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U.S. EPA Headquarters Ubrary
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Washington, DC "20450
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00-53
EXECUTIVE SUMMARY
This report, based on interviews with officials in EPA Head-
quarters, four EPA Regions and nine States, presents findings
and options for improving EPA's delegation of environmental
programs to the States. It was prepared in response to a
charge from the Administrator to examine why delegation has
been proceeding at variable rates and how to accelerate
progress.
FINDINGS
States generally want to assume responsibility for environmental
programs, though the priority which States attach to accepting
delegation varies from program to program and state to State.
States identified several obstacles to achieving delegation. A
key reason for these obstacles is that the national policy of
delegating programs to the States is subject to many interpretations
within EPA. The lack of a clear policy defining, in practical terms,
how State programs should be assessed for adequacy hinders delegation
and creates confusion about EPA's role after delegation. States
are also concerned.about the oversight and support EPA will provide
to States after delegation.
States believe that to accelerate delegation, EPA needs to be
more flexible in assessing the adequacy of State programs and to
expedite its review of State applications for delegation.
States feel that their funding concerns must be addressed,
both to achieve delegation and to ensure that States continue
operating programs after delegation. States also expect EPA
to carry out oversight and provide technical support after
delegation. However, they would like EPA to clarify both
its oversight role and its commitment to provide needed
technical support to the States.
OPTIONS FOR ACTION
The study team has developed five options which the Agency
could pursue with respect to delegation of environmental
programs to States. The options are not mutually exclusive,
but could be adopted either singly or in combination.
Option It Maintain Status Quo
EPA could continue with its existing methods and procedures for
delegating State programs, recognizing that considerable progress
has been made. This includes tracking of delegation progress
through the Administrator's Management Accountability System,
performance standards related to delegation for Regional
Administrators, and statements by the Administrator and other
senior EPA officials about the importance of delegation to the
Agency.
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ES-2
Option 2; Builda Foundation
EPA could issue a delegation policy statement which would set forth
the Agency's central concerns and objectives with respect to dele-
gated programs, and establish principles of EPA oversight of dele-
gated programs.
Option 3? Make Structural Repairs
EPA could change its current accountability structure to more
thoroughly track Headquarters as well as Regional performance
in reviewing applications for delegation. EPA could also change
its procedures for review and approval of delegation applications
to eliminate some of the procedural problems identified by States
and Regions.
Option 4t Lay Bricks and Mortar
EPA could, in addition to issuing a general delegation policy
statement, develop specific guidelines for each program. These
guidelines would address both the review of delegation appli-
cations and the oversight of programs already delegated. One
component of developing the guidelines could be to identify
program-specific areas where regulatory or statutory changes
are needed to reflect current Agency policy on delegation and
oversight.
Option 5: Design for the Future
Problems with delegation exist which are common to several programs
within EPA. EPA could conduct cross-cutting studies of such areas
as oversight practices; EPA's provision of technical or financial
support to the States; alternative funding sources for State environ-
mental programs; and other problems such as penalty policies,
confidentiality of documents, and public participation.
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Table of Contents
Page
Executive Summary. ES-1
I. Introduction 1
A. Background 1
B. The Delegation Study 1
II. Findings... 4
A. The Underlying Problem: Lack of a Fully Defined
Delegations Policy 4
1. Many Interpretations of EPA's Responsibility
2. Existing EPA Procedures Hinder Delegation
3. EPA Hasn't Determined Its Post-Delegation
Role
B. Incentives for Delegation Identified By States... 8
C. Specific Obstacles to Delegation Identified By
States 9
1. Increased Flexibility Needed
2. Delegation Review Process Needs Improvement
3. Funding is a Concern
D. EPA's Future Role 15
1. Oversight
2. Standard Setting
3. Other EPA Functions
III. Options for Action 17
Option 1: Maintain Status Quo 18
Option 2: Build a Foundation: Develop a Delegations
Policy 18
Option 3: Make Structural Repairs: Improve EPA
Procedures 19
Option 4: Lay Bricks and Mortar: Develop Operating
Guidelines 21
Option 5: Design for the Future: Determine EPA's
Future Role 23
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I. INTRODUCTION
A. Background
In 1970 when the U.S. Environmental Protection Agency (EPA)
was formed, there was great variation in the degree to which
individual States were implementing pollution control programs.
Therefore, in addition to EPA's functions of performing basic
research and setting national standards, Congress gave EPA the
responsibility for directly administering national pollution
control programs.
However, the past decade has seen the growth and develop-
ment of State environmental protection laws and regulatory programs,
which were spurred in part by major changes in Federal environ-
mental laws and supported by Federal grant funds. While individual
States may not have programs for every component of the Federal
environmental protection structure, virtually all State programs
now cover at least the basic elements of a minimum national
program. In some cases, under their own laws and regulations,
States have imposed more stringent controls than the Federal
government requires.
Recognizing that a dual structure for environmental pro-
tection is unnecessary and undesirable, the Congress directed
and the Agency has pursued a policy of delegating program
responsibilities to States which have adequate legal authority
and capability to carry them out. However, recent evidence from
the Administrator's Management Accountability System-of inconsis-
tencies in patterns of program delegation among EPA programs and
Regions suggests that this policy has not been evenly interpreted
and applied within the Agency.
B. The Delegation Study
In response to a request by the Administrator, the Office
of Management Systems and Evaluation conducted a study to examine
why delegation of environmental programs to the States has been
proceeding at variable rates among EPA programs and among EPA
Regions, how to accelerate progress, and what EPA's role might be
after programs have been delegated. Because accepting the delegation
of EPA programs is voluntary on the part of States, the focus of
this study was primarily on the attitudes and perceptions of
State officials and staff regarding the progress and problems of
delegation.
The first phase of the study was to collect 'background infor-
mation on selected programs and on the delegation status of selected
States. This process included informal interviews with staff at EPA
Headquarters in order to gain a program perspective. The second
phase involved site visits to EPA Regional offices and State offices.
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The Regional visits allowed the study team to verify and expand .
our information on the States and to gain a Regional perspective.
In the study's third phase, the team conducted formal interviews
with State environmental program staff. The fourth and final
phase was to analyze the results of interviews and develop options
for action by EPA.
The sample of Regions and States was selected to represent
a range of progress in achieving delegation, in order to document
successes and incentives as well as obstacles. Four programs were
selected to provide variety in the substantive issues (air, water,
hazardous waste) but commonality in the control mechanism, since
each is a permit program. The programs selected were the Prevention
of Significant Deterioration (PSD) program in air, the National
Pollutant Discharge Elimination System (NPDES) and Underground
Injection Control (UIC) programs in water, and the Resource Conser-
vation and Recovery Act (RCRA) program in hazardous waste. Regions
and States selected were: Region II, New Jersey; Region IV, Florida
and Alabama; Region VI, Arkansas and New Mexico; and Region IX,
California and Arizona.
^ ^ The study team conducted interviews with Regional and
State officials in the four Regions and seven States. Regional
representatives participated in each state visit 'to assist with
the interviewing and to provide" a Regional perspective. These
Regional team members were selected from Regions II, III, VII,
and X, which allowed more Regions to be involved in the study.
In addition, staff from Region I initiated a companion study by
using the study team's interview guide to interview officials
in Vermont and Massachusetts, thus increasing our sample to a
total of nine States.
Respondents were promised confidentiality so that they would
be free to express their views. As a result, statements of par-
ticular State or EPA officials are not identified by name or by
specific State or Region. The objective of this study was not to
solve specific program, Regional or State problems with delegation,
but rather to take a broad, generic look at the problems and at
possible improvements to the Agency's overall processes and proce-
dures for delegating programs to States. The analysis of these
interviews, taken as a whole, has been used-to suggest several
options to improve EPA's delegation and post-delegation efforts.
These options are discussed in detail in the last section of the
report.
J
A few brief footnotes are in order here. Different programs
use different terms to refer to "delegation." For example, in
RCRA, "authorization* is the term contained in the statute; in
UIC, the term "primacy" is used. In this report we will refer
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collectively to these terms as "delegation;" they all refer
to the assumption by a State of pollution control responsibilities
which in the absence of State action now rest with the Federal
government. In the four programs studied, the responsibility
being delegated is to issue permits allowing facilities to
dispose of certain pollutants and to enforce against those who
violate or ignore these permit requirements and restrictions.
There are some statutory differences among the four
programs concerning what EPA can do if it objects to a particular
State action after delegation. Revocation of a State's authority
is possible in all four programs, but the statutes differ in
the legal authority they give EPA to (for example) object to a
State permit decision. However, the differences in theory are
sometimes less in practice, as an adverse EPA reaction is
almost always a matter of significant concern to a State whether
EPA has official legal authority to object or not.
Finally, other EPA programs which this study did not
specifically address may have their own special concerns regard-
ing delegation. For example, delegated construction grants
management under Section 205(g) of the Clean Water Act carries
with it a particular obligation to protect the substantial
Federal investment in this program from fraud, waste, and abuse.
However, despite the unique features of some delegated programs
not included in this study, many of the States' concerns about
delegation and oversight in these four permit programs apply to
other delegated Agency programs as well.
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II. FINDINGS
A. The Underlying Problem: Lack of a Fully-Defined Delegation Policy
Participants in this study identified many specific obstacles
to delegation and concerns about EPA's future role. Sections II.C.
and II.D. of this report describe these specific obstacles and
concerns in detail. However, we have concluded that they are
symptoms of an underlying problem. Although EPA's general policy
to delegate programs to the States is understood, the policy has
not been sufficiently detailed to eliminate operational questions
about how to implement delegation. The lack of a more fully defined
EPA policy has hindered decisions on delegation approval by EPA
staff and created confusion about EPA's role after delegation.
National environmental laws state broad goals and objec-
tives for pollution control programs and establish a basic
framework for how EPA and States are to achieve these goals
and objectives. However, in almost all cases, EPA must
interpret, through its rulemaking process and/or administrative
deliberations, the specific statutory responsibilities and
obligations of Federal and State governments.
This process of interpretation has not always proceeded
smoothly. Offices within EPA have had difficulty in agreeing
among themselves about which'national concerns must be.satisfied
before delegation can be granted, and which concerns require a
continuing presence by EPA after programs have been delegated.
Even when agreement exists in principle that continued Federal
involvement is necessary or useful, EPA offices have often
disagreed about the specific form this involvement should take,
or the specific "tests" which a State must meet to satisfy EPA
that minimum national standards are being or will be maintained.
1. Many Interpretations of EPA's Delegation Policy
State officials repeatedly suggested that EPA decisions on
delegation have varied widely because there are currently many
interpretations of EPA's overall delegation policy. For example,
there are inconsistencies in EPA's general philosophy or approach
toward delegation to the States. Some EPA officials believe that
the Agency should not delegate until all potential problems
with a State program have been resolved. Others believe that a
program should be delegated as soon as a State demonstrates the
basic capability to carry out the responsibility, with EPA and the
State working out ways to resolve imperfections as they arise
after delegation.
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Part of the difficulty steins from the conflicting policy
interests of the various offices involved in the delegation
approval process (see chart below). In the absence of specific
guidance to the contrary, an individual office will reflect its
own particular institutional perspective in reviewing applications
for delegation. For example, the Office of Legal and Enforcement
Counsel places its highest priority on ensuring that a State's
legal authority is adequate to implement the program, and that a
State meets all applicable legal requirements.
EPA OFFICES WHOSE CONCURRENCE IS REQUIRED FOR DELEGATION APPROVAL
y-
POLICY CONCERN IN DELEGATION
Maximize legal certainty
Maximize national consistency
Expedite delegations
Maximize flexibility to States
EPA OFFICES
AA
X
X
OLEC
X
X
RA
X
X
Since not all policy interests and perspectives can be
equally satisfied at the same time, some choices must be made
among them. But in the absence of clear policy guidance regarding
which interests are most important, EPA has tended to decide
conservatively by delaying or blocking.delegation until a
"consensus" decision satisfactory to all parties could be reached.
This process of "managing by consensus" has proved especially
frustrating for Regional offices, which are now held accountable
for the progress of delegation by means of the Administrator's
Management Accountability System and the Regional Administrators'
performance standards- Delays in approving delegation on the
basis of Headquarters' concerns about legal authorities or national
consistency are relatively common, and thus Regions are being held
accountable for delays which are in fact attributable to Head-
quarters offices.
There are also many interpretations of how EPA should exercise
its national responsibility for pollution control programs. For
example, most EPA and State officials agree that EPA has a role in
minimizing the relaxation of needed environmental controls by
States because of the interstate competition for new industry.
However, in practice, EPA officials differ in how they believe EPA
should do this. Some believe that the Agency's statutes and regu-
lations require States to use identical technical and administrative
procedures (e.g., for modeling the ambient impact of air emissions)
to issue a permit. Others feel that more legal flexibility exists,
and that in the final analysis, as long as comparable sources
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in different States have to meet comparable discharge standards,
this basic "equity" interest is met. Still others believe that
while a State's procedures are not important, it is imperative
for a State program to guarantee that no source will escape
controls mandated by Federal law and regulation.
EPA has delayed decisions on whether to delegate to a
particular State as a result of such disagreements. The
responsibilities and the possible definitions shown below
represent actual interpretations suggested in the course of
our interviews. Virtually all of the conflcts within EPA
which result in delayed delegation stem from such differences
in interpretation.
Possible
EPA ResponsibiyAies
Possible Operational
Definitions
Resulting Areas of
Inconsistency and Uncertainty
1) Ensure the protection of
health and welfare based
upon minimum national
standards
l.a) State programs have to be
identical to EPA'a.
b) State programs have to be
•equivalent" to EPA's.
c) State programs have to
achieve equal environmen-
tal results.
l.a) What is an "equivalent*
. program?
b)-Who should decide if a
given program is
•equivalent*?
2) Minimize the relaxing of
environmental controls by
States as a means of
competing for new industry
2.a) State processes (e.g.,
for getting a permit) have
to be identical to EPA's.
b) Comparable sources in
different States have to
meet comparable standards.
c) A single failure to apply
standards means State's
entire program has failed
2.a) How much must State
procedures look like
EPA's? (e.g., reporting
requirements, modeling
procedures)
b) Does EPA mean to apply
a 'zero errors" standard
to State programs in its
oversight?
3) Protect public access to
information and decisions
about environmental
control programs
3.a) States have to use same
» mailing lists as EPA.
b) State public notice and
comment periods have to
be identical to EPA's.
c) State confidentiality
provisions cannot be any
more protective of trade
secrets than EPA's
3.a) Who is 'the public"?
b) Is it EPA's obligation
to tell a State how to
inform its citizens
about what it is doing?
c) Who judges whether
different procedures
will meet the same
goal?
d) Do States have to change
procedures just for EPA?
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2. Existing EPA Procedures Hinder Delegation
Existing delegation approval procedures provide an oppor-
tunity for each of the EPA reviewers to make his own interpre-
tation of delegation policy. The individual reviewer of a
delegation application frequently has no clear criteria for
determining State program adequacy other than comparing the
written language in national and State law or regulation.
This creates a tendency toward conservative evaluations that
rely on a line-by-line test of whether the wording of a State's
program is identical to EPA's own program regulations.
Another problem with delegation approval procedures is
that reviewers are sometimes given only that portion of the
application for which they have specific expertise. Under
these circumstances, reviewers usually identify every issue
of concern, great and small, in order to provide full infor-
mation to those making the delegation decision. However, the
process does not allow reviewers to balance the importance of
individual issues against a defined set of basic objectives
that EPA wants the State program to meet. The result is that
even small issues, once raised-, can potentially delay or even
block a delegation approval. Clear top management choices
about allowable degrees of flexibility or EPA willingness to
incur some legal risk in approving delegation applications
must exist in order to reduce the likelihood of this outcome.
3. EPA Hasn't Determined Its Post-Delegation Role
The State officials interviewed in the course of this
study generally welcomed EPA oversight of State programs after
delegation. However, both they and EPA Regional officials
expressed concern that the Agency's oversight role needs further
clarification. Lack of a clearly defined oversight role fosters
resistance to delegation by EPA personnel who are concerned that
losing direct control of operating activities may lead to a
reduction in program quality, and who see no alternative means
of EPA influence. After delegation, this concern about losing
control of program quality can lead to oversight evaluation
activities in which EPA staff "second guess" State judgments on
individual permit actions.
Lack of a clearly defined post-delegation role also means
that EPA has not yet determined how best to provide the
services needed to support States in implementing delegated
programs. This support includes sound national standards,
procedural guidance and training, and access to technical
expertise. A more specific definition of EPA's role after
delegation could help EPA program managers make choices about
how to allocate scarce resources among these support activities.
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B. Incentives for Delegation Identified by States
There are strong incentives for States to accept responsi-
bility for EPA programs, although the strength of those incentives
varies from program to program and State to State. Delegation is
most often viewed by States as a means of reducing Federal inter-
vention, allowing States to respond better to local needs and
giving them greater ability to negotiate with regulated industry.
Delegation also eliminates dual Federal and State permitting and,
the States believe, results in more efficient and timely permit
issuance. States also want the Federal funding which accompanies
delegation.
The chart below summarizes the incentives for delegation
cited by State officials.
INCENTIVES TOU DELEGATION
1. Less intervention by Federal
government
2. Greater responsiveness to local
or State circumstances
3. Greater ability to negotiate
with industry
4. Receipt of Federal funding
5. Greater efficiency (reduced
time to issue permits)
6. Regulated community prefers
State- run program
7. Avoid dual Federal/state
permitting programs
8. State has good working
relationship w/EPA Region
9. Administering EPA rules adds
little cost to State program
10. wish to maintain State respon-
sibility for environmental "
controls
11. State has greater expertise
than EPA
12. Program addresses a high
priority State problem
13. EPA program is good lever to
push or improve State program
14. Nothing: would not do program
if no Federal law
(Total possible per incentive *
1 RCRA
8
8
7
5
S
5
7
5
1
3
1
2
1
0
9
PSD
8
5
5
3
5
5
3
2
2
1
1
2
1
1
9
NPDES
7
3
3
2
5
2
3
3
2
1
0
0
0
2
9
OIC
7
4
3
. 6
3
5
3
3
3
2
3
1
2
0
9
TOTAL
30
20
18
18
18
17
16
13
8
7
5
5
4
3
36}
NOTE: The numbers in the table represent citations by State.
For example, B of 9 possible States cited "leas inter-
vention by Federal government' as an incentive to
take on the RCRA program.
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C. Specific Obstacles to Delegation Identified by States
The chart below summarizes the obstacles to either seeking
or receiving approval for delegation which were mentioned most
often by State officials. In the following sections, the major
obstacles are discussed in detail.
OBSTACLES TO DELEGATION
1. Delegation criteria too
strict (equivalency issue)
2. Delegation procedure cumber-
some /time-consuming
3. uncertainty of Federal
funding
4. Inadequate State funding
S. Questionable legal authority
6. Inadequate Federal funding
7. Changing Federal regulations
8. Complicated Federal regu-
lations
9. State program adequate or
better
10. Lack of staff (numbers) - -
11. State laws or regulations
inconsistent w/EPA rules
12. Burdensome reporting
requirements
13. Lack of national standards/
guidelines/regs
14. Lack of trained and
experienced staff
IS. Difficult to attract/maintain
qualified staff
16. Uncertainty of State funding
RCRA
8
7
6
5
S
3
7
2
2
... 3
S
3
6
2
S
3
PSD
4
4
5
4
4
4
2
5
1
_.2'-
0
3
0
2
0
2
NPDES
8
5
S
5
4'
5
0
4
4
4
3
4
3
2
3
2
OIC 1
5
5
5
2
3
•2
3
0
4
2
2
0
0
3
1
2
TOTAL
25
21
21
16
16
14
12
11
11
11
10
10
9
9
9
9
(Total possible per obstacle
' II
36)
Note: The numbers in the table represent citations by State.
For example, 8 of 9 States interviewed believe that
delegation criteria for NPDES are too strict.
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1. Increased Flexibility Needed
States feel that EPA has not demonstrated sufficient
flexibility in delegating programs. Following is a discussion
of their comments and the study team's analysis.
Delegation Criteria Too Strict -- State officials frequently
commented that EPA's delegation criteria are too strict. While
Federal statutes authorize delegation to State programs that are
"equivalent" to EPA's programs, States believe that EPA has
frequently been reluctant to approve State programs which are
not " identical."
Often the issues that EPA raises are procedural requirements
contained in EPA regulations. For example, State procedures for
meeting Federal requirements for public participation or protection
of confidential business information have been unduly, questioned by
EPA in several States and programs. In one State, EPA has also
been concerned about a State law providing for automatic issuance of
a permit after a specified time period has elapsed, though the
State contends that such a permit would include all of the basic
requirements of the regulation and would be enforceable. This
particular provision is part of the State's administrative
procedures act governing all State programs, not just environ-
mental programs.
Minimum penalty provisions have also delayed delegations
in the UIC and NPDES program and may cause problems for final
authorizations in RCRA. EPA'has insisted that State law provide
for the authority to assess at least the same minimum penalty
as EPA has available. While this may be desirable, States may
also have some additional remedies available which EPA does not.
To the extent that national law dictates specific require-
ments in areas such as public participation, confidentiality
and penalties, EPA's flexibility is limited. However, there
is disagreement within EPA about which limits are statutory
requirements. Some Regions and programs have shown more
willingness to be flexible about requiring inclusion of
certain limits in State law by alternatively, including specific
procedures in the delegation agreement (e.g., for handling
confidential information) that satisfy national needs.
Focus on Results,Not Methods — Most States believe that
their programs can achieve environmental results equal to or
better than those which a federal program could achieve in their
State, even though the State's laws and regulations do not match
EPA's exactly. States feel that EPA's insistence on State
statutory language and program design which exactly duplicate
EPA's laws and regulations stifles the ability of States to try
more creative approaches to achieve environmental results. On
the other hand, some EPA officials feel that existing EPA regula-
tions substantially limit the flexibility that can be applied.
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In several cases, States indicated that their existing laws
and regulations are an improvement on the Federal requirements.
However they feel they are penalized in the delegation process
for having tried to develop more effective or efficient programs.
Some Regions agree with this perspective, and see their role as
defending the State's program against objections from Headquarters.
Where Regions have taken this perspective, delegation has generally
proceeded more rapidly, because the Regions have aggressively
discussed the issues with Headquarters offices to get the issues
resolved to everyone's satisfaction.
The States expect EPA scrutiny of their statutory and
regulatory authority and are willing to make essential changes.
In some cases. State environmental staff have used EPA's comments
as a means for getting needed changes through their legislative
or rulemaking bodies. But they question the need for the word-
by-word review and subsequent changes that EPA seeks, especially
when the issues raised are, in their judgment, not central to the
State's ability to conduct the program.
With regard to technical aspects of a delegated program,
States want to be able to determine their own operating procedures
and methodologies. States also do not want to be subjected to a
higher standard of performance 'than EPA would be able to meet.
They feel they should be evaluated against what EPA would be able
to achieve jjn practice if the program were not delegated, not what
EPA could achieve in theory only.
2. Delegation ReviewProcess Needs Improvement
"Everybody can say no, but nobody can say yes," is how one
State official characterized EPA's review of delegation appli-
cations. This remark reinforced a Regional official's description
of .the continuous rounds of review, with new issues identified
each time, as "the second bite of the apple syndrome." These two
phrases capture the substance and flavor of the study team's
findings regarding the review of delegation applications.
EPA's Review Processes Vary From Program To Program —
Each Headquarters program and Regional Office uses some process
for reviewing delegation applications. However, the processes
are not consistent from one program to the next. For example,
the Administrator's concurrence is required for delegation under
NPDES or UIC, but not for interim or final authorization under
RCRA. Delegations of PSD can be approved by the Regional
Administrator, while PSD SIPs must be approved as a major SIP
revision and be signed by the Administrator. Formal concurrence
procedures exist for RCRA authorizations and PSD SIP revisions;
in other programs, while concurrence requirements have not been
formally codified, an informal concurrence veto is often exercised
by the Office of Legal and Enforcement Counsel.
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These differences in the review process used by each program
partly explain why the progress of delegation approvals varies
among programs and among Regions. The requirement for concurrence
by many offices, with sometimes no single responsible arbiter of
conflicts other than the Administrator, gives each reviewing office
in the process the ability to block or delay the delegation.
Moreover, the involvement of more offices tends to increase delays.
Delegation applications which can be approved by the Regional
Administrator usually complete the review process more expeditiously
than applications which must be approved by the Administrator. For
example/ many States applying for PSD responsibilities pursued
a delegation which can be approved by the RA, rather than a SIP
revision which must be signed by the Administrator. Progress
through review may also be faster when concurrence procedures
are formally codified, or where a special effort is made to do
simultaneous Headquarters and Regional reviews.
Many States Find The Review Process Frustrating — Several
States reported that the actual working of the delegation process
was confusing and time-consuming. Most delegation negotiations
take place between the Regional Office and the State, but then the
application is also reviewed by EPA Headquarters. States feel
that Headquarters may raise an entirely new set of issues, or may
not be satisfied with the way in which the Region negotiated other
issues. Sometimes EPA Headquarters reviews the application
concurrently with the Regional office, but does not coordinate its
comments with the Region to provide a consolidated Agency response
to the State.
When there is no single responsible EPA decision-maker.
States reported that delegation requests often stall until
competing EPA offices can agree. In addition to the resulting
delays, this poses special problems in negotiating agreements
with EPA.
States want to know with whom they should be negotiating,
and that agreements made during these negotiations will be
considered commitments by the Agency. One State official said:
"Just tell us who will make the decision and we will be happy
to educate them and negotiate with them, whether they're in
Headquarters, the Region, or wherever." States also complained
that just when they had reach an understanding with EPA, new EPA
staff were assigned to review the delegation application and the
State had to start educating and negotiating all over again —
sometimes on the same issues that had already been resolved.
The timing of EPA's comments on State laws and regulations
is also a problem for the States. States cited instances where
EPA not only insisted that the State go back to its legislative
or administrative rulemaking body for changes, but also would
not commit to approving the delegation if the changes were made.
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Sometimes EPA required several additional sets of changes. Two
State officials described this process as "trying to hit a moving
target:" the State made the required legislative changes, only
to have "new" issues surface during the next EPA review of the
delegation application.
The best opportunity for EPA to make extensive comments is
during the drafting period prior to the proposal of a State law or
regulation. In some Regions, EPA assistance at this stage has
avoided problems that are more difficult to correct later. EPA
can also submit comments to the State during the public comment
period between proposal and adoption. Once a State law or regu-
lation is adopted, changes are considerably more difficult to
obtain. While EPA often provides comments during the preadoption
stage, EPA's unwillingness to commit to approving the delegations
if changes are made reduces the potential usefulness of such comments
and suggestions. States feel they never know when and if EPA will
be satisfied.
Legal Issues are Key Roadblock — States believe that the
legal issues EPA raises have been the key roadblock to virtually
all program delegations. In the few cases where a State's technical
capability to carry out the program was cited as a barrier to
delegation, the State viewed that barrier as a relatively minor
problem that could be resolved through State/EPA agreements
covering oversight, training, and technical support.
The legal issues, however, have not been so easily resolved.
Legal issues raised by EPA have ranged from fundamental questions
about the State's legal authority to issue and enforce permits,
to minor interpretive questions about the adequacy of 15 days
versus 30 days for a public comment period on draft permits.
Delegations have often been equally delayed for legal obstacles
of both major and minor significance.
A few States reported some encouraging efforts by EPA to
overcome legal obstacles. When EPA has provided legal assistance
in the drafting of acceptable language, the approval of State
programs has been much faster than normal. In a few cases, EPA
was willing to negotiate agreements with the State detailing
administrative or procedural steps for resolving a potential
challenge to State authority. Finding an administrative or
procedural solution to a potential legal challenge may avoid
the need to return to legislative or rulemaking bodies for
minor changes. Moreover, the States observed that EPA retains
substantial ability under all statutes to affect permit decisions
in delegated States. This opinion was not shared by some EPA
officials, who saw numerous constraints on EPA's ability to
intervene in State programs — especially under RCRA — once
a State's delegation application is approved.
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The Process Also Creates Frustrations Within EPA — Existing
procedures have also generated frustration within EPA. Often
a Region or Headquarters program office will push for approval
of a State program which the Office of Legal and Enforcement
Counsel believes cannot be approved under existing EPA program
regulations. Given the difficulties and delays involved in
revising Federal regulations, EPA program and Regional offices
prefer, if possible, to approve State applications without making
substantial changes to current EPA regulations.
Staff from the Office of Legal and Enforcement Counsel feel
that they are sometimes blamed for reluctance on the part of
program offices to follow through on policy changes to increase
regulatory flexibility. They would like programs to be more
forthcoming in proposing needed regulatory revisions. OLEC
staff see their role as providing a definitive interpretation
for the Agency of what the law says. Such information is back-
ground material to be used by other offices in making management
choices — which may include the choice to incur some legal risk
in approving a delegation application. However, the degree of
risk incurred or the importance of a particular issue are
subjects about which attorneys within EPA will disagree — a
point which sometimes causes irritation to Regional and Head-
quarters program offices. Moreover, program offices have
expressed the opinion that the legal counsel they receive is
stated as a policy imperative rather than as an opinion about
the range of possible choices.
Some EPA officials are concerned that too few staff have
been assigned to review delegation applications in Headquarters,
resulting in a backlog if several applications are received at
the same time. Lack of sufficient EPA staff also limits the
Agency's ability to work with States early to resolve potential
problems. Others disagree, however, seeing the level of effort
problem as stemming from management choices to mandate Head-
quarters involvement in areas which do not need it.
3. Funding is a Concern
The States interviewed in this study identified the uncer-
tainty of Federal funding as a barrier to delegation more frequently
than the level of that funding. While States are clearly concerned
about the level of funding, they also feel that the uncertainty
from year to year about how much Federal funding will be available
makes it difficult to plan and manage their programs. States
seeking delegation observed that it is difficult to convince
governors and State legislators to take on the new responsibility,
because, without predictable Federal funding levels, delegation
is viewed as a potential drain on already tight State budgets.
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States feel that Federal funds must be available if States
are to conduct nationally-mandated programs. All States are
adjusting to fiscal constraints imposed by both State and
Federal governments; many are seeking alternative means for
financing pollution control activities, such as levying permit
fees. However, they believe that if the Federal government wants
the States to assume or continue carrying out program responsi-
bilities, the States must also receive appropriate financial
resources.
Changing Regulations is a Problem— The States reported serious
difficulties in developing and implementing State programs because
of the continual changes in Federal regulations and standards.
This is especially true in the RCRA program, for which seven of
nine States said changing Federal regulations is an obstacle to
delegation. Lawsuits, legislative amendments, policy inter-
pretations, and new scientific or technical information lead to
revisions of Federal regulations, which affect the States as well
as EPA. States believe they are not adequately informed of
important federal developments in a timely and systematic manner
so that they can appropriately adjust their own programs. Moreover,
if a State needs to adopt a Federal requirement in order to qualify
for delegation, the State is reluctant to ask its. legislative or
rulemaking body to adopt the current version with the knowledge
that it may soon have to go back to the legislature for more changes.
Several States expressed concern that ex parte rules,
which restrict communication with outside parties during the
development of regulations, have limited their voice in the
development of proposed Federal regulations. They believe
that State participation is essential since the State agencies
actually implement delegated programs.
When EPA is slow to develop its regulations and the State
decides to move ahead with its own, it may be difficult to
reconcile the differences between them once the Federal regu-
lations are issued. For some States, delegation has been
delayed or denied even though these States are (in their opinion)
ahead of EPA in their ability to accomplish the program's
environmental objectives. As a result, other States are now
unwilling to adopt State regulations until EPA has issued
Federal regulations — which further delays delegation.
D. EPA*s Future Role
1. Oversight
The States view EPA's oversight of State programs after
delegation as important for two reasons. First, they believe
that EPA has a responsibility to ensure that minimum national
standards are being met across the country. Secondly, States
want some assurance that their neighbors are not using relaxed
pollution control regulation as a strategy for attracting
industrial development.
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While there are different opinions about the exact way
the oversight function should be performed, States unanimously
agree that oversight should be based on an overall program
review rather than a permit-by-permit review. Permit reviews
should be used as an indicator of the need for training or
improvements in the State program, and not as a vehicle for
second-guessing individual permit decisions. State admini-
strators generally agree that objective measures for a good
permit program should be established to reduce the subjectivity
of current oversight and clarify what States are expected to
achieve. Where EPA Regions have moved in this direction, the
States feel that EPA program audits have provided them with
useful feedback on problems needing State management attention.
2. Technical Standard Setting
Nearly all of the States would like to see EPA move more
quickly in establishing minimum national standards for pollution
control, such as new source performance standards in air and
effluent guidelines in water* They stated that scientifically-
based, defensible standards are essential for States to use in
negotiating permit agreements with the regulated community, as
well as to ensure national consistency. States also expect EPA
to defend the standards if the State is challenged.
3. Other EPA Functions
o Information Clearinghouse
The States would like better access to information about
permit decisions in other States so that when a new or complex
problem arises, State officials can consult with others who
have solved similar problems. States felt that a clearinghouse
for both permit and policy decisions (such as the one now
underway in Air for BACT/LAER determinations) is important
for efficient and consistent permit writing.
o Technical Expertise
The States consider it essential for EPA to maintain a strong
technical staff in order to provide the States with special expertise,
including laboratory support, in solving difficult problems. They
expressed concern that as EPA shifts its activities in delegated
programs from implementation to oversight, the engineers and
technicians in EPA who now have experience in dealing with permit
issues might no longer be available. States also want only
experienced EPA personnel to be involved in oversight and permit
review activities.
o Training
States want EPA to provide their staff with good procedural
guidance and training. They are concerned that EPA has weakened
its efforts in this area in recent years, and would like to see
EPA restore a vigorous training program.
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III. OPTIONS FOR ACTION
We have developed five options for action that EPA managers
could undertake in response to the findings of this study. These
options vary with respect to the amount and types of effort they
would require and the results which could be expected from each
one. We recognize that in considering these options, EPA manage-
ment must consider the significance of problems associated with
delegation compared to other Agency priorities.
One option is for no change in current Agency activities.
Of the four options for change, three can be implemented indepen-
dently of the others; however, Option 4 depends on the completion
of Option 2. None of the options for change are mutually exclusive,
and we believe that all four can be accomplished and will be useful,
either individually or in combination.
The study team recommends that any action to overcome
obstacles to delegation and define EPA's future role should be
•based on a more fully and formally articulated EPA statement of
what the Agency expects from delegated environmental programs
(i.e., Option 2). EPA policy on delegations is not now in a form
which Agency managers can use to guide day to day decisions or
that States can understand. A clear statement of the Agency's
expectations is the most fundamental step that can be taken to
improve delegation.
None of the proposed actions discussed in this Section
is likely to cause a quantum acceleration of delegations,
though they can clearly help. Most of the "easy" delegations —
that is, delegations to States that were highly motivated to seek
delegation and meet EPA's requirements, and that were financially
and technically able to implement a State program — have already
occurred. In the remaining States, acute financial problems may
make delegation difficult at this time, or the States simply
don't want to accept delegated programs for reasons of their own.
However, action to improve EPA policy and procedures on
delegation will have important benefits to the Agency:
o Consistent implementation of the Agency's delegation
policy.
o Improved management of EPA and State resources once
programs are delegated.
o Improved EPA-State relations.
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Option 1; Maintain Status Quo
EPA can continue to work on delegation in its present manner,
using its current tracking of delegation progress in the Accounta-
bility System, RA performance standards, and speeches by the
Administrator and other senior EPA officials to stress the
importance of delegation.
Advantages
+ Progress is being made now, despite problems identified.
+ Any action to change present internal procedures with
respect to delegation may stir up differences within
EPA which could further delay delegation.
+ Actions to improve delegation may create unrealistic
expectations in individual States, Regions, or programs
about the Agency's ability to be flexible in the face
of existing statutory or regulatory requirements.
+ Regulatory changes needed to increase flexibility
will take time and could create confusion.
Drawbacks
Individual EPA staff will continue to make policy
decisions on an ad hoc basis in the absence of further
direction.
States will continue to feel they are getting conflicting
signals about delegation, with the Agency's policy
encouraging delegation and the Agency's performance
discouraging delegation.
EPA is likely to receive increasing external criticism
for its failure to have a workable delegation policy.
Option 2: Build A Foundation; Develop a Delegations Policy
Under this option, EPA would develop an Agency policy
statement on delegation. Such a policy would include a set
of principles describing EPA's approach in responding to
delegation requests, and principles which EPA will apply in
conducting oversight of delegated programs.
A policy statement would not provide a detailed set of
operational guidelines (e.g., is a $500 minimum fine for a
violation enough?). However, the principles in the policy
statement would express the Agency's priority concerns in
delegating programs and would identify the Agency's intent
to utilize the flexibility available under the law in dele-
gating programs.
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Advantages
+ Such a statement would clarify EPA's policy and help
resolve inconsistencies and conflicts by giving top-
down policy guidance to program managers who must
make case by case delegation decisions.
+ The statement would reinforce the Administrator's
efforts to increase the number of State delegations.
+ A policy statement would reduce the current practice
of individual staff having to set ad hoc Agency policy.
+ A policy statement would provide a strong vehicle for
improving EPA-State relations.
Drawbacks
- A policy will not satisfy everybody, since some
objectives will necessarily be subordinated to
others (e.g., legal certainty vs. speed of delegation).
- By itself, the delegation policy will not resolve
pending procedural questions about who has the final
authority to approve delegations and who.must concur
before_a delegation application can be approved.
- An Agencywide policy will not resolve specific legal
or technical issues within individual programs.
Option 3; Make Structural Repairs; Improve EPA Procedures
Under this option, EPA would reform existing procedures
for processing applications for delegation. Such reforms could
include the following:
1) Establish a system to track progress of delegation
approvals in all EPA offices, not just Regions.
Presently, only Regional Administrators are held account-
able for delegation approvals in their Regions. However,
the Headquarters program offices and the Office of Legal
and Enforcement Counsel can also delay delegation approvals.
The tracking system would show the source of delays, in order
to encourage all offices to: (a) get involved in the preli-
minary and draft application stages; (b) assume a problem-
solving attitude toward resolving issues; (c) respond to
complete applications in a timely manner; and (d) ensure that
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adequate staff resources are available for the reviews
and to provide any technical or other assistance needed
to solve problems. Serious delays or a pattern of delays
would be investigated by the Office of Management Systems
and Evaluation.
2) Prepare or revise written procedures for reviewing and
concurring on applications. Some major improvements
are suggested below, but the list is not all inclusive.
Any one or all of these improvements can be instituted,
or some combination.
o Define and require only essential reviews and
concurrences.
o Establish a single decision-making authority and
responsibility.
o Require simultaneous Headquarters and Regional reviews
of delegation applications at each stage (preliminary,
draft, and final).
o Set time limits for offices to raise and resolve
v major issues.
o Establish a. mechanism for.resolving internal Agency
conflicts.
o Provide for only one set of EPA comments to the State
at each stage.
o Establish an EPA "negotiating team" to work with the
State, whose decisions would be considered commitments
by EPA.
o Provide a record of decisions reached or issues resolved
which cannot be re-opened by EPA at a later time.
The development of these procedures will require involve-
ment by the Headquarters program offices, the Office of
Legal and Enforcement Counsel, and the Regional offices.
Because changes in review/concurrence procedures will
affect the relative influence of differe'nt policy per-
spectives on any given delegation application, EPA should
first decide which concerns it wishes to highlight, and only
then structure its procedures to reinforce these concerns.
Advantages
+ Accountability for progress in delegation would be
established at all levels.
+ Some of the most severe problems of coordination and
inappropriate review comments would be solved, thus
removing some primary irritants to the States.
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+ Clarifying the location of authority for delegation
approval and concurrence would reduce uncertainty,
delay and other problems of the existing management-
by-consensus decision process.
+ The current effort to revise EPA's internal Delegations
Manual provides an appropriate vehicle for this type
of reform.
Drawbacks
Efforts to reform the approval/concurrence process
may initiate turf battles among the EPA offices
involved.
Changing approval/concurrence procedures (e.g., by
giving RAs more authority) may create major changes
in the balance of power between Headquarters and
Regional offices.
Option 4; Lay Bricks and Mortar; Develop Operating Guidelines
Option 4 would build on the EPA delegation policy statement
by developing program-specific operating guidelines. Such guide-
lines would make reviewing State applications and making routine
decisions more consistent across Regions. For example, there
might be a guideline for evaluating the adequacy of State fines,
specifying that a $500 minimum fine for a specific kind of
violation is "enough", and why. Thus program guidelines would
translate Agency policy into operational reality for both
delegation and oversight activities.
Delegationi Each Assistant Administrator would:
o Identify the national objectives for their program(s).
o Establish explicit criteria for assessing State
program approvability.
o Identify specific areas where flexibility can and should
be applied in assessing the adequacy of State programs.
o Evaluate where statutory/regulatory changes are
needed to facilitate delegation, and initiate the
process to achieve such changes.
Each program would be required to examine its laws and regula-
tions to determine where flexibility can be applied. In cases
where barriers to delegation are regulatory rather than
statutory, and the Federal statute allows greater flexibility,
AA's should initiate regulatory change needed to eliminate
unnecessary requirements imposed on the States.
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Oversightt Each Assistant Administrator would develop
performance measures and standards for evaluating State
programs on a routine basis after delegation. Development of
such measures and standards would involve extensive interaction
with State officials. Final measures and standards would:
o Reflect agreement among national program managers.
Regional Administrators, and State program directors.
o Be as objective as possible and concentrate on
program results.
o Provide for on-site program audits, rather than
primarily relying on "paper" reviews.
o Define essential reporting requirements and their use.
Advantages
+ Some programs (e.g., NPDES, RCRA) have already initiated
efforts to revise regulations and/or program guidance to
eliminate unnecessary barriers to delegation.
+ This option is most likely to offer practical solutions
to program-specific operational problems..
+ This option will apply the principles of the Administrator's
overall policy statement to specific programs.
+ The identification of objective performance measures and
standards for use in 'oversight is a key need which has not
been addressed by the Agency.
+ Development of objective oversight measures will save Agency
time and resources in the long term.
Drawbacks
Both the regulations/guidelines changes and the develop-
ment of objective oversight measures would create
additional work for the program offices in the short term.
The delegation policy statement is a prerequisite for
developing program guidelines; therefore, this option
cannot be initiated immediately.
Some Regions have already developed delegation and over-
sight policies and may resist changing them if they
conflict with particular AA policies.
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Developing additional guidelines runs the risk of reducing
current flexibility in the Regions.
If regulatory changes are needed to increase flexibility,
they will take time. Moreover,,these changes will create
some confusion and delay as States try to understand EPA's
new criteria for program approval.
Option 5; Design for the Future; Determine EPA's Future Role
The fifth option addresses some of the long range issues
which are affecting delegation in all programs and will continue
to be major future concerns of the Agency. Such issues include:
o Federally-required elements common to all delegated
programs (e.g., public participation procedures,
confidential business information, penalty provisions).
o Alternate State funding sources, such as permit fees.
* o EPA practices in evaluating State performance after
delegation.
o EPA's role in supporting States after delegation.
Each of these areas would be a major project, and would
require significant resources to succeed. In particular, the
projects on oversight practices and EPA's support role repre-
sent major staff investments which could substantially affect
the future structure and conduct of business within the Agency.
These two projects would address such questions as:
o In what areas does EPA have a comparative advantage over
States because of its research, technical, and other
resources?
o In what areas do State agencies have an advantage over
EPA?
o In what areas must EPA legally retain or share
responsibility?
o What tools and methods do States need from EPA in
order to perform their work efficiently and effectively?
How can EPA provide these tools and methods?
o How should EPA change to serve State needs better
and improve State performance?
A task force which includes participants from several programs
and Regions would be desirable to support each project, with
OPRM in the lead role.
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Advantages
These special studies would help to increase consistency
within EPA on topics of multiple-office concern, and
would reduce the duplication of effort which now occurs
when each program does independent research on the same
problem.
The Agency would be able to focus on opportunities for
reform which would be widely favored by States, rather
than simply fixing problems in response to State
complaints.
The Agency would have an opportunity to assert a
positive future role for EPA, and to focus on what
the Agency can do to support State and local pollution
control efforts.
Drawbacks
For any of the projects mentioned above to succeed,
substantial EPA staff resources and high-level EPA
management attention will be required.
While relatively short term (3-month) projects might
be possible in areas such as penalty provisions and
confidentiality, a project in the area of defining
EPA's future role is likely to take at least six months
to a year because of the need to incorporate the views
of a large number of .different offices and agencies,
both within and outside the Agency.
Some of these projects have major implications for
the shape and mission of the Agency. Consequently,
they will be inherently controversial both inside
and outside EPA.
U.S. Environmental Protection Agency
Library, *•?**. ?-*04 PM-211-A
401 M Street, S.W.
Washington, PC 20460
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