. Overall, the States still rely
on EPA/Federal grants, at 22 percent of the total, the second largest
funding category. State general funds are another major source of clean
air funding at 12 percent of the total. The other budget source
categories--dedicated State fund (7 percent), enforcement (2 percent)
and other (1 percent), make up only a small percentage of State clean
air funding.
State air program expenditures
The survey also investigated how States spend their air pollution
control funds. On average, States spend 24.7 percent of their budgets
on permitting activities, 15.8 percent on ambient air monitoring, 12.8
percent on enforcement, 12.1 percent on administration, 10.3 percent on
source monitoring, 6.3 percent on technical assistance/industry
outreach, 5 percent on policy analysis, 3.2 percent on environmental
science research, 2 percent on community outreach, and 9.4 percent on
other categories (usually mobile source issues). Many States estimated
income and expenses, since they do not record the budget expenditures
and sources in the categories listed in the survey.
Conclusion
The 1990 Clean Air Act contained a series of challenges for State
clean air programs. The Title V permit section required many States to
restructure their programs, including their regulatory structures and
enforcement approaches. The HAP program expanded the scope of State
clean air regulations to a vast new array of pollutants and sources.
For the most part, States have met these challenges. Title V permit
fees have become the most important source of State air program
funding, as the 1990 Clean Air Act intended. By 1998, the U.S. EPA had
granted the States authority to administer the vast majority of air
pollution control programs, including the expansive HAPs program.
Most importantly, however, is the obvious intent of the States to
pursue their own environmental protection agenda according to their
unique circumstances. The CSG study shows that in many policy areas the
States have gone beyond minimum Federal requirements to become leaders
in establishing and implementing clean air policy. Rather than racing
to the bottom, the States seem to be vying for the lead in protecting
the health of their citizens and ecological resources in a manner as
unique and diverse as the States themselves.
______
Responses by R. Lewis Shaw to Additional Questions from Senator Smith
Question 1. The South Carolina Deputy Commissioner and ECOS
President stated in his testimony that the time for command-and-
control, top-down programs has ended and that it should be replaced by
a set of mutually agreed upon national goals and standards. He also
emphasized that a ``one size fits all approach'' has outlived its
usefulness. He further stated that local and regional environmental
challenges differ and that requires that States have the flexibility to
take the lead in adopting environmental goals and standards, and apply
innovative approaches to achieve them. What is the new direction and
how do we get there?
Response. First, in response to this all-encompassing question, we
are already heading in a new direction. For example, the respective
roles of EPA and the States have changed dramatically in recent years.
As I indicated in my written testimony, States have assumed the lion's
share of environmental responsibility and service delivery.
The new direction would have the States and Federal agencies
working as true partners in a Federal environmental protection system.
States would have early, meaningful, and substantial involvement in the
development and implementation of environmental statutes, national
standards, policies, rules, programs, reviews, joint priority setting,
budget proposals, budget processes, and strategic planning. Under this
new system, more programs would be delegated to the States and the
appropriate Federal focus would be on program reviews and joint
priority setting. EPA would intervene in such State programs only in
rare and egregious cases after the State has had a chance to correct
program defects. Where the Federal Government requires that
environmental actions should be taken, it would fund those actions, and
not at the expense of other State programs. And, this new direction
would affirm that the Federal Government would be subject to the same
environmental rules and requirements, including the susceptibility to
enforcement that it imposes on States and other parties.
In this new direction, Congress and the EPA would provide the
maximum degree of flexibility in the design and implementation of
environmental programs. The Federal Government would support
nonregulatory approaches to meeting Federal standards so that
integrated environmental protection is encouraged and narrow pollution
control regulations are discouraged.
To avoid the ``one-size-fits-all'' standard and maximize limited
resources, flexibility would include the authority for States to
prioritize environmental problems and allocate resources on a ``worst-
first'' basis, as well as the authority to shift EPA-administered grant
funds among programs to target local priorities. In addition, EPA would
look at the cumulative impacts of rules across program areas to ensure
that unintended burdens could be avoided and inconsistencies minimized.
A climate that encourages regulatory innovation is critical as we
face the next generation of environmental problems. The EPA and State
environmental commissioners have agreed on the need to experiment with
new approaches to improve our nation's environment, as embodied in the
Joint EPA/State Agreement to Pursue Regulatory Innovation, signed in
April 1998. These new approaches can help us identify cleaner, cheaper,
smarter ways to ensure that all Americans enjoy a clean environment and
healthy ecosystems. Through this joint commitment, EPA and the States
agree to encourage, evaluate, implement, and disseminate ideas that
seek better ways of achieving our environmental goals.
Congress could play a key role in defining this new direction. For
example, Congress could:
Expand incentives to encourage innovation, such as
regulatory process changes (things like predictable, timely
permitting and reduced administrative burdens), economic incentives
(for example, tax credits, fee waivers, new funding), and greater
use of environmental management systems;
Actively explore both regulatory and nonregulatory
innovations directed specifically at existing unregulated problems,
such as nonpoint source pollution, habitat loss, diffuse use air
pollution and urban sprawl;
Enact legislation that provides protection to innovators
pursuing agreed upon goals and objectives while working ``outside
the box;''
Explore legislation directing EPA to approve delegated
State programs that vary from Federal regulations under specific
environmental laws, submitted to EPA under the regulatory
innovation process described above, if the alternative program
approach meets criteria established through discussions among
States, EPA, Congress and other interested parties; and
Enact legislation that paves the way for an integrating
environmental statute.
The new direction would also involve the appropriate use of risk
assessment and cost-benefit analysis to improve environmental
decisionmaking. My ECOS colleagues and I believe that the appropriate
use of risk assessment and cost-benefit analysis will enable Congress,
EPA and the States to ensure that increasingly limited public resources
are used most effectively and efficiently in achieving environmental
objectives.
Question 2. What transformation does ECOS see that is needed in the
Federal-State structure to get us there?
Response. As my previous answer indicates, most of the change that
we see as required involves relationships and processes. There are,
nonetheless, certain trends that suggest structural changes that may be
on the way.
For example, many of today's challenges are multi-media and
ecosystem-based, rather than single-source, single-pollutant issues.
Yet, it is the single source/pollutant focus of the earlier years that
has dictated our current environmental management structure. As a
result, Federal statutes and all the actions that have flowed from them
have had the effect of shifting pollution problems from one
environmental medium to another. Contaminant-laden ashes and sludge
from air and water pollution control processes destined for landfills
are a couple of examples.
Meeting the challenges posed by meeting water quality criteria help
illustrate the need for a new structure. Making a stream habitable for
a particular fish may involve improvements at a wastewater treatment
facility, the reduction of polluted runoff from farm fields and
backyards, cleaning up contaminated industrial sites along the stream
bank, controlling nitrogen oxide and mercury emissions from power
plants many miles away, restoring wetlands and other fish habitat,
preventing resuspension of toxics in the stream sediments--and more.
Historically, these have been isolated and independent activities in
State and Federal agencies, with little or no policy direction
regarding the interplay among the problems or opportunities among the
solutions.
Recognizing this integration problem, Minnesota has reorganized its
environmental agency on a geographic basis, as opposed to along media
lines (air, water, and waste). In order for a truly systematic and
flexible system to evolve, not only the implementation but also the
policy-making structure must change. We are concerned that Congress'
structure, for example, might preclude the kind of comprehensive policy
direction necessary to tackle watershed quality issues or coastal and
estuarine challenges that can involve multiple Federal agencies and a
multitude of State and local jurisdictions.
Question 3. The GAO points out that there is no guidance for
negotiating a Performance Partnership Agreement (PPA) and that there is
a wide variance in content among the various agreements. Would some
standardization be helpful in reducing the transaction costs that
accompany these individual negotiations?
Response. I am not surprised that an auditor would find the PPA
process a bit unstructured. But, that was the intent. The purpose of
NEPPS was to move away from the cookie-cutter mentality and embrace the
reality of State priorities and challenges. The fact that 38 States
might negotiate completely different agreements with EPA was expected
and embraced by the States. Our concern all along was how EPA would
react to this new way of engaging the States.
Understandably, EPA was concerned about its obligations under
Federal statutes to ensure their mandates were met, the contents of
individually negotiated PPAs notwithstanding. Given that understanding,
and appreciating the need for certain information from the States on
issues of national significance, ECOS has negotiated Core Performance
Measures (CPMs) with the principal program offices at EPA.
We, nonetheless, remain concerned about the interplay of the
flexibility promised by NEPPS and the relatively rigid expectations of
the Government Performance and Reporting Act (GPRA). ECOS has resisted
attempts to transform the PPA process into a dictation by EPA of its
expectations--whether derived from perceived obligations under GPRA or
other Federal mandates. The States accept that the Federal
environmental statutes provide the floor for PPA negotiations, and that
the purpose of the PPA process was to identify State priorities beyond
the Federal requirements, and find a way to build the capacity to meet
those priorities.
Unfortunately, the NEPPS process is still, to large extent, simply
laid on top of the usual programmatic expectations. Some regions, for
example, still require States to submit program workplans in addition
to PPAs. NEPPS also needs to be more fully integrated into EPA's
strategic planning.
In order to address these sorts of issues, EPA and ECOS convened a
NEPPS Workshop late last year. Several short- and long-term issues were
addressed. Rather than look for standardization as a way to inject
efficiency, participants agreed to develop a Best Practices Handbook
that would describe successful PPAs, practices and negotiations. This,
rather than a more prescriptive process, would best meet each State's
desire to shape a relationship with EPA that will meet their respective
needs.
Question 4. At the hearing held Tuesday May 2, 2000, by this
committee, Senator Baucus read that quote to you and asked you to
respond. Each of you said that you agreed with Mr. Jorling that there
was a need for the Federal gorilla to remain in the closet. Would you
please elaborate on that response. In your elaboration, would you
please address the following issues:
Question 4a. Is it necessary for the EPA, in order to ensure that
the States protect the environment, to second-guess the States, or to
be able to second-guess the States, regarding every exercise of a
State's enforcement discretion, every permitting decision made by the
States, and the like?
Response. The relationship between the States and EPA has in the
decade of the 1990's moved from that of supervisor/employee where the
States often disagreed with ``management'' on what were important tasks
of the job and how to get the job done to a partnership where both
parties make joint decisions. In a true partnership, there is no place
for one partner to second-guess the other on individual decisions.
Instead, the overall performance needs to be evaluated on mutually
agreed upon outcome based measures. If outcomes are not being achieved,
the mutually agreed upon corrective actions must be put in place.
Question 4b. Are the States able and willing to exercise
reasonable, responsible, and vigorous enforcement and permitting
discretion if the States are no longer subject to second-guessing in
every case?
I. If so, please explain why that is true today, even if it was not
true in past years.
II. If so, please support your explanation why that is true with
examples showing that the States have reasonably, responsibly, and
vigorously enforced the following:
A. Federal environmental laws, and
B. State and local environmental laws, over which the EPA exercises
no supervisory responsibility.
Response. The States have a demonstrated record of their
willingness to exercise enforcement and permitting authority. The
States are responsible for between 75 percent and 80 percent of all
enforcement actions taken by EPA and the States combined. The large
majority of permits are issued by the States. While many of us are
concerned about ``enforcement for enforcement sake'' or bean counting,
we realize that a strong, credible enforcement program is vital to the
overall mission of environmental protection. In order to be credible,
enforcement actions must be fair and equitable to all in the regulated
community and must be timely in order to affectively deter repeat
violations. Many States have developed penalty matrix to assure fair
penalties applied consistently to similar violations.
Since States have largely adopted Federal law and rules into State
law and regulations, we do not distinguish between enforcing Federal
law and State law. They are equally enforced. In South Carolina, we
have enforced against and fined the Department of Energy, Savannah
River Site, just as we have enforced against and fined a local church
for demolishing a building without properly inspecting for asbestos. My
Agency has fined other State Agencies such as the Department of
Education, Department of Transportation, and Department of Corrections
for various violations of environmental rules over the years. These
were obviously politically difficult actions for us to take, but they
show our commitment to utilize our enforcement authority fairly and
equitably.
Question 4c. Are there alternative approaches to the current
``second-guessing approach'' that could still provide assurance to EPA
that the States programs are protective of public health and the
environment? For example, an approach that would allow EPA to review,
on a 5-year, 7-year, or 10-year, basis, the overall performance of the
State, and renegotiate the State's delegated authority based on the
level of progress that the State had made toward a better environment
during that period.
Response. I believe that it is appropriate for the States to
continue to have periodic oversight from EPA. Being accountable for
meeting long range goals and shorter term outcomes is an expectation
all States should have. However, this process should focus on overall
performances and not on individual decisions made by States on specific
permits or enforcement actions. Such an approach should, however, allow
EPA to act where a State has made an egregious error and has failed to
take corrective action after notice from EPA.
Question 5.Please indicate whether you agree or disagree with the
following statement: ``Reasonable people, acting in good faith, can
disagree over the best method for protecting the environment. For
example, reasonable people can differ over the proper mix of
enforcement and compliance assistance as generic tools, and the proper
use of a particular choice of method(s) in a specific case.
Accordingly, the best approach for gauging a State's environmental
protection program is to evaluate the entirety of the State's efforts,
both enforcement and compliance assistance, over a long period of time,
and to determine whether the State has improved the condition of the
environment, rather than focusing on a particular case or series of
cases, the number of enforcement actions brought in a particular State
(or any other similar so-called `bean counting' system), and the
preference (if any) between enforcement and compliance assistance.''
Response. I agree with this statement. Without using the word
``flexibility'' this statement captures the essence of why flexibility
is so important to States in their efforts to meet National and State
environmental protection goals. As long as States are demonstrating
reasonable progress toward meeting those goals within mutually agreed
upon timeframes, then EPA should consider those State programs as
acceptable.
______
Responses by R. Lewis Shaw to an Additional Question from Senator
Voinovich
Question. As a followup to Senator Baucus' question regarding the
1993 testimony of New York's former environmental commissioner, Thomas
C. Jorling, could you please explain in what ways States have changed
since 1993?
Response. At the 1993 hearing, Mr. Jorling mentioned that among the
appropriate roles for EPA was to play the ``gorilla in the closet.''
The implication--or perhaps even the explicitly stated reason--was that
at least some States lacked the commitment and capacity to meet their
and the Federal Government's environmental expectations. A lot has
changed since 1993.
States have demonstrated their commitment to environmental
protection by taking responsibility for 75 percent of the environmental
programs that can be delegated to States. They have increased spending
on environment and natural resources by about 140 percent in the last
10 years. And, States have increased their work force devoted to the
environment by about 60 percent in the same timeframe; the State work
force is now approximately three and one-half times the size of the
Federal work force.
Furthermore, the delegation of programs to the States is proceeding
at an increasing rate, with approximately 75 percent of the total
delegation having taken place in the last 6 years. And finally, States
perform the vast majority of environmental protection tasks in America,
including 80 percent or more of the enforcement actions; 97 percent of
the environmental inspections; and actions which collect more than 94
percent of the environmental quality data currently held by the EPA.
Rather than seeking an EPA gorilla, the States support the
authorization or delegation of programs to the States and believe that
when a program has been authorized or delegated, the appropriate
Federal focus should be on program reviews and joint priority setting.
We further believe that the Federal Government should intervene in such
State programs only in rare and egregious cases after the State has had
a chance to correct program defects or in cases where the State and EPA
are working cooperatively to force compliance or seek recompense from
environmental ``bad actors.'' The recent Harmon decision suggests there
is a solid a legal basis for this view.
______
Responses by R. Lewis Shaw to Additional Questions from Senator Chafee
Question 1. Chart No. 2 in your handout shows that overall
expenditures on environmental protection and natural resource programs
have increased, while EPA grant funding has decreased. While this may
be true, EPA is not the only government agency that provides
environmental grants to States; the Department of Interior, the
National Oceanic and Atmospheric Administration and the Department of
Agriculture all provide grant funding. Do you have any sense of how
State expenditures compare to TOTAL Federal expenditures, not just EPA
programs?
Response. As of Fiscal Year 1996, States spent, on average, about
1.67 percent of the total State budget on environment and natural
resources. This percentage has increased steadily since 1986.
It is true that States receive funding from other Federal agencies.
For those States with surface mining activities, the Office of Surface
Mining within the Department of the Interior can also be a significant
source of Federal funding. The vast majority of Federal funding our
environmental agencies receive, however, is from EPA. These other
Federal agencies invest in natural resource activities, which in many
of the States are performed in agencies separate from the environmental
agency.
Unfortunately, I do not have a sense of how State expenditures
compare with the total Federal investment in State environmental and
natural resource programs. That is important information, and it might
be worth asking the Congressional Research Service to develop those
figures. We would be happy to assist.
Question 2. In your testimony, you argue that ``the time for
command-and-control, top down programs has ended,'' and perhaps it
should be replaced by a set of ``national goals.'' Several of our
environmental laws already set national goals; for example the Clean
Water Act has a goal that all waters should be ``fishable and
swimmable.'' How would the national goals you refer to in your
testimony differ from the goals already on the books?
Response. The Federal statutory goals are THE goals to which most
of the State and EPA programs are directed. Fishable and swimmable are
great and appropriate aspirations. Along the road to these goals are
many others that relate to how one achieves them, how one measures
progress toward them, and how multiple agencies with responsibility
coordinate to meet them. EPA's GPRA goals and objectives are examples
of ``goals within goals.'' The States, as major players in achieving
the will of Congress, simply desire to be a part of Congress' and EPA's
processes for identifying the best course for achieving these
aspirations--including the interim goals along the way.
Question 3. You propose a system in which the Federal Government
and the States would agree upon goals, and the States would be left to
achieve those goals. Should the States fail to attain the agreed upon
goals, what would be the appropriate response of the Federal
Government?
Response. In so many ways, the States are already at the vanguard
of the process to meet Federal as well as their own goals. States
already manage 71 percent of the programs that Congress has said are
delegable to them, and over 75 percent of that delegation has occurred
over the past 6 years. Clearly, both the States and EPA agree that the
States have the will and much of the capacity needed to meet Federal
environmental goals. Furthermore, Congress has already made clear what
should happen to States who fail to live up to that responsibility. At
any time a State has demonstrated such an inability or incapacity, its
authority should be revoked.
What the States seek is relative autonomy to meet the goals
established by Congress, rather than be second-guessed step-by-step.
EPA should evaluate overall State performance on a regular basis, but
day-to-day operation of the programs--including permitting and
enforcement and compliance activities--should be the sole province of
the States. Where irregularities and insufficiencies crop up, EPA
should discuss those programmatic shortcomings with the States, not
inject itself into individual cases. In that way, EPA and the States
can become true and most effective partners, focusing their respective
skills, abilities and responsibilities on achieving desired
environmental results.
______
Responses by R. Lewis Shaw to an Additional Question from Senator
Lautenberg
Question. Do you agree with the notion that a highly performing
State should get less oversight than a State that is having difficulty
implementing a program? Is there a method of measuring performance
agreed to by both EPA and the States? Are States gathering and
disclosing to EPA and the public the information necessary to evaluate
the performance of the States? If so, which States are performing well
and which are not performing well?
Response. Generally, we agree that highly performing States should
get less oversight than a State that is having difficulty implementing
a program. But, more to the point: this is a partnership, and States
and EPA should be working together to identify goals and helping each
other to achieve them on an on-going basis. NEPPS provides a great
model for developing that cooperative working relationship.
EPA should evaluate State performance under delegated programs.
Where there are problems, the partners should work to resolve them.
Under this system, States with difficulties will naturally get more
``oversight'' and better performing States will get less. The NEPPS
agreement of 1995 envisioned this sort of ``differential oversight,''
but because of the difficulty of measuring comparable State
performance, ECOS has not pursued this option with EPA. The States of
Region 8, however, have agreed with EPA to try such a program. Under
their agreement, the States are rated and ranked on their enforcement
activities by a set of agreed upon performance measures. Those States
ranking the lowest receive additional assistance from EPA.
Each State in negotiating its Performance Partnership Agreement
(PPA) with its EPA regional office identifies the variety of
performance measures by which its programs and efforts would be
measured. This information is shared with EPA and the public--often
through State of the Environment reports--and is used as part of the
PPA evaluation process and as a basis for negotiating subsequent PPAs.
To my knowledge, there is no recent composite list of good and bad
State performers. Typically, certain States excel in certain areas,
whereas they and others may be relatively weak in others. For example,
States and the General Accounting Office have identified significant
shortfalls in the resources of some States to meet the TMDL
requirements of the Clean Water Act. States and EPA have jointly
identified significant resource shortfalls affecting their collective
efforts to meet certain Clean Air Act requirements. Gaps have been
identified in several other programs, as well.
Furthermore, States should not be evaluated as good or bad
performers based solely on whether or not they have passed so-called
``no more stringent than Federal requirements'' laws. The Natural
Resources Defense Council in its testimony before your committee on May
2, 2000 tried to suggest that 19 States were deficient in their
environmental commitment because they had such provisions on the books.
These provisions include up-ramps that permit more stringent
requirements if deemed necessary. In any case, legislatures are free to
change such a requirement at any time. Most, if not all, States have
some environmental requirements more stringent than those mandated by
the Federal Government. In 1997 alone, State legislatures passed 700
bills concerning environmental issues.
__________
Statement of Robert W. Varney, Commissioner, New Hampshire Department
of Environmental Services
Good morning Mr. Chairman and members of the committee. I am Robert
W. Varney, Commissioner of the New Hampshire Department of
Environmental Services. I have held that position for the last 12 years
serving under the last three Governors. I am also the immediate Past
President of the Environmental Council of the States (ECOS), and it is
in that capacity which I appear before you today. I would like to
highlight the success of two cooperative programs that ECOS and the
U.S. EPA have developed jointly--the National Environmental Performance
Partnership System or NEPPS and the ECOS/EPA Regulatory Innovations
Program.
NEPPS was created 5 years ago and grew out of an awareness that
Federal and State government could be more effective if they cooperated
as equal partners in planning, implementing and reporting environmental
protection. The States and EPA believed that they could be more
efficient if priorities were determined jointly, and that any planned
environmental work was based upon an agreed set of goals. The States
directly implement most environmental laws and often have a better
understanding of what is needed to effect environmental improvement.
This demands flexibility to respond to local circumstances so that
environmental problems can be addressed quickly and effectively. As a
final component of the NEPPS concept, ECOS and EPA wanted to reduce the
data reporting burden by improving and streamlining how information is
gathered and reported from the States to EPA.
NEPPS agreements are called PPAs, Performance Partnership
Agreements. In New Hampshire, for instance, we just signed a 2-year PPA
with the EPA-New England. Our comprehensive agreement sets forth the
goals, activities and measures of progress for a full range of Federal
and State programs, which represents a comprehensive plan for all of
our agency's programs. I should mention that the full agreement is
available to the public on our Department's website at
www.des.state.nh.us. ECOS is linking its home page to many other State
NEPPS agreements also available electronically.
To gauge how NEPPS is working, Congress has asked the National
Academy of Public Administration to study that question and provide you
an answer in approximately 2 months. I appreciate this opportunity to
tell you why we think it is successful? To date, 38 States have PPAs
under the system. Many of them have been accompanied by Performance
Partnership Grants (PPGs) which allow some realignment of EPA funds so
that limited resources can be allocated for the most pressing problems.
There now is a cadre of experienced environmental professionals who
have committed to the NEPPS process and whose work is dedicated to
continually improving the system. As a result of the third national
meeting in Baltimore, Maryland, last fall, ECOS and EPA have re-
committed to improving the NEPPS process through renewed emphasis on
improving how the agreements are forged and how they are carried out.
The commitment we have to NEPPS was renewed by the adoption of ECOS
Resolution 00-5, at our national meeting on April 12, 2000. I have
attached a copy of the resolution to this testimony.
Regulatory Innovation Program
I would like to now talk about another cooperative State/EPA
program which was designed to stimulate innovative approaches to
regulation. Here I distinguish ``innovative approaches to regulation''
from ``technical innovation'' which will be addressed by another
witness. The States have been a well stream for inventiveness. In
dealing with specific circumstances unique to a State location or
problem, we are forced to develop innovative approaches. ECOS and EPA
recognized that some of these innovations might be transferable to
other locations with similar issues. In April 1998, ECOS and EPA signed
a ``Regulatory Innovation Agreement'' to review and approve State
proposals that exhibited such promise. In the words of the agreement
itself, ``this agreement presumes that EPA and the States will find
ways to help good ideas succeed, and that joint EPA and State efforts
to promote and test new ideas will result in the maximum benefit to the
American people and their environment.''
Texas was the first State to submit a project under the Innovations
agreement. The Texas Natural Resource & Conservation Commission (TNRCC)
wanted to extend the opacity certification period for all air
inspectors from 6 months to 2 years. Measured opacity is a common test
of air quality and a certain level of training and certification are
required to ensure the validity of test results. Texas argued that
opacity readings are not used often enough in enforcement actions to
justify the hundreds of person-days lost for training and certification
each year. TNRCC and EPA agreed to reduce the number of opacity
certified inspectors from approximately 100 to 50 each year, thus
freeing up 75 more person-days to do facility inspections. This
innovative tradeoff is now transferable to other States wanting to
explore the option.
This example demonstrates the goal of identifying innovative
approaches to make available faster, cheaper, better approaches to
environmental protection. It is especially useful when, as in this
instance, the approach can be tailored by other States to meet their
needs.
Last month at the ECOS Spring Meeting, EPA reported that five State
proposals have been submitted and four have been approved. Five
additional proposals were recently received for review and another two
are expected in early May. It is evident that the Agreement is proving
to be a useful tool, but there is much innovation occurring
independently of the agreement as well.
I have provided for the committee's use several other ECOS
publications describing myriad State innovations. These innovative
approaches demonstrate what can be accomplished when States work in
partnership with each other and with the U.S. EPA, and when we strive
to develop innovative approaches.
Thank you for the opportunity to address the committee this morning
and to tell part of the story of the States. I would be pleased to
answer any questions I may have raised in my remarks.
______
Responses by Robert Varney to Additional Questions from Senator Smith
Question 1. Commissioner Varney suggested in his testimony that
States and the Federal Government need to be equal partners in
planning, implementing and reporting environmental protection. Does
this partnership exist today? How can the partnership be improved?
Response. The relationship is evolving. In 1995, EPA and the States
entered an agreement to implement the National Environmental
Performance Partnership System (NEPPS). The theory behind NEPPS, in
part, was to facilitate a shift from paternalism to partnership in the
attitude of EPA toward the States. The evolution would include a
process of identifying State environmental priorities and jointly
building the capacity to meet those priorities.
The State/EPA relationship is highly variable--from State to State;
from program to program; from year to year. The concept of partnership
involves not only process, but also perspectives. Whereas the
intentions of EPA's leadership and the leading State officials
regarding partnership are generally honorable and good, there are many
instances where the partnership fails to live up to the promise.
A great deal of investment has been made by the Environmental
Council of the States (ECOS), EPA, the General Accounting Office, the
National Academy of Public Administrators and others to determine
whether the partnership exists and what can be done to improve it. My
assessment: partnership exists, and like any marriage, it will require
continuing care and respect to meet expectations.
The partnership can be improved by ensuring that the Performance
Partnership Agreements (PPAs) are indeed the foundation for the State/
EPA relationship. These agreements are the opportunity for the partners
to lay out their concerns, set goals and objectives, agree upon
measures of performance, and ensure that everyone is pitching in
appropriately to ensure that national as well as State needs are being
met. Not only should the EPA regions that negotiate the agreements
respect them, but also the national program managers in Washington.
Another major obstacle in the partnership is ensuring that the
cultures in both the States and at EPA adopt a partnership perspective.
As Lewis Shaw pointed out in his testimony, no matter how you slice it,
the States are carrying an increasing majority of the environmental
management load. That reality needs to be recognized and appreciated
throughout the system. Given that fact, it is clearly time to reassess
the relative capacities and charges of the States and EPA to make sure
the right people are doing the right job. A better partnership will be
achieved once those roles and responsibilities are clearly articulated.
Question 2. States are currently taking a leadership role in many
areas of environmental protection, but lack of resources is often an
obstacle. Some have suggested that the Federal Government can play an
important role in this respect by serving more as a resource to the
States, instead of as a hammer--making available both funding and
technical assistance. Does the Commissioner agree with that and how
would the Commissioner suggest that the government's role be enhanced
in that regard?
Response. ECOS and I agree with this assertion. The issue of
defining appropriate roles for States and EPA is crucial. States are
already doing so much of the day-to-day business of managing the
environment--roughly 80 percent of the enforcement actions, over 90
percent of the data collection, the vast majority of interactions of
any sort with facilities and citizens.
Question 3. Please describe in more detail how the New Hampshire
Performance Partnership Agreement works. Please address how and what
does the Agreement allow the State to do and how does it allow the
State to prioritize resources? How would you improve it in the future?
Response. Performance Partnership Agreements (PPAs) are the
strategic documents that provide the framework for States and EPA in
the National Environmental Performance Partnership System (NEPPS).
These Agreements are a product of joint planning and priority-setting
between States and EPA, with the ultimate goals of improving
environmental performance and strengthening relationships. Performance
Partnership Grants (PPGs) are the financial mechanisms to ensure that
the work outlined in the associated PPA can be carried out. As
envisioned through NEPPS, the PPA and its associated PPG are the two
key enabling tools allowing flexibility in both setting environmental
priorities and directing appropriate financial resources.
The most current New Hampshire PPA (available on-line at
www.des.state.nh.us/ppa/ppa--intro.htm) covers the 2-year period
October 1, 1999 through September 30, 2001, and sets forth the goals,
activities and measures of progress for the full range of cooperative
State-Federal environmental programs under the New Hampshire Department
of Environmental Services' (DES) jurisdiction, as well as all of DES's
non-Federal programs. Thus, all DES programs are represented,
regardless of the funding source. In total, the Agreement describes how
the available financial, human, and technical resources will be used in
New Hampshire to address the environmental quality issues of the
greatest concern to the Department and EPA New England.
The 2000-2001 New Hampshire PPA is distinctly different from the
previous Agreement in that the core section of the document have been
organized around the Department's 12 Strategic Goals, rather than
simply by the three Division--Air Resources, Waste Management, and
Water. Taken together, the newly formatted 12 goal sections form the
DES Comprehensive Action and Assessment Plan. This substantial
formatting change was the direct result of stakeholder comments, and is
an important step in making the Agreement a key directing document at
DES.
For the current PPA, DES communicated its environmental priorities
and intended resource shifts upfront via detailed program tables, as
well as through a discrete list of jointly prioritized ``Focal Points
of Cooperation.'' The information in these tables (and in the Focal
Points list), in most instances, is the result of frequent staff
interactions with many on-going and ad hoc stakeholder groups, as well
as with program counterparts at EPA New England. Also reflected are the
priorities outlined and discussed at two annual joint planning meetings
(EPA/States meeting on enforcement and P2 and compliance assistance and
a regional PPA meeting). EPA New England staff typically review the
tables and focal points in great detail on at least two points in the
PPA development provide and provide comments to DES which are reviewed
and incorporated as is, or are set aside for more detailed
negotiations. All issues of importance to both agencies must be
negotiated before a signed PPA can be secured.
A key component of a fully functioning PPA, is the State self-
assessment process. At a frequency agreed to by the State and EPA
(typically annually), the State must conduct a self-assessment of
progress made at accomplishing the work outlined in the PPA, as well as
specific progress made at addressing identified environmental
priorities and goals. The intent is for these self-assessments to do an
increasingly better job of reporting actual environmental results, not
simply environmentally related activities conducted by the State. While
good progress has been made, both DES and EPA New England continue to
struggle with to best conduct and gain improvement value from the self-
assessment process, as well as how to most effectively report on the
state of the environment in New Hampshire. To help answer these, and
other, results-based questions, DES has identified ``Environmental
Indicators and Program Measures'' as a Focal Point and has been
focusing resources to work through the issue.
DES has had success working with EPA New England to redirect
resources to those environmental issues of most importance for New
Hampshire, both at the upfront PPA negotiation stage, as well as when
there are limited PPG funds available at the end of the fiscal year
cycle. One of the significant potential advantages of the PPG is the
ability to look at the grant funds in total and allocate specific funds
as appropriate to the different programs and activities according to an
assessment of State-specific needs and priorities. In the past, DES,
received different grant awards for each program, and those funds were
earmarked specifically for that program and could not be used for any
other purposes. Now, the Department receives a single grant award--
approximately $4.8 million in Federal fiscal year 2000--that provides
funding for a range of air quality, waste management and water quality
programs, and the Department and EPA New England can agree to shift
resources across the programs to reflect the needs and priorities set
forth in the PPA. The PPA is the single, comprehensive work plan, and
the PPG is the single funding mechanism to implement the work plan.
Some recent success stories that reflect refocused State (and EPA)
priorities include shifting PPG resources to address sprawl, mercury
strategy, restoration of shellfish beds, and protection of in-stream
flow in rivers.
While DES has had some success in both reprogramming priorities and
funds through existing PPA and PPG mechanisms, there are barriers in
the process. There appear to be some disconnects between the regional
and national program offices relative to the earmarking and utilization
of the various funds (i.e., ``strings''). The national program managers
appear to be adhering to more stringent standards compared with the
Region, and therefore may be stifling some of the possible flexibility.
One example would be strict pass-through requirements for 319 Nonpoint
and 104(b)(3) Wetland funds. This is an area that could possibly use
some attention.
Finally, it is vital that I stress that PPG funds are riot keeping
place with inflation. The PPG in particular has reached a point where
flee funds it provides are no longer adequate to support core staff
positions or the associated core program responsibilities. Without
increased Federal funding for DES, any flexibility possible through the
PPA and PPG is a moot issue.
Question 4. The EPA-State Regulatory Innovation Agreement appears
to lay the foundation for better collaboration between States and the
Federal Government to explore new ideas. But again, it seems limited;
only five proposals have been approved so far, although a few more are
in the pipeline. How can the Congress encourage SPA and the States to
take advantage of these programs? Is additional funding or flexibility
in the laws needed to make these kinds of programs work better?
Response. The Agreement is beginning to bear fruit. As of May 20,
2000, 18 projects have entered the process and about one-third of them
have been approved. Moreover, the principles underlying the Agreement
are taking root broadly, and a lot of innovation is occurring that is
not strictly done under the official rubric of the Regulatory
Innovations Agreement.
Innovation does not mean changing flee basic objectives of a safe
and healthy environment. But it does suggest a different way of getting
there. Collectively, we can expand incentives to encourage innovation,
such as regulatory process changes (like predictable, timely permitting
and reduced administrative burdens), economic incentives (tax credits,
fee waivers, new funding), and greater use of environmental management
systems.
An integrated Federal environmental statute would greatly assist
our efforts to find innovative solutions to increasingly complex,
multimedia environmental challenges.
Congress can also help by fostering an accountability system that
focuses more on environmental results and less on the host of
administrative proxies that we call ``beans.'' By emphasizing the
results necessary to achieve our goals, the way would be cleared for
all the partners--EPA, the States, local government, as well as the
entire community--to exercise their collective desires, talents and
experience. Existing prescriptions and a cumbersome process stifle
creative solutions--including the development of new technologies that
are essential to attaining environmental goals.
EPA could be clearly authorized to delegate to the States a certain
level of ``innovation'' authority which would enable the States to
develop agreements and manage the day-to-day operations (like
permitting) under the agreement, and retain for EPA a monitoring
responsibility to ensure that desired results are achieved. This
monitoring could be tied to an agreed-upon performance indicator
process like that developed in Florida.
Having EPA focus on the agreed upon goal rather than second-
guessing State decisions along the way (including permitting and
overfiling) would greatly facilitate innovation. Along these lines, we
would encourage Congress to adopt legislation that would provide
protection to innovators pursuing agreed upon goals and objectives
while working outside the box.
It would be helpful to have clearly identified points of contact
for innovation projects at both the State and Federal level. For these
new initiatives, agencies tend to ``borrow'' folks from other
responsibilities. Since these projects involve a different way of doing
business, they frequently bring together a diversity of personnel--with
no one explicitly charged with getting the innovation done.
In order to encourage commercially viable innovative technologies,
developers need quick review and acceptance from agencies.
Certification processes like those being developed by States and EPA
need to be fostered.
In a broader sense, we might explore legislation that would direct
EPA to approve innovative alternatives to delegated State programs that
vary from Federal regulations if these alternative programs meet
criteria established through discussions among States, EPA, Congress
and other interested parties. Innovation includes risk of failure.
Congress could include some indemnification provisions that would ease
the legal consequences of failure, thus stimulating the willingness to
take a chance on new ideas or technologies.
Question 5. Do you see an expansion of the EPA/State Innovation
Agreement to produce a more holistic approach to the environmental
issues?
Response. We would like to see the EPA/State partnership evolve to
a point where, with the appropriate goals and accountabilities
established, there would be no limit to innovation. There is growing
interest in innovation projects, and several initiatives are in the
works. We hope that the fears and concerns that have accompanied the
ideas of innovation and flexibility will fade as we discover ways to
produce desired environmental results visibly, accountably and
efficiently. We agree that common sense and creative thinking should
apply holistically to our environmental challenges.
One way we would like to see the innovations effort expanded is for
States, EPA and Congress to pursue innovations directed specifically at
existing unregulated problems, such as nonpoint source pollution,
habitat loss, diffuse air pollution and urban sprawl.
Question 6. In the area of regulatory innovations, SPA has
committed to responding to State suggestions within 4 weeks for initial
followup and within 90 clays for a preliminary decision. How are these
deadlines working? Is this an appropriate length of time for these
decisions?
So far, there have been no complaints, but EPA has voiced concerns
that they must evaluate not only the process but also the substance of
the proposals. From a State perspective, these deadlines seem to be
working fairly well.
Question 7. At the hearing held Tuesday May 2, 2000, by this
committee, Senator Baucus read a quote from a 1993 hearing testimony
given by Thomas Jorling, and asked you to respond. Each of you said
that you agreed with Mr. Jorling Flat there was a need for flee Federal
gorilla to remain in the closet. Would you please elaborate on that
response. In your elaboration, would you please address the following
issues:
A. Is it necessary for the EPA, in order to ensure that the States
protect the environment, to second-guess the States, or to be able to
second guess the States, regarding every exercise of a State?s
enforcement discretion, every permitting decision made by the States,
and the like?
B. Are the States able and willing to exercise reasonable,
responsible, and vigorous enforcement and permitting discretion if the
States are no longer subject to second-guessing in every case?
I. If so, please explain why that is true today, even if it was not
true in past years.
II. If so, please support your explanation why that is true with
examples showing that the States have reasonably, responsibly, and
vigorously enforced the following:
a. Federal environmental laws, and
b. State and local environmental laws, over which the EPA exercises
no supervisory responsibility.
c. Are there alternative approaches to the current ``second-
guessing approach'' that could still provide assurance to EPA that
the States programs are protective of public health and the
environment?
Response. As you know, the role and capability of States has
changed significantly over the past 15 years. From 1986 to 1996, for
example, State spending on environmental protection increased 142
percent. In 1993, when Tom Jorling made his statement, only 41 percent
of eligible programs had been delegated to the States. By 1998, that
share had grown to 71 percent. Today, State environmental officials
conduct roughly 80 percent of the approximately 12,000 enforcement
actions taken each year by environmental agencies at the State and
Federal level.
In addition, it should be noted that many States leave requirements
which exceed Federal requirements. For example, the New Hampshire
Department of Environmental Services has established standards for the
land application of sludge which are perhaps the most stringent in the
nation, and much more restrictive than the Federal 503 standards. We
also recently set a standard for Methyl tertiary Butyl Ether (MTBE) at
13 parts per billion, a level which is the most stringent in the
nation. I could provide many more examples if necessary.
New Hampshire would prefer that EPA's limited resources be focused
on research and program performance reviews, rather than waste effort
on case-by-case reviews. Any decisions can be criticized or second
guessed on a case-by-case basis--the key is to have an open,
transparent and accountable system which relies on the States as the
primary implementation vehicles.
Question 8. Please indicate whether you agree or disagree with the
following statement: ``Reasonable people, acting in good faith, can
disagree over the best method for protecting the environment. For
example, reasonable people can differ over the proper mix of
enforcement and compliance assistance as generic tools, and the proper
use of a particular choice of method(s) in a specific case.
Accordingly, the best approach for gauging a State's environmental
protection program is to evaluate the entirety of the State's efforts,
both enforcement and compliance assistance, over a long period of time,
and to determine whether the State has improved the condition of the
environment, rather than focusing on a particular case or series of
cases, the number of enforcement actions brought in a particular State
(or any other similar so-called `bean counting' system), and the
preference (if any) between enforcement and compliance assistance.''
Response. I would fully agree with this statement. In fact, such a
philosophy is embodied in an important DES document, the Compliance
Assurance Response Policy (CARP), which is available on the DES website
at http://www.des.state.nh.us/legal/carp/. As described in the CARP,
DES is committed to a consistent, predictable, and appropriate
compliance assurance response, which is protective of public health and
the environment while creating a credible deterrence against future
violations. DES believes that compliance with environmental regulations
is best ensured by using a multi-tiered, multi-media approach starting
with education and outreach, and proceeding successively to compliance
assistance, compliance monitoring, and timely and appropriate
enforcement. Compliance assurance is a fundamental goal. DES endeavors
to create incentives for compliance and encourage the regulated
community to surpass the minimum requirements of compliance through
pollution prevention and innovation. Accordingly, DES maintains an open
and on-going dialog with the regulated community.
DES encourages early intervention to ensure that violations of
environmental laws are identified and corrected as soon as possible in
order to minimize impacts to public health and the environment. To this
end, DES discloses violations to responsible parties as soon as
possible after they are discovered and will offer or recommend
appropriate assistance to violators to correct deficiencies even while
formal enforcement action may concurrently be in development to address
the violations. To prevent recurrence of noncompliance, DES
investigates root causes of noncompliance and takes action when
appropriate. As environmental compliance has a direct impact on
everyone, DES seeks expanded public involvement in compliance assurance
activities, and supports the public's right to know which facilities
are in or out of compliance with environmental laws.
Over the last few years, and as a key component of the Performance
Partnership planning process, DES has made significant progress with
flee development and implementation of improved performance measures.
The focus of our efforts has been on going beyond the traditional
``bean-counting'' system, to more fully employ the use outcome-based
measures and environmental indicators. DES and many other environmental
agencies have recognized that the sole reliance on the traditional
measures does not recognize alternative and innovative approaches to
problem solving and does not tell the entire, increasingly complex,
environmental protection story. Our most recent initiatives in this
area include the development of a comprehensive measures data base and
work on a EPA grant project that will test better compliance measures.
______
Responses by Robert Varney to Additional Questions from Senator Chafee
Question 1. You note that 38 States have Performance Partnership
Agreements under this system. Why don't all of the States have these
agreements, is it because the program is relatively new, or are there
structural obstacles to getting 100 percent participation?
Response. The original NEPPS agreement between the States and EPA
was signed on May 15, 1995. In terms of participation by the States,
else record in flee short time since has been gratifying. It is not a
perfect partnership yet, and all the full promise of the original
agreement remains to be realized. The fact that not all States
participate probably has more to do with obstacles than the newness of
the program.
Among the obstacles is the need to foster a greater understanding
and support for NEPPS among staff in EPA and the States, especially in
merging the NEPPS approach with existing priority-setting systems. We
are also concerned that EPA affirm that burden reduction remains a
vital aspect of the NEPPS ideal and that the agency increase reporting
burden efforts to implement and effect burden reduction as a necessary
requirement of all EPA programs, offices and regions.
We also see EPA's continuing presence through direct inspection and
enforcement as inconsistent with NEPPS' call for use of Federal
resources ill jointly identified State-specific priorities, NEPPS or
other joint Federal State planning processes.
EPA also needs to accelerate the transition to a more results-based
environmental management system by making investments necessary to
develop improved environmental indicators, outcome-based goals,
objectives, measures and information management systems for use in
NEPPS, GPRA and other relevant systems.
We realize these transitions are a part of the partnership, and
that States and EPA need to work on these challenges throughout our
agencies.
Question 2. In your testimony, you emphasize the importance of
State innovation. What do you feel are the greatest obstacles to State
innovation? Given that innovation is an unpredictable process, how
would one design national environmental laws to encourage innovation?
Response. Chairman Smith asked the same question, and I offer the
same response that I will share with you here:
Innovation does not mean changing the basic objectives of a safe
and healthy environment. But it does suggest a different way of getting
there. Collectively, we can expand incentives to encourage innovation,
such as regulatory process changes (like predictable, timely permitting
and reduced administrative burdens), economic incentives (tax credits,
fee waivers, new funding), and greater use of environmental management
systems. [from Resol. 98-3]
An integrated Federal environmental statute would greatly assist
our efforts to find innovative solutions to increasingly complex,
multimedia environmental challenges. [from Resol. 98-3]
Congress can also help by fostering an accountability system that
focuses more on environmental results and less on the host of
administrative proxies that we call ``beans.'' By emphasizing the
results necessary to achieve our goals, the way would be cleared for
all the partners--EPA, the States, local government, as well as the
entire community--to exercise their collective desires, talents and
experience. Existing prescriptions and a cumbersome process stifle
creative solutions--including the development of new technologies that
are essential to attaining environmental goals.
EPA could be clearly authorized to delegate to the States a certain
level of ``innovation'' authority which would enable the States to
develop agreements and manage the day-to-day operations (like
permitting) under the agreement, and retain for EPA a monitoring
responsibility to ensure that desired results are achieved. This
monitoring could be tied to an agreed-upon performance indicator
process like that developed in Florida.
Having EPA focus on the agreed upon goal rather than second-
guessing State decisions along the way (including permitting and
overfilling) would greatly facilitate innovation. Along these lines, we
would encourage Congress to adopt legislation that would provide
protection to innovators pursuing agreed upon goals and objectives
while working outside the box. [from Resol. 98-3]
It would be helpful to have clearly identified points of contact
for innovation projects at both the State and Federal level. As new
initiatives, alley tend to ``borrow'' folks from other
responsibilities. Since these projects involve a different way of doing
business, alley frequently bring together a diversity of personnel--
with no one explicitly charged with getting the innovation done.
In order to encourage commercially viable innovative technologies,
developers need quick review and acceptance from agencies.
Certification processes like those being developed by States and EPA
need to be fostered.
In a broader sense, we might explore legislation that would direct
EPA to approve innovative alternatives to delegated State programs that
vary from Federal regulations if these alternative programs meet
criteria established through discussions among States, EPA, Congress
and other interested parties. [from Resol. 98-3 almost undecipherable]
__________
Statement of James M. Seif, Secretary of the Department of
Environmental Protection
Mr. Chairman and members of the committee, I am Jim Self, Secretary
of the Pennsylvania Department of Environmental Protection.
Pennsylvania is pleased to appear before you today to discuss some of
the innovative environmental programs that we and other States have
developed.
When he took office, Governor Tom Ridge committed to make
Pennsylvania a leader among States and a competitor among nations. He
has pursued that commitment by cutting taxes, promoting exports, and
making Pennsylvania a ``high-tech'' State through the introduction of
new electronic commerce and electronic government tools. Another
important part of the Governor's plan was restoring and protecting
Pennsylvania's environment by cleaning up old industrial sites--
``brownfields''--and returning them to productive use.
Complicated Federal remedies of the late 1970's and 80's such as
RCRA and Superfund have, at best, a mixed record in addressing the
legacy of old industrial sites left from years of being the world's
industrial leader. The unworkable liability scheme of Superfund often
produced litigation instead of cleanups. Requirements that contaminated
sites be returned to pristine condition--a standard that was
financially and sometimes technologically prohibitive--left once-
productive sites in many communities permanently off the tax roles and
off-limits to renewal and reuse.
Governor Ridge, and the leaders of the Pennsylvania General
Assembly, recognized that we needed a different approach to cleaning up
contaminated sites. The passage of Acts 2, 3 and 4, the three acts
establishing Pennsylvania's Land Recycling Program, provided the
environmental platform to allow us to tear down the fences around these
sites, to begin to restore our communities, and to turn our
manufacturing heritage back into an asset.
Pennsylvania on May 2, 2000 is a much different place than it was 5
years ago on May 19, 1995, the day that Governor Ridge signed the Land
Recycling Program into law. Had you been with us that rainy day in
Western Pennsylvania at the site of the former U. S. Steel National
Tube Works, you would have seen an environmental scene that could have
been in Anytown, U.S.A.--a rusted hulk that resulted from the battles
and success of our first industrial revolution.
The Lands Recycling Program is an innovative solution that evolved
from concept to reality so successfully that Governor Ridge has
described the program as ``simply a case of government making sense.''
This common sense approach provides a statutory liability release,
standardized procedures, realistic goals, cleanup options and funding
assistance. These features destroyed the barriers that stood in the way
of the Federal and early State remediation programs.
Don't think that the Land Recycling Program uses lax environmental
standards. On the contrary, the program used sound science to establish
cleanup standards that protect public health and the environment. The
difference is that these standards are realistic enough to promote the
reuse of contaminated sites.
The program's four cornerstones--uniform cleanup standards,
standardized review procedures, release from liability, and financial
assistance--all address crucial business Issues.
Uniform standards, under four cleanup options, give communities the
flexibility they need to attack this nationwide problem. Total costs
and project time are also easier to establish. Agreements to protect
buyers' rights and the financial viability of owners of multiple
contaminated sites are available to business.
Standardized review procedures provide a uniform statewide process
for cleanups. A technical guidance manual was published, in plain
language, to help people use the program. The program imposed review
time limits and guarantees a reply to applications within 60 days.
Releases from liability take the risk out of remediation. Anyone
who cleans up a site to the new standards is released from any
additional cleanup of the old contamination. This liability travels
with the property and can extend to financial institutions, economic
development agencies, and local authorities. It essentially puts the
site back into the stream of commerce.
While the program has attracted millions of dollars of private
sector investment in cleanup, funding assistance is also available to
help reach sites that might not otherwise get addressed. The Industrial
Sites Cleanup Fund, initially stocked with $15 million, makes grants
and low-interest loans available to cover up to 75 percent of the cost
of site assessment and remediation. Pennsylvania's Department of
Community and Economic Development has already provided in excess of
$20 million in grants and loans to assist land recyclers.
The results speak for themselves. Since the inception of our Land
Recycling Program, more than 700 sites have been remediated and
hundreds more are in various stages of cleanup--compared to Superfund,
in which only 16 of 112 sites on Pennsylvania's NPL have been delisted.
Many of these brownfields properties are now back on the tax roles, and
more than 17,000 people now have jobs on these redevelopment sites.
As David Gergen from U.S. News and World Report has pointed out,
``These results are impressive. Pennsylvania has created strong
incentives for businesses to clean up and revitalize abandoned urban
sites, while preserving farms and undeveloped land in the process.''
Our program is not only producing environmental protection and
economic development gains at individuals sites, but also is an
effective strategy to accomplish broader policy goals such as reversing
urban blight and developing a sustainable future. Working with
redevelopment authorities, local government, lending institutions and
the private sector, we are creating jobs, increasing tax revenues,
improving transportation infrastructure, revitalizing urban areas, and
preserving open space.
Let me go beyond basic statistics though, to give you a flavor of
how Pennsylvania's brownfields program has affected and influenced
``real people.''
A particularly noteworthy Land Recycling Project is the
site of Bethlehem Steel Corporation's original steel-making facility in
Bethlehem, Pennsylvania. This represents the largest brownfield project
currently being undertaken in the Nation (nearly 2000 acres). This
site, which once supported heavy industrial processes, is being
converted into a recreational, educational, cultural and entertainment
center of regional, if not statewide, significance. The Smithsonian
Institution will occupy a key location there to house and display
artifacts of our nation's industrial heritage.
Several other examples include a large industrial
complex, the Transit America facility, in North Philadelphia that is
being remediated and returned to open space use as an 18 hole public
golf course. In West Chester, a turn of the century Laundromat has been
converted into a fitness center. And in McKeesport, in the Mon Valley,
a steel mill site has been converted into the eastern headquarters of
Echostar Corporation and will house more than 2000 customer service
representatives.
Our partners in redeveloping these sites have been most
generous in their praise. A few quotes illustrate how successful the
program has been. Michael Theisen of Woodmont Corporation, which turned
an auto wrecking yard into a shopping center pointed out, ``It would
have been impossible to acquire tenants or the financing needed to make
such a center feasible, particularly one located downstream from a
Superfund site, without the support and assurances provided [by the
Land Recycling Program]. Perhaps the success of our program is most
easily summed up by Lou Marseglia of Grundy Recreation who said ``If it
wasn't' for the [Land Recycling Program], we couldn't have built it''
in reference to the recreation center built on the site of a former
carpet mill.
Further, our program has been recognized as an
``Innovations in American Government Award Winner'' and a 1997 ``Ford
Foundation Award Winner.''
People in other nations have noted our success and looked
at us as a model for programs of their own. The Scottish Environmental
Industries Association invited us to share our experience at the
Contaminated Lands Forum in Scotland. We have also gotten inquires from
Brazil and Eastern Europe on our program.
The flexibility offered by Pennsylvania's Land Recycling Program
has allowed us to be innovative in our approaches to cleaning up sites.
We have entered into a multi-site agreement with the U.S. Army, Air
Force, Navy and Defense Logistics Agency to facilitate the cleanup of
all sites used previously for military purposes and to prepare them for
reuse a decade earlier than originally scheduled. This was a landmark
agreement that will have tremendous economic development benefits for
the Commonwealth and has formalized a plan of action for resolving
Federal liabilities at 1,260 sites in 26 counties. This agreement was
only possible because of the flexibility afforded by the State laws
establishing the Land Recycling Program and clearly can be a model for
other States to follow.
As often happens, one successful innovation points the way to
others. To raise awareness of the availability of sites for
redevelopment, DEP created the Brownfields Inventory Grant (BIG)
Program, which provides grants to local governments, economic
development agencies and other qualifying agencies to inventory the
brownfields properties in their area. Sites that are identified are
added to the Pennsylvania Brownfields Directory on our Department's
website, so that parties interested in developing sites will know that
they are available. This data base currently lists over 130 sites.
As a further inducement for the revitalization of communities,
Governor Ridge signed legislation creating Keystone Opportunity Zones,
in which tax abatement is offered to businesses locating in
economically depressed areas.
The unrealistic standards and open-ended liability of Superfund
have often been strong deterrents to the use of new technologies at
environmental cleanups. The cleanup options available to voluntary
parties under our program are more conducive to the use of new
technologies. Promoting the use of new technologies is another State
success story that is shared by many States. States are working
together to improve State permitting processes and to speed deployment
of technologies by using the Interstate Technology and Regulatory
Cooperation Work Group, or ITRC, which is an organization affiliated
with ECOS. The ITRC is a State-led, national coalition of regulators
working with industry and stakeholders to improve State permitting
processes and to speed deployment of technologies through interstate
and regulatory collaboration.
Currently, 31 States actively participate in ITRC activities and
additional States are indirectly involved through participation in
training events and technical work team activities. Other participants
include the Departments of Energy and Defense, and the Environmental
Protection Agency. The ITRC can document success stories in all 50
States, through the use of ITRC products or examples of institutional
change.
These innovations, taken together, have made the efficient re-use
of industrial land far more attractive in Pennsylvania, and have
reduced the pressure on undeveloped ``Greenfield'' areas.
We believe that we have gotten the fundamentals right. Now it is
time to make it even easier for these sites to be cleaned up and
returned to productive use. The Pennsylvania Department of
Environmental Protection in collaboration with a number of other State
agencies has launched additional new initiatives to do just that.
Financial Resources for the Environment is one of two
initiatives of its kind in the Nation in which public sector entities
are working together with lenders, utilities and corporations to
develop a financing vehicle to provide funding for brownfields
redevelopment. In many cases private financing for brownfields projects
is difficult to obtain. This project will fill in that gap and promote
more redevelopment without the necessity for increased public funding.
We are developing a request for proposals to offer a
Commonwealth-wide insurance policy that can protect owners and
developers from the uncertain liabilities associated with conducting
cleanups. By purchasing coverage under this--umbrella policy--owners
and developers will receive coverage more affordably than seeking it
alone and can even be insured against actions taken by our Department.
This will provide even more confidence for individuals seeking to sell
and buy brownfield sites.
Many other States have also attacked the problem of brownfields
with innovative programs of their own. At least 35 States have
voluntary cleanup programs, and, while many share common elements, each
is tailored to the particular needs of the State. Thousands of sites
around the country have been cleaned up under these programs.
In short, Pennsylvania and the other States have figured it out.
Brownfield redevelopment is becoming a common and natural aspect of
real estate development and sound land use planning in our Commonwealth
and across the nation. There are some legislative steps that can be
taken to accelerate the pace at which these programs can restore our
environment and revitalize our communities.
I encourage the Senate to consider passing brownfield legislation
based upon the model developed and supported by many States. The key
elements of such legislation are: (1) a release of Federal liability at
State land recycling sites, (2) a waiver of Federal permitting
requirements at State land recycling sites, and (3) Governors
concurrence on proposed NPL listings.
A Federal release of liability will heighten developer confidence
that EPA will not take judicial or administrative action should EPA
decide to second-guess a State's decision regarding a clean up. Second,
there needs to be a waiver of Federal permitting requirements at land
recycling sites being addressed under a State voluntary cleanup
program. In Pennsylvania, our General Assembly gave DEP the authority
to waive State permits at sites being handled by our land recycling
program, but only Congress can waive the requirement to obtain Federal
permits. These are the same permitting requirements that EPA has the
authority to waive at sites in the Superfund program. In asking for
this waiver, be assured that discharges to the air and water are fully
regulated by our State regulatory programs, and persons cleaning up
sites in our State system have to meet all of our applicable emission
and discharge limitations, both during cleanup an thereafter. In
addition, Congress should reinstate the opportunity for Governors to
concur on proposed Superfund listings. Governors can best decide
whether sites have the potential to be redeveloped and, therefore,
moved through a State land-recycling program as opposed to being
relegated to the NPL.
We are very proud of what we have achieved in Pennsylvania. Our
Land Recycling Program has preserved open space, revitalized town and
urban centers and made people feel better about their communities and
the government's role in them. We believe our Program can serve as a
national model and I thank you for the opportunity to speak with you
today.
Thank you.
______
Pennsylvania Department of Environmental Protection,
June 1, 2000.
Honorable Robert C. Smith, Chairman,
Senate Environment and Public Works Committee,
Senate Office Building,
Washington, D.C. 20510-6175
Dear Chairman Smith: Thank you again for permitting the Environmental
Council of the States to present some of its views to your committee at
the hearing on May 2, 2000.
Toward the end of the hearing you had asked a question about
finality and I apparently misunderstood it. Your question, as Mr.
Conover later explained it, was about the need for or value of finality
in the land recycling process. My answer would be, and perhaps you will
permit the record to be supplemented, as follows:
Finality in land recycling transactions is the sine qua non for
success. Choices made about how sites are selected, about the future
use of the site, about future ownership patterns, and about financing
are made by the private sector, and they will not be made at all in
absence of certainty about the finality of government regulatory
action. For many sites, this chilling effect of non-finality (for
example, possible Federal action), will continue to stand in the way of
cleanup and reuse.
Thank you again for the opportunity to testify, and I am looking
forward to an informal visit with some members of your staff to develop
some additional thoughts on improvements to the statutory structure of
our nation's environmental programs.
Sincerely,
James Seif, Secretary.
______
Responses by James Seif to Additional Questions from Senator Smith
Question 1. The brownfields success in Pennsylvania is a clear
example of State innovation and a commonsense approach. In your
testimony, you presented three recommendations for the Senate to
consider: (1) a release of Federal liability at State land recycling
sites, which will give the States ``finality'' in their decisions,
something they do not currently have; (2) a waiver of Federal
permitting requirements at these sites; and (3) Governor's concurrence
on proposed NPL listings. How would such a release mentioned in (1)
work in practice? Would there be instances where Federal involvement
would be appropriate? What are those instances?
Response. The Federal Government, through statute, should establish
that Federal enforcement authorities under CERCLA do not apply to sites
that have been cleaned up in accordance with the provisions of
effective State voluntary cleanup programs. Federal involvement at such
sites could be appropriate if information about the existence of
serious additional risks from contamination at the site came to light,
and the State was either unable or unwilling to address those risks
under the provisions of its own program. Additionally, contaminated
properties exist which may not be attractive for private investment,
and may be posing unacceptable risks to public health and the
environment. It is these sites where Federal and/or State funded
cleanup involvement is warranted and should be focused. Federal action
under the emergency (``immediate removal'') provisions of Superfund
might also be useful in certain fact situations.
Question 2. What would be the result of providing State finality in
decisions on cleanup of brownfield properties?
Response. The opportunity for voluntary parties to obtain both
State and Federal finality would result in increased participation in
the State program. We are convinced that this single issue is
discouraging many property owners from initiating voluntary cleanup
efforts under our program.
Question 3. Does the Secretary believe that States that adopt this
model will find that more funding would be available for cleanup at
these sites from private and State sources?
Response. States with proven and recognized voluntary cleanup
programs have been and will continue to attract a greater level of
private and public funding for assessment, cleanup and reuse of
contaminated property.
Question 4. How important is it to the States' continued success
that the uncertainty associated with the EPA's second guessing of a
State's decision regarding cleanup be removed?
Response. Finality in land recycling transactions is the sine qua
non for success. Choices made about how sites are selected, about the
future use of the site, about future ownership patterns, and about
financing are made by the private sector, and they will not be made at
all in absence of certainty about the finality of government regulatory
action. For many sites, this chilling effect of nonfinality continues
to stand in the way of cleanup and reuse.
Question 5. At the hearing held Tuesday, May 2, 2000, by this
committee, Senator Baucus read [a quote of Thomas Jorling] to you and
asked you to respond. Each of you said that you agreed with Mr. Jorling
that there was a need for the Federal gorilla to remain in the closet.
Would you please elaborate on that response?
Response. It is certainly not necessary for EPA to be able to
second-guess every individual State decision. In fact, that second
guessing is just as likely to reduce the effectiveness of State
programs, as members of the regulated community grow reluctant to
committing resources to achieving compliance if they believe that
another opinion of what constitutes compliance is possibly to be
substituted later. This reverses delegation, turning the day-to-day
implementation of programs back to the EPA.
States are willing and able to exercise reasonable and vigorous
enforcement. Governors are elected by the same citizens who elect
Senators, and recognize the same strong support among those citizens
for effective environmental protection. Governors are more likely than
Senators, I suggest, to be held accountable by those citizens if
environmental problems in their States are not appropriately addressed.
The notion that States will ``race to the bottom'' is just not true.
As evidence of this, States have been shouldering a growing share
of the effort of environmental protection in this country. States have
sought and obtained delegation of the vast majority of Federal programs
that can be delegated. State spending on environmental protection has
risen steadily and the percentage of State environmental budgets that
is provided by the Federal Government has shrunk to about 20 percent on
average, and much lower in some States. States conduct the overwhelming
majority of environmental inspections, and about 80 percent of the
enforcement actions taken nationally.
There are a number of specific instances in Pennsylvania that
demonstrate our willingness to take strong action against those who
violate the law. We have assessed and collected a $3.2 million penalty
against Westinghouse for groundwater contamination at a facility in
Adams County, using a combination of State and Federal authorities.
Another example is Action Mining in Somerset County, where we brought
enforcement action against the company for illegal discharges to a
stream, resulting in $625,000 in civil penalties.
An important point to make however, is that vigorous enforcement is
not, in itself, an adequate measure of an effective environmental
program. We have achieved, for example, an 88 percent compliance rate
with the Federal standards for upgrades of underground storage tanks in
Pennsylvania. The large number of tanks and tank owners throughout the
State, many of which are small businesses or ``mom-and-pops'', required
the use of many different tools--outreach, education, compliance
assistance, and, when needed, enforcement. The enforcement actions
alone don't tell the story of whether the environment is being
protected or not; the compliance rate does.
Also, we take some enforcement actions in cooperation with EPA. We
recently decertified several laboratories in Pennsylvania for
inaccurate or fraudulent environmental testing results. EPA then used
Federal authorities to bring criminal action against those who
generated fraudulent results. This is the kind of ``gorilla in the
closet'' that works. We want to have the ability to do the best job we
can with our authorities, and, only then, the option to turn to the
Federal Government for help when their authorities or expertise are
needed.
The current Federal laws already provide a mechanism whereby the
Federal Government can maintain oversight without the need to second
guess individual State permitting and enforcement decisions. EPA must
approve the delegation of any Federal program to a State, and EPA
retains the right to revoke that delegation. If any State should fail
to meet the requirements for operating a delegated program or fail to
be protective of public health or the environment, EPA can initiate
proceedings to revoke delegation, and instead run the program itself.
EPA should delegate the programs, let the States run them, and take
them back if the States fail. EPA should not pretend to delegate the
program then continue to make the decisions.
Question 6. Please indicate whether you agree or disagree with the
following statement: ``Reasonable people, acting in good faith, can
disagree over the best method for protecting the environment. . .''
Response. I agree with the statement. I would add that it is not
just the mix of enforcement and compliance assistance that matters. We
have made some of our best environmental gains in Pennsylvania through
efforts that have little or nothing to do with patrolling a standard.
The Land Recycling program about which I testified is a good example,
where we created conditions under which private parties volunteer to
spend their own money to clean the environment. Through pollution
prevention and energy efficiency programs we are helping businesses and
individuals in Pennsylvania go beyond what the law would require. Our
work to promote new technology is bearing fruit not only for
Pennsylvania's environment but also for the rest of the country and, in
fact, the world. Enforcement is just one facet of compliance with the
law, and compliance is just one facet of environmental protection.
______
Responses by James Seif to Additional Questions from Senator Chafee
Question 1. You note in your testimony that Pennsylvania is
pursuing an ``umbrella insurance policy'' for Brownfield cleanups. How
can environmental insurance facilitate further redevelopment?
Response. We have found that uncertainty is one of the primary
inhibitions to private sector investment. Our request for finality is
one important element in establishing the kind of certainty that will
promote greater private investment in environmental cleanups. The
insurance program we envision would establish another kind of
certainty. Environmental insurance has come into favor as a hedge
against unanticipated and unexpected costs. We will soon be selecting a
qualified broker to establish underwriting that builds upon the strong
points of the Land Recycling Program. Private parties will be able to
take advantage of competitive premiums for primary coverage options
including cost overrun, third-party and tort claims, and State and
Federal reopener and compliance costs. We anticipate that this
additional certainty as to cost will make potential redevelopment
projects more attractive to private parties and the lending community
in particular.
Question 2. Are most brownfield sites cleaned up under your State
program brought to your attention by the volunteers or do you discover
the sites first?
Response. In most cases, we do not know about a given site until a
notice of intent to remediate is filed with us. As I mentioned in my
testimony, we have offered grants to local governments and authorities
to inventory brownfield sites within their geographic areas, and we
maintain a data base of such sites for those who may be searching for a
property to redevelop. The majority of the sites in our program
however, are first identified by the voluntary party seeking to clean
up and reuse them.
__________
Statement of Brent C. Bradford, Deputy Director, Utah Department of
Environmental Quality
Mr. Chairman and members of the committee; my name is Brent C.
Bradford. I am the Deputy Director of the Utah Department of
Environmental Quality. I am here representing the views of the
Environmental Council of the States (ECOS) of which I am a member and
immediate past chairman of the State/EPA Information Management
workgroup and current Vice Chairman of the ECOS Strategic Planning
Committee.
I want to speak to you today regarding State activities and
initiatives in managing environmental information. I'd like to give you
four messages:
1) States generate most of the data in EPA's national data systems;
2) States are driven to manage this data effectively because they
must have it to operate their own programs;
3) States have become the greatest innovators in the management of
environmental data, and
4) States are working with EPA and the public to make this data
available.
First, States collect and provide about 94 percent of the
environmental pollutant information contained in Federal program data
systems (report attached: ``Environmental Pollutant Reporting Data in
EPA's National Systems''). This includes data from the regulated
community and direct measurements of environmental quality. It includes
data for water, air, waste and drinking water. States provide EPA
nearly all the environmental pollutant and compliance data it uses to
manage the environment. Data that EPA passes on the to the public
through programs such as Envirofacts often originates in the State
environmental agencies.
Second, States use this data themselves to manage their own
programs, and so are driven to make sure that the data is managed
usefully. This became especially true during the 1990's as the States
assumed more and more of the delegated programs from EPA. More States
over the past 2 years have invested in information technology and moved
toward data integration. This increases the effectiveness of
environmental program management and provides for sharing and exchange
of information, and thus improved public access to data and improved
data quality. States work together through ECOS to share experiences
and knowledge and thereby assist one another and EPA in developing
capabilities to manage environmental information. Some States have made
significant investments of State funds and others have relied heavily
on Federal funds coming through EPA's One-Stop program. Such Federal
funding has been particularly helpful to smaller States such as ours.
My third point is that the conditions I have already mentioned have
led the States to become great innovators in environmental data
management.
In my home State of Utah, our agency has developed a standard used
by all programs to identify facilities and link them between program
data bases. We also created a global data catalog to allow public
access to information contained in our data bases. We have developed an
electronic reporting capability to allow regulated facilities to report
required information and to provide for sharing of that information
among the media programs within the department. From these efforts, we
developed an Internet access capability that will allow public access
to information 24 hours per day, 7 days per week. We especially wanted
to make permitting and compliance information available.
Other States have also made remarkable progress in this area. For
example,
1) Pennsylvania was one of the first States to present timely
multi-media compliance information on facilities on line to the public.
They are now sharing that system with other States.
2) The State of Washington's led other States in developing a de
facto national standard its Facility Identification Template for States
is now in its second version and is being used by at least 25 States to
help them jump-start their data reinvention efforts, saving each State
about a quarter of a million dollars.
3) New Jersey's Environmental Management System fully integrates
all regulatory and permitting systems one of the first anywhere to do
so when it's completed later this year.
4) Virginia's Centralized Enterprise Data System was created in 18
months, merging 77 legacy systems that were not compatible into a
single integrated system. The State itself invested $12 million of its
own State tax dollars to create this system. Virginia is now offering
the system to other States at no cost.
5) New Hampshire is integrating its environmental data bases by
linking facility and site data, and has begun making site remediation,
UST, and air permitting information accessible via the Internet.
My fourth and final point is that States are committed to working
with our Federal partners in making our data available to the public.
The States and EPA created the State/EPA Data Management Workgroup in
January 1998. We developed a vision statement and a set of operating
principles (see attached: ``State/EPA Vision and Operating Principles
for Environmental Information Management''). These define a framework
for a new way for States and EPA to do business together. They commit
States and EPA to a partnership in building locally and nationally
accessible information systems. Major accomplishments of the workgroup
include:
1) the creation of a data standards council,
2) the development of a vision for a national data exchange
network,
3) establishment of a joint process for addressing burden reduction
in data reporting and
4) a discussion forum and action plan for public access to
environmental data.
A full summary of the activities of the workgroup is attached for
your information.
Conclusions and Plans
States are making significant accomplishments in environmental data
management. But the cost is high. Currently, the President's budget
proposes $30 Million for environmental information management (proposed
as $16 million for States and $14 million for EPA). States believe that
this funding is essential in addressing a new vision of environmental
information management. States and EPA will use this funding to develop
data exchange standards, and enhance the capability of both States and
EPA to exchange data. Continued Federal investment is critical for this
vision to be realized, and we need to make sure that all States have a
full opportunity to participate. Collective investments in standards
development will be needed to make such a network viable.
States envision a national environmental information exchange
network that recognizes that the agencies that collect information
would be responsible for its stewardship, and will provide access to
such information through the network. Such a network is based on common
standards that will provide a common base for information access,
exchange and use; but will allow flexibility in meeting individual
State and EPA needs regarding data housing and handling. This would
move the focus away from a common national data ``system'' toward a
focus on data quality and interpretation, while providing States, EPA
and others the ability to use their on-going work to create ``portals''
for access to information sources. This will require both State and EPA
effort to make such an exchange work and must be developed in such a
way that all States, both large and small can participate in the
exchange. (A copy of the working version of the State-EPA ``Shared
Expectations for a National Environmental Exchange Network'' document
is attached).
Given the impact of decisions made based on environmental
information and the need to assure its accessibility and accuracy, it
is important that States and the Federal Government continue to work
together to develop and utilize data management technology in a sound,
responsible and efficient way. There is a long way to go, but
significant progress is being made. States have provided leadership in
this important effort and are committed to continuing to do so to
assure that the ever-increasing demands for information are met and
that necessary information is available for responsible environmental
decisionmaking.
______
EPA Vision and Operating Principles for Environmental Information
Management
Approved by State/EPA Information Management Work Group at Salt Lake
City Meeting
The States and U.S. Environmental Protection Agency (EPA) are
committed to a partnership to build--locally and nationally accessible,
cohesive and coherent environmental information system that will ensure
that both the public and regulators have access to the information
needed to document environmental performance, understand environmental
conditions, and make sound decisions that ensure environmental
protection.
Joint State/EPA Operating Principles For Effective Environmental
Information Management
Working closely with local governments, the regulated community,
the public, and tribal governments, the States and EPA will adhere to
the following Operating Principles in their efforts to build efficient
and effective environmental information systems that recognize
customers'' needs, ensure full public access, strengthen environmental
program management, minimize reporting costs, and ensure fairness and
due process in the protection of trade secrets.
1. Data collected by the States and/or EPA should have a specific
and demonstrable use that:
contributes to public understanding and decisionmaking
about environmental and health risks in their communities;
supports States' and EPA's ability to manage
environmental programs effectively and enables regulators, legislators
and other oversight bodies, and the public to measure success in the
implementation of such programs, in a manner that is increasingly based
upon environmental results; and??
imposes the least burden on the private and public
sectors, consistent with the above public requirements.
2. The States and EPA commit to developing ways of sharing core
environmental information based on jointly developed data standards and
compatible system design. To this end, business processes and
information systems designed by either or both States and EPA should:
be designed and managed employing methods and
technologies that will assure that the burden of collecting, storing,
maintaining, and retrieving these data is minimized and provides for
timely data sharing among all users;
be managed and maintained to provide enhanced data
quality, reliability, security and overall system stewardship;
be integrated across programs and facilities based on
data standards, in part so that information collection duplication and
or redundancy is reduced as much as possible;
provide the context, purpose, reliability, and collection
methods for these data, in order to enhance users' understanding and
use of data to address environmental issues; and
promote ready access to quality environmental information
for all levels of government, the regulated community, and the public.
3. The States and EPA will leverage and share existing and future
State and Federal investments in the use of information technology.
Recognizing the opportunities and risks associated with the rapid pace
of developments in information technology, the States and EPA will work
as partners to modernize environmental information systems as rapidly
and efficiently as possible, while doing everything possible to ensure
that all EPA components and all States participate fully in this
process.
4. The States and EPA recognize that there is a critical need to
share information for each agency to be successful in its general
mission. While recognizing that both have special data needs for
specific programs that do not require information to be shared or for
which information sharing may not be necessary, States and EPA
recognize the overriding importance of transparency in public
activities and decisionmaking and of respect in the use and
dissemination of each other's information.
5. The States and EPA will improve the collection, management, and
sharing of environmental information to support the achievement of
their respective and shared environmental goals and priorities.
Integration of and agreement on these goals and priorities will occur
through a structured dialog (such as the National Environmental
Performance Partnership System [NEPPS]).
______
Responses by Brent C. Bradford to Additional Questions from Senator
Smith
Question 1. The EPA's testimony stated that Core Performance
Measures are needed to paint a national picture of environmental
progress. Can you describe what some of these core performance measures
are? How are the data collected by the States related to the Core
Performance Measures and environmental indicators?
Response. Core Performance Measures (CPMs) have been developed
through the joint efforts of EPA's program offices and ECOS. The 1995
NEPPS Agreement established a system for developing Performance
Partnership Agreements (PPAs) between States and the EPA. The PPAs, in
turn, provide a vehicle for articulating both State and national
environmental priorities and for establishing results-based performance
measures. In 1997, the States and EPA signed a Joint Statement on
Measuring Progress and produced the first set of CPMs for fiscal year
1998.
CPMs are a set of environmental indicators, program outcome and
output measures used to assess progress in certain subject areas, such
as protection of aquatic ecological health, reduction of pollutant
discharges, and others. They have been developed for air, waste, water
and accountability measures have been developed for enforcement and
compliance assurance programs. There are no CPMs for pollution
prevention, pesticide, and toxic programs in fiscal year 2000.
As an example, within the air and radiation programs, ECOS and EPA
have agreed upon the following CPMs for reducing air toxic emissions
and health risks: Core Environmental Indicator: Trends in emissions of
toxic air pollutants as reflected in EPA's National Toxics Inventory;
Core Program Outcome Measure: Reduction in air toxic emissions from
1990 levels; and Core Program Output Measure: State progress in
collecting and compiling ambient and emission source data for toxics to
better understanding the nature and extent of the air toxics problem.
Each media committee of ECOS and its EPA program counterparts, as a
part of the Core Performance Measures development process, determined
not only the measures, but the information needed to evaluate the
measures. In most cases, it was jointly determined that the data were
already being collected and that additional information was not needed.
However, it was determined that States and EPA would have to work
together on interpretation of information and assure that the data were
used for the purposes for which it was collected. This has come to be
known between States and EPA as the issue of respectful use. This issue
of respectful use resulted in a joint effort on the part of State, EPA,
environmental groups and industry to address how environmental
information is used and interpreted, how data quality is assured and
how data gaps are appropriately filled. While States and EPA have
agreed to continue to search for and eliminate nonproductive data
collection, this does not seem to be nearly as important an issue as
how those data are used and interpreted.
Question 2. What are the States doing now to ensure that the data
they collect relating to core performance measures is of good quality
and used in the right context? One concern that is heard often is that
States collect different types of data that may not translate well into
a national data base and, also, that data collected in one context may
not be applicable when they are considered in another context. Do these
issues affect the use of information for core performance measures?
Response. The collective State/EPA process that led to CPMs ensured
that the data supporting CPMs would be accessible and of good quality.
By their nature, CPMs are a collection of data that translates well
into a national data base--intended, as Mike McCabe's testimony on
behalf of EPA indicated, to paint a national picture of environmental
progress. It is important to understand that the information collected
by the States is utilized to manage State programs. These data are the
same information that is shared by States and EPA in the Core
Performance Measures. Individually, States have taken steps to assure
quality of data as they are used for the States own purposes and are
available to those to whom the State agency is responsible. Thus, there
is incentive for the State to assure the data are of highest quality.
Many of the national data bases are outdated and unworkable. This has
been recognized by both the States and EPA. Therefore, the current work
of the State/EPA Data Management Workgroup is focused on the creation
of a new data exchange network that would eliminate the needed for
inputting data into national program data bases and would allow EPA
direct access to State data. This system would preclude double entry of
data and create new ways for States and EPA to share information and
assure its quality and accuracy.
Of course, the envisioned data exchange network does not imply that
all State-generated and transmitted data will be used as originally or
appropriately intended. There are occasions, for example, when States
and EPA have disagreed about the release of certain data or the
proposed use of that data. We understand and share the urgency to
ensure our citizens have access to environmental information. For that
reason, we must continue to work with EPA to ensure that the
information and its characterizations have received the necessary
quality assurance, peer review, and appropriate instructions for
interpretation and use. Fortunately, EPA and ECOS have established a
solid working relationship focused on the need for relevant, reliable,
high-quality, accessible, and useful data.
Question 3. What is the impact on the type and quality of the data
collected, if the EPA and the States have not agreed on the
environmental priorities and goals?
Response. One of the big challenges facing EPA and the States is
identifying what data is necessary to support our collective priorities
and goals. ECOS and I believe that greater attention needs to be placed
by EPA and the States on developing high quality environmental goals,
objectives and performance measures that the majority of Americans can
understand and rally around. These goals, objectives and measures will
be significantly enhanced if they are developed in close consultation
with State environmental agency leaders who possess significant
expertise and experience in environmental management along with
significant responsibility for environmental protection. We give credit
to EPA for its recent effort to reach out to State environmental
leaders to identify their priorities as EPA undertakes its strategic,
operational and budget planning.
One of the challenges of an increasingly results-based
environmental management system is that old measures of activities are
increasingly irrelevant. Some may still be important, but many others
are not. New measures, particularly environmental indicators, will
require new monitoring efforts--and resources are a major concern. As
States and EPA tackle increasingly complex environmental issues such as
nonpoint source pollution, ecosystem health, and toxic risks, new data
and analytic tools will become necessary. The good news is the science
is now available. The bad news is that the funds frequently are not.
National data collection that does not support the attainment of
agreed upon priorities is suspect, and as the process of collective
priority setting moves ahead, my colleagues and I are looking for
opportunities to drop unnecessary data burdens.
Question 4. What additional assistance, if any, do the States need
from EPA to develop and implement core performance measures?
Response. For the CPMs that are currently in place, States do not
need much more assistance. However, ECOS continues to push for
increasingly results-based measures, and these will require a joint
commitment of resources to identify and implement. One of the reasons
we are still heavily reliant on output, or activity, measures is that
they are relatively easy to measure, we are already measuring them, and
they are relatively cheap. Besides, we have been measuring those things
for years; they are part of the culture. Unfortunately, they are poor
proxies for real measures of our environmental condition.
We also need the ability to collect data over substantial periods.
Environmental results often take a long time to develop and
materialize. Good, long-term, data are needed to ensure that the trends
are in the right direction and the investment is paying off.
As the States and EPA continue--through NEPPS and other joint
planning efforts, like GPRA--to identify our environmental priorities,
appropriate results measures will also become evident. We need a
culture at the State and EPA levels, as well as in Congress, that will
embrace this new management approach and which will provide the
resources necessary to put it in place.
Question 5. Is it necessary for the EPA, in order to ensure that
the States protect the environment, to second-guess the States, or to
be able to second guess the States, regarding every exercise of a
State's enforcement discretion, every permitting decision made by the
States, and the like?
Response. Not only is it unnecessary for EPA to second guess the
States, it is unproductive, contentious and costly. It results in
delays in compliance and undermines the ability of the State to
effectively take and complete enforcement actions. It is important to
realize that State environmental agencies are much closer to these
enforcement issues than EPA and are also held much more closely
accountable by the public and elected officials. Further, it is
important to understand that States have the knowledge and ability to
take into consideration local conditions and situations that may have a
significant impact on achieving and maintaining compliance. EPA
generally fails to consider such situations in taking actions. In Utah,
our experience with EPA enforcement has generally been very negative.
EPA has waited until cases have been negotiated by the State, said
little or nothing regarding those negotiations and then, after a
settlement has been reached, come in to reopen the case and attempt to
extract additional or different penalties. This has a significant
adverse impact on the State agency, on the local community and on the
facility.
By way of example, the experience of the town of Spanish Fork, Utah
may be helpful. The town of Spanish Fork is a rural Utah community with
a population of approximately 8000 people. The town built a new sewage
treatment facility, for which our agency issued a permit. The design of
this facility is similar to that of others that are currently operating
in the State. The facility did not operate in compliance with permit
requirements and the town contacted DEQ and reported the noncompliance
problem. After reviewing the available data, we issued an enforcement
action and the town hired a consultant to try to identify and correct
the noncompliance problem. A second consultant was brought in to assess
the problem and determine the reason for high residual chlorine. Our
staff that had reviewed the plans and also worked onsite to help
identify the problem. Finally, the city expended an additional $800,000
for a de-chlorination unit and the problem was corrected and compliance
was achieved. The State settled the case without penalty because of the
good faith shown by the city in identifying the problem and coming
forth to fix it. Four years after the issue had been resolved, EPA
notified the State that they wanted DEQ to reopen the issue and collect
a penalty of at least $100,000. The DEQ attempted to dissuade EPA from
this position given that compliance had been achieved and maintained
over a lengthy period. EPA insisted on pursuing the case. The Region
was requested by the State to meet with representatives of the town and
the State, including State legislators, prior to initiating any action.
EPA refused, issued an enforcement action and then, reluctantly, met
with the community indicating that if the State had ``done its job'',
they would not be there. They further indicated that if the town wanted
to appeal the action, a hearing could be requested, but would be held
in Denver. This precludes attendance of many who may be interested,
including elected officials who serve part time. EPA then contacted the
State and indicated that they would back out of active participation if
the State would reopen its action and obtain a minimum penalty of
$100,000. The community approached DEQ about the possibility of having
the State join them in a suite against the EPA action. Ultimately, the
community did meet with EPA in Denver and EPA settled the case for
$24,000. (After telling the State, that they would accept nothing less
than $100,000 in a State-negotiated settlement). Subsequent to this
action, the State legislature passed, and the Governor signed, a joint
resolution stating the State position on enforcement, identifying what
they believe is the appropriate EPA role in environmental enforcement
and requesting action on the part of EPA. EPA has never acknowledged or
responded to the resolution This case is typical of the heavy-handed
EPA approach to enforcement and an example of second guessing the
State. The EPA action cost the State, the town, the elected officials
and the public time and funding, accomplished no further progress in
environmental protection and may have permanently damaged relationships
between the State, town and Federal Government. The DEQ has seriously
questioned whether this was what Congress intended when they empowered
EPA to enforce environmental statutes. If, in good faith, an entity is
attempting to understand and comply with environmental requirements
should they be treated as a criminal? This is the question that the
elected officials of this State continue to ask as a result of this and
other cases brought by EPA in our State.
EPA's goal in this case was not compliance. That had been achieved.
EPA was intent on flexing its Federal muscle and establishing a
presence in enforcement in Utah. In doing so, EPA only delayed work on
the problem, alienated all associated with it and undercut the ability
of the State to take effective enforcement actions. When EPA takes this
kind of approach, it significantly undermines the ability of the State
to enforce, because facilities are reluctant to negotiate with the
State for fear that EPA will not accept the settlement. The result is
delay in achieving compliance, continued threat to the environment
because of legal positioning of the regulated facility, a lesser
commitment on the part of the facility to cooperatively correct the
problem and finally, damage to relationships between the State agency,
elected officials, the public and the regulated community.
Another example that may be of interest is that of the State action
regarding excess emissions at the company's Salt Lake Refinery. The
State initiated an enforcement action for excessive emissions at the
refinery. After reviewing the Federal and State rules and evaluating
the information received during inspections and from the company in
response to the enforcement action it was determined that the emissions
were a result of unavoidable breakdown as defined in Federal and State
rule and therefore, penalties were not appropriate as actions had been
taken to correct the problem. EPA determined that the State action was
inappropriate and that the rules had been interpreted incorrectly. EPA
sought a $1 million penalty from the company. The action has been in
the legal process for 2 years. The State has recently been informed
that EPA now believes that the State interpretation was, in fact,
correct and that violations did not occur.
In the meantime, both the company and the State have incurred
substantial legal costs. The EPA action did nothing to achieve
compliance, but did create a costly and contentious process for a
period of 2 years.
Question 6. Are the States able and willing to exercise reasonable,
and vigorous enforcement and permitting discretion if the States are no
longer subject to second-guessing in every case?
If so, please explain why that is true today, even if it was not
true in past years.
Response. In Utah, we have always taken our responsibility to
enforce environmental requirements seriously and have aggressively
pursued compliance with environmental requirements of both State and
Federal laws. It is important to recognize that the majority of
compliance actions taken are State, not EPA actions. In Utah, we have
the capability to take such actions and we take our stewardship to
protect the environment seriously. It is our belief that much of the
current problem, at least between our State and the EPA, is a result of
two things: 1) a difference in the philosophy of enforcement and 21
differences between the State and EPA in what constitutes a measure ot
success In enforcement and compliance issues. The position of the State
has been that the goal is compliance with environmental requirements.
There are many tools to help us gain that compliance and the
enforcement tools represent an important part of the toolbox but not
the only tool in the box. However, if compliance is the goal, then it
may not be necessary to always utilize extensive penalties, orders, and
court actions if the facility is cooperative and compliance can be
achieved with lesser actions.
EPA has placed emphasis in three areas: 1) deterrent value of
penalties, 2) national consistency and 3) the importance of a Federal
presence in each State. All three of these areas have been troublesome
to Utah. While we don't disagree that there is value in penalties, when
the penalty becomes the major objective in settling a case at the
expense of compliance, this is problematic. This has been our
experience with EPA in Utah. National consistency may be important for
EPA, however, it has not allowed for consideration of local
circumstances and conditions that may be important in assuring an
adequate solution to the problem. Federal presence has generally not
been to the benefit of the State, because of the credibility issues
that have resulted from the unwillingness of EPA to work with the State
and local government in solving compliance and enforcement issues.
Federal presence only tends to entrench the parties further and
undermine the ability of the State to expeditiously resolve compliance
issues. If measures of success are shifted to problem resolution and
compliance rates as opposed to actions taken and penalties collected,
the effectiveness of State actions becomes readily apparent. In Utah,
we are achieving compliance. For example, recently, we shared with EPA
the compliance rates that had been achieved in the Underground Storage
Tank program as a result of implementing a compliance assistance
program to help tank owners understand and comply with tank
requirements. Current compliance rates are substantially higher as a
result of such assistance than they were when an aggressive enforcement
program was underway. In this example, enforcement and penalties were
not achieving the compliance goal. Assistance was the key and
compliance was the result. This is an example of using the right tool
for the right job. EPA had refused to use this tool. While we have used
enforcement vigorously where it is needed, other approaches have also
been effective in achieving compliance if it becomes the goal.
Question 6a. If so, please support your explanation why that is
true with examples showing that the States have reasonably, responsibly
and vigorously enforced the following: A. Federal environmental laws,
and
B. State and local environmental laws, over which the EPA exercises
no supervisory responsibility.
Response. The following are some typical examples of State actions
to enforce Federal environmental laws:
The State filed a natural resources damage claim against Kennecott
Copper Corporation for contamination of soils and ground water
throughout the western portion of the Salt Lake Valley. The State
negotiated a settlement which has resulted in a program for cleanup of
contaminated sites and ground water. That cleanup program is ongoing.
The State has taken action against other major industry violations in
the mining, oil and power industries. In addition, we have focused
efforts on minor sources which contribute significantly to the
nonattainment status along Utah's Wasatch Front. We have aggressively
administered the provisions of the Clean Air Act relating to prevention
of significant deterioration to protect the unique canyon country of
southern and southeastern Utah.
The following are examples of actions taken regarding State
environmental laws over which EPA has no responsibility:
The State has developed an underground storage tank program that
includes certification programs for tank installers and inspectors. The
State vigorously enforces this certification program. There is also a
State underground storage tank financial trust fund established for
meeting the financial assurance requirements of the State and Federal
law. The compliance requirements for a tank owner to get onto the fund
and utilize it are much more stringent than the Federal requirements
and are vigorously enforced by the State. The State has established a
ground water protection program and groundwater permitting requirements
that do not exist at the Federal level and these are vigorously
enforced. Individual waste water disposal system rules are a joint
responsibility of the State and local governments. These are critical
given the growth being experienced in rural Utah. Such rules do not
exist at the Federal level. These rules are aggressively enforced by
the State and local government. Utah has designated nerve agents as
hazardous waste and has enforced hazardous waste requirements against
the U.S. Army at the Tooele Army Depot chemical agent destruction
facility. Federal rules do not treat nerve agents as hazardous waste.
Utah has established requirements for Air Quality permits for minor
sources of air pollution. This is above and beyond the requirements for
permits under the Federal clean air act. These are just a few examples
of where the State has established and enforced requirements above and
beyond those established under Federal law. Each of these requirements
is designed to assure appropriate environmental protection in the State
and address concerns that are either unique to Utah or are of higher
priority to the State than to the Federal Government.
Question 7. Are there alternative approaches to the current
``second-guessing approach'' that could still provide assurance to EPA
that the State programs are protective of public health and the
environment? For example, an approach that would allow EPA to review,
on a 5-year, 7-year, or 10-year basis, the overall performance of the
State, and renegotiate the State's delegate authority based on the
level of progress that the State had made toward a better environment
during that period.
Response. EPA could have a number of significant and helpful roles
in enforcement. First, EPA could continue to provide resources to the
State in the form of funding, training and technical assistance.
Second, they do have an oversight responsibility under the Federal
environmental statutes and it is appropriate that such a role exist.
However, the problem is the ``philosophy'' enforcement. If EPA
continues to take an ``enforcement for enforcement sake'' position when
the State takes ``compliance is the goal'' approach, it doesn't matter
whether EPA reviews State actions once a month, once a year, or once
every 10 years, the conflict will continue to exist. Until EPA and
States can agree to a common goal tor enforcement and agree to measures
that appropriately reflect that goal, it will be difficult, at best, to
find a productive resolution to this problem. Third, EPA can assist the
State enforcement and compliance issues where the State has a
jurisdictional issue or a resource problem that precludes the State
from appropriately addressing the issue. When programs are delegated to
a State, Federal law requires EPA to make a determination that the
State has adequate resources, expertise and authority to conduct the
delegated program. When such a determination has been made, EPA should
shift its emphasis from over sight to collaboration.
By partnering with the State, EPA can bring its expertise,
resources and authorities to the table to work with the State in a
State driven process for addressing compliance and enforcement issues.
This kind of partnership would allow focus of limited State and Federal
resources on problem solving instead of continuing an unproductive
dispute over who controls enforcement.
Question 8. Please indicate whether you agree or disagree with the
following statement: ``reasonable people, acting in good faith, can
disagree over the best method for protecting the environment''. For
example, reasonable people can differ over the proper mix of
enforcement and compliance assistance as generic tools, and the proper
use of a particular choice of methods in a specific case. Accordingly,
the best approach for gaging a State's environmental protection program
is to evaluate the entirety of the State's efforts, both enforcement
and compliance assistance, over a long period of time, and to determine
whether the State has improved the condition of the environment, rather
than focusing on a particular case or series of cases, the number of
enforcement actions brought in a particular State (or any other similar
so-called ``bean counting'' system) and the preference (if any) between
enforcement and compliance assistance.
Response. This statement is basically true. If the goal is
environmental protection, then measuring progress toward that
protection is important and may be the best measure of effectiveness of
any environmental program. However, there may be value in measuring
compliance to be able to ascertain the effectiveness of programs. There
is a significant difference between measuring compliance rates and
measuring enforcement activities. In certain cases, compliance may be
achieved effectively with methods other than enforcement. There is too
much emphasis placed by EPA on the negative incentives of enforcement
and not enough emphasis on positive incentives that can be used in
achieving compliance. The net result is that many compliance approaches
other than traditional enforcement are not being utilized effectively.
Measures of success which evaluate all aspects of the compliance
process along with trends in environmental protection would be much
more appropriate.
______
Responses of Brent C. Bradford to Additional Questions from Senator
Lautenberg
Question 1. How long have EPA and State agencies been working to
integrate environmental information management and to streamline
environmental reporting?
Response. The State/EPA Data Management Workgroup was formed in the
fall of 1997 and held its first meeting in January, 1998. The first
effort of the workgroup was to establish a shared Vision and a set of
Operating Principles. These have become the foundation upon which
States and EPA have built their work around environmental data issues
(copy attached). After the establishment of the joint vision and
operating principles, the three initial priorities of the work group
were to look at the issues of what information is being collected for
what purpose, how is it being housed and shared and how is it being
used. The workgroup formed a series of action teams to address issues
around technology transfer, facility identification, appropriate use of
data, etc. As the work of these teams went forward it became evident
that several issues were important to address. Standards became a
central theme around which all data discussions had to revolve and a
data standards council has now been formed. Data quality and data gaps
have become significant issues for both industry and environmental
groups and a forum for discussion of these issues has been formed as a
part of the respectful use discussions. In 1999, EPA realized the
importance of this effort and created their Of flee of Environmental
Information to establish a structure within the agency to better handle
data issues within the EPA and to focus work with States in this
important area. There has been a recognition on the part of EPA and
States that 94 percent of the environmental program data are collected
and managed by States; but, that both States and EPA rely on those data
for program management. This makes it critical that a way be found to
share information, make it easily available to those who have a need
for or interest in it and assure that the information is accurate and
used appropriately. The most recent work effort of the workgroup is the
development of a vision for a national environmental data exchange
network in which the stewardship of information resides at the point it
is collected, primarily within the States, while providing the ability
for EPA and other interested parties to gain direct access to that
information. This would eliminate the need for program legacy data
bases and would eliminate the need for reporting on the part of
regulated entities and States. This has been an evolutionary process
which has developed as States and EPA have come to better understand
needs, relationships, technology, interests and importance of data
issues. It continues to evolve.
Question 2. Which of the following attributes will the integrated
reporting system envisioned by the EPA-State partnership be expected to
have:
Will a facility be able to identify, through one point of contact,
all the EPA reporting requirements that apply to it? Will a facility be
able to identify as well, through the same point of contact, all the
State, Tribal, and local environmental reporting requirements that
apply to it?
Response. The environmental information exchange network envisioned
by the States and EPA is not about creating a single point of contact
to determine applicable reporting requirements. It is about sharing
information through direct access to it. It would be virtually
impossible to have a single point of contact that could keep track of
all Federal, State and local reporting requirements or needs. However,
realizing that States collect a majority of information and are the
stewards of that information, a system can be created that will allow
sharing of that information between States and EPA and thereby reduce
reporting burdens on industry and States and allow EPA access to
necessary information.
Question 3. Will a facility be able to submit, through the same
point of contact, all information that is normally submitted directly
to EPA programs? Will a facility be able to submit as well, through the
same point of contact, all information required under applicable State,
Tribal and local environmental reporting requirements?
Response. The data exchange network would recognize the importance
of the State role as collector and steward of information and would
provide for EPA to be able to access information directly within a
State data base. EPA would then create the capability to share that
information within the agency with those programs that need the
information. This would eliminate duplicate reporting on the part of
the regulated entity, eliminate a significant reporting burden on
States and ensure better quality of information by eliminating multiple
inputting of data into various systems. While the discussions have
focused on the relationships between State and EPA, local and tribal
needs could be addressed through this same mechanism.
Question 4. Will the reporting system direct the facility to
information on applicable OSHA reporting requirements and environmental
reporting requirements administered by Federal agencies besides EPA?
Response. The data exchange network currently being discussed would
not address reporting requirements from OSHA and other Federal agencies
as the basis for the current vision is access to and sharing of
information, not the reporting requirements themselves. The reporting
requirements have been addressed in two other forums: the work of ECOS
and EPA around Core Performance Measures and the burden reduction
efforts of the State EPA Burden Reduction Action team. The data system
discussion is not the place that discussions about appropriate
reporting requirements have been held.
Question 5. Will the reporting system use data standards for units
of measure, terms for chemicals, pollutants, waste, and biological
material, and methods of identifying reporting facilities, developed in
consultation with industry, environmental groups and other
stakeholders?
Response. Data standards are a fundamental component of the
information exchange network. States and EPA have created a Data
Standards Council to discuss these and other standards issues. Tribal
interests are also included on the Council. A standards development
process is envisioned which would allow participation of interested
stakeholders.
Question 6. Will the reporting system use an ``open data format''
that allows facilities to download information from their own internal
data management systems directly to the integrated reporting system?
Response. Again, it is important to note that we are not discussing
a single national reporting system; but, rather an information exchange
network which allows sharing of information once it is reported and
which recognizes most environmental information as collected.
Electronic reporting is currently the subject of discussion in many
States. In Utah, for example, we have developed electronic reporting
capability that allows regulated entities to report air emissions
inventory and water quality monitoring data electronically. The
information can then be accessed and shared by various programs within
the Department of Environmental Quality. In the data exchange network
envisioned, these data would be accessible to EPA but would continue to
reside in our State data warehouse. The State/EPA data management
workgroup is working with the National Governor's Association and the
EPA One-Stop program to evaluate and encourage electronic reporting,
but; given the nature of environmental data collection today, such
capability will have to be developed at the individual State level in
order for electronic reporting to be effective.
Question 7. To ease reporting by businesses with facilities in more
than one jurisdiction, will EPA and State, tribal and local agencies
all use he same data format and standards?
Response. The previously mentioned Data Standards Council will
address the issue of standards. The question of format becomes
important at the point of collection, but given that once the
information is collected, it will be shared by direct access to it, it
would relieve the reporter of the burden of having to concern
themselves further with data format.
Question 8. Will a facility be able to receive information on
pollution prevention technologies and practices through the reporting
system.
Response. This issue has not been specifically discussed to date.
The focus of the data exchange network discussions have been data flows
and information itself. Pollution prevention information could be made
accessible through such an exchange network to the extent that such
information is being collected.
Question 9. By what date may we expect the envisioned integrated
reporting system, or aspects of the system, to be in place?
Response. Significant progress has been made, a facility
identification standard has been developed and other standards are
under discussion, the vision for the national environmental data
exchange network has been developed and discussions between States and
EPA are on-going. One key factor to the success of this effort is the
continuation of Federal funding. In the President's budget there are
$30 million identified for environmental information management ($16
million for State and $14 million for EPA). This funding is critical if
this effort is to go forward. States have committed significant
resources of their own to develop the capability to manage
environmental information, the EPA one-stop program has been key for
many smaller States to enhance their capabilities. The realization of
this national data exchange vision can only happen if the resources
necessary to create the structure are available. Without such funding,
the States and EPA would have to divert existing resources to this
effort. For many States, this may be impossible.
Question 10. Are the air, water and waste programs of EPA and the
State agencies fully participating in the development of the integrated
reporting system?
Response. EPA has created the Of flee of Environmental Information
and charged it with the responsibility of overseeing and coordinating
this effort within EPA. OEI is having discussions with EPA's Quality
Information Council regarding this issue. The QIC in an internal EPA
group made up of executive representation from the various programs
which is advisory to the Office of Environmental Information. ECOS is
coordinating this effort through the Information Management Workgroup,
a part of the ECOS Strategic Planning committee and through the
committee structure established within ECOS. In addition to these
efforts, the joint State/EPA Data Management Workgroup has
representatives from EPA programs who are actively participating in
these discussions.
______
Response of Brent C. Bradford to Additional Questions from Senator
Chafee
Question 1. You note in your testimony that the States are making
significant accomplishments in environmental data management, but the
cost is high and continued Federal investment is essential. On average,
how much of their own resources do the States spend on environmental
information management?
Response. States spend, on average, about 1.67 percent (as of
Fiscal Year 1996) of the total State budget on environment and natural
resources. This has increased steadily since 1986. Unfortunately, we do
not yet have any estimates on average State spending on environmental
information management.
In Utah, in the past 3 years, we have expended approximately $3.5
million of State Funds to enhance our data management capabilities and
make information accessible to EPA and the public. In addition, we have
utilized a $500,000 EPA one-stop grant to develop a specific project
related to public accessibility to permitting and compliance
information, electronic reporting or inventory and water quality
monitoring data. States such as ours rely heavily on Federal funding to
accomplish our data management goals.
Some States have spent significant State funds on information
management. For example, the Commonwealth of Virginia has spent about
$12 million over a 2-year period for its Comprehensive Environmental
Data Systems (CEDS). Other States are making considerable investments,
as well. On the other hand, many States have not yet made or had the
capability to make substantial investments. One thing seems certain,
however. In order to manage better the data that already exists, and to
be able to maximize its utility to managers, government partners,
industry and the public, substantial investments will be required
across the board. While States are stepping up to that need, Federal
assistance would be valuable considering States generate well over 90
percent of the data that EPA relies on to tell the nation's
environmental story.
Question 2. The lack of adequate data has been cited as an obstacle
to current environmental efforts. Do you feel that we as a nation are
investing sufficient resources in data collection? How much do the
States spend on monitoring programs?
Response. In many respects, we are data rich but information poor.
We collect lots of data, but we cannot always make sense of it without
additional resources for analysis.
Much of the question related to adequate data must be looked at in
terms of what information may be needed to determine progress in
environmental protection. This then relates to goals established for
that protection and the measures of success associated with those
goals. In some cases additional information may be necessary, in
others, it may be more a case of how to appropriately use the
information we have.
As we focus environmental management more on environmental results,
we will have to begin to measure environmental conditions in a way and
to an extent that is unprecedented. This may require additional or
different information to be gathered. It certainly will require
substantial work on the part of both EPA and the States to understand
and properly utilize the information we collect. An investment in
development of proper measures and the gathering and interpretation of
data needed for those measures will be essential if the environment is
to be protected.
I do not have figures on State spending on monitoring.
______
______
ENROLLED COPY H.C.R. 3
RESOLUTION ON THE ADMINISTRATION OF ENVIRONMENTAL LAWS
1999 GENERAL SESSION
STATE OF UTAH
A CONCURRENT RESOLUTION OF THE LEGISLATURE AND THE GOVERNOR REQUESTING
THE ENVIRONMENTAL PROTECTION AGENCY TO REFRAIN FROM OVERFILING
ON STATE-NEGOTIATED COMPLIANCE ACTIONS AND TO DEFER TO STATE
AND LOCAL PRIORITIES IN TAKING COMPLIANCE ACTION; AND
REQUESTING CONGRESS TO INVESTIGATE ENFORCEMENT ACTIVITIES OF
THE ENVIRONMENTAL PROTECTION AGENCY AND REQUIRE THE AGENCY TO
DEFER TO STATE ENFORCEMENT AND COMPLIANCE ACTIONS WHERE ACTIONS
ACHIEVE COMPLIANCE AND ARE PROTECTIVE OF HEALTH AND THE
ENVIRONMENT
Be it resolved by the Legislature of the State of Utah, the
Governor concurring therein:
WHEREAS, protection of public health and the environment are among
the highest priorities of State governments;
WHEREAS, Congress has provided by statute for the delegation of
certain Federal program responsibilities to the States;
WHEREAS, to obtain delegation of Federal environmental programs, a
State must demonstrate that it has adopted laws, regulations, and
policies as stringent as Federal laws, regulations, and policies;
WHEREAS, over the past 25 years, the States have developed and
demonstrated expertise in operation of Federal environmental programs
enabling States to obtain and maintain the delegations;
WHEREAS, the States of Utah, Colorado, Montana, Wyoming, North
Dakota, and South Dakota constitute an area designated by the
Environmental Protection Agency (EPA) as Region VIII;
WHEREAS, the States in Region VIII make compliance with
environmental laws, rules, and permits the highest priority;
WHEREAS, the State of Utah has full delegation in all Federal
environmental programs;
WHEREAS, the EPA and the States have bilaterally developed over the
past 25 years policy agreements which reflect roles and which recognize
that the primary responsibility for enforcement and compliance resides
with the States, with the EPA taking enforcement action principally
when the State requests assistance or is unwilling or unable to take
timely and appropriate enforcement action;
WHEREAS, inconsistent with these policy agreements, the EPA has
conducted direct Federal inspections within programs delegated to
States, has taken direct enforcement actions, has levied fines and
penalties against regulated entities in cases where the State
previously took appropriate action consistent with the agreements to
bring the entities into compliance, and has failed to notify the States
in advance of their action;
WHEREAS, the EPA has begun to use its enforcement authority in
cases where the State had worked with the regulated entity to achieve
compliance, and the overfiling by the EPA accomplished no further
protection of the public health or environment but only imposed an
additional penalty on the regulated entity;
WHEREAS, the EPA's current enforcement practices and policies and
the resultant detailed oversight and overfilling of State actions
substantially weaken the State's ability to take compliance actions and
resolve environmental issues;
WHEREAS, the EPA's enforcement practices and policies have had an
adverse impact on working relationships between the EPA and States;
WHEREAS, the EPA's reliance on the threat of enforcement action to
force compliance may not result in environmental protection, but rather
may result in delay and litigation, cripple incentives for
technological innovation, and provoke animosity between government,
industry, and the public; and
WHEREAS, the Western Governor's Association has adopted
``Principles for Environmental Protection in the West,'' which
encourages collaboration not polarization, advocates the replacement of
command and control with economic incentives and rewarding results, and
encourages the weighing of costs against benefits in environmental
decisions:
NOW, THEREFORE, BE IT RESOLVED that the Legislature of the State of
Utah, the Governor concurring therein, requests the EPA to refrain from
overfiling or threatening to overfile on State-negotiated compliance
actions if the actions achieve compliance with applicable State and
Federal law and are protective of health and the environment.
BE IT FURTHER RESOLVED that the Legislature and the Governor
request that the EPA, in taking enforcement and compliance actions,
recognize and defer to individual State and local priorities that are
important for the protection of the environment.
BE IT FURTHER RESOLVED that the EPA should work with and assist
States in evaluating the overall effectiveness of State compliance
programs and not focus on the detail of individual actions.
BE IT FURTHER RESOLVED that the Legislature and the Governor
request the Congress of the United States to investigate EPA
enforcement activities and require the EPA to defer to State
enforcement and compliance actions in delegated States where the
actions achieve compliance and are protective of health and the
environment.
BE IT FURTHER RESOLVED that copies of this resolution be sent to
the President of the United States, the President of the U.S. Senate,
the Speaker of the U.S. House of Representatives, each member of the
Utah congressional delegation, the Administrator of the U.S.
Environmental Protection Agency, the Assistant Administrator of the
U.S. EPA Office of Enforcement and Compliance, the Regional
Administrator of the U.S. EPA Region VIII, the National Governor's
Association, the National Council of State Legislators, the Council of
State Governments, the Western Governor's Association, and the
Environmental Council of the States.
__________
Statement of Lynn Scarlett, Executive Director, Reason Public Policy
Institute
Senator Smith and members of the committee, thank you for inviting
me here today. My name is Lynn Scarlett. I am Executive Director of
Reason Public Policy Institute, a nonprofit, nonpartisan policy
research organization located in Los Angeles, California.
Earth Day Legacy
April 2000 marked the 30th anniversary of Earth Day. After three
decades of environmental policy initiated since that first Earth Day,
environmental policy is in a state of transition. The environmental
model that emerged after the first Earth Day had four characteristics.
First, the model engendered relatively prescriptive regulations that
both set goals and required particular technologies and methods to meet
those goals. Second, the model emphasized process over performance,
with permits often serving as a proxy measure of performance. Third,
the old model segregated environmental problems into discrete
categories air, water, and waste, for example and addressed each
separately. Finally, the model tended to focus on punishment
enforcement actions as the central strategy for achieving environmental
progress. ``Sticks'' rather than ``carrots'' predominated.
This regulatory strategy produced some successes. Open dumps were
virtually eliminated. Phosphorous levels, a major indicator of water
pollution, had fallen 40 percent or more in the Great Lakes by the
1990's contrasted with pollution levels in the 1970's. In Los Angeles,
stage one smog alerts declined from more than 120 in 1977 to 13 in
1995.
But all is not well. The punitive model often engendered high
conflict and litigation. The prescriptive emphasis tended to stifle
innovations in pollution prevention and environmental restoration.
Segregating problems into distinct categories sometimes resulted in
unintended consequences shifting of pollutants from one medium to
another. And, finally, costs to achieve results were higher than might
have been possible in a context that inspired innovation and wider
implementation options.
Moreover, circumstances are changing, giving rise to increasing
tensions between the regulatory model of the 20th century and the
complex and dynamic 21st century context.
First, new kinds of problems are moving center stage. The old model
focused primarily on ``point'' sources of pollution. By 2000, many
remaining challenges took the form of ``nonpoint'' pollution from
agricultural waste, stormwater runoff, and so on.
Second, a new breed of industry had emerged that reflected the
environmental values of the broader American culture. By the 1990's,
industries had begun to move toward ``knowledge-based'' production and
products and ``closed loop'' production, accelerating the process of
dematerialization using fewer resources for each good or service
produced. ``Industrial ecology'' the deliberate incorporation of
environmental values into product-design and process decisions began to
flourish. In this context, a survey of large American corporations
showed that 77 percent cited pollution prevention as an important
business strategy.
Architects of environmental policy thus face a new ``problem set.''
There is a growing mismatch between permit-focused compliance and the
reality of complex, often dispersed problems. There are growing
tensions between prescriptive regulations and the broadening press for
fast-paced innovation within firms and on farms and ranches. Finally,
the punitive model has limited scope for inspiring environmental
excellence a nation of self-motivated environmental stewards.
Put another way, four recurring challenges confront environmental
stewards in both the public and private sectors:
How can policies better ensure environmental innovations?
How can policies better focus on results and take into
account simultaneously many interrelated goals and complexity of the
physical world?
How can policies better foster private incentives for
stewardship?
How might policies better take into account specific, or
local, knowledge the knowledge of time, place, and circumstance?
New Environmentalism
In this changing context with its combination of new and old
challenges, a new environmentalism is emerging. The States and their
environmental protection agencies, working with the private sector, are
at the forefront of this ``discovery process.'' Programs and policies
emerging as part of this new environmentalism have four features. These
features include: (1) greater flexibility in how firms, farmers, and
local communities might achieve environmental goals; (2) a focus on
performance rather than on process; (3) a move toward incentives rather
than punishment as the strategy of choice; and, (4) a move toward
place-based decisions where the ``devilish details'' of local
circumstance become part of the decision process.
Flexibility. By the 1990's, States were overseeing, implementing,
and enforcing the majority of all environmental programs. That day-to-
day, hands-on experience made State regulators acutely aware of some of
the challenges, missed opportunities, and unintended consequences of
prescriptive and process-focused environmental regulations. Acting upon
this recognition, State regulators have launched an array of programs
intended to inject greater flexibility into the way the regulated
community may achieve desired environmental goals.
These experiments in flexibility do not imply ``roll back'' quite
the opposite. Most of these endeavors involve extending the performance
envelope upward and outward to cover more environmental problems and
with higher ultimate goals. Some of these endeavors have been initiated
independently by the States. Others have advanced in tandem with
Federal programs such as Project XL and the National Environmental
Performance Partnership system.
These programs include the development of ``environmental
performance compacts'' with firms and farmers; facility-wide permitting
programs that move away from source-by-source permit requirements; and
industry-wide permits. Some are pilot programs; some have become more
broad-based initiatives. States with both Democratic and Republican
legislatures and Governors are moving in this direction.
Among the trend setters in developing these programs are Wisconsin,
Oregon, Illinois, Minnesota, Massachusetts, New Jersey, and Florida.
Wisconsin's Green Tier program establishes a two-tier permit
option. The first, the Control Tier, applies traditional source-by-
source permits. The second, the Green Tier, allows firms that
demonstrate high levels of compliance an opportunity to develop a
``performance compact'' in effect, a single, facility-wide permit. This
permit establishes a set of performance criteria, potentially on a
multi-media basis, spelled out in a ``contract'' or ``compact'' between
the firm and the public. The compact is enforceable in the courts.
Under its Green Permits program, Oregon's Department of
Environmental Quality (DEQ) offers two types of permits available to
facilities that have achieved superior environmental performance a
Green Environmental Management System (GEMS) Permit and a ``Custom
Waiver Permit.'' The GEMS permit requires that firms use a formal
environmental management system through which firms establish and
maintain environmental goals. The custom waiver allows limited waivers
of normal permit requirements if a waiver is needed for the facility to
achieve superior environmental results (for example, through pollution
prevention).
Florida is developing a Phosphate Industry permit that establishes
a single permit for an entire mining operation over its life. The
permit agreement sets performance standards and identifies
environmental data the industry must report and make available to the
public. It will allow reductions in paperwork and process burdens,
results-based performance, and increased public accountability.
Massachusetts introduced an Environmental Results Program, which
establishes performance goals and compliance assistance for selected
industries on an industry-wide basis. Under the traditional permitting
program, some 10,000 facilities in the target industries were regulated
using over 16,000 permits. The Department of Environmental Protection
spent significant resources issuing permits rather than focusing on
achievement of environmental results. For example, the department was
issuing air permits to some 4,400 facilities, of which two-thirds were
small- and medium-sized companies that accounted for just 5 percent of
the State's total air emissions. Under the new program, the State
created industry-wide standards. Participating firms agreed to comply
with the standards; the State focused on auditing and enforcement. The
program resulted in a 43 percent reduction in fugitive emissions from
participating dry cleaners and a 99 percent reduction in silver
discharges by photoprocessors.
In the mid-1990's, New Jersey experimented with a facility-wide
permitting program. Through the program, participating facilities must
keep emissions below specified performance caps but may achieve those
goals in whatever ways they deem most effective and efficient. For one
firm, the old, source-by-source permitting process had generated ten
binders of paperwork. The new system reduced paperwork to a 1.5-inch
thick packet. A single permit replaced 80 separate permits and could be
processed in 90 days rather than 18 months. One firm estimated that it
reduced 8.5 million pounds of emissions per year because the permit
allowed them to modernize their facility (without getting new permits
for each individual process change). Through the modernization, the
firm eliminated 107 of 350 pieces of equipment.
Performance. While most State-initiated new environmental programs
emphasize results (rather than process), several programs have
particularly focused on developing performance indicators. Among these
efforts are programs in both Florida and Oregon.
Florida, for example, has developed a three-pronged set of
performance measures that move away from simple ``bean-counting'' of
enforcement actions as the proxy for performance. The first tier of
measures sets forth direct indicators for environmental and public-
health outcomes. These include indicators of air quality, surface and
groundwater quality, aquatic and marine-resource protection, public
health and safety, and public recreational opportunities. The second
tier evaluates behavioral and cultural measures that go beyond mere
compliance statistics. While the State measures regulatory compliance,
it also looks at voluntary adoption of environmental technologies,
pollution prevention achievements, energy consumption, per capita
freshwater consumption, and so on. Tier three includes traditional
enforcement statistics, but they attempt to measure internal agency
efficiency and effectiveness as well time taken to issue permits,
resources spent on compliance assistance, research, and monitoring,
resource management, and land acquisition. Indicators are ranked as
``good,'' ``watch,'' or ``focus'' areas, allowing State regulators to
set priorities by focusing on those areas in which resources are most
needed to solve problems.
Incentives. The ultimate goal of environmental policy is to foster
a nation of self-motivated environmental stewards. As States grapple
with how to inspire firms and farmers to move ``beyond compliance'',
many have introduced environmental-incentive and compliance-assistance
programs. Through its Texas Clean Industries 2000 program, for example,
Texas has attracted over 140 participating firms into pollution-
prevention activities. The firms commit to achieving a 50 percent
reduction in toxic chemicals over a 2-year period. After one year, the
program was credited with fostering reductions in hazardous waste by
43,000 tons; reductions in energy consumption by 11.3 million kilowatt
hours; and reductions in 317 million gallons of water consumption. Also
in Texas, the State established a landowner incentive program to
encourage farmers and ranchers to restore and maintain habitats to
attract threatened species such as the lesser prairie chicken.
Mississippi launched a voluntary stream protection program in which
the Department of Wildlife, Fisheries, and Parks worked jointly with
farmers, riparian landowners, and individual citizens to reduce water
pollution, primarily through pollution-prevention efforts.
Pennsylvania, through its Pollution Prevention Site Assessment grants,
helps small-business owners identify pollution-prevention and energy-
conservation strategies. Wyoming has an Outreach and Environmental
Assistance program also designed to help participants meet
environmental goals. Illinois, through its Clean Break Amnesty program,
offers compliance assistance to small businesses. In exchange for their
participation and completion of pollution-reduction efforts, the small
businesses are exempted from various fees and fines.
Among the more notable incentive programs are those designed to
clean up ``brownfield'' (abandoned hazardous waste) sites. A number of
States, including Michigan, Pennsylvania, Illinois, New York, and many
others now have voluntary remediation programs. The programs typically
have several central features. First, they often tailor clean-up
standards to the proposed use of the property, so standards are based
on expected exposures to hazards rather than on a single, bright-line
clean up standard. Second, they often provide some liability protection
to developers that invest in site clean up to the prescribed levels.
Liability protection does not extend to future pollution but applies to
pre-existing conditions only.
Place-based Decision-making. As experience with environmental
problems builds, one observation recurs many environmental challenges
involve location-specific details. A landfill in Florida, with high
water tables, faces different challenges compared to a landfill in a
desert. Fast-moving streams involve problems that differ from slow-
moving delta streams. Forests in low, wet latitudes require different
management practices than forests in high, dry mountains. The
recognition of location-specific challenges of many environmental
problems has led many States to experiment with place-based
decisionmaking. Local settings also have the potential to bring
together diverse people with varying interests and needs in
relationship to local resources.
To some extent, voluntary remediation programs represent a move to
place-based decisionmaking, because local economic, environmental, and
social interests are woven together in final clean up decisions. But
one of the most fertile arenas for place-based decisions has centered
on watershed management challenges. Numerous States and localities have
attempted to tailor decisions about watershed management to local
circumstances and priorities by devolving decisions to those most
affected by such decisions.
In Minnesota, for example, the Department of Natural Resources,
City of St. Paul, University of Minnesota, and the Ramsey-Washington
Metro Watershed District joined forces to develop a watershed
management program for the Phalen Chain of Lakes in the Mississippi
River basin. Since the project's inception, another seven city
governments and two counties have joined the effort. The project moves
away from the single-problem focus of the more traditional regulatory
process, addressing simultaneously water quality, fisheries, wetland
protection, vegetation and wildlife management, and river corridor
protection and restoration.
Minnesota and Idaho have both pioneered effluent-trading schemes
that improve water quality by involving ``point-source'' and
``nonpoint'' (for example, chemical runoff from farming practices)
sources. The Minnesota Pollution Control Agency (MPCA) has capped new
and existing discharges into the Minnesota River. Because the cap made
it difficult for firms to modernize or upgrade, the MPCA agreed to work
with the Coalition for a Clean Minnesota River and one brewing company
to institute an effluent-trading program. Under the program, the
brewing company was permitted to discharge effluent from its new
wastewater treatment plant if it helped reduce other discharge sources
along the river. The company agreed to offset its emissions by
investing in programs that helped farmers reduce their chemical runoff
and other pollution sources.
On the Upper Clark Fork River basin in Montana, initial disputes
between environmental activists and farmers over instream flows yielded
to consensus for a leasing arrangement after a local, collaborative
decision process was initiated. The lease agreement allowed for
temporary transfer of pre-1973 water rights rather than the outright
sale or relinquishment of those rights. The lease allayed fears of
ranchers that they would lose prior claims to those water rights, while
still allowing them to be remunerated for conserving water and leasing
the ``saved'' water for instream flow maintenance. Increased instream
flows, in turn, helped to maintain wildlife habitats.
Challenges and Opportunities
State environmental innovations toward flexibility, performance
focus, incentives, and place-based decisionmaking invite substantial
new opportunities to improve environmental performance. In general,
these programs allow for a more holistic approach to environmental
problem-solving that recognizes the interconnectedness of many of these
problems. They also nurture private-sector innovation and private
stewardship, creating a context in which firms and communities are
better able to set priorities, target resources to critical problems,
and craft more cost-effective approaches to reducing these problems.
But these efforts face both political and implementation
challenges, including constraints imposed by the existing Federal
regulatory context. For example, an April 2000 survey by the
Environmental Council of the States, an association of State
environmental regulators, ranked problems with EPA's existing policies,
procedures, and rules as the most significant barrier to their efforts
at innovation.
In general, challenges cluster into three categories. First are
challenges posed by fitting new regulatory structures within the old
regulatory context. These include uncertainties about allocation of
enforcement responsibilities between Federal and State agencies. Lack
of clarity in this regard has given rise to concerns about potential
overfiling in enforcement cases by Federal regulators.
Another central challenge tied to regulatory structures is how to
ensure that permits or agreements initiated under the new programs,
which often deliberately avoid issuance of traditional source-by-source
permits, will supplant the source-by-source permits without: (a)
triggering an enforcement action, or (b) requiring a negotiation
process with Federal regulators on each and every source-by-source
permit that is intended to be avoided through the flexible-permitting,
or multi-media permitting process. Some streamlined Federal mechanism
to allow the new permits to supersede the old may be warranted.
Currently, through its Project XL and other programs, U.S. EPA has
attempted to create conditions for this blending of the old and the new
to occur. However, these processes remain unevenly implemented;
procedures and qualifying conditions remain unpredictable.
States also face difficulties in meshing new data-reporting
mechanisms that emerge from more holistic and performance-focused
programs with the data-reporting requirements of the old regulatory
model.
The second set of challenges are technical.
For example, as States move toward effluent trading, for example,
establishing equivalencies among pollutants subject to trades is not
straightforward. Allocation of initial baselines or emission credits as
part of tradable credit schemes is also difficult and often
contentious. At least one proposed State air-pollution trading program
failed because of difficulties over these allocation questions.
Development of appropriate performance indicators by States also
poses technical and conceptual challenges. Environmental problems are
complex and numerous. Reducing indicators to a workable set and
determining appropriate measures for different problems involves data
aggregation and simplification. Regulators face a choice between what
might be called ``richness'' detailed, highly tailored indicators and
``reach'' indicators that are sufficiently generic so that they can be
reduced to a manageable and broad set.
The third set of challenges relate to stakeholder interests and
concerns.
In developing facility-wide compacts with firms or in establishing
place-based watershed management programs, a key question is which
``stakeholders'' should be at the decision table. These issues likely
should not be settled at the Federal level but rather on an individual
basis by States as they determine what decisionmaking forums work well
in different circumstances.
Some stakeholders have also raised questions about ``fairness'' as
well as about the certainty of outcomes that might emerge in programs
with multi-media permits, compacts, or voluntary incentives. Air-permit
trading, for example, may shift pollution to certain ``hotspots,''
thereby unevenly benefiting different populations.
Conclusion
George Meyer, Secretary of the Wisconsin Department of Natural
Resources, eloquently summarized the new environmental challenge to
lawmakers:
It is time for public policymakers to unleash America's potential
to solve its remaining and emerging environmental problems. . . . With
Congressional direction, and adequate infrastructure, the States can
create a learning system, with useful knowledge applied outward to each
other and upward to Washington, their co-implementation partner.
New environmentalism involves a discovery process a search not only
for new technologies but also for new institutional forms that inspire
environmental stewardship and yield continuing environmental progress.
There is no reason to think that, in our first attempts at constructing
rules and decision processes to address environmental issues, we
achieved institutional perfection. Current State innovations are
pointing to new institutional forms that have potential to reduce
conflict, enhance environmental performance, and more efficiently
deliver environmental benefits.
______
Responses by Lynn Scarlett to Additional Questions from Senator Smith
Question 1. What legislative changes does the Institute think are
needed to get to a new environmentalism approach?
Question 2. What changes does the Institute propose to the Federal
role in the new environmentalism?
Response. The new environmentalism, as embodied in State
initiatives toward flexibility, incentives, and a performance focus,
shows substantial promise to deliver environmental performance more
holistically and efficiently. While some innovations are occurring,
without changes in Federal law these innovations will likely remain
marginal ``special'' programs. Fostering these State initiatives does
not require an overhaul of the major environmental statutes. It does,
however, require what Debra Knopmann of the Progressive Policy
Institute has referred to as ``transitional legal space.''
Crafting that transitional space requires a delicate balance
between, on the one hand, asserting congressional commitment and
authorization for flexibility and, on the other hand, resisting
prescription and micro-management of the innovation process. Moreover,
expression of congressional commitment to innovation may be inadequate.
The new environmentalism places a premium on performance measurement,
which may require additional resources allocated toward monitoring and
helping States invest in developing indicators. Finally, a Federal
commitment to a new environmentalism will require a more systematic way
of tying priorities and resource allocation to results as measured
through various indicators--a challenge States like Florida, Oregon,
and New Hampshire have begun to address independently.
Options
Congress has a number of options that could facilitate the move
toward a new environmentalism more focused on performance, incentives,
and innovation made possible through greater flexibility for States and
firms.
Congress could institute changes through:
the reauthorization of existing statutes, with provisions
for greater flexibility in reaching environmental goals (it has been
over decade since the last CAA debate, 13 years since the CWA received
a full review, and 14 years since Superfund was overhauled).
development of an EPA authorizing statute that would
clarify Federal, State, and regional agency roles and specifically
indicate congressional intent to foster State environmental
innovations, perhaps by endorsing and clarifying the NEPPS mechanism to
provide State flexibility. One mechanism could be through a tiered
approach in which States would hold all permitting and enforcement
authority for fully delegated programs, with Federal monitoring of
real-world results. If results fell short of required levels as agreed
to in the delegation (or NEPPS-style) agreement, EPA action would be
triggered. The nature of that action would need to be clarified. Those
programs that were not delegated would be implemented by U.S. EPA or
its regions. Through periodic reauthorization of the EPA authorizing
statute, additional changes could be made to individual statutes to
remove specific barriers to integrated, flexible approaches to
environmental management.
development of an environmental indicators statute that
allocated resources to States to support the development by States of
their performance indicators. Such a statute could also require
development by EPA of threshold measurement criteria to be used by the
States to allow some consistency and comparability among measures
(particularly for water and air quality). The statute might link to the
GPRA process so that performance indicators are linked to resource
allocation decisions and agency accountability (e.g., modeled after
Australia or the U.S. Agricultural Extension Service, which has used
analysis of performance measures to enhance outcomes).
Whatever congressional mechanism(s) are selected, Congress should
resist prescribing a particular ``flexibility and incentive''
environmental management regime. As experience with Project XL, the
various State alternative permitting programs, and other environmental
management innovations have demonstrated, different permitting and
decision models may be applicable in different circumstances. Moreover,
decisions regarding which firms might participate, what benefits they
receive for participation in incentive-based or flexible programs, and
so on, should be left to States to allow for maximum experimentation
with different environmental management models.
Question 3. Is it necessary for the EPA, in order to ensure that
the States protect the environment, to second-guess the States, or to
be able to second-guess the States, regarding every exercise of a
State's enforcement discretion, every permitting decision made by the
States, and the like?
Response. Clearer lines of authority and responsibility between the
States and U.S. EPA are necessary to ensure less duplication of effort
and greater certainty by States and the regulated community regarding
the legal status of State permits or other performance agreements. The
States now account for over 80 percent of enforcement actions. They
have demonstrated an ability and commitment to effectively enforce
environmental statutes. One possible arrangement of roles and
responsibilities would be for U.S. EPA to maintain permitting and
enforcement programs for nondelegated programs and for States that
choose not to have authority delegated to them. For those States that
have signed NEPPS agreements or have otherwise been delegated
implementation authority for specific programs, the States should have
sole permitting and enforcement responsibility. EPA's role, in these
instances, should be to monitor the State's performance, ensuring that
it is meeting its obligations. If it is not doing so, EPA can take
action to challenge the delegation agreement. In other words, the
``backstop'' role of EPA should not be to overfile on enforcement
matters, nor to require its own second set of permits. Rather, its
backstop role should be to monitor State performance, with
accountability assured through review of delegation or other
partnership agreements with the States.
Question 4. Are the States able and willing to exercise reasonable,
responsible, and vigorous enforcement and permitting discretion if the
States are no longer subject to second-guessing in every case? If so,
why is this true today even if it was not true in past years? Support
your explanation with examples showing that States have reasonably,
responsibly, and vigorously enforced Federal environmental laws, State
and local environmental laws over which EPA exercises no supervisory
responsibility.
Response. States have become the center of environmental activity.
By 2000 70 percent of major programs that could be
delegated had been delegated
States undertake on average between 75-80 percent of all
enforcement actions and 97 percent all enforcement inspections.
State spending on environmental and natural resource
protection has grown from $5.6 billion in 1986 to $12.5 billion in 1999
In 1986, the Federal Government provided 58 percent of
spending dollars for States; by 1996, the Federal Government provided
20 percent ($2.5 billion) of State environmental spending dollars. From
1986 to 1996, State spending increased 140 percent.
States conduct many other nondelegated programs on their
own, including innovations toward more flexible, results-focused
programs. States passed over 700 environmental laws in 1997 alone, at
least half deal with nondelegated environmental programs (pollution
prevention, waste management, etc.)
80 percent of States have at least one clean air standard
stricter than Federal minimums.
These data suggest that States have invested increasingly
significant resources in environmental protection. The charge that
States are likely to ``race to the bottom'' appears unfounded given
that 80 percent of States have at least one air quality standard that
is stricter than Federal standards and have initiated programs for many
environmental problems not addressed by Federal law, and many States
have environmental protection programs that address issues unregulated
by the Federal Government.
The vigorous commitment to environmental quality by States is
particularly evident in the lead role they have taken in solid waste
management and resource recovery. While the Federal Government does
regulate landfill safety, it does not regulate resource recovery.
Nonetheless, 48 of the 50 States have independently developed recycling
and waste diversion mandates or goals, with no Federal oversight or
requirement that the States implement such programs. These programs
have been responsible for increasing the Up. recycling rate from below
l O percent of municipal waste in the early 1980's to nearly 30 percent
by 2000.
Also notable are State efforts to clean up hazardous waste sites.
For example, through their brownfields clean-up programs, Pennsylvania
and Illinois have each cleaned up several hundred sites within a few
years of having implemented their programs. By contrast, a recent GAO
report notes that after nearly 20 years and $14 billion spent, clean up
at Federal Superfund (hazardous waste) sites had not been completed at
over 40 percent of National Priority List sites. Numerous other States
have now emulated the models set forth by Illinois and Pennsylvania.
A number of States have pollution-prevention programs not tied to
any Federal program. Through its pollution-prevention program,
California worked with the petroleum industry to achieve 66,000 tons of
hazardous waste reductions in one year--a 30 percent reduction.
Examples of State programs implemented without Federal involvement are
too numerous to catalogue here. For additional examples, please refer
to Race to the Top:
State Environmental Innovations, by Alexander Volokh, Lynn
Scarlett, and Scott Bush (Los Angeles. RPPI, 1998).
Question 5. Would States be able to protect the public health and
the environment if the EPA, instead of having the ability to second-
guess every decision made by a State, were limited to reviewing on a 5-
year, 7-year, or 10-year, basis, the overall performance of the State,
with the EPA having the ability to withdraw a State's delegated
authority if the State could not prove that it had made progress toward
a better environment during that period?
Response. Most States have both the inclination and the skills to
manage environmental programs to maintain public health and eco-system
protection (and restoration). Some States, for example, California,
actually have greater capabilities than the U.S. EPA in areas such as
air quality protection. Only a handful of States have chosen not to
invest significant resources in environmental protection, some have
chosen to defer to EPA to implement and enforce programs.
A tiered approach to environmental protection would ensure that
those States with the commitment and capabilities to manage
environmental programs are able to do so, while those without this
commitment or resources could defer to the Federal Government.
Specifically, an EPA authorizing statute could clarify Federal, State,
and regional agency roles and specifically indicate congressional
intent to foster State environmental innovations, perhaps by endorsing
and clarifying the NEPPS mechanism to provide State flexibility. One
mechanism could be through a tiered approach in which States would hold
all permitting and enforcement authority for fully delegated programs,
with Federal monitoring of real-world results. If results fell short of
required levels as agreed to in the delegation (or NEPPS-style)
agreement, EPA action would be triggered. The nature of that action
would need to be clarif ed. Those programs that were not delegated
would be implemented by U.S. EPA or its regions. Initially, the
periodic review of State delegated programs should probably occur at
intervals of no more than 5 years. Depending upon State performance,
that interval could lengthen over time. Another option would be to have
an initial ``probation'' period after program delegation, with EPA
review occurring after a 2-year interval. If the State is successfully
implementing and enforcing the program, subsequent reviews would extend
to intervals office years, with the focus on review of actual outcomes
and performance indicators rather than on ``bean-counting'' of
enforcement actions and review of permitting activity.
Any congressional effort to clarify State and Federal roles and to
support State innovations should also be accompanied by development of
an environmental indicators initiative that would allocate resources to
States to support the development by States of their performance
indicators. Such an initiative could also require development by EPA of
threshold measurement criteria to be used by the States to allow some
consistency and comparability among measures (particularly for water
and air quality). The statute might link to the GPRA process so that
performance indicators are linked to resource allocation decisions and
agency accountability (e.g. modeled after Australia or the U.S.
Agricultural Extension Service, which has used analysis of performance
measures to enhance outcomes).
Whatever congressional mechanism(s) are selected, Congress should
resist prescribing a particular ``flexibility and incentive''
environmental management regime. As experience with Project XL, the
various State alternative permitting programs, and other environmental
management innovations have demonstrated, different permitting and
decision models may be applicable in different circumstances. Moreover,
decisions regarding which f rms might participate, what benef ts they
receive for participation in incentive-based or flexible programs, and
so on, should be left to States to allow for maximum experimentation
with different environmental management models.
______
[From the Reason Public Policy Institute]
Moving to a New Environmentalism Summary: Barriers and Next Steps for
Congress
(By Lynn Scarlett)
What, if any changes are needed to encourage innovation and improve
environmental performance? How can these changes be orchestrated? What
are the respective roles of the legislature through policy
modifications and the executive branch through executive orders and
agency policy changes?
Background
Modern environmental regulations developed over the past 30 years
have yielded some successes. But persistent challenges remain, and new
circumstances require different policy directions. Specifically,
environmental laws and regulations have generated high conflict,
stifled innovation in some instances, and least-cost options have not
generally been pursued. In addition, lines of responsibility have been
unclear among the U.S. Environmental Protection Agency (EPA), its
regional offices, the States, and regulated entities. Lack of clarity
has resulted in some duplication of effort.
Moreover, the traditional regulatory model is sometimes ill suited
to new problems, such as those created by dispersed (nonpoint)
pollution, and the traditional model limits the possibilities for
holistic environmental management by firms.
Finally, the traditional regulatory approach, with its focus on
permitting of pollution sources and hazards by medium (air, water,
waste), inhibits opportunities for integrated environmental management.
The regulatory focus on prescribing technological solutions and tying
permits to those technologies has also turned attention away from
development of clear performance indicators and priority setting based
on measuring results.
State Environmental Policy Innovations
Scope of State Initiatives
As embodied in the Clean Air Act (CAA), Clean Water Act (CWA),
Resource Conservation and Recovery Act (RCRA), Safe Drinking Water Act
(SDWA), and other Federal statutes, the traditional regulatory approach
offers some latitude for program variations. Through several special
Federal programs and through programs operated by States under
delegated authority, experiments with a new environmental model are
surfacing.
States have, in fact, become the center of environmental activity:
By 2000 70 percent of major programs that could be
delegated had been delegated
States undertake on average between 75-80 percent of all
enforcement actions and 97 percent all enforcement inspections.
State spending on environmental and natural resource
protection has grown from $5.6 billion in 1986 to $12.5 billion in 1999
In 1986, the Federal Government provided 58 percent of
spending dollars for States; by 1996, the Federal Government provided
20 percent ($2.5 billion) of State environmental spending dollars. From
1986 to 1996, State spending increased 140 percent.
States conduct many other nondelegated programs on their
own, including innovations toward more flexible, results-focused
programs.
States passed over 700 environmental laws in 1997 alone;
at least half deal with nondelegated environmental programs (pollution
prevention, waste management, etc.)
80 percent of States have at least one clean air standard
stricter than Federal minimums.
A New Environmentalism
Of particular note among these State activities is the
proliferation of experiments with a new environmental model that
emphasizes flexibility, incentives, and results. An informal survey of
regulated industries indicates interest in the following State program
features:
Permitting flexibility (e.g., Wisconsin)
Fewer inspections
Fewer or consolidated reporting (e.g., New Jersey and
Colorado)
Longer permit duration
Credits for reductions in emissions or discharges
(Colorado)
Acceleration of review and processing of permits/
equipment changes (Oregon)
Single agency point of contact for permitting (New
Jersey, Oklahoma) Plant-wide applicability limit permit (Michigan)
Expedited permitting (New Jersey, Oregon)
Deterrents to Participation: Private-sector Perspective
Deterrents to participation in some of these programs limit the
breadth and scope of their implementation. These deterrents fall into
two categories: 1) persistence of some highly prescriptive
implementation details in some cases; and 2) limited benefits or extra
costs associated with Federal constraints or a lack of clarity in the
respective roles of State, regional, and Federal agencies.
Prescriptive deterrents include provisions in which States have
linked program flexibility or incentives to requirements that firms
employ specific environmental management systems such as ISO 14001,
that ISO 14001 systems be externally certified, that firms recycle 100
percent of onsite residuals, or that they conduct mandatory audits.
Deterrents also result from unclear Federal, State, or regional
roles. On the one hand, lack of clarity sometimes constrains States to
offer only minimal or public relations benefits since they do not
perceive that they have full authority to supplant source-based Federal
permits with flexible alternatives. A corollary to this limitation is
that details regarding the scope of flexibility offered are sometimes
lacking. On the other hand, lack of clarity also sometimes induces
increased costs and workload, since participating firms must navigate
two, or even three, regulatory systems (State, regional, and Federal)
to get approvals for alternative permits. To avoid this challenge, some
States have limited permit flexibility to State permits only, thereby
limiting the overall potential of the new programs.
Deterrents to Innovation: State Perspective
The Environmental Council of States undertook an informal survey of
its member State environmental agencies to explore what they perceived
as key barriers to State innovation toward improved environmental
performance. Respondents ranked the following as notable barriers:
EPA headquarters doesn't adequately consider States'
opinions or recommendations in establishing priorities, procedures, and
rules
Resource limitations, including funding and expertise
Congress doesn't adequately consider States and passes
laws that limit innovation
National environmental groups are a deterrent by charging
States with backsliding if program changes are proposed
The innovation process is a barrier--it is time
consuming, resource intensive, and often yields too limited benefits
State regulators consider their ability to innovate most limited by
air regulations, followed by water and waste regulations.
Federal Innovations
Lessons of Project XL
A brief survey of 45 projects initiated under EPA's XL program
showed that one-fourth of participants sought exemptions or changes in
RCRA regulations, including reclassification of a chemical in order to
treat hazardous materials more efficiently onsite. A handful of XL
projects sought changes relating to the Clean Water Act and Clean Air
Act. One each sought changes relating to Superfund provisions and to
the Toxic Substances Control Act.
Types of changes sought were highly situation specific. However,
some common themes emerge. For example, several firms sought pre-
approval of modifications to their manufacturing processes; a number of
firms sought multimedia permits. Both changes help firms innovate and
maintain their competitiveness in a context of rapidly changing
technology. Other desired changes sought through XL projects included a
transition to incentive-based monitoring; continuous monitoring rather
than permit-required ``grab'' sampling; simplified monitoring, online
permit applications and renewals, and real-time compliance information.
In each XL project, participants sought to reduce permit
acquisition, monitoring, and reporting costs as a prerequisite to
improving their overall environmental and economic performance.
Lessons of the National Environmental Performance Partnership (NEPPS)
The NEPPS program was unveiled in May 1995 to provide a framework
for improving the effectiveness of environmental programs. It emerged
out of concerns about inconsistent oversight by EPA, micro-management
of State actions by EPA, insufficient technical support, and inadequate
consultation of State regulators by EPA. Under the program, States sign
agreements with EPA designed to give to the States greater flexibility
while setting forth core performance measures. Though NEPPS agreements
have extended beyond the initial six pilot States to include 45 States
by the end of 1998, the impact of these agreements appears to be
limited. A review of NEPPS programs prepared for the National Academy
of Public Administration concluded that their effectiveness in reducing
Federal micro-management of States has been limited. Nonetheless, the
NEPPS partnership agreements in some States (for example, New
Hampshire) have been credited with improving priority setting and
enhancing State flexibility.
Key Needs
The new environmentalism, as embodied in State initiatives toward
flexibility, incentives, and a performance focus, shows substantial
promise to deliver environmental performance more holistically and
efficiently. While some innovations are occurring, without changes in
Federal law these innovations will likely remain marginal ``special''
programs. Fostering these State initiatives does not require an
overhaul of the major environmental statutes. It does, however, require
what Debra Knopmann of the Progressive Policy Institute has referred to
as ``transitional legal space.''
Crafting that transitional space requires a delicate balance
between, on the one hand, asserting congressional commitment and
authorization for flexibility and, on the other hand, resisting
prescription and micro-management of the innovation process. Moreover,
expression of congressional commitment to innovation may be inadequate.
The new environmentalism places a premium on performance measurement,
which may require additional resources allocated toward monitoring and
helping States invest in developing indicators. Finally, a Federal
commitment to a new environmentalism will require a more systematic way
of tying priorities and resource allocation to results as measured
through various indicators--a challenge States like Florida, Oregon,
and New Hampshire have begun to address independently.
Options
Congress has a number of options that could facilitate the move
toward a new environmentalism more focused on performance, incentives,
and innovation made possible through greater flexibility for States and
firms.
Congress could institute changes through:
the reauthorization of existing statutes, with provisions
for greater flexibility reaching environmental goals (it has been over
decade since the last CAA debate, 13 years since the CWA received a
full review, and 14 years since Superfund was overhauled).
the creation of an Advisory Panel on Intergovernmental
Liaisons, established by statute as an advisory body to EPA to function
like the Science Advisory Panel, but with a focus on institutional
interaction.
development of an EPA authorizing statute that would
clarify Federal, State, and regional agency roles and specifically
indicate congressional intent to foster State environmental
innovations, perhaps by endorsing and clarifying the NEPPS mechanism to
provide State flexibility. One mechanism could be through a tiered
approach in which States would hold all permitting and enforcement
authority for fully delegated programs, with Federal monitoring of
real-world results. If results fell short of required levels as agreed
to in the delegation (or NEPPS-style) agreement, EPA action would be
triggered. The nature of that action would need to be clarified. Those
programs that were not delegated would be implemented by U.S. EPA or
its regions. Through periodic reauthorization of the EPA authorizing
statute, additional changes could be made to individual statutes to
remove specific barriers to integrated, flexible approaches to
environmental management.
development of an environmental indicators statute that
allocated resources to States to support the development by States of
their performance indicators. Such a statute could also require
development by EPA of threshold measurement criteria to be used by the
States to allow some consistency and comparability among measures
(particularly for water and air quality). The statute might link to the
GPRA process so that performance indicators are linked to resource
allocation decisions and agency accountability (e.g., modeled after
Australia or the U.S. Agricultural Extension Service, which has used
analysis of performance measures to enhance outcomes).
Whatever congressional mechanism(s) are selected, Congress should
resist prescribing a particular ``flexibility and incentive''
environmental management regime. As experience with Project XL, the
various State alternative permitting programs, and other environmental
management innovations have demonstrated, different permitting and
decision models may be applicable in different circumstances. Moreover,
decisions regarding which firms might participate, what benefits they
receive for participation in incentive-based or flexible programs, and
so on, should be left to States to allow for maximum experimentation
with different environmental management models.
__________
Statement of Erik D. Olson, Senior Attorney, Natural Resources Defense
Council
I. Introduction
I am Erik D. Olson, a Senior Attorney at the Natural Resources
Defense Council (NRDC), a national, non-profit public interest
organization with over 400,000 members dedicated to protecting public
health and the environment. We appreciate the opportunity to testify on
the important issue of State-Federal relations in environmental
programs, often referred to as ``environmental federalism.''
The appropriate State and Federal roles in environmental programs
have been debated for decades, beginning well before President Nixon
created the U.S. Environmental Protection Agency through a
Reorganization Plan, shortly after the first Earth Day in April 1970,
almost exactly 30 years ago. From the 1940's on, the Federal
Government's role in the environmental field traditionally was limited
to conducting research, assisting State authorities, and occasionally
issuing generally voluntary, hortatory Federal guidelines such as
drinking water guidelines. States usually were free to adopt or reject
the Federal standards.
It became increasingly clear by 1970 that serious air and water
pollution problems and other environmental crises had reached a
critical point. Infamous problems such as the Cuyahoga River catching
on fire, Lake Erie essentially dying, air pollution in Donora,
Pennsylvania and elsewhere killing local residents, and a series of
drinking water contamination problems and waterborne disease outbreaks
made it clear that the Federal Government had to step into the breach.
States were unable or unwilling to address these and other problems.
The enactment of the major Federal environmental statutes by
Congress, often lead by this committee, have been a widely touted
triumph, immensely successful at cleaning up the environment, popular
with the American public, and heralded internationally as landmark
events in the history of environmental protection. These statutes, such
as the Clean Air Act, Clean Water Act, and Safe Drinking Water Act,
generally adopted the ``cooperative federalism'' model. The Federal
Government sets national standards, while States use their special
knowledge of local issues to implement and apply those standards, with
some remaining Federal oversight and enforcement presence. States are
expected to live up to national environmental and health standards, but
generally are free to go beyond Federal minimum requirements.
II. The Importance of Cooperative Federalism
The concept of environmental federalism seeks to take advantage of
the best the State and Federal Governments have to offer. This approach
recognizes that States often have greater localized knowledge of
environmental conditions and problems than the Federal Government may
have, and recognizes that the Federal Government needs ``the
substantial resources, expertise, information, and political support of
State and local officials'' to make the programs work. It also
acknowledges that State officials often are more knowledgeable about
the local players and political landscape than are Federal officials.
Moreover, cooperative federalism seeks to capture the benefits of the
fact that the States are the ``laboratories of democracy,'' because
``States are a natural laboratory for testing new ideas.''
However, cooperative federalism also acknowledges the realities
that States can be more susceptible to local political influences and
political ``brownmail'' from powerful local industries that threaten to
withdraw from the State or to produce political repercussions if State
officials crack down on pollution. This approach also seeks to
recognize that States may not be able to muster the political
wherewithal to address pollution problems that primarily affect
downstream States, and acknowledges that States often have fewer
scientific and technical resources than the Federal Government.
III. Rationale for a Significant Federal Presence in Environmental Laws
In these days when the Federal Government's role in environmental
programs has come under increasing attack from some State officials, it
is worth briefly reviewing the rationale relied upon by this committee,
academic commentators, and many other observers for supporting a
significant Federal presence under our environmental statutes. Among
the most critical factors are:
State Inaction in the Face of Significant Environmental
and Health Problems. Before the adoption of the Clean Air Act, Clean
Water Act, Safe Drinking Water Act, Resource Conservation and Recovery
Act, and other major Federal statutes, many States simply failed to
address critical and obvious environmental and health problems. For
example, although the U.S. Public Health Service had issued drinking
water standards since the 1940's, and although 130 waterborne disease
outbreaks had been documented in the previous decade, as of 1971, only
14 States had adopted these standards, and enforcement of the standards
was ``poor.'' Similar State inaction was documented in the air, surface
water, hazardous waste, and many other areas.
Need for a ``Level Playing Field'' Nationally for
Industry to Avoid a ``Race to the Bottom.'' In the words of a leading
treatise by academic legal commentators, ``it is widely accepted that
Federal standards help prevent States from succumbing to local economic
pressures.'' Without minimum Federal standards, there is immense
pressure on States competing for industries and jobs to adopt weak
environmental standards and enforcement policies even though over the
long run, such weak policies are economically destructive. The ``race
to the bottom'' is especially likely where the environmental or health
problems are not immediately readily visible or traceable to particular
sources of pollution. This makes it difficult for the public to
recognize the problem even if objectively it is extremely serious. A
legal brief recently filed by five States makes this point surprisingly
bluntly. The States noted (in opposing a court decision that will
undermine EPA's ability to enforce where a State later comes in and
settles with the same polluter), that ``by making it harder for EPA to
maintain a level playing field nationally, the panel's decision opens
up States to the risks that they will suffer the adverse effects of
pollution generated in neighboring States and that regulated entities
in other States will gain an unfair competitive advantage over another
State's law-abiding competitors.''
The Growing Use of State ``No More Stringent Than Federal
Standards'' Clauses Demonstrates the ``Race to the Bottom'' is at Work
Today. By 1995, 19 States had adopted at least one statute (and
sometimes more than one law), prohibiting the State from adopting
environmental rules that are more stringent than Federal requirements.
Some of these ``no more stringent than'' clauses apply to all State
environmental programs; others apply only to certain State laws such as
a State clean air law. The increasing use of such clauses lead a
leading commentator to note:
the trend among State legislatures to embrace Federal minimum
standards as State maximum standards, viewed in the context of the
States' historical failure to produce socially desirable environmental
improvements through State legislation and regulation, provides some
evidence that the concern about a ``race to the bottom'' in the absence
of Federal minimum standards remains valid.
Right to Baseline Minimum Public Health and Environmental
Protections for All Americans. When Americans travel across the
country, they expect to be able to breathe the air, drink the water,
swim, fish, and enjoy the environment wherever they go. They do not
expect that their family's health, or that of their fellow citizens,
will be put at risk, depending upon the State in which they are
traveling or living. A healthy environment is the foundation of a long-
term healthy economy and high quality of life for the U.S. Only with
minimum Federal standards can we be assured that all Americans, and our
national environmental heritage are protected. As one academician has
put it, the Nation ``decided to make a moral and arguably
constitutional commitment to afford all citizens the same basic level
of protection.''
Only the Federal Government Has the Scientific and
Technical Resources and Expertise, and the Economies of Scale, to Adopt
Many Standards. With the increasing complexity of the scientific and
technical issues that are raised by standards for protecting public
health and the environment, most States simply do not have the
resources or scientific expertise to adopt standards that are
scientifically sound and technically well grounded. This is
particularly the case as we move toward more specific, highly
technically sophisticated standards that must take into account the
technical capabilities of major industries. The more tailored a
standard is to a particular industry (as opposed to the often-
criticized ``cookie cutter'' approach), the more scientific and
technical expertise is required to promulgate the standard. Local and
State authorities often lack the resources and political capability to
face down major multinational companies that have the financial,
technical, and political resources to bury them in studies, litigation,
political challenges, and other diversions that may make it virtually
impossible for the State to act. While in some areas a handful of
States have developed significant scientific and technical expertise,
because of ``the substantial economies of scale in having environmental
standards adopted on a national scale,'' often only the Federal
Government has the resources to adopt complex standards.
The Need for a Federal ``Gorilla in the Closet.'' State
officials, while usually not saying so in public, often admit privately
that without mandatory Federal requirements, it can be difficult for
them to muster the resources and political support to adopt important
environmental and health standards, or to take enforcement actions.
They sometimes need to point to the Federal ``gorilla in the closet''
to take actions that they feel are necessary, but politically
difficult, to take.
The Need to Address Interstate and Trans-boundary
Pollution Problems. States may have little incentive to impose
restrictions on pollution by powerful local industries (or others for
that matter) when the ill-effects of that pollution are most heavily
felt in other States. Thus, the ``river of smog'' that travels from the
Midwest to the Northeastern U.S., the acid rain problem exacerbated by
tall stacks that put pollutants high into the atmosphere to come down
and contaminate communities hundreds of miles away, and the pollution
of interstate rivers, estuaries, and the Great Lakes, all are
illustrations of the problem. The State of New Hampshire and several
other States, for example, have filed petitions to seek redress for
such interstate air pollution problems.
National or International Industries Benefit from
National Standards. Major corporations actually benefit from the
relative predictability and centralized authority that comes with a
Federal environmental legal framework even though the States are free
to adopt more stringent State rules that tailor these minimum Federal
requirements to local needs.
Ironically, Federal Minimum Standards Have Been Shown to
Spur State Creativity and Experimentation. Because Federal
environmental laws have stimulated States to establish their own
agencies, staffs, and statutes to carry out environmental programs,
experts have found that rather than stifling State creativity, adoption
of Federal environmental law ``paradoxically gives States greater
opportunity and incentives to undertake policy experimentation.''
IV. Experience with Environmental Federalism: How It's Working
Most States have responded to the challenge in Federal
environmental statutes by adopting State programs that EPA has approved
for delegation. Thus, according to a recent law review summary,
delegations include:
Clean Air Act: 42 States
Clean Water Act: 34 States
Hazardous Waste (RCRA): 37 States
Drinking Water: 39 States (49 States have at least
partial primacy for public water systems)
Pesticides (FIFRA): 39 States.
Some of these State programs can be pointed to as models
demonstrating that the ``laboratory of democracy'' truly is at work.
Indeed, some States have put enormous effort into innovative laws and
programs that build upon or take a different tack from Federal
requirements. In many cases, these innovative State programs later are
adopted by other States, or by the Federal Government.
Recent examples include California's and New York's drinking water
right to know requirements, recently adopted into Federal law under the
1996 Safe Drinking Water Act Amendments. In other States, including
Wisconsin, Iowa, and New Jersey, State authorities have adopted
innovative programs to protect groundwater from contamination.
However, these innovative State laws and EPA's delegation of
programs to States does not tell the whole story. Programs that EPA
delegated to many States are not living up to legal requirements.
Enforcement problems at the State level abound, as do problems with
inadequate State resources, poor data management and compliance
tracking, and failures to address significant environmental problems.
For example:
Serious State Enforcement Inadequacies Have Been
Repeatedly Documented by GAO and the EPA Inspector General (IG). A
plethora of GAO and EPA IG studies have documented that many States
simply are unable or unwilling to effectively enforce certain Federal
programs even in the face of legal requirements to do so. Among the
most significant problems are: (1) inadequate monitoring of regulated
parties; (2) failure to pursue ``timely and appropriate'' enforcement
actions against significant violators; (3) failure to recover economic
benefit of noncompliance; (4) inconsistencies in the approaches used to
enforce and in the level of enforcement activity; and serious problems
with enforcement and other data. One recent case is Virginia's failure
for many years to take meaningful enforcement action against Smithfield
Foods' swine slaughtering and processing plants for major violations of
its clean water permit, ultimately requiring EPA to step in with
Federal enforcement action, alleging serious environmental harm, false
reporting, and destruction of records; a recent court decision affirmed
liability and a large multimillion dollar penalty.
Failure to Track and Document Violations. GAO, the EPA
IG, and EPA itself have repeatedly documented that many States with
delegated programs simply do not adequately track compliance and
violations, nor do they report even many significant violations to EPA
as required. In one recent example, EPA made front page news when it
completed an audit of 27 States' drinking water programs and found that
States were reporting only 19 percent of known Maximum Contaminant
Level (health standard) violations for chemicals in tap water.
Moreover, States reported just 11 percent of treatment standard
violations, and only 10 percent of monitoring violations to the agency.
The ``good'' news was that States reported 68 percent of total coliform
violations to EPA.
Inadequate State Resources. While some States have
successfully sought significant resources to implement their
environmental programs, others have fallen well behind the curve. A
recent review of State spending found huge disparities among the
States, and said that it was likely that ``some States are committing
severely inadequate resources to environmental protection.'' For
example, State expenditures per capita on environmental programs varied
by almost four-fold; spending per ton of toxic emissions varied even
more, with Mississippi spending over 38-fold less per pound of toxics
than Colorado. A recent study of State hazardous waste cleanup programs
found serious State program resource problems. For example, New York's
program ran out of money in 1999, Kansas, Idaho, Wyoming, and Puerto
Rico had zero balances, Missouri had a negative balance, Nebraska and
D.C. had no cleanup fund, eight States had balances of under $1
million, and 14 States had fund balances of $1 million to $5 million.
State Inaction on Expired Permits. Recent studies by GAO,
the EPA IG, and others have shown that there is a pattern in many
States of failure to address expired State permits for water and air
polluters. In Michigan, for example, 65 percent of major facilities
were operating on expired water permits, and many other States had
serious backlogs, according to a 1995 GAO report. A more recent
analysis of 6,700 permits for major water pollution sources nationally
found that more than half of all permits for major polluters had
expired in seven States, and that more than one-third are expired in 17
States. Expired permits not only violate the law, they fail to assure
progress toward improving air and water quality, and shut the public
out of the process of seeking water quality improvements.
State Failures to Address Major Environmental Problems.
There is a long history, continuing over the past 30 years, of State
failures to address significant environmental problems, sometimes even
when they are required to do so under Federal law. For example:
State Inaction on Cryptosporidium in Tap Water. Despite several
significant outbreaks from this disease-carrying organism, including
the largest documented waterborne disease outbreak in U.S. history in
1993 in Milwaukee Wisconsin in which over 400,000 people were sickened
and over 100 died, to our knowledge not a single State adopted a
Cryptosporidium standard for tap water until mandated to do so in 1998
EPA rules.
State Inaction on Concentrated Animal Feeding Operations (CAFO).
While it is widely recognized that CAFOs are major sources of surface
and ground water pollution, most States have done little to address the
problem. Officials in the few States that have begun to tackle the
issue, such as Maryland, have privately expressed concerns about
threats that industry may move their businesses to other, more lax,
States.
Failure to Issue Maximum Pollution Loading Requirements for
Nutrients and Other Water Pollutants. Over 25 States have been sued for
failing to adopt the required ``Total Maximum Daily Load'' (TMDL) rules
required by the Clean Water Act since 1972. These TMDLs are supposed to
force a crack down on many unaddressed sources of pollution in
watersheds that are seriously contaminated, since over 40 percent of
the nation's rivers and lakes that have been assessed are not fishable
or swimmable, according to EPA.
States' Failure to Address Trans-Boundary Air Pollution Problems.
Acid rain problems in the Northeast are due in large part to long-range
transport of sulfur dioxide and nitrogen oxides often from tall stacks
at fossil fuel-fired power plants in the Midwestern U.S. Similarly, the
``river of smog'' problem is caused by long-range transport of air
pollutants from heavily industrialized and urbanized areas, often to
less populated down wind areas. These problems generally have not been
voluntarily addressed by polluting States. Federal intervention has
been necessary, and still is needed, to force States to deal with these
classic ``externalities'' that they cause but that may not visibly
directly affect them.
V. Conclusions and Opportunities for Cooperative Federalism in the
Future
Many observers suggest that there are opportunities to improve
State-Federal relations in the future. EPA and States have initiated a
program in 1995 known as the National Environmental Performance
Partnership System (NEPPS), which allows States more ``flexibility'' to
implement Federal laws.
While the concept of NEPPS is attractive in principle, it raises
several significant issues. First and foremost among them is whether
the States are able and willing to make this program work, and whether
they will agree with EPA, through an open public process, to assure
environmental protection by meaningfully tracking, measuring, and
assuring adequate EPA oversight of progress in implementing the
programs.
Academic observers have suggested that if this program goes awry
and there is a significant chance that without improvements it may ``we
could lose substantial ground before the public or Congress realizes
what is happening.'' A former State and EPA enforcement official
recently suggested in a law review article that many States lack the
resources for such an approach, and that it NEPPS ``could lead to a
further decline in deterrence-based enforcement, given States' lack of
interest in conducting such enforcement and other factors.''
However, it is possible to streamline and improve State-Federal
relations in environmental programs, so long as the following key
principles are observed:
The Federal Government should:
Establish national goals;
Set national health and environmental standards;
Establish minimum procedural safeguards for citizen
participation
Approves State programs and maintain a backstop
enforcement role;
Periodically publicly review and make findings regarding
State performance;
Provide resources and technical and scientific
assistance.
States should:
Assume primary implementation and enforcement
responsibility, where qualified;
Meet national goals and standards;
Show they have adequate resources and procedural
safeguards to make the programs work;
Develop innovative solutions to problems;
Agree with EPA on performance tracking and documentation
of successes or failures.
Within this context of shared responsibilities, there is much room
for State innovation. EPA has recognized that it must, in appropriate
cases, loosen the reins of Federal oversight where a State can show
that its is qualified and meets the criteria for flexible delegation.
Such loosened reins cannot, however, mean that EPA gives up its
oversight responsibility or waives basic legal requirements.
In conclusion, NRDC agrees that there is much room for improvement
of State-Federal relations. While State flexibility can and does work
in some cases, it must be remembered that States must have the
capability and willingness to make this work. States must agree with
EPA upon specific measures to assure that the State is accountable for
making the progress envisioned by Federal laws, that enforcement and
implementation of basic requirements will not be compromised, and that
EPA and public oversight and participation are meaningful.
__________
Statement of Jason S. Grumet, Executive Director of the Northeast
States for Coordinated Air Use Management (NESCAUM)
Introduction
Thank you Mr. Chairman. My name is Jason Grumet and I am the
Executive Director of the Northeast States for Coordinated Air Use
Management (NESCAUM). NESCAUM is an association of State air pollution
control agencies representing Connecticut, Maine, Massachusetts, New
Hampshire, New Jersey, New York, Rhode Island and Vermont. The
Association provides technical assistance and policy guidance to our
member States on regional air pollution issues of concern to the
Northeast. We appreciate this opportunity to address the committee
regarding innovative efforts to reduce air pollution in our region.
As we approach the 30th anniversary of the passage of the Clean Air
Act, it is appropriate to reflect upon the tremendous achievements
government and industry have made in reducing air pollution and
protecting public health and welfare. The interlocking Federal and
State authority and obligations set forth in the 1970 Clean Air Act are
fairly understood to mark the modern era of environmental protection in
our nation. The desire to provide all citizens with minimum standards
of protection and to provide industry with consistent national
obligations compelled Congress in 1970, and in every reauthorization
since, to establish substantial Federal oversight and enforcement of
our nation's clean air strategy. At the same time, public health
protection in our Federal republic is appropriately vested within the
obligations and police powers of State government. Through the creation
of State Implementation Plans (SIPs), Congress recognized that States
must bear the ultimate responsibility and represent the best hope to
design and implement effective clean air laws. I believe that it is
useful to reflect upon this most basic tension between the desires for
national consistency and State autonomy when exploring how to promote
and honor effective State innovation.
One of the central challenges of democracy is to communicate
complex themes in simple and popular terms. In this discussion, the
subtle complexities of federalism are often described as a choice
between ``command and control'' Federal prescription and ``innovative
and flexible'' State efforts. This construction results from the
frustration many of us maintain as we watch government erect seemingly
nonsensical barriers to the creative, well intentioned efforts of
business owners and local officials who have the courage and ingenuity
to suggest a different approach or a better way to achieve a clean
environment. Even worse, under the time honored theme ``no good deed
goes unpunished,'' every close observer of clean air policy can cite
several examples where innovation is met not only with disinterest but
is actually penalized by our regulatory system.
While my members live this frustration, we recognize that it is not
borne of malice or incompetence at any level of government. Instead we
recognize that these moments of apparent insanity flow inherently from
a regulatory regime necessarily designed to protect the public in
situations where private economic incentives and volunteerism are
inadequate. While the ``Command and Control vs. innovation'' construct
is rhetorically powerful, the polemic in this description suggests a
false choice. I believe that a more productive inquiry follows from the
premise that national standards, while essential, often fail to capture
and channel the ingenuity of local government and industry. In this
light, improving our environmental regulatory system is a pursuit to
refine and not replace enforceable Federal requirements. Congress'
appreciation of the need for clear and enforceable national clean air
requirements is evidenced by the fact that in every reauthorization
since the first clean air public health statutes in the 1950's,
Congress has consistently increased the Act's prescriptive national
requirements and limited the discretion of both the EPA and the States.
It is fruitful to reflect upon this history as we begin to contemplate
the amendments that will guide the fourth decade of our nation's
pursuit of clean air.
Let me now transition from the abstract to the particular and
describe two innovative efforts in the Northeast. These initiatives
demonstrate that through creativity and collaboration, States, EPA and
industry can identify mutual interests and opportunities that the
current regulatory system would otherwise squander and direct these
energies toward environmental improvement. The first area I will
discuss is an exciting array of projects to reduce pollution by
retrofitting heavy-duty diesel equipment. The second initiative I will
describe is an innovative effort that goes by the acronym P4 which
stands for Pollution Prevention in the Permitting Process. The
essential wisdom of this effort is that there is no better way to
reduce air pollution than to never create it. In both projects, the
northeast States have partnered with regional and national EPA offices
and industry to achieve considerable successes. However, let me stress
at the outset that these successes have not come easy and we are far
from finished. While we have created effective beachheads within EPA to
launch these collaborative efforts, the EPA is a large institution with
an array of corporate cultures. Suffice it to say that those offices
charged with the obligation of enforcing the statute and EPA
regulations are struggling, at times awkwardly, to maintain a coherent
enforcement regime that rewards innovation.
Diesel Retrofits
Overview of the Diesel Pollution Problem
Diesel engine pollution is one of the prime concerns of air quality
regulators in the U.S. The 10 million heavy duty diesel engines
operating in the U.S. emit millions of tons of soot and ozone-forming
pollutants annually. Heavy duty diesel emissions comprise 33 percent of
total NOx (from all sources) and 80 percent of mobile source
particulate pollution in the northeast States. In addition, diesels
contribute substantially to the nation's inventory of toxic pollution
such as formaldehyde. The relative contribution from diesels to our
nation's air pollution is rising annually. Several factors contribute
to this trend of increasing heavy-duty diesel pollution. First, the use
of diesel engines to power the nation's fleets of buses and trucks is
becoming more pervasive due to the durability of these engines. Second,
growth in annual truck miles traveled continues to increase steadily.
Third, diesel engines pollute at a higher rate than do gasoline engines
and thus replacing gasoline engines with diesels will cause continued
increases in air pollution from mobile sources.
Technologies Exist to Reduce Diesel Engine Emissions
The good news is that there are commercialized technologies to
reduce diesel PM, NOx, and toxic pollution such as formaldehyde. New
technologies used in the New York City bus fleet and in Europe have
proven that diesel engine NOx and PM pollution can be reduced by 90
percent. The Federal Urban Bus program (begun in 1993) has established
the potential of rebuild/retrofit programs to significantly reduce
emissions from heavy duty diesels. In 1993, the U.S. EPA began
regulating engine retrofit/rebuilds in heavy duty urban buses in cities
of over 750,000 population. The regulations require that newly
overhauled transit bus engines meet more stringent particulate
standards than required by the original engine certification. As part
of this program, EPA has certified over ten products to reduce
emissions from urban buses. Certified products have the potential to
reduce particulate emissions by up to 80 percent. Over 40 urban areas
have benefited from reduced urban bus emissions due to this program.
Urban bus certified products can also be retrofitted onto most existing
truck engines. California and New Jersey have established guidelines
and methodologies for implementing retrofit/rebuild programs in non-
urban buses.
Diesel Standards Lag Behind Gasoline Engine Standards
While new technologies exist, diesel engine exhaust standards
currently lag behind standards for gasoline engines by 10 years or
more. The Federal Government must close this gap by adopting strict new
engine standards for future diesel vehicles. Implementation of
protective diesel emission standards is contingent upon dramatically
reducing the level of sulfur in diesel fuel. Like lead, sulfur can
poison many of the after-treatment emission control strategies that
must be employed to reduce diesel pollution. We understand that EPA is
on the verge of proposing regulations that will cap diesel sulfur
levels at 15 ppm by 2007. Once enacted, this proposal and the resulting
emission controls that it enables will dramatically improve public
health across the nation. Ensuring the timely implementation of a 15
ppm sulfur cap on all diesel fuel is the most important single action
Congress could undertake to promote innovative diesel reduction
strategies.
Slow Diesel Fleet Turnover Requires a Control Program for
Existing Engines
While there is good news in the potential for cleaner new diesel
engines, the problem of the existing, highly polluting fleet of 10
million diesel vehicles must also be addressed. Diesel engines last as
long as 25 years and travel more than a million miles in many
applications. Older engines pollute at a much higher rate than new
engines due to 1) engine deterioration and 2) less stringent emission
levels in older model year engines. Thus, targeting emissions from
older diesel engines is essential to reducing the pollution from the
nation's diesel fleets in the near term.
Legal Barriers Prevent Traditional Regulatory Programs
Unfortunately, while cost-effective retrofit technologies exist to
significantly reduce diesel emissions from existing engines, and while
Federal action has been taken to reduce emissions from a small subset
of diesels, States are substantially preempted by the Clean Air Act
from taking large steps to reduce pollution from existing diesel
vehicles. Historically, States have been given authority under the
Clean Air Act to regulate in-use engine emissions from mobile sources,
but are largely preempted from adopting independent requirements
affecting new vehicles. However, a 1996 lawsuit brought by the Engine
Manufacturers Association (EMA) resulted in a change to the nonroad
engine rule which preempts States from requiring the retrofit of in-use
nonroad engines (such as those found in construction equipment) to
control emissions. Similarly, States face legal hurdles to the
establishment of mandatory retrofit programs for highway vehicles. As
an example, a State cannot pass a regulation requiring construction
companies to install pollution control devices on construction
equipment even though cost effective products are available. Similarly,
a State cannot pass a law to require school buses to be retrofitted to
reduce childrens' exposure to carcinogenic elements in diesel exhaust.
Collaborative Action to Overcome Regulatory Barriers
In the face of these legal barriers, Northeast State environmental
staff have worked with the EPA, the Engine Manufacturers Association,
the Manufacturers of Emission Controls Association, and many others to
develop opportunities to integrate voluntary diesel-retrofit mechanisms
into the existing regulatory regime. Through this collaborative effort
we have encouraged the use of commercially available technologies by
developing a standardized method for States to calculate State
Implementation Plan (``SIP'') credits for retrofit projects. To enable
timely, cost-effective action and diminish administrative burden we
have developed a third party verification system to review new
technologies. Last we have developed a menu of recommendations on
technology matches between retrofit equipment and heavy-duty engine
applications.
EPA has provided an overarching forum for this collaborative effort
by creating the Voluntary Measures Retrofit Program (VMEP). VMEP is a
quintessential example of creating a space within the existing
regulatory framework where innovation can flourish. The premise behind
VMEP is to trust but verify. Through this program States are empowered
to take credit for non-traditional measures to reduce mobile source
pollution in their SIPs. Prior to VMEP, States often had to wait years
for EPA to even consider new approaches before they could proceed with
implementation. The VMEP pilot program inspires innovation by allowing
States to credit innovative measures for a de minimis portion of a
State's total SIP inventory so long as States commit to verify that
these programs actually achieve their projected benefit in practice. As
part of the VMEP retrofit program, EPA announced the establishment of a
coalition to achieve the retrofit of 10,000 heavy-duty diesel vehicles
within the next year. The program is also providing technical support
to public agencies and State and local regulators that are implementing
retrofit programs. Due in large part to this effort, a highly
successful retrofit program has developed in the Northeast.
Specific Examples of Retrofit Projects
The specific examples that follow are each inspired to varying
degrees by three main themes: 1) Compliance with regulatory
requirements (SIP obligations, conformity requirements etc.); 2)
Addressing community concerns over growth and new construction; and 3)
The selfless desire to reduce air pollution.
New York Urban Bus Retrofit Project
New York City has just attained the existing PM 10 standards and
recognizes that further regulatory efforts will be necessary to address
levels of fine particle pollution in the coming years. In light of the
City's recent non-attainment status and the overwhelming evidence of
fine particle health consequences, New York State is devoting
considerable energy to reducing in-use diesel emissions. In 1999, the
New York City Transit Authority along with the New York Department of
Environmental Conservation, fuel producers, and retrofit technology
developers established a program to retrofit 50 urban buses with
continuously regenerating particulate traps. To date, 30 buses have
been retrofitted and testing results show that PM pollution is reduced
90 percent in the retrofitted buses. Because of the success of the
program, Governor Pataki recently announced a significant expansion of
the program. Under this breakthrough agreement, the New York City
Transit Authority (NYCTA) will purchase low sulfur fuel and traps for
the entire fleet of 3,700 hundred buses. Through the VMEP program, New
York State will now be able to take credit for this substantial
achievement in future PM attainment plans.
Big Dig Retrofit Project
In Boston, over 100 pieces of construction equipment are being
retrofitted as part of the ``Big Dig'' retrofit project. The multi-
billion dollar Big Dig project has concentrated hundreds of pieces of
construction equipment in the City of Boston, many of them operating
next to apartment and office buildings and hospitals. The retrofit
program was initiated when residents living adjacent to the Big Dig
complained about diesel exhaust from construction equipment. NESCAUM
worked with Massachusetts transportation and environmental officials to
fund and implement the retrofitting of nearly < of the permanent diesel
construction equipment on the project. The project has evolved to
include a strictly voluntary component and a mandatory component. The
voluntary retrofits are being undertaken and paid for by the highway
department and contractors. There is also a contractual requirement
stipulating that machines operating near hospitals, apartment and
office buildings be retrofitted. Massachusetts is pursuing similar
requirements in a host of major construction initiatives in the State.
Here, the need to reconcile the needs of the community with the need to
accommodate development in Boston spurred meaningful innovation.
Manchester Airport Retrofit Project
At the Manchester Airport in New Hampshire, airport operators, the
New Hampshire Department of Environmental Services, and NESCAUM are
collaborating in an effort to retrofit a majority of diesel ground
service equipment. Like many airports, the Manchester airport is
currently undergoing a major expansion in order to increase aircraft
service and vehicle access for airport users. This expansion is likely
to increase air pollution associated with airport operations. In part
to offset this increase in emissions, the airport is moving ahead with
a project to retrofit 60 airport owned nonroad vehicles such as de-
icers and snow removal machines. The Manchester project is a
combination of a program that aims to do environmental good combined
with the need to comply with regulatory (conformity) requirements.
School Bus Retrofit Project
Another project under active consideration by Northeast air quality
regulators is a school bus retrofit project. As part of the program,
school districts in Northeast States will be encouraged to devote
resources necessary to implement an varying array of diesel fuel
quality improvements and emission control retrofits. In this case, the
major impetus for the project will be to improve environmental quality
and to reduce childrens' exposure to toxins.
Diesel Retrofit Conclusion
All told, we anticipate that up to 15,000 vehicles in the Northeast
will be retrofitted in the first phase of this incentive driven
initiative. As a result, thousands of tons of PM, hydrocarbon, and
toxic emissions will be reduced in the Northeast. In all of these
projects, a combination of regulatory requirements and voluntary
measures have been combined to result in a highly successful program.
Our model is presently being replicated in several cities in California
and in Chicago. Based on the broad interest we have received from
programs across the country, we are optimistic that similar retrofit
efforts will be commonplace in the next several years.
Pollution Prevention in Permitting Programs (P4)
Overview of P4 Projects
Efforts to encourage pollution prevention within the existing
regulatory structure reveal many of the barriers to innovation that I
identified earlier. While the traditional Federal/State regulatory
regime has achieved great success, the traditional focus on technology
based control strategies presents several shortcomings:
Overly prescriptive compliance approaches foster a focus
on actions rather than results.
The focus on pollution control rather than pollution
prevention discourages industry from investing in less toxic and more
efficient technologies.
The emphasis on single media technology requirements
tolerates the shifting of pollution from one media to another rather
than eliminating it at the source.
EPA and the States have developed several innovative programs to
address these shortcomings without jeopardizing the environmental gains
that have been achieved through traditional regulatory efforts. One
such program is the Pollution Prevention in Permitting Project (P4).
The logic of pollution prevention is unassailable. Rather than
spending millions of dollars to manufacture, handle, and ultimately
control the pollutant emissions of hazardous substances used in the
creation of desirable goods and services, pollution prevention enables
the creation of these same goods using comparably benign methods. By
changing manufacturing processes, many industries have determined that
they can reduce air pollution considerably and cost-effectively. Under
this approach, facilities are given maximum flexibility to operate
their business while still maintaining adequate measures to ensure
compliance with environmental regulations. Ultimately, these permits
create a regulatory incentive to design waste out of the process and
increase production efficiency.
P4 Permits
In 1995, Intel and the Oregon DEQ wrote the first P4 permit. This
permit had two goals; (1) to increase operational flexibility at
Intel's Aloha facility and (2) create a regulatory program that creates
incentives for facilities to use pollution prevention to meet
regulatory requirements. To meet these goals, the permit contained pre-
approvals for specific operational, pollutant-specific, plant-wide
emission caps. Speed and flexibility to expand the facility were key
factors for Intel wishing to seek a P4 permit. As a result of the P4
permit, both the goals of flexibility and pollution prevention were
realized. In the first 2 years of the P4 permit, VOC emissions per
product unit fell 47 percent, while production increased 70 percent. In
addition, the facility was reconfigured without re-opening their Title
V permit. Finally, the use of pollution prevention to reduce per-unit
emissions and to keep emissions under regulatory thresholds resulted in
Intel saving $2 million in avoided control costs. This innovative
effort brought considerable benefit to the environment and the company.
NESCAUM P4 Pilot Project
Seeking to replicate this success in our region, NESCAUM has
embarked on a multi-State effort to incorporate pollution prevention
into the next generation of environmental permits. The basic tenet of
our effort is to set stringent environmental outcomes while providing
companies with optimum flexibility to design their compliance strategy.
To date, EPA's efforts to support P4 initiatives nation-wide have
resulted in several important achievements:
Development of six enforceable Title V permits that meet
all substantive and procedural requirements;
Creation of permit terms which encourage pollution
prevention to achieve compliance; and
Integration of ``living'' Title V permits which include
flexibility conditions that support rapid, cost-effective operational
change and creates lower administrative burdens for both sources and
permitting authorities.
NESCAUM seeks to build upon these successes by leading an effort to
fully integrate P4 approaches into traditional air permitting
activities. Through this effort NESCAUM is working with our member
States and EPA to identify and overcome regulatory barriers that stand
in the way of integrating P4 into the traditional regulatory regime. In
addition, NESCAUM will be working in targeted sectors to develop
flexible Title V permits. Targeted sector includes chemical
manufacturing, semiconductor (chip manufacturing), pharmaceutical
manufacturing, metals manufacturing (coating, anodizing), and pulp and
paper operations.
Our focus on these target sectors is premised on the recognition
that P4 is not equally appropriate in all sectors or for all companies.
P4 permits require considerable effort and resources to develop.
Therefore, we have opted to focus our energies on those sectors with
the greatest need for flexibility in order to evolve with dynamic
market demands. In addition, P4 permits should only be written for
those specific facilities that have demonstrated and credible
environmental management systems. Facilities with poor compliance
records tend to have poor process controls. Establishing flexible
permits with such facilities could render the public open to
unacceptable risks. By the end of our 2-year effort, NESCAUM expects to
have identified a host of sources that are appropriate candidates for
P4 and develop consistent approaches among our member States in
crafting these permits.
Barriers to P4 Permits
A current barrier to promoting P4 permits is the overarching
deadline for States to complete issuance of all Title V permits.
Permitting agencies are under intense pressure to issue all their Title
V permits by January 1. 2001. Permitting programs in the Northeast were
among the last to receive interim approval and therefore have had the
least time to write these permits. This situation puts the States at
odds with P4. Working flexibility into permits requires significantly
more time than writing a traditional permit. Given this pressure to
issue permits, States are reluctant to devote significant resources to
programs that will slow down the permit process.
Furthermore, barriers created in existing regulations and policies
can often hamper innovative efforts. One such barrier is the ``once in,
always in'' policy developed for MACT standards. Under Title III of the
Clean Air Act, EPA regulates hazardous air pollutants or HAPs.
Generally, these regulations require significant amounts of monitoring,
record keeping, and reporting activities. The ``once in always in''
policy creates a perverse disincentive to reduce the use of hazardous
substances because even the elimination of hazardous production
materials does not alleviate the unique regulatory burdens that were
explicitly designed for HAP sources. Given this situation, facilities
have little inducement to investigate alternative technologies that are
less polluting.
P4 Conclusion
The NESCAUM project has been underway for nearly 6 months. Work to
date has found that many facilities and permitting agencies are eager
to engage in this process. Critics within the government and
environmental communities however, continue to express the anxiety that
flexible programs, such as P4, do not provide adequate protections for
the public. The result of these fears has been to hold P4 permits to a
far higher standard than that of traditional permitting activities. Our
hope is that the scrutiny and transparency provided by our
collaborative regional effort will help to overcome these fears and
enable P4 permits to proceed efficiently.
Conclusion
While the focus of my remarks has reflected upon State and EPA
efforts there are two fundamental roles that Congress must fulfill for
this evolution to succeed. First, in the short term, innovation costs
money. While our society will save billions of dollars each year by
honing the regulatory system to appreciate the heterogeneity of our
States and businesses, designing and administering flexible yet
credible approaches is a far more complex and costly undertaking than
the ``one size fits all'' schemes that many appropriately deride. EPA
and the States must be provided the necessary resources and flexibility
to use them if we hope to navigate this transition. Without increased
resources, well intentioned efforts toward flexibility will ultimately
be undermined by a small minority of interests who will seek to exploit
this flexibility for private gain. Since change is always held to a
higher standard than the status quo, Congress, EPA and the States must
work together to ensure that we are collectively up to the test.
Second, even more than financial resources, successful innovation
requires trust. Trust is ample when innovation succeeds. However,
innovation will not occur unless trust isn't also dependable when well-
intentioned, credible efforts fail. Sources must trust State agencies
to provide constructive havens to remedy the creative control
approaches that will inevitably fall short of expectations. States must
trust the EPA to acknowledge and not penalize innovative State programs
both when they succeed and when they do not. EPA must trust
Environmental organizations to recognize that some efforts will not
succeed and environmental organizations must trust that failed efforts
will be remedied when critiquing perceived inadequacies. Of course in
all cases, trust must be earned through dialog, access, and
transparency of data. Congress, as the creator of laws and overseer of
EPA plays a vital role in setting the tone for this evolution toward
innovation and trust. I would like to thank Senator Smith for
initiating this dialog and look forward to working with the committee
in the months ahead.
______
Heavy-Duty Diesel Emission Reduction Project
Retrofit/Rebuild Component
(Prepared by NESCAUM for the U.S. Environmental Protection Agency)
Executive Summary
The purpose of this document is to expand the use of retrofit
pollution control technologies in heavy-duty engines through the
development of consistent guidelines for voluntary retrofit programs.
Such programs would be targeted to heavy-duty vehicles not affected by
the Federal Urban Bus Program and would include control technologies
not certified under that program as well as Urban Bus Program certified
technologies. Specifically, this document recommends 1) a protocol for
calculating State implementation plan (SIP) credits for voluntary
retrofit projects; 2) the structure of a third party retrofit
verification system for retrofit technologies; and 3) an in-use testing
program to ensure that emission reduction credits claimed are achieved
in the field. The last chapter of this document outlines model State
policies to reduce heavy-duty engine pollution through retrofit
initiatives.
This effort builds on the above mentioned U.S. Environmental
Protection Agency (EPA) initiative begun in 1993 to reduce urban
residents' exposure to diesel exhaust, the Urban Bus Retrofit/Rebuild
program. The program requires that urban buses operating in
metropolitan areas with populations over 750,000 be equipped with EPA
certified retrofit pollution control devices such as oxidation
catalysts or be rebuilt using certified low emission components at the
time of engine overhaul. To date, approximately 10,000 of 42,000
eligible urban buses have been retrofitted or rebuilt as a result of
the program. Two States, New Jersey and California, have undertaken
retrofit programs or guidelines as well. These efforts are intended to
expand the significant emission reductions gained through the Federal
Urban Bus Program by promoting the use of pollution reducing
technologies on the existing heavy-duty fleets in those States.
The need for reducing emissions from the nation's in-use heavy-duty
diesel fleets is clear. Current inventories estimate that heavy duty
engine emissions comprise 33 percent of all nitrogen oxides (NOx)
pollution and 80 percent of all particulates (PM) from mobile sources
in the Northeast States. Emissions from these engines contribute to
serious air pollution problems in the region. NOx causes eutrophication
of lakes and streams, acid rain, and is a precursor to ozone which
aggravates lung disease. Hydrocarbon (HC) emissions are also ozone
precursors and are made up, in part, of toxic substances such as
benzene, toluene, and 1,3 butadiene, some of which are known
carcinogens. PM emissions are very high from diesel engines and are
known to aggravate lung diseases such as asthma, emphysema, and
bronchitis. In addition, PM has been labeled a probable human
carcinogen by EPA and a toxic air contaminant by the California Air
Resources Board. In order for States to achieve air quality goals,
significant reductions in heavy-duty diesel emissions will need to be
made.
The recommendations contained in this document are based on
discussions of a workgroup organized by the Northeast States for
Coordinated Air Use Management (NESCAUM). The workgroup was created to
provide guidance to State and local agencies, as well as to private
organizations that plan to retrofit heavy-duty diesel vehicles with
pollution control devices. It included input from State and Federal
agency staff, testing laboratories, and control equipment
manufacturers. In addition, a draft of these guidelines was distributed
to EPA regional offices and the heavy-duty engine manufacturers. Their
comments and suggestions were reviewed and incorporated by the
workgroup into the recommendations contained in this report.
Primary Recommendations
All of the recommendations detailed below represent the views of
the Retrofit/Rebuild workgroup and NESCAUM.
1. Use of Urban Bus Program Certified Technologies
Oxidation catalysts certified with the Urban Bus Program should be
eligible without administrative or peer review for use in any highway
heavy-duty engine, with States being allowed to claim a 20 percent
reduction for PM, a 40 percent reduction for carbon monoxide (CO), and
a 50 percent reduction for HC. These credits may be claimed before a
project is implemented. Verification of emission reductions should be
conducted during or after project implementation by 1) a review of
retrofitting records and 2) through in-use emissions testing. These
recommendations are detailed in Chapter I, section D and Chapter III.
For use of technologies certified with the Urban Bus Program that
are engine specific such as rebuild kits, the workgroup recommends that
a PM emission reduction credit of 20 percent be granted automatically
when the rebuild kits are used in engines that the technologies are
certified for under the Urban Bus Program. Chapter I, section B
describes the credit allowed for ``.1'' technologies. As with the use
of oxidation catalysts, reporting and in-use testing recommendations
for rebuild kits are detailed in Chapters I.D and III.
2. Use of Technologies Not Certified with the Urban Bus Program
For all products that have not been certified with the Urban Bus
Program, emissions testing should be conducted by the manufacturer to
determine the emission reductions potential (percent reductions) of the
retrofit/rebuild product. Similar data should be required for the
voluntary program as are required for certification with the Urban Bus
Program (see Chapter III, section A for a detailed description). An
engineering analysis should be conducted by the manufacturer to
determine which engines the retrofit/rebuild equipment may be used on.
These data and analysis will be reviewed by the third party verifier to
establish the emission reduction level and applicability for engine
families for the voluntary retrofit program.
3. Third Party Verification System
A third party verification system should be established which
consists of an administrator and a peer review committee. The workgroup
recommends that Environment Canada be the administrator for this
program. The administrator will process all applications to the
retrofit/rebuild program, review data for thoroughness, organize the
work of the peer review group, make decisions on the level of in-use
testing required, and communicate with EPA. The peer review committee
should consist of temporary volunteer members from industry,
laboratories, and trade organizations (such as the Society of
Automotive Engineers) with expertise in heavy-duty engines and retrofit
equipment. The committee will make determinations for emission control
devices on the level of in-use testing, completion of the in-use
testing requirement, acceptability of in-use testing method, emission
reduction potential of emission control products, and engine families
that control equipment can be used with.
4. In-use Testing Requirement
In order to verify the emission reductions claimed from retrofit
projects and to assess control equipment durability a percentage of all
emission control products installed as part of a retrofit/rebuild
program should be tested in-use. The procedure for establishing the
number of units to be tested in the field is outlined in Chapter III
and is adapted from EPA's in-use compliance testing requirements for
new pleasure craft marine engines. An in-use testing trigger should be
established for different types of technologies based on unit sales. A
70 percent pass rate on tested units will be needed in order for
devices to ``test out'' of the in-use requirement.
5. Calculating SIP Credits
In order to calculate SIP credits from retrofit projects, baseline
emission factors for heavy-duty engines to be retrofitted needs to be
established. The workgroup recommends that Federal Test Procedure (FTP)
certification data for engine families be used as baseline emission
rates for retrofitted engines. Emission reduction percentages (as
recommended in this document for devices certified with the Urban Bus
Program and as established by the third party verifier for devices not
certified with the Urban Bus Program) can be applied to these baseline
rates. Mass emissions reductions can be calculated for individual
fleets using the formulas detailed in Chapter IV and information
available to fleet operators such as vehicle mileage, hours in
operation, or fuel consumption. In some cases, States may choose to
develop baseline emission rates through testing of heavy-duty engines
in-use. The States will need to develop a testing plan in coordination
with EPA to determine these baseline levels.
6. Retrofit/Rebuild Program Information/Website
The workgroup recommends that if possible all retrofit/rebuild
devices certified with the Urban Bus Program and all devices
``verified'' through third party review be listed on a retrofit/rebuild
website which States and others interested in undertaking retrofit
projects can easily access. The retrofit website could provide SIP
credit calculation formulas, information on emission control products,
applicable engines, and EPA certification data for engine families.
7. Model State Retrofit Policies
States have policy and funding options to increase the use of
retrofit devices to reduce heavy-duty diesel pollution. Retrofitting
heavy-duty vehicles and machines to reduce PM, HC, CO, toxics, and in
some cases NOx, can assist States in reaching air quality standards.
Executive orders, contract requirements, and agency policies represent
potential methods to increase the use of retrofit devices. Funding from
Federal sources such as the Congestion Mitigation Air Quality
Improvement program (CMAQ), State funding in the form of bond issues
and agency budgets, and supplemental environmental moneys can provide
financial support for retrofit projects. The last section of this
report outlines model retrofit policies that have been used in the
region, funding sources, and example strategies to increase the use of
pollution control equipment.
______
Responses of Jason Grumet to Additional Questions from Senator
Lautenberg
Interstate Transportation of Air Pollution
Question 1. NESCAUM has studied the movement of air pollution into
the northeastern States from other States. What have you learned and
what does that say about the need to maintain a strong Federal role in
environmental policy?
Response. This response presents NESCAUM's work in two particular
areas of air pollution transport that have received a great deal of
attention in recent years. The first area concerns ozone (smog). The
U.S. Environmental Protection Agency (EPA) recently implemented a
regional plan to reduce emissions of nitrogen oxides (NOx), the most
important precursor contributing to ozone transport on a regional
scale. The second area concerns acid rain. NESCAUM has done recent work
on acidic deposition in New England and linkages with pollution sources
in upwind regions. The 1990 Clean Air Act Amendments (CAAA) created the
Federal Acid Rain Program that has resulted in a significant decrease
in sulfur dioxide (SO2) emissions, the precursor to acidic
sulfate deposition. NESCAUM's work indicates that upwind reductions in
SO2 emissions correlate strongly with downwind reductions in
acidic sulfate deposition. Unfortunately, environmental recovery
appears to be slower than expected, and additional regional reductions
are likely needed to adequately protect sensitive land and water
resources from the damaging effects of acid rain.
In keeping with the theme of the May 2 hearing before the Senate
Committee on Environment and Public Works, NESCAUM would like to
reiterate its strong support for State flexibility in addressing
environmental problems. The NESCAUM States take pride in developing
their own innovative efforts to reduce pollution within their borders--
an approach that requires a cooperative framework with the Federal
Government to provide sufficient flexibility for the States. While the
NESCAUM States seek flexibility in addressing the pollution sources
within their borders, they also recognize the need for a Federal role
in addressing pollution caused by sources outside a State's borders. In
light of NESCAUM's work on air pollution transport, we clearly see the
need to maintain a strong Federal role in environmental policy to deal
with these types of interstate air pollution issues. Unfortunately, an
upwind State all too often has little incentive to reduce pollution
from in-State sources when public health and environmental damage occur
downwind outside the State. In the experience of the NESCAUM States, it
seems that upwind States all too often believe a downwind State must
control in-State sources almost to the verge of bankruptcy before
upwind States feel obligated to reduce their own contributions to a
downwind State's pollution problem. The Clean Air Act, however, places
equal responsibility on all pollution sources for their contributions
to downwind pollution problems, regardless of where the sources are
located. When upwind States mistakenly believe they have less of an
obligation to address their own contribution to downwind pollution
problems, downwind States have little recourse but to appeal to the
Federal Government for relief.
In addition to interstate pollution transport, there is another
need to maintain a strong Federal role in environmental policy. A
number of cost-effective pollution control options, such as low sulfur
fuels and heavy-duty diesel engine standards, are often national in
scope and fall outside State jurisdiction. These types of control
options are the quintessential programs best addressed by the Federal
Government.
I. Ozone and precursor transport
The transport of NOx and ozone in power plant plumes has been known
since at least the mid-1970's. Measurements of power plant plumes have
documented high ozone levels transported from Wisconsin into Michigan
(Miller, et al., 1978), Tennessee into Indiana (Gillani & Wilson,
1980), and Missouri toward Chicago (White, et al., 1983). These studies
show that NOx in power plant plumes produces significant amounts of
ozone, and the ozone travels long distances into neighboring States.
Within the Ohio River Valley, where the concentration of large
coal-fired power plants is greatest, there is a large and persistent
area of high ozone during the summer months relative to air in other
parts of the country (Husar, 1996). Within this region, winds
intermingle ozone pollution from different power plant plumes (as well
as other pollution sources). Because of this mixing, a large
``reservoir'' of ozone forms across much of the east-central United
States. People living in southern Indiana, southern Ohio, northern
Kentucky, and most of West Virginia actually experience higher long-
term ozone levels than people living in metropolitan Chicago or Boston
(see Figure 1).
The large ozone reservoir in the Ohio River Valley returns each
summer with little abatement. Researchers have found no significant
trends in regional ozone levels from 1980 to 1995 (Five, et al., 1998).
While urban levels have decreased somewhat due to pollution controls on
automobiles, regional ozone and NOx levels have not significantly
changed. This is due in large part to the lack of significant NOx
reductions from fossil fuel power plants which, in places such as the
Ohio River Valley, contribute 40-50 percent of the total NOx emissions
in a given region. Between 1987 and 1996, NOx emissions from power
plants rose 3 percent nationally (EPA, 1998). Because regional ozone is
more sensitive to NOx controls than volatile organic compound (VOC)
controls, the lack of significant NOx reductions from power plants is
impeding progress toward reducing ozone levels.
Researchers observed the movement of ozone from the Ohio River
Valley into the Northeast as early as 1979. During early August in
1979, scientists tracked a mass of ozone leaving Ohio, crossing
Pennsylvania and southern New York, and entering into the Northeast
Corridor (Clarke and Ching, 1983). When this mass of air from the Ohio
River Valley entered into the Northeast Corridor, it contained about 90
parts per billion (ppb) of ozone. \1\ The current 1-hour Federal ozone
standard is equivalent to 120 ppb (0.12 parts per million). Therefore,
the amount of ozone observed entering the Northeast was 75 percent of
the 1-hour ozone standard and represented a significant contribution to
the overall ozone burden experienced in the Northeast during that time.
---------------------------------------------------------------------------
\1\ The researchers also indicated that as the air mass entered the
Northeast corridor, it contained enough transported precursor emissions
to generate an additional 35 ppb of ozone on top of the 90 ppb already
formed. Consequently, the amount of background ozone and precursors
entering the Northeast could have resulted in an exceedance of the l-
hour ozone standard in the Northeast even if only minimal additional
precursor emissions occurred locally.
---------------------------------------------------------------------------
As the persistent ozone reservoir establishes itself every summer
in the Ohio River Valley, large amounts of ozone continue to be
transported into the Northeast from the west. During the summer of
1995, the North American Research Strategy for Tropospheric Ozone-
Northeast (NARSTO-NE) conducted aircraft measurements of ozone in air
masses along the western edge of the Northeast Corridor. During pre-
dawn hours, scientists measured ozone levels up to and in excess of 100
ppb above Shenandoah, VA, Gettysburg, PA, Poughkeepsie, NY, and other
locations in the Northeast (Lurmann, et al., 1997). During this time of
morning, the ozone could not have been formed locally (no sunlight is
present to initiate the formation of ozone), so it must have been
transported during the overnight hours. Wind direction on some of the
highest ozone days (e.g., July 14, 1995) was out of the west
(Blumenthal, et al., 1997). Therefore, we can conclude that the ozone
traveled into the Northeast from points to the west, i.e., the Ohio
River Valley.
At transported ozone levels of over 100 ppb during the pre-dawn
hours, the Northeast is already over 80 percent on the way to an
exceedance of the 1-hour standard before the sun rises. The Northeast
is in the predicament of achieving the 1-hour 120 ppb Federal ozone
standard in situations where 100 ppb or more of the ozone is beyond its
control. Only an additional 20 ppb of ozone generated within the
Northeast will cause an exceedance of the 1-hour standard, and the
situation is even worse for the more protective 80 ppb 8-hour standard.
\2\ The high levels of transported ozone virtually guarantee that the
Northeast will not achieve air quality goals without NOx reductions
from upwind sources.
---------------------------------------------------------------------------
\2\ The U.S. Court of Appeals for the District of Columbia Circuit
(D.C. Circuit) has remanded the revised 8-hour ozone standard back to
EPA, a decision currently on appeal to the U.S. Supreme Court. Although
questioning the standard on constitutional grounds, the D. C. Circuit
recognized that detrimental health impacts occur at ozone levels below
the current l-hour standard.
---------------------------------------------------------------------------
Estimating Ozone Transport into the Northeast
A range of ozone transport into the Northeast can be estimated from
the field measurements mentioned in the preceding section, and from
computer modeling of ozone formation and transport. Based on results
from a model called CALGRID, \3\ we estimate a plausible contribution
of transported ozone from outside the Northeast to ozone exposure above
the 1-hour 120 ppb and the 8-hour 80 ppb standards inside the Northeast
in the range of 20-45 percent. This was estimated as described in the
following text.
---------------------------------------------------------------------------
\3\ U.S. EPA has approved the CALGRID model for ozone attainment
planning purposes in the New England Domain.
---------------------------------------------------------------------------
Two modeled scenarios were generated for a severe ozone episode
occurring on 11-15 July 1995 in the eastern United States. \4\ In the
first modeled scenario, the reductions proposed in the EPA NOx SIP Call
were applied only within the Northeast Ozone Transport Region (OTR),
and current Clean Air Act measures were put in place outside the OTR
using emissions projected for 2007 (Run 1). In the second scenario, the
EPA NOx SIP Call reductions were applied throughout 22 eastern States
(Run 2).
---------------------------------------------------------------------------
\4\ Communication from Mark Fernau, Earth Tech, Inc., Concord, MA.
---------------------------------------------------------------------------
In each scenario, the total ozone exposure above the 1-hour 120 ppb
standard and the 8-hour 80 ppb standard was determined. The total
exposure to ozone above the 1-hour standard was calculated from the
model by multiplying all calculated ozone concentrations above 125 ppb
by the total hours above 125 ppb and the area of each modeled grid cell
(144 km2) in which an ozone concentration above 125 ppb occurred. For
the 8-hour standard, a surrogate 1-hour value of 110 ppb was used as
the threshold exposure level in the model, and the total exposure was
calculated in the same manner as for the 125 ppb threshold. The 1-hour
threshold of 110 ppb is used because ozone monitoring data suggest that
when a 1-hour concentration of 110 ppb is reached or exceeded, it
typically coincides with an 8-hour average above 85 ppb at the same
monitor. \5\
---------------------------------------------------------------------------
\5\ The values of 125 ppb (1-hour) and 85 ppb (8-hour) are used to
be consistent with EPA's monitoring test for an ozone exceedance.
According to EPA's data truncation guidance, an exceedance of the l-
hour ozone standard does not occur until monitored l-hour
concentrations reach or exceed 125 ppb, and an 8-hour exceedance does
not occur until the 8-hour average reaches or exceeds 85 ppb. For the
modeling test, this may be a conservative threshold to use because
models often underestimate observed peak ozone concentrations.
---------------------------------------------------------------------------
The reduction in ozone exposure within the Northeast Ozone
Transport Region due to NOx controls outside the Northeast is shown in
Table 1. The reduction is given as the percentage decrease in ozone
exposure between Run 1 (EPA NOx SIP Call in the OTR only) and Run 2
(EPA NOx SIP Call in 22 eastern States).
Table 1. Percent reduction in ozone exposure (ppb hr/km2) greater than 125 ppb (1-hour standard) and 110 ppb
(surrogate for 8-hour standard) within the Northeast Ozone Transport Region due to applying the EPA NOx SIP Call
beyond the borders of the QTR.
Percent daily reduction in modeled ozone exposure within the Northeast Ozone Transport Region due to 22 State
NOx SIP Call
----------------------------------------------------------------------------------------------------------------
July 11 July 12 July 13 July 14 July 15
----------------------------------------------------------------------------------------------------------------
Reduction in ozone exposure 2125 ppb.......................... -31% -16% -35% -33% -42%
Reduction in ozone exposure 2110 ppb.......................... -37% -27% -32% -34% -47%
----------------------------------------------------------------------------------------------------------------
Modeled reductions are based on 11-15 July 1995 ozone episode.
Based on the modeled reductions in Table 1 and the high levels of
ozone observed entering the Northeast during the field studies
mentioned above, NESCAUM estimates a plausible contribution range of
20-45 percent to ozone exposure above the 1-hour and 8-hour standards
in the Northeast Ozone Transport Region due to transported ozone from
outside the region.
The estimated range is consistent with modeling results from the
Ozone Transport Assessment Group (OTAG). OTAG estimated ozone transport
impacts by ``turning off'' all human-related sources of NOx and VOC
emissions in various parts of the eastern United States. When human-
related emission sources were set to zero in the OTAG model (OTAG used
a model called UAM-V), changes in ozone levels in downwind receptor
regions could be estimated. These modeling runs indicated that human-
related emissions in various upwind regions significantly contributed
to ozone levels in downwind receptor regions. For example, OTAG results
for the July 1995 episode indicated that turning off NOx and VOC
emissions in parts of the Ohio River Valley reduced ozone exposure
above 120 ppb in the Philadelphia area by 41 percent, and in the
Baltimore/Washington, DC area by 43 percent. \6\
---------------------------------------------------------------------------
\6\ Tables of ozone exposure data calculated from the OTAG July
1995 modeled episode can be found at the OTAG Northeast Modeling and
Analysis Center web address: http://sage.mcnc.org/OTAGDC/aqm/uamv/
jul95.
---------------------------------------------------------------------------
The Economic Impact of Ozone Transport Into the Northeast
The out-of-region ozone transport contributing to ozone levels
above Federal standards within the Northeast Ozone Transport Region
creates additional economic costs within the Northeast due to the need
for more stringent local controls.
If no additional NOx measures beyond Clean Air Act acid rain
controls are applied on sources upwind, the additional control costs in
the Northeast to compensate for ozone transport could be from $1.4 to
$3.9 billion each year. If upwind sources met the reductions in EPA's
NOx SIP Call, the economic costs to the Northeast will be reduced to
about $0.2 to $1.1 billion each year (NESCAUM, 1998).
In addition, there are significantly more low-cost opportunities
for reducing NOx emissions at upwind sources than in the Northeast.
Upwind power plants are estimated to be able to meet the EPA NOx SIP
Call budgets at an average cost of $662/ton. Northeast power plants
will spend about 50 percent more to achieve the same budget
requirements--about $1,013/ton. While the cost to Northeast power
plants is still reasonable, there are not enough available reductions
remaining from these emission sources to fully offset the impact of
transported ozone. Any additional reductions in the Northeast must come
from other emission sectors at higher costs.
The Need for a Federal Role
The NESCAUM States have struggled for years to overcome the amount
of smog transported into their region from upwind sources beyond their
jurisdiction. Without a Federal presence to implement a multistate
regional smog strategy, there is little likelihood that air quality
standards can be met for millions of people living in the Northeast.
The U.S. EPA's regional NOx SIP Call, recently upheld in large part by
the D.C. Circuit, is the first major step by the Federal Government
toward addressing this problem. A Federal ``cap and trade'' program for
NOx, similar to the successful SO2 trading program under
Title IV of the CAAA, promises a cost effective regional program for
reducing smog that cannot be accomplished through individual,
uncoordinated State action (or inaction). The program provides needed
flexibility to the States to devise their own control options, but the
application of the program's NOx reduction targets across many States
is the proper and necessary role of the Federal Government.
II. Acid deposition in the New England States
A number of recent studies have investigated acidic deposition
trends (sulfates and nitrates) since the 1980's in areas of the United
States (Lynch et al., 1996; Husain et al., 1998; Holland et al., 1999;
Shannon, 1999). NESCAUM's work focuses on the New England region and
extends the period of analysis to 1998, which is the most recent year
for which deposition data are currently available. Consistent with the
results of the earlier studies, NESCAUM found a decreasing trend in
annual sulfate deposition in New England since 1980 (Miller, 1999). The
decline after 1990 is presumably a result of SO2 emission
reductions under Title IV of the 1990 Clean Air Act Amendments,
although SO2 power plant emissions have increased somewhat
since 1995 following a period of significant decline. Nitrate
deposition trends show no discernable change over the same period, nor
do NOx emissions.
In general, NESCAUM finds that the decreasing sulfate deposition
trend in New England strongly correlates with the SO2
emissions trend from fossil fuel power plants located within a group of
eastern States and the Province of Ontario. NESCAUM estimated the
geographical scope of the SO2 source region that influences
downwind sulfate deposition in New England using results from EPA's
Regional Acid Deposition Model (RADM) (EPA, 1995). The RADM model
``tagged'' SO2 emissions from power plants and large
industrial sources in 53 separate subregions of the eastern United
States and Canada. For each subregion, the model simulated
SO2 emissions in 1985 and projected for 2010 after
implementation of Title IV of the Clean Air Act, and then tracked the
SO2 and its chemical transformations during downwind
transport and ultimate deposition. From RADM's deposition contribution
plots, NESCAUM identified the following States and province as
containing sources that contribute some level of sulfate deposition in
New England: Connecticut, Delaware, District of Columbia, Illinois,
Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New
Hampshire, New Jersey, New York, Ohio, Ontario, Pennsylvania, Rhode
Island, Vermont, Virginia, and West Virginia (see Figure 2).
To correlate with the SO2 emissions trend, NESCAUM used
sulfate deposition data from ten monitoring sites in New England
collected by the National Atmospheric Deposition Program (NADP). \7\
The usual caveat applies in assessing a correlation. A strong
correlation between emission and deposition trends does not necessarily
imply a cause-and-effect relationship. The difficulty is that
SO2 emissions from power plants are decreasing across much
of the eastern United States. Any deposition decrease in New England
could be positively correlated with any decrease in SO2
emissions no matter where it occurs in the eastern United States.
Therefore, NESCAUM uses the RADM modeling results to better refine the
scale of the potential source region. Determining which upwind areas,
based on the RADM results, contain sources contributing to downwind
deposition provides an objective rationale for narrowing the
geographical scope of the potential source region. While not completely
conclusive, it provides a reasonable basis for believing a positive
correlation between SO2 emissions and sulfate deposition in
the New England region will be more than coincidental.
---------------------------------------------------------------------------
\7\ National Atmospheric Deposition Program (NRSP-3)/National
Trends Network, 1998, NADP Program Office, Illinois State Water Survey,
2204 Griffith Drive, Champaign, IL 61820.
---------------------------------------------------------------------------
Figure 3 presents a plot of the emissions-related correlation with
the scaled sulfate deposition. The trend in sulfate deposition in the
New England region is strongly correlated with fossil fuel
SO2 emissions in the source region identified from the RADM
modeling results (correlation coefficient R2 = 0.78). \8\ The results
are consistent with previous trend analyses by other researchers
(Holland et al., 1999; Shannon 1999). The strong correlation supports a
conclusion that upwind sources in the region identified by th RADM
results contribute to acidic deposition in New England, and recent
SO2 reductions at these sources have led to decreases in
downwind acidic deposition.
---------------------------------------------------------------------------
\8\ A correlation coefficient R2 approaching a value of one
indicates a strong correlation. On the other hand, an R2 approaching
zero would indicate a weak correlation.
---------------------------------------------------------------------------
The Need for a Federal Role
A report by the General Accounting Office (GAO, 2000) concludes
that at the time Congress drafted the 1990 Clean Air Act Amendments, it
did not recognize how lakes and soils in the Adirondacks and other
eastern areas might lose the ability to neutralize acidic deposition or
use excess nitrogen. Therefore, even with reduced emissions of acid
forming pollutants under the 1990 CAAA, the Northeast's ecosystems may
be too impaired to respond. Noticeable improvement in the environment
may not occur unless pollution sources make deeper reductions beyond
current CAA requirements.
Although pollution sources are meeting the CAAA acid rain
requirements, the acidification of northeastern surface waters
continues. Recent reports suggest that pollution sources will need to
achieve additional substantial reductions in SO2 and NOx
emissions beyond what the CAAA Title IV requires (GAO, 2000; Acidifying
Emissions Task Group, 1997). Action at the State level is beginning to
respond to the CAAA shortcomings. Recently signed legislation in the
State of New York attempts to discourage New York businesses from
selling any available emission allowances to upwind States where the
added emissions may contribute further to New York's acid deposition
problem. While there is debate over whether New York's action will have
much of an impact, it indicates a growing level of frustration with
progress toward reducing acidic deposition that is beginning to
manifest itself politically. Unfortunately, a State has only limited
ability to compensate for environmental damage caused by pollution
sources located over a broad region outside its borders. To
realistically address this problem, States need action at the Federal
level.
Conclusion
States need flexibility to develop innovative programs that will
meet public health and environmental goals. At the same time, the
Federal Government has an important role to play in ensuring that out-
of-State pollution sources share equal responsibility in solving
downwind pollution problems. Air pollution transport is one such area
that requires in-State flexibility combined with a Federal role to that
ensure all States recognize their mutual obligations to address
interstate pollution problems.9
One approach that combines State flexibility with a strong Federal
role is a multistate and multipollutant ``cap and trade'' program.
Title IV of the CAAA has had great success in accomplishing cheap
reductions of SO2 pollution across a broad region of the
country. The Federal Government set an overall target, but left it up
to the States and pollution sources to develop the best approach for
meeting the reduction target. The requirements of EPA's NOx SIP Call
promise similar flexibility in reducing NOx emissions during the ozone
season.
At the Federal level, a multi-pollutant cap and trade scheme along
the lines proposed by Senator Smith would facilitate flexible State
action in partnership with a Federal role. Under a multi-pollutant
scheme, further reductions in SO2 and NOx emissions could
build upon the success of the current CAAA Title IV national
SO2 emission cap and trade program. The NOx SIP Call, as
currently being implemented, will cap NOx emissions in a number of
eastern States, but only during the 5-month ozone season. States will
need Federal support to further tighten the SO2 cap beyond
current Title IV levels, and extend NOx limits from seasonal to annual
requirements in order to fully address continuing acid rain problems.
States could also pursue complementary reductions in other pollutants,
such as mercury, and develop voluntary programs to reduce carbon
dioxide, a potent greenhouse gas. The multipollutant approach would
give States flexibility in developing innovative strategies to reduce a
range of pollutants emitted in-State, but retain a Federal presence to
ensure all pollution sources share in their mutual responsibility to
address interstate pollution problems, regardless of where the sources
are located.
References
Acidifying Emissions Task Group, 1997. Toward a National Acid Rain
Strategy, Submitted to the National Air Issues Coordinating Committee.
Report available from Environment Canada, Ottawa (October).
Blumenthal, D.L., et al. 1997. Transport and Mixing Phenomena
Related to Ozone Exceedances in the Northeast U.S., Sonoma Technology
Report STI-996133-1710-WD1.1, February.
Clarke, J.F. & J.K.S. Ching 1983. Aircraft Observations of Regional
Transport of Ozone in the Northeastern United States, Atmos. Envt.,
Vol. 17, pp. 1703-12.
EPA, 1995. Acid Deposition Standard Feasibility Study Report to
Congress, EPA 430-R-95-001a (October).
EPA 1998. National Air Quality and Emissions Trends Report, 1996,
EPA 454/R-97-013, p. 17, January.
Fiore, A.M., D.J. Jacob, J.A. Logan, & J.H. Yin 1998. Long-Term
Trends in Ground Level Ozone over the Contiguous United States, 1980-
1995. J. Geophys. Res., Vol. 103, pp. 1471-80.
GAO (General Accounting Office), 2000. Acid Rain: Emissions Trends
and Effects in the Eastern United States, General Accounting Office,
Washington, DC (March).
Gillani, N.V. & W.E. Wilson 1980. Formation and Transport of Ozone
and Aerosols in Power Plant Plumes, Ann. N.Y. Acad. Sci., Vol. 338, pp.
276-96.
Holland, D.M., P.P. Principe, and J.E. Sickles, II, 1999. Trends in
atmospheric sulfur and nitrogen species in the eastern United States
for 1989-1995, Atmos. Envt., Vol. 33, pp. 37-49.
Husar, R.B. 1996. Spatial pattern of daily maximum ozone over the
OTAG region, Web address: http://capita.wustl.edu/OTAG/Reports/
otagspat/otagspat.html.
Husain, L., V.A. Dutkiewicz, and M. Das, 1998. Evidence for
decrease in atmospheric sulfur burden in the eastern United States
caused by reduction in SO2 emissions, Geophys. Lett., Vol.
25, pp. 967-970.
Lurmann, F.W., et al. 1997. Evaluation of the UAM-V Model
Performance in the Northeast Region for OTAG Episodes, Sonoma
Technology Report STI-996133-1716-WD2.1, March.
Lynch, J.A., V.C. Bowersox, and J.W. Grimm, 1996. Trends in
precipitation chemistry in the United States, 1983-1994--An Analysis of
the effects of Phase I of the Clean Air Act Amendments of 1990, Title
IV, U.S. Geological Survey Open-File Report 96-0346.
Miller, D.F., A.J. Alkezweeny, J.M. Hales, & R.N. Lee 1978. Ozone
Formation Related to Power Plant Emissions, Science, Vol. 202, pp.
1186-88.
Miller, Paul J., 1999. Emissions-related acidic deposition trends
in Maine and New England, EPA Project No. CX826563-01-0, NESCAUM,
Boston, MA (December).
NESCAUM (Northeast States for Coordinated Air Use Management),
1998. The Costs of Ozone Transport: Achieving Clean Air in the East,
NESCAUM, Boston, MA, (July).
Shannon, J.D., 1999. Regional trends in wet deposition of sulfate
in the United States and SO emissions from 1980 through 1995, Atmos.
Envt., Vol. 33, pp. 807-816.
White, W.H., D.E. Patterson & W.E. Wilson, Jr. 1983. Urban Exports
to the Nonurban Troposphere: Results from Project MISTT, J. Geophys.
Res., Vol. 88, pp. 10,745-52.
__________
Statement of Robert J. Huston, Chairman, Texas Natural Resource
Conservation Commission
Mr. Chairman, members of the Senate Committee on the Environment
and Public Works, I am Bob Huston, Chairman of the Texas Natural
Resource Conservation Commission. I am pleased to provide information
to you about the successes we've had in Texas in assuming delegation of
environmental responsibilities from the U.S. Environmental Protection
Agency, in particular delegation of the National Pollutant Discharge
Elimination System (NPDES) permitting authority.
I add my testimony to that of other representatives from across the
United States: from South Carolina, from New Hampshire, from
Pennsylvania, and Utah. There are many more like us who could also
testify to the successes that come from devolution of environmental
responsibilities. Because while the issues may be similar across the
States, there are marked differences in how those issues should be
approached. Quality air, good water, safe waste disposal these are the
goals to which we all adhere. Geology, climatic conditions, topography,
industrial and commercial activity, population clusters, diversity of
natural resources these are some of the variables that make each of our
States unique and that require responses that are tailor-made rather
than cut down from a one-size-fits-all.
EPA cannot begin to respond to the unique needs and circumstances
of each State. The sheer size of this country makes that a foregone
conclusion. Rather, EPA works best when it serves as our partner,
providing oversight, guidance and assistance.
I say this with profound conviction born of first-hand experience
through baptism by fire.
Let me lay out the scene for you:
I was appointed to the TNRCC by Governor George W. Bush in January
1999. I stepped into the position just as Texas, after 25 years of
effort, was delegated responsibility from the EPA for administering the
NPDES program. NPDES is the national program for issuing permits to all
facilities that discharge wastewater. Permittees range from huge
industrial complexes and municipal wastewater treatment facilities to
confined animal feeding operations to facilities serving a single
subdivision or mobile home park. Permits specify a whole host of
criteria: the volume of wastewater that can be discharged under
differing conditions as well as the composition of the discharge, such
as the concentration of chemicals, nutrients, and other substances
contained in the discharge. Those who fail to comply with the terms of
the permit face significant penalties. NPDES permits expire after 5
years; when reissued, they often require the permitted facility to meet
tighter discharge parameters. This process ensures continued progress
toward enhanced water quality . . . at least in theory.
In reality, the NPDES program for Texas was not in very good
condition. When Texas inherited NPDES from EPA we also inherited a
backlog of some 4,000 permit files, including many applications, some
for renewals, others for new permits. Many of the files were obsolete.
Some of the files included applications that were 20 years old . . .
and had never been acted on.
This is not to say, however, that no one in Texas was tracking,
monitoring, assessing, and, when appropriate, enforcing water quality
regulations. The State of Texas was handling these tasks and handling
them well. Texas knows how to properly run a water permitting program.
During the 25 years that NPDES had remained a federally managed program
in Texas, we had been issuing State discharge permits to a much broader
universe of facilities. Although NPDES requires permits of all
facilities, the program as administered by EPA was focused on major
facilities. As demonstrated by the backlog, it was unable to handle
most of the minor facilities. Texas waste-water discharge permits, on
the other hand, were being issued to all facilities, major and minor.
This is significant because we are unique among States in having
significantly more almost five times more minor facilities as major
ones. Our current tally is about 550 major facilities compared to about
2,500 minor facilities.
Those minor facilities would have fallen through the cracks without
our State permitting program. And as we all know, small facilities can
have potentially major impacts, and the cumulative effects of this
universe of dischargers cannot be ignored.
Basically we were running a system that was parallel to the NPDES
but much more comprehensive. Furthermore, the discharge parameters for
all permits whether written by EPA or by Texas have always been based
on water quality standards set by the State, as provided by the Clean
Water Act. The States are the ones with detailed knowledge about the
water bodies within our boundaries.
Over the years, we continued to refine our system to reflect our
ongoing work in the field. For example, Texas has successfully moved
permit renewals to a basin rotation, so that all permits within a given
river basin come up for renewal at the same time. This allows us to
consider the cumulative impacts of wastewater discharges on water
quality, rather than looking at each facility in isolation.
In Texas, like in many other States, the program was working and
working well. Overlaying this comprehensive and effective State program
with a Federal program provided little benefit to the environment and
was burdensome to the regulated community.
Fortunately, Texas was delegated the program in September 1998,
along with its 4,000 files.
Now, with the new Texas Pollutant Discharge Elimination System,
facilities no longer need both a Federal and a State permit. They can
now apply for a single wastewater discharge permit through a
streamlined and more cost-effective permitting process. For entities
with complex permits, this means thousands of dollars in cost savings
and processing time. For Texas, it means more efficient and effective
water quality protection, with permits tailored to the needs and
conditions of each local water body and the communities it serves. The
end result is efficient protection of our water resources.
Building this new system was not easy. We needed to quickly merge
the two permitting systems, absorb the Federal backlog, and do so
without unduly affecting the many permittees who expect and deserve
their new and renewal applications be processed in a timely fashion. It
was akin to changing a tire on a moving car.
The TNRCC workload increased dramatically. Nonetheless, after first
organizing and categorizing the massive set of inherited files, we set
for ourselves an ambitious goal of clearing out in one year (calendar
1999) the permit backlog accumulated by EPA over 20-plus years. I am
proud to say we excelled at the job: by January 2000 we had erased the
backlog and had the new TPDES program running on an even keel.
How did we do it? There are three parts to that answer. Hard work
and know-how are one part. Certainly, we could not have accomplished
this feat without the dedication of TNRCC staff and their years of
experience in developing wastewater discharge permits, their thorough
knowledge of the State's water bodies, and their comprehensive
understanding of Texas water quality standards.
Another part of the answer is flexibility. We reallocated resources
from other parts of the agency primarily permit writers from our air
and waste programs so that we could focus intensive efforts on this
project. This type of flexibility is the hallmark of State
environmental programs; we can respond to priorities in ways not
available to the EPA. In Texas, we see the future of environmental
successes not always in prescriptive regulations and procedural
mandates but rather in regulatory flexibilities that set clearly
defined goals and standards for accountability. This is the way we run
our agency and the way we craft our programs.
Finally, the third part of the answer is EPA itself. Region 6,
under Regional Administrator Gregg Cooke, provided us with $2.5 million
in grants to bring additional resources to the effort. Just as
importantly, Region 6 furnished technical resources and provided
oversight assistance. Region 6 made delegation work.
TPDES is a success story for everyone:
for the TNRCC, which took an already massive State
permitting program and merged it seamlessly with a Federal program;
for Texas facilities, which now have a single efficient
system for permitting wastewater discharges;
for Texas communities, which enjoy a sound and
responsible program for protecting the quality of water in their lakes
and rivers; and
for the EPA, which can now focus on its proper role of
overseeing and providing resources to ensure successful implementation
of Clean Water Act objectives. Through delegation, it has achieved its
goals.
In Texas, we firmly believe this success can be replicated in other
areas, most notably with the Total Maximum Daily Load program. To EPA
we say yes, set the goals, but give us the flexibility to achieve those
goals in the most efficient and effective manner, taking into account
our unique circumstances. Delegation, not micromanagement, is the key
to successful protection of the environment.
Thank you for the opportunity to share this success story with you.
__________
Georgia Department of Natural Resources,
May 19, 2000.
The Honorable Robert C. Smith, Chair,
Senate Environment and Public Works Committee,
U.S. Senate,
Washington, D. C. 20510
Dear Chairman Smith: I appreciate the opportunity to enhance the
testimony of my ECOS colleagues as to the role of the States in
enforcement of the environmental statutes of the nation.
The Georgia Environmental Protection Division (EPD) is responsible
for enforcing 20 State laws passed over the past 34 years to protect
Georgia's environmental resources. In addition, the responsibility for
environmental programs under four Federal laws is delegated to EPD.
The regulated community affected by these laws is extremely
diverse, ranging from individual car owners to large corporations to
most local governments.
EPD directly regulates over 60,000 facilities by permit, rule and
license. There are 30,480 facilities regulated by permit, 29,260
regulated by rule and 772 regulated by license. In addition, there are
2,800,000 vehicles in metropolitan Atlanta regulated by emission
testing and inspection.
EPD uses various mechanisms to assure compliance and to respond to
non- compliance. These include inspections, review of self monitoring
data, written violation notices, orders, monetary settlement
(penalties) collection and referrals to the Attorney General for
penalty imposition hearings.
We estimate the compliance rate of facilities in Georgia to be
roughly 90 percent. The remaining 10 percent is the subject of our
enforcement.
From 1991 through 1997, EPD executed an average of 412 enforcement
orders each year. However, starting in 1998 our enforcement has been
increasing. In 1998, we issued 996 enforcement orders and in 1999,1410
orders. Since 1991, EPD has collected over $50,000,000 in environmental
penalties.
An important question is, ``How many of our enforcement orders
pertain to federally delegated programs?'' The answer is ``the vast
majority''. For example, in 1999,1263 of the 1410 orders were for such
programs.
I would like to highlight an important Georgia enforcement policy.
Starting in 1998, Georgia has ``zero-tolerance'' for violations of the
Georgia Water Quality Control Act (the equivalent of the Federal Clean
Water Act) for facilities located in sensitive river basins (basically
all of highly populated North Georgia). This zero-tolerance policy
provides that any violation, no matter how minor, results in a monetary
penalty. This includes wastewater permit violations, sewer overflows or
spills, and failure to meet construction schedules. This policy was put
in place with the thinking that the owners and operators of wastewater
systems have had adequate time to know the requirements and to adhere
to them. This policy allows no excuse for violations. In 1998, 79
enforcement orders were executed and $339,000 penalty dollars collected
resulting from this policy. In 1999, the 75 enforcement orders were
issued and $552,000 were collected. It is our hope that theses numbers
will decrease over time as our enforcement policy will convince cities
and industries to avoid even the most minor infractions.
It would be inappropriate to fail to mention and commend Region IV
of the U.S. Environmental Protection Agency for its support of our
enforcement program. Although EPD carries out a very effective program,
we typically ask and receive assistance from Region IV on a few key
enforcement cases yearly. Region IV accepts our requests willingly and
aggressively.
Thank you for your consideration of our information and the
testimony of other ECOS members.
Sincerely,
Harold F. Reheis, Director,
The States Protect the Environment.
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